Stop Trying to Be a Home Run Hitter

[Gekko78 10]

Came across this today .......... I like the philosophy. Thoughts???

 

 

 

In Baseball there are home run hitters and there are players who get a lot of hits. Usually the two are not synonymous meaning the players who hit the most home runs are usually not the same players who get a lot of hits. However , in baseball getting on base 3 out of 10 at bats could get you into the hall of fame. Hitting home runs is great of course and something many people strive for but , some people are just not home run hitters. In fact , your chances of getting into the hall of fame are greater by getting hits than they are getting home runs.

 

This same concept applies to trading as well. When people first start out they tend to try and go for those "home run" trades. Trying to turn $1,000 into $10,000 in a month. While this is not impossible to do it is HIGHLY improbable to achieve.The problem here is that a new trader who is trying to turn a little into a lot will usually take on excessive risk and poor money management techniques in order to try and improve his bottom line. Sure he may get lucky a few times and have some good winners with this but eventually the market will teach him a lesson and he will likely lose all his capital.

 

If you think about it another way and go for the "base hits" you will more than likely achieve greater results over a longer period of time consistently which is really the name of the game. Anyone can have a few lucky trades but being able to stay the course for the long term is something very few can do.

 

Here is an example to illustrate this point:

 

A trader with a starting bankroll of $1,000 going for a 5% weekly goal will have turned that $1,000 into $12,643 by the end of year one.

 

If the trader were able to consistently maintain this strategy for 2 years he would have transformed his original $1,000 into $159, 843( due to the power of compounding) ....not bad for 1% a day right?

 

The problem is that the trader wants the $159,843 RIGHT NOW! Not in 2 years.....hence why 90% of traders lose over time.

 

To do this the trader must set a daily goal of 1%. 1% of $1,000 is $10 a day . That should be fairly easy to do. $10 is a 2 point movement in the YM , NQ or 6B ( $6.25 ) contracts. ( not including commissions.) This is also is a little less than a 1 tick move in the E-mini S&P futures contract ( $12.25 per tick)

 

The issue is that traders get greedy , they win one they keep going , they win another one they keep going even after they have hit their targets until evetually they hit a streak of losers and give it all back to the market. When you hit your goal for the day you are DONE for the day.

 

Discipline , money management and controlling your emotions are the keys to the trading kingdom while strategy plays a very small role.

 

1% is easy to do but the catch is it is also easy not to do. If you want to make it in this business you have get consistent in order to be successful.

[SIUYA 11]

Thoughts off the top of the head......most of mine are opposing as the article is so positive and I am a trouble maker.....

 

..............

 

A home run in base ball at best will get you a limited number of runs.....a home run in trading has a far better return.

 

Many traders who try for home runs also realise that most trades wont turn into the big winner. You still have to manage the trade. If the market changes, so does the trade, but at least you are giving your self the opportunity to make a lot as opposed to restricting yourself.

 

If you are a trader who makes it over a few days then gives it all back...what makes you think you have the strategy to stick to trying to make 1% a day with consistency.

Whats wrong with doing less trades, sitting and waiting for higher probability trades, or sitting on longer term trades.....if you have the same discipline, money mgmt and control

 

The other issues many traders have is they over trade - how do you stop this becoming a problem?

 

"1% is easy to do" ---- is it?

If you have such a great system that can pick levels well, then why limit their upside?

 

If you have a system that is soooo good that 1% per day is easy - why stop when you hit your $ profit for the day.....surely with that consistency you keep doing more and more trades if the setups are right? There seems to be an inconsistency here.

 

If the trader is so reliably hitting 1% then he should have no problems with 2-3% a day. If they cant do this, then how scalable is the system?

 

Make sure you have low commissions

 

Do you require a system that costs $1000 per month to trade like this --- if so, you will need far more than $1000 in the account!

 

The article states "The problem is that the trader wants the $159,843 RIGHT NOW! Not in 2 years.....hence why 90% of traders lose over time"

 

Well, we all know its not the only reason traders are not profitable, and yet at the same time as telling us we should walk before we run....it then promotes the idea of a trading style that seems to idolise instant gratification from short term trading as opposed to a slow and steady sitting on a position....contradictory maybe?

