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What is the most important question for a new trader?

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  • First Post: Sep 23, 2020 11:23pm Sep 23, 2020 11:23pm
I'll start:

Can you sit in front of a computer screen for one to five hours watching price move and not enter a trade if you don't get a good setup?
Quoting Seneca pilot
I'll start: Can you sit in front of a computer screen for one to five hours watching price move and not enter a trade if you don't get a good setup?
And then enter a trade and see how it hits your stop-loss?
Buy low, sell high.
Quoting HappyMan
{quote} And then enter a trade and see how it hits your stop-loss?

Ok, not sure I follow you but that brings up another question for the discussion.

Do you always set a stop loss and never touch it?
Quoting Seneca pilot
{quote} Ok, not sure I follow you but that brings up another question for the discussion. Do you always set a stop loss and never touch it?
I am talking about the very first SL. When you enter a trade but the price immediately goes against you. Double the pressure if one was sitting a few hours in front of the screen fishing for a setup.
Buy low, sell high.
Quoting HappyMan
{quote} I am talking about the very first SL. When you enter a trade but the price immediately goes against you. Double the pressure if one was sitting a few hours in front of the screen fishing for a setup.
Ok, now I follow. Absolutely, we also all have days where the first one or two trades go against us. Makes it hard to set the stop on the third and let the trade go.
I am not sure how much time I will spend on this thread but I do plan to post up a few questions in the coming days to make newer traders and unprofitable traders think about what might be holding them back.

Before anyone asks, I am not seriously trading spot forex any longer. Too much counter party risk. I am trading futures. My methods have evolved over the years and I do still trade a little forex but my larger trading is in ES and ZB.
Nice question and definitely would be something helpful for newcomers.

Although, I don't think there is just one important question lol

In my view, this would be in the top few important questions;
-What don't I know about this (topic/ thing/ industry .etc) yet, that I need to know in order to have the best probability to succeed in what I am trying to achieve?

That alone would likely lead to many more (sub-)questions, but also raises awareness on how little one knows when they are starting something new
"Only you can Make the Future you will be proud to be a part of..." -Me
I have one that is my main struggle right now:

Can you detach completely from the money/ego and be able to keep making what you planned in the exact same way, without reacting by emotional impulses?
Can you write code?
Are you a programmer?

If the answer is NO then you should approach trading as a hobby and nothing more. Or even better forget about trading and move on with your life to the greener pastures because otherwise you are going to lose your time and money.

You need at least basic math skills, coding skills and a solid understanding of statistics and probability theory.
Quoting alphaomega
Can you write code? Are you a programmer? If the answer is NO then you should approach trading as a hobby and nothing more. Or even better forget about trading and move on with your life to the greener pastures because otherwise you are going to lose your time and money. You need at least basic math skills, coding skills and a solid understanding of statistics and probability theory.
bullshit
"Men Who Can Both Be Right & Sit Tight Are Uncommon" ~ Jesse Livermore
Quoting michisuperfr
{quote} bullshit
Exactly. It's bullshit. Very expensive bullshit.
Quoting alphaomega
{quote} Exactly. It's bullshit. Very expensive bullshit.
Haha

I actually kind of agree with you, math and coding skills are definitely a very good start but there is more to it. Of all the traders I know who have been doing it for more than 5 years and are profitable, there is not a single pure mathematician or programmer.
"Men Who Can Both Be Right & Sit Tight Are Uncommon" ~ Jesse Livermore
Quoting lonetraderBR
I have one that is my main struggle right now: Can you detach completely from the money/ego and be able to keep making what you planned in the exact same way, without reacting by emotional impulses?

This is very important.

You cannot completely detach completely from the money. You have to come to terms with the fact that it is part of trading to lose money. The best traders have win rates in the fifty five to sixty percent range. This means that if you are the best you will still lose forty percent or more of the time. To win long term requires learning to think in a probability mindset. You have to accept that each trade has a random outcome even though over a large set of trades you will have a higher probability of winning over losing.

When I place a trade I set a stop. Before I actually enter the trade I make sure that I can handle the loss. If that means adjusting size of cancelling the order I listen to myself. If you have not yet been able to detach from the money you may be trading too much size. It can take quite a long time to work up to a larger position size. Your position size should be small enough that you can set your stop, set your target, and walk away from the computer and go about your day. If you can't do that get smaller until you can then work your size back up as your comfort level allows.
Quoting michisuperfr
{quote} Haha I actually kind of agree with you, math and coding skills are definitely a very good start but there is more to it. Of all the traders I know who have been doing it for more than 5 years and are profitable, there is not a single pure mathematician or programmer.
But do you know why?

