Why most traders fail

Quote from mark2:

More bull shit ....a chart is never complete nor useful without the reference time/volume/ tick frame defined. When you draw a chart, you have X and Y axis, one for the period and one for the price. These two are the basic elements for that to qualified to be a valid chart. I don't see the point of making any statement based on removing the time unit on the graph.

Basicallly what a 5 mins chart tells doesn't have to be the same as what a weekly chart tells... not to mention the volume and tick charts

the point is .. yes tho the charting rules and principles can be apply to a chart on any time frame, the results of the inmterpretation and analysis can be different on different time frame. Remving the time frame of a chart and then making a statement is truely unrealistic.
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Quote from stock_trad3r:

When you zoom out to a 3 year timeframe the chart may appear parabolic but when you zoom in to a 3 month chart it is linear or even flat. Which do you use? 3 month or 3 year? This is called the rescale problem and there exists no solution to it.

The baseline chart for inflation becomes parabolic over a long enough timeframe as does the S&P chart so a chartist could assume that based on this parabolic chart the S&P should fall 30% but compounded growth such as riskfree interest is parabolic.
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Nonsense. This sounds lofty, but only an academic, college kid, or grad student, most of whom don't trade and have never traded, would buy into this.

This is fractal geometry at its finest. Go re-read my original comment about the fractal nature of markets. Also go read Benoit Mandelbrot.
 
Quote from monty21:

IMO, most traders fail because they lack a sufficient amount of funds to begin their ventures...
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Not if you have a minimal drawdown strategy with no margin. Traders can trade with a small account if they can satisy this criterion.

I know because I have done it with no problems...
 
Quote from ShoeshineBoy:

Not if you have a minimal drawdown strategy with no margin. Traders can trade with a small account if they can satisy this criterion.

I know because I have done it with no problems...
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Thanks for the response... Can I ask what instrument(s) do you trade? How much money do you think it was necessary to begin with, considering that you do not want to take crazy risks. I mean like what management system is necessary to becoming potentially profitable yet avoiding the chance of being totally whiped out just in several trades and even with using stop losses and so forth? Realistically?

I know you can start small in some markets, but I just feel like it is much tougher to succeed. Maybe because it takes better results to overcome commissions...

What do you think?
 
Quote from monty21:

Thanks for the response... Can I ask what instrument(s) do you trade? How much money do you think it was necessary to begin with, considering that you do not want to take crazy risks. I mean like what management system is necessary to becoming potentially profitable yet avoiding the chance of being totally whiped out just in several trades and even with using stop losses and so forth? Realistically?

I know you can start small in some markets, but I just feel like it is much tougher to succeed. Maybe because it takes better results to overcome commissions...

What do you think?
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I started with < 10k in an IRA IB account swing trading stocks and have slowly built it up. I trade no margin, long only. The secret is, imho, lots of backtesting and lots of practice. Of course, there's many roads to get to the same destination. I'm just telling you my experience. It took me a couple of years to get consistently profitable but even in those two years, I never had significant drawdowns. And that includes times when the market was tanking...
 
Quote from stock_trad3r:

Trading is overrated. Long term trading/investing works far better. I don't understand why most people fail to see that short term chart patterns and trends are for the most part random.
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Let's say that the markets are random.

Poker is random too. Would you agree with that? So, should professional poker players be able to make money, or are they successful due to the "random constant luck"?

Let me ask you another question. Blackjack is random too...right? Imagine that you watch a black jack player play hand after hand, but you have the ability to jump in at any time before the next hand is dealt and play their hand. Could you increase your odds to a fairly predictable probability that ensures you win in the long run? Think about it long and hard. If you understand probabilities, the answer should be fairly easy.

Let me ask you a fourth question. Do you think a casino would allow you to just sit and watch a black jack table and all the players hands that were dealt all day long, while you "jump in" whenever you "feel like it"?:D

Go to a casino and try it. See what happens. :eek:
 
Quote from ShoeshineBoy:

I started with < 10k in an IRA IB account swing trading stocks and have slowly built it up. I trade no margin, long only. The secret is, imho, lots of backtesting and lots of practice. Of course, there's many roads to get to the same destination. I'm just telling you my experience. It took me a couple of years to get consistently profitable but even in those two years, I never had significant drawdowns. And that includes times when the market was tanking...
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Interesting... did you put your entire captial (i.e 10,000) on a single stock or did you diversify... I assume you also didn't just pick round lots either?
 
Quote from trader56:

Keep working on, yuo contradict yuorself, but are on the right track.
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Absolutely not true... I did not contradict myself. Maybe you wan to tell me more why you think so.
 
Quote from monty21:

Interesting... did you put your entire captial (i.e 10,000) on a single stock or did you diversify... I assume you also didn't just pick round lots either?
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I trade between a quarter and a third on any one stock. Sometimes I had to do odd lots! But I never went over a third. I also avoid trading a few days before or after earnings releases for obvious reasons...
 
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