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Well Put Walt: I think so many times traders are trying to find that one
system that will make em a ton of money, It just doesnt happen. It may
make some for a while but soon it will give less than desireable
results. I think if more traders looked more at minizing risk then
maximizing profits you'll see a lot more traders in the long run that
are still in the market. In one of my favorite books "The Daytraders
Advantage" by Koppel and Abel, they give some rules at to a good trade
and that is 1) Trend of the market 2) Entry point 3) Exit point 4) Money
management and risk management . These things are trading basics and
should be the basis of every trade before you enter regardless of
system you are trading. Remember gang our main interest here is trying
to make money not whether we are right or wrong . One of my favorite
sayings is " Never put on a trade that will not let you come back
tomorrow".
Walt Downs wrote:
> nwinski wrote:
> >
> > Eric wrote:
> > >
> > > >
> > > > Russ,
> > > > Your excellent research confirms my own anecdotal
> observations.
> > >
> > > Well Norm, I don't know how excellent and thorough this research
> really
> > > was, but I have to take exception to a few things you say.
> > >
> > > Those
> > > > who confine themselves to day trading put an aritificial limit
> on
> > > > themselves that only serves to limit winning trades. You should
> > > > be a daytrader for your losing trades and let your winners ride
> as long
> > > > as necessary.
> > >
> > > I think your trading style should fit your personality and risk
> > > tolerance. Not all of us can be home run hitters. Some are very
> > > comfortable hitting singles on a more consistent basis, even
> though we
> > > might not get the headlines.
> > >
> > > Also, it is my observation that the more you trade the
> > > > less likely you are to make money. This is true for two reasons.
> 1)
> > > > Transaction cost will significantly erode any profits. 2)
> Trading
> > > > represents risk, the more you trade the more risk you are
> taking.
> > >
> > > Is this really true. I think the longer you have market exposure
> , the
> > > more risk. That means a daytrader will have less risk than a buy
> and
> > > hold. That would also be borne out by the normal rule of more
> risk more
> > > reward. I don't think you can have your cake and eat it too by
> saying
> > > buy and hold is always more profitable AND less risky. If so,
> more of
> > > us would be in the group REALBUYANDHOLDERS instead of REALTRADERS.
>
> > > True, daytrading may not maximize profits in a strong trending
> market,
> > > but how about a market like stocks in 1994. Buy and hold makes
> nothing,
> > > daytrading makes money (maybe).
> > >
> > > > With an increase rate of trading your risk reward drops and your
>
> > > > transaction cost go up.
> > >
> > > Absolutely, transaction costs go up, that is one of the trade offs
> for
> > > less market exposure.
> > >
> > > But, don't try to tell any of this to the
> > > > daytrading junkies who are seeking the latest holly grail
> trading system
> > > > so they can get their daily fix of excitement in S&Ps. Afterall,
> 95% of
> > > > those trading are not in it for the profits, but rather for
> excitement,
> > > > the lifestyle (talk markets with my buddies), or to vent some
> > > > reoccurring neurosis, or some combination of the above.
> > >
> > > Come on, why so much derision in these statements? Isn't this a
> little
> > > overboard? After all we short term guys provide liquidity when
> you need
> > > it.
>
> Eric and Norman,
>
> Both of you guys have valid points.
>
> I use BOTH trading styles, letting the market dictate how I trade.:)
>
> It's all about "maximum profit vs. minimum risk" .
>
> If the market is trending strongly, or trading at extremes
> a longer term approach provides
> less risk and more profits.
>
> If the market is exceedingly choppy, the Intra-day and Short-term
> techniques provide better RR ratios.
>
> All depends on what the MARKET is doing.
>
> I never concern myself with STYLE. I only ask myself, "What's the risk
>
> and WHERE'S THE MONEY"....... :).
>
> Walt Downs
> CIS Trading
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