If the odds are 50/50 why do most people lose ?

Once I realized there are bad, marginal, good and great set ups my trading took off.

Avoid the bad and marginal, play the good and hammer the piss out of the great ones. I can make 5x more on a great set up than I'll lose on 5 good ones that don't work because of the increased size. I just wish I could find more great ones.
 
Quote from Redneck trader:

Neveral0ne

You can take the next step in one of two ways

Go External – and look for better setups, better money management, some sort of fix all answer… which ultimately you’ll find doesn’t work

or

Go Internal (where the real answer lies) – and basically figure out how to rewire yourself… You need to become more rigid/ disciplined is some aspects, more open and flexible in others

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Mr. Redneck,

I respectfully disagree with your first point.

For me, personally, turning the profitably corner was all about keying in on set-ups where I could risk a little to make a little more. I look for trades where a relatively small move against me will invalidate my reason for being in a trade, this leading to much smaller losses whilst my winners ran a bit further than I let them run before. Also, this approach led me to an overall higher win%. This was acheived by, wait for it....countless hours of studying charts bar by bar, SUPRISE!!!! Turning that corner is what allowed me to really focus on you second point. Coincidentally, this also led me to take way fewer trades than I had been taking before.

Your second point, well thats just an undeniable truth of this wacky road we choose to walk down.

Just my 2 shares.
 
Quote from neveral0ne:

1.Lets face it, you are either right or wrong, things can go in your favor or against, only 2 directions where the market can go, but why is it that most people lose far more than 50% of the time? More like 85% positions are losers 15% are winners....



2. I checked back on my performance for the past 1 month (ninja trader account thing) and for 1 month I have 57% winners, 43% winners yet I am still negative overall in performance (inc. commissions)
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Oh gosh, you are such a rookie...

It depends on the odds and edge. Winning percentage alone means nothing.
 
Quote from spd:

Mr. Redneck,

I respectfully disagree with your first point.

For me, personally, turning the profitably corner was all about keying in on set-ups where I could risk a little to make a little more. I look for trades where a relatively small move against me will invalidate my reason for being in a trade, this leading to much smaller losses whilst my winners ran a bit further than I let them run before. Also, this approach led me to an overall higher win%. This was acheived by, wait for it....countless hours of studying charts bar by bar, SUPRISE!!!! Turning that corner is what allowed me to really focus on you second point. Coincidentally, this also led me to take way fewer trades than I had been taking before.

Your second point, well thats just an undeniable truth of this wacky road we choose to walk down.

Just my 2 shares.
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Spd

Just plain ole RN please


As far as disagreeing with me – Sweeeet….(and I really mean that because possibly I’ll learn something here)


Allow me to state my case then tell me where I’m wrong/ you disagree

-----------------------------------------------------------------------------------------------------------------------

First my assumptions upon which I based my response (and Neveral0ne will need to validate they are correct – otherwise my assumptions and response are all wet)



I assume Neveral0ne has recently had an epiphany while simultaneously hitting a wall


The epiphany

He is seeing and realizing the act of trading ain’t all that hard - but it is damn taxing on the psyche.

Also he is / or has come to understand (rationalize) that at worst a person should have a 50/50 shot at making money, so then why the heck ain’t he…


The wall

He’s hit a wall (based on reading his other posts) where his current set up / trading approach works for the most part… meaning he has more winning trades than losing… Unfortunately however he is bleeding money.

Hence this thread and question

Now right or wrong this is pretty much the assumptions I based my answer on

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As for my answer


I believe there are two facets that must work in unison and be at peace for a trader to be successful

Framework - Our approach, methodology, way we trade, timeframe, setups, money management, risk management, etc

Our Self –The way we believe, think, and act – must be that of a trader

The first is important no doubt… The second is absolutely vital – imo of course

Bottom line I think Neveral0ne has the first – for the most part…, but is significantly lacking the second.

So, again imo, if he were to focus on the first (better framework) – I believe it would be in vain


Hence my response

--------------------------------------------------------------------------------------------------------------------------------


Now I fully acknowledge everyone is different, I also acknowledge that depending on a person’s current progression toward becoming a trader – focusing on framework might be more appropriate...

