You're not smart enough

[awg]

That's rubbish. If you don't know the average outcome before you take the next 10 or 100 trades then you shouldn't be taking them. True the next 10 or 100 trades could individually do anything but if you don't KNOW what your average expectations are over that period, or how you will handle the ones that don't fit your expectations then you are throwing darts blind at a moving dartboard hanging upside down while receiving the cucumber rumba!!



Maybe an edge but still not a reason to jump in without first developing and training that edge.


Like people that are good at playing computer games? Which is what a Prop shop looks like.

Hi TH,
So are you saying out & out, dont even TRY trading until one has a FULLY developed and tested system??



I know you said in another thread words to the effect it cost you about $80k before you became fully profitable.

I am extremely interested in knowing how long you believe it took you in retrospect to be a satisfactory trader

I have developed some plans, largely modeled on the work of others that went before me. The level of understanding that is required to fully develop and test plans of ones own is fairly high

because i am a novice, development is a steep curve.

my next step is to fully test my systems on proprietry software.

i reckon this might take me 12 months minimum, just for the basics.

it certainly is a stage that sorts the sheep from the grubs

as has been mentioned numerous times, one has to get a feel for what instrument and methodology is suitable for the self.

regards tony

 

[farout]

Going back some 10 odd years I lost close to everything I had invested. I must admit I was a little unlucky in choosing both MIM & PAS. Fortunately I had only invested about $8k, but seemed like a lot of money back then. Perhaps I was one of those people you are talking about.

Having that loss certainly gave me a reality check and I have been closely watching market movements ever since. I would still class myself a high-risk high-reward trader, somewhat of an educated 'all-in' gambler.

In hindsight I probably wouldn't recommend people take the risks I have, however my current well paid job gives me some security.

Two and a half years ago I invested $20k, which performed so well I decided to sell my car and invest another $20k. Trading capital of $40k. Seems stupid to sell your car to fund trading right? Well, it is the smartest move I ever made. Since then I have probably added in another $10k.

I am well on the way to turning that initial $50k outlay into a portfolio worth in the vicinity of $1mill.

Do I have any tips?
Your money has to be accumulating, if it isn't then move it elsewhere.
Don't trade like me unless you can afford to lose it.
Your car doesn't earn you money

Now that I have made my money I plan on downgrading my risk. Decreased risk trades & real estate is on the future agenda.

Hope that wasn't too much of a waffle or a 'look at me' speech. Happy to accept some trading-style criticism

 

[Trembling Hand]

So are you saying out & out, dont even TRY trading until one has a FULLY developed and tested system??

I know you said in another thread words to the effect it cost you about $80k before you became fully profitable.

Yes I'm saying that if you don't know how to trade don't assume you will be able to cut it with anything less than what it takes in other endeavors.

And I was meaning to put yesterday but ran out of time that this is well and truly a hind site view. But after I lost my first $20,000 it started to dawn on me that just because I had found it easy at growing a couple of biz' that that success was in noway a guarantee to trading success. Which from that time made me think what is it about trading that enables people to ably silly logic, logic that is unique to the trading field. A field that is probably the hardest one out there to sustain success.

 

[Michael9]

Sometimes it's useful to use the term craft rather than skill. People who are eventually exceptional at what they do; say a top surfer or carpenter, have internalised what they do to the point of apparent efforlessness For them it's is all about feel. (Top surfers get dumped too though!) In teaching the best practitioners generally labour at it not at all. They read the micro signals from the group and respond before the group develops negative momentum. In trading I read about traders who've, in the end, thrown away the indicators (or all but a few) and just follow the ticks. That's analogous here.
NLP teaches us that we all chunk down the world into a manageable data stream and in that process we each end up living a unique reality. No generic style or method is going to work for an individual trader. For me it's going to be two to three years before I get any reliable feel for the business. At the moment though I just need a few more glimmers on the horizon!
Trembling Hand thanks for the book recommendation, also ... "deliberative practise"?

 

[Michael9]

I've got it now. Deliberative practise is a performance feedback loop that constantly improves the outcome. (I know that because that's why my lacrosse coach used to seem all spiteful and mean at times.)

Like the Japaneses Kaizen used in management and leadership constructs.

