Is Trading Just a Sort of Gambling?

[Kiwi 16]

It's gambling MMS. It seems you've lost your taste for the Casinos because you now realise that the odds there are either against you or very poor - so you are now much wiser.

 

To me, gambling is "taking a chance" for thrill or profit.

 

Amateur gambling is usually for thrill (with the perception that you might make a profit).

 

As you get better at trading you move towards being a professional gambler in a casino that offers the opportunity to run high expectancy games - if you are calm, disciplined and professional enough. What's more, the liquidity and price discovery that you assist with actually provides a valuable service for the financial world you are part of - so you contribute, unlike in the Casino (unless you count community and sports group donations financed by gambler's losses).

 

So I like to think of myself as the professional gambler. I come into the HSI session after 30 minutes have passed and the wild thrill seeking of the open is over. I watch carefully for a very few high expectancy hands, putting nothing on the table except my time until they occur. I don't get excited; I minimize frustration and boredom; I just wait and stay alert ( 1m time bars, none of this tick rubbish )

 

When the cards come up right then I place my bets. Stay calm. No thrill. Leave that to the amateurs out there. And take my money or pay the cost to find out.

 

The differences between a professional and an amateur: having a tested setup or setups with good enough expectancy; waiting until it happens even if they have to sit through entire sessions with nothing to show; accepting wins or losses with little emotional impact; being there to do the job not for the thrill.

[$5DAW 10]

A lot of good information here, and many differing opinions. Is Trading Just a Sort of Gambling? On some level I'd have to say, yes, on another I'd say no. I think of the markets as an enigma, they're made up of many participants with just as many points of view or opinions as to the direction of future price movement. All trading strategies have the possibility of failing, some have a higher probability of success than others, but no strategy has a 100% success rate. So if I have a system that has proven to me in real-time trades that 85% of the time I'll be stopped out with a profit, then what is my gamble? Am I gambling that my next trade is the first loser and all my trades thereafter are losers and the system ceases to perform as it has for the last year or two? Or am I "gambling" that this trade is one of the 15% of the losing trades my system has proven to generate over the last year or two. Risk, gamble or probability call it what you want, the outcome is the same. As for luck, I believe it has no place in trading, good or bad. I've found, if I use the word luck in any sentence to describe my days trading........ I'm only making excuses for not doing what really needs to be done.

[Ingot54 13]

 

I began trading recently as trainee.

I was trying to make some plan ... to create rules.

I include fundamental analysis and technical analysis ...

As I don’t like gambling ...

Hi Salma

 

I was wondering if you are a trainee, why your mentor was unable to provide these answers for you?

 

There have been many very good responses to this question, and my own would simply be that there is a difference between 'taking a gamble' and 'gambling'.

 

The objective would be not to consciously remove any gambling aspect from the activity, but to locate the best probabilities (your edge) and consistently execute trade-after-trade in accordance with your plan.

 

You are then moving from gambling, to structured and calculated investing. To sum up - you are creating your own luck by moving into a business-like approach and by removing as much uncertainty as is possible.

 

Yes, I would prefer to take it as business. Business is risky and that's ok.

I guess my next question will be what is the correct approach?

 

Salma - you are very teachable and deserve honesty.

 

There is no 'correct approach' as such - only a process of discovery. There are several things you will eventually address as you develop as a trader

 

a) What is your Trading Personality/Profile? What method suits your personality - discretionary, mechanical, a mixture of both? And what markets suit your personality - stocks, derivatives, indices, commodities?

 

b) What is your risk profile? Can you handle the drawdown (temporary losses) that come along as markets ebb and flow on their way to creating direction? Do you prefer the fast-thinking and highly technical world of the scalper, or the more relaxed way of the position trader? Does intra-day or weekly trading appeal more? Can you make the decision to close a trade that is clearly not going as planned?

 

c) Are you mentally tough? Can you decide on a winning plan, and remain with that plan, instead of jumping from one trading idea to the next? Can you consistently operate a strategy regardless of the previous win or loss, when over time, that strategy has shown to have a winning edge? Can you handle being wrong with a trade and simply move on to the next setup? Can you take a loss without taking it personally? The market is NOT "out to get you"! This is a very big topic, and I have not begun to cover it really.

 

d) Are you well enough capitalised? Having only a small amount of capital can lead to desperate trading, and this truly is gambling. Scared money will have trouble surviving.

 

e) Are you willing to continually educate yourself? There are many things you do not know that you do not know. But when you discover what it is that you do not know, then you have to do something to address the knowledge deficit. Things like Money Management (Position Sizing), Trade Management, Spread and Slippage, Brokerage and Brokers, technical Indicators, Price Action, the role of News and Fundamental Analysis and Events, Insider Activity, Market Manipulation, Correlation with other Markets (Gold, Oil, Foreign Exchange) ... and so on ad infinitum ...

 

f) Are your personal circumstance suited for you to be trading? Are you employed full-time, or part-time; do you have family that rely on your being available at call; are you able to sit at the computer for long periods learning and watching the markets as they move; do you have toe kind of insight required to be aware of what else is happening in your life while you are engrossed in the cyber-world of virtual reality; are you able to maintain physical fitness while trading; will your significant relationships suffer through your involvement in trading; all the above are serious considerations, and yes, even these things have to be considered as a gamble, if you are not able/willing to continue to nurture and maintain them as essential life-style considerations.

 

g) ... many other things which are not basic, but do serve to 'tweak' and improve your ability to trade well.

 

Once you begin this journey, you are truly beginning to "put luck in your favour".

 

I guess I could ask if you have a personal mentor, but since you mentioned you are a trainee, I assume you have a mentor. But it may also be that you meant that you are a beginner. If you do not have one, I suggest the fast track would be to find one - not necessarily an expensive mentor, but someone who trades for a living, or who is trading successfully themselves. many teachers are unable to trade, but are very good at 'market speak'. The technical stuff flows freely, but the ability to use it is lacking.

 

Salma - I think the hardest questions you will have to find answers for, are whether you want to do this so that you can safely invest; or whether you want to do it to provide an income stream for the rest of your life; or whether it is something you want to try to see if you are good at it.

 

For myself, I see that I allowed my physical health to deteriorate over 6 years, subtly, but certainly, and I have now been able to reverse that and get back my fitness.

 

But more damaging, was the failure to maintain close personal relationships - to remain connected emotionally - with those in my family who cared more for me than any money I might bring. Thankfully - I have been blessed, and it was not too late to also address this imbalance in my life. Certainly I did lose some good time with family as they grew up, because I was telling myself that "I am doing this for them".

 

But now I am able to balance trading with real life. It is something you/we all need to watch for - that fine line where passion becomes obsession.

 

Keep your perspective, your family, your health and your friends.

