Trading advice

[brty]

One of the best pieces of trading advice I ever heard was the following...

Assume you are incorrect when you put a trade on, let the market prove you are correct.

How this works in practise is that when I have implemented a position, if it does not go in my favour relatively quickly (according to the analysis) then take the position off. Yesterday I closed out 2 separate trades that were effectively going sideways instead of up. There are plenty of better opportunities out there.

By closing the trades because I assumed them to be incorrect from the start, I did not lose anything, yet if I had used the common 'stop loss' that most go on about, I could have lost a couple of thousand on the trades. Each of these trades had been in play for 1-2 weeks, yet the market had not proved the trades correct.

I do not use stop losses in the traditional sense, that is what 90%+ of traders do. However I do have risk mitigation in play.

brty

 

[lukeaye]

This is probably not what you want to hear, but it is the god honest truth.

TRADING IS NOT A FAST TRACK TO RICHES.

If you think its easy, think again. Its not. Its very very very hard.

If you are not ready to devout all of your free time, alot of money, and lots of boring hard work, then don't bother.

Yes it is boring. If you are having fun, then your not doing it right. There are elements of advanced maths, pyhsics and more. It isn't pretty pictures, it isnt cocktails in the caribeens. Its god damn hard work. And anyone who makes money deserves to because they are smarter then everyone else.

You will not make money for a long time, that is reality and fact. It will take you years.

Put simply, if you are making money then somebody else is losing money. You are competing against people who may or may not have decades of experience, mathamtics degrees, people who have devouted there lives to it, like you obviosuly have had property.

You are competing against large institutions who have a wealth of power, information and systems far more advanced then yours, with 10000 x the buying power of you.

To top it all off, nearly every piece of information out there is uselss. You could wipe your ass with it. It is a journey of discovery which you must take alone, because thats the only way you can know if what you find is correct or not.

Prepare for a very long long journey my friend.

I have been doing it for 3 - 4 years. I still consider myself a beginner/intermediate.

Good luck, not trying to scare you, just giving you the truth and reality.

 

[Mr J]

That's your truth and reality. Other experiences will vary. I disagree with almost everything you have said when I consider trading from my own perspective, so there's no point going into detail - just consider the opposite of each of your points.

 

[lukeaye]

That's your truth and reality. Other experiences will vary. I disagree with almost everything you have said when I consider trading from my own perspective, so there's no point going into detail - just consider the opposite of each of your points.

Yes but you still paper trade dont you?

 

[Mr J]

No, and I never did to start with. The only time I have paper-traded was a week in November last year (when first looking at the markets), and two weeks in the middle of this year, while testing a strategy. I've made it clear several times that I'm not a paper-trader.

 

[lukeaye]

No, and I never did to start with. The only time I have paper-traded was a week in November last year (when first looking at the markets), and two weeks in the middle of this year, while testing a strategy. I've made it clear several times that I'm not a paper-trader.

Ok so lets break this down then.

For you it is easy?

It is a fast track to riches?

It isnt hard work?

You made money straight away?

All the information out there is true?

Its a short journey?

You must be very gifted then Mr J

 

[Mr J]

For trading? As a whole, yes. I'm not gifted; I may have good mental traits, but the trading itself is simple. All I do is ride trends and enter at retracements to S&R levels. The only difficulty I've had with trading is "turning up", so to speak, but that is a personal problem, not a problem I have with trading.

 

[lukeaye]

For trading? As a whole, yes. I'm not gifted; I may have good mental traits, but the trading itself is simple. All I do is ride trends and enter at retracements to S&R levels. The only difficulty I've had with trading is "turning up", so to speak, but that is a personal problem, not a problem I have with trading.

If its that easy, then you should be able to explain in one simple post, how to consistenly, trade profitibly.

I noticed you mentioned you enter using simple strategies, what about your exit? Is the exit not equally as important?

 

[prawn_86]

If its that easy, then you should be able to explain in one simple post, how to consistenly, trade profitibly.

I too would be interested. Lots about how easy trading is, but no examples or discussion of personal trades from Mr J.

How about a couple of example charts or trades?

 

[Julia]

I too would be interested. Lots about how easy trading is, but no examples or discussion of personal trades from Mr J.

