What is risk/reward knowing more than 90% of traders lose?
- Thread starter emg
- Start date
You have to learn market mechanics which most traders dont. You arent trading off the chart or news or fundamentals. You trade off order flow. You have to be patient and wait for the setups. Understand how large funds move their money around. Know that leveraged etfs must deleverage at the end of the day. Thats why you see the reits and financials move at the end of the day. In this enviroment funds are getting margin calls and liquidating calls. Like the 300k share offer that drove down fcx and when it exhausted at 30.99 it popped a point. Or the NYSE order that drove down IOC the other day. You buy those prints.
The market is not efficient and you have to take advantage of those inefficiencies.
The market is not efficient and you have to take advantage of those inefficiencies.
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Quote from traderjmb:
Well, there is some really GOOD insight here.... and there's also a lot of BS as well!
To answer the question directly... it's rather SIMPLE!!
Q: What is risk/reward knowing more than 90% of traders lose?
A: Simply plan to be on the side that has 10% winners!!
( Let's face it, there's MORE room on that side of the fence! )
Seriously, don't laugh, just analyze what I said.... "PLAN" to be with the winners!!
What does it mean?
1) Well, right away... YOU NEED to... PLAN! (most won't & don't)
2) It also means.. take a look @ what the 90% are doing, and... DON'T DO WHAT THEY DO!!
That's right, whatever the losers are doing... just DON'T DO THAT!!
Beyond that... open a small account somewhere... use it to SIM-trade... you'll learn THAT particular piece of software inside & out... PLUS, you'll get lot's & lot's & lot's of screen time!... virtually, FREE!
(remember... you won't be REALLY TRADING... so you won't REALLY BE LOOSING! Already, you can say you're doing better than 90% or more at this stage of the game!)
If it's fair to say that you'll probably BLOW-OUT your 1st trading account... then spend that amount of money on EDUCATIONAL MATERIALS!
(do the research, you'll figure it out!)
IF you're fortunate enough to find a MENTOR that is:
a) successful
b) has the ability to teach, as well as something worth teaching, and
c) willing to teach/put up with you for that amount of time!!
WORSHIP THE GROUND THEY WALK!
plus, thank your lucky stars... because, you are TRULY blessed!
PLAN to spend years doing this.... and when you finally start figuring it out....
1) you'll still be around!
2) you should be pretty well educated!
3) you should know your software, inside & out!
4) you should have ample amount of screen time!
5) you should have confidence in your decision process by now!
6) you'll know if YOU REALLY LIKE THIS LIFE! (it's not all glam!)
7) you've SURVIVED long enough to almost say... "I've seen it all..."
8) BUT, most important... YOU'LL STILL HAVE ENOUGH MONEY LEFT OVER to actually put all YOUR YEARS OF HARD WORK to good use!!
(should have made a Letterman TOP-10 List!)
And don't think for a moment that it won't be YEARS of HARD WORK & LONG HOURS in front of your PC or reading books/magazines/manuals!!
Have FUN, Enjoy the TRIP.... if you survive, the JOURNEY is excellent!!
Happy Trading,
TraderJMB
Here's a couple tips of MY wisdom, that TOOK ME, way too long to FINALLY figure out...
1) this game is literally 90% psychological (think HERD mentality, and use it to your advantage!)
2) the trend REALLY IS your friend!
3) treat your STOPS like the "seat-belt" in a car... "you don't really want its protection on every trip you take... BUT, when things go wrong... YOU'RE SURE GLAD IT WAS THERE!"
... in other words, put it where you DON'T think the market will go... AND DO NOT MOVE IT... EVER!! (except to tighten)
4) assume that every trade you make, WILL BE A LOSER!! IF, you can't stand the pain of that... TRADE SMALLER!!
Last, and certainly not least... MY PERSONAL most valuable piece of wisdom... FIND a "trading group", not too big (10-20 or so) of like minded traders... get to know & trust each other.... meet up 2-4 times a month, talk, share, learn!! Between that many people... YOU'LL ALL HAVE SOMETHING THAT YOU CAN TEACH, THE REST!! Not to mention sharing BOOKS & EDUCATIONAL MATERIALS... It's FUN, you make GREAT FRIENDS... and you'll save a TON OF TIME & MONEY!! (I personally couldn't find this... so, in 1995, I started the "Los Angeles Futures Support Group." Let me say this, to you... of the 13 founding members on day-one, NINE of us were still there 8-years later! And to this day, I see & speak to most of these guys on a regular basis.... AND ALL OF THEM, are some of my VERY BEST FRIENDS!!
THANK YOU.... Jack, Gunter, Bill, Mark, Steve, Larry, Ben, Ken H., Ken B., Kim, Chris, Mike & Phil and the dozens of others that came & went over those many years together!
... I OWE YOU GUYS, EVERYTHING!! MUCHO LOVE!!...
Wow,...I read this and said...YOU have lived my life exactly,..with one minor exception. I do not have a trading group to join in my area. I have joined ET because I am seeking this sort of outlet. However, I have become profitable and find every thing you mentioned to be true of my path to this point in my trading career. Glad to know I was able to do it and like you I have paid my share of tuition to Wall Street University.
I agree with your post and think others should read it and take heed at the comments.