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Show me the money!!!!

  • #1
  • First Post: Edited 12:27am Dec 23, 2005 12:26am | Edited 12:27am
Ninety five percent of you who start to trade will fail. (I remind myself of this fact daily) If you last more than 6 months you are in the top 10% and you owe yourselves a pat on the back. Some, after blowing their accounts will return to try again and 95% of those will again fail.

These markets are brutal and unforgiving and you are always only one trade away from wiping out. You have to perform at your best day in day out and that performance is measured in cash.

There is, of course, a certain amount of irony in this. Trading is all about making money but if you focus on that money, you’ll almost certainly lose. On the other hand, if your focus is on trading well, the opposite is true and the by-product money. In order to trade well you really have to love it. It has to be a passion. Is it one of yours?

Trading is 95% a mind game and success therein, 100% self determined.
For those who succeed you will be bloodied and bruised but all the better off for it. The rewards you can receive go far beyond money and the lessons last a lifetime.

To those who fail, I encourage not to become embittered. You as a person are not measured by your success or failure in this or any other game. We all have God given talents and you will find that once you’ve identified yours, in whatever area they are in, you will have more enjoyment and satisfaction that you thought possible. You may even find you get on your knees and thank your Creator that you never went any further with this silly little game called trading.

To all I wish a very happy Christmas.
May God shine His Light on you and yours.

Steve
I was here, here I was. Was I here? Yes I was!
  • #2
  • Dec 23, 2005 12:47am Dec 23, 2005 12:47am
Well said, steve.
Merry X'mas .

Gavin.
  • #3
  • Dec 23, 2005 1:25am Dec 23, 2005 1:25am
Quoting SterlingTDR
Ninety five percent of you who start to trade will fail. (I remind myself of this fact daily) If you last more than 6 months you are in the top 10% and you owe yourselves a pat on the back. Some, after blowing their accounts will return to try again and 95% of those will again fail.

These markets are brutal and unforgiving and you are always only one trade away from wiping out. You have to perform at your best day in day out and that performance is measured in cash.

There is, of course, a certain amount of irony in this. Trading is all about making money but if you focus on that money, you’ll almost certainly lose. On the other hand, if your focus is on trading well, the opposite is true and the by-product money. In order to trade well you really have to love it. It has to be a passion. Is it one of yours?

Trading is 95% a mind game and success therein, 100% self determined.
For those who succeed you will be bloodied and bruised but all the better off for it. The rewards you can receive go far beyond money and the lessons last a lifetime.

To those who fail, I encourage not to become embittered. You as a person are not measured by your success or failure in this or any other game. We all have God given talents and you will find that once you’ve identified yours, in whatever area they are in, you will have more enjoyment and satisfaction that you thought possible. You may even find you get on your knees and thank your Creator that you never went any further with this silly little game called trading.

To all I wish a very happy Christmas.
May God shine His Light on you and yours.

Steve
Great post Steve! I particularly agree with and like the part I've highlighted in blue above. All new traders should print that and paste it over their monitors! When I quit looking at the money, and focused on trading with discipline, that is when I started being consistently profitable.

Again, great post!

Dial
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  • #4
  • Dec 23, 2005 1:40am Dec 23, 2005 1:40am
Is it really that simple?
For me, what you say is really easy to say but very hard to do..
Moreover, does everybody know the reason behind such statement (the statement that attitued determines the winners from losers) ?

How can you say that it's really the attitude that's the determining factor?
I'm just beginning to factor in attitude as the component of being a successful trader, but can you give a reason or an example for such statement?

How about a concrete example of attitude being the factor in a successful trader's result..
  • #5
  • Dec 23, 2005 1:53am Dec 23, 2005 1:53am
Quoting eastmaels
Is it really that simple?
For me, what you say is really easy to say but very hard to do..
Moreover, does everybody know the reason behind such statement (the statement that attitued determines the winners from losers) ?

How can you say that it's really the attitude that's the determining factor?
I'm just beginning to factor in attitude as the component of being a successful trader, but can you give a reason or an example for such statement?

How about a concrete example of attitude being the factor in a successful trader's result..
Hey East, if you haven't read it yet, then get yourself a copy of Trading in the Zone by Mark Douglas.

The very first trading book I ever bought was Toni Turner's "A Beginners Guide to Short Term Trading". In that book, Toni makes the statement, (roughly quoted) "Don't trade to make money. Trade to trade well, and the money will follow." For some reason that phrase stuck in my head, but I didn't understand what it meant until I read Mark Douglas' book mentioned above.

Even then, I did not apply it and I kept losing money. But, when I started focusing on my discipline and following my rules and thinking of my equity as just a numeric score and not really money, that score started increasing instead of decreasing as it had up to that point.

I'm sorry I'm not really answering your question. I really can't explain why. I only know it is true, and it works.

I wish Fiji would jump in here and give his take on this.

Dial
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  • #6
  • Dec 23, 2005 2:03am Dec 23, 2005 2:03am
Hi Dial,

actually, I'm already reading it.. I'm just trying to do a little debate here with Sterling..

