Something a trader should never do

There are certain absolutes in trading that don't necessarily apply in long term investing. Some of those absolutes are: don't average up or down, always use stops, and always trade with the trend. These can be bypassed in longer term investing, but absolutely not in trading. D08 has made an idiotic reply.

There is but one correct method of trading for the retail trader.

1. Keep losses small. (Never risk more than 2% of Total Liquid Net Worth on any one trade/idea.)

2. Let winners run using stops outside the noise.

3. Keep commissions small

4. Don't scale in or scale out.

5.Trade with the trend.

Thank you for your time.
 
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Buy1Sell2 said:
There are certain absolutes in trading that don't necessarily apply in long term investing. Some of those absolutes are: don't average up or down, always use stops, and always trade with the trend. These can be bypassed in longer term investing, but absolutely not in trading. D08 has made an idiotic reply.

There is but one correct method of trading for the retail trader.

1. Keep losses small. (Never risk more than 2% of Total Liquid Net Worth on any one trade/idea.)

2. Let winners run using stops outside the noise.

3. Keep commissions small

4. Don't scale in or scale out.

5.Trade with the trend.

Thank you for your time.
More...


Though i agree with most of what you say and that's how i play the game there is the possibility that some traders might do better without SL, or very good at counter trend moves.
 
Buy1Sell2 said:
There are certain absolutes in trading that don't necessarily apply in long term investing. Some of those absolutes are: don't average up or down, always use stops, and always trade with the trend. These can be bypassed in longer term investing, but absolutely not in trading. D08 has made an idiotic reply.

There is but one correct method of trading for the retail trader.

1. Keep losses small. (Never risk more than 2% of Total Liquid Net Worth on any one trade/idea.)

2. Let winners run using stops outside the noise.

3. Keep commissions small

4. Don't scale in or scale out.

5.Trade with the trend.

Thank you for your time.
More...

You're quite usual in that you insist that everyone trades the same way, not realizing that there are a multitude of methods that require very different approaches.
I've traded very different styles which made me realize that what's true for one approach is quite possibly the worst thing for another. I suggest you broaden your mind.

1. Keeping losses small applies to highly liquid instruments with small spreads. Any mid- to small cap equities will have periods with very large spreads which will create massive slippage. Same holds true for many futures contracts if trading size.

2. This is another generic piece of advice which I agree holds true for certain types of trading...and absolutely destroys profitability in others.

3. While important, worrying about commissions too much will distract you from generating a significant profit; I'm guilty of this. Most traders have little to no control over commissions anyway.

4. You fail to understand that if you trade any kind of size, you have to scale in and scale out as to not move the price too much. I'm not talking about trading 2 ES contracts here.

5. Contrarian traders specifically trade against the trend, there's quite a few on this board who are successful at it. For them, your advice is pure nonsense.
 
kut2k2 said:
Never say KISS ("Keep it simple, stupid.")

The simplest strategy is buy&hold. Good luck getting that to work once the bull goes away.

The trader who wins is the one whose strategy falls into the sweet spot between overly complicated and overly simplified.
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Those guys who bought the spx at the top of the internet bubble and have held it through today have done better than 95percent of the traders on elite trader over the same timeframe. And that's pre-tax. Post tax it's probably 99 percent.
 
d08 said:
You're quite usual in that you insist that everyone trades the same way, not realizing that there are a multitude of methods that require very different approaches.
I've traded very different styles which made me realize that what's true for one approach is quite possibly the worst thing for another. I suggest you broaden your mind.

1. Keeping losses small applies to highly liquid instruments with small spreads. Any mid- to small cap equities will have periods with very large spreads which will create massive slippage. Same holds true for many futures contracts if trading size.

2. This is another generic piece of advice which I agree holds true for certain types of trading...and absolutely destroys profitability in others.

3. While important, worrying about commissions too much will distract you from generating a significant profit; I'm guilty of this. Most traders have little to no control over commissions anyway.

4. You fail to understand that if you trade any kind of size, you have to scale in and scale out as to not move the price too much. I'm not talking about trading 2 ES contracts here.

5. Contrarian traders specifically trade against the trend, there's quite a few on this board who are successful at it. For them, your advice is pure nonsense.
More...
ABSOLUTELY RIDICULOUS
----Thank you for your time----
 
newwurldmn said:
Those guys who bought the spx at the top of the internet bubble and have held it through today have done better than 95percent of the traders on elite trader over the same timeframe. And that's pre-tax. Post tax it's probably 99 percent.
More...
If all you want to do is buy and hold, no need to be here or any other trading forum. Presumably you're looking for something better than b&h. Which was my point. The simplest strategies won't get you there.
 
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