...and let your winners run.
Basically, my profit is made of my big winners.
Sounds easy at first, but we still need to implement it the right way.
What are the most valuable lessons you have learned?
- Thread starter HuntingBenjamins
- Start date
Basically, my profit is made of my big winners.
Sounds easy at first, but we still need to implement it the right way.
Took me many years, even after being told by someone smarter than me, that markets move because they have to.
Stops being hit causing price movement ... causing more stops triggered, cascading up or down.
Now I'm not smart enough to "know" where all the stops are, just smart enough to follow price itself. That and an anchored VWAP or two.
Stops being hit causing price movement ... causing more stops triggered, cascading up or down.
Now I'm not smart enough to "know" where all the stops are, just smart enough to follow price itself. That and an anchored VWAP or two.
95% blow their account
How to be in the 5% ?
Blow your account 58 times
0.95^58 is 5% HERE YOU ARE
Be patient, take care of yourself and enjoy the ride.
Most valuable lessons ?
BE MORE SELECTIVE aka. Trade less
Play only the best games (Table, Player, Hand)
Gamblers take every bet at every price.
You don’t want to be a gambler.
Don’t be here for the action.
No EDGE -> No BET
Perfect your Selection, timing & management.
By management I mean … Best thoughts ought to outweigh worst ones.
Eliminate the left tail from your trading,
Insight from NN Taleb’s Risk incerto:
Risk management isn't about being very prudent and careful - it is about eliminating risk of ruin so that you can very AGGRESSIVELY take non-ruin risks.
Play great defense, Play not to lose
But Play Very Agressively.
If you want to invest then diversify,
If you want to trade then concentrate.
How to be in the 5% ?
Blow your account 58 times
0.95^58 is 5% HERE YOU ARE
Be patient, take care of yourself and enjoy the ride.
Most valuable lessons ?
BE MORE SELECTIVE aka. Trade less
Play only the best games (Table, Player, Hand)
Gamblers take every bet at every price.
You don’t want to be a gambler.
Don’t be here for the action.
No EDGE -> No BET
Perfect your Selection, timing & management.
By management I mean … Best thoughts ought to outweigh worst ones.
Eliminate the left tail from your trading,
Insight from NN Taleb’s Risk incerto:
Risk management isn't about being very prudent and careful - it is about eliminating risk of ruin so that you can very AGGRESSIVELY take non-ruin risks.
Play great defense, Play not to lose
But Play Very Agressively.
If you want to invest then diversify,
If you want to trade then concentrate.
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I don’t have the exact quote
But Martin Schwartz aka. The Pit Bull had an interview not long ago with MrTopStep (Not the firm) where he said …
The market is, in the short term, a liquidity seeking mechanism.
No one really know where the stops are,
But we can see when they’re being hit.
Weakness, absorption, … can be seen
Nothing is 100% but worth seeing
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Case in point....One of my largest daily losses (which I can recall) actually came just last Thursday July 20th. I was doing quite well upto then, but got too greedy the day before and boom I took it on the chin that day. I have recovered a lot of it back this week, but that day was brutal. It was definitely a lesson learned.
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Log bar-by-bar or event-by-event, backtest, make observations, define hypothesis, forward test, build stats of the method, iteratively refine.. build wealth slowly more-so than lose fortunes quickly.
Holy Grail is you; transform one's own thinking/attitudes/perceptions/beliefs/values/actions/habits from lead into gold.
It's a marathon not a sprint. Sprinting, while can be initially successful ultimately forms bad habits that leads to the Mother-Of-All-Losses/Liquidation.
ymmv
edit: No, you're not special.
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If you haven't been doing it for very long my suggestion is you stop doing it and do something else with your life instead... 
I like to keep whatever secrets I discover close to my chest, but I'd say a very valuable and general lesson which applies to all traders and systems is the math of expectancy. At the end of the day, week, month and year every trader or system is subject to the trader's equation and can't escape it.
Simply put: you need to earn more than you lose.
Note, I did not say that you need to win more often than you lose. In fact, you can have a win rate well below 50 % and still make good money as long as your average winner is considerably greater than your average loser. At the other end of the spectrum you have a high win rate system where your average R/R is 1:1 if you're very good or as is usually the case with these systems you risk more than you stand to gain, i.e., risk 2 to gain 1.
So, spend some time understanding this mathematical equation and the various profiles (win rate/average winner/average loser) which can make up a profitable trading methodology.
Of course, trading is rigged against human nature so when you start trading you may very well end up running your losers and cutting short your winners which effectively makes you a net loser anyway.
I like to keep whatever secrets I discover close to my chest, but I'd say a very valuable and general lesson which applies to all traders and systems is the math of expectancy. At the end of the day, week, month and year every trader or system is subject to the trader's equation and can't escape it.
Simply put: you need to earn more than you lose.
Note, I did not say that you need to win more often than you lose. In fact, you can have a win rate well below 50 % and still make good money as long as your average winner is considerably greater than your average loser. At the other end of the spectrum you have a high win rate system where your average R/R is 1:1 if you're very good or as is usually the case with these systems you risk more than you stand to gain, i.e., risk 2 to gain 1.
So, spend some time understanding this mathematical equation and the various profiles (win rate/average winner/average loser) which can make up a profitable trading methodology.
Of course, trading is rigged against human nature so when you start trading you may very well end up running your losers and cutting short your winners which effectively makes you a net loser anyway.
Too late for me. I am already addicted.If you haven't been doing it for very long my suggestion is you stop doing it and do something else with your life instead...
But what would you recommend to do instead?