Because most mathematicians and programmers are too smart for this game! They very quickly find that there is no edge in trading and naturally move on to develop their career in something productive and profitable. They know that time is the most valuable resource.

It's mainly the stupid people that tend to persist in the long run mainly because they are addicted gamblers. Some of them will get lucky and this is how the trading legends are born.
Quoting michisuperfr
{quote} Haha I actually kind of agree with you, math and coding skills are definitely a very good start but there is more to it. Of all the traders I know who have been doing it for more than 5 years and are profitable, there is not a single pure mathematician or programmer.

Jim Simons is the only one I know that is purely math and coding but Renaissance is very secretive so we can only take what he says in interviews to know. I know several traders and have not known any that were successful long term without some discretion. It is our intuition and discretion developed over years of watching price move that allows us to recognize when conditions are not favorable for our method. Computers have not gotten there yet. We adapt to changing market conditions as a function of our built in pattern recognition and sense of momentum. Indicators cannot replicate this as they are only based on past data and cannot make subjective judgements about current price action.

I do not code, but I do hire a coder to mine data and build tests. He and I have worked together for nearly ten years. I teach him my methods by virtue of giving him the parameters for my testing and data mining needs. He has told me for ten years now that he cannot code my thoughts into an EA. Your mileage may vary.
Quoting alphaomega
{quote} But do you know why? Because most mathematicians and programmers are too smart for this game! They very quickly find that there is no edge in trading and naturally move on to develop their career in something productive and profitable. They know that time is the most valuable resource. It's mainly the stupid people that tend to persist in the long run mainly because they are addicted gamblers. Some of them will get lucky and this is how the trading legends are born.
Successful trading actually has little to do with addictions or luck. Discipline is the one skill that separates winners from losers. I have known failed traders that had very good methods with edge but lacked the discipline to follow them. This is the reason I chose the first question in this thread.
Quoting alphaomega
{quote} But do you know why? Because most mathematicians and programmers are too smart for this game! They very quickly find that there is no edge in trading and naturally move on to develop their career in something productive and profitable. They know that time is the most valuable resource. It's mainly the stupid people that tend to persist in the long run mainly because they are addicted gamblers. Some of them will get lucky and this is how the trading legends are born.
It has a lot to do with arrogance. You think you're smart because you can code?

Book smart, street stupid
"Men Who Can Both Be Right & Sit Tight Are Uncommon" ~ Jesse Livermore
Quoting alphaomega
{quote} But do you know why? Because most mathematicians and programmers are too smart for this game! They very quickly find that there is no edge in trading and naturally move on to develop their career in something productive and profitable. They know that time is the most valuable resource. It's mainly the stupid people that tend to persist in the long run mainly because they are addicted gamblers. Some of them will get lucky and this is how the trading legends are born.
You have confused coincidence with causation. Just because YOU can't do something you assume no one else can either. Very arrogant assumption.
So why am I posting here again?

Fair question, I watch a lot of Youtube while I trade to defeat the boredom. I like to watch live trading and see what other people are doing.

I was watching a futures trader yesterday and as price moved down you could actually see him become uncomfortable that he was not in. He always seems to be counter trend and fighting the market though. So when he could take it no more he saw a tick up and dove in. As price moved against him he sat there live on Youtube talking about patience and waiting for your trades to work out. He trades NQ and when price had moved against him by forty or more points he added. Then he waited patiently as price did return to his average but he didn't take the trade off and sigh in relief he waited for bigger profits.

Well bigger profits never came and he ended up taking the trade off for a big loss. This guy paints himself as an experienced trader helping out the newbies but in that one series of trades he made every loser move you can. I have privately offered to help him but he declines and says I've got it. I have passed several Top Step combines and I know what I am doing.

I will be asking questions in this thread? Each question has a specific purpose and I would encourage you to ask your own questions. If I know the answers I am happy to help. If not, we will find the answers together. This is not method thread and I will not go down that road. I have already made that mistake and will not repeat it. The only thing I will say about method is that it is not nearly as important as you think. Find the trend for the day, find trapped traders going against that trend, and profit from their stops. Much of what I discussed in my older thread works with this principal.

The purpose of the thread is to help traders stop making dumb mistakes and learn to stop fighting the market and yourself.
Quoting michisuperfr
{quote} It has a lot to do with arrogance. You think you're smart because you can code? Book smart, street stupid
Not really. I know I'm not very smart and my coding skills are average at best.

But you don't have to be a genius to see the obvious.
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