What was the ***last*** thing you had to master before becoming profitable?

[Buy1Sell2]

For me it was risk mgmt - it gave me a lot of confidence and so far has kept me profitable for 13 out of the last 14 years. It was like a Rocky film where in the big fight he is getting pounded by everything his opponent could throw at him and was still on his feet, he realizes he can win the fight because his defense is strong. Same with me when I got hip to risk mgmt.

RIGHT AS RAIN

 

[BONECRUSHER]

For me it was risk mgmt - it gave me a lot of confidence and so far has kept me profitable for 13 out of the last 14 years. It was like a Rocky film where in the big fight he is getting pounded by everything his opponent could throw at him and was still on his feet, he realizes he can win the fight because his defense is strong. Same with me when I got hip to risk mgmt.

Comagnum...do you have more of an edge than just the risk management aspect?

 

[comagnum]

Comagnum...do you have more of an edge than just the risk management aspect?
____________________________________________________________________________
Yea, I have my share of edges. But the edges in and by themselves are of little value without a strong defense - which is risk mgmt.

"And then at the end of the day, the most important thing is how good are you at risk control. Ninety-percent of any great trader is going to be the risk control."

Paul Tudor Jones (Self made billionaire, from floor runner to Forbes #125 wealthiest)

 

[BONECRUSHER]

Comagnum...do you have more of an edge than just the risk management aspect?
____________________________________________________________________________
Yea, I have my share of edges. But the edges in and by themselves are of little value without a strong defense - which is risk mgmt.

"And then at the end of the day, the most important thing is how good are you at risk control. Ninety-percent of any great trader is going to be the risk control."

Paul Tudor Jones (Self made billionaire, from floor runner to Forbes #125 wealthiest)

Agree...it takes both. When I figured out risk control, I quit losing money and made modest profits. As I discovered more effective edges over time...I made the journey from modest profitability to effectively making a living. So, in my opinion/experience...the big bucks are made with edge in timing entries to high probability of a "price run" and of course getting out before overstaying my welcome, but R:R isn't my first priority.

 

[Alpha Trader]

Yea, I have my share of edges. But the edges in and by themselves are of little value without a strong defense - which is risk mgmt.

+∞!!!

 

[777]

Make sure whoever's advice you buy on this forum, look to see how long they have been here, so you at least get an idea of how long they have been trading so you know if they know what they are talking about. Like if some guy who just registered on elite trader 6 months ago is telling you how he became profitable, dont trust it. If someone who registered in 2002 is telling you, he MIGHT be a bit more credible as he has withstood a good number of years with the market.

Now with that said...the last thing i learned was not to put a large chunk of your cash in 1 trade and NEVER use margin I dont care if your account is 2000 dollars or 2,000,000 dollars. If you feel like you HAVE to use margin, then you dont have the emotional ability to trade. If you cant be patient with your gains, then be prepared to lose it all.

IMO, the ONLY people that can use margin are the guys that have at least 250k in the bank and are trading 25k accounts. These are the guys that make a couple hundred K per year and are pulling cash out when they get their account to 100k or so.

This advice is easy to give, but hard to listen to. Chances are you will be like the rest of us who had to blow our accounts(or blow a substantial amount of money) to find out what works for us or what trains us the best.

Most professional traders use leverage, or did when starting out.

As a matter of fact, not using leverage would be a huge mistake for many winning traders and hedge funds.

Leverage is one of a handful of reasons to join a prop firm.

Certain areas of trading can not be done as well without leverage, such as market on open orders or pair trading.

All of this said, improper risk management or lack of edge (sometimes both) are key reasons why traders blow up.

Longterm Capital used leverage that was not reasonable and blew up- even though they were quarterbacked by a room full of experienced people with IQ's above MENSA.

If one is unsure, it is better to error on the side of caution.

Part of winning is surviving the game durring adversity.

 

[777]

I dont care if people think I'm credible. I think there are alot of people on this board with better advice than me, but i think there are a hell of a lot more with worse advice. And since probably 90% of them leave after the first year or so on this board, it usually means they lost all their money. I'm the type who like to play odds in my favor. Odds are that someone who signed up a few months ago doesnt know what they are doing yet. Yes, its not a fact that EVERYONE whos registration date is 3 months old is a newbie trader, but the odds are that they are. Its like going to vegas and playing craps. I can tell you "dont bet the 12, its a 36 for 1 shot and its a bad bet." and you might say to me...That doesnt mean it wont hit (which is basically the same thing you just said to me about my logic) Over enough rolls ( or on elite trader, enough noob accounts) my logic will win in the end.

Sorry if i didnt explain myself to such an "Educated" trader so he could understand what i meant more easily.

Most leave ET because, as you say, they lost all their money.

However, some leave when they become highly profitable. It is partly a time-efficiency thing and also they have developed a private network of other winners.

Elitetrader members are lucky when winners like Lescor and Xela post for years.

 

[ironchef]

Elitetrader members are lucky when winners like Lescor and Xela post for years.

Agree.

Thank you Xela for providing support and coaching to us small retail traders.

 

[Sprout]

The OP's question will never get one to profitability.

As a possibility, ask a better question to get better answers to make better choices.

An alternative form of the question might be, "What did you focus upon that made a difference for you to improve at _______?"

The questions we ask ourselves control the focus of our thoughts which makes us feel a particular way and hold our body in a particular state. It's a loop that also works in reverse. If one changes their body's particular state, it changes the background of emotions as well as creates space to think differently.

It's the distinction between HAVE, DO, BE and BE, DO, HAVE.

Being is in the present moment. Most folks spend their present moments either in fear of the past repeating itself or in anxiety about a fantasy based future. Your current beingness frames the thoughts and emotions by which your actions arise.


To answer the question I infer you asking, for me it was annotating and logging bar-by-bar by hand after I got the above sorted out. For it was getting the above sorted out that led me to the correct answers I was seeking.


All in all, if whatever path leads to you trusting yourSelf more, than it is the right path.

 

[doggyfx]

Most professional traders use leverage, or did when starting out.

As a matter of fact, not using leverage would be a huge mistake for many winning traders and hedge funds.

Leverage is one of a handful of reasons to join a prop firm.

Certain areas of trading can not be done as well without leverage, such as market on open orders or pair trading.

All of this said, improper risk management or lack of edge (sometimes both) are key reasons why traders blow up.

Longterm Capital used leverage that was not reasonable and blew up- even though they were quarterbacked by a room full of experienced people with IQ's above MENSA.

If one is unsure, it is better to error on the side of caution.

Part of winning is surviving the game durring adversity.

Last sentence says its all. All big whales and sharks move the market to squeeze out leverage traders. And the more funds you borrow to enter the position the less is swing magnitude needed to eliminate you.