Luck- is It a Supportive Factor to Everyday Trading?

[Jack Francisco 10]

Many traders rely on luck in their everyday trading. Do you think that luck lead you through success or through misguided ? Who trade with luck here- share your views with me and do you get unlimited profit everyday?::doh:

[Obsidian 10]

chances of making 10 mistakes to blow your account and making 10 profitable trades to double your account are equal in theory...but you see more losers than winners

[SIUYA 11]

it would be unlucky not to think that luck plays a big part.....however luck will not make you a good trader, it may give you a few good wins, that when the smarts ones realise they were just lucky.

[onesmith 10]

Luck is a coincidence of circumstances that creates a memorable event. The value of luck in the context of my trading is limited to the priceless info that's always there, lurking behind the circumstances, waiting for me to see it.

[MightyMouse 12]

Luck is a huge factor. It is not skill when price turns 1 tick from your stop and goes on to make a big winner. It is also luck that it stops you out and then moves in the right direction without you. I have waited to take a trade and gotten up to pee and came back to see that the trade happened without me. Why did I have to pee right then? Or, why didn't it happen when I was there? Either way, there was no trade and no gain.

 

The luck is in the timing of things. In the end your luck should even out. When it does even out your true edge will show up as dollars and cents in your account.

[wrbtrader 10]

Many traders rely on luck in their everyday trading. Do you think that luck lead you through success or through misguided ? Who trade with luck here- share your views with me and do you get unlimited profit everyday?::doh:

 

I've never met a profitable trader that relied (dependent upon) on luck to be consistently profitable. Yet, every profitable trader will have "some" lucky trades but not of any statistical significance especially when they will have nearly just as many "unlucky" trades.

 

Early today I had one "unlucky" trade (resulted in a loss) due to a trade execution error and then several hours later I had a "lucky" trade (resulted in a profit) via the exact same trade execution error.

[jpennybags 11]

I've been in the right place at the right time, the right place at the wrong time, and the wrong place at the right time... all decisions that I made with full knowledge... no luck involved.

 

If I have a really good week, or string together a few days that are out of the norm... was that lucky... maybe, but I don't look at it that way: just part of the give and take, and I'm pleased to be taking. The same goes when my fortunes are headed in the opposite direction: no big deal.

 

Money management and sticking with the rules makes for successful trading... no luck there either. Not a believer in luck...

[MightyMouse 12]

My father,who,when i was a kid,always used to say "you make your own luck in life" is the luckiest son of a bitch i've ever known.Which kind of makes his statement a debatable point.

They say fortune favors the brave.Would Nassim Taleb be lucky if the market crashed today,or is he unlucky every day it doesn't?

 

if you have a 50/50 chance of an event occurring and you hit 5 winners in a row, you were lucky. It is a temporary condition.

 

It Teleb is taking a risk on a 1/1000 year event that already occurred 5 years ago and he hits it again, then he was lucky.

[SIUYA 11]

if you have a 50/50 chance of an event occurring and you hit 5 winners in a row, you were lucky. It is a temporary condition.

 

It Teleb is taking a risk on a 1/1000 year event that already occurred 5 years ago and he hits it again, then he was lucky.

 

unless of course his point is right - that the 1 in 100 year events are actually more frequent that we think.

eg; 1987 share crash, 1991 - gulf war, 1992 bull market, 1997 Asian crisis, 1998 LTCM, 2000 internet bubble, recent events etc; etc;...

There are plenty of opportunities for dislocations, and they certainly occur more than "risk" models suggest (VAR - what a joke)...anyways that is a different discussion.

 

I read a book a few years back - the luck factor by Richard Wiseman - I thought that was a pretty good read and summary.

[MightyMouse 12]

unless of course his point is right - that the 1 in 100 year events are actually more frequent that we think.

eg; 1987 share crash, 1991 - gulf war, 1992 bull market, 1997 Asian crisis, 1998 LTCM, 2000 internet bubble, recent events etc; etc;...

There are plenty of opportunities for dislocations, and they certainly occur more than "risk" models suggest (VAR - what a joke)...anyways that is a different discussion.

 

I read a book a few years back - the luck factor by Richard Wiseman - I thought that was a pretty good read and summary.

 

That makes the statistics of 1/1000 wrong and him smart for knowing that the stats are wrong.

 

If you get a chance, read: FRB: Speech, Bernanke--The Great Moderation--February 20, 2004. It is Bernanke talking about the "Great Moderation". I read it way back before I knew who he was and marveled at how he dismisses all possible causes of the decrease in macro-economic volatility and arrogantly suggests that it is primarily the result of monetary policy. It was written in 2004. It is awesome to see in hindsight how his arrogance was misplaced, given the economic events, later in the decade. You can know argue that the monetary policy that he claimed led to the Great Moderation also led to the financial crisis of 2008. I suppose you can argue against it too.

