Focus or Money Management?

1

12WBT

Day trading on very short times frames.
Tick, 1 min charts, etc or the DOM.

What is more important to you?
Focus or money management.
Love to hear other traders thinking or thoughts.
 
12WBT said:
Day trading on very short times frames.
Tick, 1 min charts, etc or the DOM.

What is more important to you?
Focus or money management.
Love to hear other traders thinking or thoughts.
Click to expand...

Money management.

Just get long short as many times as you like. Think of it as tossing coins....how many times can you be wrong given that you can bias either side ! :)
 
Been thinking about this for a while now.

When I posted I was thinking money management was a biproduct of focus.
And that focus will control the outcome, wrong or right.

But then doe's money management control focus.
 
Both decent money management rules and focus obviously needed. No lapses, even small lapses ever allowed in trading. It's a very competitive business.
 
counter_violent said:
Money management.

Just get long short as many times as you like. Think of it as tossing coins....how many times can you be wrong given that you can bias either side ! :)
Click to expand...

Don't you think that the money management should have been considered before entering the trade? Tossing coins is random, so each closing trade will decide how much further to go with that procedure and what loss can be tolerated on each trade.
 
Splitlink said:
Don't you think that the money management should have been considered before entering the trade? Tossing coins is random, so each closing trade will decide how much further to go with that procedure and what loss can be tolerated on each trade.
Click to expand...

Well, for those who want to sit there all day focussing and timing trades, then that's fine. But in my experience, there is a danger of trying to justify computer screen time to making profits.

I can't be bothered with all that frankly given that it is extremely time consuming and that every decision is still a less than 50% chance of being correct successful. Success in the sense that it was the correct decision at the right time and price both for entry and exit...let alone correct stop placement and so on.

All I'm saying is, it's perfectly possible to keep playing the bias stake game until you reach a point of profit overall. It doesn't mean that we have to keep on adding trades ad-infinitum. We can always close off profitable trades when we decide the bias has shifted to the other side, and maybe back again and so on. It's just totally flexible in that sense.
 
I don't see how any amount of focus will help if the basis for which you're employing the focus is flawed. Having a trading method which has a consistent edge would seem to come ahead of focus. And I'm not even sure you'd need the latter with the former.

And money management - a similar view. Doesn't matter how well you trim your losers and let your winners run/pyramid up - if you've got a net losing method no amount of money management will protect your capital.

counter_violent's point about coin toss and 50/50 is interesting. I've set trades to open with a default 15 pip stop and 15 pip target. I further only took trades inline with what I perceived at the current trend (slope of price line and position with respect to a medium term moving average). I still get far more losers than winners. I haven't gone as far as basing trades on a coin toss, but even then, I suspect if I did with similar 15:15 or N:N stop/target levels, I'd still get more losers than winners - not 50/50. Why is that?
 
I suspect if I did with similar 15:15 or N:N stop/target levels, I'd still get more losers than winners - not 50/50. Why is that?
Click to expand...

Commission or spread will affect this.
 
BTW trading based on a coin toss wont necessarily give a 50% win rate , i don't understand how people came to that conclusion the outcome of the coin toss heads or tails yes it is 50/50 but that's irrelevant when it comes to trading based on that outcome .
 
Sigma-D said:
I don't see how any amount of focus will help if the basis for which you're employing the focus is flawed. Having a trading method which has a consistent edge would seem to come ahead of focus. And I'm not even sure you'd need the latter with the former.

And money management - a similar view. Doesn't matter how well you trim your losers and let your winners run/pyramid up - if you've got a net losing method no amount of money management will protect your capital.

counter_violent's point about coin toss and 50/50 is interesting. I've set trades to open with a default 15 pip stop and 15 pip target. I further only took trades inline with what I perceived at the current trend (slope of price line and position with respect to a medium term moving average). I still get far more losers than winners. I haven't gone as far as basing trades on a coin toss, but even then, I suspect if I did with similar 15:15 or N:N stop/target levels, I'd still get more losers than winners - not 50/50. Why is that?
Click to expand...

I once did a study of a clear down trend move over a period of a few weeks on USD CAD
It was simply counting up and down candles on all time frames from 1m through to 1 day.
The findings were interesting to say the least. On all time frame counts up to 1 day, up v down candles were roughly equal in number. It was only when we got to 1 day count that the percentage started to bias in the direction of trend. Roughly 53% down v 47% up.
 
