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What I wish I would have known when I got started.


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What I wish I would have known when I got started.

  #51 (permalink)
otiose
Malaysia
 
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When we first start either through ourself, or a live room or a mentor or etc....
we have the urge to trade NOW. to some money.
but one thing i have learn throughout the years if that a big portion of room/mentor/etc are probably scammers. or suffice to say that in most case not a ticket to make money 'that soon'.

So, the lesson here is. UNTIL you can make consistent returns for 3,6,9.... months on sim/demo account. DO NOT trade live. Or if you wanna trade live as forward testing instead of demo, make sure that amount per trade is very very very low. even with 20x-40x losses u do not feel it.

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  #52 (permalink)
 sleip 
Karlsruhe, Germany
 
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i wish someone would have told me, that lagging indicators are useless in my trading and with them i will only loose money

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  #53 (permalink)
 
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I wish that when I started I knew the difference between risk and uncertainty. This may have helped in other areas besides trading as well.

Matt Z
Optimus Futures

There is a substantial risk of loss in Futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #54 (permalink)
 musickbc 
New Braunfels
 
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mattz View Post
I wish that when I started I knew the difference between risk and uncertainty. This may have helped in other areas besides trading as well.

Matt Z
Optimus Futures

This intrigues me.

Can you elaborate on the difference between the two, and the implications for a novice trader? I gather from the postings of others that patience and risk/money management are of the utmost importance for consistent success, and it sounds like you have some insight into the latter. Perhaps a lesson hard learned on your part that others could avoid.

Thanks in advance,
BC

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  #55 (permalink)
 
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musickbc View Post
This intrigues me.

Can you elaborate on the difference between the two, and the implications for a novice trader? I gather from the postings of others that patience and risk/money management are of the utmost importance for consistent success, and it sounds like you have some insight into the latter. Perhaps a lesson hard learned on your part that others could avoid.

Thanks in advance,
BC

The concept of risk and uncertainty are both related to psychology and stats. But, if I had to put it in a nutshell, I would say that Risk is a quantified with negative and positive outcomes. Uncertainty is a bunch of variables that could not be quantified to arrive at a decision in terms of risk and reward.

I have learned over the years to think of the positive and negative outcomes of my decisions while considering the variables I am given. In my opinion, it is the conservative approach and also a simple approach to evaluate things.
This is what most people should adopt especally when it comes to trading. (However, IMO, uncertainty has a way higher payoff because it entails a higher risk. This approach should be adopted only by experienced decision makers and experienced traders).

As a beginner trader, you should know what variables are needed to reduce risk and increase reward.
Therefore, simple methods with a few variables are better for trade evaluation than a "collage" of indicators that move you to uncertainty.

I hope this helps.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
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  #56 (permalink)
 
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 paps 
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mattz View Post
(However, IMO, uncertainty has a way higher payoff because it entails a higher risk. This approach should be adopted only by experienced decision makers and experienced traders).

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.


agree. Pysco plays a big part. Yes perhaps a slightly higher degree of risk (but could be controlled risk if having rules)......but that's where the asymmetric payoff's in trading come into play.

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  #57 (permalink)
 
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paps View Post
agree. Pysco plays a big part. Yes perhaps a slightly higher degree of risk (but could be controlled risk if having rules)......but that's where the asymmetric payoff's in trading come into play.

Taking decisions with uncertainty could be taken if the person's DNA has a higher appetite for risk.
But, uncertainty itself does not have control or risk variables, if it did, it would be calculated risk, and that is precisely why it has a substantially higher asymmetric reward.

I know some chose to make fun of Donald Rumsfeld when he said the below, but he captured the essence of risk and uncertainty.
"There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know."

The "unknown unknowns" is the uncertainty.



Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
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  #58 (permalink)
Ozquant
Brisbane Queensland Australia
 
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I wish i understood this phrase better " Trading is about defining probability and managing possibility " To me this encapsulates the basic premise of good trading . Sadly it took me many years to really understand the need for intensive quantitative analysis to really define probability . Guessing just doesnt cut it . If you knew you didnt have positive expectancy you should stop trading , i was oblivious to my expectancy for many years and paid the price . Expectancy , win/loss , risk /return , probability curves , risk of ruin overlooked by the majority . Do this you almost have no hope of making it . Psychology has little to do with it ultimately , its all about methodology , process and trust in the process . A positive expectancy leads to a positive mindset , not the other way around ... You really need to be the ultimate critical thinker to make it in this game .

“If you can’t measure it, you probably can’t manage it… Things you measure tend to improve.”

Ed Seykota

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  #59 (permalink)
 
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 bobwest 
Western Florida
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Ozquant View Post
Psychology has little to do with it ultimately , its all about methodology , process and trust in the process . A posiive expectancy leads to a positive mindset , not the other way around ...

Important point here.

On the one hand, I would say that psychology has a huge amount to do with it, but that is because when your process doesn't work, or when you don't even have one in a defined sense, or if you don't trust it, then you're going to operate on random psychological factors: fears, doubts, overoptimism, greed, impulse trading and all the rest.

You'll say after a trade, "Why did I do that?"

Focusing on the psychological factors -- other than to be aware of them so you can stop yourself -- is looking at the effect instead of the cause. It can be important, but the cause is that you don't have a method that works and that you are willing to rely on and be consistent with.

A paradox is that there are many methods that work just fine, but individual differences in application, which may get down to personal psychological issues -- how objective are you, how dispassionate are you -- will largely determine whether they work for a given person or not....

But without a real, and repeatable, positive expectancy, nothing is really going to go well.

Bob.

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  #60 (permalink)
 musickbc 
New Braunfels
 
Experience: Beginner
Platform: WindoTrader
Trading: Emini
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mattz View Post
The concept of risk and uncertainty are both related to psychology and stats. But, if I had to put it in a nutshell, I would say that Risk is a quantified with negative and positive outcomes. Uncertainty is a bunch of variables that could not be quantified to arrive at a decision in terms of risk and reward.

I have learned over the years to think of the positive and negative outcomes of my decisions while considering the variables I am given. In my opinion, it is the conservative approach and also a simple approach to evaluate things.
This is what most people should adopt especally when it comes to trading. (However, IMO, uncertainty has a way higher payoff because it entails a higher risk. This approach should be adopted only by experienced decision makers and experienced traders).

As a beginner trader, you should know what variables are needed to reduce risk and increase reward.
Therefore, simple methods with a few variables are better for trade evaluation than a "collage" of indicators that move you to uncertainty.

I hope this helps.

Matt Z
Optimus Futures


mattz View Post
Taking decisions with uncertainty could be taken if the person's DNA has a higher appetite for risk.
But, uncertainty itself does not have control or risk variables, if it did, it would be calculated risk, and that is precisely why it has a substantially higher asymmetric reward.

I know some chose to make fun of Donald Rumsfeld when he said the below, but he captured the essence of risk and uncertainty.
"There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know."

The "unknown unknowns" is the uncertainty.



Matt Z
Optimus Futures

It helps tremendously. Thank you for the response. So, if I am understanding it correctly, risk can be quantified while uncertainty cannot. Risk should be taken into account for every trader when making a decision, but uncertainty will require experience to get a "feel" for, and thereby incorporate into trading decisions. Does that sound close?

On a similar note, any guidance on understanding risk(s) associated with trading? For me personally, the idea of risk is somewhere between a known unknown and an unknown unknown, and is definitely something I endeavor to improve. So, a more targeted question would be "Are there any books, courses, videos, threads, etc. that you, or anyone else, could recommend?" I will be searching on this forum for any discussions around risk and how to find and quantify it, but I appreciate any guidance.

BC

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