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Attachments: How can we avoid losing trades? - discussion thread
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How can we avoid losing trades? - discussion thread

  • Post #21
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  • Edited at 5:43pm May 25, 2018 5:25am | Edited at 5:43pm
An addition to the list:

Reason Why Traders Lose Money ****************************
Beginner Traders
1. Not acquire the knowledge of Technical Analysis
2. Strategy follow macro/minor news – Go long/short position instantly after news announcement
3. Follow rumors 4. Emotions Trading – Hold earning position until become losing trades 5. Gambling Behavior – Anyhow entry & exit position randomly 6. No planning - No ideas what is going to do 7. No discipline – No follow plan, strategy & trade all games 8. No management – Do not care about capital protect & keep trying losing 9. No analysis – Do not have analysis about trend behavior, distant/range for time bar Intermediate Traders 1. Apply Technical Analysis in various situations – Anyhow use to fulfill a trade 2. Emotions Trading – To exit position early due to worry about trades could turn into losing case 3. Partial Planning – Do not have consistent growth of trading return ,with/without monitoring games strategy 4. No discipline – Do not follow plan, strategy & trade all games 5. No analysis – Do not have fully evidence to sustain the strategy works 6. No back-testing – Do not know the final return of strategy for long period of trading games 7. No management – Return drawdown sharply without hedging or capital protect
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Why Don't You Hear More About Diversification?

OK, so if diversification is so great, why doesn't the average retail trader hear more about it? How come very few people talk about diversification?

1) It Is Hard To Do For The Little Guy Let's face it, there are a lot of little guys in trading. I should know, I was one of them way back when, struggling to survive with my $5,000 account. I felt lucky to trade one system back then, much less 4 or 5. I just did not have the margin to be in many different trades. To be properly diversified, you need a larger account. Most people, unfortunately, never get to that point.

2) There is Nothing For Vendors To Sell How does a typical vendor sell "diversification?" He really can't. It is not a fancy new indicator, a "secret" entry method, or something you can see on a mini S&P price chart candlesticks. So, if there is nothing to sell, there is no reason to talk about it.

3) Why Multiple Systems, When Many Vendors Sell "Perfect" Systems So many of the scummy trading vendors market their trading system as the ultimate, the best, the only one you'll ever need. Obviously, this sales scheme works, or they would not do it. For them to admit that their super terrific trading strategy needs the help of diversification just leads to their whole sales pitch falling apart. And they cannot handle that!


4) It Is An Advanced Concept In this fast paced, need it now Internet age, people want answers fast, and don't want to take time to learn the right way to do things. People want to be Warren Buffett, but most aren't willing to put the time or effort into learning something complicated. Diversification takes analysis, and also requires multiple trading strategies. It can be done, but it is work and it is tricky at first. But once you understand it, and develop trading algorithms to exploit it, diversification can become a trader's best friend.
source: TheBigSecretToTradingSuccess%20-Diversification%20-%20%20Kevin%20Davey.pdf
page 7
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The most important aspect in trading is proper education from the very start, most traders start in this business being self taught or having a different mindset about the market and so most of us fall into the situation where we do a lot of mistakes during live trading, if only aspiring trader take the time to learn everything about the market, practice in demo account as if its a real account before jumping into live trading then all situation that mentioned by the thread starter could have been avoided or perhaps minimized. In reality trading profession is hard but most traders seems to ignore this fact.
One of the key point, good timing.
Only trade when high liquidity!!
Never trade when low liquidity which cause super high spread with non-trend period.

Wrong timeframe, spread give too much ratio on your trade reward ratio.

Take Action when trendy and stop on subway/non-trend period.
Because the ratio on reward : spread should over 5 to 20+
for those less then 0.x to 2 on reward : spread, Don't get in.
Quoting cowbearcar
One of the key point, good timing. Only trade when high liquidity!! Never trade when low liquidity which cause super high spread with non-trend period. Wrong timeframe, spread give too much ratio on your trade reward ratio. Take Action when trendy and stop on subway/non-trend period. Because the ratio on reward : spread should over 5 to 20+ for those less then 0.x to 2 on reward : spread, Don't get in.
Thank you. Can you please explain what your trend system is?
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Quoting HudithePfupf
Don't participate in a negative sum game - stop trading. It works - You will never ever have a losing trade. ;-)
Strange every place I see your posts you try to discourage people from trading. Please read the FF Code of Ethics, it says clearly to help and support traders, not discouraging them.