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Splitlink said:
Don't you think that the money management should have been considered before entering the trade? Tossing coins is random, so each closing trade will decide how much further to go with that procedure and what loss can be tolerated on each trade.
Click to expand...

If you do 30 trade's in an hour for example.
Maybe you are trading the outcome without looking at the money management.
You can keep a score in your head of the points/pips made or lost.
Then when the work is complete you can look at the account balance.
 
counter_violent said:
Well, for those who want to sit there all day focussing and timing trades, then that's fine. But in my experience, there is a danger of trying to justify computer screen time to making profits.

I can't be bothered with all that frankly given that it is extremely time consuming and that every decision is still a less than 50% chance of being correct successful. Success in the sense that it was the correct decision at the right time and price both for entry and exit...let alone correct stop placement and so on.

All I'm saying is, it's perfectly possible to keep playing the bias stake game until you reach a point of profit overall. It doesn't mean that we have to keep on adding trades ad-infinitum. We can always close off profitable trades when we decide the bias has shifted to the other side, and maybe back again and so on. It's just totally flexible in that sense.
Click to expand...

Agree it is very labour intensive and not for everyone.

But surely if do this type of work over a long period.
You are better than a coin toss.
 
Trader333 said:
Commission or spread will affect this.
Click to expand...
No trader333, it doesn't.

Try it for yourself.

Select an instrument at random.

Select a point in time at random.

Enter long or short at random with the stop the same distance form the target.

I f you have more losses purely because of the spread I'll eat my hat and take sonic out to dinner. (And then on up to Brokeback for a cowboy weekend. I don't care how pretty his gf is, we all need the real stuff now and again...)
 
counter_violent said:
I once did a study of a clear down trend move over a period of a few weeks on USD CAD
It was simply counting up and down candles on all time frames from 1m through to 1 day.
The findings were interesting to say the least. On all time frame counts up to 1 day, up v down candles were roughly equal in number. It was only when we got to 1 day count that the percentage started to bias in the direction of trend. Roughly 53% down v 47% up.
Click to expand...

Are you saying the trend on the daily has a higher probability of carrying any trade in a lower timeframe? Please tell me that's all there is to it. I'm ready to believe anyone, anything.
 
Sigma-D said:
Are you saying the trend on the daily has a higher probability of carrying any trade in a lower timeframe? Please tell me that's all there is to it. I'm ready to believe anyone, anything.
Click to expand...

I'm saying that even with a visible strong trend...there is sufficient noise in the market to take you out more than 50% of the time and on all time frames sub 1 day.

So if you must be an entry, target and stop trader, then a top down analysis (month,week,day) is the Only way to go. That's the edge...longer time frame and lots of patience !
 
Last edited:
counter_violent said:
I'm saying that even with a visible strong trend...there is sufficient noise in the market to take you out more than 50% of the time and on all time frames sub 1 day.

So if you must be an entry, target and stop trader, then a top down analysis (month,week,day) is the Only way to go. That's the edge...longer time frame and lots of patience !
Click to expand...
I looked at the longer tfs when I ran out of humour with the 15 min some time back. The charts looked rather similar. None of this fractals bollox, just the same spikes, reversals, whipsaws etc.

I'll give it another go as I have nothing to lose.

Thanks for the suggestion.
 
Sigma-D said:
I looked at the longer tfs when I ran out of humour with the 15 min some time back. The charts looked rather similar. None of this fractals bollox, just the same spikes, reversals, whipsaws etc.

I'll give it another go as I have nothing to lose.

Thanks for the suggestion.
Click to expand...

Also, you really do need to think about the first obstacle to overcome, which is spread cost.

How many trades might you do in a typical year? For me it could easily be 10 a day. Which equates to 2,500 a year. So lets assume a 2 spread x stake, even at a quid that's 5k large. A lot of traders would be very happy to make 5 large as opposed to losing 15!
 
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counter_violent said:
Also, you really do need to think about the first obstacle to overcome, which is spread cost.

How many trades might you do in a typical year? For me it could easily be 10 a day. Which equates to 2,500 a year. So lets assume a 2 spread x stake, even at a quid that's 5k large. A lot of traders would be very happy to make 5 large as opposed to losing 15!
Click to expand...

Spread is operational cost. No way round it.

Seriously, if I could make 1/10th of what my broker makes on each of my trades as a profit, I'd sign my soul away.
 
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