Thor1..... im not trying to be mean or anything but, me laying out my exact procedures really wouldn't benefit anyone, as i've stated before. And please keep in mind, this thread is in psychology, not strategy.
Like i said, for a long time, I too was asking many traders, to please give me the stragety they use. They never would... all they would say was " you must find a method that works for you". I always believed they were just snobs towards me... until i saw the light and realized what they were saying all along was true. wether you get it for free, or pay for it through a service, any and all information from a trader or advisory service you receive.....is like buying an entertainment center... yes... you get the wood, glue, and screws..... but YOU assemble it at home.
My original post is what happened to me over along time.... towards the end..I kinda new the markets... but still couldn't make $$ cause i was still using the rules i was told as a new trader.
Having said that... the problem i had with stops was that i had it in my head that they must be as small as possible. That "new " traders should always ALWAYS only take trades that offer 3:1 r/r ratio. It never dawned on me... that this "advisory service" also had its own brokerage, would even offer discounts in their training newsletters if you switched over to their brokerage firm. Hmmmmmmmmm new traders should only take trades that offer 3:1 ..... could that be because... oh, i don't know.... because you will get stopped out more often???? naww it couldn't be..... advisory services are good guys... they would never do that to a new fledgling trader.... would they?
What targets are easier to hit... trades that are 5:1 r/r.....3:1..... or 1:1?
If new traders should only stick to 3:1 or higher r/r.... well then, what the hell....why not just take trades that offer 10:1... or 20:1..???
New trades are told the opposite of the truth.. only the most experienced traders have the keen eye to spot and execute high r:r ratio trades.... not only are they very very good in reading market eternals... but they are also working on multiple time frame set-ups simultaneously... thats how they get high r/r. They are masters in what they do. New traders will just be stopped out. It wouldn't bother me if the advisory services said the truth.... "only stick with 3:1 r/r.....you wont make any money, but...because you are new and don't know shit...it will keep you alive, and we get our commissions."
You must not confuse the two things....
So far..... most everyone here has misread my original post!
People are looking for the answer on how i became profitable with strict money management......... I didn't"T.
Strict money management just keeps you alive longer.... you will constantly get stopped out... but the losses will be small. Wont take much to win the $$ back.
You will only start to show a profit after you have the experience. Strict $$ management just keeps you alive long enough to get that experience... just like i stated in the original post. But no one wants to hear that.
I disregarded the 3:1 r/r mantra that was ingrained in my head AFTER...repeat AFTER i had put my time in and had experience to read the mkts better... i simply didn't get stopped out as much, quickly regained all the money i had lost.
To make money... you need the experience... the experience will allow you to take 2:1... 1:1...and even inverted r/r ratios!! You will be able to learn new methods and ideas 100 times faster than when you first didn't have the experience.
Also.... after you start getting good.... please forget about the dumb.... batting average and R/R ratio arguments.... IT doesn't MATTER if you are pulling in a 4:1 sharpe with a crappy 40% win ratio.. or a poor 1:1 sharpe with a 80% win ratio... BOTH are money makers. To me, i now prefer the higher batting average... i believe its psychology better for me. Versus going weeks at a time with no profits.... waiting to score on that high r/r trade.
To get the experience, you need time in the markets.... no other way around it. They ONLY way to stick around long enough, is through strict money management.... I.E. take the higher r/r trades..... obey stops...etc...just don't think you will be making any money.
Its a two stage stragety..... strategies that i flip flopped after i knew enough about the mkts.
So to clear it up.... if you are asking me how did i become profitable... I stopped trying to find only the higher r/r ratio set-ups, the ones that kept me alive in the mkts for so long but never showed a profit, and just started taking higher probabilities ones. I took 2:1......1.5:1...... and even 1:1, because i recognized what a good probability set-up was. A new trader trying this will get killed... because he/she wont know what a good probability is versus a bad one. Two set-ups that look exactly the same can have very different odds.... depending on mkt eternals, the sector...and momentum in its higher time frames...etc. I also abandoned the set-ups i learned through this advisory service... they were out dated.....i took alot for me to break free from them... the people i believed in for so long.... the ones i believed with all my heart were the real deal in the business. Its like when i hatched... they were the first ones i saw ......I have also left stocks and went into Emini Dow.... tired of playing the earnings surprise.... upgrades/down grades.... company news... all things that will take a good set-up that you're in and whack it till you get stopped out.
Any new traders reading this ..... don't believe anyone that tells you that if you do what they do or follow a certain technique, you will make you money... they will be lying... you must put the time in.... don't know any other way to say it.