 

Treat trading as a vocation - you do not need to be at your computer desk 16 hours a day. And you certainly do not have to wonder any longer if trading is gambling. It is not.

 

I wish we could learn to use terms like 'progress' instead of 'winning' and 'draw-down' instead of 'losing'. The words 'winning/losing' do indeed align trading with gambling ... but it is simply NOT so.

 

Having an edge - a high probability of a trade succeeding - is what removes gambling from trading as an idea.

 

The choice will only be yours, and that will depend on how seriously you want to prepare yourself to meet the market.

[neutral 10]

Trading- versus buying a lottery ticket- gives more degrees in freedom to design, organize, standardize and refine your own process in terms of:

1] selectivity; niche,tollerance, bu-hours

2] control: monitors, setups

3] precision: timing entry and risk adustment, ordertypes, trail plan

4] training: specific, realistic with zero$cost simulators

Edited January 17, 2011 by neutral

[salma 10]

I found myself nodding my head in agreement - a lot of experienced wisdom shared here.

MMS

 

I agree with you. There are so many helpful advices

[salma 10]

I was wondering if you are a trainee, why your mentor was unable to provide these answers for you?

 

Thank you very much. I'll save all these questions and think about them. It's really very helpful for me.

About my current situation. Yes I am a trainee and I have a mentor. But I would not say that he's a trader, he's investor and he's very busy with all his businesses.

Other two guys are trading but we have difficulties with language understanding.

That's why I find myself lonly in trading.

[MightyMouse 12]

Not to directly poke at anyone, but it is a very silly notion to assume that you can control luck.

 

Luck plays a very big and direct part of whether you make money on your next trade or not. It does not matter who you are, or how many times you back tested your set up. The next trade you take is completely unique to the set of trades that you are comparing it too.

 

Order flow needs to be in your direction to make money and it needs to continue to be in your direction until your target is hit. When you enter a trade and order flow is in your direction, you pat yourself on the back for being so brilliant. If order flow counters your entry, then you end up with a loss if it doesn't stop before your stop.

 

You need to be lucky enough to have order flow in your direction. When you get it right, you make money, when you don't, you lose.

 

Order flow can continue or change direction at any time. You can have a great read on what is going on and enter long and somewhere across the globe someone is thinking: " if I see one more contract hit the bid, I am going dump my 5000 contracts and call it a day". That contract comes, and bam all hell breaks loose and the market free falls and hits your stop no matter where it is only to turn back in the right direction 1-4 ticks after it takes you out. You're pissed because if your stop was just a few more ticks away, you could have survived. You had it right, but the stop was just a little too close.

 

Similarly, a floor broker in Chicago who cares less about his job and more about his Johnson, gets off his cell phone with a hot girl he met last night who agrees to meet him for lunch in 20 minutes. He has orders to fill before he cuts out for the day. You, in front of your screen see an excellent short opportunity that you have rigorously back tested, you enter short, the floor broker dumps his contracts so he can split. He sets off a selling frenzy and you benefit. He may lose his job and not get laid as he hopes, but his stupid actions lead to money in your pocket. This time, you pat yourself on your back for being so brilliant.

 

MM

[MadMarketScientist 11]

MightyMouse

 

Those are good points but I think it's why the advice is to put the odds in your favor as much as possible. However, that means you are accepting a certain percentage of the time that hot girl you mention will interfere with the best laid plans. So to speak.

 

I think about cheering for sports. If you're live at the event you might be able to have a slight amount of influence through your support or cheering. If you're at home yelling at the television, you can jump up and down all you want, scream and swear and you have literally 0% influence on the outcome. To me, that's trading - we have absolutely no influence on what ends up happening. We're just followers subject to all the random and planned events that take place after hitting buy or sell.

 

MMS

[MightyMouse 12]

MightyMouse

 

Those are good points but I think it's why the advice is to put the odds in your favor as much as possible. However, that means you are accepting a certain percentage of the time that hot girl you mention will interfere with the best laid plans. So to speak.

 

I think about cheering for sports. If you're live at the event you might be able to have a slight amount of influence through your support or cheering. If you're at home yelling at the television, you can jump up and down all you want, scream and swear and you have literally 0% influence on the outcome. To me, that's trading - we have absolutely no influence on what ends up happening. We're just followers subject to all the random and planned events that take place after hitting buy or sell.

 

MMS

 

I beg to differ. If it wasn't for me last night watching at home, the New York Jets would not have won.

[Ingot54 13]

You make a good case for the influence of luck, Mighty Mouse - I can't dispute your analogies would have had me scratching my head about market action in smaller TF. But I would put these down to being more closely aligned to Black Swan activity (probably unfair to the Black Swans) than any form of luck in my trading.

 

I usually keep an eye out for up-coming news releases when trading (Forex Factory Calendar being the main quick source) and tread carefully if my trades do not yet have the break-even point secured. During the current -17th January - Euro-US sessions I was surprised to see the rapid fall in the EURO, and couldn't find any immediate news event related to that. I traded the move anyway, and later found the reason on Bloomberg News.

 

But I have to go with the "make your own luck" camp on this, while not denying the influence of a one-off event.

 

Take a look at the MONTHLY chart of Gold. Since putting in a recent high of USD$1423 on 3rd January, it has lost USD$67. Now you know within the Monthly trend is a Weekly trend and Daily and 8H trends too ... so by only trading with the established trend, a lot of "bad luck" is eliminated. Further, by keeping out of the time frames that "louder noises" influence so much, these incidences of "bad luck" can be reduced.

 

A similar story with the EURAUD - the pair has been in serious monthly decline since February 2009, and only the current month (and maybe one or two others) has seen much of a dispute with that trend. But we still have a couple of weeks to go in this month, and it is a high probability that we may even see another month of decline.

 

If so, there is a lot of "good luck" to be made if you are observant with these kinds of trends. If not, then eventually there is a high probability of a good short, as/if the down-trend resumes, depending on your observations of the charts.

 

I don't know of many traders who follow the monthly trends - not too many - because I rarely read of anyone trading off the direction of that TF when writing about trading. But you would have to agree that it would take something like a bond market failure somewhere, to nudge the monthly trend too far off course. Even the 9/11 event did not significantly alter the course of monthly trends.

 

It CAN happen of course - but part of "making your own luck" in trading is being prepared for it. It may never happen - but if it does, traders should never be surprised by it.

 

Trading is not a matter of being controlled by luck ... or controlling it; luck certainly can not be dismissed in anything we do, and no, we can not prepare for some events. But by keeping away from the kind of trading that seems to be surrounded by "unfortunate market moves" shall we say, it is possible to limit the number of times these kinds of circumstance influence our profitability.

