How often you're 80%-100% sure ?

[Nobert]

So, i am in this trade right now, and it's like,

never in my life, i was so sure about anything, as i am about this trade.


As ridiculous and stupid it may sound.


It was a start of a new book,
new relationship,
new job,
new portrait,
new goal to achieve,
new skill-set to learn,

or any of those, still, never had such a clear end result in my mind, as this trade. (Swing - 2weeks - 2 months)


The question is :


How often in your trading/investing career , you were bloody hell sure about the trade and it didn't worked out ?

Would yo go in with 50% of the capital, or, maybe, even all in & single position ?

Disclaimer , disastrous unknown variables :

• Company is cooking the books (Enron)
  
• Crash happens (1987)
• Having a blindspot , judgement clouded by incorrect data, from similar trades in the recent past

 

[nooby_mcnoob]

I pretty much always assume I'm going to be wrong, so I risk accordingly.

 

[tiddlywinks]

I am 100% sure that the market is 100% correct, WITH NO EXCEPTIONS.

 

[Scataphagos]

80-100% sure? Ridiculous notion. No way to measure such.

If/when you feel motivated to "go big", use a reasonable/tight stop... ALWAYS!!

If the conditions are such that you can't effectively control the risk with a reasonable stop (like you want to make a BIG play on a thinly traded issue... or any other consideration which hinders risk control), then you probably should not make the play.

It's not uncommon for someone to be "cock sure" about a trade on a new idea or thinly traded stock... and are willing to go big and accumulate a large position. What happens when that doesn't work out? They've "become the market" themselves and are at the mercy of other sellers. IOW... you've become stuck, screwed, and you can't get away from the position. Nobody in his right mind would take such a risk.

 

[Specterx]

Being sure about a trade is usually a huge warning sign - doubly so if you are using only pricing data or technicals vs. some kind of fundamental or macro analysis. If you are 100% sure then lots of other people are 100% sure too, so why isn't it already priced in?

It's possible to have high conviction for trades with a macro/funda basis, but here the problem is translating the thesis into a specific prediction wrt price moves and timing - and in doing so, you run into the same problem as above. Sometimes you can get a fat-pitch layup on these kinds of trades where all the stars and planets align but it's very rare, couple times a year at most.

In my experience, the market just does not move in a way that makes high conviction/accuracy a reasonable goal. Much better to focus on taking a large number of bets with microscopic risk, offering rare large payoffs and occasional gigantic ones.

 

[Peter8519]

Nothing is for sure in the market. Hedge our risk and diversify.

 

[Handle123]

I think in terms 100% it is a good signal. Not all signals can be taken cause previous price action shows support/resistance so first signal is to be negated.
Some methods have higher percentages cause they target much smaller targets, other systems only have 5-15% chance of success cause they reach for much larger profits. Always a trade off.

 

[Turveyd]

100% sure it'll work out in my favour every time I trade, ofcourse only 50% area profit so as above kinda pointless.

 

[danielc1]

You miss another possible option in your poll:
0% you are never sure about a single trade and you win big due to large samples of trades and having a skew risk/reward system like 1 to 5 or much bigger.

 

[R123]

80-100% sure it will work out on entry, otherwise would not take the trade. Once I am in trade I am 100% sure if my stop is hit, I screwed up, otherwise I won't be trading in the future.