I think I figured out why trading can never work for so many people
- Thread starter ChkitOut
- Start date
i look at setups like these and to my detriment the next thing i do is try to perfect it, ill say, ok.. looks good, now lets try to weed out all the losers by looking for all sorts of reasons why it may fail and the good ones succeed.
well, after a while i need to tell myself to just shut up and take them with almost reckless abandon.
but i dont know really either way.. as i dont have any statistical data to know for sure.
This is where you really have to do your homework ... buy quality historical data for your markets of interest, and gather that key statistical data.
This is where so many people fail ... they won't pay for quality historical data (and enough of it), and even if they did, they won't put in the hours to gather the statistical data needed to evaluate any particular trading idea.
And once you are solidly on this path, you still have to stumble upon valid trading ideas, which is a lot less easy than it seems.
Once you've determined stats in your favor, you do just have to shut up your brain and trade the setups with reckless abandon. The odds in your favor will take care of the profits.
I mindlessly placed orders based on my setups and every now and then after my position's on I see something that makes me go "Doh!", and I take the loss and move on. I could sit around and try to filter for everything in a quest for "perfection", but the end result of that is usually lower odds.
I'll post this again and again, says it all regarding profitable trading:
http://www.cornixtrading.com/2012/07/rats-vs-yale-students-randomness-psychology/
Assuming even R:R, a 60% win rate allows you to trade for a living.
A 52% win rate allows you to gradually transfer your entire account to your broker.
BTW, here's another gem from Cornix (bold emphasis is mine):
"Moral of the story: traders usually have rules for a reason. They develop rules when away from the markets, in a calm state of mind. We should watch ourselves not to be fooled by randomness and caught in second-guessing rules just because single trades do this or that. Thatâs market playing the mind games with us, because we lose the sense of a border between real-time and hindsight, when actively trade."
I mindlessly placed orders based on my setups and every now and then after my position's on I see something that makes me go "Doh!", and I take the loss and move on. I could sit around and try to filter for everything in a quest for "perfection", but the end result of that is usually lower odds.
I'll post this again and again, says it all regarding profitable trading:
http://www.cornixtrading.com/2012/07/rats-vs-yale-students-randomness-psychology/
Assuming even R:R, a 60% win rate allows you to trade for a living.
A 52% win rate allows you to gradually transfer your entire account to your broker.
BTW, here's another gem from Cornix (bold emphasis is mine):
"Moral of the story: traders usually have rules for a reason. They develop rules when away from the markets, in a calm state of mind. We should watch ourselves not to be fooled by randomness and caught in second-guessing rules just because single trades do this or that. Thatâs market playing the mind games with us, because we lose the sense of a border between real-time and hindsight, when actively trade."
you know whats actually really interesting. after a while of trading one of my BIGGEST gripes has been.. when my setup looks really good, the profit never comes easy, it either grinds in my direction or it fails.
i'll look back at the day or week and ill say.. i cant believe the ones that "looked" like dog pooh just moved nicely for a profit and i decided to pass on them.
its definitely a mind bender.
I had around a 50% win rate with around a 2-to-1 RR for all of my trades last year..and believe me when I tell you that I printed money last year.
in fact, I'll go so far as to say that if you expect much more than 50% winners long-term then you're not being realistic....operative word is long-term
edit: I'm doing better than that this year but I expect it to drop back down to around 50%
You skipped the preface to what I said, "assuming even R:R".
I watched a guy print money for an entire year with a 48% win rate and a 2:1 R:R.
But if you use an even R:R (and many scalpers do), you need a higher win rate to cover slippage and commish.
LMAO! Same here...I often skip valid setups because they look like dog pooh or the overall price environment "feels" poopy. They invariably lead to quick easy money without me!
I have a question on my mind for those such as Woodyk, NoDoji
and other day traders.
If you have identified a higher or highest expectancy setup
that happens at lower frequency why not watch multiple markets
CL,ES,EUR,JPY,ZN simultaneously ?
I understand that that would be a lot easier to do with one hour bars as opposed to one minute
bars but even so... if the
setups are mechanical and qualatative opinion should not be injected why is that most traders,
( seemingly to me based on ET threads), watch only one market?
Mind you, I cant/dont do this but I wonder why others do not.
The CL and ES specific threads stand out as example of this.
Thanks.
and other day traders.
If you have identified a higher or highest expectancy setup
that happens at lower frequency why not watch multiple markets
CL,ES,EUR,JPY,ZN simultaneously ?
I understand that that would be a lot easier to do with one hour bars as opposed to one minute
bars but even so... if the
setups are mechanical and qualatative opinion should not be injected why is that most traders,
( seemingly to me based on ET threads), watch only one market?
Mind you, I cant/dont do this but I wonder why others do not.
The CL and ES specific threads stand out as example of this.
Thanks.
My most relaxed trading is when I trade one instrument. I'm scalping oil and it usually provides so many opportunities a day I just get into the flow of it. All my setups are high quality setups, some are just a little better than others.
I always keep an eye on the ES though and sometimes trade it as well. Last week there was excellent volatility in the ES and setups appeared that were so textbook I felt like a sucker for trading them. Well, they played out just like in the trading books. So much for "classic TA doesn't work", ha!
Z1 trades multiple markets. I have no idea how he trades all the stuff he trades because we've never spoken with each other because he can't take five minutes to say "Hi" because he's too busy trading too many things
