How to make money trading

[trader_dante]

Which is why you are more likely to hear someone on a trading floor say: "I've had a difficult week, lost $400,000 but, I'll get it back" rather than "Say, er, Bob, you had a good week didn't you? What moving averages do you use when you trade the S&P?"

 

[fayalac]

Of course veryone cares, its money....
Going back to Sienna´s Miller analogy, ok, she rejected you, my basic question here would be why looking for a less desirable lady?, maybe you are not her kind what does not mean you are not all those ladies kind.
Lets say i was after a 150 pips trend which failed for just 1 pip, ok, maybe i will leave with the remaining pips once i realize on the trends change, but i will keep looking for those kind of trends instead start looking for 10 pip runs.

 

[wackypete2]

I would be proud to say I was rejected by Sienna Miller, knowing I took my best shot.

Peter

 

[meanreversion]

Struggling to think what I'd say to her actually. "I loved you in your last film, er ... .. um what was it called again?"

 

[fayalac]

Me toooooooo!

 

[meanreversion]

Come to think of it, I can't recall a single film she has been in. Still wouldn't k.h.o.o.b.f.f. though.

 

[Jumpinjack]

Peter[/QUOTE]


OK, I agree with this. My opinion is that you DO have to be certain your method works, but not necessarily be confident that a particular valid trade signal will win.


Let me tell you something here. On average I do 2/3 intraday trades per trading session. Before I enter the market I know that my position will bring me a profit!

 

[fayalac]

Peter

OK, I agree with this. My opinion is that you DO have to be certain your method works, but not necessarily be confident that a particular valid trade signal will win.


Let me tell you something here. On average I do 2/3 intraday trades per trading session. Before I enter the market I know that my position will bring me a profit![/QUOTE]

No, what you do know is that the most probable thing to happen is that your signal will render a profit.
The market can go against you at any time, even in logical enters, and probabilistically anything that can happen will happen sometime.

 

[Splitlink]

Saying that the best traders "don't care" is just misleading. The best traders have a system and understand it, and realise that on occasion there is drawdown. They will approach losses with equanimity, which is to say they understand that "it happens".

To say that they "don't care" is slightly ludicrous. In fact they care about every single trade, but know that some (or maybe most) will be losers.

Imagine if a very good trader messes up an order, or skips a signal because he is hungover, and it costs money ---- do you seriously think he simply wouldn't care?

After reading "Liar's Poker" by Michael Lewis it would appear that the trader cares very much, indeed. He gets on to the salesmen who start ringing up the clients, suggesting that whatever the trader is overhung on is a good buy or sale. There is a big effort, at every gullible client's expense, to get that trader's account straightened out.

I advise that that book should be read, even though it is 20 years old, because we have had another crisis since the 1987 one and it doesn't look as if we have learned anything, at all. I'm afraid that it does not put traders in a very good light and, certainly one that would want me to become one in a large trading house.

 

[fayalac]

After reading "Liar's Poker" by Michael Lewis it would appear that the trader cares very much, indeed. He gets on to the salesmen who start ringing up the clients, suggesting that whatever the trader is overhung on is a good buy or sale. There is a big effort, at every gullible client's expense, to get that trader's account straightened out.

I advise that that book should be read, even though it is 20 years old, because we have had another crisis since the 1987 one and it doesn't look as if we have learned anything, at all. I'm afraid that it does not put traders in a very good light and, certainly one that would want me to become one in a large trading house.

If you were someone else i would be laughing....

 

[Jumpinjack]

Let me tell you something here. On average I do 2/3 intraday trades per trading session. Before I enter the market I know that my position will bring me a profit![/QUOTE]

No, what you do know is that the most probable thing to happen is that your signal will render a profit.
The market can go against you at any time, even in logical enters, and probabilistically anything that can happen will happen sometime.[/QUOTE]

Yes, of course, I know from my techniques that my position will yield a profit. I also know that from back testing and from the on balance average of my trades that I will make money when a signal appears. I know that I will make money before I take the positon, thats how confident I am. Sure, occasionaly I get caught in a fluke move and it throws me a curve but overall I make money. Why? Because I know I will make money if I take the positon! Just like you know that when you get into your car the engine will start!

 

[Splitlink]

If you were someone else i would be laughing....

Well, let's hear the joke!

Don't tell me! You know some , or are yourself, a professional trader and butter would not melt in their mouths.

