The Secret That Makes For a Successful Trader

[Trembling Hand]

My view on successful trading is that it is necessary to know as much as possible about the company involved. I would never buy a stock that I have not researched. That is my policy, not my secret. I have had a 75% return on capital in the past financial year even with a few dogs which may even yet help provide a similar result this financial year.

If you don't make an effort to understand the stock don't buy the stock.

Where as I am the complete opposite.
I have very little to no idea about the stock---only its code.

That just sums up how ridiculous the title of this thread is. It is not risk management that makes you successful. Its skill, edge, knowledge.

Risk management will not stop a blowup if you have no edge and don't know how to exploit it. it may just keep you around a tad longer.

 

[Sean K]

Method.

................................................................................................

 

[tech/a]

Risk management is a part of trade management which in itself can give you better return on an average application which has a positive expectancy.

However risk and trade management on a fundamentally flawed methodology wont turn it from disaster to profit,no matter how good it is.

 

[MichaelD]

So, now you're contibuting to the boom thread?



Another Pro,

Contributing when it's convenient.

WTF!

I'm lost.

It is an interesting phenomenon that when markets turn sour people turn nasty.

 

[MichaelD]

It is not risk management that makes you successful. Its skill, edge, knowledge.

Risk management will not stop a blowup if you have no edge and don't know how to exploit it. it may just keep you around a tad longer.

I only partially agree.

You can have an edge, but if you don't apply proper risk management, you will blow up.

Take a perfectly profitable system traded at 25% position size and change the position size to 100%. It guarantees that you will blow up in the long run.

Trading successfully requires the "perfect storm"; edge, risk management, money management, psychology. You can't ignore any one of these components.

 

[Trembling Hand]

I only partially agree.

You can have an edge, but if you don't apply proper risk management, you will blow up.

Take a perfectly profitable system traded at 25% position size and change the position size to 100%. It guarantees that you will blow up in the long run.

Trading successfully requires the "perfect storm"; edge, risk management, money management, psychology. You can't ignore any one of these components.

Yes Yes but I will take skill/edge any day as the first and most important "Secret".

The rest is obviously a part of the whole game but mostly its just Blah Blah Blah. The most elusive is still a quantifiable edge.

 

[tech/a]

Define edge.
Define quantifiable--against what?
Out performance?--against what benchmark?

 

[Trembling Hand]

Quantifiable edge = positive historical results that you know HOW you came up with them.

Who mentioned anything about Out performance.

 

[Trembling Hand]

There is a whole industry/Rambling Bullsh!t going on about psychology and risk management and discipline but its all a scam.

I get ATLEAST one email a week from someone struggling with trading and they all have the same theme. Discipline/Psychology/Risk Blah Blah Blah.

What none of them say is I have developed these trading skills but risk management is stopping me making money.

GET SOME TRADING SKILLS thats the bloody secret. The rest is just looking after business.

 

[MRC & Co]

Quantifiable edge = positive historical results that you know HOW you came up with them.

But that edge is also tied up in the trade management etc.

I don't think you can define one aspect that makes you successful (as a trader) in the markets, it's the entire package, as Michael stated earlier.

You cannot quantify any given 'edge'.

If that makes sense.

One email a week? Geez, you have built up quiet the reputation eh!

 

[weird]

I would have thought that risk management would be considered just part of the secret ... find something that 'works', and 'do' it 'as much' as possible.

3 pillars of trading

 

[theasxgorilla]

Yes Yes but I will take skill/edge any day as the first and most important "Secret".

The rest is obviously a part of the whole game but mostly its just Blah Blah Blah. The most elusive is still a
quantifiable edge.

Here's an assertion...the significance of Blah Blah Blah is inversely proportionate to the potency of your "quantifiable edge".

 

[Sean K]

It is an interesting phenomenon that when markets turn sour people turn nasty.

Sorry Michael. It's not the market. It's alcohol. Apologies.

 

[theasxgorilla]

Risk management will not stop a blowup if you have no edge and don't know how to exploit it. it may just keep you around a tad longer.

Hopefully long enough for a bull market to arrive to prove the method your guru sold you works...what me? cynical?

 

[SGB]

There is a whole industry/Rambling Bullsh!t going on about psychology and risk management and discipline but its all a scam.

I get ATLEAST one email a week from someone struggling with trading and they all have the same theme. Discipline/Psychology/Risk Blah Blah Blah.

What none of them say is I have developed these trading skills but risk management is stopping me making money.

GET SOME TRADING SKILLS thats the bloody secret. The rest is just looking after business.

I think what TH is trying to convey about the edge theory is being able to master your own style without spending scrupulous amounts of dollars about the analogies of trading .i.e. Same theories but different paraphrasing.

