Best single characteristic of a trader?

Best single characteristic of a trader?

-Success

In the end that's all that matters.

You are victom of a logical fallacy here. You say "to make it become profitable....." fella, YOU never make any trade profitable. It is a gamble from the time you click buy to the time you click sell.

Stylish gambling with clues

patience and balls.

The ability to place a trade, and walk the hell away from it. Let it do it's thing.

Also, if you are stuck at home, a bit of skill in something like World Of Warcraft doesn't hurt either.....to keep you from messing with your trade!

Very True, the more decisions one needs to make the more chances of messing up... Set it and forget it.

Money Management...
is the only characteristic a trader needs. If a trader could limit losses and hold gains ... he/she would be wealthy beyond imagination. I believe a lot of new traders forget they are playing with REAL money, money Im sure didn't come easy!

Its like to idea of, an employee that has bills out of his yen-yang ... and he blows is paycheck and bonus on a new flat-screen. Risk managment/Money management should be take seriously, new traders should be and take responsablilty for any trade place, whether good of bad.

Everyone wants to be rich, no one is willing to learn what if takes to gain.
Scalping, high margin/leverage trades, is a dangerous game in the hands of a noob.

Money management, patience, and the ability to "pick" your trades = success in this forex game.

A trading plan that makes sence and works(maby?)

Seems like weve got some of the 'beleive it will happen and it will brigade' in da house.

Your perception of the markets.

If you perceive the market to be moving up, then your mind will ignore whatever signals the markets hands over to you pointing you in the other direction and continue to follow your perception.

This is what happens to traders/investors that don't take money management in mind:
http://finance.yahoo.com/banking-bud...lowups-of-2008
.
.

ummmmm.. position sizing - dont risk more than 2% per trade.

Devise system and Stick to it.

Profit target > Stop loss

With predetermined gains larger than pretermined losses you can win.


Adios

This must be about the 99th time I’ve posted this type of message.
It’s addressed to all of those well-meaning folk who believe that:

-- you can succeed in forex with MM and discipline alone
-- the system doesn’t matter; it’s all about the trader, his mindset, and his mastery of self
-- it’s possible to profit in the long term by using random entries
-- trading psychology books (like Mark Douglas'), and/or clichés posted on forums, tell you most of what you need to know

Consider this:

An EA will trade according to strict MM rules, and with perfect discipline. Writing an EA that “enters every emerging move, cuts losses short, lets profits run, and risks only 1% (or 2%) of your account per trade” is a very simple algorithm to program. An EA will trade 24/7, executing a plan flawlessly, consistently, tirelessly, emotionlessly. It removes the trader, his mindset, and any lack of self-mastery, from the equation altogether. An EA automatically guarantees all of the following: Adherence to strict MM rules. Perfect accuracy of execution. Endless patience. Unwavering discipline. No fear, greed or hesitation. Immunity from hunches, guesswork or outside ‘noise’. Around-the-clock trading that’s unaffected by tiredness, illness, stress, negative attitudes. No data entry errors. Much more recreational time for the trader, away from his PC.

But I think it’s fairly obvious that, if long-term profit was this easily attainable, then everybody would own such an EA, and we’d all be forex millionaires.

So here's my point: If MM and discipline are all that’s needed, and an EA addresses them perfectly, why do the vast majority of EAs ultimately fail? The answer is much the same reason why 95% (or whatever the number is) of traders do likewise. Their ‘market knowledge’ of how, when – and possibly why – prices move, simply isn’t good enough. Their analysis isn’t intelligent or accurate enough to locate ‘on-balance’ profitable price patterns, cycles, or behavior that’s potentially robust enough to last a lifetime. Or, failing that, they’re not smart enough to periodically evaluate whether such an inefficiency is still operating as profitably as it did previously, and if necessary adapt accordingly. Knowledge, analysis, inefficiencies, forecasting, adaptability…. these all relate to entries, and apply irrespective of whether an approach is ‘discretionary’ or automated.

Heck, if entry is completely unimportant, then why bother with any kind of analysis? Why look at price charts at all? (now that’s really trading naked, LOL) Why study averages, or economic trends? The big funds could save themselves millions in salaries by dismissing all of their analysts, and running primitive EAs along the lines of the one that I described.

Yes, it’s true that reckless MM and indiscipline will deplete an account much more quickly than an ineffectual method, and may therefore mask the latter. But the fact is that, without some kind of methodological edge, you must also eventually fail. Costs make forex a negative sum game.