 

I suspect that the events that are occurring with a higher frequency are occurring with a higher frequency because of the very high frequency of interference by central banks central banks throughout the world over the last 90 years.

[Leinster 10]

I think you make your own 'luck' per se. Calculating out your money management, exits drawdown and targets all assists with 'luck'.

 

Between 1-20 trade maybe some 'luck' occurs as in 5 loser's 15 winners.

 

The thing is the 'luck' may just be pure statistically naivety . If you work off 1000K trades then the 'luck' irons itself out.

 

I recall seeing something occur on the market recently and i said to myself i must test that condition too see if it can add too an existing strategy (mechanical trading strategy). After adding it to the strategy it produced maybe 2% more profit in total, did i add it in no as it was pretty much statistically irrelevant. Its my belief by these actions luck irons itself out.

 

 

And dont get me started about "trade execution error " id say we must have the same broker! I got murdered a few times with this an error in the platform i use with the broker i use. These errors can only be ironed out after they are seen only in live trading. Does that make me more lucky now that i have ironed out the issues 'yes probably' it definetly makes me less unlucky.

[4EverMaAT 10]

My father,who,when i was a kid,always used to say "you make your own luck in life" is the luckiest son of a bitch i've ever known.Which kind of makes his statement a debatable point.

They say fortune favors the brave.Would Nassim Taleb be lucky if the market crashed today,or is he unlucky every day it doesn't?

 

It appeared your father was "lucky", because you look at life as being random series of events. Your father understood the power of choice, and controlled his life story by making wise choices. Most people write their life stories without awareness, so when something "good" comes their way, it appears as what you are calling luck.

 

if you have a 50/50 chance of an event occurring and you hit 5 winners in a row, you were lucky. It is a temporary condition.

 

It Teleb is taking a risk on a 1/1000 year event that already occurred 5 years ago and he hits it again, then he was lucky.

With spread and commissions, you are actually still behind. Casinos realize this and remove the "edge" from all of their games. There must be less than 50% chance of you winning with any game where you play against the dealer where you can win the whole pot or a matching bet.

[joshdance 10]

If a trader breaks risk management rules, and survives the trade, THAT is luck. Catching a big winner is not luck; for the trader has to choice to close the position at any time. But surviving a large drawdown in a trade is luck, because it was a mistake that allowed the drawdown in the first place, and yet one is getting out with his shirt intact.

[MightyMouse 12]

It appeared your father was "lucky", because you look at life as being random series of events. Your father understood the power of choice, and controlled his life story by making wise choices. Most people write their life stories without awareness, so when something "good" comes their way, it appears as what you are calling luck.

 

 

With spread and commissions, you are actually still behind. Casinos realize this and remove the "edge" from all of their games. There must be less than 50% chance of you winning with any game where you play against the dealer where you can win the whole pot or a matching bet.

 

Still behind if the payout is 1:1 not so otherwise. Casinos also limit the size of your bet because they understand that black swans can occur.

[Roger Felton 10]

The market has something new to teach us every day. I never close my charts until I can identify what that "something new" is. Many hours per week are spent learning market behavior, developing unique and innovative ways of using Technical Analysis, finding clearer and effective ways to view the markets, keeping emotions in check, building patience, confidence and focus. I keep an extremely detailed journal and I review it often.

 

I consistently find that the more time spent doing the above, the more "luck" I consistently enjoy in my trading results.

[Hugh Morris 10]

It could be argued, much as it is for trading, that luck is a supportive factor to everyday life.

[xtraCache 10]

luck as a random process, or luck as the label of intuition?

[Obsidian 10]

I wish I was lucky enough to long eur/chf before SNB peg to 1.2 :doh:

have to admit that luck is involved when the price turns 1pip from stop-loss and marches towards your tp

[bobcollett 10]

Trading is a job.If you do your job well,you don't get luckier,or unlucky.The good luck bad luck part is the very mundane details that others have mentioned.This isn't about luck.It's simply a case of either/or.

.

 

Well mitsubishi,

Every so often you post something significant. Your post on Talib was another.

Your father was very lucky to have a good kid like you:)

regards

bobc

[Roger Felton 10]

Ok Roger.Let us put recent past disagreements behind us since you've decided against "unmembering" yourself and despite having bade us farewell on numerous occasions.

So,this is not a personal attack MMS -this is not a personal attack.I'll leave aside the obvious implications for your students since your post is indicative of someone who is somewhere in the middle of the learning curve rather than near the end.