Just a friendly discussion..
  • #7
  • Dec 23, 2005 2:15am Dec 23, 2005 2:15am
Quoting eastmaels
Hi Dial,

actually, I'm already reading it.. I'm just trying to do a little debate here with Sterling..

Just a friendly discussion..
Ah! Gotcha! Okay, I'll butt out so you two can debate.
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  • #8
  • Dec 23, 2005 2:16am Dec 23, 2005 2:16am
Rob Booker said performance is not measured in cash but how well you trade, and I agree. Therefore, that sentence was incorrect and should have been left out completely. If traders, especially new ones, think that performance is measured in cash, but at the same time hear based on your post and
others like it that they shouldn't focus on that the cash to be successful, that will screw them up more than anything else.
  • #9
  • Dec 23, 2005 2:20am Dec 23, 2005 2:20am
Don't butt out man.. Actually, your reply is actually what can keep this discussion going..

So for the moment, let's say that I disagree with your statements.. And that I don't believe that attitude is the determining factor..

I'm not really trying to mislead anybody here.. Let's just say that I want you guys to prove me wrong for me to believe your statements..
  • #10
  • Dec 23, 2005 2:21am Dec 23, 2005 2:21am
Quoting SterlingTDR
you are always only one trade away from wiping out.
Let me butt back in for a sec.

Steve, the only way I can see this happening is for the trader to have a highly leveraged trade, with no stop and just sit there and watch it eat his account down to a margin call. Your statement makes it seem like such a trade is always lurking around the corner and will nail the trader without any warning or mercy. That is simply not the case. A trader would have to deliberately put themselves in the position as described above. Your post was indeed excellent, but this one point seriously overstates the danger. (just debating a debateable point ).

Butting back out now.....

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #11
  • Dec 23, 2005 2:24am Dec 23, 2005 2:24am
Quoting mmills4x
Rob Booker said performance is not measured in cash but how well you trade, and I agree. Therefore, that sentence was incorrect and should have been left out completely. If traders, especially new ones, think that performance is measured in cash, but at the same time hear based on your post and
others like it that they shouldn't focus on that the cash to be successful, that will screw them up more than anything else.
Ya lost me. What sentence should be left out? Quote somebody please!
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #12
  • Dec 23, 2005 2:53am Dec 23, 2005 2:53am
Yeah, the figure of people who fail is around 95%, but there are actually 2 groups which fall into remaining 5%.
Those are the winners and the break evens & unfortunately majority of that group are the break evens.
It's definitely something to think about.
  • #13
  • Dec 23, 2005 3:23am Dec 23, 2005 3:23am
Well said Steve (the one trade to wipe out apart).

But I think all this melodrama is not useful too, too much sentiments! :
Yes, if you put yourself in the "one trade to live or die" condition
I must admit the drama is served!

Never act like an Hero while trading, it may be the last time!

Happy holidays!
  • #14
  • Edited 7:54am Dec 23, 2005 7:53am | Edited 7:54am
Quoting mmills4x
Rob Booker said performance is not measured in cash but how well you trade, and I agree. Therefore, that sentence was incorrect and should have been left out completely. If traders, especially new ones, think that performance is measured in cash, but at the same time hear based on your post and
others like it that they shouldn't focus on that the cash to be successful, that will screw them up more than anything else.
If you were a baker and you were responsible for baking 100 muffins in a restaurant each morning, your boss would analyse your performance by the amount of muffins you made relative to your daily quota. He would analyse the quality of your muffinson a muffin-by-muffin basis.

Your performance (the end result, positive or negative during a given period) of your trading can only be quantified via a cash basis. How well you trade (the quality) dictates your overall performance.

Focussing on making money means your not focusing on trading well. Focus on making the cash and you’ll find you are much more susceptible to the powerful influences of fear and greed. Focus on following your rules and it’ll be easier to ignore rationalization and thoughts stemming from your feelings.

Steve
I was here, here I was. Was I here? Yes I was!
  • #15
  • Dec 23, 2005 8:05am Dec 23, 2005 8:05am
Well Put Steve

First thing I had to do on Meta trader platform was change the default P/L display in the terminal to "show as points" pips are more psychologically pallatable for me to manage/discern/analyse....than my taco funds!

HJ
"posterboy for spell checker!"

Quoting SterlingTDR
If you were a baker and you were responsible for baking 100 muffins in a restaurant each morning, your boss would analyse your performance by the amount of muffins you made relative to your daily quota. He would analyse the quality of your muffinson a muffin-by-muffin basis.

Your performance (the end result, positive or negative during a given period) of your trading can only be quantified via a cash basis. How well you trade (the quality) dictates your overall performance.

Focussing on making money means your not focusing on trading well. Focus on making the cash and you’ll find you are much more susceptible to the powerful influences of fear and greed. Focus on following your rules and it’ll be easier to ignore rationalization and thoughts stemming from your feelings.

