How is this for a strategy since 95% of tradres loose
- Thread starter millydog
- Start date
The house always has the edge with random gambling so you still loose taking the opposite side. In trading you might possibly have an edge, but to think a newbie has an edge and just happens to be taking the wrong side of each trade is optimistic at best. Newbies with no edge are random and because of commissions, "the house" always wins.
by doing so you are basically admitting that you are a bad trader.if the only way you could conceivably make money is to attempt to take the opposite side of a losing traders position then you will get killed in the long run. also,you never know at which point the trade will blow up on the other guy so by you taking the opposite side of his trade and you are short,what happens if it goes his way?perhaps his problem is he does'nt know when to take a profit..are you going to ride it at?on paper it sounds easy but putting your money into it where true emotions are involved is another story/
This suggests that you used a let your losers run, take your profits quickly strategy ... assuming that your customers were using stops and stopping out. Was that the case?
This would only work if you both opened AND closed your positions at the same time as the other trader.
But the pyschological difference between holding a losing position and holding an identical in all (except direction) winning position means that you will probably never treat the 2 the same. With the elation of a highly profitable position how could you put yourself in the shoes of it being a losing position to see when you would have closed it.
Therefore the argument that you should trade opposite never holds.
I was only trying make the distinction between newbies that loose because their actions are random vs. those that loose because their actions are correct except they are on the wrong side of too many otherwise winning trades. Following random newbies you will loose by reversing what they do and the others you will win. I'm not saying it wouldn't work, just that it seems unlikely.
I can see how this might work in a professional trading environment where a newbie has it half-right. Watching a newbie watching the market might give you insight into what that 95% is thinking. The newbies I know are far too random for anything like this to work.