Disliked{quote} That's correct. I trade off daily, 4h, 1h. So far I've only been getting 1 to 3 opportunities per week but they are high probability. I've only taken 4 trades the last three weeks.Ignored
Trading Institutional Order Flow
- #5,146
- Nov 15, 2017 11:48pm Nov 15, 2017 11:48pm
- | Commercial User | Joined Jan 2016 | 2,682 Posts
In response to several traders concerned about lack of trades. This was a big issue for me when I first started trading. If I didn't see a trade on the 4h chart, I would look at the 1h chart. Then the 30 min. And so on. This will make you take bad trades. If you look hard enough, you'll see something to trade even if it's not high probability. I've only made one trade this week and it's currently in profit 140 pips. I use to feel bad if I didn't get at least 1 trade a day. But quality will win out of quantity any day. My the time frames are daily,...
OH YES!!!!
Preach it Clayton. Preach!!!!!
Amen.
I sound like a broken record when i say this to traders
Inspiring. Thank you for sharing these thoughts. I know it has benefited many.
best wishes
Be careful what you think because your thoughts run your life..Solomon
- #5,147
- Nov 15, 2017 11:51pm Nov 15, 2017 11:51pm
- | Commercial User | Joined Jan 2016 | 2,682 Posts
Be careful what you think because your thoughts run your life..Solomon
- #5,151
- Nov 16, 2017 11:25am Nov 16, 2017 11:25am
- | Commercial User | Joined Jan 2016 | 2,682 Posts
Hello everyone.
The next chapter in the T.I.O.F series on trading
When I began trading over a decade ago, the longer I spent in trading circles, facing the same challenges as all new speculators, having some wins, and many losses, the more frustrated I got.
I kept hearing and reading, “the goal of every trader is to make money consistently”, “the aim is to be consistent”. Many of us have the experience of being consistently inconsistent in out trading results, some good days and many hard days.
Then I came across the idea of random distributions. The phrase goes, “there is a random distribution between wins and losses”, quoting the late Mark Douglas. Now, what does that mean and what is the significance of this to me a retail trader?
I mean I understand I can’t win every trade, I get that, I said to myself. Did I really believe that or indeed even truly understand that though? With hindsight, I can say I didn’t.
I was mentally aware that every trade could not be a winner, but I did not really believe that to be the case. How do I know? Well, by my actions.
Beliefs are nothing but thoughts that drive our actions, basically, thoughts that are acted upon.
For example, if we truly believed that we would not win every trade, then we would limit the potential downside for our trades by using stops. We all know many of us do not and some of us even revere traders who don’t use stops.
If we truly believed that no trade has a certain outcome and could lose no matter how good the set up is, why then do we revenge trade and in effect say to the market after a loss, “give me my money back” by taking random, unplanned, low probability trades that wouldn’t ordinarily meet our rules?
Consistency is indeed the goal or at least it should be. However, that term, I have found, does not mean the same thing to everyone. Many think Consistency means making money trade after trade, consistently.
The dictionary defines Consistency as “the steadfast adherence to the same principles, course, form”
So, if I say to someone, you can make consistently by speculating in the financial markets, I am not lying to the person. I am making a statement of fact. If the person follows their principles, their course and apply the form of trading they have learned to the markets, they will make money.
What is missing though is what I have not told the person, that out of 10 trades for example, only 3 will work and that those 3 will more than likely not be back to back trades. They will be trades I, 2 and 7 of the 10 trades.
Now imagine you make money on trades 1 & 2. You are feeling good, happy and confident. Then you lose on trades 3, 4, 5, and 6!!! How confident are you feeling now, especially if you have not acquired and learned the concept of random distributions between wins and losses, and the link to profitability when speculating?
You then win on trade 7 but lose on 8, 9 & 10.
So, in total, you have had 3 winning trades, “randomly distributed” in your sequence of 10 trades.
How do you really feel about these stats? You will know how you really feel by asking yourself if you would talk about these stats to your wife or partner, or speak of them at a dinner table or heaven forbid, to a conference of traders!
You can repeat this 30% consistency year after year (if your wife, partner or girlfriend does not make you choose between them and your trading after the first couple of years
).
The more important difference between wins and losses is how much is made on the winnings versus how much is lost on the losses. That is the main consideration
So, is one making money consistently? - Yes.
is one making money consistently trade after trade? – No.
is one inconsistent in your wins and losses? - Yes
Should one care? – No
Why? – because there is a random distribution between wins and losses in every system under the sun. You will make money back to back sometimes and you will lose money back to back sometimes.
The focus is better placed on ensuring that when one wins, one wins in greater multiples of what one risks, whilst consistently keeping the same risk on each trade.
