Not Cashing In On Pay Day

[ryanmitcho]

Quote from daniel_m:



actually, that statement right there is complete BS.

it's true that, if you daytrade, you do attempt to make that particular day a winner -- ie, you are obviously not attempting to lose money on any one day

but

if you are gonna tailor the way you trade just to make it easier for you to be able to make some money every day, i regard that as a complete loser's game.

and the reason that is that, over the long run, by being so insistent on making it every day, you won't make as much as if you were prepared to make less, or, (gulp) even lose, on the worse days. (and i'm not talking about psychology here -- i'm referring to the long run expectancy of the methods)

sorry, bud, but i just don't see anything ok about losing money ever. i am a scalper and i am very risk averse- i look for the same consistent set-ups everyday and look to take 20-30 cents profit on my trades. while it is true that sometimes i miss out on capturing larger moves, i am able to be net positive 17-18 days out of 20 a month on average. capturing larger moves and riding trends is great when you can recognize and ride them as I sometimes do, but it usually requires a higher pain threshold- i.e. risk $1 to make $2- when you trade large size like i do, losing $1 on a trade is unacceptable. I prefer to instead wait for a high probability set-up, enter with size and trade it aggressively. Its not glamorous, but with my system, i am on track to net over $250K this year, and thats a damn good living in my book. I am building my account and as it grows, I have been taking trades with a longer time frame, but with smaller size than my scalp trades and it has been fairly successful. Its just that i hate holding large overnights because of the haircut charge and event risk- i.e. one of your stocks has bad news and you get blasted for 6 dollars on size.

so, to each his own, whatever works for you, thats fine.
obviously we differ in our pain threshold and trading style and i understand your point that you should not enter each day with a set profit objective- you take what the market and your system gives you everyday- some days are great and some may be just mediocre, but i would sure rather have a day that i only made $300 than a day where I lose $3000 because I have the mentality of "oh, thats ok, i just lost a lot of money- but it is to be expected and i will still win in the long run." drawdowns are a part of any strategy and are not fun at all. however, i feel that by focusing on being disciplined, focused and selective in my trading, following my strategy explicitly and being green everyday, I do not set myself up to destroy my account by becoming complacent about losing money, which i might add is very easy to do if you are in a slump. and yes, my strategy is tailored to make money every single day and it sure as hell isn't a "losers game" as you so eloquently put it.

if you wouldn't mind sharing, daniel_m, what is your style of trading?- i presume that you are a swing trader.

good trading everyone,
ryan

 

[Brandonf]

Quote from daniel_m:



actually, that statement right there is complete BS.

it's true that, if you daytrade, you do attempt to make that particular day a winner -- ie, you are obviously not attempting to lose money on any one day

but

if you are gonna tailor the way you trade just to make it easier for you to be able to make some money every day, i regard that as a complete loser's game.

and the reason that is that, over the long run, by being so insistent on making it every day, you won't make as much as if you were prepared to make less, or, (gulp) even lose, on the worse days. (and i'm not talking about psychology here -- i'm referring to the long run expectancy of the methods)

That might be the first time I have found that myself thinking I agree with everything you have said. Trying to adjust yourself to the market every single day is a lot like trying to make the entire world happy: You end up miserable and you probably will be pissing most people off anyway. The best traders have a few basic things they do and stick with that.

Brandon