Why? Bad Trading Strategy: Entry
Everything else means dogshit without a world class entry.
Funny, that choice only has 7% of the vote.
Everything else means dogshit without a world class entry.
Funny, that choice only has 7% of the vote.
(Why) do most traders lose?
- Thread starter kiwi_trader
- Start date
Most are born to be losers. They're Sheep raised to be fleeced.
They don't know how to ask the right questions, so they never get the right answers to their problems.
Garbage in = Garbage out.
Born to be tools and remain tools. I'm trying to maximize the fleecing while it's still good, things are going to get worse pretty soon.
They don't know how to ask the right questions, so they never get the right answers to their problems.
Garbage in = Garbage out.
Born to be tools and remain tools. I'm trying to maximize the fleecing while it's still good, things are going to get worse pretty soon.
Kinda like I was going to say...
I say most traders lose because they are destined to lose. They come into this game, with a mentality, that will never allow them to progress. They just find trading as a quick fix for money, and expect huge results.
I think that could simply sum it up. Those that do put in the real effort (which isn't many) either can't deal with the emotions, or just can't develop a system or don't have backups or not prepared.
The rest, could very well be unlucky when they first start out, even though I don't believe in luck, maybe it could just be the bad few days where things go wrong that destroy any potential, which could be related to being undercapitalized, or being far too cocky with your money and wanting the rewards.
It all kinda intertwines, but I believe most that come in, are just destined to fail because it's too easy to fail, it's very simple to fail this, just give up, lose your money, which is a very easy thing to accomplish.
For those that are lazy, or not dedicated, the EASY way is best, and since easy is failure, that's what happens.
Go figure?
"wOrLd clAsS eNtRy tm"
1) Minimum 8:1 r/r.
2) win/BE/loss/catastrophic loss ratio = 53+/21/13/13
3) A tight stop. (catastrophic stop is a max of 10% of Daily ATR(14)).
When you achieve these figures who fricken cares about all the psych. mumbo jumbo people are on about. Concentrate on good entries. I'll say it again: it all stems from having world class entries (even if its only one entry per day or week).
*Even a trading psychologist is not going very far with bad entries.
*Even with conservative money management you'll still have shitty drawdowns
*Even if your disciplined you'll still mess up Why?: BECAUSE YOU HAVE A SHITTY ENTRY.
*Even if you have shitty exits - you'll still do well with "a good entry"
*Even if your undercapitalised you'll still increase your account fast with a world class entry.
If your next question is how the f*** you gonna achieve these figures. Answer: Learn to only look for the signals that your fib time analysis (not how it's used conventionaly) tells you is a probable reversal period.
It got 7% of the vote because thats about the percentage of traders who are truely profitable.
But the question is "Why do most traders lose?" not what is the most important element.
I've run into hundreds of "traders" in chat rooms and most are not succeeding yet. A few times I've tried to teach someone else but now I refuse because I don't believe I have what it takes to teach someone to trade and its not interesting to continue trying. I know the method works because I know people who make it work, myself included. And I've asked people to tell me in detail what they do and how they define their strategy but most can't and if they can they don't do it.
I originally said: "My pick for first reason: trading: they never had a fully tested systematic way of trading in the first place."
But a world class system (entry+exit) doesn't save someone who doesn't execute it properly. And all the evidence is that virtually no new traders execute properly.
And they all end up blaming the system if they bought it, the broker, or anyone but the real source of the problem: themselves.
Which brings me to something I hadnt read for a while but (to me) seems to be spot on.
Original article was published in 'CTCN' by "Anonymous Trader".
1. We accumulate information - buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence.
Fear starts setting in.
8. We start to listen to 'outside news' and to other traders.
9. We go back into the market and continue to 'donate'.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get 'over-confident' and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.
Most people will give up at this point, as they realize work is involved.
15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but over all we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rules and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow the rules.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear), and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little over-confident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.
I've run into hundreds of "traders" in chat rooms and most are not succeeding yet. A few times I've tried to teach someone else but now I refuse because I don't believe I have what it takes to teach someone to trade and its not interesting to continue trying. I know the method works because I know people who make it work, myself included. And I've asked people to tell me in detail what they do and how they define their strategy but most can't and if they can they don't do it.
I originally said: "My pick for first reason: trading: they never had a fully tested systematic way of trading in the first place."
But a world class system (entry+exit) doesn't save someone who doesn't execute it properly. And all the evidence is that virtually no new traders execute properly.
And they all end up blaming the system if they bought it, the broker, or anyone but the real source of the problem: themselves.
Which brings me to something I hadnt read for a while but (to me) seems to be spot on.