 

I would rather NOT have good luck - I would rather know my edge - know my probability of success - and just work my strategy. And I like to imagine that through my trading this way, I can remove myself far from the sphere of gambling, and simply ride the coat-tails of those who are truly moving the markets consistently.

[ahimsa 10]

hi salma...and hi all.

i perfectly understood that you develop this kind of awareness.i trade in real to one year.but observe (in demo)and study the financial market to 3 years.surelly i must learn more,and more,but your statement, make me,think over.Me too when i draw the lines in a chart and after i can see that,not ever these reflect the right prediction. it seems that is not true,but why i think im right?maybe i'm wrong or i forget some lines or some line was deleted,or maybe its arrive a bad news?or was a speculative action by strong hands...im not sail in the right side?many are the answers and every time,there's even somethings that goes wrong, is like if the market are going away without you..when you lose.and the only thing that you want in those moment was cry.no stop to trade ,go out make sport,

in these moments your brain needed oxigen.after, when you come back at home or at your office you will see the things more clearness.make a bit of demo(its a good execise,) not for play in a surreal acrobatic way,but for the pleasure to observe the trend of market in all type of side.if you go on crude oil,you can observe that it move like a current value ,here you needed many lot of wise ,and a bit of cardiotonic....for your heart.this is the side that seems more gambling.it's also imprevedible.while if you want to being more sure you can try to start in real whit a title like coca-cola for example....its a bit more trust like a title.

I don't like to think that trading is a gambling...for play poker,or going to casino i don't need to study,i put a good dress and go.for make trading are fondamental..the study,the quiet,the observation, a bit of luck...better more ...and many many security when you must entry or exit from the market if you want being a profitable trading.

 

good luck,you have needed like all us.

good

[MightyMouse 12]

You make a good case for the influence of luck, Mighty Mouse - I can't dispute your analogies would have had me scratching my head about market action in smaller TF. But I would put these down to being more closely aligned to Black Swan activity (probably unfair to the Black Swans) than any form of luck in my trading.

 

I usually keep an eye out for up-coming news releases when trading (Forex Factory Calendar being the main quick source) and tread carefully if my trades do not yet have the break-even point secured. During the current -17th January - Euro-US sessions I was surprised to see the rapid fall in the EURO, and couldn't find any immediate news event related to that. I traded the move anyway, and later found the reason on Bloomberg News.

 

But I have to go with the "make your own luck" camp on this, while not denying the influence of a one-off event.

 

Take a look at the MONTHLY chart of Gold. Since putting in a recent high of USD$1423 on 3rd January, it has lost USD$67. Now you know within the Monthly trend is a Weekly trend and Daily and 8H trends too ... so by only trading with the established trend, a lot of "bad luck" is eliminated. Further, by keeping out of the time frames that "louder noises" influence so much, these incidences of "bad luck" can be reduced.

 

A similar story with the EURAUD - the pair has been in serious monthly decline since February 2009, and only the current month (and maybe one or two others) has seen much of a dispute with that trend. But we still have a couple of weeks to go in this month, and it is a high probability that we may even see another month of decline.

 

If so, there is a lot of "good luck" to be made if you are observant with these kinds of trends. If not, then eventually there is a high probability of a good short, as/if the down-trend resumes, depending on your observations of the charts.

 

I don't know of many traders who follow the monthly trends - not too many - because I rarely read of anyone trading off the direction of that TF when writing about trading. But you would have to agree that it would take something like a bond market failure somewhere, to nudge the monthly trend too far off course. Even the 9/11 event did not significantly alter the course of monthly trends.

 

It CAN happen of course - but part of "making your own luck" in trading is being prepared for it. It may never happen - but if it does, traders should never be surprised by it.

 

Trading is not a matter of being controlled by luck ... or controlling it; luck certainly can not be dismissed in anything we do, and no, we can not prepare for some events. But by keeping away from the kind of trading that seems to be surrounded by "unfortunate market moves" shall we say, it is possible to limit the number of times these kinds of circumstance influence our profitability.

 

I would rather NOT have good luck - I would rather know my edge - know my probability of success - and just work my strategy. And I like to imagine that through my trading this way, I can remove myself far from the sphere of gambling, and simply ride the coat-tails of those who are truly moving the markets consistently.

 

A trader waiting for a few more contracts to hit the bid is an everyday occurrence and not a black swan event. If you think monthly time frame trends are not vulnerable to strange occurrences, you haven't been trading that long.

 

It sounds like you are a trend trader, which means that you will have to take multiple stabs to get it right since there are a lot of times that trends have a false start. If you haven't experienced that occurrence, you have, plainly, been lucky, but you choose to attribute its absence to your careful analysis.

 

It could very well have been that when your started to take your trades, each time you took an entry, the market entered into a period of chop and took you out at your stop, depleting your capital before you got it right. Denying the possibility is foolish. You were lucky to survive. Luck alone won't do it, but you are doomed in the absence of good luck.

 

I attempt to discern between good luck and bad luck all the time. My big winners, almost all the time, have elements of extraordinary good luck and I know it to be good luck. I also know what I am doing but knowing what I am doing is not going to line up a series of events that will bring me extra good fortune. Assuming such would be nonsense. I will take all the good luck you want to get rid of.

 

 

Good Luck

 

MM

[MadMarketScientist 11]

First, I thought the Jets won as a result of my dance after that first touchdown.

 

Second, as I thought about this I have many times thought I had "bad luck" on certain trades/losses so I guess it's only fair to accept/admit there is some luck involved as well on the winners. I think this would be on a trade by trade basis. However, if I look at a large set of trades, 100+ lets say - then I think it's more about probability and odds in my favor/against me. So on a macro level I feel it's probabilities -- each individual trade, sure a mix of luck, skill and even randomness (do I get executed at a limit order or does someone else)

 

MMS

[Ingot54 13]

A trader waiting for a few more contracts to hit the bid is an everyday occurrence and not a black swan event. If you think monthly time frame trends are not vulnerable to strange occurrences, you haven't been trading that long.

Agreed, but as mentioned, in higher TF I regard traders hitting the bid with 5000 contracts as noise - it does not happen continuously, and even if it did, it would simply be a blip in the other thousands of bids/offers. Central Bank Intervention (Swiss and Japanese central banks most recently) is the same - just get over it - it is NOT happening every day - set SL to deal with it.

 

This kind of dumped-contract-trade at a strategic level ... or "just a few more ticks and I am out of this trade" kind of activity - especially for 5,000 contracts does NOT occur frequently. If it did, we would evolve methods to deal with that. I stand by the "black swan" cliche for aberrations that are not the norm. I prefer to base my trading on events that DO occur regularly, and with high probability - not on events that are outliers.

 

It sounds like you are a trend trader, which means that you will have to take multiple stabs to get it right since there are a lot of times that trends have a false start. If you haven't experienced that occurrence, you have, plainly, been lucky, but you choose to attribute its absence to your careful analysis.