 

[jersey10]

Now I have your attention the thread should be named "Your not smart enough for short Cuts because its not what counts"

From a discussion in the Beginners - Introduce yourselves! thread I thought I would start a discussion about something that I have always found a little strange. Why reasonable smart and logical people apply thinking that in my experience is illogical and must be unique to the trading field. It seems that the thinking and process of "I'm a sharp cookie at XYZ therefore I can jump in live with hard earned money and go up against pros and succeed" is unique to trading only.

If that logic is fine then it should work in reverse. That is a Pro trader should be able to jump in "live" at another profession. I have made some good money the last couple of years trading so does anyone want me to build them a house, run a school or perform open heart surgery????????

How much sense would it be for the surgeon to jump to Pro musician in 3 months of dubious training. Or the Builder to turn to electrician with 3 months of reading how-to become a sparkie journal's. It would be madness. YET thats is exactly how I would say 99% of people come to trading. They spend a couple of months "learning" the trade. And then get in all sorts of bother because they find it hard. I say WTF did you expect. Where or what else can you succeed at without a long and structured curriculum to acquire skills and correct processes?

No wonder a whole sub-industry has sprung up about trading psychology. When what is really needed is more SKILLS through correct development and feedback.

You obviously need some level of intelligence and motivation which success in one field may be an indication of possible success in another field but its the learning process that makes the diff in the end to those that have a chance (ability). In no other field outside of trading/investing does one try their hand at the task "live" without a LONG training period. Think surgery, nope years learning. Musician nope 10 years before they stand next to pro and perform. Sports, nope start in the back yard then junior sports then elite amateur then pro. Again about 10 years. Apprentice trade, you would never give an apprentice the hammer and saw to build a house without 3 years or probably more of supervision. Chess, same a period of learning against better and better opposition not grandmasters after 3 months.

The same should be for trading. What has the Musician, Surgeon, Pro sports person, Apprentice and Chess players all had before they went "live". Progressively harder results in simulation. The same should be for trading. No money down until you have results without risking real cash. No playing with the Pros until you have a positive expectancy system on sim or back-test. A "trading plan" is rubbish without the skills to go with it. And you only get the skills with progressive practice.

TH,

Would like to get your opinion on the following question. In order to become a consistently 'good' trader, how much depends on the personality of the person and how much depends on the training / study they do?

Jersey10

 

[Trembling Hand]

In order to become a consistently 'good' trader, how much depends on the personality of the person and how much depends on the training / study they do?

To that question my answer is always the same. Success comes with the right blend of personality, market niche and practise.

But I never believe that "a" personalty is the difference in success or not. Study after study have shown the difference in elite performance and also ran is time spent practising/research/coaching etc.

With that said does it take a certain personality to engage in that practising/research/coaching etc???????????? No idea, maybe. But I would think if you carn't do the work then you probably haven't found your niche and therefore not yet in a state of FLOW.

 

[IFocus]

Great thread TH where were you 10 years ago........

When starting out I though I more than had the smarts, market decided otherwise.

The bit I struggled with was understanding / changing my behaviors, once I got that I made progress.

I see others compare trading or learning to with other endeavors which has merit but will not fix the bit how new traders relate to money.

 

[Mike Of Hobart]

This is a great thread.

One quality I've noticed in alot of successful traders is an immense humility. These are people who have complete control over their ego. Happy to admit they were wrong, happy to admit they need to learn more, happy to admit they have limitations.

Whether this is a quality that is learned or somehow innate is another question of course.

The really tricky thing is that in the "real world" people often become successful by denying their limitations and letting their egos run riot. I guess this is one reason that the translation from business success to trading success often ends in failure.

 

[farout]

Well said Mike, one of the most intelligent things I've read today. Keep the informative posts coming

 

[njc.corp]

does the word choice make a impact in this thread-

like do the eveyday traders make the wrong choice without understainding the true meaning of the word choice?

???

Thanks

Nick--

 

[theasxgorilla]

The really tricky thing is that in the "real world" people often become successful by denying their limitations and letting their egos run riot. I guess this is one reason that the translation from business success to trading success often ends in failure.

Wow. Sincerely, very insightful IMHO.

 

[It's Snake Pliskin]

I prefer the cricket analogy myself.

"I've always really liked cricket. I've always felt that it is something I would really like to start doing properly one day. So I went on this website where all these smart guys which knew about cricket were and learned what kind of bat I should have, and about all the protective gear too. I went to one of the websites they recommended and ordered all this gear, and got it delivered, and it arrived within a week...pretty cool, eh? That was in May last year. I've been practising with a ball in a sock hung from the roof of my patio every day now for over a year. And with my mate Robbo every other day down in the nets at the local park. And by next summer I expect to have an appointment with a Mr B Lee in the centre of the MCG...wish me luck everyone" :

I like the analogy asx! And Robbo how Australian.

