So after years of seaching..
- Thread starter tandh
- Start date
Well, there is a real problem--trader was not utilizing prudent money management. Winners need to be allowed to run at least 3 times the stop loss( or more). Doesn't always happen but it needs to be allowed to each time. Traders trading 1 to 1 will lose.
No trader lost as trader had ZERO clue when to enter and exit, there trade logic was based on utter illogic like most so yes they'll fail.
Going for 3:1 would just give you many more SL hits, not enough to cover the increased profits, without a GOOD REAL WORLD EDGE!!
If one had an edge and could often 'get the direction right' what makes you think that they'd get stopped out or fail to take a profit? I'd imagine the same edge that helped them get into a profitable trade would help them get OUT at a good time, too.
I don't think that's a rule.
If you use big profit targets and tiny stops (without an edge) then you'll just have lots and lots of stop outs with the odd big win and will be a net loser over a large sample.
If you use a tiny profit target and a big stop, you'll have loads of tiny wins with the odd ugly loss, and you'll be a net loser over a large sample.
1) Money Management is very important
2) Money Management is not the most important variable in a trading plan...it is equally important with other components
3) It doesn't matter if Money Management is consider an edge or not an edge because it won't change the fact that its important
4) You will still lose if you have excellent Money Management but poor trading skills (there's many online academic articles and statistics that proves such...use Google to find them or just review some of the ET journals). Simply, money management alone...you will still fail if that's all you're using.
With that said, there's a few folks running around ET that believe just because someone doesn't talk about their money management...they must not be using it. In fact, they are doing such in a troll behavior via ridiculing folks that don't share their money management info with them.
That's like me saying just because the money management preachers aren't talking about their brokers or broker statements...they must not be real traders. That would be a ludicrous statement for me to make just because I don't see them posting their broker statements or any account info to verify they themselves are following their own money management rules that they are not transparent beyond them just saying...Money Management is the Key.
Seriously, there's a lot of important variables in a trading plan and money management is just one piece of the puzzle.
2) Money Management is not the most important variable in a trading plan...it is equally important with other components
3) It doesn't matter if Money Management is consider an edge or not an edge because it won't change the fact that its important
4) You will still lose if you have excellent Money Management but poor trading skills (there's many online academic articles and statistics that proves such...use Google to find them or just review some of the ET journals). Simply, money management alone...you will still fail if that's all you're using.
With that said, there's a few folks running around ET that believe just because someone doesn't talk about their money management...they must not be using it. In fact, they are doing such in a troll behavior via ridiculing folks that don't share their money management info with them.
That's like me saying just because the money management preachers aren't talking about their brokers or broker statements...they must not be real traders. That would be a ludicrous statement for me to make just because I don't see them posting their broker statements or any account info to verify they themselves are following their own money management rules that they are not transparent beyond them just saying...Money Management is the Key.
Seriously, there's a lot of important variables in a trading plan and money management is just one piece of the puzzle.
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In time, you will likely realize that there is no valid argument against prudent money management being the only true edge in trading.
Let it be noted that none of the high win system posters was ever willing to post real time calls that included entries and stop loss levels to confirm validity of their high win rates. All we get is constant excuses why it can't be done publicly. Well, says it all. Until this happens for all to see, high win systems remain to be seen in action to be believed in.
Real edge IS in "prudent money management", win some, lose some, win more than lose. End of story.
Real edge IS in "prudent money management", win some, lose some, win more than lose. End of story.
Not quite. You can't make blanket statements based on what anonymous strangers on some random internet forum will or will not tell you. The books about the great traders say you are wrong about MM being an 'edge'. Everyone should practice excellent money management. That goes without saying, but MM in and of itself is not an edge.
Please read this inside out, print and hang on your wall. We are just trying to help you realise the reality of things.
"The difference between a successful trader and a losing trader has a lot less to do with the successful trader’s ability to pick winners than you might think. All traders are going to experience losers and lots of them. It’s a fact of the business."
http://m.futuresmag.com/2011/12/31/simple-money-management-wins-over-time
"The difference between a successful trader and a losing trader has a lot less to do with the successful trader’s ability to pick winners than you might think. All traders are going to experience losers and lots of them. It’s a fact of the business."
http://m.futuresmag.com/2011/12/31/simple-money-management-wins-over-time