Best Thread Why do you think you can make money trading?
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robster970
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1. Profiting at the expense of participants making emotional decisions.
2. Providing liquidity when assets are mispriced often causing reversals and profit opportunity.
3. Aggressively trading using market orders rather than passively using limit orders therefore increasing the number of opportunities to profit rather than failing to trade because limit orders didn't get hit or filled as the market moves away from them.
2. Providing liquidity when assets are mispriced often causing reversals and profit opportunity.
3. Aggressively trading using market orders rather than passively using limit orders therefore increasing the number of opportunities to profit rather than failing to trade because limit orders didn't get hit or filled as the market moves away from them.
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oildaytrader
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Keeps stops small when volatility has broken out and increased.Tight stops of 5 to 10 points on stocks, trading against the house of cards and market makers increases profitability .Some of stock trading gurus are minting money with tight stops.:cheesy:
Placing limit orders can look impressive , so say the real traders of stocks.
http://www.tradingmarkets.com/.site...-Trading-In-Forex-Market-Volatility-79092.cfm
barjon
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mmm, I suppose anyone who has seen their account growing consistently over a decent period of time, 5+ years say, can conclude that they must be doing something right even if they don't know what it is
On that basis, it's reasonable to think that you can continue to make money if you've done so consistently before. Get the 5+ years under your belt first though, otherwise it's maybe just wishful thinking :whistling
good trading
jon
On short term timescales, the markets can be, essentially, considered zero sum. Some are precisely zero sum (most derivatives are, although it has to be noted that those that derivive from an underlying non zero sum market are not zero sum... or more precisely they are but there is a mean win of the risk free return built into one direction [and the converse] but you can consider them zero sum as with all other markets for short timescales).
So why do you think you can make money from these zero sum games - particularly when you are playing with other participants who can? I will explain why I know I can in a few days, but I make this post with the aim of provoking thought, so do go on and post...
Because I have been short the euro since 147.00 and I have been shorting rallies.
I have a profit target of 125.00
So far, I am up six figures and I am going for 7 figures.
DionysusToast
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mmm, I suppose anyone who has seen their account growing consistently over a decent period of time, 5+ years say, can conclude that they must be doing something right even if they don't know what it is
On that basis, it's reasonable to think that you can continue to make money if you've done so consistently before. Get the 5+ years under your belt first though, otherwise it's maybe just wishful thinking :whistling
good trading
jon
How would one account for a divorce drawdown in the interim ?
zupcon
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mmm, I suppose anyone who has seen their account growing consistently over a decent period of time, 5+ years say, can conclude that they must be doing something right even if they don't know what it is
Personally I'd be very uncomfortable with that situation.
barjon
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You mean the "even if they don't know what it is" bit, zup?
I wasn't suggesting that they were haphazard traders - although you could argue that such a person must have a good "feel" for the market they trade which could constitute an edge. Perhaps I should have said - even if they don't know precisely what it is in their strategy that gives them an edge. Or would that still be uncomfortable?
good trading
jon
barjon
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bs
"5+ years under your belt first though"
= longer? shorter? not relevant?good trading
jon
counter_violent
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Anyone who has to justify to a risk manager is fkt.
counter_violent
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Trade small relative to pot and manage.
DionysusToast
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Does that include spouses ?
Benton D Struckcheon
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Mine stays away. She knows the house came from our trading profits; I also once managed her mom's money (this was an income-oriented retirement account), and kept her mom happy (believe me, not an easy thing) so she knows I know what I'm doing, despite the occasional large losses.
zupcon
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Yes exactly.
montmorencyt2w
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[Stone cold sober now, honest! ]
Some interesting answers above.
From the point of the quite small paddler in this large pool, I'd say it was keeping out of the way of the big boys, my trades just being noise to them, not even worth running my stops.
With the help of the first part, the second part is to survive long enough to actually learn something about the markets over and above charting.
If the first part "works", it implies that there is a limit to the amount by which a small retail trader can grow, since he will eventually become visible to those he was trying to evade. This may be the time he either blows up, moves on, or moves out.
]Some interesting answers above.
From the point of the quite small paddler in this large pool, I'd say it was keeping out of the way of the big boys, my trades just being noise to them, not even worth running my stops.
With the help of the first part, the second part is to survive long enough to actually learn something about the markets over and above charting.
If the first part "works", it implies that there is a limit to the amount by which a small retail trader can grow, since he will eventually become visible to those he was trying to evade. This may be the time he either blows up, moves on, or moves out.
TraderNumber7
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a) The "Limit" is a Myth.
I can make far more revenue in the Forex as a so-called "Retail" trader than I ever could as a so-called "Institutional" trader. Why? One word: Leverage. If I open up an account with Standard Chartered Bank, UBS, USBC, Deutsche Bank, etc., with a nominal $15 to $25 million and I do not use Prime Broker to access the Bank's trading platform, do you really think the Bank is going to issue the credit to my account necessary to trade at 100:1? Most of them will start to top out at 10:1, if they grant that much credit to your "Institutional" account at all. At 10:1, with the same accuracy, I grow 10 times slower. That's huge.
b) Low Profile - High Volume Trading.
Sounds like an oxy-mo-ron, yes? Of course, it does - but does it have to actually be one? No, of course not. The scoop is not really rocket science at all - it is just plain ole common sense.
