Come into the Trader's Den

Smart_trade · Jan 30, 2011

There are different ways of adding to your positions.....one way is if you are short, add on a rally with a rigid stop at the earlier pivot highs....because the market can change its trend anytime .Advantage of adding in this way is you add at a better price.As long as the downtrend is in force you can take adds on such rallies....the moment trend changes, cover all your short positions and go long initial position and start adding in longs till the uptrend lasts.....

Taking adds when the pivot low breaks has an advantage that the market is going in your desired direction ,you are adding on a confirmed weakness and also the stop loss /take profits level trails down....

Both ways are valid for adds....one should choose the way with which one is comfortable.

ST

tnsn2345 · Jan 30, 2011

anuragmunjal said:

Dear Anurag,

As in most of the cases including in trading, what happens is we start with random theories, then learn something, start making things/ methods / tracking systems etc which get complex with passage of time, then as we get more and more into it and the air is cleared and noise eliminated, we start simplyfing things, only to then come out with very very simple straight forwards methods and tracking mechanisms.

So currently my main parameter is 'Trading Success' but other ones too are the one which are reviewed at regular intervals. But about those someother time.

Incidently, with my score of 75* runs innings my Strike Rate (another parameter of profitable trade to non profitable trades) is 76% (57 : 18 :: Profit : Loss) is still not the best as compared to my earlier scores where Trade Success was less but Strike Rate was high. So it is a mixed bag. But for me the implication (and joy) of measuring this parameter (Trade Success) is higher measuring the Strike Rate parameter. It gives me a sense of satisfaction.

Again coming to the point of adds and reductions (which are essentially part of my larger TF trading plans, not for intraday / short TF TPs) I review the trading plan in between also, so the TP is not static as that of the original one, because as new things pan out, the TP is tweaked a little, but the basis still is the original TP. Very rarely (but yes) on some ocassion, the intermidiate TP was quite different than the original one. This happens in my Options trading setups, when what is initiated is closed with a different end. It happens here many times. But I have to still monitor and register this too. No loose ends.

Regards,

AW10 · Jan 31, 2011

tnsn2345 said:

That's great to know your new approach to measuring trading performance.
Wishing you all the best for hitting the century soon.

Generally, professionals (trader, sports person etc) need to have atleast 2 types of goals and method to monitor them - performance goals and process goals.
Most of the time, we focus on performance goals (win%, loss %, P&L etc), and do not monitor the process (entry, exit, trade mgmt, mental state, thought process etc).
Basic concept of all quality system (cmm, iso etc) is to gain the perfection in process and results will automatically become more consistent.

In my trading, I use bit of discretion in trade setup, so I also rate my trade for SETUP Quality, Entry , Exit and trade mgmt.
Many of us use our discretion in trade mgmt hence One can also split trade mgmt into initial stop /trailing stop /Targets etc to gain insight into our trade mgmt skills and later improve on it. It takes 1 min extra to fill my tradelog, but it has certainly given me better understanding of my trading habit and helped me to improve on it.

Hope this helps.
Happy trading.

anuragmunjal · Feb 4, 2011

hi friends

carrying on a discussion frm 'good bye trading..'
there are a lots of different posts in the forum regarding the comparison between trading and gambling.. generally I have seen traders getting offended whenever there is a comparison between trading and gambling.
Imo there are lots of similarities between trading and gambling ( here I am speaking of intraday trading or futures trading and not investing)
both trading and gambling are 'zero sum'... if one guy makes money trading futures, another ( or a few others) loose, it is the same in gambling, if one guy wins at a table, one or more persons loose on the same table.
It is a fact that majority of gamblers loose money, but so do majority of traders...
there are a few gamblers who make money consistently... the professional card counters on the blackjack tables ( at times the casino bans proffesional card counters) , professional poker players, professional rummy players etc. they have an 'edge'
similarly, a few traders who have the 'edge' which could be there better undestanding of TA, FA, pure intution,a good trading system etc. also make money consistently..
money management is important fr a good gambler as well as a good trader...
looking at probabilities ie. when not to bet or when to raise stakes is very important fr a good gambler... and so is the case with a good trader... he knows when the mkt. conditions are not conducive( when not to trade) and on other occasions he may add agressively to his winning position.

