+1 You hit the nail square on the head!
Day trading is losers game
- Thread starter oilfxpro
- Start date
+1 You hit the nail square on the head!
ALL TYPES OF TRADING HAVE UNKNOWN OUTCOMES!!! Regardless of the stats on a high probability setup over a large sample size-- each individual trade based on that setup stands alone as a random event with uncertainty attached to it. Here's the key though:
Consistency comes from knowing what you're going to do next.... NOT knowing what's going to happen next.
If the setup has an edge-- you will be profitable bottom line.
Hogwash... pure hogwash.
Success comes from having an edge. Tight stops being taken out frequently is a misnomer as a general statement in and of itself.... there are reasons specifically why tight stops will be taken out. Conversely-- with the right market conditions along with knowing the right trade setups on your individual equity being traded and the timing of the entry results in maximum reward with least amount of risk (1R or less).
As an example-- price comes down intraday to revisit a low of day-- some consider it novice to place a stop just below the low on a long reversal trade-- because market makers know stops are there and will sweep "losers" or "amateurs" away. Not so-- It's all about the edge. Those that have no edge are forced to set wider stops... thinking they are being smarter than the pros by not "advertising" to be taken out by market makers. But that diminishes the reward! What they dont seem to realize is that with the right timing and setups price will have an extremely low probability to revisit that extreme high or low during their trade's timeframe...this allows for max reward! (mathematically impossible to have it both ways-- wide stops and max reward dont go hand in hand-- unless of course u want to raise the risk) The true amateurs are those that are forced to set wide stops due to lack of an edge on timing the entry!
Disagree? Read through this thread (pgs 10-14) which will explain further with a real world trade example:
http://www.elitetrader.com/vb/showthread.php?s=&postid=3559444#post3559444
TheBlackHand
Guest
+1
Very good points, Riffraff!
That's exactly what most don't understand: trading, any trading is always a bet on unknown outcome. Thinking it isn't simply means one either owns the world (the most important inside information at least) already or just is a person who is not in control of his/her own ego.
Second case is much more common of course, this forum is full of unrecognized geniuses, who think they can be more than just pro gamblers in this game.
That's exactly what most don't understand: trading, any trading is always a bet on unknown outcome. Thinking it isn't simply means one either owns the world (the most important inside information at least) already or just is a person who is not in control of his/her own ego.
Second case is much more common of course, this forum is full of unrecognized geniuses, who think they can be more than just pro gamblers in this game.
With day trading , you are trading noise and trading with the wind.
If the set up has an edge , IF is the important word. Set ups in day trading are not identifiable from random walks , more set ups fail . INTRA DAY SET UPS based on discretionary trading can not be back tested , to see if they have an edge.
So according to you ,it is all about discipline , psychology , your game plan and how you react to the market behaviour and those failed set ups .It all works fine in theory , until the market starts behaving unpredictably .
http://www.elitetrader.com/vb/showthread.php?s=&threadid=236978&perpage=6&pagenumber=1