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My friend,your question is as old as
trading.....
Traders fail because they have not understood the
most basic thing: trading,in any time frame and in any stock or future
contract,is simply a game of probabilities....Any and every trade can win or
lose.The way you manage the trade is your success or failure
passport....
Buying the next 50 or 100 books or seminars will
only offer you more academic knowledge and certainly more confusion.You really
don't need them.Once some traders tested a system with sound money and trade
management and they were very successful.Do you know which setup they used?
flipping a coin!!! yes,they were profitable in the long run.....
Choose 1 or 2 (no more) setups that you like,that
you understand and that you can execute in real time.....You don't need any
fancy indicators,or line studies,or mysterious chart patterns.These are nice for
academic discussions,but not for making money.If all these people selling and
promoting books,seminars and all that stuff could make money trading,they
wouldn't try to sell you anything....can you understand this very simple
concept?
So,find 1 or 2 setups,a sound management plan,a
good way to exit your trades and that's it! Nothing works all the time....You
need enough capital to last through the inevitable drawdowns.So keep your loses
small.Eliminate your risk in a trade as soon as possible.It doesn't matter if it
is capital risk or profit's risk.Your profits will have to pay for your
education,your expenses,your losses,your capital and your time....So,there are
as important as your initial capital.Don't close a trade simply because you win
a lot.Don't keep a trade that is absorbing your capital.Be careful.Have
confidence in your system,but first have confidence in yourself....
Good luck !!!
A.A
----- Original Message -----
Sent: Tuesday, June 14, 2005 7:24
PM
Subject: [EquisMetaStock Group] Why do
traders FAIL?
I have a question (unrelated to Metastock) for the
experienced traders
on this forum.
I have now read a dozen books on
trading -- not the foo-foo books that
promise $10M in the next trade, but
ones by Tharp (my favorite),
Chande, Le Beau, Stridsman, Elder, Covel,
Schwager (and O'Neil,
Link,...) and a couple of Tharp's IITM publications
on money
management etc. Will get to Kaufman next. And of course every
issue of
Roy's MSTT which are simply marvellous.
I've put a couple
of hopefully positive expectancy systems together
(discretionary at this
point so it's not easy to use the system
tester). The systems have four
stages: 1) setup (to identify market
trend and stock trend but not entry),
2) entry (looks at timing), 3)
exit and 4) money management. I have spent
quite a bit of time on 3)
and 4) because I believe they hold the key to
being a successful
trader. I use volatility as a significant determinant in
all 4 stages.
So I've done my homework. The odd thing is that none of
this has been
difficult to understand -- not just for me but I'm sure for
anyone who
takes the time and has some patience.... and now I am
confused.
1) Why do so many traders fail? Have they not read these
books?
(Please don't reply that they are undercapitalized and/or they
have
the wrong psychology for trading).
2) What do reading the next
50 books buy me (besides the enjoyment of
reading them)? Surely the law of
diminshing returns kicks in right
about now.
3) At this point, what
would the typical causes of failure be?
4) This is a Metastock forum.
Can someone point me to a more
appropriate forum for this type of
discussion (I have not found
one).
Thanks!!!
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