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The 3 Elements of a Successful Trader

  • #61
  • Apr 24, 2012 9:39am Apr 24, 2012 9:39am
But just as a discussion point (I realise it's subject of personal belief) in what order would you place them;

Money management
Mind
Method?

IMHO many 'systems' (indicator based mechanical) work and are easily taught therefore I'd place method third.


Quoting 4xpipcounter
LesLau, I don't know what you would consider a successful trader, but if it is someone who trades the markets on a FT basis from his home office, has the ability to assess the markets and trade them accordingly, then I'm a successful trader.
As far as what has brought me my success, I can only tell you my personal experience and what I have observed in copious others that I have talked to over the years that I have been trading.
First of all, karma is not part of my equation because I do not believe in it, so it has no part, whatsoever, in my...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #62
  • Apr 24, 2012 11:37am Apr 24, 2012 11:37am
I'm all for healthy discussion, so let's discuss.

You cannot have money management skills without applying it somewhere. You apply the money management to your methodology. Therefore, the methodology has to be in place before you can apply the money management.
You will never know what sort of trading discipline you have until you go live. You better not go live until you have a methodology soundly in place.

There is nothing easily assimilated in trading. If mechanical trading systems were all they were advertised to be, then there would be no forums like the one we are in, because there would be no half-starved people for knowledge to learn to trade (I did not mean that to be impolite. I'm just telling it like it is.). People would already be making lots of money. Even though learning a methodology is the easiest part of the 3 steps, it is still not easy.

I don't mean to embarrass anyone with this comment, but based on this quote, "many 'systems' (indicator based mechanical) work and are easily taught ", would you please announce to everyone the system you are talking about that is so easily taught? If it is easily taught, then it must be easily assimilated. If it is easily assimilated, then it must be easily traded with. If that is the case, then everyone else will be making lots of money.

Where the rubber meets the road is applying the principle of a trading method that works. This is why I opened my thread is for people to track the principled elements of what I do. Much to my fault, at times, I have a big mouth, but I back that big mouth up with action.

Let me add it is very hard for me to dissimilate the order of the developmental process towards trading riches, such as the 3 M's in the order I described. Beyond that is where all the opinions come in at in order to be a success in trading. Indicators, methods, time holding a trade, risk factors and tolerances, et al. This is why I believe my methodology is best for me, but only me. It is incumbent upon all of us to develop the totality of the methodology that is best for us, personally.



Quoting Spreadbetter
But just as a discussion point (I realise it's subject of personal belief) in what order would you place them;

Money management
Mind
Method?

IMHO many 'systems' (indicator based mechanical) work and are easily taught therefore I'd place method third.
  • #63
  • Apr 24, 2012 11:49am Apr 24, 2012 11:49am
As we're both no doubt aware you could (in theory not practice) devise the perfect system, but traders will always fail it by violating their MM or lacking the discipline to stick to the plan through poor mind application, IMHO the trading'method' is as simple as finding a decent entry system, which is the cornerstone of a simple edge (based on the higher probability of the trade going your way), we're then at the mercy of the Market and none of us will ever get our exits totally right.

Initially we angst over "the system", yet even random entries can work if the MM is right which is why I'd always regard it as the most important issue.

Quoting 4xpipcounter
I'm all for healthy discussion, so let's discuss.

You cannot have money management skills without applying it somewhere. You apply the money management to your methodology. Therefore, the methodology has to be in place before you can apply the money management.
You will never know what sort of trading discipline you have until you go live. You better not go live until you have a methodology soundly in place.

There is nothing easily assimilated in trading. If mechanical trading systems were all they were advertised to be, then there would...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #64
  • Apr 24, 2012 11:54am Apr 24, 2012 11:54am
Roofx, we take no one's money. That is a lie that impermeates the industry. When you make your money, you make it based on your skills and efforts. When someone loses money, they do it based on their lack of skills and efforts.

