trading is a business. the vast majority of businesses in ANY industry fail
trading is no different.
the primary difference between trading an other businesses, is that in almost any other business you do not need to directly risk capital to make money.
in trading, no matter how good you get, and how much capital you amass, every time you want to make more, you HAVE to risk capital.
thus, in trading - risk management (and this includes money management, not overleveraging, being patient, respecting stops ALWAYS etc.) is far more important than in most other businesses.
are the setups important? sure. but a trader w/o a good business plan, the proper psychological approach, etc. will still lose money with my setups.
when i invest, i buy stocks for the longterm. i've had AAPL (for instance) for several years. i've had PG for a decade. etc. i may trade around a core position intraday, use covered calls, protective puts sometimes, but in general, i just buy good stocks on weakness. i'm 50% buffett, and 50% labrador retriever
(obscure reference)
when it comes to TRADING, i trade futures almost exclusively.
imo, if you can't CLEARLY define what your edge is, you don't have a rock solid business plan, you don't understand risk, etc. , and you don't have the patience to wait until you have an EDGE before you enter a TRADE (i strongly distinguish trades from investments) - you will almost certainly lose, like most traders.
futures, unlike stocks, are zero sum. on ANY day, there is exactly the same amount of money won vs. lost in terms of overall positions. every tick that causes an aggregate of $$$$ lost among 50% of positions, is correspondingly benefiting the exact same # of positions (contracts, specifically) with the exact same $$$ gain. that's math, and its incontrovertible.
so, SOMEBODY is making money. research reveals that most of the volume in futures (90%) is less than 10% of the participants. you need to understand what moves markets, how to find it, and where trades are most opportune.
you MAY be able to trade successfully (stocks) using neato keen indicators etc. . i don't know. that's not how i trade. i do suspect that the vast majority of profitable futures traders (myself included) are not using much if any lagging indicators ( i don't), . let retail traders play with moving averages, oscillators, and whatnot. i don't see an edge there (for me), so i don't use them.
chances are if you are doing what everybody else is doing - you won't make money. cause they are losing money. trust me on that. find your edge, develop your trading/business/risk management plan, then trade.
as for mentors. ime, generally speaking, the ones who seek mentors are already demonstrating a professionalism - a willingness to invest in their education. the average trader thinks he can do it on his own - and most can't. they'd rather throw away thousands of dollars "learning" (*learning how to lose) than invest in learning how to make money. their bad.
but in brief, if you are 1) undercapitalized 2) unable to manage risk with ROCK SOLID discipline 3) don't have a business plan 4) don' t have a clearly defined edge - you will most likely blow your account out.
:eek:
