Why Is The Obvious Not So Obvious?

Discussion in 'Risk Management' started by nysestocks, Jan 25, 2009.

  1. nysestocks

    nysestocks Guest

    Why Is The Obvious Not So Obvious?

    I have read thru some of the recent and distant posts in this section, and have come to the conclusion that; the obvious is not so obvious to many!

    There appears to be a lot of textbook information being thrown around, especially in relation to position sizing and risk management.

    What every trader has to realise, is that all the risk management and position sizing techniques in the world are of no use what so ever, unless the trader is aware of the obvious pre-requisite to trading any market.

    It will be very interesting to see what answers the many traders come up with for the obvious, those with little and lots of experience alike!
    RobSwe and lawrence-lugar like this.
  2. the starting biggest problem, is that most traders think they will somehow be in the 5% that are going to be profitable. Everyone else is going to be the 95%.

    The continuing biggest problem is that the trader never really has an outperformance edge. And all the position sizing and risk management in the world will not overcome the house advantage (commissions, fees, slippage, errors, etc. etc.)

    aquarian1 likes this.
  3. nysestocks

    nysestocks Guest

    Whilst we know that we can never compete on the same scale as the finance business professionals, the fact remains that all a trader has to do to make money in any market is BLASH or SHABL.

    However, unless the obvious is known, a trader will find it very hard to make money from trading, with BLASH and SHABL becoming BLALL and SHALH!
  4. Walander puts it elsewhere that the "majority seemingly lack general common sense". I agreed with him
  5. How is slippage, errors house advantage? Can a trader not capture others slippage and errors? I can penny a market maker and be the best bid.
  6. jem


    edge and the capital
    fullautotrading and kut2k2 like this.
  7. nysestocks

    nysestocks Guest

    Capital is obvious, but what is the "edge"?
  8. nysestocks

    nysestocks Guest

    Who ever he is, he is correct.

    But common sense thinking, in itself, is of limited value unless a trader knows what he/she needs to know!
  9. the house is the market. the slippage is what you pay to trade bid/ask, etc.. the errors are making mistakes, which everyone will do. Unless you are on the floor, you are not immune to these, commissions or fees.
  10. Banff01



    you didn't conclude this thread and I am still curious what did you mean by the obvious? Not a bad thread - some interesting thoughts here...
    #10     Jan 28, 2009