Original article was published in 'CTCN' by "Anonymous Trader".
1. We accumulate information - buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence.
Fear starts setting in.
8. We start to listen to 'outside news' and to other traders.
9. We go back into the market and continue to 'donate'.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get 'over-confident' and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.
Most people will give up at this point, as they realize work is involved.
15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but over all we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rules and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow the rules.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear), and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little over-confident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.
Moe power to you,if you can find enough entries that have an 8:1 risk reward ratio.I personally find that you will be treading on very dangerous "over allocation of capital" if you want to acheive a decent return on total capital.You simply dont get enough trades,so you need to employ apx 30% of capital per trade in order to get a meaningful return..
I fully agree with you in theory as I have some scans that acheive those numbers,but it occurs too infrequently to trade with any sort of prudent position sizing .
With that said,i typically look at daily bars,and i should probably be looking at intraday data to possibly increase my sample/trade size..
Thanks for the insight
I fully agree with you in theory as I have some scans that acheive those numbers,but it occurs too infrequently to trade with any sort of prudent position sizing .
With that said,i typically look at daily bars,and i should probably be looking at intraday data to possibly increase my sample/trade size..
Thanks for the insight
Come on guys, it seems that we're "overcomplicating" the whole idea of trading for a living again....(bear with me, I'm not "judging" or "scolding" LOL).
I almost hate to say this...but "trading is simple" IT's the Psychology/Mental part is the "hard" part...hard to overcome so many "can'ts" "didn'ts" and my favorite "I tried" ....
The comment about the trader at home trying to make money is true for the most part...there are 15 million or so retail "trading" accounts that have a great number of smart people attempting to trade ...without having been adequately trained...(believe it or not, I'm not trying to sell anyone on our training specifically.
That being said, it does take a good understanding of how things really work, and seeing real traders trading for a time period, to develop a comfort level which is absolutely necessary to becoming a good trader. If you're not comfortable with your exectution choices, strategies, entries/exits...then you will not be able to "pull the trigger"....and, thus, not get the experience to make good money.
Get the basics from someone who can actually back up what they're showing you with track records....then continue the "learning path" with other successful traders....our path is one (basic 3 day, open to public, 4 week "hands on" boot camp" , then perhaps Pairs and Mergers up in British Columbia for example).
Some people will just plain never accept training...prefering to "already know" enough to begin trading...not the smartest move...often times we get people long after they have gone through the long numbered list on a previous post...and we hear "gee, I wish I knew this or that before" etc. And some people insist on blaming others for their lack of success...which is a fundamental flaw, not only in trading, but in all business pursuits, IMO.
Anyway...if anyone is interested in a free overview, and lives in Chicagoland... Rob from PairCo and I will be giving a free set of workshops on August 22. More info: www.stocktrading.com/chicago2006.html
All the best everyone,
Don
(I guess this did end up sounding a bit like an ad...but I firmly believe all the above to be true...and there are other places who train....FNYS for example).
I almost hate to say this...but "trading is simple" IT's the Psychology/Mental part is the "hard" part...hard to overcome so many "can'ts" "didn'ts" and my favorite "I tried" ....
The comment about the trader at home trying to make money is true for the most part...there are 15 million or so retail "trading" accounts that have a great number of smart people attempting to trade ...without having been adequately trained...(believe it or not, I'm not trying to sell anyone on our training specifically.
That being said, it does take a good understanding of how things really work, and seeing real traders trading for a time period, to develop a comfort level which is absolutely necessary to becoming a good trader. If you're not comfortable with your exectution choices, strategies, entries/exits...then you will not be able to "pull the trigger"....and, thus, not get the experience to make good money.
Get the basics from someone who can actually back up what they're showing you with track records....then continue the "learning path" with other successful traders....our path is one (basic 3 day, open to public, 4 week "hands on" boot camp" , then perhaps Pairs and Mergers up in British Columbia for example).
Some people will just plain never accept training...prefering to "already know" enough to begin trading...not the smartest move...often times we get people long after they have gone through the long numbered list on a previous post...and we hear "gee, I wish I knew this or that before" etc. And some people insist on blaming others for their lack of success...which is a fundamental flaw, not only in trading, but in all business pursuits, IMO.
Anyway...if anyone is interested in a free overview, and lives in Chicagoland... Rob from PairCo and I will be giving a free set of workshops on August 22. More info: www.stocktrading.com/chicago2006.html
All the best everyone,
Don
(I guess this did end up sounding a bit like an ad...but I firmly believe all the above to be true...and there are other places who train....FNYS for example).