How certain are you of the trades you place?

rin4et said:
For successful day traders, how certain are you of the trades you make on a scale of 1 to 10?
10 - being as sure as the sun will rise tomorrow :)
1 - getting heads on a coin flip

Also for context please answer the following questions:
1) How many trades do you place on average per day?
2) On average how many of those trades do you get wrong i.e. stopped out with a loss?
3) What is your average position size? In dollar amount.

Please respond to this thread only if you are a successful day trader. Thanks!
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Good thread for trade psychology.

Read recently on ET about a successful trader who would play video games and poker online all the time.................in wait for the "right" trade set up to form and then he would get in with high confidence.
 
toc said:
Good thread for trade psychology.

Read recently on ET about a successful trader who would play video games and poker online all the time.................in wait for the "right" trade set up to form and then he would get in with high confidence.
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Hello toc,

You have the link to this story please?

I have been brainstorming this type of thinking as well lately. I am getting more patient and waiting for that right trade to come to risk more for better rewards. My goal is 1-2 setup per day and scaling up. Along with system building and testing in spare time some trade ideas.

But overall, I am confident. I am only not confident, when I do not know what I am doing.
 
I think it was some thread to do with real life experience from prop trading. It was on ET for sure and it was recent like 2 weeks or 4 weeks at most.
 
Well there is something called death by a thousand cuts. A stop loss doesn't protect against that especially if you are not selective and focus only on high probability trades.
Let's say traderA and B both have $3000 to play with.
TraderA sits on his hands waiting for that high probability trade. Whereas B thinks a stop loss will protect him against low probability trades.
On Day 1 traderB takes takes 2 low probability trades and gets stopped out with a loss of 3% each.
If this happens 2 days in a row he is down to $2656 all the while traderA has been calmly sitting on his hands and still has his $3000. Not to mention pressure is building on traderB due to the loss and he might be become more risk averse and be hesitant to pull the trigger on the next good trade.
Now on Day 3 let's say a high probability trade comes along and both traderA and B take it. Let's say they both make 13%. Now trader B is just cutting even whereas traderA is at $3390. If this process repeats a few times traderA will be way ahead of B whereas B will be struggling to dig himself out of the hole.
There is a quote from market Wizards that talks about a cheetah waiting for a week in the bushes for a high probability kill.
Although the cheetah is the fastest animal in the world and can catch any animal on the plains, it will wait until it is absolutely sure it can catch it’s prey. It may hide in the bush for a week, waiting for just the right moment. It will wait for a baby antelope, and not just any baby antelope, but preferably also one that is sick or lame. Only then, when there is no chance it can lose its prey, does it attack. That, to me, is the epitome of professional trading.
 
I agree totally. This alludes to the importance of patience in trading, as is in hunting.

The fundamental issue here, however, is how one correctly calculates the probability of the trade. It’s more complex than it appears.

I think that’s what truly distinguishes the winning traders from the losing ones, given everything else is the same, such as risk management, etc.
 
lawrence-lugar said:
As Morpheus, Laurence Fishburne, :cool: would say...I am trying to Free your Mind, Neo. But I can only tell you. You're the one that has to trade it,
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I think you say some ridiculous things. But parts of it kind of rings true that only with experience you can relate too. Parts of me think you're some type of troll. But at the same time some of the things you say do makes sense.

My conclusion is too much trading probably has fried your brain. However like with some people brain damage can make them genius. There used to be a ET member here that went by RedNeck. You might have seen him. He said he is a profitable trader but his writing skill was horrible. You would think that he was some type of retard. Especially when he mentioned he used to be an Engineer before becoming a full time trader. But maybe he has brain damage too.


Anyways back to the Matrix analogy, here is a better one. Think of trading like the spoon. Most traders think the goal is to try to bend the spoon with their mind. That is impossible which is why 95% fail. Because what they need to realize is that there is no spoon.
 
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rin4et said:
Well there is something called death by a thousand cuts. A stop loss doesn't protect against that especially if you are not selective and focus only on high probability trades.
Let's say traderA and B both have $3000 to play with.
TraderA sits on his hands waiting for that high probability trade. Whereas B thinks a stop loss will protect him against low probability trades.
On Day 1 traderB takes takes 2 low probability trades and gets stopped out with a loss of 3% each.
If this happens 2 days in a row he is down to $2656 all the while traderA has been calmly sitting on his hands and still has his $3000. Not to mention pressure is building on traderB due to the loss and he might be become more risk averse and be hesitant to pull the trigger on the next good trade.
Now on Day 3 let's say a high probability trade comes along and both traderA and B take it. Let's say they both make 13%. Now trader B is just cutting even whereas traderA is at $3390. If this process repeats a few times traderA will be way ahead of B whereas B will be struggling to dig himself out of the hole.
There is a quote from market Wizards that talks about a cheetah waiting for a week in the bushes for a high probability kill.
Although the cheetah is the fastest animal in the world and can catch any animal on the plains, it will wait until it is absolutely sure it can catch it’s prey. It may hide in the bush for a week, waiting for just the right moment. It will wait for a baby antelope, and not just any baby antelope, but preferably also one that is sick or lame. Only then, when there is no chance it can lose its prey, does it attack. That, to me, is the epitome of professional trading.
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Looks to me like you answered your own question. Provided that you know what a "high-probability trade" looks like, how ever you happen to define it, compared to what a "low-probability trade" that still meets basic entry criteria looks like. (I would think that the "low-probability trade" must at least meet basic criteria otherwise it is not even a consideration.)

Personally, I don't like the term "high-probability," because it suggests more confidence in the face of uncertainty than I feel is warranted, but I'm going along with your lingo.
 
However it is an exceedingly pleasant post after a long time. After going through almost same posts I am in high spirits to read the answers of all. However, all the answers are fully relative, since I can’t answer them in a just statistical figure. The accomplishment of trading is varying from situation to situation. On an average as a scalper I engage in 5 to 6 currency exchange trades and thereby earn a moderate profit in each trade.
 
rin4et said:
On Day 1 traderB takes takes 2 low probability trades and gets stopped out with a loss of 3% each.
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Surely nobody taking low-probability trades is exposing anything like 3% of their account funds to risk on an individual trade?! Not anyone with any mathematical/statistical awareness, anyway - and not for long even without it? The lesson learned from doing that would doubtless be pretty fast and very effective?
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