Like you, I have never spent one dollar on the lottery. I never go to casinos and have no use for them. I don't want to open a new can of worms in the op's thread, but trading is not gambling. When you play poker or those other card games, or pitch pennies, or make bets with people, there is a transfer of money from one to the other. In other words, someone is taking OPM.
The one-armed bandits (So rightly called.) in the casino requires no methodology. You pull the arm and hope lots of money falls out. For the most part, you lose, because they is how the big casinos got built was on people losing. So, in that case the proprietor of the casino took all your money.
In trading, I do not hope or wish to make money. I do not take from others just because I'm good at what I do. I enter a trade based on the sound principles of my methodology and it yields its own success.

Keep in mind, there is nothing dishonorable about making money in trading. If you are making lots and most people are bankrupting their rolls, you don't need to feel bad. You did not take or steal from them. They bankrupted their rolls because they did not pay the price to learn to trade effectively.

If I sound overly candid about these things, it's because I am highly passionate about what I do.


Quoting Roofx
As traders we contribute very little to society. We take other people's money. It is a lot like gambling. I'm not a gambling man. I don't even like spending a dollar on the lottery. But I trade because I can't make much money from my honourable business that does give a lot fo society.
  • #65
  • Apr 24, 2012 12:05pm Apr 24, 2012 12:05pm
That is the beautiful thing about being human. We can be wrong, make mistakes and not feel bad about it. In trading, I make 20% losing trades. I don't feel one bit bad saying that. It is just the price of doing business. My trades are all based on a high confidence ratio, but there are times things don't go as expected.
I can also tell you beyond any shadow of a doubt if I was the more patient trader my winning ratio would be higher than 80%. Patience is not one of my strong points, and so I pay the price, at times.
Big deal! The whole idea is to stay profitable. 80% winners still yields profitability.

Let me say this too, in doing my best to give you the benefit of the doubt. Naturally, we don't know each other because our only acquaintanceship is on the internet highway. If you have proven to you through consistent winning trades your random entry theory, then you are the first exception to the rule I have met with regards to the No. 1 priority being methodology.


Quoting Spreadbetter
As we're both no doubt aware you could (in theory not practice) devise the perfect system, but traders will always fail it by violating their MM or lacking the discipline to stick to the plan through poor mind application, IMHO the trading'method' is as simple as finding a decent entry system, which is the cornerstone of a simple edge (based on the higher probability of the trade going your way), we're then at the mercy of the Market and none of us will ever get our exits totally right.

Initially we angst over "the system", yet even random...
  • #66
  • Apr 24, 2012 1:10pm Apr 24, 2012 1:10pm
You can have the skills, but you will still need the mind as someone pointed out. Consistent and patient.
  • #67
  • Apr 24, 2012 2:03pm Apr 24, 2012 2:03pm
Ah..never claimed I'd taken a consistent lump out of the market with random trading, I'm suggesting a random trading method, let's call it hunch based, could work if the MM was sound. I've experimented with it and it was ok 40% win rate, kinda made me smile given the lengths I've gone to to strive for some kind of false hope perfection before accepting the certainty of imperfection. Fwiw I trade off 1-2 TFs, I'm hardcore technical and have a circa 58% win rate. Humbled on a regular basis..

Quoting 4xpipcounter
That is the beautiful thing about being human. We can be wrong, make mistakes and not feel bad about it. In trading, I make 20% losing trades. I don't feel one bit bad saying that. It is just the price of doing business. My trades are all based on a high confidence ratio, but there are times things don't go as expected.
I can also tell you beyond any shadow of a doubt if I was the more patient trader my winning ratio would be higher than 80%. Patience is not one of my strong points, and so I pay the price, at times.
Big deal! The whole idea...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #68
  • Apr 24, 2012 3:21pm Apr 24, 2012 3:21pm
And as long as that is the case, you will not only trade2day, but trade2tomorrow too.

I was having fun, but you're right.

