SOC,
Skilled traders do not view commissions, stops, platform costs, telephone bills, stationery, or datafeed subscriptions as risks, they view these as business expenses.
Agreed, for the most part. However, "stops" are not business expenses, they are indeed part of the "risk" and for very good reason.
Stops, when they were first introduced into the traders arsenal as a money management tool in the early 1900's, were a sound and logical progression within the speculators methodology for attempting to profit from price fluctuation.
As "Charting" gained popularity, and the numbers utilising the concepts increased, so the variety of methodologies became inversely proportionate, which makes sense, as the truely horrible methods would see you broke quickly. Thus, the more successful the methodology, gradually the greater the number of people using it.
The outcome, is that, on any given signal to buy or sell, ever greater numbers of people are competing, within a compressed time frame to either enter, or exit.
This by definition causes competitive buying and selling, which in the aggregate, must result in a higher buying price, or lower exit price.
I would expect your answer to be somewhere along the lines of..............I always get the price I planned, ........the early bird, someone must always be first, and this will be proportionate to the skill, execution speed of individual traders, floor traders will be first in most instances, followed by the best of the rest, ............but for the 95%, my previous assertion holds true, therefore stoplosses increase their risk, over and above any cost of doing business.
cj12,
Many of life’s failures are people who did not realize how close they were to success when learning to day trade. But they gave up.A man can fail many times,day trading but he isn't a failure until he begins to blame somebody else.
The old saying 95% lose day trading.I rather say 95% of the failures come from people who have the habit of making excuses
All very nice, and I'm sure like many of the self-help books out there, more than a kernal of truth. However, all the self-motivation provided by these books are non-specific to the task at hand..........viz. I could be a failing surgeon, due to anxiety attacks, (we just got that TV series, my wife loves it) and possibly the advice contained would allow the ramping up of self-confidence, esteem,.........however, all the pumping-up in the world will not help unless you have the skills, and as we continuously see, even very intelligent people struggle in the financial markets. Therefore, the positive vibe, will in all likelihood increase their losses, unless they can go back to square one, and start the whole learning process again, most can't or won't.
RUDE,
Ducati, again, do agree with you in the most, but if expenses are high then a person needs to know how to economise here, it's a buissiness, after all. A simple charting package and a broker, maybe? Got to rush!
Unfortunately, as alluded to in my response to SOC, speed of execution is of primary importance to the daytrader, and even to myself, who will wallow in and out of positions.
Scrimping on trading platforms is a false economy, as it will without a doubt increase your losses.
c6,
And how many T.Edisons are there in the worlds population, anywhere approaching 5% or less?
RUDE,
Ducati, you mention 'self delusion', 'self delusion' as a self controlable part of the human psyche, defines 'winners' and 'losers'. It's up to the individual to be able to control how deluded they become about the markets. Delusion/risk, risk/delusion, in a way they create each other. Just my 2 cents?
Weeeeeeeeeell, how would you ....
1...realise you were self-deluded, if in point of fact you were?
2...and what would you do to rectify this unhappy circumstance?
SOC,
The reduction of risk to a very large extent hinges on trading ability. Trading ability relies on dealing skills and knowledge. Knowledge is not enough, there are other components that compliment it and the trader's familiarity with the instrument and its potential and or idiosyncrasies.
Disagree.
Accurate recognition and defining of risk is step one.
Step two involves the assessment of how this risk can be managed, if at all.
Step three, formalise a plan for your personal management of the risk.
Step four, take the risk (enter) or, reject the risk, (stand aside)
You imply that trading skill can overcome risk. This is nonsense.
I would agree that knowledge is vital, without this, you can not recognise,define, or manage your risk.
I think (personal observation) that you assume a greater level of knowledge within the participants on these boards, and thus jump or skip the basics, which are now purely subconscious for you, but lethal to someone just starting out. The rest of your post is undoubtably true.
cheers d998
