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Why most traders fail, in 1 minute of an interview


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Why most traders fail, in 1 minute of an interview

  #11 (permalink)
 
Massive l's Avatar
 Massive l 
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I'm not trying to predict the future. Trading profitably is a game of averages. To create averages that generate income I create strategies that do the following:
Win more than they lose and
Winners are greater than losers

Easier said than done but in essence that's all I'm doing. Of course you have to take action however I've found that to be very easy when you have the averages to backup the action. You need to be confident in yourself and your ideas/strategies you've created. If you're not then you're always going to screw things up. Winners take the shots. Losers hesitate. Taking a shot in and of itself doesn't make you a winner. Again, you need the skills/stats/averages/strategies to backup the confidence.

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  #12 (permalink)
 
Tap In's Avatar
 Tap In 
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Massive l View Post
I'm not trying to predict the future. Trading profitably is a game of averages. To create averages that generate income I create strategies that do the following:
Win more than they lose and
Winners are greater than losers

Easier said than done but in essence that's all I'm doing. Of course you have to take action however I've found that to be very easy when you have the averages to backup the action. You need to be confident in yourself and your ideas/strategies you've created. If you're not then you're always going to screw things up. Winners take the shots. Losers hesitate. Taking a shot in and of itself doesn't make you a winner. Again, you need the skills/stats/averages/strategies to backup the confidence.

100% this.

The number one reason most traders fail is lack of a tradable edge. Everything else is commentary

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  #13 (permalink)
 
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 wldman 
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Is there tradable edge, how would you define that?

If there is definable edge, is it fair to say that many traders STILL LOSE?

De facto there must be more involved than edge. Much of that commentary may actually matter.


Tap In View Post
100% this.

The number one reason most traders fail is lack of a tradable edge. Everything else is commentary


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  #14 (permalink)
 
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 snax 
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Just my two cents. I believe, at least in theory, that some trader could find a collection of entries that are profitable consistently for them, their "system" if you will...then try to teach it to an "apprentice" down to the last detail, explained perfectly, and that apprentice very well might not see the same results due to the fact that everyone executes differently and the market is full of confusion and subjectivity.

Hence I believe you need to find something on your own that seems to resonate with you as a trader first and then build around that, rather than trying to seek the answer from others first. I think you need to develop your own "Point of Reference".

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  #15 (permalink)
 
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 Massive l 
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wldman View Post
Is there tradable edge, how would you define that?

If there is definable edge, is it fair to say that many traders STILL LOSE?

De facto there must be more involved than edge. Much of that commentary may actually matter.

I also mentioned you have to take action / execute. Edge. Execution. Michael Jordan didn't pull up to a jumper and think man I don't know about this one.

Of course we're not robots (although there's where programming your strategy comes into play) so there is the psychological factor which everyone is aware of. It happens in all competitive mediums. You either have the confidence or you don't. Losing streaks can break that confidence. Then you have to ask yourself "is it my strategy or my execution?" Regardless of which one it is you will need to confront it and take action. Refine the strategy, build a new one, hire a psychologist, etc. Winners correct the issues and push forward.

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  #16 (permalink)
 
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 wldman 
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but what is definable edge any more? a series or confluence of indicators with a standard of rules applied? Is that edge?

30 years of experience? The fastest machine? I just have a hard time defining quantifiable edge.

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  #17 (permalink)
 
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 Massive l 
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wldman View Post
but what is definable edge any more? a series or confluence of indicators with a standard of rules applied? Is that edge?

30 years of experience? The fastest machine? I just have a hard time defining quantifiable edge.

An edge is seen in your trading stats. It can come from all of the factors you listed or maybe just one.

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  #18 (permalink)
 
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 Schnook 
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Relevant also to the above would be the distinction between discretionary and systematic trading strategies.

What is true for one, may not be true for the other. Systematic is quantifiable, definable, measurable. Discretionary is not.

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  #19 (permalink)
 
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 Massive l 
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Schnook View Post
Relevant also to the above would be the distinction between discretionary and systematic trading strategies.

What is true for one, may not be true for the other. Systematic is quantifiable, definable, measurable. Discretionary is not.

I see what you're saying but discretionary edges are absolutely measurable.

ROE, Winning %, R/R, expectancy, # of trades, largest win, average win, largest loss, average loss

When I look at trading journals I want to see stats. I don't care the who what when how or why. Give me the numbers. Is there an edge or not? Now I still appreciate the insights, struggles, and everything else in trading journals but at the end of the day all I care about is the performance.

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  #20 (permalink)
 
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 Schnook 
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Massive l View Post
I see what you're saying but discretionary edges are absolutely measurable.

ROE, Winning %, R/R, expectancy, # of trades, largest win, average win, largest loss, average loss

When I look at trading journals I want to see stats. I don't care the who what when how or why. Give me the numbers. Is there an edge or not? Now I still appreciate the insights, struggles, and everything else in trading journals but at the end of the day all I care about is the performance.

You're describing returns statistics, which is what the edge produces. But the edge itself is not truly definable unless it's repeatable. I realize it's a very subtle distinction but an important factor in trade psychology. A purely discretionary trader can't backtest or forecast his strategy the same way a systematic trader can. Nor can he as easily diagnose problems or errors when they arise.

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