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What is most important in trading?

  • #1
  • First Post: Nov 9, 2009 8:07pm Nov 9, 2009 8:07pm
It is very difficult to have one answer to this question. But this is how I divide to 3 categories:
1) Solid System - 10%-15%
2) Trading IQ 30%-40% - rules, discipline & money management
and 3rd most important is:
3) Trading EQ - 50%-60%

to read more and share your experience, please visit my free blog which I created for this subject:
http://tradingeq.blogspot.com/
  • #2
  • Nov 10, 2009 5:31am Nov 10, 2009 5:31am
I don't think the % scale is a good way to measure it.

If "Solid System - 10%-15%", does that mean without a solid system, you can still be an 85%-good trader? I don't think so. Without a solid system, you'll lose money.

 

  1. System/Strategy/Method
  2. Money Management
  3. Psychology/Discipline/Emotional Control


In no particular order. All 3 are equally important, i.e. essential.

  • #3
  • Nov 10, 2009 5:40am Nov 10, 2009 5:40am
Money management by far and away most important, followed by discipline.
  • #4
  • Nov 10, 2009 5:55am Nov 10, 2009 5:55am
Chicken or Egg??

I would say the most important thing is having a profitable system/strategy - without that no amount of money management or discipline will make you profitable.

Having said that if you don't have the money management and discipline nailed down then that profitable system will become a loosing one!

Regards,

Dan
  • #5
  • Nov 10, 2009 6:07am Nov 10, 2009 6:07am
What about the broker? he s not at all included in your opinion?
  • #6
  • Nov 10, 2009 7:55am Nov 10, 2009 7:55am
I believe what you define as IQ and EQ is very interrelated, in the sense that rules and discipline diminish the influence of emotions.

I like mathematician's list. I do have the feeling that the term Money Management has lost some of its value because its used so often in forums like these. May I ask what you define as Money Management?
The nail that sticks out gets hammered back in
  • #7
  • Nov 10, 2009 10:01am Nov 10, 2009 10:01am
The most important for forexIQ seems to get some page impressions for his google ads in his blog.
  • #8
  • Nov 10, 2009 10:56pm Nov 10, 2009 10:56pm
Maybe you right...it's just my hard experience...
Quoting mathematician
I don't think the % scale is a good way to measure it.

If "Solid System - 10%-15%", does that mean without a solid system, you can still be an 85%-good trader? I don't think so. Without a solid system, you'll lose money.

 

  1. System/Strategy/Method
  2. Money Management
  3. Psychology/Discipline/Emotional Control


In no particular order. All 3 are equally important, i.e. essential.

  • #9
  • Nov 10, 2009 10:59pm Nov 10, 2009 10:59pm
I tried about 15 difrt. brokers and right know trading with Dukascopy...I think it's part of trading, but not important as other things...
Quoting Tomo1
What about the broker? he s not at all included in your opinion?
  • #10
  • Nov 10, 2009 11:01pm Nov 10, 2009 11:01pm
Money management is part of IQ - my opinion...it was my hard way to learned and this is how I divided from my experience...but I might be wrong...

Quoting Noloqy
I believe what you define as IQ and EQ is very interrelated, in the sense that rules and discipline diminish the influence of emotions.

I like mathematician's list. I do have the feeling that the term Money Management has lost some of its value because its used so often in forums like these. May I ask what you define as Money Management?
  • #11
  • Nov 10, 2009 11:03pm Nov 10, 2009 11:03pm
I had 80% profitable system and still loosing my real acct. and tripling DEMO acct. in few weeks...this is why I divided on that % scale rate...it's from my painful experience...

Quoting DanUK
Chicken or Egg??

I would say the most important thing is having a profitable system/strategy - without that no amount of money management or discipline will make you profitable.

Having said that if you don't have the money management and discipline nailed down then that profitable system will become a loosing one!

Regards,

Dan
  • #12
  • Nov 10, 2009 11:23pm Nov 10, 2009 11:23pm
Here is my suggestion:

1) System is a must (with or without money management)
2) Passion and drive is a must (without passion and drive, you are simply playing for money sake. You will get bore when you hit losing streaks.)
3) EGO, Mentality, Personality, Attitude, and the rest lies in this third miscellaneous category. Each person is different. Therefore, this third category can be a combination of anything and will be unique.

Yeap. I think it is correct.
  • #13
  • Nov 10, 2009 11:32pm Nov 10, 2009 11:32pm
I like it...
Quoting charlyher
Here is my suggestion:

1) System is a must (with or without money management)
2) Passion and drive is a must (without passion and drive, you are simply playing for money sake. You will get bore when you hit losing streaks.)
3) EGO, Mentality, Personality, Attitude, and the rest lies in this third miscellaneous category. Each person is different. Therefore, this third category can be a combination of anything and will be unique.

Yeap. I think it is correct.
  • #14
  • Nov 10, 2009 11:56pm Nov 10, 2009 11:56pm
Risk management....and your money it at risk for each and every trade.
you can be right 8 out of 10 times and still be a breakeven or losing trader.
  • #15
  • Nov 11, 2009 12:14am Nov 11, 2009 12:14am
Quoting forexIQ
I had 80% profitable system and still loosing my real acct. and tripling DEMO acct. in few weeks...this is why I divided on that % scale rate...it's from my painful experience...
That's why it's a hard question to answer. Without the profitable system you won't make any money. But just because you have a profitable system it doesn't mean you will make any money!

So you tripled your demo account but burned your live account? If you don't mind sharing - what was it that you struggled with in your live account?

Regards,

Dan
  • #16
  • Nov 11, 2009 12:17am Nov 11, 2009 12:17am
to feel good

discipline
Invincibility lies in the defence, the possibility of victory in the attack
  • #17
  • Nov 11, 2009 5:50pm Nov 11, 2009 5:50pm
I agree with Mathematician and DanUK. The importance of the method can not possibly be less than 100%. It's the first part of the equation that a trader must get sorted. This topic has been discussed many times before; here are my thoughts in more detail, for whatever they're worth.

If an "80% profitable" system fails in a live situation, then either:

  1. the prior testing was statistically invalid (e.g. poor quality data; test sample was too small); or
  2. the trader is not following the rules (i.e. ill-discipline); or
  3. the trader has not been trading live for long enough to prove the testing (sample of live trades is too small); or
  4. the live account conditions (e.g. spreads, fills/requotes, broker cheating) are different from the demo.

A little self-honesty and common sense should easily tell you which of these is the cause of the problem.

  • #18
  • Last Post: Feb 7, 2010 12:05pm Feb 7, 2010 12:05pm
A solid system that suits your goals and personality is the most important thing, but you need to develop and thoroughly test the system yourself in order to get the confidence to consistently follow it through winning and losing periods.
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