Quoting Trade2Day
You can have the skills, but you will still need the mind as someone pointed out. Consistent and patient.
  • #69
  • Apr 24, 2012 3:29pm Apr 24, 2012 3:29pm
Regardless how much confidence someone has, the markets will keep you humble.

I'm like you, inasmuch I am a 100% TA chartist. I could care less about FA's and anything else outside the domain of sound charting TA's. That is mine/ our viewpoint of how we trade.

This post you just made I think has confirmed the point I made about a methodology needing to be established first. After all, if you flip a coin, you're going to be right 50% of the time.
That is why, unless proven otherwise, to me, random entries don't cut it. After all, we don't want to add to the angst. We want to contribute to the feel good feeling of consistent winning trades on a regular basis.


Quoting Spreadbetter
Ah..never claimed I'd taken a consistent lump out of the market with random trading, I'm suggesting a random trading method, let's call it hunch based, could work if the MM was sound. I've experimented with it and it was ok 40% win rate, kinda made me smile given the lengths I've gone to to strive for some kind of false hope perfection before accepting the certainty of imperfection. Fwiw I trade off 1-2 TFs, I'm hardcore technical and have a circa 58% win rate. Humbled on a regular basis..
  • #70
  • Apr 24, 2012 4:56pm Apr 24, 2012 4:56pm
Just a few off the cuff thoughts here:

Sometimes I really have to laugh. I don't when it happened but it seemed all of a sudden the world had some kind of revelation and things such as karma became sooooo important. I am not trying to poke fun at anyone but it if we are all so worried about karma then shouldn't we all be going to church every single Sunday without fail?... or maybe enrolled in a Bible study program/course? Isn't it pretty much the same concept... karma being equivalent to fearing God?

Then there are "The Secret" and "The Law of Attraction"... wow... those things seem to have been created just to make money like Hallmark type Holidays such as Sweetest Day and Valentine's Day. What amazes me is how many so-called forex traders seem to be sooooo interested in this stuff... just like the latest forex scam... huh... huh... what do you think?... do they seem similar?

OK, many of you may strongly disagree with me and that is perfectly fine. At the very least, maybe I have made a few of you laugh and/or maybe think differently. Thanks for reading, Mike.
  • #71
  • Apr 24, 2012 7:08pm Apr 24, 2012 7:08pm
Mike, in theory, you nailed it. I like to have my quiet time before I start each day. It's a matter of practice. I also like to have it at the end of the day. I also live right and treat my wife right. Al this make for a nice personal flow in my life.
Now, this is the catch. It has not been proven that any of that is good for everybody. The whole topic of conversation, and what everything really comes down to is, "What is it that can make all of us better traders?" There has to be a separation between our personal little theories and what are true principled conditions for trading. Spreadbutter and I had a nice conversation along those lines. It's the 3 M's. Beyond that, nothing matters.

LOL, about your comment on "laws of attraction." Man, if that was the case, I'd be the best and coolest trader on the universe. I got the best wife in the world, the best dog in the world, and the 16 best grandchildren in the world. They all love me and are all highly attracted to me.
Now, the bad news. None of them is responsible in any way for my trading. Maybe I need to make a trip to Hallmark.Do you think that might help me get a few extra pips on my next trade.
I know. I'll pass out $100 bills to everyone on the street corner. All these people would be attracted to me, and my pips would sky rocket.
Then pips would come in so fast, I would have time to count them all, and then I would have to coin a different name on me.


Quoting mike22
Just a few off the cuff thoughts here:

Sometimes I really have to laugh. I don't when it happened but it seemed all of a sudden the world had some kind of revelation and things such as karma became sooooo important. I am not trying to poke fun at anyone but it if we are all so worried about karma then shouldn't we all be going to church every single Sunday without fail?... or maybe enrolled in a Bible study program/course? Isn't it pretty much the same concept... karma being equivalent to fearing God?

