Why a "Trading Method" is important

Let me set up a hypothetical.

I have a bag of marbles. In the bag are 7 white marbles and 3 red marbles. I ask you to pick a marble out of the bag. I tell you that if you pick a red marble you PAY ME $100, but if you pick a white marble I will PAY YOU $200.

How long would it take for everyone to buy a plane ticket to Las Vegas so that you could play? I think all realize that under these circumstances your mathematical expectation is very positive, and that each and every pick of a marble yields a specific mathematical return to you. After many thousands of marble picks your profit would be very close to this positive expectation known from the beginning.

Is there anybody in this forum who is going to be thinking, "But what if I lose 2, 3, 4, or even 5 times in a row? What if I just keep picking out red marbles? No, nobody thinks this way because the math says it can't happen. Intuitively all of us accept this outcome.

In trading, there are no CERTAIN mathematical probabilities, but we do have history to examine. Through DISCIPLINE in our method we control the size of our losses versus our wins. This will certainly yield a positive mathematical expectation.

So why the reluctance of most traders to stick with a method [any method] when history tells us it will be positive. Why the extreme focus on any particular trade? Why would you buy a plane ticket, in an instant if you thought I was serious, to be here and play the marble game?

FEAR.

Lose the fear of failure. Face the demons with confidence. Everyone looks them in the eye at some point. Trading is not about you, it is about making money. Never forget this point.

Hope you all get something out of the new file.

Thanks Vegas,

I can never be reminded of that too often.

I've never seen any sporting event where the contestant with a lack of confidence wins the day.

It's so frustrating to watch your team being so close to winning but playing like a cat on a hot tin roof.

Bemac.
ps.
I just finished setting up a new desktop template for Daily Tunnel Eur/USD.
the rest should go quite quickly now.

Good to have you here Vegas, you make a lot of good points

Thanks
Quinn

Great stuff, Vegas. The new file is a real eye-opener. Which currency pairs do you think work best with this Currency Daily strategy? I would imagine the best ones are the ones that range a lot? Thanks!

Vegas,

I'm thinking primarily about the Inititial time frame after an Entry.
Whilst within that time frame, do you ever re-evaluate the trade.

I know we all have Lo_sing Trades.[and if there are only so many lo_sers to share, I'm holding up my end ;-)]

I just wonder if you have an intuition or method that, after 'x' Time from Entry, if the Trade has not confirmed that it is a good one, that it probably may not be.

OR
Do you always Stick to your Stops?

B

Hey Vegas, your presence here is really great and I think all board members appreciate your contribution...

Your thread have hit a sensitive portion of system trading I guess...I think you are one of Dr. Van Tharps' fans, exactly like me

As long as we are talking about system trading, expectancy and probabilities, what do you think about Van Tharps' "Trade Your Way To Financial Freedom"?? I would like to know your opinion about this book if you already read it...


Thanks,

Nader

a very nice read for me too, vegas.

This is a good example, why I still focus on developing my system, not absolutely trading it.

Good post Vegas.

Nicely put.

I know a lot of people talk about fear and greed. I actually think that just about every trader I've ever met is not greedy, they just want to be professional and make good profits. And they are a very sincere bunch of people.

Fear is indeed the big killer. Master the dynamics of the mind and find out what is preventing you from being as successful as you deserve to be, and you're well on your way.

great great post. I'm going to make a banner with this phrase!