i promised to get back at this. sorry for the delay.
So here we go,
At shadowman: Why not trade to much? well in fact Reyth answered that beautifully.
Yeah indeed its mostly about anti fatigue measures and sharpness of mind.
The market can fluctuate in matther of seconds. Your concentration has to be 200%, and execute the trade fast.
If you're doing trade after trade all day long, you'll start off doing things on semi auto pilot. Mistakes will be made.
It often is said that if you are right 6 times out of 10 you are considered an expert. Most wont even get 5/10. but in fact this stated is just a lot of crap.
Doesn't matter how succesfull your hit ratio is. what matters is, when you hit it right, you have to make it count.
to simplify this. just take a roulette example. what do you gain if we got Ec's right 6 out of 10?
what do we gain if we get a single bet right 1 out of 20?
So hit ratio isn't important at all.
So you ask about my edge. well it's not about which trade i do exactly or how many times i'm right or wrong.
as stated in a previous post. its about how many you can take and keep moving forward.
My money management is so strong in a way that it can take a lot. And that is what makes a good trader.
Believe it or not, main concern for a serious trader is what to do to not lose his capital. he'll only trade when the conditions are met which indicate that the chances of losing his trade are very slim, and when it does lose, it hardly affects his capital.
a inexperienced trader will think , how can i win. I think you see the difference.
Everybody is an financial expert in a bull market. But when the market turns against you, then you get to see which ones are good traders, and which have just had some luck previously
Lets take my own trading situation as an example. the months november, december, just gave me crap on the market. i've endured a string of losses, and the good trades were very average. But still manages to balance my capital.
The mounth january i got 3 beautifull trades. I only needed one the balance out all previous losses. so the other two were net profit. Now the month february is almost over. hasnt been a great month either. and that what makes it hard also.
the discipline, and the patience. sometimes its harder than you think. But its well worth it. i only need a couple of strong hits a month to get nice profit and thats what counts.
if been papertrading for 3 years, and 2 years with real money. in these past 60 months i only had 2 months with a net loss. and these were so small that it didn't even bother me a bit.
Many beginners would say, i'm not expierenced enough, but i'm interested so, he's paying a bank advisor for his service to guide him through.
To be honest. you are better of educating yourself instead of putting your money in the hands of someone else. Bank advisors will tell you that gaining a yearly profit of 10% is a great result.
Let me tell you this , 10% profit on yearly basis , thats an amateur talking.
at Reyth: I like the way you think. You could become a good trader if you would get serious about it. But i guess the fascinating game called roulette takes away much of your time
you are correct concerning why not overdoing the amount of trades to be done daily. Less is more principle for reasons i explaned above.
About technical vs fundamental analysis, best way to go is use both.
about the randomness in roulette and financial market. seems like you get it.
its not the same kind of randomness . What does make the market move? Rumors. Speculations, actions made by traders, make a course chance. so yess, financial market can get random, but its al based on human actions.
in roulette the outcomes wont be affected by the players decission.
At mr perfect: Correct it clearly comes down to understanding the market, and knowing what to do in different scenarios. You got to know when tot rade, when to back off, which trades are worth taking. And most importantly. When you are doing a trade, reflect on how it can influence your bankroll. All this is the hard part.
That’s where i’m strong at, doesn’t matter that much for me if a taken trade is losing, and even so if a losing streak appears, where the market is clearly going against me. My capital/ bankroll can handle it. i only need a couple of good trades.
To explain this the roulette way, it’s like playing a single bet flat betting, and the number hits 5% of the time on a continous basis. You see , no worries there.
The reason why i’m not able to fully be able to live from trading is because of what sceps has mentioned. It’s easier to start of with a higher bankroll. But its not a premise to be succesfull.
To simplify this, lets just look at this the roulette way.
I do reinvest my profits by buying new contracts. The more contracts you have. The stronger your position gets.
Its the same with roulette. Having more contracts simply means to push on higher stakes in roulette
1 contract could be : 1 point = 1 euro. If you have 10 contracts , 1 point would represent 10 euro’s.
So the amount of contracts you have equals your betting size in roulette. Knowing that you betting size may not expand 1-2% of your bankroll. It safe to say when you’re able to higher your stakes (contracts) without taking more risk.
Thats one reason why i’m not able to live from trading succes only. I’ll have to buy more and more contracts to get a stronger position. This simply needs time. So thats why having a higher starting bankroll/ capital does save you lot of time.
The second reason is that i focus only on european market because i fully understand it.
Asian market i do have tested and could be interesting but its to time consuming cause its out of my timezone, so i does affect my sleeping hours a lot. Which could have a big influence on my trades in terms of lack of rest i could get slappy. So i simply dropped it.
To be able to get were i want to be, i’ll have to jump on the US market. So i’m doing the same research i did on european markets. And thats why i’ll be attending trading school, because the trading principles taught over there focus on us market only.
My trading plan as it is right now doesn’t work as it should on US, mostly because of the volatility. Its much harder to get well positioned over and over again in US market.
Once this ‘US problem’ is solved and i’m getting more and more contracts in. I wouldnt have any concern about getting a dayjob.
Isn’t this everybodies dream?? To be financially independend, not be pushed to work your ass off for some asshole boss to get a salary which aint high enough to live comfortly.
Be your own boss, without the need to work for it for 12 hours a day.
In fact i only spend 4 hours a day max on trading activities. So i do have a lot of free time. Although part of that free time goes in research to even get better.
At scepticus: indeed, the psyh is extremely important. Tobe succesful, you got to adjust you mindset in a way that it aint used too. Many people fail because this aspect is to hard on them.
You dont necessisarly need a huge bankroll, but it sure is handy. Although many would say its appropirate to have a capital between 25 and 50K, I’ve personally started with only 5k and doing just fine. Having a higher bankroll does save you time.
A plan sure is indespensable. Searching for one that is profitable without neglecting the important basics, is the hard part and very time consuming. But when that is done. It all comes down to apply it, and having the patience and discipline not to deviate from it.
As explaned above my edge isn’t about an assumption of which trade to take. I dont assume anything at all. I just let the market do its thing. The beauty of it is, it doesn’t matter much what the market decides to do. I know i’ll stay in front in the end.