Prudent Risk Management Is The Only True Edge In TRADING
- Thread starter Buy1Sell2
- Start date
If aspiring traders could only trade this way
And I do not mean trying to get / persuade / force - the mkt to bend to you - that ain't happening - ever
Rather..., trade it..., when it meets / is on - your terms
Patience my dear Watson..., patience till the time right - then strike with all the vengeance.., and deliberation of a cold hearted hunter
or..., fight the damn thing..., then H123..., myself..., and our colleagues - will end up with your money
RN
I'm sorry to read those words J_S, but I expect that you will return. FWIW there are just two recent people on ET whose posts I would make a point of reading, you are one and I'm sure that you know who the other is.
MN, never ignore what others write, for, the next poster may be the smartest person in the world when it comes to trading, you just never know until he/she posts.
I must admit, I have been humbled this evening, and it has made me think serious about what I say and do. As I was watching the market close on my laptop, a programme came on tv about a man in England who got motor neuron disease, and wanted to end his life in Switzerland with assisted suicide. My focus quickly shifted to the important subject!
I consider myself to be a "tough" bastard when it comes to emotions, but I have to admit, this one got me. It is a programme well worth watching, as the last 6-8 months of his life are covered in great detail, ranging from his home relationships, to his close friends and college class. A very successful business man, with 4 languages, age 57, not much older than myself, faced with the dreaded motor neuron disease, and his daughter of 18 only after dying from bone cancer in the last year or so.
It is amazing how a simple thing can stop you dead in your tracks, and make you really think about the silly and stupid things that we concern ourselves with. We think we have problems, when in fact we are 10,000 times better off than most, especially those who find themselves in such situations.
From now on, I will think before I post, as you never know who you are talking to on this stupid internet!
I am never afraid to admit when I am wrong, especially when it is made as clear as day to me.
J_S
A good policy and one that I wish had come naturally to me. Like trading, it is a learned behavior.
Yes, and we are not as tough as we think we are, which I suppose can be a good thing.
Habits are things that we acquire, mostly bad ones, and it is very hard to change a habit, as it takes years to learn them, and you can not reverse overnight what has taken years, it is just not possible.
I have watched the market very closely that last few weeks, on mobile phone during the day, and on laptop during the evening. The reason is simple, if you are not in tune with what is happening, then it becomes very hard to gauge what might happen next. Even though anything can happen at any time, be in no doubt what so ever, that the moves are controlled, be it with auto trading, or big institutional orders, but controlled they are, by those who have plenty of money.
So you do not part with your hard earned cash, I believe the best way to beat the controllers at their own game, is to watch them closely, and get a feel for what they are now doing, as they can change tactics quickly enough, but not in an instant - that only happens when a black swan arrives, and control is gone out the window for a short period.
Prudent risk management is a fundamental requirement for trading, as risking too much will cause you to lose too much, and this will end your trading career very quickly.
Add selective trading to the equation, and now you are getting somewhere, as, you should only be entering and exiting when the controllers are doing so, as they move price due to their sheer size.
Therefore, your ultimate goal, should be to identify when and where the controllers are at work. I have found they operate slightly different, with the open of the US markets being the time for the institutional control, and the remainder of the day being the auto trader control.
Thus, I have found you require a different approach to trade both effectively, and by using the different approaches, you are less likely to get caught out and make a good deal more winning trades than losing ones.
If you try and use the same approach for both, I am convinced your odds are drastically reduced, and if you get the approaches mixed up, you are even reducing them more!
You know why price moves differently, so all you need do is identify the difference, and once identified, it should be easier trade the differences. If you find you are getting in, and your stop is being hit very frequently, then you must stop, as you are entering at the completely wrong time, or have your stop way too close, or even both to make it worse!
Timing is everything when trading, so it is a good idea to concentrate on your timing, and not on squiggly lines and indicators that have no real association with the way the controllers work, for, they are not going to make public what they are doing, as that would be silly of them, to say the least.
Just some of my thoughts of course!
J_S
I was watching that programme too, in my opinion its wrong that the man had to go to Switzerlandand and pay £7000 in order to carry out his wish. I count my blessings too that I'm fortunate to be in good health as there are some people that I meet who are not.
MN, maybe I am getting soft
, but I am going to try an experiment with 2 people, but I must first know if you are currently trading, and are able to trade the ES or NQ during the evening time, say anytime between 7pm to 9pm GMT - or you can trade spreadbet if you like for smaller risk, but the charts have to be accurate enough, and IG's charts are OK.
What I will try, if interested, is a way to trade with the auto traders, and you can then say what you think about what I have said, as in, yes, you think it works well and helps you have more winning trades than losers, or, it is just the same as any other way you have seen, no real difference.
Es or NQ for a valid reason, as that is where the auto traders mostly hang out!
The other trader is already picked, so let me know if you are interested in this little experiment with live trading?
It can be any day, no particular day of the week, and if only 1 day a week then that is fine, but, the more days tried the better, as you need to get enough trades done to get the win/loss ratio, as there will be both winners and losers.
The downside to this, if you use spreadbet is small, if outright futures then about $3K risk, and the upside, is, if it works you can keep doing it, and possibly make a lot of money, once you don't get carried away and start overtrading, as it is very easy to want more when you make some, but it must be proven first of course
SPY or QQQ can also be used for small risk, with small share size, but I will need to check the charts, as I have only been watching ES and NQ, but they should be in sync enough.
J_S
, but I am going to try an experiment with 2 people, but I must first know if you are currently trading, and are able to trade the ES or NQ during the evening time, say anytime between 7pm to 9pm GMT - or you can trade spreadbet if you like for smaller risk, but the charts have to be accurate enough, and IG's charts are OK.What I will try, if interested, is a way to trade with the auto traders, and you can then say what you think about what I have said, as in, yes, you think it works well and helps you have more winning trades than losers, or, it is just the same as any other way you have seen, no real difference.
Es or NQ for a valid reason, as that is where the auto traders mostly hang out!
The other trader is already picked, so let me know if you are interested in this little experiment with live trading?
It can be any day, no particular day of the week, and if only 1 day a week then that is fine, but, the more days tried the better, as you need to get enough trades done to get the win/loss ratio, as there will be both winners and losers.
The downside to this, if you use spreadbet is small, if outright futures then about $3K risk, and the upside, is, if it works you can keep doing it, and possibly make a lot of money, once you don't get carried away and start overtrading, as it is very easy to want more when you make some, but it must be proven first of course
SPY or QQQ can also be used for small risk, with small share size, but I will need to check the charts, as I have only been watching ES and NQ, but they should be in sync enough.
J_S
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Yes, I see the UK gov rejected the right in the UK, but that is life, no good complaining about it.
That was a very hard programme for his family to make, and I must say his wife was very brave throughout, and she spoke with common sense and truthful words. I did not think they would show him starting the drip, but they did, and I was delighted they showed it, as it brought the reality of it home.
As mentioned, we really have nothing to worry about, and we waste most of our life pondering over silly and ridiculous things that have no real bearing on life, but that is the society we find ourselves in, and it is so easy to get into the rut, as that is what everyone else is doing.
It takes a strong mind to say No, but learning to say No is probably one of the best things you can do for yourself in this life.
J_S