 

There is no mention of the leverage involved......to get 1% a day - its probably pretty large.

 

Drawdowns in such a system are probably harder to recover from, and a few big losses will take out many many days profits. So in other words - you always need to be on your game, as a slip up is likely to be very costly.

 

 

.......................

 

Same old story - there are different ways to do things.

No one way is right or wrong....there is no single truth out there, each trader is different......yadda yadda....if short term trading a hitting singles mentality works for you dont let anyone tell you different, and if such articles give you the right mindset to help go for it.....just get a good reliable cheap broker.

[Gekko78 10]

Thoughts off the top of the head......most of mine are opposing as the article is so positive and I am a trouble maker.....

 

..............

 

A home run in base ball at best will get you a limited number of runs.....a home run in trading has a far better return.

 

Many traders who try for home runs also realise that most trades wont turn into the big winner. You still have to manage the trade. If the market changes, so does the trade, but at least you are giving your self the opportunity to make a lot as opposed to restricting yourself.

 

If you are a trader who makes it over a few days then gives it all back...what makes you think you have the strategy to stick to trying to make 1% a day with consistency.

Whats wrong with doing less trades, sitting and waiting for higher probability trades, or sitting on longer term trades.....if you have the same discipline, money mgmt and control

 

The other issues many traders have is they over trade - how do you stop this becoming a problem?

 

"1% is easy to do" ---- is it?

If you have such a great system that can pick levels well, then why limit their upside?

 

If you have a system that is soooo good that 1% per day is easy - why stop when you hit your $ profit for the day.....surely with that consistency you keep doing more and more trades if the setups are right? There seems to be an inconsistency here.

 

If the trader is so reliably hitting 1% then he should have no problems with 2-3% a day. If they cant do this, then how scalable is the system?

 

Make sure you have low commissions

 

Do you require a system that costs $1000 per month to trade like this --- if so, you will need far more than $1000 in the account!

 

The article states "The problem is that the trader wants the $159,843 RIGHT NOW! Not in 2 years.....hence why 90% of traders lose over time"

 

Well, we all know its not the only reason traders are not profitable, and yet at the same time as telling us we should walk before we run....it then promotes the idea of a trading style that seems to idolise instant gratification from short term trading as opposed to a slow and steady sitting on a position....contradictory maybe?

 

There is no mention of the leverage involved......to get 1% a day - its probably pretty large.

 

Drawdowns in such a system are probably harder to recover from, and a few big losses will take out many many days profits. So in other words - you always need to be on your game, as a slip up is likely to be very costly.

 

 

.......................

 

Same old story - there are different ways to do things.

No one way is right or wrong....there is no single truth out there, each trader is different......yadda yadda....if short term trading a hitting singles mentality works for you dont let anyone tell you different, and if such articles give you the right mindset to help go for it.....just get a good reliable cheap broker.

 

Yea there are probably a few things that need to be gone into further detail here.

 

I like the philosophy as that is kind of of something I already do .

 

I have $$ targets per day that I shoot for , after that I move over to SIM and try out other things. There is no need to "keep going" ....sure I miss out on some winners but I miss out on losers to .....and those losers would have forced me to give back profits.

 

I stopped looking for 10-20 tick winners a long time ago ....especially when trading things like ES , 6B and NQ.....a lot easier to get a 4-5 tick winner than 20 ........

 

2-4 tick ES winners are presented all day long .....

 

Guess it depends on your style of trading also .. I could not sit in a trade for 20 ticks .....to stressful . Like you said you have to do what works for you..........I learned a long time ago that swing trading , or anything longer , is not for me as I do not have the patience for it . I cannot change that so I play to strengths and not try and change my weaknesses ( at least not yet)

 

I think getting 1% a day is a lot easier than most people think ...........a profit is a profit whether it is $1 or $100

 

I do not know what goes on in other traders minds when they are trading......everyones emotional level is different . That is why indicators do not work well because they try and quantify emotion which cannot be done.

