Question to trader who really trade?

W

WDGann

I was chatting with a friend a while ago and we got into a debate why traders lose and why traders win.

We agreed that it's not about the edge the person has. I trade Gann with a system signal and he trades using LBR's Street Smart's material. Some people try to use Gann but they can't and some claim LBR's material is not viable.

We had came to a point that:

1. It doesn't matter what kind of edge or technique you use. It's a matter of getting better at using something. For me it's Gann, for him it's other technical analysis. We have a deeper, realistic, and practical understand of what and how we use it.

2. Knowledge and Experience leads to Discipline. Discipline leads to Confidence. Confidence leads to Persistance. Persistance leads to Comfortability. When I mean comfortability, I don't mean just slacking and easy. We are used to keeping are cool and we just do it without much(not none) strain.

3. There's a groove. Groove... Mojo... it's an attitude or a mental state of flow that you get when you are on the roll. It's the time when every trade turns out well. We try to intentionally bring our minds to that state. Some of the ways we do that is listening to music, stretching, reading particular books, meditation, talking to other traders with the groove, etc. etc..

4. Doing homework. After the market closes we do homeworks. Actually when the market starts it doesn't really matter whether I did or not (like today... TS broke down). Still, there is a peace of mind I have when I am more prepared. The fact that I'm doing the homework is more important than the information derived from it.

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Well, there are some of the things we came up with. I was wondering if there are other psychological points that separate us from profitable and not. It's a very thin line between it but it'll be nice to hear from other profitable traders about this matter and some extra things you do intentionally bring you there.

I think it will help aspiring traders and also profitable traders too.
 
It is hard to prove or disprove anything you have said, therefore I will give you my opinion - I agree with you 99%...

nitro
 
WDGann,

Add one:

Believing that you can succeed, trade profitably, even if there are ups and downs along the way. This belief, should be deeper, more primordial than actual experience.
 
Quote from WDGann:
[2. Knowledge and Experience leads to Discipline. Discipline leads to Confidence. Confidence leads to Persistance. Persistance leads to Comfortability.
[/B]
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i cant help it -- didnt Yoda say this? :)
 
Quote from miniTrdr:


i cant help it -- didnt Yoda say this? :)
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LOL... Fear leads to Hate thing???

Does that mean I'm a trader from the Darkside...??? I've sold my soul to the devil???... LOL
 
It is all in our heads, Mental discipline and toughness is what separates the winners from the losers. I went to a state college and have seen numerous MIT, Harvard, other elite university graduates fail at trading because of the mental side of this game.

Use the force Luke.........................I say it is about 80% mental.

My advice to breakeven traders is to stop ready TA books and work on subjects in Books like Trading in the Zone(Douglas), topics on NLP and Mental Disciplane books. Just my opinion. GoldenGate University in SF, has a solid Program on the above subjects. The Director, Hank Pruden, is a master on the subject.
 
Quote from jeffgus:

I went to a state college and have seen numerous MIT, Harvard, other elite university graduates fail at trading because of the mental side of this game.
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Well, I went to MIT and my response is...

...thank you for listing MIT before Harvard! :D
 
My opinion is that most traders fail because they are undercapitalized. I have seen many people who give up when they get very near to the breakeven point b/c they have nothing left for the final push to breakeven.

Second largest reason is just that most traders come into the game without any real knowlege of how they will trade or what system they'll use. Buying something in motion and hoping it stays in motion is not enough to make you profitable in the long term.

Third largest reason is that someone doesn't follow his system, but dabbles in other systems that seem hot at the moment. If a system has had good results in the most recent time period, most likely, it's period of outperformance is just about over. Chasing what's hot is almost doomed to failure.

Fourth, most people think that trading is something you can do for 20 minutes a week. I know a lot of very profitable traders. Most of them are online and doing research at 3am on a saturday night. In fact, I often drop ideas on them at around that time. This is the reason for their success. They are a slave to their trading. If you don't intend to be that dedicated, just write a check to me. It will save me the commission costs. Trading isn't an effortless get rich plan.

The final reason is just sheer stupidity. Lets face it, 95% of all traders fail. I'd say that about 95% of the population is completely retarded. I think there's a similarity in the two statistics. Some people just lack the simple intelligence to trade profitably. Somehow most of these people seem to make it onto CNBC despite their best efforts to squander the retirement money entrusted to them.
 
Quote from praetorian2:

My opinion is that most traders fail because they are undercapitalized. I have seen many people who give up when they get very near to the breakeven point b/c they have nothing left for the final push to breakeven.

Second largest reason is just that most traders come into the game without any real knowlege of how they will trade or what system they'll use. Buying something in motion and hoping it stays in motion is not enough to make you profitable in the long term.

Third largest reason is that someone doesn't follow his system, but dabbles in other systems that seem hot at the moment. If a system has had good results in the most recent time period, most likely, it's period of outperformance is just about over. Chasing what's hot is almost doomed to failure.

Fourth, most people think that trading is something you can do for 20 minutes a week. I know a lot of very profitable traders. Most of them are online and doing research at 3am on a saturday night. In fact, I often drop ideas on them at around that time. This is the reason for their success. They are a slave to their trading. If you don't intend to be that dedicated, just write a check to me. It will save me the commission costs. Trading isn't an effortless get rich plan.

The final reason is just sheer stupidity. Lets face it, 95% of all traders fail. I'd say that about 95% of the population is completely retarded. I think there's a similarity in the two statistics. Some people just lack the simple intelligence to trade profitably. Somehow most of these people seem to make it onto CNBC despite their best efforts to squander the retirement money entrusted to them.
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nice job, you have summed it perfectly! i agree with each and every point.
 
No edge....without it, you're at the mercy of randomness.

Lack of discipline. Even if you knew a great opportunity existed, you still need to pull the trigger.

Psychology....only important when losing (have to build up the crushed ego).

Money....only important to the extent that you have enough to ride out the drawdowns while waiting for your edge to pull away.

Would it have been tough to take these daytrades knowing the edge has been making money every month for more than 5 years?
 

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