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Hi Troy
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> From: Troy Kelley <tkelley@xxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: GEN: Worthless Pursuit
> Date: Sunday, March 08, 1998 4:26 AM
>
> I am about to start trading on a system I have worked hard on, but I am
> beginning to wonder whether this is a worthless pursuit.
I cannot comment on mechanical systems, my experience is limited to
discretionary traders. With that caveat in mind.....
> Reasons: Larry Williams doesn't trade, he sells his stuff. Neiderhoffer
> went bust. Tom DeMark doesn't trade. Schwager doesn't trade. Linda
> Rasche doesn't trade any more. Richard Dennis had a 60 percent drawdown
> last I heard. I am not sure if Gann really ever made any money. These
> are the biggest players in this world, and they don't make a living from
> purely trading. I am wondering if all these people just had a lucky
> streak and now all they can do is sell their "knowledge".
There are a lot of traders out there who trade profitably but do not
publicize their ability. Indeed among my group of acquaintances, there
is almost a superstitious belief that becoming a well known trader
is tantamount to the start of, at least, one losing year.
The point I am making is the fact you have not heard of successful
"names" does not mean there aren't any. Don't lose heart!
> When I started this, I assumed that if I could predict the direction of
> the market I would make money. But now I realize that prediction is easy
> compared to actually making money from the prediction. I think this is
> also what Larry, Linda, Tom ect..all these other people realize.
> Prediction is easy, making money from the prediction is hard. And once
> you start making money, making money for extendend periods of time is
> almost impossible.
> I think the real problem is not figuring out the randomness of the
> market, but dealing with all the competition of the market players. We
> are all taking money from each other. We are all smart people and we
> don't like loosing money. This makes for an incredibly competitive
> environment. It also means that no one, no one, will stay on top for
> very long.
I think we need firstly to start with a statement for our goals.
Do we want to be the best traders we can be and as an important by-
product of that goal, make money consistently or do we want to be
the "top gun"?. My belief is the latter goal is doomed to failure:-
there may always be a faster draw just around the corner.
In addition that goal is hardly conducive to inner peace - which
some psychological theories hold to be crucial for our long
term happiness.
Let's say we opt for the first goal - why is it so many fail? At
the end of the day, it's not the competitive environment. We fail
because:
* we don't have a trading method that gives an edge and/or
* we don't have effective money management and/or
* we fail to acquire the mental paradigms essential to trading
success i.e. we fail to inculcate winning psychological traits.
If we look at the names mentioned above, you'll find that the reasons
for their not trading will be one or all of the above e.g. in
Neiderhoffer's
case, it was clearly a lack of effective money management that brought
about the loss of the fund.
So if you have the necessary commitment and willingness to learn from
past and future "failures", you can make a very good living from
trading.
"Trading is simple but not easy. It's simple because the rules for
success are clear and well known, It's not easy because the rules
are hard to apply consistently".
regards
ray
R Barros
101/25 Market Street
Sydney NSW 2000
Australia
e-mail: ramon@xxxxxxxxx
tel: 61 2 92673470
fax: 61 2 92673478
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