Being real about your own skill level while trying to have an edge means finding your own niche as an individual, and fortunately, requires all that BLA, BLA, BLA before you can actually arrive to that destination.

I’m on your page TH about the hype that is a given in these situations, but also feel it’s important to go through these lessons to not only define who you are as a trader but also unravel the weeds that cross the maze into where you want to go.

 

[tech/a]

There is a whole industry/Rambling Bullsh!t going on about psychology and risk management and discipline but its all a scam.

I get ATLEAST one email a week from someone struggling with trading and they all have the same theme. Discipline/Psychology/Risk Blah Blah Blah.

What none of them say is I have developed these trading skills but risk management is stopping me making money.

GET SOME TRADING SKILLS thats the bloody secret. The rest is just looking after business.

Strong accusations.
Could be expensive.

Even your own results when studied showed that profit came from those few outliers that skewed your trading in your favor. You didnt know when they would come or how you'd find them. Your edge was and still is the ability to catch ENOUGH of these moves to make profit---you didnt get them all.
Without that skewing your results that I saw were as ordinary as the next guys.

There are only 3 ways to achieve profit.(That I know of).
(1) Far more wins than losses.
(2) Far more profit than losses.
(3) Both.

You dont have risk management?
You dont have a psychological edge that others dont?

An edge isnt an edge unless you can skew profit in your favor.
Many edges find themselves discarded as their owners can do this.

What none of them say is I have developed these trading skills but risk management is stopping me making money.

Obviously then they have no idea how to apply it.

 

[wayneL]

Kennas, have you been chewing to many cocoa leaves...........or maybe not enough?

Cocoa leaves aren't much fun. Coca leaves on the other hand....

 

[Trembling Hand]

One email a week? Geez, you have built up quiet the reputation eh!

Maybe one day when you have something to say that cuts through the bulls*** and can show some results you too can build a following. Until then just work on being more arrogant.:

Even your own results when studied showed that profit came from those few outliers that skewed your trading in your favor. You didnt know when they would come or how you'd find them. Your edge was and still is the ability to catch ENOUGH of these moves to make profit---you didnt get them all.
Without that skewing your results that I saw were as ordinary as the next guys.

Love it. after 8+ years of trading and hundred of thousands of trades you see 1 day and are an expert on my trading.

You dont have risk management?
You dont have a psychological edge that others dont?

Obviously then they have no idea how to apply it.

You have missed my point. All the money/trade management/risk/psyc stuff is part of the game for sure. BUT its just a part. People that struggle seem to get stuck on these risk/psyc issues. I would say that they would be better off developing trading/investment skills rather than taking the line that risk management is the "Secret That Makes For a Successful Trader".

Trading as you know is your own one man business. When starting any small business the skills to make or supply a superior product is the starting point. When starting a building biz as a one man show you don't raise capital, put together a killer biz plan then go do an Apprenticeship. You do the apprenticeship FIRST, you get skills first.

 

[Sean K]

Cocoa leaves aren't much fun. Coca leaves on the other hand....

It takes 8kg of the leaves to make a gram. Apparantly.

So, chewing on it isn't really that great anyway.

Have tried it, and it's really not that pleasant.

Coca tea is quite nice though. Good for altitude sickness and hangovers.

You know that coca plants are grown everywhere here. It's the gum tree of Peru. I imagine that Koalas would like to live here. They usually sit at the entrance of hotels, along with a San Pedro cactus. Google that. eeeek!!

 

[tech/a]

Love it. after 8+ years of trading and hundred of thousands of trades you see 1 day and are an expert on my trading.

TH I have and can only comment on what Ive seen.
Are you saying that your trading is successful inspite of M/M--T/M?
That if you critically look at your results you cant say that your success has been attributed to any one or more of the 3 listed above?

You have missed my point. All the money/trade management/risk/psyc stuff is part of the game for sure. BUT its just a part. People that struggle seem to get stuck on these risk/psyc issues. I would say that they would be better off developing trading/investment skills rather than taking the line that risk management is the "Secret That Makes For a Successful Trader".

Trading as you know is a your own one man business. When starting any small business the skills to make or supply a superior product is the starting point. When starting a building biz as a one man show you don't raise capital, put together a killer biz plan then go do an Apprenticeship. You do the apprenticeship FIRST, you get skills first.

While I can see where your coming from Id be suprised if you didnt agree that SOUND trading methods can be rescued and improved even turned spectacular with great M/M and Trade management.
More over M/M and Trade management will in the very large degree save most from ruin even with a flawed methodology. Which after all is extremely important.