I admit I want to have a freedom, out from a day job and be my own boss. After a while, I realized a trader's work is even harder, longer, and more difficult to do. Searching the suitable edge, roller coaster emotion and psychology, neverending hours learning the market, and so on. Where's the easy money?
If trader is similar with athlete, then there'll be a tireless practice, adding skills, and so on. An athlete without practice will lose their competitive edge. For me, trading don;t have to be like that. It's more like a business. Learn how to build the business and become profitable after run it. Like business, there's also up and down session. If my products weren't liked by market, then I have to find new product aka. new edge. Sometimes the new edge is just a modification of the existing one.
For example, my ES setup usually produce max 6 pts per trade. But after 1 week, there's only 4 pts max. With only adjusting the Profit Taking, I am back in business. Not so profitable, but I also can adjust the amount of contracts, or maybe creating ambush setup (entering position at much better price).
IMO traders work consists 2 big things:
1. Finding the edge, review, backtest, analyze and enhance. Creating rules that have the best odds and memorize it.
2. Trade the edge with rules applied
I think when trading especially for daytrader, there's no need to think at all. Follow the setup, follow the rules and after the end of days review it. Is it good? are there errors? etc. It's going back to the first job.
That's it, sound and simple. But evem the simplest thing and the soundest thing still difficult to make money.
Actually I already find my edges. Today it should produced more than 8pts ES, more than 40 cents Crude Oil. But mentally I wasn't prepared. I can't stand losing $500 in my account, which is my maximum drawdown per day. I am afraid. First attempt succeed, I quit for the day. It's not a good thing. Not consistent. I will full-trade when I am ready risking those amounts. The market will still be there long before and after I prepared.
My edges is not a 90% Winning Ratio. It's only slightly above 50%. And the drawdown will occur someday. All I can do right now is taking profit early which is increase the winning ratio to 70% and quit early.
Meanwhile, I will enhance the edges to become more profitable. I don't know how to, but I will do it.
Traders are taught that the Holy Grail to Investing doesn't exist. Real people were taught that all the planet's move about the earth, don't go to far out into the ocean(you'll fall off the earth), on and on..........
ReplyDeleteWhen one looks outside the box(inventor), goes against the group(thinks for self), said they found(developed) something that is supposed to be impossible(airplanes), they were once killed. Now these people are called bad names and delegated to be unheard, and ignored group.
The ultimate business solution. The ability to cut the cost of any business expense, or just plain invest.
I developed multiple arbitrages that enable me to trade(not invest) in the finacial markets, without risk(The Holy Grail to Investing), or arbitrage that anyone can do. Over 30% a year.
Thomas Adair
thomasadair@live.com
Hi Thomas,
ReplyDeleteIt's amazing you have those arbitrage edge. I don't know a lot about arbitrage but I think it's good things to learn. Congratulation for your performance.
I also believe that Holy Grail do exist. It's just most people think holy grail is a bullet proof indicator that having 100% winning ratio.
IMO it's not like that. Holy Grail is kind like giving a consistent edge with a profitable trade. Sometimes it's produce losses. But in the long run it gave consistent profit more than the losses.
Thanks for come by. Looking forward for your next insight.
Somehow I feel Thomas Adair sounds like a scam. be careful out there.
ReplyDeleteHi RCM,
ReplyDeleteThanks for your warning.