How about a couple of example charts or trades?

I'd also be interested.

Mr J, when you say you are 'riding trends', do you mean in both directions?

 

[Wysiwyg]

I'm not interested. Thought I would let you know Mr. Jay.

 

[DocK]

Paper trading if fine but it will never take the place of real time trading because when you have to activate your 'stop loss' your real emotions take over.

Trading is more about managing your risk and capital. You should first decide if you want to be an 'investor' or a 'trader'.

Ninety percent of people who start trading fail because they don't know what they are doing and do not have the mental strength to press the 'sell' button when they have reached their 'stop loss'.

Pulling the trigger to sell when my stop loss point was hit was my biggest failing - I'd let emotions get in the way and endlessly ponder every "what-if" scenario until either the price had completely got away and I finally sold at a greater loss, or price improved and I could congratulate myself on changing my mind One of the best things I've learnt (from Nick) is to change to a broker that doesn't charge extra for stoploss executions, set my stoploss when putting on a trade based on my money management rules, and then step away from the pc and let the market do its thing. I've found that with no interference from me my stoploss sales have prevented a larger loss (as intended) more often than they have cost me a potential profit. Hindsight trading remains the only certain way to set a stoploss at the optimum price imo, so a system that works more than it fails is the next best option - and my system works best if I automate it as much as possible

I think Byan's point is that, no matter how much paper trading you do, once there's real money in there you can get emotional and screw things up.

"Ok, I just lost 10 thousand dollars in a week. If my wife finds out she is going to set my PC on fire, maybe my testicles too, and never let me trade again. BUT, hey, that company has good fundamentals, right? I mean, there was a reason I got in, right? So it's still as likely to go up as it ever was! Yeah! Hell, if I sold it now, I'd just be getting back in because now it's even better value than when I got it the first time. Maybe I should buy more...? And if I don't sell it, it's not a loss yet, is it? So I'll just hold it another couple of days - there's good news due any day now, and everyone has the earning expectations wrong, I'm certain. And anyway, if I save it 'till tax time and sell it then I could use that loss to offset my winnings from elsewhere! Thank you government, paying 40% of my losses. In any case, I'm sure it's all to do with that bad news yesterday - it'll bounce right back. That was an abberation, it doesn't count. Plus, the dividends! With those and the tax write off, I'm practically in the black! I just need to hold them a bit longer, and I'll be right".

Yeah, that way lies madness. And poverty. And burnt testicles.

Learn what to do until you know WHY you're doing it, so you WILL do it. Be a meaty cog in the money-generating machine.

...and don't tell your wife every time you take a loss, because taking a loss is part of the game. The whole point of this is to stay in the game, and taking a loss when you need to is how you do that.

(Not to say "don't paper trade", just be aware of the traps once you trade real money).

Agree that emotions and second-guessing can be your biggest enemy - and I probably used just about every excuse you mentioned until I changed my ways. I now pat myself on the back every time a position is stopped out, for sticking to my plan and taking a small loss rather than a large one. Fortunately, there have been enough wins to keep me ahead of the game, and letting them run can be just as hard when it's sometimes soooo tempting to take a sure profit rather than risk giving some back. I find relying on a trailing stop allows me to sleep at night, knowing that I may give back a bit, but most will be preserved.

Not having testicles, I can't quite imagine how it would feel to have a smoking pair, but personally I always feel it's best to only brag to husband about my winning trades, and not to bother him with details of the losers

 

[Investor82]

change to a broker that doesn't charge extra for stoploss executions,

In the past I have only ever used Commsec to buy and sell - can you set a stop loss on commsec? Which broker do you use?

 

[skyQuake]

In the past I have only ever used Commsec to buy and sell - can you set a stop loss on commsec? Which broker do you use?

Commsec charges u $9.95 on top for a S/L

Bell Direct is free.

 

[DocK]

In the past I have only ever used Commsec to buy and sell - can you set a stop loss on commsec? Which broker do you use?