Then there are "The Secret" and "The...
  • #72
  • Apr 25, 2012 1:32am Apr 25, 2012 1:32am
1) Method with an Edge
2) Money Management
3) Psychology

or

M - Method
M - Money
M - Mind

Whatever floats your boat. All 3 are equally important and you MUST have all 3 to be successful. There isn't one is more important than the other. 1 out of 3 or 2 out of 3 won't cut it. You MUST have 3 out of 3. If you don't and are still successful, it's just luck.



Karma... Well, there is something to it, but I'd put it as a subset of Mind / Psychology. Being a good person and doing good deeds one must have their mind in the right place. I think this is required for a good person to have great wealth on earth. Bad people that are mega rich usually have sold their souls. Hahahaha.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #73
  • Apr 25, 2012 2:07am Apr 25, 2012 2:07am
Quoting 4xpipcounter
Roofx, we take no one's money. That is a lie that impermeates the industry. When you make your money, you make it based on your skills and efforts. When someone loses money, they do it based on their lack of skills and efforts.

Like you, I have never spent one dollar on the lottery. I never go to casinos and have no use for them. I don't want to open a new can of worms in the op's thread, but trading is not gambling. When you play poker or those other card games, or pitch pennies, or make bets with people, there is a transfer of money from one...
I think it is gambling to some degree...

Have you seen the way some structured products are marketed to institutions? If there is quantifiable risk then you can call it a gamble.
  • #74
  • Apr 25, 2012 3:38am Apr 25, 2012 3:38am
Please,i will like you to give details of they three element you listed.
SELF|PATIENCE
  • #75
  • Apr 25, 2012 5:11am Apr 25, 2012 5:11am
Wouldn't want anyone getting any ideas sweet cheeks..

Quoting 4xpipcounter
Mike, in theory, you nailed it. I like to have my quiet time before I start each day. It's a matter of practice. I also like to have it at the end of the day. I also live right and treat my wife right. Al this make for a nice personal flow in my life.
Now, this is the catch. It has not been proven that any of that is good for everybody. The whole topic of conversation, and what everything really comes down to is, "What is it that can make all of us better traders?" There has to be a separation between our personal little theories and what are...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #76
  • Apr 25, 2012 5:16am Apr 25, 2012 5:16am
When I first traded I refused to call my trade "a bet" now I do and tbh it's quite cathartic. It's a bet, it's a two horse race, but once you pull the trigger you have to accept you have absolutely no idea what the outcome is. The only controls you have are your money management skills and your emotional self control. We simply place our bets based on our edge which in turn is (at best) nothing more than a higher probability of a favourable outcome.


Quoting saussiche
I think it is gambling to some degree...

Have you seen the way some structured products are marketed to institutions? If there is quantifiable risk then you can call it a gamble.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #77
  • Apr 25, 2012 12:37pm Apr 25, 2012 12:37pm
Sorry. It's a typo.
I also ain't sweetcheeks. I also don't want anyone getting any ideas. The only one I want winking at me is my wife.


Quoting Spreadbetter
Wouldn't want anyone getting any ideas sweet cheeks..
  • #78
  • Apr 25, 2012 12:42pm Apr 25, 2012 12:42pm
Have you seen the same structured products marketed to my Weekly Forecast?
I'm not sitting here in my home office because I made it through gambling.
If you're a gambler, I won't hold it against you. It's just that traders, not gamblers make their fortunes in trading.


Quoting saussiche
I think it is gambling to some degree...

Have you seen the way some structured products are marketed to institutions? If there is quantifiable risk then you can call it a gamble.
  • #79
  • Apr 26, 2012 4:48am Apr 26, 2012 4:48am
Don't worry mate, your Freudian slip (spreading butts) is safe with us

Quoting 4xpipcounter
Sorry. It's a typo.
I also ain't sweetcheeks. I also don't want anyone getting any ideas. The only one I want winking at me is my wife.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #80
  • Apr 26, 2012 5:15am Apr 26, 2012 5:15am
drawing conclusions

promise in your heart that will never give up (it mean never)
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