One Thing I Have Come to Appreciate More Over the Past __ Months Is:

[Frank 10]

Trading is something that requires continual learning. Phil Ivey, considered the best poker player in the world, says that every time he plays he learns something new. So this thread is just to discuss things that you have learned or come to more fully appreciate over the past __ months (you choose or just discuss in general without specific dates). In a few more months from now, hopefully I will have learned more and can share something from that.

 

One thing I have come to appreciate more over the past 12 months is this:

 

It doesn't take very many trades to make good money at trading. A MAJOR side benefit of this 'don't overtrade' mentality is that you are quite unlikely to go 'on tilt' --- ie, make mental errors due to series of losses -- if you control your trading to only the very best set-ups per day.

[DugDug 10]

After last year.

 

I more fully appreciate...

 

1 - the requirement to plan a trade and stick to the plan (hence less trades and only those ones that work for me. It was not necessarily trades that cost me when I did not stick to my plan, but those trades that I entered into without a plan.)

2 - losses are just a part of the business (it does not necessarily pay to try and avoid losses, sometimes its best just to accept them as part of the plan. (minimise them -yes) - there is no need to continually look to improve things that work. If you treat losses like business costs, would you expect a business to be profitable without having any costs at all?)

[BlowFish 10]

I re-read Market Wizards over Christmas for the first time in years. One thing that struck me was how many of the wizzes used simple 'old fashioned' trend following systems. It made me think. There are clear 'pros' to that sort of approach though of course there are 'cons' as well.

[DugDug 10]

Blow fish - even the ones who are not classified as true trend traders and are not systematic do much the same thing.

While maybe not a wizard he is certainly the master - Soros swings for the big moves.

Buffett - much the same.

There is something in that for all of us.

[brownsfan019 17]

I've come to appreciate the beauty of markets that are non-indexes. While the indexes get much of the talk, I've come to appreciate markets such as oil and grains much more than in the past.

[SNYP40A1 10]

I have realized trading is not easy. I have been searching for a consistently-profitable (high reward : risk ratio) trading strategy for the past year now and I have not placed a single trade over that time period. It takes a lot of work, but I do feel that I am making progress.

 

I also realized that most trading books can probably be condensed down to about 5 pages of actual material. There's a lot of fluff.

[MidKnight 12]

Over the last 3 months I have learned that much of my regular pain with trading was/is from trying to achieve perfection,catching nearly the exact top or bottom on an entry and taking no heat and then exiting at virtually the exact right time to exit to maximize most virtually all of 'the move'. I've long known its an unrealistic expectation but I was on small time frames scalping and felt this type of mentality was virtually unavoidable to make both the math work and the fast paced trading of scalping working. Over those past 3 months I have been exploring a longer term approach on currencies that does not get perfect entries or exits by any stretch of the imagination and to my huge surprise it works quite well. I sometimes take quite a bit of heat for quite a bit of time under this approach. As noted by Frank in his first post, I have also noticed that I do not 'go on tilt' within this time frame like I easily do in small scalping time frames.

 

Moral for me: Everyone is imperfect. The market is made up of everyone, and therefore is also imperfect. I am imperfect. Making money from trading is imperfect. Accept imperfection.

 

With kind regards,

MK

Edited January 20, 2010 by MidKnight

[DugDug 10]

Midknight - to help strengthen your belief (as I also sometimes get those feeling to - comes from being a market maker in my early days I think)

 

George Soros - always used to remind himself that he was fallible - that he could and most likely would be wrong and would constantly remind himself, check himself and question if he was - and look at what a success he was.

 

When it comes to picking the tops and bottoms I think about it this way - if the odds of you picking the tops or bottoms are say 1 hundred to one, then wouldn't the odds of the current trend continuing be the inverse of that. Helps give me some patience.

[thalestrader 14]

Over those past 3 months I have been exploring a longer term approach on currencies ...

 

I wish you all the success you deserve for your hard work, MK. If you don't feel it would "give too much away," I'd hope you would share some of your trades with us as you become more comfortable with your approach.

 

Best Wishes,

 

Thales