Australian (ASX) Stock Market Forum

You're not smart enough

Trembling Hand

Can be found on the bid
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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. :confused:

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.
 
Re: Your not smart enough

How about ''use are dumb'' or for our Kiwi members ''ewes are dumb'':p:
 
Re: Your not smart enough

i agree with the above comments-but the people we are talking about-are they making money or slowly eating away-

i think its mainly mind over matter-

if u think u are ahead of the game because u are good at a other trade u got it coming-

as a business owner and operator x2- i will say trading is the hardest thing i have ever done(and sometimes i wonder why i got in-but i really enjoy doing it on the side--its so bloody hard to make a $$ or gain a % here or their-

to me if u got the wrong attitude u are going down baby-i have seen 1 case and 1 case only and that was enough- to scare me of what can happen when u think u know everything-

i have always wanted to know why u can't help someone at the start-u can only help them on the way down or right at the end-and sometimes its not to late-



Thanks

Nick--
 
Trembling hand, I would like your opinion.

I find more often than not, no matter what decision I make, it is wrong for me.(not the desired outcome)
Using all my experience from similar situations doesn`t mean anything because the outcomes are always different.Which to me means there is no way of knowing what will happen next, so clearing any preconceived idea of what will happen next maybe the best way to go.What do you think about that?





.
 
I have got a few remarks.

I just started day trading on 6th May.

I joined ASF in Sept 07, to try and learn to day trade in my new SMSF.

I have 15 years investing experience, and had bought and sold shares online, but never day traded.

I have been studying for 8 months. Reading books and trawling ASF.

TH and Tech_A posts in particular have been informative.

TH posted that day trading reduces your overall risk IF DONE PROPERLY.


I had a very bizarre start to my day trading experiences.

My first stock was LNC up 100% on the day.

I also traded EPS up 350% then halted. ( came back on down 40%, I was out)

LMP also up over 100% on the day.



I am trying to analyse how i manged the trades now. (some good, some poorly)

I dont think that sort of situation is likely to occur very often.

so strange, i learnt a lot from this, especially how lamentable my setup is.
(=missed profits)

did make enough to pay for a laptop, intra-day data and software of my choice, just trading 5k to 10k lots, in 2 weeks.

I consider this to be mainly due to luck, but i did work very hard, and u know what they say.

I agree with TH that u should have a good trading plan, before u start.
the better the better.

I now intend to do just as advised. I wont be doing so much day trading, until my systems are better. I am mainly a long-term investor anyway.

I also found out that being glued to my screen all day bought back bad memories of past jobs.

I would say, that I dont believe most people would have the ability to develop a good trading plan, prior to having quite extensive exposure to a trading learning environment of some kind ( probably 97%:)

regards tony

)
 
Hi TH, I agree with something you posted in another thread about a skill that's crucial to trading success:

"I don't use indicators. Price and volume (and there patterns) is all I'm interested in."

It has taken me many months of staring at the screen, looking at bid/ask prices, volumes and graphs, to become familiar with the patterns which predict imminent danger or reward.

It takes a long while to become familiar with what is happening. Once you have this instinctive awareness then you can make decisions with confidence, and without relying on backward-looking indicators.
 
Hi TH, I agree with something you posted in another thread about a skill that's crucial to trading success:

"I don't use indicators. Price and volume (and there patterns) is all I'm interested in."

It has taken me many months of staring at the screen, looking at bid/ask prices, volumes and graphs, to become familiar with the patterns which predict imminent danger or reward.

It takes a long while to become familiar with what is happening. Once you have this instinctive awareness then you can make decisions with confidence, and without relying on backward-looking indicators.

Indicator users usually shift from that position to a "I ONLY LOOK AT PRICE" position which highlights a total BIAS that could be very costly. Indicators use PRICE. IF you understand them then they can benefit. Trading purely by them is MANIACAL though.

What needs to be taken into consideration is NOISE which totally makes PRICE only reading that much harder. Not to mention the F/A that when ignored could bite big time.

I was watching TSE for a play recently and then came the big drop. What the f...? Lucky I hadn't taken a positon. It turned out the greater influence of the unknown dictated the direction.(a drop in profit or something to that effect) So much for PRICE only.

Nice pick up on the grammar StockGuru.
 
Trembling hand, I would like your opinion.

I find more often than not, no matter what decision I make, it is wrong for me.(not the desired outcome)
Using all my experience from similar situations doesn`t mean anything because the outcomes are always different.Which to me means there is no way of knowing what will happen next, so clearing any preconceived idea of what will happen next maybe the best way to go.What do you think about that?
.

The problem I have with people comparing TRADING to other things such as CHESS or TENNIS is that TRADING is far different in that the outcome is out of our control in a pradoxical way. So I rephrase that with "desired outcome".

In my example with TSE I was expecting a forehand but someone in the crowd came in and hit an overhead slam. Where did that come from?

I think you get my point.
 
Hi Snake - aren't we discussing comparing learning to trade with learning to play chess/tennis whatever? Not actually comparing trading, but the procedure for learning trading?
 
Hi Snake - aren't we discussing comparing learning to trade with learning to play chess/tennis whatever? Not actually comparing trading, but the procedure for learning trading?

Timmy,

I guess I have missed the point. Perhaps learn to trade instead of using other sports etc. to foster learning.
 
In my example with TSE I was expecting a forehand but someone in the crowd came in and hit an overhead slam. Where did that come from?

I think you get my point.

Yes that is what i mean.The outcome could be influenced by a large holder which triggers the majority or some news that triggers the majority.A constant battle of forwards and backwards.
Majority rules apply.
 
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" :p:
 
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.
 
One reason why people that are successful in one endeavour have difficulty becoming successful in trading could be due to them overlooking the years of learning, effort and experience that they gained in order to be successful. They wouldn't forget that they started at the bottom and worked their way up, but now that they are successful, their business or endeavour is easily maintained with minimal effort.

Not many realise that trading is a very competitive business. Not only do they want to start trading at the top level, they assume that they only need put in a minimal effort to be successful.

Only the few with ambition and motivation to work towards their trading goals will get there.
 
I find more often than not, no matter what decision I make, it is wrong for me.(not the desired outcome)
Using all my experience from similar situations doesn`t mean anything because the outcomes are always different.Which to me means there is no way of knowing what will happen next, so clearing any preconceived idea of what will happen next maybe the best way to go.What do you think about that?

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!!



Personally I think people with a Business/Accounting/Budgeting type background have an edge.
Maybe an edge but still not a reason to jump in without first developing and training that 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.
Like people that are good at playing computer games? Which is what a Prop shop looks like.
 
It's ok. It's only money. If people want to lose their hard earned the hard way, let them. Besides, someone's losses are someone else's gains. :)
 
Whoeever decides that they would like to be involved in trading,will have to start at some point.

I certainly agree that is its un wise to jump in the deep end.
Those that do will ultimately realise how unwise it was.

Most follow this path.
Few get on the freeway.
 
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