I've already made my point and now you have led this off to an unrelated situation where location, product, likability , advertising etc come into play.
The "Aha" Moment!
- Thread starter Sweet Bobby
- Start date
And how are these factors any different than one trader's analysis being a buy, versus another trader's analysis of the same vehicle at the same moment, a sell?
This is a joke---there is no advertising or likability or product or location choice offered by the trader. --Get right
WRONG!!
Trader CONTROLS when (and/or at what price) he/she enters or exits a trade. Not entering or exiting is also included in this control.
NB: "control" may or may not be automated.
You haven't really made a point at all - you said "the only edge is risk management" and claimed that when/where one chooses to buy or sell is irrelevant. Which is certainly at odds with my experience as well as with a reasoned analysis of what successful market speculation actually requires.
However, I can see why you might believe this, as the basis of your trading seems to be to stay on the long side only with measured risk, and to periodically re-buy if stopped - ultimately relying on the long-term bullish tendency of the market indices to eventually catch a good entry and hold, possibly for years.
That may or may not work for you, but it certainly isn't very informative about trading or market speculation in general. For one thing, that approach would be totally useless on instruments like FX or commodities which don't exhibit any consistent bullish bias. Excellent risk management with no actual edge just means your account drains more slowly.
I was thinking a bit and made the following reflection: is not everything you do prudent risk management?
Let me explain: the aim of finding an edge is to make money. But nobody can control the market, or knows in advance with 100% certainty what the market will do. So what you in fact do is take action to limit your risk as much as possible. So you use a strategy to limit your risk and have to wait, passively, to see the result. You cannot influence anything.
How can you limit your risk :
- find an edge that gives you good entries and/or exits
- put a stoploss
- change size of position
- diversify
- decide when to get in or out (time and/or price)
- ...
So maybe the problem is the defintion of "prudent risk management".
It is not the first time that a discussion ends in different interpreting of definitions. So both sides can be right. Depends of how you define "prudent risk management".
Do all these actions not limit the risk? Because then it can be part of risk management.
I am not a pro B1S2 poster, just making reflections on what is what exactly. All a traders does is limit risks; he can not change the behavior of the market so he is submitted to what the market does. Which limits all his action to limiting risks.
When B1S2 tells that when/where one chooses to buy or sell is irrelevant, he is wrong. But deciding when/where one chooses to buy or sell is determined by when the traders thinks he can make most profit or less losses as possible. Which means he is controllling the risk. Risk to miss profits or risk to catch losses.
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