Why keep the same risk on every trade? – because the “belief” driving that action is that the outcome of every trade is unknown, so it makes little logic to increase risk on trade A and reduce on trade B. Doing that implies the trader “believes” more in trade A than trade B and that trade A is going to work, and Trade B is less likely to work. Of course, there is no way of knowing that before the fact.
The key to understanding consistency therefore is how the person “thinks” about trading as an activity.
I wish you well.
The next chapter in the T.I.O.F series on trading
Inconsistent Consistency
When I began trading over a decade ago, the longer I spent in trading circles, facing the same challenges as all new speculators, having some wins, and many losses, the more frustrated I got.
I kept hearing and reading, “the goal of every trader is to make money consistently”, “the aim is to be consistent”. Many of us have the experience of being consistently inconsistent in out trading results, some good days and many hard days.
Then I came across the idea of random distributions. The phrase goes, “there is a random distribution between wins and losses”, quoting the late Mark Douglas. Now, what does that mean and what is the significance of this to me a retail trader?
I mean I understand I can’t win every trade, I get that, I said to myself. Did I really believe that or indeed even truly understand that though? With hindsight, I can say I didn’t.
I was mentally aware that every trade could not be a winner, but I did not really believe that to be the case. How do I know? Well, by my actions.
Beliefs are nothing but thoughts that drive our actions, basically, thoughts that are acted upon.
For example, if we truly believed that we would not win every trade, then we would limit the potential downside for our trades by using stops. We all know many of us do not and some of us even revere traders who don’t use stops.
If we truly believed that no trade has a certain outcome and could lose no matter how good the set up is, why then do we revenge trade and in effect say to the market after a loss, “give me my money back” by taking random, unplanned, low probability trades that wouldn’t ordinarily meet our rules?
Consistency is indeed the goal or at least it should be. However, that term, I have found, does not mean the same thing to everyone. Many think Consistency means making money trade after trade, consistently.
The dictionary defines Consistency as “the steadfast adherence to the same principles, course, form”
So, if I say to someone, you can make consistently by speculating in the financial markets, I am not lying to the person. I am making a statement of fact. If the person follows their principles, their course and apply the form of trading they have learned to the markets, they will make money.
What is missing though is what I have not told the person, that out of 10 trades for example, only 3 will work and that those 3 will more than likely not be back to back trades. They will be trades I, 2 and 7 of the 10 trades.
Now imagine you make money on trades 1 & 2. You are feeling good, happy and confident. Then you lose on trades 3, 4, 5, and 6!!! How confident are you feeling now, especially if you have not acquired and learned the concept of random distributions between wins and losses, and the link to profitability when speculating?
You then win on trade 7 but lose on 8, 9 & 10.
So, in total, you have had 3 winning trades, “randomly distributed” in your sequence of 10 trades.
How do you really feel about these stats? You will know how you really feel by asking yourself if you would talk about these stats to your wife or partner, or speak of them at a dinner table or heaven forbid, to a conference of traders!
You can repeat this 30% consistency year after year (if your wife, partner or girlfriend does not make you choose between them and your trading after the first couple of years
).The more important difference between wins and losses is how much is made on the winnings versus how much is lost on the losses. That is the main consideration
So, is one making money consistently? - Yes.
is one making money consistently trade after trade? – No.
is one inconsistent in your wins and losses? - Yes
Should one care? – No
Why? – because there is a random distribution between wins and losses in every system under the sun. You will make money back to back sometimes and you will lose money back to back sometimes.
The focus is better placed on ensuring that when one wins, one wins in greater multiples of what one risks, whilst consistently keeping the same risk on each trade.
Why keep the same risk on every trade? – because the “belief” driving that action is that the outcome of every trade is unknown, so it makes little logic to increase risk on trade A and reduce on trade B. Doing that implies the trader “believes” more in trade A than trade B and that trade A is going to work, and Trade B is less likely to work. Of course, there is no way of knowing that before the fact.
The key to understanding consistency therefore is how the person “thinks” about trading as an activity.
I wish you well.
Be careful what you think because your thoughts run your life..Solomon
- #5,156
- Nov 16, 2017 10:07pm Nov 16, 2017 10:07pm
- | Joined Feb 2016 | Status: Be brave, be courageous, be prudent | 492 Posts
Is there a list of set rules on how we trade supply and demand? Watching youtube videos and reading the posts in this thread is great, but clear definitions would also help
Live life king size !
- #5,157
- Nov 17, 2017 1:02am Nov 17, 2017 1:02am
Is there a list of set rules on how we trade supply and demand? Watching youtube videos and reading the posts in this thread is great, but clear definitions would also help