I feel that there are a lot of similarities between a trader and a gambler.. but then there are good traders and good gamblers and there are bad traders and bad gamblers....

regards

4xpipcounter · Feb 4, 2011

Anuragmunjal, let me guess that just maybe (Not trying to be offensive.) that you are a trader, and do not win consistently. The reason I am saying is because most people that believe the way you do are not making it as a trader. That would also make good sense, because anyone that truly believes trading is like gambling would lose, because trading only becomes a gamble.
Your analogies are incorrect. Gambling has to be a losing proposition. There is a casino here in the US that brags about 97.5% winnings in their casino. This means for every $100 bet in the casino, $97.50 comes out winning. Based on that figure, it is guaranteed that $2.50 is lost for every $100 bet.
In trading, everyone can be a winner if they want to. But, it is through hard work and approaching their trading just like a regular job. 90% of all traders lose, because, in part, they are not willing to pay the price for what it takes to become an outstanding trader.
Everyone that is reading this post can put up a winning trade on the next trade. There is an 80+% chance I will. Those are just my normal numbers. No one will win 80% of the time gambling. Also, if everyone that reads this post were to sit at a card table and gamble, only one would win that hand, and that would be the case for every hand gambled.
Majority of gamblers lose, because that is just the way it has to happen. Casinos build huge buildings with bright lights, and beautiful hotel rooms with people's losses-- not winnings. Brokerage houses are built from people that have worked, and are now putting their investment into that business.
I already explained why 90% of all traders lose, but they don't have to. 100% can win if they want to.
Casinos cater to lazy people wanting to make a buck without hard work. If you are a winner in trading, it is because of hard work. There are unscrupulous salespeople in this industry that try and capitalize off of people's laziness by selling EA's and all other kinds of garbage and advertising slogans like, "How I turned $1,000 into $1 million in 3 months" That kind of thing caters to people's laziness.
Now, please, everyone else get this in your head. If you work hard, and apply yourself, you can do very well in trading. Trading is work, not gambling. OTOH, you can approach trading like gambling, and join the ranks of the 90%, and be a loser. I am, beyond any shadow of a doubt, an outstanding trader, but I have no greater 'edge' than anyone else. I just worked hard to get where I am. End of story!!!

anuragmunjal said:

anuragmunjal · Feb 4, 2011

Anuragmunjal, let me guess that just maybe (Not trying to be offensive.) that you are a trader, and do not win consistently

hi forexpipcounter
although I do not need to prove anything to anyone. but since u have raised this question.... I come with my real name , anybody who wants to make an inquiry can do so... not with a person, nor with a broker but the exchange itself (multi commodity exchange). most of the senior employees of mcx based in Delhi who have been working fr the past 4-5 yrs.,would be able to tell u how 'good' or 'bad' trader I am. it is just that I am content trading my own calls and do not solict other people to follow me...

Your analogies are incorrect. Gambling has to be a losing proposition. There is a casino here in the US that brags about 97.5% winnings in their casino. This means for every $100 bet in the casino, $97.50 comes out winning. Based on that figure, it is guaranteed that $2.50 is lost for every $100 bet.

probably u are not aware that same is the case with trading, securities transaction tax, exchange charges, brokerage, stamp duty, slippage etc. account for thousands of crores per year, which obviously come frm trader's pocket. in simple words, if someone buys a stock for 100 rs. and sell it back fr the same price, he would be a looser..

Everyone that is reading this post can put up a winning trade on the next trade. There is an 80+% chance I will. Those are just my normal numbers. No one will win 80% of the time gambling. Also, if everyone that reads this post were to sit at a card table and gamble, only one would win that hand, and that would be the case for every hand gambled.

I do not know whether u are aware or not... there are two ways to approach trading.... one as u correctly said would be to have a high percentage of ur trades as winners... card counting in blackjack is just that... when u know that there are high percentage of face cards left in the deck, u bet big as the probability of higher wins increases... and the other way to trade is where people have made millions by having a small percentage of their trades as winners, but they made their winners count by making correct adds and followed proper money management. All the trend followers, ed seykota, Richard Dennis... turtels etc. would come into this category....it is the same with gambling. an intelligent gambler knows when to fold and when to raise his stakes.