 

[It's Snake Pliskin]

Personally I think people with a Business/Accounting/Budgeting type background have an edge.
People who know how to quantify risk and importantly know how to make a decisive decision while running flat out---also have an edge.

A decent base capital doesn't go astray either.

Procrastinators will be eaten alive.

Hi tech/a,

I agree on the procrastination part.

I don't agree on the first part. I would more like to put it "survivalists".

 

[njc.corp]

Hi tech/a,

I agree on the procrastination part.

I don't agree on the first part. I would more like to put it "survivalists".

snake- i would like your view on the part u don't agree-whats wrong with a soild background in any workforce thats has had its ups and downs

not having a go-just want to understand where u are coming from-

Thanks

Nick--

 

[It's Snake Pliskin]

snake- i would like your view on the part u don't agree-whats wrong with a soild background in any workforce thats has had its ups and downs

not having a go-just want to understand where u are coming from-

Thanks

Nick--

Nick,

I don't use the word "any".

A solid background in something is good for anything in life but does not mean it can be applied to something else. More a natural instinct to take something up easily with a lot of work. Survival of the fittest.

Success in one field does not equate success in another.

With regard to tech/a's comments the risk aware mindset I do agree with.

But I may be wrong and if someone has the answers I would love to know, though suspect they may be contextual.

 

[tech/a]

Snake.

Agree certain attributes doesnt guarentee success.
However certain attributes should give those with them an understanding of what is required to "run the business" of trading.

Its said that professional people like Doctors,Scientists etc make terrible traders because they need definative results,results that can be quantified,being right takes more precident than the art of trading.

They tend to be wrong longer than those who understand being wrong in analysis (any type of analysis) is all part of the trading process.
What you do when your right and what you do when your wrong plays a most important role.

 

[njc.corp]

Nick,

I don't use the word "any".

A solid background in something is good for anything in life but does not mean it can be applied to something else. More a natural instinct to take something up easily with a lot of work. Survival of the fittest.

Success in one field does not equate success in another.

With regard to tech/a's comments the risk aware mindset I do agree with.

But I may be wrong and if someone has the answers I would love to know, though suspect they may be contextual.

snake-thanks for the reply back-

maybe i was not clear-

this fact-is based on me only- as a business owner it makes it easy for me to enter the market that has risk-

i know what risk is as i have had ups and downs and bad business choices-(and am ready for twice the amount of down's because i cant tell and don't want to know the future of the market as this is a new ball game for me)

i must agree and say that it wont make me a sucess story as its too early for me to even think about it-

but the entry of risk is easy for me-which i know makes it good-because this is what i have learnt about my business-

i had to start my first business 3 times before i made it become good-(and still trying for new idea's and different directions)

my second business took me 2 go's and so on-(still trying for new idea's and different directions)

but i am not treating the market as my business as i cant control the market- the only thing i can control is how much money it takes from me-

Thanks

Nick--

 

[MRC & Co]

Its said that professional people like Doctors,Scientists etc make terrible traders because they need definative results,results that can be quantified,being right takes more precident than the art of trading.

They tend to be wrong longer than those who understand being wrong in analysis (any type of analysis) is all part of the trading process.
What you do when your right and what you do when your wrong plays a most important role.

I know a world class orthadontist (spelling) who is at the head of his field.

He started trading and as soon as his stop was hit, he couldn't handle it, thought it would turn around and so bought back in. Needless to say, it didn't take long until he blew up his account and gave up trading.......for now!

 

[Timmy]

This is a great thread, thanks for starting it TH.

There seems to be some good questions about how much of a role 'personality' plays in becoming a successful trader. TH, you asked if it takes a certain type of personality to actually engage in the research/practise/coaching in order to get successful .... I am way out of my depth here but I think there may be some helpful points made in this post by Sails from earlier in the year. There are some links to very interesting articles about

how mindset can affect learning – explaining how brilliant minds or those with natural talent can be stunted by the wrong mindset and how those struggling can use the right mindset to achieve results that otherwise may not happen.

I think reading the links in Sails' post and combining the findings with those about deliberative effort is not a bad road to be on?