 

I think if people looked at trading from a simple viewpoint instead of over complicating it then things might be a little easier ..............but that is just me

 

As I already know there are many people on this forum who do not share my viewpoint.

 

[Seeker 11]

Well it's not easy to get 1% a day. That's the problem. It is a seemingly simple goal on a given day, but extended over time, it's incredibly difficult. This is a 1300% return. How many of the greatest traders have ever got such a return in ANY year, never mind multiple years?

 

So contrary to what you say, that 1% per day is easier than most people think...no it's harder than most people think. Much harder.

[Gekko78 10]

Thoughts off the top of the head......most of mine are opposing as the article is so positive and I am a trouble maker.....

 

..............

 

A home run in base ball at best will get you a limited number of runs.....a home run in trading has a far better return.

 

Many traders who try for home runs also realise that most trades wont turn into the big winner. You still have to manage the trade. If the market changes, so does the trade, but at least you are giving your self the opportunity to make a lot as opposed to restricting yourself.

 

If you are a trader who makes it over a few days then gives it all back...what makes you think you have the strategy to stick to trying to make 1% a day with consistency.

Whats wrong with doing less trades, sitting and waiting for higher probability trades, or sitting on longer term trades.....if you have the same discipline, money mgmt and control

 

The other issues many traders have is they over trade - how do you stop this becoming a problem?

 

"1% is easy to do" ---- is it?

If you have such a great system that can pick levels well, then why limit their upside?

 

If you have a system that is soooo good that 1% per day is easy - why stop when you hit your $ profit for the day.....surely with that consistency you keep doing more and more trades if the setups are right? There seems to be an inconsistency here.

 

If the trader is so reliably hitting 1% then he should have no problems with 2-3% a day. If they cant do this, then how scalable is the system?

 

Make sure you have low commissions

 

Do you require a system that costs $1000 per month to trade like this --- if so, you will need far more than $1000 in the account!

 

The article states "The problem is that the trader wants the $159,843 RIGHT NOW! Not in 2 years.....hence why 90% of traders lose over time"

 

Well, we all know its not the only reason traders are not profitable, and yet at the same time as telling us we should walk before we run....it then promotes the idea of a trading style that seems to idolise instant gratification from short term trading as opposed to a slow and steady sitting on a position....contradictory maybe?

 

There is no mention of the leverage involved......to get 1% a day - its probably pretty large.

 

Drawdowns in such a system are probably harder to recover from, and a few big losses will take out many many days profits. So in other words - you always need to be on your game, as a slip up is likely to be very costly.

 

 

.......................

 

Same old story - there are different ways to do things.

No one way is right or wrong....there is no single truth out there, each trader is different......yadda yadda....if short term trading a hitting singles mentality works for you dont let anyone tell you different, and if such articles give you the right mindset to help go for it.....just get a good reliable cheap broker.

 

Well it's not easy to get 1% a day. That's the problem. It is a seemingly simple goal on a given day, but extended over time, it's incredibly difficult. This is a 1300% return. How many of the greatest traders have ever got such a return in ANY year, never mind multiple years?

 

So contrary to what you say, that 1% per day is easier than most people think...no it's harder than most people think. Much harder.

 

Depends on account size 1% of $1,000 is $10

 

1% of $100,000 =$1,000 a lot harder to achieve.

 

Also harder to achieve mentally.

[Seeker 11]

No it's hard to achieve full stop. Hard to achieve on a $1000 account. Very hard. We're talking every day aren't we, not just one day. Increasing the account size only makes a hard task even harder.

 

Again, who do you know that can achieve this, day after day after day for years?

[Gekko78 10]

No it's hard to achieve full stop. Hard to achieve on a $1000 account. Very hard. We're talking every day aren't we, not just one day. Increasing the account size only makes a hard task even harder.

 

Again, who do you know that can achieve this, day after day after day for years?

 

Guess we will have agree to disagree .

[SunTrader 10]

.........a profit is a profit whether it is $1 or $100

Far from it .