A couple of assumptions there, Mighty Mouse. The first one is correct - I am not good/comfortable with scalping, so I avoid it. But it is incorrect to say that "you will have to take multiple stabs to get it right". The skilled trader waits patiently until the trend is confirmed, and by using the higher TF and an appropriate SL for the pair traded (or instrument traded for non-FX trades) a smooth transition into the trade can be achieved.

 

If not, then the trade is culled, and the "next setup" is taken. That is how I trade - I expect losses - I do not regard a loss as bad luck, or a win as good fortune. I place the probability of success in my favour, and this is a rock-solid approach over time. Wild horses could not separate me from my strategy.

 

It could very well have been that when your started to take your trades, each time you took an entry, the market entered into a period of chop and took you out at your stop, depleting your capital before you got it right. Denying the possibility is foolish. You were lucky to survive. Luck alone won't do it, but you are doomed in the absence of good luck.

It does sound like you are having a personal battle with the market Mighty Mouse. You simply need to get past the idea that it takes good luck to be a good trader. It does NOT. Luck or the lack of it is simply taken in stride - it is not the strategy in itself. Far from "denying the possibility" of the market entering into chop and stopping out the trade, it is possible to simply account for the possibility in the strategy.

 

Luck is irrelevant ... consistency is king.

 

Yes - chop WILL occur at times - thus the less-than-100% success rate for all trades. But it does NOT occur with every trade - or even frequently enough to damage a well-constructed strategy. If it did, then we would be no better than coin flippers. But even a coin flipper can win, provided sound Money Management is employed.

 

I attempt to discern between good luck and bad luck all the time. My big winners, almost all the time, have elements of extraordinary good luck and I know it to be good luck. I also know what I am doing but knowing what I am doing is not going to line up a series of events that will bring me extra good fortune. Assuming such would be nonsense. I will take all the good luck you want to get rid of.

Hmmmm. Sounds like a recipe for a big problem one day here. It is simply irrational to look back at trades and think "Gosh what good/bad luck". To do so sells yourself very short indeed.

 

You say you know what you are doing. If you are successful then I do not doubt for a second that you have a consistent approach with a known probability of success. And, it is this attribute of your trading that is growing or shrinking your account - luck has nothing to do with consistency, and all to do with outlier events. Such events are NOT a part of EVERY trade.

 

You dismiss your own skills, Mighty Mouse, in attributing success/failure in trading, to the winds of fortune, and eventually it may be that a new account will be required. If you continue to trade without knowing that YOU caused the win/loss, and take responsibility for that, instead of shifting the onus onto luck, then you would be in a zombie state, and never learn what works and what needs adjustment in your strategy.

 

I don't for one minute believe that what you have written is your actual position on this subject, unless you are kidding. IF you are having any degree of success, then it is MORE than luck - it is down to consistency in application of a strategy. It is down to sound money management, and it is down to trading markets and time frames that suit the strategy and the personality of the trader.

 

Trading based on the presence or absence of some imaginary benevolent influence belongs with the beer-and-pizza party approach to gambling. "If we win, we win. And if not, then we had a good time."

 

Sorry - for me, trading is the treatment mathematically (probability) and science (taking into account all the known facts) of a financial instrument. I can not afford to rely on an ethereal entity to achieve my objectives, and neither should, or does any other trader who hopes one day to break out of the 95% latitudes.

 

I notice that the harder I work at refining what I do, the luckier I become in trading.

 

EDIT: Trading could be regarded as an ART, and a SCIENCE, as well as a SKILL, based on the perception of each trader. It is inevitable that differences of opinion will occur. We are all approaching trading from either the ART/SKILL model, or from the MATHS/SCIENCE/SKILL model. Of course there is an other model - the gambling one, where results rely on luck, or are seen as luck. It is possible to be lucky for a long time, but eventually that run WILL indisputably end ... badly.

 

Salma,

 

Please forgive the indulgence of my going more deeply into this aspect of trading - I hope you do not feel your thread has been taken too far off-topic here. But the gambling and luck model does need to be discussed and placed into perspective. I hope you have been able to understand a few of the obstacles that await new traders. I suggest you do not trade with real cash for several months, until you have had opportunity to experience the kinds of market activity that can occur.

 

Only then can you begin to grasp the approach that will suit your personality and risk profile, and bring to you a sense of security and relaxation as you trade. Please may I suggest that you try to master the higher time frames - DAILY and perhaps WEEKLY charts - before attempting to get involved in the fast-and-furious aspects of scalping and very short time frame trading. Having success in the slower-moving time frames is very important, and NO LESS profitable, despite that scalpers generally are attracted to that form of trading. More trades does NOT necessarily mean more money.

Edited January 18, 2011 by Ingot54

[MightyMouse 12]

First, I thought the Jets won as a result of my dance after that first touchdown.

 

Second, as I thought about this I have many times thought I had "bad luck" on certain trades/losses so I guess it's only fair to accept/admit there is some luck involved as well on the winners. I think this would be on a trade by trade basis. However, if I look at a large set of trades, 100+ lets say - then I think it's more about probability and odds in my favor/against me. So on a macro level I feel it's probabilities -- each individual trade, sure a mix of luck, skill and even randomness (do I get executed at a limit order or does someone else)

 

MMS

 

It's also luck that your edge continues to be an edge before you have drawn down your account because of bad luck. The best and biggest thought they had an edge and the market proved otherwise. Fortunately, for some of them they have a central bank that is sympathetic and willing to bail them out of their failed trades. You and I do not have that luxury.

 

If you take 10,000 traders of equal ability and let them trade in a market amongst themselves. The average trader will lose a little because of trading costs. But at the extremes, there will be about 4-5 traders who consistently win and at the opposite extreme there will be about the same number of traders who consistently lose. Each of these 10,000 traders has equal ability. The winners will pat themselves on their backs for being so brilliant, and the losers will be questioning their ability to trade. The group of traders will experience a net loss of equity at the end of the period. The losses will be born by the losing traders.

 

If you do this again, the same situation will develop, but it won't necessarily be the same traders at the extremes. Luck is entirely responsible for wins and losses in these two scenarios.

 

When you relax the assumption of equal ability, you have more of a realistic trading environment, but not devoid of the need of luck to come out ahead. What you also add into this scenario is the unknown of if the people you are trading against are better, equal, or worse then you. For your edge to hold, your edge has to be better than the edge of the person you are trying to take money from.

 

Can you win from someone who is a better trader than you? Yes, but you are going to need good luck to beat him. Can you lose to a trader who is a worse trader than you? Yes, but he is going to need good luck to beat you. Clearly, you want to trade against traders who are worse traders than you and avoid trading against traders who are better than you.

