The concept of Edge is a relative one and can mean different things to each trader. For some, It may be some indicator values, for others It may be a price action setup/pattern y terms of retracements, momentum, etc.
A Big one for me was patience. Say you are a day trader looking for one or two entries per day. Now say it's been 3 days, and you haven't taken a single positions, because you haven't got your Edge terms met. Of course, all this time, the market has been moving, and you feel like you are "missing" a lot of pips. So at this moment, what many start doing is adjusting the terms of their Edge. 35% retracements Will do, instead of at least 50%, or medium momentum instead of a strong one. This is a terrible mistake.
You need to take just the absolute best setups the market gives you. If you feel you get very little "signals" you need to backtest your new terms or look for additional edges/setups in the same or different market/pair.
Certainly, this doesn't mean you need to have a extremely strict Edge; you just need to have the terms properly defined and stick to them with patience, no Matter how long you've been without entries.
As I say in my reply to a post above above, your 1st priority as a trader is to protect your capital. The tasks you face are as follows and in this order. 1. Protect your capital 2. Grow your capital 3. Learn from each trade you make and get better.
What size of drawdown would be unsettling for you ? Here's the thing...when in a trade it is common to experience discomfort and the body communicates that to our brains, resulting in the all too common response to ending that discomfort...by exiting the trade early. (Our body reacts to perceived dangers...
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Just wanted to say I really appreciate the time you have taken to share freely what has taken you many years to gain from personal experience. Hoping you may again wish to share some more in the near future...
Everyone loses money, and you can't do anything about it. This is how trading works. Of course, professional traders manage to lose less and less money while trading, but experience comes in time. I am in this business for more than 4 years and I don't consider myself a good trader yet. The market can be unpredictable because its work depends on humans, and no matter how good you think you are, it happens to lose sometimes. Just don't give up and move on.
The author's statements are close to the truth. And these aspects are really important, they are known to almost everyone and there is a lot of material on the Internet about money management, risk distribution, financing and warnings about not trading with the last vital savings, and there is also a lot of material (infinite amount) about different strategies, nuances, how to improve or automate and disassemble them in detail.
Imo, the most interesting thing in the main question is why, while of a gigantic amount of information and well-known analyzed rules, most traders continue to destroy capitals?
And the answer covered in the question. There is too much information, everyone can express "authoritative" opinion or write an article or analyze markets. There is a lot of subjective information and it is very difficult to highlight really useful advice.
Therefore, the most valuable skills are gained through practice and introspection.
Indicator free clean chart with only Drawing tool is better than thousands of indicators. Your brain is your indicator. If you can't make use of your built-in indicator. I don't how other indicators from other vendors can help you. Make use of your built-in indicators.
The main problem for most people is excitement. They do not notice how they begin to get more and more involved in this. Therefore for successful trading the first step is to get rid of this habit. If you lose you need to fix it and not wait for the dd to be sustained. After all the chart can go contrary to your expectations (as often happens).
In order to stop lose you need to study a lot.
Also it will be better if you learn how to analyze the market (technical and fundamental analyzing). Perhaps you will find your own algorithm during watching the market.
Try your own thinks on demo then on real and you will earn money
The main problem for most people is excitement. They do not notice how they begin to get more and more involved in this. Therefore for successful trading the first step is to get rid of this habit. If you lose you need to fix it and not wait for the dd to be sustained. After all the chart can go contrary to your expectations (as often happens).
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risk management is important
and trade on minimal volumes to achieve self-confidence and concistency, and only then move on to serious numbers.
What you say it's more about "negation of what is happening", maybe fear.
Point of view is a common opinion, passed through the prism of experience
They don't have a plan on when to take a loss and even if they do they don't take it and let it turn into a bigger loss. Human nature is hard to fight.
{quote} risk management is important and trade on minimal volumes to achieve self-confidence and concistency, and only then move on to serious numbers. What you say it's more about "negation of what is happening", maybe fear.
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When a person is afraid, he tries to avoid a factor influencing it. And how do you then explain the fact that a person having lost a certain amount, starts trading again. And then again and again and can no longer stop. I think there is only one name for this - excitement.
...The vast majority of retail traders lose money for one or more of the 3 reasons cited below, and they are nothing to do with big bank/institutional money conspiracies against the retail trader! They are: 1. They don't know what a trading edge is, what you need to know about one to maximise your money and risk management to it, and generally they don't have one anyway. Ie - they don't have the recorded empirical evidence of an edge they feel theoretically has potential, over a large forward tested representative sample in the market conditions...
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I have developed a trading strategy that i back-tested over 1500 times and it is extremely profitable with 40% win rate, 30% loss and 30% breakeven on average. I've combined this with a good risk to reward strategy never risking more than 0.5 account size.
Through back testing I can generate 10-20% monthly account gain but I can't seem to replicate this in the live market.
What can I do to improve my discipline/ psychology? I'm very good at controlling my emotions but every once in a while i try too hard and break from my strategy and scalp which i know i'm not good at.
Any constructive advice would be very greatly appreciated
{quote} What you say it's more about "negation of what is happening", maybe fear.
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Fear is also an emotion. And as we know, where there is money, there should be no emotions. Emotions have a particularly negative effect on income. Even the joy of making a profit can provoke you to incur losses. Therefore, a successful trader should have no emotions when trading. Losses should be perceived as a recoverable loss or investment in your trading experience.
{quote} Fear is also an emotion. And as we know, where there is money, there should be no emotions. Emotions have a particularly negative effect on income. Even the joy of making a profit can provoke you to incur losses. Therefore, a successful trader should have no emotions when trading. Losses should be perceived as a recoverable loss or investment in your trading experience. This is my opinion.
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Investing in a trading experience is the time you spend on trading, practice (on lower lots, for example), and losses are the imperfection of the strategy. Nothing is perfect, and undoubtedly losses are part of the trade, but refusal to accept them is distructive, you need to continuously work on the strategy and on the mistakes.
...The vast majority of retail traders lose money for one or more of the 3 reasons cited below, and they are nothing to do with big bank/institutional money conspiracies against the retail trader! They are: 1. They don't know what a trading edge is, what you need to know about one to maximise your money and risk management to it, and generally they don't have one anyway. Ie - they don't have the recorded empirical evidence of an edge they feel theoretically has potential, over a large forward tested representative sample in the market conditions...
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Poor money management, bad timing, or a poor strategy. These factors do play a role in individual trading success…but there is a deeper reason why most people lose.
