Why Is The Obvious Not So Obvious?

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

  1. nysestocks

    nysestocks Guest

    Trading is not easy, but it is possible to make money if you know what you have to do.

    For this discussion we will assume that we are talking about daytraders, not investors!

    When a daytrader starts to trade live for to make a living, it is normal for everything that he/she has learned up to that point to fall apart.

    This will happen for several reasons, which we will probably get as many answers as traders, but it really happens due to one obvious reason, which is not so obvious!

    I think it best for now that traders try and come up with the answer, not for a guessing game, but it will make them think about what they are doing, and when the answer is eventually out in the open, and I am certain that some traders will get it, it will then become obvious why this very important pre-requisite to trading is so important to success.

    However, knowing what is required, and knowing how to do it correctly, are not one in the same (that is actually a hint if read correctly).
    #11     Jan 30, 2009
  2. Brandonf

    Brandonf ET Sponsor

    Because asking the average person to think for themselves is a lot like asking water not to flow, it goes against nature and it simply won't happen.
    #12     Jan 30, 2009
  3. NoDoji


    The not so obvious:

    1. The ability to leave your ego at the door before entering the trading room. Ego kills the 95% of traders who fail.

    2. Thinking. The first time you get your Pattern Day Trader notification from your broker, there should be a big red letters that say: "Warning: Day trading while thinking is hazardous to your wealth."

    Observe, Learn, See, Act.
    #13     Jan 30, 2009
    Tradester likes this.
  4. why is the obvious not so obvious?

    well, isnt that obvious?
    #14     Jan 30, 2009
  5. Banff01


    Since you are talking about daytrading for a living transition I would say that one of the major prerequisites is the ability to detach from the meaning of money. Every trade comes with a risk and a set of trades can easily turn into a drawdown. Perception of risk may change significantly for someone whose only income is trading as opposed to someone who gets a regular paycheck and plays the market on the side. This results in extra fear which in turn results in delayed entries, missed trades and late exits effectively destroying the small edge that existed before. It is essential to focus on the quality of trading plan execution. This of course is easier said than done.
    #15     Jan 30, 2009
  6. this has potential to be a good thread...
    #16     Jan 31, 2009
  7. Lesson in pattern reconition and position management, and you only need to be able to remember 1 or 2 patterns, not count into a 6 chute deck. 1 for bad 2 for good.

    #17     Jan 31, 2009
  8. nysestocks

    nysestocks Guest

    It is very hard to detach from money, no matter how hard we try.

    Maybe this will clear things up a bit?

    Making money in the markets consists of a few simple actions on the part of the trader, as follows:

    BLASH - Buy Low And Sell High


    SHABL - Sell High And Buy Low

    and for a lesser few we have:

    BHASH - Buy High And Sell Higher


    SLABL - Sell Low And Buy Lower

    No matter how much you understand risk control, how smart you are with position sizing, and how quickly you exit losing trades, it is all no damn use unless you know what the obvious is, which of course is not obvious to the majority!

    The reasons why it is not so obvious are many, but namely due to the idiots who think they are experts, and for some stupid reason (possibly human nature), the majority are like, if you pardon the phrase, sh*t to a blanket!

    I am considering explaining clearly to new traders what they "must" do if they want to succeed, but as I know only 1 or 2 will actually benefit from it, I might not do it.

    I am no expert, but I don’t have to be to make money trading, no one does!

    But, if one wants to succeed, then you know what they must do, and I will not repeat it again as I don’t think I need to.
    #18     Jan 31, 2009
  9. nysestocks

    nysestocks Guest

    As Raymond said, "One 5"!

    Looks like a good film; I must download it and watch it :)

    The problem with Pattern Recognition is that you are going on the assumption that an historical event will repeat itself.

    Some even bring a myriad of calculations into the equation!

    When ever we assume anything we run the risk of making an ASS out of U and ME.

    To me, this sounds very like wishing and hoping, and we all know what that will do to a trading account!
    #19     Jan 31, 2009
  10. doli


    Buy when the price is going up.

    Sell when the price is going down.

    Be patient.

    Almost any trade will eventually make money.
    #20     Jan 31, 2009