Maybe the book has painted professional traders badly but no-one has sued the guy and one has to believe someone. Michael Lewis is a person who was a trader, himself (so he professes) like many who profess to be on here. Heaven alone knows what goes on on panic days.

 

[meanreversion]

I was an institutional trader once and the main problem in the trading room was ego. Highly paid (and sometimes poorly educated) men flinging large amounts of cash around the globe ... sometimes it's devastatingly effective (Goldman) and sometimes it goes tits up (Lehman). The worst examples of trading I saw were when ego came into play and the cardinal rule of run winners/cut losers was inverted to simply run losers.

Here's something to ponder. In most professions, 2-3 years training are required, or more (law, medicine, architecture etc). Institutional traders have NO formal training, it's all learning on the job. Astonishing, isn't it?

 

[Splitlink]

I was an institutional trader once and the main problem in the trading room was ego. Highly paid (and sometimes poorly educated) men flinging large amounts of cash around the globe ... sometimes it's devastatingly effective (Goldman) and sometimes it goes tits up (Lehman). The worst examples of trading I saw were when ego came into play and the cardinal rule of run winners/cut losers was inverted to simply run losers.

Here's something to ponder. In most professions, 2-3 years training are required, or more (law, medicine, architecture etc). Institutional traders have NO formal training, it's all learning on the job. Astonishing, isn't it?

I am glad to learn that I was not sticking my neck out too much when I mentioned Michael Lewis. Where there is smoke there is fire. I, personally, am not close to the trading community, except for those posting on this site, but your descriiption and his are close enough to attract the attention of all those who should realise that Lewis traded in the eighties whereas I assume that your experience was, relatively, more recent. As in Lehman, Salomon Bros was taken over, the business went down the chute and the incidents were twenty years apart so nothing, really, has changed.

Thanks for your post.

 

[meanreversion]

I am glad to learn that I was not sticking my neck out too much when I mentioned Michael Lewis. Where there is smoke there is fire. I, personally, am not close to the trading community, except for those posting on this site, but your descriiption and his are close enough to attract the attention of all those who should realise that Lewis traded in the eighties whereas I assume that your experience was, relatively, more recent. As in Lehman, Salomon Bros was taken over, the business went down the chute and the incidents were twenty years apart so nothing, really, has changed.

Thanks for your post.

I don't think human nature ever changes, does it? Greed, fear, ego, they're all part of us and that won't go away. Remember the tech boom in 2000, that burst and everyone assumed no more bubbles.. then 5-6 years later another massive bubble, this time in property? Bubbles (I think) are unpreventable. A certain market will start to rally for fundamental reasons, and eventually it approaches hysteria with people buying for fear of being left behind. Then it deflates/collapses, and a while later the same thing happens elsewhere. This has been going on for hundreds, possibly thousands of years.

 

[meanreversion]

This is the idea behind trend following - kurtosis ... the market is more prone to exaggerated moves than a standard binomial distribution would predict. Leptokurtosis = fat tails.

 

[fayalac]

Let me tell you something here. On average I do 2/3 intraday trades per trading session. Before I enter the market I know that my position will bring me a profit!

No, what you do know is that the most probable thing to happen is that your signal will render a profit.
The market can go against you at any time, even in logical enters, and probabilistically anything that can happen will happen sometime.[/QUOTE]

Yes, of course, I know from my techniques that my position will yield a profit. I also know that from back testing and from the on balance average of my trades that I will make money when a signal appears. I know that I will make money before I take the positon, thats how confident I am. Sure, occasionaly I get caught in a fluke move and it throws me a curve but overall I make money. Why? Because I know I will make money if I take the positon! Just like you know that when you get into your car the engine will start![/QUOTE]

I also know that once i enter into a position i will make money as when i start my car it will run. But i am always aware that when the market goes against me it can take me some time, i just dont know how many, but i will profit from that position. I dont do 2/3 trades a day. Since i am following trends i work clockwise, simply - sometimes - i kow that to get my signal can take some time and if i know that my signal can appear among 2-3 of the morning then i just try to identify my enter point (S/R) and if i know i wont be there i just program the order to be executed at some price, normally it pays me back into the next few hours. I follow 4 pairs, but sometimes at the highly correlated pairs ( which makes 8 i follow ) the effect is delayed at some of them and i can get both, so i do normally 8 - 10 trades a day.

 

[fayalac]

Well, let's hear the joke!

Don't tell me! You know some , or are yourself, a professional trader and butter would not melt in their mouths.

