Temjin, I agree with you but would have put it thus: The 3 most important parts of trading are 1) psychology, 2) psychology and 3) psychology.One word, psychology.
I find it very dificult to be honest and objective when analysing my trades and my performance in comparison to my trading plan. I have particular difficulty with exits. I tend to move my stop loss around due to conflicting feelings of fear and greed and end up stopping out too early (stops are too tight) thus not letting my profits run.
Traders fail because they follow "Plans" or "Rules" that are flawed,methodologies that are logical paths to success in the traders mind yet doomed to failure when executed
Nothing more nothing less..
So turning the question around: Why do traders succeed?Agree wholly with tech.
So much talk about psychology, but the best psychology in the world is not useful if your plan does not incorporate sound money management, and has not been tested and is not proven to trade with a positive expectancy.
Tech/A has hit it pretty solid.
The adage of "practice makes perfect" is a lie. If you practice your golf swing 15 hours a day, and then go and hit the ball, you will find that you are perfect at that swing, however, this may correlate with a ball in the bushes through a 30 degree slice.
So in order to be "perfect" you must practice perfectly. Thus if you practice the correct thing , you will ultimately become better at it, so long as your noggen allows it.
No offence, but i dont think that we can even be mentioning Warren Buffet in any of these conversations. I often have a chuckle when people talk about the Warren Buffets, and how the buys for long term and fundamentals and blah blah blah.
Firstly he isnt a trader,
Secondly, he isnt an investor of the share market either.
Buffet is interested in business, that is it. He buys based on the business.
I am sure he doesnt sit down behind the computer, and say "gee that looks good, i might put in a buy for a million shares" so he logs onto commsec and off he goes. He buys considerable portions of businesses. To produce cashflow.
My belief why so many people get trading wrong, is because they treat it like a hobbie. If you want to make a go of it, like any job, you have to do the work required.
Oh and one last thing, buying shares, as an "investment" is not investing. basically all you are doing is placing your money into an interest earning bank account called BHP or TLS. This bank account will pay you some percentage with the possibility of growth valuation.
Maybe this is just me, i consider investing in shares in order to produce cashflow to build capital. i.e. you invest in BHP to write options, to produce cashflow etc. and the cycle goes on.
ok that is enough of my rambling
Tech/A has hit it pretty solid.
The adage of "practice makes perfect" is a lie. If you practice your golf swing 15 hours a day, and then go and hit the ball, you will find that you are perfect at that swing, however, this may correlate with a ball in the bushes through a 30 degree slice.
So in order to be "perfect" you must practice perfectly. Thus if you practice the correct thing , you will ultimately become better at it, so long as your noggen allows it.
No offence, but i dont think that we can even be mentioning Warren Buffet in any of these conversations. I often have a chuckle when people talk about the Warren Buffets, and how the buys for long term and fundamentals and blah blah blah.
Firstly he isnt a trader,
Secondly, he isnt an investor of the share market either.
Buffet is interested in business, that is it. He buys based on the business.
I am sure he doesnt sit down behind the computer, and say "gee that looks good, i might put in a buy for a million shares" so he logs onto commsec and off he goes. He buys considerable portions of businesses. To produce cashflow.
My belief why so many people get trading wrong, is because they treat it like a hobbie. If you want to make a go of it, like any job, you have to do the work required.
Oh and one last thing, buying shares, as an "investment" is not investing. basically all you are doing is placing your money into an interest earning bank account called BHP or TLS. This bank account will pay you some percentage with the possibility of growth valuation.
Maybe this is just me, i consider investing in shares in order to produce cashflow to build capital. i.e. you invest in BHP to write options, to produce cashflow etc. and the cycle goes on.
ok that is enough of my rambling
[sigh] such a tiresome argument.intresting, what about peter lynch, what stlyle does he trade at ?
Quote --
Buffet is interested in business, that is it. He buys based on the business
I would say that would be the best reason to buy and trade in a stock ! after all you are investing into a bussiness and not lines, that appear on commsec.
Kind of makes me chuckle to myself. I draw some lines on a piece of paper and you can predict the way it going to move?
If there one thing I have learnt from stock trading/investing and I would assume I started this when I joined these forums;
NEVER EVER WALK INTO A ROOM when a charist and fundamental person are debating the best method to trade.(unless u have popcorn).
If i may bring attention upon a book
"A fool and his money, the odyssey of an average investor" by John Rothchild.
Made me laugh when reading it.
NEVER EVER WALK INTO A ROOM when a charist and fundamental person are debating the best method to trade.(unless u have popcorn).
hongwong said:Kind of makes me chuckle to myself. I draw some lines on a piece of paper and you can predict the way it going to move?
Stage 2
So do you really think that its about the analysis?
"Kind of makes me chuckle to myself. I draw some lines on a piece of paper and you can predict the way it going to move?"
Exactly. This is what some don't grasp. T/A is not about prediction. It doesn't matter how many times you point it out, they come back with the same (non) point.The line will do one of 5 things or a combination of most of them and cannot do anything more at any point in time.(we are talking about a line not a stock)
I will either be proven correct or incorrect.
I wont care which of one or combination of the things it does next.
I'm a technical trader.
I wont care how its drawn or what its drawn with,wether it was drawn well or the person who drew it was/is good at drawing lines.
I wont be predicting anything---I'm a technical trader I dont Predict!
$97,273 Compounded BUT
is $350,000 as of Last Friday.
For clarification then do you think the massive difference is about the analysis?
Thought my point was/is clear---seems not.
[sigh] such a tiresome argument.
This has been gone over countless times in countless places. Fundies try to disparage technical traders with the use of satirical phrases such as "Kind of makes me chuckle to myself. I draw some lines on a piece of paper and you can predict the way it going to move?"
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