After engaging in trading for an extensive period and exploring various approaches, could you pinpoint the singular action or decision that has consistently enabled you to generate profits?
Being profitable
- Thread starter charlotte_daily
- Start date
Quantify what a trade should earn and what the risk is.
There is a classic story about a CBOE trader who got fired after having an up $ 5 million p and l for the year. He ran around the exchange griping to everyone. When his boss was asked why he would fire a "successful" trader his answer was simple. He made $ 5 million with $ 25 million in risk.
Everybody quotes ROR - but consider the return on risk. Be willing to pass trades and don't trade just to trade unless the trade passes the return on risk test.
There is a classic story about a CBOE trader who got fired after having an up $ 5 million p and l for the year. He ran around the exchange griping to everyone. When his boss was asked why he would fire a "successful" trader his answer was simple. He made $ 5 million with $ 25 million in risk.
Everybody quotes ROR - but consider the return on risk. Be willing to pass trades and don't trade just to trade unless the trade passes the return on risk test.
Yes, deciding to treat trading as a very serious business with zero tolerance for sloppiness.
- Have you got a business plan (with all the necessary business subcomponents) to guide the whole trading business venture?
- Do you have a trading plan with a positive trade expectancy?
- Does your trading edge fit your own beliefs and personality?
- Have you got discipline procedures in place?
- Do you have an efficient daily routine in place?
- Do you follow detailed checklists?
- Are you doing daily debriefing?
- Apart from trade matrix statistics, are you keeping statistics of how many mistakes you make? (mistake is not a loss, but rather not following your plan even if it’s a winning trade)
- Do you have corrective procedures in place that you follow for overcoming your mistakes and weaknesses?
- Do you have worst case contingency plan?
- And so on, and on, and on . . . . . .
I gave up being a contrarian, thinking I could accurately fade tops and bottoms. I’ve heard there are people who can pull it off consistently but I find it a whole lot easier to just buy when volatility is low and sell when volatility is high. Once I started doing that I suddenly became a lot more profitable.
This, in my humble opinion, is the most determining factor for trading success.
Even with a profitable methodology/system in place, you can still lose money if you're not able to follow it diligently at all times and get sloppy on your preparations and execution of said system.
Of course, most people are idle dreamers and optimists and lack even a basic system.
I trade futures and the futures market is largely traded by algorithms or bots. So I trade the futures market with robots and I have seven of them that consistently generate profitability in real time over the last 2 1/2 years of trading without changing its settings once. That works for me
Two things were most important:
1. When I started backtesting specific entry and exit rules, and
2. When an objective method was used to enter trades in the direction of the current trend...
Have a written plan and the discipline to follow it.
Keep your losses small.
Focus on process rather than P&L
Good Morning mason macgregorson,
Congratulations on your bots in the futures market.
How much money did your bots make the past 2 years?
Thank you