Maybe the book has painted professional traders badly but no-one has sued the guy and one has to believe someone. Michael Lewis is a person who was a trader, himself (so he professes) like many who profess to be on here. Heaven alone knows what goes on on panic days.

The joke mate?, come on... Some years ago i went to a curse, it was not about trading, to Mexico City, it was interesting but at some time, the speaker change the subject. He started saying "these kind of professional suffer, and HE is willing to do it, likes hard, very hard working periods and most of the times he gots nothing back, lives with too small ammounts of money....", i standed from my chair and left the place.
If i will do something that from the very beggining i know it will fail, then i will not waste my time.
I´ve been trading for some years and i can say it took me long to be profitable. I have seen panic days and trendless days as well at most of the pairs, i am not a mentallist - as anyone here - but i know if i stick to my method - intraday - i will win and i am very well aware that things can go bad anytime so i am also aware that at some time i may be forced to take some losses, if normally i win to take an eventual loss doesnt bother me at all.
Regarding to be a professional or not..., that is another issue. Noone is really a professional untill he can claim he knows it all but the markets are so dynamic that you never do.
I dont remember these guys name at the moment, maybe some physicist arround can tell us, but for example the guy who originally described and proved quarks existence was not a physicist he was a mathematician and most physicists were jeallous with hem saying he was only a "mathematician", honestly who cares what profession he had if after all he was rigth?.
My point is - and i hope you didnt took my comment at a bad way - if someone wins - despite hes personal history and development - then hes doing something good, why dont we hear what he does instead try to missqualify just because the theory does?.
Someone - as many people arround have - said why do you trade if 80% of traders lose, 15% make a living and only 5% are rich?, well since we - you, me and everyone else here - were born we were statiscally condemned to pooberty since 80% of world population lives in pooberty, 15 - 16% belong to middle classes and only 5% are rich or superrich, since we are here we have to make an effort for something, at least i believe people arround the trading arena are not those kind of guys who spend their saturday´s afternoon drinking beer at the sofa, watching footbal or some other stuff.

 

[Splitlink]

The joke mate?, come on... Some years ago i went to a curse, it was not about trading, to Mexico City, it was interesting but at some time, the speaker change the subject. He started saying "these kind of professional suffer, and HE is willing to do it, likes hard, very hard working periods and most of the times he gots nothing back, lives with too small ammounts of money....", i standed from my chair and left the place.
If i will do something that from the very beggining i know it will fail, then i will not waste my time.
I´ve been trading for some years and i can say it took me long to be profitable. I have seen panic days and trendless days as well at most of the pairs, i am not a mentallist - as anyone here - but i know if i stick to my method - intraday - i will win and i am very well aware that things can go bad anytime so i am also aware that at some time i may be forced to take some losses, if normally i win to take an eventual loss doesnt bother me at all.
Regarding to be a professional or not..., that is another issue. Noone is really a professional untill he can claim he knows it all but the markets are so dynamic that you never do.
I dont remember these guys name at the moment, maybe some physicist arround can tell us, but for example the guy who originally described and proved quarks existence was not a physicist he was a mathematician and most physicists were jeallous with hem saying he was only a "mathematician", honestly who cares what profession he had if after all he was rigth?.
My point is - and i hope you didnt took my comment at a bad way - if someone wins - despite hes personal history and development - then hes doing something good, why dont we hear what he does instead try to missqualify just because the theory does?.
Someone - as many people arround have - said why do you trade if 80% of traders lose, 15% make a living and only 5% are rich?, well since we - you, me and everyone else here - were born we were statiscally condemned to pooberty since 80% of world population lives in pooberty, 15 - 16% belong to middle classes and only 5% are rich or superrich, since we are here we have to make an effort for something, at least i believe people arround the trading arena are not those kind of guys who spend their saturday´s afternoon drinking beer at the sofa, watching footbal or some other stuff.

I'm not sure where I am with you on this but I don't think that we are very far apart.

Nevertheless, I do not think so kindly about those mentioned in "Liar's Poker" and the financial sectors have got us into another crisis since then.

Anyway, thanks for taking the trouble to answer me, I don't always deserve it.

Split

 

[meanreversion]

What was the line, a million dollars, one hand, no tears?

One of those protagonists was John Meriwether, whose latest fund closed about 6 months ago due to poor performance. The only person he's ever made money for is himself - he's also managed to lose a lot of money for his investors down the years.