Exactly, given enough time, a head and shoulders top can trade into a symmetrical triangle, or a bull pennant can trade into an ascending triangle and come back into the pattern and tag your stop before the pattern is resolved, which, by the way, could be in the other direction. Do you reverse? Oh sure, that could work but it probably won't. It'll break support, bounce back and tag your stop again before making a monster move, long after you've given up on the stock. What went wrong? You got wrecked by randomness. Patterns look great in hindsight.
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Market's gotta be rigged
- Thread starter Eliot Hosewater
- Start date
Gotta agree with you for the most part Nik. I started with $5000. However, there are definite advantages to having a larger account. When I started the market was behaving nicely so making money wasn't all that difficult. It would be brutal to trade <i>this</i> market with 5k. In this business size matters.
Quote from traderNik:
Hi Don
Interesting post. Given that there are a lot of traders here on ET that make a living trading and sweep their accounts so that they never have anything approaching $1MM in play at any time, I am a bit surprised by this comment.
In my opinion, the gurus and experts are here (and elsewhere) trying to convince the unwary that a) it's easy to take $20,000 and make living and, in a related note, b) the unwary can make a living by paying the guru a smaller amount of money for a 'system', or possibly for the privilege of entering a chat room where the guru makes a bunch of generalized comments about the markets and uses ridiculous stops to show that as long as you stay in a trade it will eventually go your way.
I have to say that although I have never found your posts here to be overly optimistic about BT or anywhere near as snake-oily as the usual crowd of hypesters, I disagree with the comment quoted above. I'm sure you're familiar with the Market Wizards books, in which many of the traders describe how they took tiny amounts of capital and created big accounts. Many of them blew out several times, of course.
Are we all Market Wizards? Of course not. But to say that it's 'nearly impossible' to take $20,000 and make a living (in a few years, let's say) is, to me, just not true. Unlikely, yes, but that has nothing to do with the 'opportunity potential' in the markets. It has everything to do with psychology. That's the reason people who start with $20,000 won't make it, and in my opinion it has zero to do with the fact that $20,000 isn't $1MM. If everyone had the right mindset, there would be no need to enter the markets with $1MM. I hope I am making myself clear here. It is not nearly impossible to make a living with a $20,000 account because it's not a $1MM account, it is nearly impossible because people don't have the right approach.
Is it easier to make money using BT strategies? Probably for some it is, for others it may not be.
You see what I do, I'm sure - newbs open an account with no plan, no research, no clue that the training period for this will be counted in years for many, and then they blow out.
Anyhow Don, not a flame at all, I have enjoyed reading your posts here over the years and you have given out a ton of good advice and hints for free. I just had to comment about this one.
Take care
Nik
It's a great market to trade if you're properly funded. Wide stops can easily get triggered with the large swings so a string of bad trades would tear you apart. One of the best ways of managing risk is trading small with a large account. If your overall assessment is correct but your timing is slightly off you can either absorb some drawdown or stop out and size up if the subsequent setup warrants such a move.
Quote from whitster:
this market imo is INCREDIBLY tradeable. stuff simply works.
it's logical.
the thing that has changed is that volatility has increased .
how does a trader intelligently respond to increased volatility - smaller size, wider stops, wider targets
Quote from ProfitTakgFool:
Gotta agree with you for the most part Nik. I started with $5000. However, there are definite advantages to having a larger account. When I started the market was behaving nicely so making money wasn't all that difficult. It would be brutal to trade <i>this</i> market with 5k. In this business size matters.
Yeah, the problem is with the 'making a living' part of it. There are definitely noobs who figure 5K to 20K in year 1, 20K to 80K in year two, 80 to 320 in year three and then all you have to worry about is getting your copy of The Robb Report on time.
I'm just dipping my foot in the serious intraday waters after years of longer term trading (booked off 3 months to watch every day). From what I can see, I'll need 12 months and maybe more before I can say I know what I'm doing (if not longer) and ramp up size. I have the capitalization to blow through a few $5k accounts trading 1 car or 100 lots or whatever.
At this point my gold trading is paying for my day trading.
: )
"It's a great market to trade if you're properly funded. Wide stops can easily get triggered with the large swings so a string of bad trades would tear you apart. One of the best ways of managing risk is trading small with a large account. If your overall assessment is correct but your timing is slightly off you can either absorb some drawdown or stop out and size up if the subsequent setup warrants such a move."
i simply disagree about the properly funded thing
this is just a VERY tradeable market. despite the volatility, i am actually surprised at how well support and resistance hold. have the patience to wait for PRIMO setups, and then take them.
the main difference in my trading this market - i generally don't trade and think in terms of so called "trend". however, in this market, i do and find "with the trend trades" offer very nice targets
i simply disagree about the properly funded thing
this is just a VERY tradeable market. despite the volatility, i am actually surprised at how well support and resistance hold. have the patience to wait for PRIMO setups, and then take them.
the main difference in my trading this market - i generally don't trade and think in terms of so called "trend". however, in this market, i do and find "with the trend trades" offer very nice targets
Look at all these comments about people requiring massive capital to trade futures successfully.
This is solely the excuse of those failing to trade price action correctly and requiring the use of averaging down techniques aka adding to losers because they fail to buy the absolute low or fail to short the absolute high. Poor guys, they never heard of the term re-entry or/and small losses.
Come on, give me a break.
It's a trend, lack of price action reading skills lead to "fancy" money management or the illusion of security of over capitalization.
Anek
This is solely the excuse of those failing to trade price action correctly and requiring the use of averaging down techniques aka adding to losers because they fail to buy the absolute low or fail to short the absolute high. Poor guys, they never heard of the term re-entry or/and small losses.
Come on, give me a break.
It's a trend, lack of price action reading skills lead to "fancy" money management or the illusion of security of over capitalization.
Anek
Quote from Anekdoten:
.... lack of price action reading skills lead to "fancy" money management or the illusion of security of over capitalization.
Anek
very astute comment A.
The name of the game is efficient trading.
ie small balances and low fees supporting large frequent intraday trades.
regards
f9
Well, just because you don't know what's going on does not mean it cannot possibly be rigged. Right? Hehe. I am not trying to defend whoever. I was just reacting to the first sentence [which was of course not directed at me personally] the like of which I see often.Quote from The Swordsman:
Must be rigged if you dont know whats going on right? Please....dont flatter yourself.
Actually, the key is not so much whether it is rigged or not, but more importantly whether one understands how things work.
Even in a rigged situation. If you understand how things are rigged, then that understanding may well give you an advantage, possibly more so than a random, unpredictable situation.
That's not to say that rigging is right, fair, moral or ethical. It is not!
Nor does it mean that when you cannot change a rigged situation that frauds create and which you hate, yet you take advantage of your understanding of they rigged it even as you hate the rigging, you're necessarily acting unfairly, immorally or unethically.
Regards.