It most certainly does. You let trades run to maturity, you don't take profits early. If your plan is take 4 points, then don't get out with 3. Most folks rush to take profits, they don't rush to take losses. It's quite simple and I suspect that is why most traders never embrace it. --"My goodness, it can't be that simple--" ----You'll notice that the second posting on page 1 says exactly that from a trader but that it takes 10 yrs to figure that out.
Prudent Risk Management Is The Only True Edge In TRADING
- Thread starter Buy1Sell2
- Start date
Taking your example as reference. How would you know if prices will move to your 4 point profit target? What if it never reaches the target? Or lets say you place a 2 point stop loss. How would you know prices will hit your profit target BEFORE hitting your stop loss? And how would you know with this profit - loss ratio that you will be profitable if your frequency of wins is unknown?
That is what we have been trying to tell you. You can set a profit/loss target but you cannot control where will prices head to first. Or how frequently you take profits or loss.
Dude seriously. Don't use slogans with no clear definitons. What is maturity? For you it is 10 points for me it is 50 points. And what if the price turns back just BEFORE maturity and the position goes into the red? This thread should be nominated for the Bullshit Notions of the Year Award...
Prudent, maturity, etc. are all bullshit undefined words.....
Maturity is different for everybody. This is what PRM is about--managing trades according to your risk level. I cannot tell you what maturity is for you. It's your appetite for risk that determines that. This is why most traders view maturity as taking profits as soon as possible or setting a breakeven stop when the BE stop is still within the noise. The reason most folks have a tighter maturity level is because they have wildly overextended themselves and need to take profits right away. Thus they never reap full benefit from riding a trade. The only thing that a trader can control is their risk. There is nothing else in the business.
Exactly so stop saying: the key to profitable trading is not to lose money -- kind of shit.
You should be a politican, you talk and say nothing meaningful...
Nobody, and I mean literally not a soul agreed with you in the last 3 years on this subject, so you are either a misunderstood genius, or...
Mods close this inanity already.
32 out of 120 people have agreed with me. This is an important topic and should be the focal point of all trader's plans. If you want me to tell you exactly how many points you should aim for, or what setup you should use, you'll not find it here as I am not offering that. I can tell you this though---traders who employ PRM have the edge in this business. --Most traders fail and it is because they don't employ PRM.
Sorry but, Peks & BSs? You guys are arguing two sides of the same coin.
We've all been around long enough to know that a bad trader can take a great trade and lose money with it. And there *is* an entire industry on offering entries to those who can't work up their own, yet think that Great Entries is where the thinking work stops. What is not (generally) offered is risk/position/portfolio management -- it is an absolute HOLE. And it's all to the detriment to the general retail trader, who won't learn that terrible lesson until they've reached the bottom of their capital. And I *believe* that is B1S2's point. And I *believe* that Pekelo knows this to be intrinsically true, as well.
I've not followed this thread, but in 'just passin' through', it seems you're arguing on how many trades can dance on the head of a pin, and that you're willfully ignoring THE HUGE commonality(s) of your experience (and thereby, *wisdom*).....
"Bad trades will likely suffer.
Good trades are no guarantee.
The only edge we have is in managing our shit from stem to stern."
To cut that down to entries-only or post-trade-only management is to ruin a perfectly good boat.
Hrrmph.
(Peace out.
)
We've all been around long enough to know that a bad trader can take a great trade and lose money with it. And there *is* an entire industry on offering entries to those who can't work up their own, yet think that Great Entries is where the thinking work stops. What is not (generally) offered is risk/position/portfolio management -- it is an absolute HOLE. And it's all to the detriment to the general retail trader, who won't learn that terrible lesson until they've reached the bottom of their capital. And I *believe* that is B1S2's point. And I *believe* that Pekelo knows this to be intrinsically true, as well.
I've not followed this thread, but in 'just passin' through', it seems you're arguing on how many trades can dance on the head of a pin, and that you're willfully ignoring THE HUGE commonality(s) of your experience (and thereby, *wisdom*).....
"Bad trades will likely suffer.
Good trades are no guarantee.
The only edge we have is in managing our shit from stem to stern."
To cut that down to entries-only or post-trade-only management is to ruin a perfectly good boat.
Hrrmph.
(Peace out.
)
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What is considered a good entry? When I make "good entries", my risk management becomes extremely simple, almost to the point of not really having much of any "management" at all. I do see an edge in "management not necessary at this time" because of a calculated and precise entry! My edge is mostly in the entry. Why? The EXIT becomes more certain when I make very calculated entries! I would be lost and would feel like I'm on the roller coaster of randomness if I didn't have my precise entries.
Saying that everyone finds good entries is crazy! How often traders "find good entries" should be the question. If everyone is doing this so well...why all the "management"? We should do a poll asking if everyone thinks they find good entries often enough?
I'll ask again...do you enter randomly? Since you believe "everyone finds good entries"...do you believe traders that enter RANDOMLY find good entries too? Please answer these two questions! P.S. I agree traders screw up trades all the time and have to overcome this as much as possible, but that doesn't guarantee success either!
Sorry but, Peks & BSs? You guys are arguing two sides of the same coin.
We've all been around long enough to know that a bad trader can take a great trade and lose money with it. And there *is* an entire industry on offering entries to those who can't work up their own, yet think that Great Entries is where the thinking work stops. What is not (generally) offered is risk/position/portfolio management -- it is an absolute HOLE. And it's all to the detriment to the general retail trader, who won't learn that terrible lesson until they've reached the bottom of their capital. And I *believe* that is B1S2's point. And I *believe* that Pekelo knows this to be intrinsically true, as well.
I've not followed this thread, but in 'just passin' through', it seems you're arguing on how many trades can dance on the head of a pin, and that you're willfully ignoring THE HUGE commonality(s) of your experience (and thereby, *wisdom*).....
"Bad trades will likely suffer.
Good trades are no guarantee.
The only edge we have is in managing our shit from stem to stern."
To cut that down to entries-only or post-trade-only management is to ruin a perfectly good boat.
Hrrmph.
(Peace out.
Bruh, nobody said PRM is not important for traders. What we are arguing is that PRM is NOT an edge. Your actual trading strategy/skill is. PRM is simply "sizing your trades" such that the volatility of your performance is within tolerable range.
He doesn't have a point: (zero, nada, zilch)
1. PRM is not a strategy.
2. Even when using PRM with a losing strategy you WILL lose your account, it will just take LONGER.
End of story... And anybody who is using arguments like "maturity of the trade" is heavily bullshitting you.