Why Is The Obvious Not So Obvious?

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

  1. I agree. To a new trader, this thread seems to dangle the promise of grand enlightenment or profitability, if only they can think through their actions with enough clarity.

    And although I believe this thread does lead to certain enlightenment, what it does not do is provide new or struggling traders with what they are really looking for, which is a simple answer or magic formula (because none exists).

    Early on the OP asks traders to think deeply about their actions and also describes "the obvious" as being so obvious, most people would discount the information as worthless. OP also mentions in order to be profitable, one trader needs to be able to "leapfrog in front of other traders". (page 6).

    Stated another way, in order to be profitable as a trader, you really only need to be able to do one thing: sell your position to another trader for more than what you paid for it! (...seems like worthless info huh?)

    To expand this a little further, it would be wise to seriously ask yourself if your trading method gives you a reasonable expectation of accomplishing the above. It does not matter if you use a 5-Min chart, 1H chart, 4H chart, 1D chart, pure fundamental or technical analysis, trend following, combinations of indicators, new releases or chat rooms... If your method does not give you a reasonable expectation of being able to sell your position to another trader for more money, you will not be profitable!

    I encourage you to think about why famous and successful traders are able to sell (or cover) their positions profitably. How are they able to increase the probability of doing so? There is no one correct answer here either! What makes high frequency traders successful is not what makes chatroom traders successful. The only constant is that their trading method gives them a reasonable expectation of being able to sell or cover their position profitably.
     
    #8111     Apr 16, 2022
    Ed48, Vindago and tyrion like this.
  2. Vindago

    Vindago

    Very good analogy, I like it. I would add that when the weather start changing often, for some time, there is some uncertainty, for a time it is variable, it may rain and be sunny at the same time:D
    other times, it may just be a passing cloud or it may rain for a few hours, or in more extreme cases we may even have a change in the season so that the summer most generally sunny weather become autumn with its heavy rains and this change does not happen immediately, it will take some time for the change of season to take effect.:D
    So the weather is crucial but also the time factor is important and is a very critical indicator:sneaky:
     
    #8112     Apr 17, 2022
  3. Wide Tailz

    Wide Tailz


    I assure you there is something here in the first ~30 pages of the thread that is so obvious and hidden in plain sight that (speaking only for myself) if applied, can definitely help a struggling trader stay on the right side of the market. My rate of losing money has gone from -30% a year to -5% just based on this knowledge alone. Take it for what it is. For me, it's the least worst option for discretionary trading, but I need to learn to let winners run and the obvious works with that, too.
     
    Last edited: Apr 17, 2022
    #8113     Apr 17, 2022
  4. Ed48

    Ed48

    IMO, this IS precisely the "obvious" that the OP was referring to.

    The "obvious pre-requisite to [successfully] trading any market", is finding a method (an XYZ) which works. If you do XYZ, and keep doing XYZ, it will make money.

    That is why the OP was dismissive of risk management and position sizing. These are of little use if you don't have a proven XYZ.
     
    #8114     Apr 18, 2022
  5. Yes, this is indeed the obvious.

    Now we just need to find the holy grail XYZ. :D

     
    #8115     Apr 22, 2022
  6. benten

    benten

    Good one! :D
     
    #8116     Apr 22, 2022
  7. Aj2014

    Aj2014

    What's obvious is that the obvious is not obvious to all. Although it is indeed obvious. The obvious is obvious. But it's not.

    I hope i've not given too much away there. Wouldn't want it to stop working! You're welcome
     
    #8117     Apr 22, 2022
  8. Ed48

    Ed48

    Was the OP messing with people when they said the holy grail of trading does exist but only for a very very small minority?

    Even if it is only known by a very very small minority, it would be hard to keep secret.
     
    #8118     Apr 22, 2022
  9. Vindago

    Vindago

    It wouldn't matter, as the Op said once: "I could tell the obvious and it would be discounted".
    Moreover, the hard part of a successful trading method is being consistent in using it, it is enough to screw up once to easily burn a week earnings.
     
    #8119     Apr 22, 2022
  10. Mysteron

    Mysteron

     
    #8120     Apr 22, 2022