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Question to Ray, or whomever chooses to answer...
Given the following two scenarios, and assuming that it is obvious that
the best of all possible worlds is to do BOTH...
If you had to choose only ONE scenario, exclusive of the other, which
would you choose?
1) Prefer to have an "edge".
-or-
2) Dump the trade unless the market proves you right?
Again, obviously, it's best to do both. BUT, if in the hypothetical, you
are only allowed one, which idea is superior to success as a trader?
BTW, my guess is 2, but I believe most concentrate on 1.
Comments?
Regards,
Joe Balsamo
>Hi Brent
>
>----------
>> From: BrentinUtahsDixie <brente@xxxxxxxxxxxx>
>> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>> Subject: Gen: Help understand statment.
>> Date: Thursday, August 06, 1998 2:07 PM
>>
>> RT's,
>>
>>
>> Brent
>>
>> I'm of the opinion that there is actually a TRADING SECRET used by
the
>> best traders in the world. I think they all share a
common....uncanny
>>ability. They don't feel secure about there ability to complete
>>winning trades. They don't really know how to make money.
>> Their ability is their superb ability to NOT LOSE money. ... (snip)
>
>I partially agree with the good DR. The difference between successful
>traders and others is the ability not to lose. I disagree that this
secret
>lies in successfully calculating the risk reward of a trade. There is
a
>world of difference between the two ideas.
>
>When I put on a trade, I do so because I believe the odds are in my
favour.
>I know where I want to be out because, at that point, my interpretation
>of the mkt's future price action is wrong; I have also planned my exits
>if the market goes my way.
>
> But here is the point - all of the above matters.....
>
>...........not a wit if the market does not do what my scenarios says
it
>should. At that point I exit the position as best I can. The POP said
>it much better - when you put on a trade assume a trade is
>wrong and unless the market proves the trade right, you exit.
>
>Most traders take the opposite view - place the stop and let the mkt
>prove the trade wrong.
>
>Does early exit mean the market would not have stopped me out and have
>gone my way? Yes. Sometimes I do climb back on board though not at
>so advantageous a price as the original entry; sometimes I just miss
the
>move. The trade off to missing a move is you keep most losses very,
>very small.
>
>For me missing a move doesn't matter - my main concern is to protect my
>capital. If I limit my losses, then I know it is only a matter of time
>before I make my profit target for the year.
>
>regards
>
>ray
>
>R Barros
>101/25 Market Street
>Sydney NSW 2000
>Australia
>
>Voice: 61 2 92673470
>Fax: 61 2 92673478
>E-Mail: rbarros@xxxxxxxxxxxxxxxxxx
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