Majority of gamblers lose, because that is just the way it has to happen. Casinos build huge buildings with bright lights, and beautiful hotel rooms with people's losses-- not winnings. Brokerage houses are built from people that have worked, and are now putting their investment into that business.
I already explained

majority of the traders loose too, they watch the trading screen with the same twinkle in their eyes as they would watch a casino table, and the 'house', ie. the 'industry'... which would consist of the brokers, software providers, data providers, government, exchange, tip providers etc, are the winners most of the time. I am sure u would have seen the glitzy ads and plush offices of most of the brokers have. majority of these plush offices are also made by peoples' losses not profits .. as u urself said the majority loose.... I could write 10 pages here of the various unscrupulous means most of the brokers use to milk their clients..

100% can win if they want to.

yes indeed 100% can win if they want to but niether it would happen in trading nor in gambling....

I am, beyond any shadow of a doubt, an outstanding trader, but I have no greater 'edge' than anyone else. I just worked hard to get where I am. End of story!!!

that says it all ... I have heard even Roger Fedrer say that he has some room fr inprovement...

regards

Easytrader · Feb 4, 2011

anuragmunjal said:

First of all I am sorry to get in way as I have no right to outline anything here as a trader cause i am a half gambler and somekind of a trader too

any way..you both 4xpipcounter and Mr Munjal are correct in your ways.

Oldtimers i met who doesn't know what TA or charts are mostly hardcore jobbers they call themself true satoris I mean gamblers see thats how they talk so no offence to anyone. But the ones who sit all day with TA software and feeds say they are traders so you see here the ones who are on there own on paper they are traders and real life they are sattoris (Gamblers) and those who are armed with TAs softwares and feeds on paper they are traders and real life they call themselves traders too now because they have something to back on plus whitecollar sitting in office with hundred thousands of grand worth equipment and softwares well gambling is the word not accepted easily.

Everything in life is gambling because if one has to make a decision on something which no one knows where it will go but due to the back up (TA software feeds intution exp etc ) helps us to make an assumption first then the move well thats also Gambling right

see the point is when there is no assumption and when there is no prediction only 100% truth then its trading for exp we go to a shop and buy a tootpaste the shopkeeper sells it at a price we buy he makes profit that guy is a trader i agree

Regards

4xpipcounter · Feb 4, 2011

Alright, you gamble, I trade. I'm outa here.
Even in your responses, you have proven that trading is more than gambling.
BTW, I hope you are not implying I solicit anyone to follow me. That's because I am a trader, not a gambler.

anuragmunjal said:

Anuragmunjal, let me guess that just maybe (Not trying to be offensive.) that you are a trader, and do not win consistently

hi forexpipcounter
although I do not need to prove anything to anyone. but since u have raised this question.... I come with my real name , anybody who wants to make an inquiry can do so... not with a person, nor with a broker but the exchange itself (multi commodity exchange). most of the senior employees of mcx based in Delhi who have been working fr the past 4-5 yrs.,would be able to tell u how 'good' or 'bad' trader I am. it is just that I am content trading my own calls and do not solict other people to follow me...

Your analogies are incorrect. Gambling has to be a losing proposition. There is a casino here in the US that brags about 97.5% winnings in their casino. This means for every $100 bet in the casino, $97.50 comes out winning. Based on that figure, it is guaranteed that $2.50 is lost for every $100 bet.

probably u are not aware that same is the case with trading, securities transaction tax, exchange charges, brokerage, stamp duty, slippage etc. account for thousands of crores per year, which obviously come frm trader's pocket. in simple words, if someone buys a stock for 100 rs. and sell it back fr the same price, he would be a looser..

Everyone that is reading this post can put up a winning trade on the next trade. There is an 80+% chance I will. Those are just my normal numbers. No one will win 80% of the time gambling. Also, if everyone that reads this post were to sit at a card table and gamble, only one would win that hand, and that would be the case for every hand gambled.

I do not know whether u are aware or not... there are two ways to approach trading.... one as u correctly said would be to have a high percentage of ur trades as winners... card counting in blackjack is just that... when u know that there are high percentage of face cards left in the deck, u bet big as the probability of higher wins increases... and the other way to trade is where people have made millions by having a small percentage of their trades as winners, but they made their winners count by making correct adds and followed proper money management. All the trend followers, ed seykota, Richard Dennis... turtels etc. would come into this category....it is the same with gambling. an intelligent gambler knows when to fold and when to raise his stakes.

