Connect the dots, and you will realzie a real edge is the most important thing, and a lot rarer than people imagine [/B][/QUOTE]
This is true. I would add that the disciplines of planning and executions are vital as well. When I started trading I sat next to a very successful trader (a few million $ profit a year day trader) He would spoon feed me good trades that he seen and did himself and tell me why he liked them, when he got in when he got out, I am putting a bid in here I am putting an offer in here.....everything!!!!!, but I would still lose money in many of them. That is how important it is to have a reason for your trade (edge), have the discipline to have a predetermined plan for all outcomes and follow it with resolve. You must also have flexibility to realize when the circumstances that got you into the trade have changed and adjust your plan to suit the changes.
Two traders are in the same exact position and are taking a tremendous amount of pain in the position. Trader Z is whining, squirming in his seat and crying like a little baby who is not getting his way. His emotions are high and he is wretched inside cursing the world, stomping around and yelling at the screen. He tries to trade his position and improve his price or trade his way out but makes bad decisions and gets whipped around because he is so emotional and ends up getting in worse shape. He revenge and anger trades sometimes at the height of these emotional outbreaks. He doesn't know what he will do if it goes another point or two against him. He ends up losing more getting stuck deeper and sometimes even blowing out the position on a whim because he canât take it anymore, he is tired of steaming and tired of losing money and just wants it all to stop. On the other side of the coin is trader A. Trader A knows he is in a good trade that has a positive expectation and will show him a profit once the variance has been smoothed out. He knows sometimes he will get stopped out of this trade setup he is in and he will lose money. Trader A knows that even when he is stopped out and forced to cover the trade as a loser it is okay because over time this trade will pay him a profit. He is savvy, he is seasoned, and he has seen it before and will see it again and again. He is emotionally detached because he knows his risk and he knows he is right. He has ice in his veins while trader Zâs blood is boiling. An outsider looking in cannot tell that Trader A and Trader Z have on the same position. If trader Z can manage to change his thinking and actions to model that of trader A, he will make it. If not, he will remain, just another victim of the violence of the market.
