inappropriate use of stop losses & taking profit too early
Tell me about the 95% that fail
- Thread starter sneakoner
- Start date
inappropriate use of stop losses & taking profit too early
Its also interesting to note that all the advances in technology, access to indicators and price data, and sophisticated software programs hasn't really had much impact on the percent successful. I think it might even be a bit worse! In the end, the latest and greatest in technology can be a distraction. The key to success remains the same, and that is experience, instinct, consistency and good money management techniques. Advances in computer technology and cheap computing power simply doesn't translate into higher success rates. In the end, success or failure is tied to the same old parameters. Adequate capital reserves, sound money management principles, proper respect for markets, control of fear and greed, development of instinct and staying consistent.
Floyd
Floyd
okay but say i spend 12 hrs a day, 7 days a week learning and backtesting and what have you
i do this for years. i save up money and i finally get up to a $250 account...
there's still a chance for failure...probably not 95% but the chance is still there...
might as well hang myself at that point
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At the risk of sounding redundant... I believe my answer to this other thread....
"What is risk/reward knowing more than 90% of traders lose?"
... is perfectly suited for this thread as well.... Thank you & Enjoy!
See posting @ http://www.elitetrader.com/vb/showthread.php?s=&postid=3301727#post3301727
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(my army of evil minions....)
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At the risk of sounding redundant... I believe my answer to this other thread....
"What is risk/reward knowing more than 90% of traders lose?"
... is perfectly suited for this thread as well.... Thank you & Enjoy!
See posting @ http://www.elitetrader.com/vb/showthread.php?s=&postid=3301727#post3301727
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(my army of evil minions....)
Certainly having adequate capital is very important. I've seen
many individuals attempt to succeed with less than adequate
capital. And I can tell you, there is a strong correlation between
failing (particularly being wiped out) and being undercapitalized.
But, money management is absolutely crucial as well. Good
money management can keep a small account in the game,
whereas terrible money management can knock out even the
largest accounts.
The bottom line is that good money management and adequate
capital are both necessary, and the more one has of both, the
better the chances of succeeding!
Floyd
many individuals attempt to succeed with less than adequate
capital. And I can tell you, there is a strong correlation between
failing (particularly being wiped out) and being undercapitalized.
But, money management is absolutely crucial as well. Good
money management can keep a small account in the game,
whereas terrible money management can knock out even the
largest accounts.
The bottom line is that good money management and adequate
capital are both necessary, and the more one has of both, the
better the chances of succeeding!
Floyd
after 20 years+ and having traded accounts close to 400K -1M, and now I am trading 25K (after a 6 year hiatus in my day job/profession), I can tell you from a lot of experience that it does not matter.
If you have ability, skill, experience plus the intangibles you can do well with any size account. When I traded large accounts I would make or lose 25000 in a week or if I made a mistake, a day. I was a (discretionary) position and swing trader so there was always that risk of taking home positions. I found that I was not oriented enough to risk management. Now with a smaller account and a greater understanding of margin (and I have also traded 'span' margin account) I find that I am managing risk better. The only drawback I have observed is that I am too oriented to risk management and protection of capital, and thus don't go for it as much as the old days. Missing profits is never easy but I can't afford to take the risks I could (or thought I could) years ago.
My final thoughts about account size (and its borne out by this thread and others) is it creates an illusion or false sense of security that you can give less concern to position sizing and risk management. However I have known 3 traders who have blown out accounts of >1-3M, something in hindsight, they never ever thought was possible. But they got greedy and sloppy.
Profits, some early trading success coupled with large accounts and capital can and often does lead to complacency with the common illusion or belief that you are bulletproof; feeling no mater how you size it "won't happen to you" (the black swan that is).