Majority of gamblers lose, because that is just the way it has to happen. Casinos build huge buildings with bright lights, and beautiful hotel rooms with people's losses-- not winnings. Brokerage houses are built from people that have worked, and are now putting their investment into that business.
I already explained

majority of the traders loose too, they watch the trading screen with the same twinkle in their eyes as they would watch a casino table, and the 'house', ie. the 'industry'... which would consist of the brokers, software providers, data providers, government, exchange, tip providers etc, are the winners most of the time. I am sure u would have seen the glitzy ads and plush offices of most of the brokers have. majority of these plush offices are also made by peoples' losses not profits .. as u urself said the majority loose.... I could write 10 pages here of the various unscrupulous means most of the brokers use to milk their clients..

100% can win if they want to.

yes indeed 100% can win if they want to but niether it would happen in trading nor in gambling....

I am, beyond any shadow of a doubt, an outstanding trader, but I have no greater 'edge' than anyone else. I just worked hard to get where I am. End of story!!!

that says it all ... I have heard even Roger Fedrer say that he has some room fr inprovement...

regards

DanPickUp · Feb 4, 2011

Hi easytrader

""see the point is when there is no assumption and when there is no prediction only 100% truth then its trading for exp we go to a shop and buy a toothpaste the shopkeeper sells it at a price we buy he makes profit that guy is a trader i agree""

Can you enlightening us with a real live trading example about this comment ?

I mean : Giving an example to the beginners, how it is possible to sell some thing at a price which may not exist at the moment in the market ? ( But may will in a certain time in the future ? ).

The seller of the toothpaste also had to make once a decision, how much he is going to charge for the toothpaste. But this decision is not for ever and so he has to plan in advance how to act. How can we do that as option and future traders in a market, which every day changes prices ?

What kind of technical ways are around for such stuff

( I have been in a shop in Thailand, where you could buy one toothpaste and at the same time you got a present from a little can of tomato ketchup ). Please, do not laugh now, but laugh about it as I still do today.

DanPickUp

AW10 · Feb 4, 2011

Adding my views on trading /gambling topic.

IMO, it depends on our belief about trading and how we look at it. If we take it as profession then it is as good (or as bad) as any other profession. But if we look at it as source of making quick money (similar to gambling, lottery etc), then it is no different from gambling. Unfortunately, majority of people enter casino or trading with same attitude of making quick money. Infact they are better off going to casino and risking/blowing their money cause they will can few free drinks and beautiful girls around (which they won't get in trading).

I have read about professional gamblers (not to confuse with addicted gamblers) who make money from the casino. They do have their money mgmt and position system to that wins even when odds are hardly 5% in their favour. Our trend following system giving 30% winning trade is very much same from statistical perspective.
At the end of the day, trading or gambling are nothing but the show of probabilities and decision making under uncertainties. Common factor is human being and our mindset.
If we can put probablities and psychology to become winner in trading, then certainly it is possible in casino too (provided we approach that with open mind and willing to put effort there).

In my personal experience, I have been to casino before getting into trading and after knowing the position sizing, money mgmt, system development etc in trading. I have seen the difference in my thought process. It does seem lot more easy to win on a table where reward/risk is 3 to 1 and there are 5 possible outcomes. In other words, it is 20% winning rate system, giving me 3:1 reward risk ratio.

In most of the cases, our limited knowledge of other domain and comfort feel with known domain makes us biased but if take a step back then it is very different story.

In short, I do agree with the view of Anurag. If I lookback then for me trading was gambling once upon a time, when I blew my account..but it is a profession now.

As Van Tharp says - "We trade our belief in market". If we believe the market is cheap, we are right but at the same time, other person who is selling has belief that mkt is overpriced so he is selling. Two people with two different belief participating in the same market. And both are correct from their point of view. Who wins or who looses, depends on how realistic their belief are.

Happy Trading

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Come into the Trader's Den

Smart_trade

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tnsn2345

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4xpipcounter

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anuragmunjal

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Easytrader

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4xpipcounter

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