Quote from reid5525:
Recognising high probability setups is the key. Your high prob setup is your reliable fishing hole.
You need more than a high probability strategy to be a successful trader.
That's only 1 piece of the 1000 piece puzzle.
Quote from reid5525:
Throw out the 1000 piece puzzle. Keep it simple.
Did you notice that stocks rally every day? Ever tried to pick those winners. It's great fun. It's like picking the winning horse but much less risky.
Figure out how to tell which stock is likely to go up. When you get good at it you'll make plenty of money. KEEP TIGHT STOPS.
Well, that's just a silly perspective to have. (unless you have a crystal ball)
Please read the article below:
I copied and pasted part of the daily update from
www.innerworth.com
Skill Building Produces Consistent Profits
Seasoned traders often describe peak experiences in which they trade "in the zone." Everything seems to "click." They trade in synchrony with the markets, and act almost instinctively with the ebb and flow of market prices.
Although seasoned traders frequently report trading in a peak performance state, novice traders rarely achieve it. That's because trading in the zone comes with experience, and in that sense, trading is much like professional athletics; one must build up a high level of skill so as to perform effortlessly and intuitively, and for traders, that in turn leads to consistent profitability.
Once you discover a winning trading strategy, using it to make consistent profits is a matter of reading the markets accurately, executing the strategy, and exiting the trade flawlessly. The strategy may not work every time, but from historical data, you know it works with "casino odds;" just like a casino, the odds are in your favor. When the overall odds are in your favor, it's just a matter of making trade after trade so that "the numbers work for you." The more trades you make by trading your plan, the more likely you will make an overall profit across the large sample of trades.
(*******he's the point in regards to this thread*******)
However, if you "choke" on some trades because you have not yet developed a high level of trading skill, it doesn't matter that you have a strategy that puts the odds in your favor. It's similar to professional sports. There are strategic plays that are executed during the game, but an athlete must have honed a set of advanced skills to execute the play flawlessly. Otherwise, it doesn't matter how ingenious the play, it will fail without capable players. When the professional athlete sees the ball coming, he or she must take action in an instant. The receiver on the football team needs to get into the right position, catch the pass, and make it to the goal line; he doesn't have time to let his poor catching ability prevent him from spoiling the game plan. The outfielder is better off during a baseball game if he can automatically and almost instinctively catch the ball without having to over-think it. When one doesn't have a high level of skill, an inspired plan is doomed. And it's the same with trading. It doesn't matter how favorable the trading strategy is if one doesn't have the skill to execute it flawlessly.
Both traders and athletes must act on a moment's notice. They must work intuitively to observe and interpret signals quickly, yet accurately. They need to work intuitively to see signals so quickly that it is almost unconscious. Building such skills takes practice. One needs to make trade after trade, so as to perceive subtle changes in market conditions that are hard to read. Across time, one also learns how to set protective stops to manage risk, without getting "stopped out" due to extreme and sporadic volatility. And, eventually, one learns to gauge when it's time to close out the position for a profit, or cut one's losses to protect capital. The markets are continually changing, and only with practice can one learn to execute trades freely, and intuitively react to subtle market conditions. So don't underestimate the importance of practice. Sure, a winning trading strategy is necessary, but you must also have a high level of skill to take advantage of those winning odds. Skill building can help you take advantage of those odds and generate consistent profits.