And it’s true that exiting losing trades quickly, and letting winning trades bloom, is an essential component of many profitable trading approaches. But effective only if combined with an entry that gets you in on the right side of a move frequently enough to tip expectancy in your favor. Many are fooled by the idea that price moves 50/50, and therefore believe they’re assured a 50% win rate, even if they make trades with an R-value > 1. But the fact is, everything else being equal, the higher the R-value, the lower the win rate; the two are inversely proportional to each other. For an exit method to be effective in its own right, then, it must somehow overcome this inherent equilibrium.

Making random entries means trading against the ‘trend’ 50% of the time. It means completely ignoring support and resistance, momentum, rejection, volatility, correlation, statistical deviation, session considerations, economic influences and drivers, news announcements.

I’d be delighted to be proved wrong. I wish it were possible to succeed without the need to have a strategy, because it means that I could easily write such an EA, and then effortlessly become a forex millionaire myself.

So, to answer the original question as to what is most important, here’s my two cents worth:
Superior analysis and forecasting. Exploiting inefficiencies. Effective entries. A methodological edge.

Happy New Year to y’all.

Thank you for this great post and happy new year to all of the FF member!!!

Confidence... man... like the Flav

http://blog.vh1.com/files/2008/05/fl..._interview.jpg

Just couldn't keep away, could you?

Hi Tom,

Just allowing myself a little recreational read/write time over the holiday break. Then it's back to some real work, and I must again put the forum behind me. Spending several hours a day here meant that nothing else was getting done.

Hope all is well with you.

Happy New Year,
David

Totally agree with you. We think alike A little bit addition to that:

If making a good ENTRY is important (still almost impossible to get 100% accuracy) ... the proper EXIT much more important than that.

In the end... the EXIT will determine how much we profit or how much we lose.

Trader A and Trader B made and Entry simultaneously at the same pair, at the same price and at the same time.

Trader A >>> BUY (LONG)
Tarder B >>> SELL (SHORT)

Surprisingly, both of them CLOSED trade with profit. They EXIT at different time and different price.

In my post I was trying to explain why entries are more important - at least to me - than exits, MM and psychology. Hence I don’t understand why you say that you totally agree with me. It’s perfectly OK to disagree. We can still be friends.

Everybody is allowed to have a different approach to trading, which means that their opinions will also be different.

“If making a good ENTRY is important (still almost impossible to get 100% accuracy) ... the proper EXIT much more important than that”.
I don’t think it’s possible to get 100% accuracy with exits, either.

“In the end... the EXIT will determine how much we profit or how much we lose.”
To “prove” that exit is more important:
Trader “A” buys at 100, exits at 110. Net gain = 10.
Trader “B” buys at 100, exits at 120. Net gain = 20.

But by the same logic, you can also “prove” that entry is more important:
Trader “A” buys at 80, exits at 100. Net gain = 20.
Trader “B” buys at 90, exits at 100. Net gain = 10.

Actually, all this proves is that profit is the difference between both entry and exit.

Re your theory:
“Trader A and Trader B made and Entry simultaneously at the same pair, at the same price and at the same time.
Trader A >>> BUY (LONG)
Tarder B >>> SELL (SHORT)
Surprisingly, both of them CLOSED trade with profit. They EXIT at different time and different price.”
This will not occur if you use stoplosses, and price happens to move far enough in one direction to trigger the stoploss on one of the two trades. Then one of the trades will be a loss. Hence entering in the right direction is important. Of course it’s also possible, if price zigzags sideways, that both trades get stopped out for losses. You could either argue that both stoplosses were too tight, or both entries failed, depending on your perspective.

The way I trade, my edge comes from my entries rather than my exits. But a lot depends on a trader’s approach. For example, a trader who simply rides trends might justifiably argue that his edge comes from letting his profits run, i.e. his exits. That may be the way that you trade, and I respect your viewpoint 100%. Hence there is no point in debating something that is subjective, or method-dependent. If what you are doing is long-term profitable, then that is all the justification that you need.

I wish you many profitable exits in 2009.

Cheers mate Points taken.

As for me... still improvising the ENTRY skill. Yep... almost impossible to get 100% accuracy. At least the EFFICIENCY will help to get the good probability.

Tightening my discipline this year... only trade when there's good set up and good R&R ratio. No set up... no trade. Hence adequate SL and TP can be predetermined.

The EXIT I use manual TS (moving it according to S&R .. SBR... RBS). Always secured green pips once profit is growing.

A good Entry can make the process of changing the SL from NEGATIVE side to POSITIVE side easier.

IF... SL got hit... re-analyse the market again with clear mind...

This is just the way I trade and happy with it. Different trader with different approach... as you said

Sounds like you are very well organized in both your plan, and your implementation. Excellent.

And wow, I just noticed the number of posts that you've made. I thought that when I passed 1,000 I was guilty of spending way too much time on the forum. But you've just made me feel a whole lot better. LOL.

Best wishes,
David