Disillusioned

Quote from mokwit:

acrary once said "there are lots of edges. Just don't expect to find them in the Open, High, Low Close data."

It just seems that there is always some edge other than market understanding in professional trading e.g technology, info or execution advantage. Having the capital to create situations rather than react to them is an edge. Knowing where stops are is an edge. Watch the book handover stop runs in FX almost daily. Banks have access to FX flows, Pit had BBO + can see GS buying. Prop had direct access + Bullets vs Walt + Irma with browser based, SAC, Steinhardt etc had/have first call, Big funds get access to IPO’s and thus effortless outperformance, CEO of Broker allegedly tells big clients deal pipeline etc

In my local market I know exactly what my edge is and it is not all market understanding. A lot of it is processing the same info that everybody gets and the equivelent of reading the financial statement footnotes rather than just the Chairman's statement. Pros generally have intimate knowledge of one market or one asset class. I can see something on the tape and immediately know something is going on, a casual visitor would not. I go into markets I don't know when the public is in them and leave before it goes back to being the same guys who sit there everyday (at least that is the theory!).
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where do MOCs fit in?
 
Bert, judging by the page views in two weeks, either you have alot of company or this board has lots of humanatarians.

I'm betting on the former.

:)


probably regret opening this can of worms...

Oh well, life goes on.
 
Quote from neophyte321:

Bert, judging by the page views in two weeks, either you have alot of company or this board has lots of humanatarians.
I'm betting on the former.
:)
probably regret opening this can of worms...

Oh well, life goes on.
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I think we all root for the underdog,and i am willing to bet 90% of the humanitarians giving advice are NOT making a living at trading..

I will speak for myself...I am the ex head trader of equity dreivatives as well as emerging market derivatives at a MAJOR investment bank.

Fortunately,I was seriously overpaid for quite a few years and can now take a shot at being an independent hedge fund operator...

For my first year i was up 12%,albeit I trade on a relative value basis.i.e long portfoilo offset 100% by various indicies.I had a Sharpe of 1.5,which is Ok,but the point I am trying to make is I returned 12%....Nothing earth shattering.

If you are trading anything less than 500k,good luck eating,let alone feeding a family with 12% returns....One could make the argument that I shouldnt have had a short hedge on(the hedge lost 12%),but I enjoy sleeping at night.

To all those flipping the bird at their employer and planning on trading for a living,I would certainly caution you to think twice about it.Having an income stream to possibly subsidise your early trading will make your life a hell of a lot less stressful..

just my 2 cents
 
Quote from BertH:

damn, bsmeter, now I'm just dizzy! lol
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Here's a better on. Focus on the center.





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Always question your sensory inputs because they're usually wrong. By the time you become a seasoned trader, your emotion control will pretty much be on par with that of a psychopath. Meaning that you could win a million dollars or witness a gruesome murder, and the emotions in both situations will be the same. A sublime objective emotionless state of being, a true psychopath.
 
There can often be a small difference between success and failure in this business.

Everything works and doesn't work. For every technical indicator out there it is probable that there is a successful trader somewhere utilising that technical indicator in a winning trade method even though many losing traders would also swear that this indicator doesn't work.

Sometimes all you need to do is look at things from a different angle. It may be the wrong combination of indicators/techniques or using the same indicator in a different way that makes the world of difference. This may even require taking a few months off and then coming back to it so you can see the wood from the trees so to speak.

“If the oft-quoted industry loss statistics (that 90 to 95% of individual traders end up as losers) are even remotely accurate, then to succeed, you can’t just do what everyone else does. Otherwise, the most likely scenario is that you’ll end up just like them. You’ve got to think, analyze, and act differently.” Louis Mendelsohn
 
Monroe Trout said it best:
"Make sure you have the edge. Know what your edge is. Have rigid risk control rules like the ones we
talked about earlier. Basically, when you get down to it, to make money, you need to have an edge and
employ good money management. Good money management alone isn't going to increase your edge at all. If
your system isn't any good, you're still going to lose money, no matter how effective your money
management rules are. But if you have an approach that makes money, then money management can make
the difference between success and failure."
 
Quote from bluedemon77:

Security and success provided by employment are also illusions. Three months after my boss was toasting my success with champaign and giving me a big raise, I was fired.

I don't know whether this trading thing is going to work out for me, but I can tell you when I had my last job, my stomach hurt all the time from the stress caused by all of the political games. I had to travel and be away from my wife and I worked for a manic depressive lunatic who changed the rules on a daily basis.

After you've been out on your own for a while, you tend to remember the good things about having a job and forget the bad things and long for the "good old days" of employment. I do miss the paycheck every week, but I find trading far less stressful than employment (although it is stressful) . As much as I believe that the financial markets are built on the foolishness of suckers (and maybe I'm one of them), working your ass off to make some rich guy richer is not necessarily a great alternative. It all depends on the relative attractiveness of opportunities available.