But they will still have to deal with the self eventually – no way round it… And in my book self is the most important area to improve…


---------------------------------------------------------------------------------------------------------------------------
In Neveral0ne’s case I do not think framework is lacking…, I believe internal work is…


Btw imo – A trader can trade a crappy approach and make money…, a trader who isn’t right internally can take a superior approach and lose their butt



He’ll need to confirm or refute whether my assumptions are even remotely close to reality for him

If I am wrong about his situation – then I am wrong..



Your thoughts… :)

RN
 
From reading ET it is plain to see that a great deal are making life very very hard for themselves, far harder than it need be. They are stacking the deck to make it impossible for them to come out ahead in the long run.

Another observation from ET, most losing traders don't accept a wheel when it is given to them, they insist on re-inventing it for themselves.
 
Quote from DrEvil:

From reading ET it is plain to see that a great deal are making life very very hard for themselves, far harder than it need be. They are stacking the deck to make it impossible for them to come out ahead in the long run.
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Well Dr.E

Is this not the way of most (the herd) – lucky for us no....



Another observation from ET, most losing traders don't accept a wheel when it is given to them, they insist on re-inventing it for themselves.
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And as to this – just imagine how far we would have progressed as a species by now – if not for this Achilles heel



The human condition - gotta love it..., or at least profit from it :)


RN
 
"The epiphany
He is seeing and realizing the act of trading ain’t all that hard - but it is damn taxing on the psyche.
Also he is / or has come to understand (rationalize) that at worst a person should have a 50/50 shot at making money, so then why the heck ain’t he… "


I realized that I am waaay more profitable on Sim trading than real money (which is very misleading), therefore from now on all my trades are live because I learn alot more. I realize trading is harder than sim because I havent had as much success real trading as my sim account.

---------------------------------------------------------------------------------------------------------------------------------



The wall

He’s hit a wall (based on reading his other posts) where his current set up / trading approach works for the most part… meaning he has more winning trades than losing… Unfortunately however he is bleeding money.

My wall is psychological, fear of losing, accepting losses that grow - what gets me frustrated is that many times I get into a position, I turn a winner into a loser for holding on too long...or sometimes not letting a winner run long enough and take small % of maximum profits...this needs alot more work entries/exits to make me be more..efficient.

---------------------------------------------------------------------------------------------------------------------------------

Framework - Our approach, methodology, way we trade, timeframe, setups, money management, risk management, etc



Its getting alot better as times goes on, I have been sitting full time in front of charts now since october, and I have learned and been able to absorb alot, and analyze it well. Ive just discovered a nice advantage in using diff time frames how to useit effectively, its still a while to go were I want to be, money management could use more work also.

---------------------------------------------------------------------------------------------------------------------------------

Our Self –The way we believe, think, and act – must be that of a trader

The first is important no doubt… The second is absolutely vital – imo of course

Bottom line I think Neveral0ne has the first – for the most part…, but is significantly lacking the second.



Yes alot of times emotions/psychology/fear are still able to get the best of me, many times watching PNL became my judgement for a decision when to take profits ( only to see it go further without me) or absorb a loss ( which later turned around in my favor if I only held on to it) . Although my account is fairly small, I cant afford too big off a losses so I try to main tain some sort of discipline, and risk management to not blow up.


--------------------------------------------------------------------------------------------------------------------------------


But they will still have to deal with the self eventually – no way round it… And in my book self is the most important area to improve…

i Totally agree as I am trading and my days go on, my understanding, analysis , triggers, setups, comprehension of whats going on are improviing, but thosea re the typical difficulties....what I need to master is myself ... also sometimes I tend to "not trust" myself , my trendlines, my comprehension..and I tend to over - analyze which leads me into confusion, disbelief, indecisiveness.


---------------------------------------------------------------------------------------------------------------------------


Thank you for everyones input. =)
 
Quote from Redneck trader:

Well Dr.E

Is this not the way of most (the herd) – lucky for us no....






And as to this – just imagine how far we would have progressed as a species by now – if not for this Achilles heel



The human condition - gotta love it..., or at least profit from it :)


RN
More...

I'm with you there Pal.
 
Most has been said, but here are some additional thoughts.

1. Trading without a clearly defined written plan
2. Not defining the risks BEFORE placing trades
3. Not being humble enough to admit when you're wrong and kill the losing trade early
 
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