 

The market is an excellent reminder of the virtue of humility.

 

MM

[gflorko 10]

This is an old debate. The definition of gambling is "speculating on the uncertain outcome of future events while risking monetary loss". So, trading IS a "form" of gambling. However, there are many differences. For example, if you bet $500 on the Super Bowl and your team is losing late in the game, there's no way to bail out of that bet or reduce your exposure. If you lose, you are out $500 period. If you go into a trade in the financial markets risking $500 to try to make $500 and the trade is not going your way, you can bail out of that position BEFORE you've lost the full $500. That is one of the major differences and there are several others. Bottom line, you have to risk money to make money no matter what you do for a living. If you have a 30 mile commute to and from your job and you arrive at work one morning and are told that you no longer have a job there for whatever reason (fired, laid off, etc) you are out the money you spent in gas to get there. If you pay for a college eduction or other specialized training and fail to secure work in your chosen field, all you have is the knowledge gained through the education, NOT the job which was supposed to give you a return on your investment. So, next time people tell you that trading is "gambling", point out some of my examples to show them that they are already gambling whether they realize it or not.

 

 

 

Hi all

I began trading recently as trainee. I was trying to make some plan for me on how to choose a stock and how to create rules. I include fundamental analysis (such as following news, market announcements, industrial news and business frames, financial statements analysis etc.) and technical analysis as well.

Sometimes I just don’t see any confirmation of received information. Sometimes I just feel lost and don’t understand what is going on :crap:

People around me keep telling that it’s just a sort of gambling. As I don’t like gambling at all I feel lost even more.

Can anybody please help me with this point?

[Kiwi 16]

If I read MM's post then I presume that he is failing as a trader and feels that its all due to luck.

 

Which couldn't be more wrong. It would take me too long to address the whole post but just a couple of points might illustrate flaws in the reasoning:

 

- This concept that "your edge has to be better than the edge of the person you are trying to take money from" implies that I am trading against XXXX. And that if I'm long and they're short one of us will lose. Yet I have experienced the situation of trading in the opposite direction to another trader a number of times where both of us made money - because we entered and exited at different points, both following our (different) rules to a win.

 

- The "also luck that your edge continues to be an edge before you have drawn down your account because of bad luck" includes the laughable concept that a professional won't adapt to the market as the market evolves. Markets must evolve otherwise even the most moronic would eventually get it and pluck them for the bucks. So a trader who has a certain type of edge will adjust their approach slightly as the markets evolve. In some cases they may even retire it for a period (or forever) if the specific behaviours they are preying on cease to provide a decent meal.

 

Trading is gambling. And the outcome of individual trades is down to a bunch of uncontrollable factors which we end up labelling luck. But the positive outcome of a sequence of disciplined trades is not down to "luck." The positive outcome (with expected statistical variation) is down to strategy and execution. It is up to the trader to be a professional gambler and not a losing amateur. This takes time and some steps in the right directions.

 

(Should the outcome of a series of XX trades not be positive then their is valuable feedback about the current fit between the market's behaviour and your edge's parameters.)

[MightyMouse 12]

Agreed, but as mentioned, in higher TF I regard traders hitting the bid with 5000 contracts as noise - it does not happen continuously, and even if it did, it would simply be a blip in the other thousands of bids/offers. Central Bank Intervention (Swiss and Japanese central banks most recently) is the same - just get over it - it is NOT happening every day - set SL to deal with it.

 

This kind of dumped-contract-trade at a strategic level ... or "just a few more ticks and I am out of this trade" kind of activity - especially for 5,000 contracts does NOT occur frequently. If it did, we would evolve methods to deal with that. I stand by the "black swan" cliche for aberrations that are not the norm. I prefer to base my trading on events that DO occur regularly, and with high probability - not on events that are outliers.

 

A couple of assumptions there, Mighty Mouse. The first one is correct - I am not good/comfortable with scalping, so I avoid it. But it is incorrect to say that "you will have to take multiple stabs to get it right". The skilled trader waits patiently until the trend is confirmed, and by using the higher TF and an appropriate SL for the pair traded (or instrument traded for non-FX trades) a smooth transition into the trade can be achieved.

 

If not, then the trade is culled, and the "next setup" is taken. That is how I trade - I expect losses - I do not regard a loss as bad luck, or a win as good fortune. I place the probability of success in my favour, and this is a rock-solid approach over time. Wild horses could not separate me from my strategy.

 

It does sound like you are having a personal battle with the market Mighty Mouse. You simply need to get past the idea that it takes good luck to be a good trader. It does NOT. Luck or the lack of it is simply taken in stride - it is not the strategy in itself. Far from "denying the possibility" of the market entering into chop and stopping out the trade, it is possible to simply account for the possibility in the strategy.

 

Luck is irrelevant ... consistency is king.

 

Yes - chop WILL occur at times - thus the less-than-100% success rate for all trades. But it does NOT occur with every trade - or even frequently enough to damage a well-constructed strategy. If it did, then we would be no better than coin flippers. But even a coin flipper can win, provided sound Money Management is employed.

 

 

Hmmmm. Sounds like a recipe for a big problem one day here. It is simply irrational to look back at trades and think "Gosh what good/bad luck". To do so sells yourself very short indeed.

 

You say you know what you are doing. If you are successful then I do not doubt for a second that you have a consistent approach with a known probability of success. And, it is this attribute of your trading that is growing or shrinking your account - luck has nothing to do with consistency, and all to do with outlier events. Such events are NOT a part of EVERY trade.

 

You dismiss your own skills, Mighty Mouse, in attributing success/failure in trading, to the winds of fortune, and eventually it may be that a new account will be required. If you continue to trade without knowing that YOU caused the win/loss, and take responsibility for that, instead of shifting the onus onto luck, then you would be in a zombie state, and never learn what works and what needs adjustment in your strategy.

 

I don't for one minute believe that what you have written is your actual position on this subject, unless you are kidding. IF you are having any degree of success, then it is MORE than luck - it is down to consistency in application of a strategy. It is down to sound money management, and it is down to trading markets and time frames that suit the strategy and the personality of the trader.

 

Trading based on the presence or absence of some imaginary benevolent influence belongs with the beer-and-pizza party approach to gambling. "If we win, we win. And if not, then we had a good time."

 

Sorry - for me, trading is the treatment mathematically (probability) and science (taking into account all the known facts) of a financial instrument. I can not afford to rely on an ethereal entity to achieve my objectives, and neither should, or does any other trader who hopes one day to break out of the 95% latitudes.

 

I notice that the harder I work at refining what I do, the luckier I become in trading.