Then yes the only way to never have a loss is never to trade, but then if you do not want to trade what are you doing on this forum?
[quote=michaellobry;11088616]In this thread we will discuss how traders lose but could have avoided it. To complete this I will categorize the arguments. The goal of this thread is to show the bigger picture of how to trade and not trade! _______________________________ List of how traders lose trades: (constantly updated) __ Money Management: - accepting [10] straight losses which could cause 50+% drawdown -

Surely if you have 50% drawdown in ten straight losses then you are trading to big lot sizes, properly calculated trades should not give you more than MAXIMUM 10-15% drawdown, Ideally it should not be more than 5%

Remember you must always survive to trade another day with as much of your capital in place as possible.
Quoting VEEFX
{quote} I am sorry my friend but this FF Code of Ethics to help and support traders is built on a false pretext. It's hard to admit the real Truth about trading. Trading in the first few years(even a decade for some) will ALWAYS drain your hard earned savings. That is a hard fact with absolute certainty. The learning curve is HUGE. The inspiration for dreamers to make it BIG by just a $100 deposit is a complete fantasy. This must be said on forums to discourage noobs who only know how to click buy and sell buttons without understand the pure mechanics...
All of this is may be true but unfortunately blown accounts, blown relationships etc are all part of the trading school of hard knocks.

You can try and warn people but they need to experience this anyway. Some will come out of it the other side as full time traders, the rest will end up quitting or trading pivots points.
Quoting VEEFX
{quote} I am sorry my friend but this FF Code of Ethics to help and support traders is built on a false pretext. It's hard to admit the real Truth about trading. Trading in the first few years(even a decade for some) will ALWAYS drain your hard earned savings. That is a hard fact with absolute certainty. The learning curve is HUGE. The inspiration for dreamers to make it BIG by just a $100 deposit is a complete fantasy. This must be said on forums to discourage noobs who only know how to click buy and sell buttons without understand the pure mechanics...
I agree with what you say, but I think the noobs also need advice from traders like you, then if they do not listen then it is their own fault.

The title of the Tread is - How to avoid loosing trades. Obviously that is not possible, you can just minimize the losing trades and minimize the size of the loss.

I would advice a novice to play a trading games. choose a trading pair then every time a candle close you flip a coin, heads you go long, tails you go short, keep on for 100 trades, keep on till you have a winning outcome. Do not use any indicators or trading systems, only money management. If you can repeat this feat a few times on a live account, then you can trade, if not keep on practice. My worst case was 97 losers in a row with only 3 winning trades, overall my 3 winners were more than all the losers combined. That is proper position sizing and management.

I do not believe in demo accounts since the emotional stress is not there even if you trade 1 cent at a time you still have an emotional attachment to the trade.

You can avoid losing days or losing weeks, but not losing trades
Can we have constant summer, never winter?
Can we have constant daylight, never night time?
Can we have constant goodness, never evil?
Can we have constant winning, never losing?

We live in a world of duality.
Quoting 0plus0
I've been trading for five years & I've recently started to come here to help struggling traders. Please be aware that all you need in Trading is the ability to "correctly" identify "PULLBACKS" & "REVERSALS". They are the main cause of losses & they are also the main signals for entry & exit of trades. If you can "correctly" identify them, you will make a lot of money comfortably but if you cant "correctly" identify them, then they will chip away on your balance until its empty. It is that simple ...but not easy to execute
Ichimoku is one of the indicator which can identify "Pullbacks" OR "Reversals".
Well, most education web on Ichimoku gives 10000+ Words to study.
You're better to study over 10+ webs then people teach.

Another way to do:
https://www.best-metatrader-indicato...ips-indicator/

I wonder this indicator is one of the best indicator I never see before.

Only consider when Golden cross / Dead Cross to reverse.
No cross is Pullback, I just only suggest one of the slow MA is Hull MA 40
But I can't find out the missing one. I have tried over 30 MA method but no answer.
The number of Golden Cross / Dead Cross is unbelievable less as you see.
Most likely, give extra add on same Hull MA 40 to make then good couple MA.
If you can catch the similar formula to do, tell me.
Thanks
HOW TO AVOID LOSERS:

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1) Have a system that makes marginal adjustments in a trade for better positioning in a dynamic web of choices. In short, a better understanding and awareness.
2) Develop way(s) to take profits.
3) Address your weaknesses, in your trading journey. i.e is it fear? Why hasn't this been addressed in an overall philosophy for the market to avoid mental blocks and traps?
4) Don't be delusional. i.e using math to predict, when it doesn't apply to market phenomenon as each avenue is different. Every angle is pretty much 50/50. That doesn't mean my profits are 50/50. Market can be a little more rewarding than what most believe. It just depends on how you see it.

