How to avoid being one of the 90% of small traders lose
- Thread starter emg
- Start date
- Status
ding ding ding. we have a winner! The prob with ET members are, majority of them are successful traders and yet they will not post trade ahead of time. This is simple logic:
If they keep claiming they are successful traders, i must remind the public more than 90% of small traders lose. They just lose.
Must balance.
If 90% of small traders lose, I must be a little better than average. I only had to drain my account 6 times (not 10) to learn the lessons needed to stay afloat and grow.
If you want to be one of the 10%, become a complete trader. Not just a good system, but good risk management, emotion management, etc.
There are only three ways the market moves; Up, Down, Sideways. If I have no system at all and just pick one at random I have a 1/3 chance of winning. So, in order to grow and not get washed out with this plan, I need to ensure that my losses (including trading fees) are less than 1/3 the size of my wins. It's not about being right. It's about winning more (not more often, just more) than you lose. Successful traders can tell you to the penny how much their losing trade will lose before they place the trade. They know because that's part of their system.
Find a system that has max loss parameters built in and you'll have a much better chance.
If 9 of 10 small traders lose, it's because 9 of 10 small traders think trading is about being right.
If you want to be one of the 10%, become a complete trader. Not just a good system, but good risk management, emotion management, etc.
There are only three ways the market moves; Up, Down, Sideways. If I have no system at all and just pick one at random I have a 1/3 chance of winning. So, in order to grow and not get washed out with this plan, I need to ensure that my losses (including trading fees) are less than 1/3 the size of my wins. It's not about being right. It's about winning more (not more often, just more) than you lose. Successful traders can tell you to the penny how much their losing trade will lose before they place the trade. They know because that's part of their system.
Find a system that has max loss parameters built in and you'll have a much better chance.
If 9 of 10 small traders lose, it's because 9 of 10 small traders think trading is about being right.
Trade Like A Hedge Fund is one of the only "how to" books worth reading with actionable tactics that really work. Several of those ideas have been very lucrative to me.
surf
For people that do this for a living, futures day traders particularly, the potential of that happening is very very slight if they prepare themselves for the new reports that take place throughout the day.
Futures swing and position traders are more effected by gaps but there again there are ways to protect yourself holding overnight.
Stocks on the other hand, you are absolutely correct. This is one reason that the futures are safer than stocks "if" you do your homework.
+1 Wonder if we're related? Separated at birth, perhaps :eek:
LOTS of time watching. LOTS of analysis. Most of all, LOTS of TIME doing this. As I have told a few of my friends: "How many times per year do you have to trade quarterly earnings reporting cycles?". "How many times per year do you have to play year end stuff?"
Multiple the above by the various market conditions one can be in(trending up, trending down, treading water, blow UP, blow DOWN, etc) and when you add it all up, it takes a long time to feed the ol' database between the ears and get a handle on things. Throw in actual implementation of trading all of this and it's easy to see why so many fail; even the ones who hit a streak early on and then flame out when conditions change.
This sh!t ain't random. Therefore, by definition, if it ain't random, there must be occasional patterns buried in it somewhere...
- Status