Steve
HeavyJ -"Posterboy for Spellchecker!" "Will work for pips!"
  • #16
  • Dec 23, 2005 8:08am Dec 23, 2005 8:08am
Quoting diallist
Let me butt back in for a sec.

Steve, the only way I can see this happening is for the trader to have a highly leveraged trade, with no stop and just sit there and watch it eat his account down to a margin call. Your statement makes it seem like such a trade is always lurking around the corner and will nail the trader without any warning or mercy. That is simply not the case. A trader would have to deliberately put themselves in the position as described above. Your post was indeed excellent, but this one point seriously overstates the danger. (just debating a debateable point ).

Butting back out now.....

Dial
Yes you’re exactly right.

I’ve learned the hard way that mistakes and even disasters can happen in an instant. It just takes a bad day, bad frame of mind, half asleep, distractions, wrong button pushed, double tapping keys etc. and catastrophes occur. It happens believe me. I’ve lost 30% in 10 mins as a result of stupidity. Actually It was far worse than that but I spend the next 22 hours trying to trade my way out. I was very fortunate to only lose that much. Lesson learned.


Steve
I was here, here I was. Was I here? Yes I was!
  • #17
  • Dec 23, 2005 10:41am Dec 23, 2005 10:41am
Quoting eastmaels
Is it really that simple?
For me, what you say is really easy to say but very hard to do..
Moreover, does everybody know the reason behind such statement (the statement that attitued determines the winners from losers) ?

How can you say that it's really the attitude that's the determining factor?
I'm just beginning to factor in attitude as the component of being a successful trader, but can you give a reason or an example for such statement?

How about a concrete example of attitude being the factor in a successful trader's result..
Hi eastmaels,
I didn't say it was simple and niether did I say that it was about attitude.
Positive thinking or attitude is not going to make you a winner in this game. Anyone who tells you that is incorrect. It may help you but its contribution, relatively speaking, overall is quite small.
What I said was that your success is self determined.

Regards,
Steve
I was here, here I was. Was I here? Yes I was!
  • #18
  • Dec 23, 2005 6:31pm Dec 23, 2005 6:31pm
Quoting SterlingTDR
If you were a baker and you were responsible for baking 100 muffins in a restaurant each morning, your boss would analyse your performance by the amount of muffins you made relative to your daily quota. He would analyse the quality of your muffinson a muffin-by-muffin basis.

Your performance (the end result, positive or negative during a given period) of your trading can only be quantified via a cash basis. How well you trade (the quality) dictates your overall performance.

Focussing on making money means your not focusing on trading well. Focus on making the cash and you’ll find you are much more susceptible to the powerful influences of fear and greed. Focus on following your rules and it’ll be easier to ignore rationalization and thoughts stemming from your feelings.

Steve

Well, I don't have a problem with the concept...If you bake well, you have a good chance of making money, but unfortunately, if you look at companies who operate businesses (We are in a business, remember), those companies achieve max. profitability, not only by Quality, but also through their excellent and strategic finance and accounting departments...Quality alone is not enough, you have to tighten your costs, maximize your margins and do whatever it takes to beat the bottom line every quarter...There are many companies out there who are having brilliant quality products, yet many of them fail to beat the bottom line, because they are very bad with financials...

In brief, both elements are crucial for the traders' success, the quality of trading as well as the bottom line, I won't like to be winning 90% of the time with the best entries and exits, yet I don't make a profit, how can quality pay my bills anyway???


Thanks,

Nader
  • #19
  • Dec 23, 2005 7:39pm Dec 23, 2005 7:39pm
I've just lost a tremendous amount of money over the past few weeks. My plan is to make my money back one pip at a time, then two pips, then three pips and so on until I'm back to even. I think pips and money go hand in hand. You can't have one without the other. It's just that right now I need more pips than I do money. I'm not a failure and don't forsee being one. I'm here for the long term. No trading for the holiday week and January 2nd I'm back with my head held high.
Because helping each other is a good thing.
  • #20
  • Dec 23, 2005 7:59pm Dec 23, 2005 7:59pm
1st post (although I've been helped greatly by Diallist via PM) and before I go any further I'd like to congratulate everyone for a great Forum.

Some grim success/fail statistics on this thread. Just a question/comment from a newb among newbs who hasn't even begun paper trading yet--I've read quite a few posts refering to people who do well (very well) when paper trading only to get hammered when it comes to the real thing. Just read a post in fact from someone who's still paper trading and tearing things up (so to speak). To me that's a significant indicator that money management (sticking to a system) and psychology (not going scooters when real money's at stake) are huge, possibly THE major factors that determine success or failure. Am I wrong?? It seems as though method is teachable and offers (more or less) much more of a level playing field whereas these two qualities are either innate or learned the hard way if at all. I can't think of any other reasons why a person who succesfully paper trades (provided that they do it over a long enough period of time) would suddenly crap out when doing the real thing.

Well, it's back to reading my brains out for me.
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