Trading is a job.If you do your job well,you don't get luckier,or unlucky.The good luck bad luck part is the very mundane details that others have mentioned.This isn't about luck.It's simply a case of either/or.

Your last sentence is really based on the reply that some successful people in life make to somebody else who says "you're lucky" to which the reply is "yeah,the harder i work the "luckier" i get.

Nobody gets luckier by learning how to their job or doing their job well.So you were right to use inverted commas.

 

I'm still here because I was asked to stay by the moderator.

 

After you've been trading a while you will learn that there is no such thing as the "end of the learning curve".

[MadMarketScientist 11]

Working hard and doing the right things creates its own kind of luck. This is true in business and also in trading.

 

However, I admit I have a little of envy of some people who just happen to have pure luck - and those people are out there trust me I know some of them!

 

MMS

[Rocketdog 10]

I got lucky recently. I took a trade on the 6E when my entry conditions hadn't been fully met. The trade went against me immediately. I then tried to avoid the loss. I averaged down by adding another contract. That didn't work. I moved my stop several times. That didn't work either. The potential loss kept getting bigger. Price finally turned and came back to my original stop loss level. I gladly closed the position. I have since rewritten my trading plan. I have included a notation to "Never move stops or average down. Take the loss. Wait for a new opportunity."

[Roger Felton 10]

It could be argued, much as it is for trading, that luck is a supportive factor to everyday life.

 

Any trader who bases their trading strategy on luck probably won't be trading long. If, as it should, a trading strategy is based on probabilities, then luck has no bearing....unless, of course, you're Hillary Clinton trading cattle futures (yeah, right).

 

When price comes within a tick of a stop and then turns and wins, that's not luck. That's just happenstance. Your stop was where it was for a reason...or should have been. Sometimes it will get hit, too. If your trading strategy is viable, the stop is usually not hit. For the sake of this discussion, I'm not talking about a trailing stop that eventually gets hit but with a profit.

 

If a trader consistently enters trades where the stop is immediately hit, then the problem is trade selection, not trade management. If price moves towards the target but the stop gets hit before the target does, the problem is most likely trade management and not trade selection.

 

But no such determination can possibly be made by looking at any single trade....or series of trades, for that matter. Trading is nothing more than a numbers game and the trader's job is to keep the odds in their favor. Too many traders allow themselves to get caught up emotionally in the outcome of a single trade when, statistically speaking, the outcome is meaningless when factored into the thousands of trades they will take in their trading career. Do your job right and everythig else will take care of itself...just not every time. Luck has absolutely nothing to do with it. So, get that silly meaningless word out of your trading vocabulary and get to work on probabilities.

[Hugh Morris 10]

A lot happens in one's life that's about more than one's skills. There's luck involved.

 

So the lesson is...don't get too exuberant when you do well, and don't get too depressed when you don't.

 

Obviously this isn't meant to be taken to extremes and used as some sort of excuse. After all, it's been said that luck is what happens when preparation meets opportunity.

[Roger Felton 10]

Yeah,well the patronizing lil' dig is fair enough since i had a little dig at you didn't i?

Now let's deal with the bullshit part of your statement.Not bullshit because you said it,but just because people often make this claim,and you just said you learn something new every day.I say that only a beginner is learning something new about trading every day.Simple logic. For a man who claims to have been trading for 25 years (and i'm not saying it's not true/untrue) you cannot on the one hand claim you have an edge while on the other be learning something new every day or anything like it,where you would feel the need to modify that edge on a daily basis,or anything like it.You can see the logic in that can't you?

When you been trading a while you'll realize that:)

 

No, mits, in my case I don't see the logic. When a trader stops learning, they become an ex-trader. Are you telling me that you never learn anything new?? You never grow? You don't strive to be a better trader? You've learned all there is to know about trading and are now the expert's expert? I'm betting that the truth is that you don't know everything. I'm also betting that you do learn something even if it's only once in a while. Just a guess, though.

 

So why put down traders who are able to dig and uncover little nuggest of wisdom especially on a daily basis? I'm not talking about learning what S&R is or Fib Retracement. I'm talking about learning things like what algorithm works best for choosing the best chart & timeframe for a particular market. How to identify market turning points before it actually turns. What market dynamics were in play that might have caused a particular trade to fail? What unique market quirks should I be aware of in the ES that can help me in my trade selection?

 

Mits, I am very sorry if you've gone as far as you possibly can in what you know about trading. Contrary to what you might believe, that's not a good thing. But why the snide remarks just because someone is able to learn when you can't. Wasn't it you that said we should put the disagreements behind us? I've moved on...why can't you?