Everyone wants to be pretty... perfect. It's interesting how none of the courage to just develop themselves and their own trading identity in a messy way. Finding a more efficient way to make money. Conquering boundaries and finding out how to trust yourself.
Most ask, how to catch an occurrence without the risk of it changing. It just lacks depth.
Pretty with worksheets, calculations, equations, theory talk and probabilities. All pretty work.
It's just not very effective at making any money.

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As I stated before, boxers have systems. There's boxers who have more depth than their competition. Life events that gave them a certain way to question.
Let's take this situation of a boxer that trains in an unorthodox ways-- finding a balance of legs and punching. His competition, a pretty boxer, who has lovely punches hitting a stationary target. In a fight if the boxer that worked on balance of all aspects of possibilities will win the fight with a pretty boxer. The pretty boxer would be a knock out waiting to happen after he's/she's made to use aspects that he/she are not accustomed to. Round 5, breathing heavy wondering why he can't win in any positional situation. He/she forgot about questioning his way of thought and realizing he was stuck not developing a better way for him to defend himself the whole time, without truly realizing it. It's tragic and it happens to the majority in the forum. All very knowledgeable, but pretty workers.
Quoting 0plus0
{quote} Thanx cowbearcar. Let me mention that Im not here to learn about Trading because Im already a VERY profitable trader. You're however very right that the Ichomoku is the best indicator for identifying PullBacks & Reversals with. I use it everyday. I actually consider myself as an Ichimoku expert because I have discovered the real unknown Ichimoku secrets & Im in the process of compiling a book about it. All I can say for now is, the Ichimoku is indeed a "One Glance Indicator" when correctly used & it then becomes the most powerful trading...
What are the correct setting or the limitations of the " default" ones ?
Quoting michaellobry
{quote} Thank you. Can you please explain what your trend system is?
Find the trend is an important milestone for traders.
This is your trading life assignment, you should find you self as many as possible.
I got over 50 methods to determine trendy or not.

For example, bb width expand is trendy
adx of dmi face upward is trendy whereas face downward is non-trend
Gubby ma, price over sma 3 to 60 is uptrend

https://invst.ly/7kd-2
UK100 Day Chart, over bb 17,1 upper band uptrend
inside bands non-trend
Quoting cowbearcar
{quote} Find the trend is an important milestone for traders. This is your trading life assignment, you should find you self as many as possible. I got over 50 methods to determine trendy or not. For example, bb width expand is trendy adx of dmi face upward is trendy whereas face downward is non-trend Gubby ma, price over sma 3 to 60 is uptrend https://invst.ly/7kd-2 UK100 Day Chart, over bb 17,1 upper band uptrend inside bands non-trend
Interesting! Could you tell me what 50 methods to determine trend you use?
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Avoiding to lose trade can be very bad for your trading account in the long term.

Instead, I think we should embrace it as quickly as possible to keep the losses to a minimum.

At the first sign of seeing a trade not follow through our original plan we should bail...run like a coward...live to fight another day!!!

If triggered a trade by mistake, or by greed or by not following a proper plan it also should be cut immediately so that it will give you a lesson and next time you will be very careful. This will be a lesson so next time try not to repeat it.

So, all in all, I think instead of avoiding it, it will be more prudent to learn to deal with losing trade and cutting trades as fast as possible.
You have to create a strategy that can be accepting both Right and Wrong.
Quoting michaellobry
{quote} Interesting! Could you tell me what 50 methods to determine trend you use?
Huh, Above already give 4 examples, you need to do your trade life assignment.
Quoting fxzebra
At the first sign of seeing a trade not follow through our original plan we should bail...run like a coward...live to fight another day!!!
Ok.

Quoting fxzebra
If triggered a trade by mistake, or by greed or by not following a proper plan it also should be cut immediately so that it will give you a lesson and next time you will be very careful.
Ok. Isn't this the contradictory? If you have a system, isn't it contradictory to close the trade earlier than your system's rules? How do you define 'did not follow thru original plan and then bail'?
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