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Time to Give Up


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Time to Give Up

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  #11 (permalink)
 Big Mike 
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Big Mike View Post
Does this person have any business trading?

- Has been trading for 2 years, and has lost 50K out of his kids college fund
- Has paid over 20K in "courses" and "trading rooms" for "mentorships" and "systems"
- Hasn't told his wife or kids the extent of his losses

Mike

BTW, let's also mention that this person simply cannot understand or fathom stopping because once he stops, the losses are real and concrete. While he continue to trades, he still thinks he can make the losses back.

Should this person be trading?

Mike

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  #12 (permalink)
 Big Mike 
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Why did I start this thread?

Because after receiving a few thousand of these PM's and emails over the years, I want to scream sometimes... trading is not for everyone. Especially the guys ruining their life with trading. These guys are gamblers, not traders, and they are wrecking their life, their wife's life, their kids life not just in the monetary sense but also with their time and how it affects them and how that carries over into their personal life. Is it worth it?

I do not subscribe to the philosophy that anyone can learn to be a good trader. I am more realistic, and that everyone's life situation (prior to trading) is unique, not everyone can truly be in a good position to start a trading career and on top of that, not everyone has the personality traits required to be a good trader.

There are exceptions to every rule, and as I said before in my first post, if you aren't a "fighter" who has the thinking of simply making happen what you want to happen, then you really don't stand a chance.

Frequency of these emails continues to increase, which could be because of the popularity of the forum or could be because markets are getting harder to trade. But a common trait between emails is lack of accountability or responsibility. Everyone wants me to tell them where to enter, where to exit, or who to follow in order to be profitable.

Mike

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  #13 (permalink)
 Massive l 
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If your main focus and attraction to this business was/is money, then walk away while you can.
You'll probably end up blowing it all.
If your fascination with this business is managing risk, psychology, and strategy, then keep going.
Money is a by-product of those 3, not a focus.

I think a basic psychological evaluation would help most people decide if this is a career for them.
Honesty with oneself is of utmost importance. egos = internet fakers = losing traders IMO.
If it's hard for a person to be honest with themselves because their ego is in the way, then
this is the worst career choice they could make.

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  #14 (permalink)
 Big Mike 
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What about the guys who are doing things right?

- Only trading with money they can afford to lose
- Open and honest with their spouse, kids
- Steady income outside of trading that is more than sufficient to cover all life expenses while learning to trade
- Realistic expectations, knows that is likely to lose for a long time before starting to win, part of education
- Spends all of his time on research, homework, statistics, and review -- and not on indicators or trading rooms
- Creates accountability with a journal and his support network of trading friends, and his spouse

List continues.

For these guys, this thread does not apply. In fact, for these guys, they should be applauded for their conservative approach instead of thrill seeking holy grail fixation.

Mike

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  #15 (permalink)
 Big Mike 
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Massive l View Post
If your main focus and attraction to this business was/is money, then walk away while you can.
You'll probably end up blowing it all.
If your fascination with this business is managing risk, psychology, and strategy, then keep going.
Money is a by-product of those 3, not a focus.

I think a basic psychological evaluation would help most people decide if this is a career for them.
Honesty with oneself is of utmost importance. egos = internet fakers = losing traders IMO.
If it's hard for a person to be honest with themselves because their ego is in the way, then
this is the worst career choice they could make.

If you want to truly find out what kind of person you are, become a trader.

BTW, no one EVER emails me and asks me for help with risk analysis or psychological issues. Those don't even exist as far as most people are concerned.

Mike

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  #16 (permalink)
 mongoose 
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Big Mike View Post
BTW, let's also mention that this person simply cannot understand or fathom stopping because once he stops, the losses are real and concrete. While he continue to trades, he still thinks he can make the losses back.

Should this person be trading?

Mike

Its almost like a trader that is in a losing position that refuses to close it out. He keeps moving his stop or averaging down thinking it has to come back in his favor. The problem is his margain call will not be so simple, there will be no broker on the other end saying his trade has been closed out. It will be his wife calling and explaining why she took the kids and left.

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  #17 (permalink)
 Cloudy 
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I'm probably not really qualified to mention this. But my 2c. I think most aspiring traders need to realize
how small the edge really can be. It's like the wild west out there. Like winning a lottery; ok maybe not that bad, but winning a local lottery or raffle to find a way to make trading work for oneself. Almost no vendor, book or guru is going to give you an edge that works for the relatively small amount of fees for the masses. Trade secrets are just like corporate secrets of the top fortune companies. They are not going to spell it out completely at retail level dollars. Engineering and technology secrets and personnel who carry them and defect to other companies (or other countries) are constantly being sued over (or trying to be extradited). There are those making several hundreds of thousands and millions trading according to the overall stats, but again they are trade secrets i.e. proprietary trading methods and the HFT firms and prop firms probably know all the working methods already and squeezing every millisecond front-running they can out of it. I was shocked to see how little volume there was on most every short-term trading bar. Which means imo, a lot of it is electronic and working trading methods can only go so far before being saturated by too many participants trading the same way.

