Prudent Risk Management Is The Only True Edge In TRADING

Is Prudent Risk Management the only true edge in trading?

  • Yes

    Votes: 53 29.9%

  • No

    Votes: 124 70.1%
  • Total voters
    177
loyek590 said:
I think what OP is saying is that there is very little proof that most traders can guess any better than 50/50 what is going to happen. So give us all a random entry and let's see how we handle it. After you put it on you only have a few choices

1. close it out and get flat

2. close it out and take the other side

3. add to it

4. subtract from it

or a combination of the above

did I leave out anything?

oh yeah, 5. Do nothing
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6. Avoid random entries. Learn how to enter with trends, vastly increasing your chances for success.
 
kut2k2 said:
6. Avoid random entries. Learn how to enter with trends, vastly increasing your chances for success.
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it's one thing to guess right on the trend, it's another thing to manage a trade where you just accidently got on the right side of a trend.
 
loyek590 said:
it's one thing to guess right on the trend, it's another thing to manage a trade where you just accidently got on the right side of a trend.
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What's with the guessing and accident stuff? That's not what the OP said btw. What he said was being wrong on the entrance doesn't matter, whether it is done randomly or systematically.

This is utter nonsense of course. Entrances matter. Even if you can salvage a small loss from "guessing wrong", how can that possibly be as good as "guessing right" and riding that trade to a good profit?

Avoid random entrances. Figure it out (trading with the trend). It's well worth the effort.
 
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It's both. You still need some sort of timing edge in buying and profit taking to go along with good money management. If you only have one, you will be 98% likely to lose.
 
Buy1Sell2 said:
All traders guess right. All traders guess wrong. It's what you do with those guesses that makes a winning trader or a losing trader.
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So what you're saying is that exit strategy(s) matter. Duh! Everybody knows that.

My issue with you that you,re also saying entry strategy does NOT matter. I call bullshit on that.

What you're saying is that, so long as they both use good exit strategy, there's no difference between a random guesser and somebody with an 80% probability of entering trades correctly. What is this idea based on? Certainly not actual evidence.

I would bet the 80% entry guy using random exits will do at least as good as the random entry guy using great exit strategy.
 
would you rather give your money to a guy who claims he is a really good guesser when it comes to identifying the trend, or a guy who is very good at setting stops?

either way, they are both just guessing, except the stop setter has something very concrete to work with, like your account balance. The entry guesser has nothing but dreams and theories and past data to bet on.

a good stop setter has very good entries
 
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for those of you playing at home that means if you enter randomly with a risk reward of 1:infinity, the only thing you have control over is the stop. So it all comes down to, "Are you a good stop setter?"
 
loyek590 said:
for those of you playing at home that means if you enter randomly with a risk reward of 1:infinity, the only thing you have control over is the stop. So it all comes down to, "Are you a good stop setter?"
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CORRECT
 
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