As for myself, if I start to lose more than I already made, I'll bail and do something else. But it probably won't be working for somebody else. I just can't do that anymore--business is too brutal, people are too crazy and I'm tired of depending on the benevolence of some jerk for my financial future.
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Unfortunately I agree. Lucky I have great job now, but very fortunate. Takes a long time to find one where you can work with nice people doing something interesting. And then things can still change.
 
Quote from nzbryant:

Unfortunately I agree. Lucky I have great job now, but very fortunate. Takes a long time to find one where you can work with nice people doing something interesting. And then things can still change.
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Usually, the jobs I've had since out of college have royally sucked. The rare times otherwise have, as you note, ended up crappy.
What else is there to do though than to keep plugging away? It's one of the prime motivations I have for doing my own thing. Someday....
 
Quote from 2manywhiners:

This is a reality check. Log it into your checkbook, and find some satisfaction in knowing that you have been paying your dues. Not sure how long you've been at this, but guess what, you have not failed.

Payed, have you, all of your commissions? And still, after all of this time, have a trading account do you? Already know you, that which you need.

Okay, now that I'm off my Yoda trip, you need to find some satisfaction in knowing that you're not one of the 95%, or whatever it is, that failed at trading. You did not lose. Put that into your mind. Log that into your checkbook. Maybe you're not yet one of the 5%, but you never will be if you keep your current mindset.

"Every battle is won before it is ever fought."

I'm not saying that I drink from the holy cup, by the hand and the grace of God, or any of that Holy Grail bullshit. I don't. But when I started out I wasn't as lucky as you. My account was getting gouged. Bludgeoned to death very quickly. I had to learn, it is Kill or Be Killed.

Trading is simple... That being said... Trading is NOT easy. The winning plan is conviction. It is belief in what you are doing. Adhering to the rules, adhering to your guidelines. Develop a sound trading strategy. Target Profits MUST be larger than losses. If the expected per/trade win percentage is 1:1, then develop a plan that can continue to exist at 1:3. Losses MUST be limited. If your Target Profit for any particular trade is $2.00, and your Stop Loss is $1.00, but your actual Average Winning Trade (over a long period of time) is $0.75, then you are going to, on average, lose money. Trading is a numbers game, and getting the numbers right is half the battle. Over-exposure will kill the new trader. Many new intra-day traders who end up losing are in the market for 7+ hours a day. Why? Do you feel a need to get even with the market after a loss, so you jump right back in? Are you feeling a bit greedy, like you just gotta get that extra $0.05, only to lose $0.15 more? Are you up on the day, but down after commissions? Is that a good reason to jump in head first? Capital Preservation is of the utmost importance. You can NOT make money, if you run out of money. Put Capital Preservation above all else. Period. Risk Management is the name of the game.

Any Ego is too much of one. I am not a winner. I am not a Loser. I am a market participant. I am not winning. I am not losing. I am long. I am short. I am not up. I am not down. I have a vested interest in the market's direction and where it is going. Effective analysis is key, not an under utilization of available resources, not analysis paralysis either. Know what you need to know. Ignore the noise. Trade with the market. Go where the market wants to go. Ride the waves. Don't buy tops. Don't sell bottoms. The most important indicator is, and always will be, Price.

Quit going long during lunch in stocks that consistently chop or go down during that timeframe, even in a Bull market. If you trade intra-day, then trade intra-day. Do not take home a trade that was losing, only to find it gapped down even more overnight. If you have multiple trading time-frames, trade in multiple accounts.

Don't short Oil during a war crisis in the area of the world's largest supply of Oil. Not even if the Bollinger Bands, or the Moving Averages told you to do so. On the flip side, don't go long Oil after reaching historic highs during an oil crisis. It may go higher, it may not, but if it is not a trading vehicle that you specialize in, fight the urge and avoid it. Trust me, Cramer was not the first to coin the phrase "Pigs Get Slaughtered." Don't trade on fundamentals alone, if you are a short-term trader. Don't go long just because a moving average made a cross-over, it is a lagging indicator which means it has no bearing on future direction. Look at the orders, look at the ticks, look at the charts, look at the buyers:sellers, look at the market advances:declines, look at the corresponding exchange's direction, look at the sector's direction, how weighted is it in its corresponding ETF? What is that fund doing? Read its news, what is the sector news? What are its relatives and what are they doing? Have you found a better prospect yet? Collectively, what has all of this information told you? Go Long? Go Short? Avoid it altogether?

Like I said, Trading is NOT easy. But that doesn't mean that it can't be simple. In my opinion the most valuable indicators are not the ones on the price charts, they are all of the independent variables that come together to form a matrix around each trade. Look at all of the variables surrounding the trade, when a large percentage of these indicators match what the price chart is telling you, pull the trigger and make the trade.

Really, it's all only as simple as you make it. You break one rule, and you will lose clarity. You break a few, and those very same rules will end up breaking you.
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I received a PM from someone in regards to this post, so I decided to post the question and my reply here to assist the other users here on ET that still dig up old threads...
 
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