It's called a conditional order (rising buy, falling sell etc) with Commsuck, and as SkyQuake says, it costs an extra $9.95 or $14.95 on top of commission depending upon which option you elect - on execution or not. This would make my present method of trading - which is to enter on a stop buy and exit on a stop sell - very expensive. I am now with Interactive Brokers, and pay $6 per order ($12 for entire trade) regardless of whether it's instigated by a stop being triggered or not. They are so much more flexible than Commsuck, as well as much cheaper!

 

[Mr J]

If its that easy, then you should be able to explain in one simple post, how to consistenly, trade profitibly.

I noticed you mentioned you enter using simple strategies, what about your exit? Is the exit not equally as important?

I'll do even better and say so in one sentence: I observe the inherent movement of markets and exploit it. This statement is of course as generic or as deep as you want it to be, but nothing I say will prove whether or not I can trade profitably. Some people have become very successful with similar strategies, and many others have failed.

I too would be interested. Lots about how easy trading is, but no examples or discussion of personal trades from Mr J.

How about a couple of example charts or trades?

I don't have anything to prove, so take my words as you will. I doubt anyone cares whether or not I am profitable, but the idea seems to be for "proof" or lack of it to decide whether or not I'm credible. This isn't my problem or my decision -whether I am credible - to make. I don't encourage people to take my comments in any higher or lesser regard than any other random stranger on the internet.

I'm not looking to create friction, and my point in my first post to Luke was that experiences vary. Some find it hard, others find it easy. Some take a while, some pick it up quickly, and so on. Just ignore my comments on whether it is easy, because my own experience is really irrelevant, even if I proved a profitable trader. All that really matters to ourselves is our own experience. For example, Luke says it is hard, but I will say just try it and see what happens.

Mr J, when you say you are 'riding trends', do you mean in both directions?

If the trend is up, I have a buy bias. When it is down, I have a short bias. I won't only trade in the direction of the trend, but most of my trades will. My countertrend trades will have target profits, while I will look to hold my trend-trades as long as possible.

 

[lukeaye]

Mr J.

You really need to contribute something, honestly, your statement shows no strategy what so ever. I don't know whether you trade profitably or not, but you are not demonstrating or contributing any useful information?

HOW DO YOU TRADE

You buy when its going up? Give me a ****ing break

PS: Your buying on retracements at S&R levels is a micro pattern which is moving down? So by your logic you would be selling?

 

[prawn_86]

I don't have anything to prove, so take my words as you will. I doubt anyone cares whether or not I am profitable, but the idea seems to be for "proof" or lack of it to decide whether or not I'm credible. .

Obviously by a few posts in this thread some people do actually care how you trade and if you are profitable.

Personally i find it hard to swallow that someone can find it extremely easy and brag how easy it is (without showing even one basic example), when all the pro traders i know all state that it is still a challenge most days for them.

Hence, to me, your either the 1 in 6 billion that finds trading 'very easy' or you are lying/exageratting your ability. And i know what one of those thoughts the odds support...

 

[Mr J]

This is only going to cause more friction, at which point I will probably receive an infraction, so I this is my last post on the matter. I have contributed no less and in no lower quality than the majority of people while I have been here. I obviously rub people the wrong way with my blunt attitude, and the suggestion that I find trading easy, but these people can simple ignore me.

HOW DO YOU TRADE

I'm not going to give a specific answer. I don't see many others detailing their strategies to forums of strangers. Some here will suggest that most don't go around saying trading is simple and that proof is required because I say this. I don't agree, because my comment is only a comment. It may be a lie, it may be truth. Who cares?

some people do actually care how you trade and if you are profitable.

But I think only because they seek to establish whether or not I am credible. I'm willing to accept that my word means nothing to people who require proof.

i find it hard to swallow that someone can find it extremely easy and brag how easy it is

I'm not bragging, I'm stating a fact. For me, this is like playing low limit poker with a robotic strategy (abc poker). My strategy isn't quite robotic, but it is reasonably straight forward. Play good hands and value bet. Leave the hand if the opponent is showing strength. ABC. Maybe I am lucky, maybe I'm gifted, or maybe I'm just fooling myself. I don't think I'm either of those, but time will tell.

 

[ThingyMajiggy]

Over 1,500 posts in 8 months too, its obviously not very time consuming either, posting up a chart or example or two should be a breeze. I'm keen to see how easy it is too