 

EDIT: Trading could be regarded as an ART, and a SCIENCE, as well as a SKILL, based on the perception of each trader. It is inevitable that differences of opinion will occur. We are all approaching trading from either the ART/SKILL model, or from the MATHS/SCIENCE/SKILL model. Of course there is an other model - the gambling one, where results rely on luck, or are seen as luck. It is possible to be lucky for a long time, but eventually that run WILL indisputably end ... badly.

 

Salma,

 

Please forgive the indulgence of my going more deeply into this aspect of trading - I hope you do not feel your thread has been taken too far off-topic here. But the gambling and luck model does need to be discussed and placed into perspective. I hope you have been able to understand a few of the obstacles that await new traders. I suggest you do not trade with real cash for several months, until you have had opportunity to experience the kinds of market activity that can occur.

 

Only then can you begin to grasp the approach that will suit your personality and risk profile, and bring to you a sense of security and relaxation as you trade. Please may I suggest that you try to master the higher time frames - DAILY and perhaps WEEKLY charts - before attempting to get involved in the fast-and-furious aspects of scalping and very short time frame trading. Having success in the slower-moving time frames is very important, and NO LESS profitable, despite that scalpers generally are attracted to that form of trading. More trades does NOT necessarily mean more money.

 

I hope your lucky streak continues for you this way you can continue to believe the things you believe.

 

Once again, if you are trend trading and waiting for the trend to be confirmed, then you are likely entering when the trend is also partially underway. There is no reason that the trend can't cease when you enter and go revisit the support or resistance created by the trend reversal. While revisiting, there is no go reason that it has to resume the direction you are in. There are plenty of times when a trend confirms and reverses. A lot of times the sole purpose of confirmation was to trap trend traders into thinking that it was trending. You should already know this or you will learn it at some point. If you want me to believe that you know definitively that a market is going to continue trending, you will have better luck selling me a bridge. You have been fortunate enough to be in trades that have continued in your direction more often than they have reversed.

 

It does not take luck to be a good trader. I never implied that and that is probably where you may be struggling with what I say. You can have bad luck in the market and still be a good trader. And you can have good luck and be a poor trader. To make a lot of money in the market, you are going to need to be either very lucky or be a good trader with good luck.

 

 

MM

[MightyMouse 12]

If I read MM's post then I presume that he is failing as a trader and feels that its all due to luck.

 

Which couldn't be more wrong. It would take me too long to address the whole post but just a couple of points might illustrate flaws in the reasoning:

 

- This concept that "your edge has to be better than the edge of the person you are trying to take money from" implies that I am trading against XXXX. And that if I'm long and they're short one of us will lose. Yet I have experienced the situation of trading in the opposite direction to another trader a number of times where both of us made money - because we entered and exited at different points, both following our (different) rules to a win.

 

- The "also luck that your edge continues to be an edge before you have drawn down your account because of bad luck" includes the laughable concept that a professional won't adapt to the market as the market evolves. Markets must evolve otherwise even the most moronic would eventually get it and pluck them for the bucks. So a trader who has a certain type of edge will adjust their approach slightly as the markets evolve. In some cases they may even retire it for a period (or forever) if the specific behaviours they are preying on cease to provide a decent meal.

 

Trading is gambling. And the outcome of individual trades is down to a bunch of uncontrollable factors which we end up labelling luck. But the positive outcome of a sequence of disciplined trades is not down to "luck." The positive outcome (with expected statistical variation) is down to strategy and execution. It is up to the trader to be a professional gambler and not a losing amateur. This takes time and some steps in the right directions.

 

(Should the outcome of a series of XX trades not be positive then their is valuable feedback about the current fit between the market's behaviour and your edge's parameters.)

 

Kiwi,

 

You missed the point of the same, better, or worse traders.

 

Sure, you can take a trade opposite someone and you both make money. But if you are a better trader then them, then on balance, when they enter against you, you will likely end up making money from them. If they are better traders than you, then you will likely end up, on balance, losing to them. If they are equal traders to you, then on balance if you enter against each other you will both lose. Its a simplification of a zero sum game and I really don't think you thought it through before you searched for flaws.

 

Also, a professional will adapt to an evolving market, if he is able to see it as evolving and not just as a temporary aberration. Professionals frequently fail to discern between the two. Think of LTCM, Goldman Sachs, Bear Sterns, Citi, AIG, Amaranth Advisors, Atticus funds, Satellite Asset management and on and on. All funds run by professionals and all gone bust. Arrogantly, and only after the fact, can we with perfect hindsight pick apart their mistakes. And egotistically, we will say that we would not have done the same. So, can a professional adapt to an evolving market? Some will. Do all professionals adapt to evolving markets before their edge disappears? Not so laughable.

 

MM

[Ingot54 13]

Once again, if you are trend trading and waiting for the trend to be confirmed, then you are likely entering when the trend is also partially underway.

It seems you have a degree of anxiety in your approach, Mighty Mouse, and this is causing you to make certain incorrect assumptions about how markets work, and how trend traders operate.

 

I want to be crystal clear about this: I believe the higher TF are dominant. This may be at odds with others' views - and I will not enter into discussion on that point. Lower TF eventually cause the higher TF to bend and change, but not before there is visible chop in the INTERMEDIATE TF to serve as adequate warning. I use a specific indicator that tells me when the market is range-bound, or is likely to be that way, and I simply "stand by the guns" when that indicator tells me to.

 

You are making a fatal error when you assume there is something wrong with " likely entering when the trend is also partially underway". I do NOT expect to nail the tops and bottoms of trends - I leave that to the obsessive/compulsives and perfectionists - all of whom may spend time on the sidelines re-accumulating capital to "have another attempt" at trading, and still not realising that they are in the whipsaw blender. Failure to wait for a trend to confirm, is asking for whipsaws, and I am giving you the benefit of the doubt, Mighty Mouse, when I say I am surprised you don't understand this fundamental reason behind waiting for a trend/breakout to be confirmed, before jumping in.

 

Perhaps this is where your obsession with good and bad luck comes from. You are spot on - I DO wait until the trend is confirmed, and I DO leave money on the table as the price I am prepared to pay to find out if the market is willing to pay ME. I can help you to improve your trading, but you need to discard the view that the market is somehow interested in bestowing a win today and a loss tomorrow. The market does not give a toss who it is at the keyboard sending the buy/sell signals ... it doesn't care. But it DOES reward those who respect it, and do not attempt to tell it what to do. Attempting to jump into a trade BEFORE the move is confirmed, is indeed going to be BAD luck at some point. Remember the market will reward bad technique sometimes, and it is this false success that causes traders to think they are trading well, when all they are doing is gambling.

 

There is no reason that the trend can't cease when you enter and go revisit the support or resistance created by the trend reversal. While revisiting, there is no go reason that it has to resume the direction you are in.

 

Exactly, and this is the reason I don't give two hoots what the market does.

