Why Johnny cant trade..........
- Thread starter xianokie
- Start date
Hardly. I've been doing this for thirteen years. Though my strategies and tactics have changed over the years, these days I buy retracements in trends. In order to do so, however, I make use of a MACD histogram.
This is only a general response, of course, given the nature of the thread. If you're interested in specifics, I'll put something together for the "Methods" thread.
--Db
Dottom-- you always seem to be correct in what you state. Oldtrader that was very interesting. I am sure I could learn a great deal from you.
I am about as short term as you can get. Most traders do not know how to make money. Short term trading only makes them lose it faster. Then when you subtract commissions and slippage its no wonder the short term seems tougher. However, when a short term trader starts to take advantage of slippage creating positive slippage, keeps his costs low and employs a method that can make money he bypasses a lot of other trader problems. Dottom put the math together perfectly. Show me how to make the big dough while sitting with futures trades and I will be a very studious apprentice. Until then short term trading seems easier to me. (That may only be because I know how to do it.)
Scalping stocks takes concentration but for me it is significantly less taxing than holding losers and hoping they turn positive. I love dumping my losers after 10 -20 cents and looking for my next trade. That is not stressful at all. If I feel stress I usually dump the trade. Stress was my previous career. Discovery deadlines and clients that did not want to finance their cases properly but still wanted professional representation.
I am about as short term as you can get. Most traders do not know how to make money. Short term trading only makes them lose it faster. Then when you subtract commissions and slippage its no wonder the short term seems tougher. However, when a short term trader starts to take advantage of slippage creating positive slippage, keeps his costs low and employs a method that can make money he bypasses a lot of other trader problems. Dottom put the math together perfectly. Show me how to make the big dough while sitting with futures trades and I will be a very studious apprentice. Until then short term trading seems easier to me. (That may only be because I know how to do it.)
Scalping stocks takes concentration but for me it is significantly less taxing than holding losers and hoping they turn positive. I love dumping my losers after 10 -20 cents and looking for my next trade. That is not stressful at all. If I feel stress I usually dump the trade. Stress was my previous career. Discovery deadlines and clients that did not want to finance their cases properly but still wanted professional representation.
If you want to understand why Johnny can't trade, just go read the Zero Sum Game thread. Johnny wants to complicate everything rather than strip it down to the bear (no pun intended) necessities. Hell, Johnny can't even solve a simple equation or understand the concept of secondary markets!!!
Darkhorse
I must say I am normally not disappointed in your post, but in the Zero Sum Game Thread you really surprised me. Not meaning to be overly critical because I am really glad to see you back and as I have told you many times "I really enjoy your posts". But I must say that concerning the "THE STOCK MARKET", which would be the secondary market for equities, it is a simple equation and it does not "SUM" to zero.
Darkhorse
I must say I am normally not disappointed in your post, but in the Zero Sum Game Thread you really surprised me. Not meaning to be overly critical because I am really glad to see you back and as I have told you many times "I really enjoy your posts". But I must say that concerning the "THE STOCK MARKET", which would be the secondary market for equities, it is a simple equation and it does not "SUM" to zero.
IMO, the number one cause of failure is human emotions/perceptions. At least, I see this in myself; it's a constant struggle to overcome emotional decision making. I've developed several good mechanical strategies that are doing well in forward testing, but it's hard as hell for me to not futz with the trades and screw them up.
ges
ges
there is no one single reason why johnny can't trade, because everybody is different, but we have the obvious contributing factors.
--desire to pay the monthly bills exclusively from trading. If this is the goal, then certainly 90% or more will fail to achieve it. It is one thing to be profitable, it is quite another to trade for a living. It is the difference between a good amateur and a pro. Most people will never make the leap, just like most people will never be pro athletes.
--absolute beginners off the floor paying retail commissions trying to scalp. They have put themselves at a severe disadvantage and they don't know it, or don't want to know it. These are the kinds of people that fill up prop trading firms and then wash out.
--desire to pay the monthly bills exclusively from trading. If this is the goal, then certainly 90% or more will fail to achieve it. It is one thing to be profitable, it is quite another to trade for a living. It is the difference between a good amateur and a pro. Most people will never make the leap, just like most people will never be pro athletes.
--absolute beginners off the floor paying retail commissions trying to scalp. They have put themselves at a severe disadvantage and they don't know it, or don't want to know it. These are the kinds of people that fill up prop trading firms and then wash out.
There are a ton of traders making a living at trading out there. Not all of it is in stocks. There are commodities (actual or physical), real estate and even dogs. But the ones that stay in it over the long haul have one thing in common they are concentrated on money management. That means watching every aspect of the income and outflows. An old horse trader told a younger one "Keep the halters!". The younger trader didn't understand until one winter he had to sell the halters to eat. Watch the small stuff comissions, bid/ask, slippage. I have known many many successful traders in several countries and almost to a person they NEVER brag about how much they make. Don't let the right hand know what the left hand is doing. Leave the ego at the door and come to the party to make money. Don't make money your God let God be your God. Money is a tool. Fall in love with your wife and kids and nothing else. In other words hold any strategy or system lightly and don't get married to anything except your wife. Best of luck and enjoy the ride.
