Why do 5% of Traders Win?

[StarDust9182]

Quote from ExchangeBonds:

Depends what you trade. It is that type of thinking that limits a person's ability. Why is 500k harder to quadruple than 10k? If it is only about liquidity, ES and 10yr note have more than enough liquidity to make you rich or ruin your account in a day. Scared money doesn't make money, and I think you do yourself a disservice by throwing around those small accounts. It augments your growth as a trader if you can't take it seriously, or you'll still have those new trader pains once your account gets larger.

Isn't the solution obvious? Divide your account into 50 - 10K accounts. In short order you will have every dollar ever made with the FED supplying more for you.

The difference between 500K trading and 10K trading, in my opinion, is that those using 10K have a tiny part inside them that says it is OK to lose all of it. For me, I don't want to lose any of my "500K" without a fight.

Liguidity is not a limitation up to 10 million I can assure you, stupidity is.

 

[StarDust9182]

Quote from bhardy307:

There is a place where I see computers valuable for my trading style. Maybe its experience, but I find in certain situations I can't calculate and react quickly enough if I am trying to add or subtract from a position, or adjust the stop quickly on multiple entries.

A simple application that interfaces with my broker's trading platform that would allow me to click a single button to adjust the trade(s) according to a predetermined formula, would be helpful.

This is my next project.

Your point is valid. However, remember that you are trading signal in noise and the noise dominates at too small a level.

 

[highballs]

they are on the inside track that's why they win..

name one trader that isn't and wins?

why play any rigged game that's not rigged for you?

R U nuts?

 

[Mr Super Trader]

Quote from highballs:

they are on the inside track that's why they win..

name one trader that isn't and wins?

why play any rigged game that's not rigged for you?

R U nuts?

It's a tough game that's for sure. The key to trading as a retail trader is not to jump on trades that have already made a move.

You never know when the hedge funds and big playa's are going to dump there shares or lots. If you buy because you notice a there's been a move and you want to tag along all you are doing is providing liquidity for the big dogs that want to get out with a profit.

The key is to anticipate what the big dogs are going to do. Get in before they get in and get out before they get out.

Let there money work in your favor not the other way around.

Anticipation is the key. Taking profits is the most important aspect. Hogs get slaughtered right. Hedge funds dump you get slaughtered .

 

[StarDust9182]

Quote from Mr Super Trader:

It's a tough game that's for sure. The key to trading as a retail trader is not to jump on trades that have already made a move.

.....

Well there goes my edge ......

 

[Mr Super Trader]

Quote from StarDust9182:

Well there goes my edge ......

If you have an edge jumping on trades that have already making a move all the power to you.


Did not mean to make a blunt statement. If you are aware of market conditions combined with good money management and good exit strategies. You can make money with most entries.

Some stocks trend for a long time and some don't. If you find a nice looking chart with a nice yield and trade for the longer term and cost to dollar average on pull backs you can do fairly well.

Unfortunately a very high percentage of stocks move with the market. Lately the markets been moving up and down.



The point i was making. Eventually people are going to take profits and the shorts are going to come in. Usually this happens after the market has been manipulated to the upside by these hedge funds.

Have you ever heard the saying don't buy a stock on a tip.
The move has probably already been made.

Basically in a nut shell market manipulation is a constant. A hedge fund will make a large order which will cause the market to move. They wait to see who bites(retail traders and other hedge funds possibly as well) if the market moves higher they will throw another large chunk of the money and the market may continue to move higher through more bites. Then all of a sudden they throw some more money in the pot. The stock is exhausted no body bites. Smart retail traders get out. Greedy retail traders stay in. Hedge funds dump there shares. The stock crashes(stop losses are hit, shorts come in, margin calls are triggered then the big guy's manipulate the stock to the downside and the shorts that stay in too long get squeezed through the same concept.

This is some general info by all means this does not happen with every move.

Like i said don't let my blunt statement effect your edge.

 

[murray t turtle]

Quote from oldtime:

everybody seems to be an expert on why 95% of trader lose. Just wondering if there are any experts out there on why 5% of traders win.

=============
Well;
just cut out some comissions/lengthen the time frame just a tad,
to include some investing-its a lot more than 5%............................

Jack Schwager asked M Marcus or M Richie what kept him in a trade so many months?? Answer= ''monthly profits''

Not an expert or a predictor.

 

[R. Raskolnikov]

Because 95% are knuckleheads like EMG

 

[NoDoji]

Quote from Lucias:

However, I don't think there has ever been someone who has verified to do this over any length of time.

If every human being that ever lived required verification that someone else had done a thing, please explain how new and innovative and amazing things would ever get done?

Existing world records are broken and new inventions are created regularly.

There are traders who fade trends because they believe price has run too far. If there's such a thing as price running "too far" (other than dropping to $0), please explain how new highs and lows are printed.

Quote from Lucias:

I would say anything beyond 300% is really pushing the credibility boundary. Certainly possible.. but one would have to really swing for fences.. which doesn't exactly go with trading for a living.

Study CL in the 5-min and 1-min time frame, one chart above the other. Choose any day's action and tell me you can't extract 40 ticks profit out of it each day (that's $400 per contract) by trading short along the underside of a falling 1-min EMA and long on the upside of a rising 1-min 20 EMA. Trade boundaries: either shoot for 10 ticks profit with a 10-tick max stop or 20 ticks profit with a 20-tick max stop, depending on the time frame you choose to focus on.

There are at least 10 ET members who've spent time with me and can "verify" that this a viable strategy and a conservative daily profit target trading one contract.

Is this "swinging for the fences"? One contract? I don't think so.

Is $90K a year "a living"? It is for most people.

Quote from Lucias:

NoDoji, you might want to consider enter the World Cup. The entry is free this year and it only takes 10k. This would allow you to document your abilities.

I can't think of a single good reason for me personally to enter a trading contest or to document my abilities.

Quote from Lucias:

Again hope I'm wrong... but I'm an expert and I have tracked traders in competitions, systems, discretionary traders, etc. I don't believe such return possible in futures trading direction normally and consistently.

If any such return is consistently possible then it is only from scalping where one can reduce the risk per trade. As for scalping futures, this trading style is likewise one of the more dubious. This is the only way though.

I am indeed a scalper, generally capturing 20-30 ticks per winning trade, paying 8-20 ticks per losing trade and hitting the occasional home runs.

But I find scalping to be an easy way to trade futures with lots of intraday movement such as CL and 6E.

What is your area of expertise, by the way? You track traders professionally? Do you have a study or white paper available with the statistical results of all this tracking?

 

[bln]

Sound like a cliche but there are some basic reasons why they win and you do not.

Discipline
Focus
Patience
Experience
Talent
Structure/Plan
Unemotional

Be professional and treat it like a business, plan accordingly and execute, reanalyze to improve execution for each iteration.