 

I do not HAVE to win every trade - I never take a loss as a personal sign that the market "got me" or that "my luck was out". In fact, a robust system WILL have Draw Down, and WILL sustain losses - did you ever see a 100% win rate without draw down? Didn't think so, and you won't.

 

There are plenty of times when a trend confirms and reverses. A lot of times the sole purpose of confirmation was to trap trend traders into thinking that it was trending. You should already know this or you will learn it at some point.

 

Again, Mighty Mouse, your comments here are beginning to border on paranoia. You have some faulty mechanism of thinking that someone out there is trying to trap you. I agree that " There are plenty of times when a trend confirms and reverses" but I vehemently disagree with your foolish assessment that " the sole purpose of confirmation was to trap trend traders into thinking that it was trending". That was a really foolish statement, and I doubt you would find one serious and successful trader on the forum to agree with those sentiments.

 

Look - markets are what they are. They don't fool around with people's heads, as you seem to be saying. You have to have a robust strategy and a positive expectation. You need sound money management and a decent risk:reward ratio. That is all. At this point in your trading career, I am surprised that I even have to mention these things to you. Get this silly notion of "good luck/ bad luck" out of the way - this is what is defeating you. You need to have a really sound approach, and the consistency of will to operate it, regardless of what happens. Take every signal - never cherry pick.

 

If you want me to believe that you know definitively that a market is going to continue trending, you will have better luck selling me a bridge. You have been fortunate enough to be in trades that have continued in your direction more often than they have reversed.

 

You are now putting words into my mouth, Mighty Mouse - Please show me where I said that I " know definitively that a market is going to continue trending". Such a statement is truly worthy of only ridicule. It is obvious from my previous position, that you can NOT tell the markets what it should be doing.

 

But I will say categorically, that the higher TF RULE the day. If you get into a trade, and it continues to tease you into a tough situation, then if you are trading with the HIGHER TF trend, it is likely you will be able to clear a profit in time. But let me state here and now - personally I would cull the trade, and move to the next setup. Even if the trade "would have" made me a decent profit had I held on - I have no regrets - that is part of my strategy, and my personal policy of capital preservation. I like capital - you can NOT trade without it.

 

It does not take luck to be a good trader. I never implied that and that is probably where you may be struggling with what I say. You can have bad luck in the market and still be a good trader. And you can have good luck and be a poor trader. To make a lot of money in the market, you are going to need to be either very lucky or be a good trader with good luck.

 

I don't agree nor disagree with what you assess to be the attributes of a "good trader". I have never asked myself if I am a good or bad trader. I don't struggle with what you say - I see it as the ramblings of a person who hasn't yet worked out a winning strategy viz a viz the illogical and irrational assumptions you have made about the nature of markets, the influence of luck, and your flawed understanding of how trend trading works, and how trend traders ply their strategies.

 

And Mighty Mouse - what may be your need to "make a lot of money in the market" is not mine. I have a simply philosophy - if I continue to operate my strategy consistently, then I WILL continue to hit my financial targets. It is the desire you have to "make a lot of money" that reveals your gambling bent, and of course, fully explains your obsession with luck and its role in the markets.

 

Look mate - I have other fish to fry, and this is getting very tedious and I think I have given you ample opportunity to display some knowledge and rationality of approach. I don't claim to be Paul Rotter by any stretch - but I can say categorically that I am very comfortable with my strategy and my results.

 

I wish you well, buddy, and I leave the last word to you.

 

SALMA

 

Please understand that there are sometimes strong differences of opinion. But although this topic has become extremely lopsided, there are still very important issues raised. I apologise again for pursuing a 'red herring' on your thread, but hope you have been able to understand the necessity to remove "luck" from trading, and ultimately answer your very first question: "Is Trading Just a Sort of Gambling?"

 

The answer is, of course, yes, for some, and I would stress that these "traders" usually do not prosper. For those for whom trading is NOT a gamble, and who do NOT rely on luck, or blame "luck" for any outcome, they will usually be the ones with a long and satisfying trading career. It is possible. Thank you for allowing me space on your thread.

[MightyMouse 12]

It seems you have a degree of anxiety in your approach, Mighty Mouse, and this is causing you to make certain incorrect assumptions about how markets work, and how trend traders operate.

 

I want to be crystal clear about this: I believe the higher TF are dominant. This may be at odds with others' views - and I will not enter into discussion on that point. Lower TF eventually cause the higher TF to bend and change, but not before there is visible chop in the INTERMEDIATE TF to serve as adequate warning. I use a specific indicator that tells me when the market is range-bound, or is likely to be that way, and I simply "stand by the guns" when that indicator tells me to.

 

You are making a fatal error when you assume there is something wrong with " likely entering when the trend is also partially underway". I do NOT expect to nail the tops and bottoms of trends - I leave that to the obsessive/compulsives and perfectionists - all of whom may spend time on the sidelines re-accumulating capital to "have another attempt" at trading, and still not realising that they are in the whipsaw blender. Failure to wait for a trend to confirm, is asking for whipsaws, and I am giving you the benefit of the doubt, Mighty Mouse, when I say I am surprised you don't understand this fundamental reason behind waiting for a trend/breakout to be confirmed, before jumping in.

 

Perhaps this is where your obsession with good and bad luck comes from. You are spot on - I DO wait until the trend is confirmed, and I DO leave money on the table as the price I am prepared to pay to find out if the market is willing to pay ME. I can help you to improve your trading, but you need to discard the view that the market is somehow interested in bestowing a win today and a loss tomorrow. The market does not give a toss who it is at the keyboard sending the buy/sell signals ... it doesn't care. But it DOES reward those who respect it, and do not attempt to tell it what to do. Attempting to jump into a trade BEFORE the move is confirmed, is indeed going to be BAD luck at some point. Remember the market will reward bad technique sometimes, and it is this false success that causes traders to think they are trading well, when all they are doing is gambling.

 

 

 

Exactly, and this is the reason I don't give two hoots what the market does.

 

I do not HAVE to win every trade - I never take a loss as a personal sign that the market "got me" or that "my luck was out". In fact, a robust system WILL have Draw Down, and WILL sustain losses - did you ever see a 100% win rate without draw down? Didn't think so, and you won't.

 

 

 

Again, Mighty Mouse, your comments here are beginning to border on paranoia. You have some faulty mechanism of thinking that someone out there is trying to trap you. I agree that " There are plenty of times when a trend confirms and reverses" but I vehemently disagree with your foolish assessment that " the sole purpose of confirmation was to trap trend traders into thinking that it was trending". That was a really foolish statement, and I doubt you would find one serious and successful trader on the forum to agree with those sentiments.