Here's the first step: Stop Trading Single Pairs.
Here's the second step: Stop using Stops.
Here's the third step: Stop Trading and Start Managing Positions.
Multi-Pair Trade Management, coupled to Removing the Stop, coupled to Managing Positions instead of 'trading them' - will increase your volume automatically, increase your profitability automatically (IF YOU HAVE GOOD SIGNALS FOR ENTRY), increase your overall (aggregate) accuracy automatically, reduce your overall Risk automatically, improve trade optimization automatically and eventually increase the bottom line, yes, automatically. The only part that is not automatic, is the fact that beyond the trade signal itself (which can come from an automated system), you will turn in your "Traders" hat, for a "Money Managers" hat.
Ever wonder WHY most Brokers frown on so-called "Over Trading?" LOL! They hope you don't discover the secret for slamming the door on their dirty little tricks, that's why. Did you truly think that it had a rats tail to do with your losing money to their Dealing Desk? Hardly.
Develop a system that enables you to take a broad view of the currency markets, not from 30,000 feet, but from HEO (High Earth Orbit). Once you get up there and can see the full spectrum of currencies and HOW they are linked in their relative behavior, then you can turn the corner from Trader to Money Manager, even with a lousy $9,000.00 account pushing 10k lots around the corner. You won't be there for long and the skills you develop with smaller positions, will serve you well when you start pushing the larger positions.
There is no excuse for not winning in the currency markets: Retail or Institutional. The issue is not the CFTC's 10:1. The issue is not unethical Brokers. The issue is not Newbie over-leveraging. This issue is now what it has always been since the down of the first financially traded market: Education and Insight, applied.
Those that get their education have the insight and those that apply their insight, win far more than than they lose. Blow-ups happen because there was no real, strategic understanding of Market Position, Size, Money Management, Location of Price and most importantly, Risk Mitigation. The best Entry in the world can blow-up, but having the best, Market Position, Size (for the conditions), Money Management (measures), Price (location, location, location) and understanding your exposure levels before the entry, will reduce overall fatigue on your bottom line.
The OP asks: "Why do you think you can make money trading?"
1) Study the business and treat it as a profession.
2) Develop a Unique Edge.
3) Confirm the Edge's Integrity over Time.
4) Create a Financial Target (goals).
5) Engineer the Edge into a Discrete System.
6) Do Risk Mitigation Research on the System.
7) Know Risk BEFORE Entering the Market.
8) Trade Capital into the Market (entry).
9) Pay Attention to Broad Based News (Economic Reports).
9) Manage Capital out of the Market (exit).
10) Reinvest a High Percentage of Revenue.
11) Exercise Discipline at Every Level.
There is nothing wrong with remaining inside a Retail account as long as you have a good Intermediary, but there is definitely something wrong with remaining inside the typical "Retail" mindset that places limits on something that is almost (not quite), unlimited (for all practical purposes).
I mean, seriously, unless you have plans to build a large scale Non-Profit Organization with huge start-up costs, who needs a Billion dollars anyway? No one individual needs that much money to live very comfortably: Private jets, private yachts, 30 thousand square foot homes, fast super-cars that do 254 mph, etc. All of that can be easily taken care of with a lot less than all the money there is inside the Forex. So, when you become success, truly successful, always reach back and find a way to help somebody else live out their dreams, or find away to help those who seriously cannot help themselves. It is the human thing to do.
I can't stand people who sit on top of billions in personal wealth, having all their needs met and could give a rats tail about those who don't even have boots to "bootstrap" themselves. Asking somebody to bootstrap themselves, when they can't even afford a pair of socks, is rude and arrogant. So, get rich, yes. But, REACH BACK!
If anybody wants to steal this as their outline for an Educational Trading Seminar, you are welcome to use it to help others. If you can think of a tighter outline for getting people up to speed, just correct or amend where necessary. I, quite frankly, find these eleven (11) steps to be very tight myself.
TradeSMART by Managing your Positions Well. :smart:
arabianights
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Oh, as for the answer: I'll be brief - like anything else, to earn money you should provide a service or break the law.
In trading, that service should be price discovery, liquidity, insurance or ideally all three.
In trading that crime should be front running, insider dealing, or similar variants of what is pretty much the same thing.
Toodles.
In trading, that service should be price discovery, liquidity, insurance or ideally all three.
In trading that crime should be front running, insider dealing, or similar variants of what is pretty much the same thing.
Toodles.
oildaytrader
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Trading is war of the bulls versus the bears,buy when the bears are fleeing the battle zone and sell when the bulls running scared and fleeing the battle zone.Its easier to conquer the least path of resistance.
You, as a participant, not only have to know your own game, but you also have to know the other participants 'games'.
Your only aim as a player is to take advantage of the other players....why else would you enter the market?
You could have given an example of your own trading, but you did not.
My market opened up today to the downside with no buying interest, i sold into this as previous support was 10pts off,....who was on the other side of my trade, and more importantly, where were they going to off-load it?
Liquidity.
I'm not a big player so my few contracts don't even come into the equation, they are gathered and dumped into the mass pool of limit orders below.
How do i know this?
I made money from the trade.
Eazy peazy lemon squeezy.
