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SSI, Why Traders Lose

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Trading isn't very different from gambling or professional poker playing.  To the extent that gambling isn't a sustainable choice of profession for most people, trading isn't either.  Unless you're trading with someone else's capital, and getting paid a regular salary for it.  Or providing technical 'analysis' aka wishful thinking :P

 

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2 hours ago, dmedin said:

Trading isn't very different from gambling or professional poker playing.  To the extent that gambling isn't a sustainable choice of profession for most people, trading isn't either.  Unless you're trading with someone else's capital, and getting paid a regular salary for it.  Or providing technical 'analysis' aka wishful thinking :P

 

The reason you see this as being no different from gambling is because that is exactly how you look at it.

Listen to your own commentary; ooh it's up yeah, ooh it's down noooo, up, down, up, down. you may as well be on a race track 🏇🏇

At some point you will realise that that really is not the way.

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23 minutes ago, Caseynotes said:

Listen to your own commentary; ooh it's up yeah, ooh it's down noooo, up, down, up, down. you may as well be on a race track 🏇🏇

It is though.  Look at it sliding up and down like a trombone recently😱

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2 minutes ago, dmedin said:

It is though.  Look at it sliding up and down like a trombone recently😱

yes but who cares? if you are emotionally tied to every trade is a telltale that you have no 'edge', no statistically backed system ruling your decision making. instead you are just riding your emotions which is exactly what a gambler must resort to.

  • Thought provoking 1

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Posted (edited)
34 minutes ago, Caseynotes said:

statistically backed system ruling your decision making

 

Never been able to find anything that reliably makes profits ... as far as I can see all of technical analysis is pretty much random, hence the reason why there are so man indicators (they are all equally useless) ... I suppose people that do keep it to themselves which is why we only ever heard of traders losing.

Edited by dmedin

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Posted (edited)

@dmedin

sort of, nearly, but not quite. there is such a thing as arbitrage, if enough people do the same thing others will find a way to take advantage and it will cease to work. but at the same time you also need others to join in and push your trade on.

but none of that is the point. your 'edge' or system does not need to be brilliant or complicated. it is just a set of conditions that signals an entry and filters out more losers than winners so you are left with a win rate vs risk reward ratio that gives a profit over a number of trades. 

the entries your system signals don't have to be the best entries, just favourable. your trades don't have to be the most profitable, just favourable. you don't have to take all of them, just enough. your filters may block many great trades, doesn't matter.

so long as the system, if adhered to, gives a positive expectancy is all you are looking for. but first you must have a system and second it must be tested to produce reliable stats. That's the only thing that will give confidence and negate the need for emotion.

Edited by Caseynotes

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@Caseynotes

I read on Babypips.com that a 'trader' is distinguished from a 'gambler' in terms of whether they have a plan/system.  This actually sounds a lot like denial (and hence, perhaps indicative of an addiction). 

Check this out - it's pretty much the definition of a trader:

https://en.wikipedia.org/wiki/Betting_strategy

 

This is pretty serious stuff.  A lot of people lose a lot of money, and they even keep coming back after they've 'blown' their original accounts.  That's gambling addiction, pure and simple.

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1 minute ago, dmedin said:

@Caseynotes

I read on Babypips.com that a 'trader' is distinguished from a 'gambler' in terms of whether they have a plan/system.  This actually sounds a lot like denial (and hence, perhaps indicative of an addiction). 

Check this out - it's pretty much the definition of a trader:

https://en.wikipedia.org/wiki/Betting_strategy

 

This is pretty serious stuff.  A lot of people lose a lot of money, and they even keep coming back after they've 'blown' their original accounts.  That's gambling addiction, pure and simple.

👀 sometimes I do believe I am just wasting my breath 😂

if you have no proven system that has positive expectancy then you are just a gambler riding your emotions, no matter what playing field you are on.

Be different, become a trader instead, build a simple system that has positive expectancy as proven by testing.

Build it. Validate it. Do it.

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20 minutes ago, Caseynotes said:

if you have no proven system that has positive expectancy

 

A proven system ... nope.  I have been studying TA hard, but I have not seen a single thing that I would call a 'proven system'.  Certainly there are some things that have a higher probability of success than others, but I don't call that 'proven'.  I call it 'slightly more likely'.  And I still consider that to be gambling and an unsustainable way to make a living.

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2 minutes ago, dmedin said:

 

A proven system ... nope.  I have been studying TA hard, but I have not seen a single thing that I would call a 'proven system'.  Certainly there are some things that have a higher probability of success than others, but I don't call that 'proven'.  I call it 'slightly more likely'.  And I still consider that to be gambling and an unsustainable way to make a living.

no, you build a system then you test it to prove it works or not. forget your TA. TA has nothing to do with it.

people believe that a system needs to be complicated and catch every move and ride that move to the max. nothing could be further from the truth.

a simple breakout past the recent high in an uptrending market could be enough. what would you need?

a trend indicator, price action on a chart, a bracket order for entry and a 2x stop loss target.

Here is what such a system could look like on a chart. Would that system be profitable (I don't know) so test it.

image.thumb.png.cac101c4cbf3e7004d77f9cc7c434ec0.png

if it doesn't work modify or discard and start again, if it does work then do it, a system with proven expectancy is exactly what you are searching for, that's it, start on small size and keep increasing.

 

 

 

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    • Good call I was a bit premature  
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