 

Look - markets are what they are. They don't fool around with people's heads, as you seem to be saying. You have to have a robust strategy and a positive expectation. You need sound money management and a decent risk:reward ratio. That is all. At this point in your trading career, I am surprised that I even have to mention these things to you. Get this silly notion of "good luck/ bad luck" out of the way - this is what is defeating you. You need to have a really sound approach, and the consistency of will to operate it, regardless of what happens. Take every signal - never cherry pick.

 

 

 

You are now putting words into my mouth, Mighty Mouse - Please show me where I said that I " know definitively that a market is going to continue trending". Such a statement is truly worthy of only ridicule. It is obvious from my previous position, that you can NOT tell the markets what it should be doing.

 

But I will say categorically, that the higher TF RULE the day. If you get into a trade, and it continues to tease you into a tough situation, then if you are trading with the HIGHER TF trend, it is likely you will be able to clear a profit in time. But let me state here and now - personally I would cull the trade, and move to the next setup. Even if the trade "would have" made me a decent profit had I held on - I have no regrets - that is part of my strategy, and my personal policy of capital preservation. I like capital - you can NOT trade without it.

 

 

 

I don't agree nor disagree with what you assess to be the attributes of a "good trader". I have never asked myself if I am a good or bad trader. I don't struggle with what you say - I see it as the ramblings of a person who hasn't yet worked out a winning strategy viz a viz the illogical and irrational assumptions you have made about the nature of markets, the influence of luck, and your flawed understanding of how trend trading works, and how trend traders ply their strategies.

 

And Mighty Mouse - what may be your need to "make a lot of money in the market" is not mine. I have a simply philosophy - if I continue to operate my strategy consistently, then I WILL continue to hit my financial targets. It is the desire you have to "make a lot of money" that reveals your gambling bent, and of course, fully explains your obsession with luck and its role in the markets.

 

Look mate - I have other fish to fry, and this is getting very tedious and I think I have given you ample opportunity to display some knowledge and rationality of approach. I don't claim to be Paul Rotter by any stretch - but I can say categorically that I am very comfortable with my strategy and my results.

 

I wish you well, buddy, and I leave the last word to you.

 

SALMA

 

Please understand that there are sometimes strong differences of opinion. But although this topic has become extremely lopsided, there are still very important issues raised. I apologise again for pursuing a 'red herring' on your thread, but hope you have been able to understand the necessity to remove "luck" from trading, and ultimately answer your very first question: "Is Trading Just a Sort of Gambling?"

 

The answer is, of course, yes, for some, and I would stress that these "traders" usually do not prosper. For those for whom trading is NOT a gamble, and who do NOT rely on luck, or blame "luck" for any outcome, they will usually be the ones with a long and satisfying trading career. It is possible. Thank you for allowing me space on your thread.

 

I never said there was anything wrong with entering a trend while it is underway. Look at who is paranoid and jumping to conclusions.

 

You are also jumping to many different conclusions about how I trade and further that traders who consider luck do not prosper. Nothing could be further from the truth.

 

It apparently bothers you to use the word luck. Trading without considering luck is simply arrogance. I do hope for your sake that you do continue to be lucky with your dominant time frame. If you do run out of luck in your time frame, then by all means come on back and read some of the posts on this thread so that you can get a firmer grip on the relationship of luck to trading.

 

Keep Winning,

 

MM

[SIUYA 11]

Luck, good or bad, is irrelevant.

 

So long as you recognise good luck for just what it is - luck and not skill, then thats all that counts.

[MightyMouse 12]

Luck, good or bad, is irrelevant.

 

So long as you recognise good luck for just what it is - luck and not skill, then thats all that counts.

 

Siuya, it is relevant. You need to plan for the existence of good and bad luck. Most trading plans that I see are designed to have bad luck take advantage of them. Yet they are not designed to take advantage of good luck. In other words, a lot of trading plans are designed with a flaw. So, the unsuspecting trader who trades his flawed plan with discipline will eventually fail even though he is trading what seems to him to be an iron clad plan.

 

But you are correct about separating luck and skill and recognizing it.

 

MM

[Cory2679 11]

MightyMouse,

 

From reading your posts and your market philosphy (and not just from this thread), I have to ask...why do you even bother? (and I mean this with all due respect)

 

What I get from your posts is that it's virtually impossible to make money in the markets consistently over the long-run...unless you're some kind of super-trader or just happen to fall onto the right side of luck...like someone who flips a coin and gets heads 10 times in a row (and even still...it's unlikely that that person will flip heads another 10 times...just as unlikely as it was the first time...their first 10 heads gives them no advantage into the next flip).

 

I'm not saying whether I think your philosophy is right or wrong...I suspect it falls somewhere in between...like with all of us.

 

Just curious why you bother pursuing this vocation.

 

Also, I see it often and I always think this so I thought I'd throw it out there...in my opinion, it's not relevant to compare traders like us to Goldman Sachs, etc...they are in an entirely different game...apples and oranges.

 

-Cory

Edited January 18, 2011 by Cory2679

[MightyMouse 12]

MightyMouse,

 

From reading your posts and your market philosphy (and not just from this thread), I have to ask...why do you even bother? (and I mean this with all due respect)

 

What I get from your posts is that it's virtually impossible to make money in the markets consistently over the long-run...unless you're some kind of super-trader or just happen to fall onto the right side of luck...like someone who flips a coin and gets heads 10 times in a row (and even still...it's unlikely that that person will flip heads another 10 times...just as unlikely as it was the first time...their first 10 heads gives them no advantage into the next flip).

 

I'm not saying whether I think your philosophy is right or wrong...I suspect it falls somewhere in between...like with all of us.

 

Just curious why you bother pursuing this vocation.

 

Also, I see it often and I always think this so I thought I'd throw it out there...in my opinion, it's not relevant to compare traders like us to Goldman Sachs, etc...they are in an entirely different game...apples and oranges.

 

-Cory

 

Cory, it is very difficult to make money in the markets, no doubt. It is also easy to begin to believe that our set up is infallible or the time frame we are trading is superior, or that we simply know where the market is heading. I think none of the above and choose to keep my ego in check.

 

Every trade I take I am prepared to take a loss and prepared to win. Either can happen and I have a higher chance of losing on my next trade than I do of winning. However, I am prepared to take advantage of the time when I do call the coin correctly 10 times in a row and will never get taken advantage of when I call it wrong 10 times in a row. Over time, both will happen.

 

Clearly, the large hedge-funds have to manage their money differently than us. But, each firm who had a division that blew up, had a chief trading strategist who failed to call the market correctly. From that perspective, it is relevant. It is difficult even if you have millions of dollars of resources available to you.

 

I do think it is awesome how some people read something that disagrees with what they think and automatically assume it is wrong because it counters what they think. I also think it is awesome how some people will only believe something if they read it from a book; as if someone is going to detail how to make money in a book and sell it to us for $39.95.

 

 

MM

MM