Al Brooks said in his materials that while having a mentor or two, they won't give you a piece of a super working edge until you've developed a trusting relationship after a period of time, maybe even a year or more. At best vendor materials out there may provide a working clue to construct one's own working system. Also , the trade management side (i.e. psychology, money management, take profit strategies, or whatever it's called) is just as important as the entries. Other famous successful traders have mentioned they picked up one thing from one mentor or resource, and another thing from another etc. Or came up with their simplified method after reading "Edwards and Magee" etc.

Of course there are very generous people on futures.io (formerly BMT) and other places, even some solid vendors, willing and attempting to share trading ideas that may very well be a great singular piece of the personal "jigsaw" puzzle that one could put together to make their own viable trading method(s). And also good to have more than one method in case one method fails as the markets always change seemingly in some multi-yearly basis now.

I think if one can't derive or find, or modify the few things counted on one hand that works and make up their own system that works for them, after the long searching from the vast amount of learning resources, commercial or not, within a viable personalized home economic time period, then maybe that is the time to quit or at least take a year or more hiatus from trading.

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  #18 (permalink)
 Disciple 
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Our culture is about instant gratification...getting what I want now. Heaven forbid if I have to wait...

The values of patience, resilience, hard work, relationships and honesty are replaced with you get what you want now...and to be successful = lots of money (there were and are cultures that define success by who you are not what you own).

So its a double whammy - instant gratification and a belief that money makes you. When a person starts trading its so comfortable to want a system right now that will make you all you ever wanted to be. The scammers and sharks prey on this.

Trading is a complicated mix of personality, risk management and market understanding. What works for one may not work for another given these factors. Thats where old school values come in - patience, resiliance, hard work, teamwork and honesty (all the stuff that goes into things with great outcomes).

When should you give up
  • If you believe money make you who you are - give up because you will always be trading looking at profit loss and not executing your trades well
  • If you want a quick fix and a simple solution - give up because trading is about probabilities and risk management not certainty of outcome

If however you have some old school values and value who you are - I believe you are on the right track. Well I hope its the right track because that is where I am right now.

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  #19 (permalink)
 Big Mike 
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Cloudy View Post
Trade secrets are just like corporate secrets of the top fortune companies. They are not going to spell it out completely at retail level dollars. Engineering and technology secrets and personnel who carry them and defect to other companies (or other countries) are constantly being sued over (or trying to be extradited). There are those making several hundreds of thousands and millions trading according to the overall stats, but again they are trade secrets i.e. proprietary trading methods and the HFT firms and prop firms probably know all the working methods already and squeezing every millisecond front-running they can out of it.

Meh, I don't really agree with a discretionary trader having a "trade secret". Now many of them think they do, that's for sure, but they probably don't. As for algo trading, sure, it's lines of code so it does what it is programmed to do, and that is a different scenario as far as protecting it.

But a discretionary trader having a secret is like saying Tiger Woods has a secret to why he is so great at golf. It isn't because of where he enters or exits a swing, just like for a trader it isn't simply the entry or exit of a trade. Trying to boil it down to that is meaningless and drastically undervalues all other aspects of trading, or golfing. It would be like saying to be a good golfer you need to hit the ball well. To be a good trader you need to trade well. Really, wow. Thanks for that. The process of how you hit the ball, and how you trade, is the edge. Not your chart and indicators, not your clubs or balls.

Mike

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  #20 (permalink)
 Big Mike 
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Disciple View Post
When should you give up
  • If you believe money make you who you are - give up because you will always be trading looking at profit loss and not executing your trades well
  • If you want a quick fix and a simple solution - give up because trading is about probabilities and risk management not certainty of outcome

I'd also like to add that almost any desk job is easier than trading. You get a paycheck unless you really screw up. With trading, you can do everything right and still have a losing trade, a losing day, even a losing week or month depending on your trade style or frequency.

Those that want to be traders because they envy the freedom it brings are in for a surprise in terms of how much responsibility and accountability is required which is not present at a normal desk job. Even for those of us who have run our own businesses in the past, and the additional responsibility that comes with that, it does not compare to the responsibility and accountability a trader faces.

Let me also say that if trading is making you miserable, you are way stressed out or constantly sweating the next trade, day, or week's outcome, then find something else that is more enjoyable. There are a lot of jobs in this world, everyone can find something that makes them happy. Especially if you live within your means and don't make it about the money.

Mike

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