Trading is all about discipline. Ha ha ha
- Thread starter WhiteOut56
- Start date
Quote from Cheese:
There is no such thing as an 'edge'. At best it only means that a person claiming to have an 'edge' has learnt a part more than the parts he thinks he already knows.
The whole day session is rich in points, particularly so in volatile markets (eg CL). So the amateur with limited capital, if wise enough, will concentrate his study and preparations where the money is. The moneys in the gyrations, the sequential swings up and down (or vice versa) from open to close. Applying a reliable methodology the amateur trader can begin the process of taking as many points as he or she can from each swing.
The chief considerations for taking good points from each swing are (1) the type of charts (time, range and/or volume bars) you use and (2) accurate use of any indicators you deploy to help you.
Are you serious?! I prefer to pick bottoms and tops. Cheese, all you're doing is pushing my trade along. Thanks bud! I appreciate it
You understand that AUCTIONS function the same way across the board....correct?
BACK ON TOPIC
Discipline is HUUUUUUUUUUUGE. It's number 1.
That comes with understand your edge. Understanding that YOU HAVE AN EDGE. Lastly understand potential risks and reward.
The discipline involved in trading is the same discipline involved with counting cards. Card counters have an edge. You think discipline is a small fraction of their edge? Get real. IT'S HUUUUUUUGE. But at the same time they're smart enough to know right from wrong.
Wouldn't this only be correct if you could properly identify the underlying distribution of the market? How do you define your probability of winning?
By statistical analysis, from backtest (edge expectancy) to forward testing a strategy (note: in this context "my stomach tells me IS a strategy) to then comparing THIS - permantly - to the results of your trade. Naturally different trading approaches go into different buckets.
I always wonder how people can loose hugh amounts of money without actually realizing hey loose, quite consistently - a specific amount / percentage PER TRADE. YOu run any quantifiable analysis and you get out an optimal R (Risk per trade) of 0 (becasue: you loose money trading), and they still trade real money.
Not saying a backtest / foward test on sim gives you a valid result, but if you forward test loosing money, why the heck even put money on it?
Hope for gains? THAT is where discipline comes in. Trade when you KNOW you have a statistical advantage.
I agree with original poster , genuine edge is hard to find , but there is no substitute, you hear so much about money management being the key etc ,I once got into an argument on t2w with a guy who said any system will win with the correct money management , I guess he's off to play roulette with his money management.
Actually any system will loose no / little money with money management because moeny management will tell you to not trade the system.
The main discussio nehre ist hat this still IS A discipline issue, because a lot of peopl will STILL trade the system (in an improoved way without proper testing) hoping they win
No, that's a stupid thing to post.
The fact he says that, and goes on to say he chases "gyrations" around all day is another story. If he's going to give abstract advice like that, either explain or don't do it at all. It serves no purpose and can lead people to chase bullshit advice.
My intentions were to get the idea across that he doesn't have the holy grain, and in fact is probably late to the party compared to other traders who don't lack the skill of precision. Picking tops and bottoms was a weak argument on my part, you're right. DUMB. But that's my edge regardless.
So back on topic, lets hear what else you have to say. You're on a roll bud.
Discipline is very, very important, but unfortunately not the only thing.
As has been alluded, you need a working approach.
Short term trading is full of randomness. The only thing that really works over the long haul on a universal level is to identify situations where someone is trying to buy or sell a large quantity of shares in a relatively short period of time, and either doesn't care or is not skilled enough to hide their intent.
If there is no major order flow imbalance, stay out unless you are market making/HFTing.
Some instruments can go days or weeks without a significant opportunity showing up intra-day.
Other people are taking your market share too, with dark pools, block trading, and automated trading. It's a tough business.
As has been alluded, you need a working approach.
Short term trading is full of randomness. The only thing that really works over the long haul on a universal level is to identify situations where someone is trying to buy or sell a large quantity of shares in a relatively short period of time, and either doesn't care or is not skilled enough to hide their intent.
If there is no major order flow imbalance, stay out unless you are market making/HFTing.
Some instruments can go days or weeks without a significant opportunity showing up intra-day.
Other people are taking your market share too, with dark pools, block trading, and automated trading. It's a tough business.
I agree with you and the OP
If somebody is going to claim discipline is an "edge", he may as well claim breathing and literacy are also "edges".
Discipline is a prerequisite to an edge, not an edge in and of itself. An edge enables you to win. All discipline does is enable you to not lose (i.e., not trade or bet) when you don't have an edge. Not losing and outright winning are two entirely different things.
Most traders lose because (1) they never have an edge to begin with (e.g., confusing a bull market with being a trading genius), and (2) they lack the money management skills to determine when to stop trading because THEY HAVE NO EDGE. Lacking discipline is the least of their problems. They have no trade smarts!