Is Daytrading dangerous?

[uasish]

Nice to hear "Saint" in this thread.

 

[ratan jain]

Saint:

Thank God brains are not necessary to trade succesfully....

I had lost all hope of making it as a trader....

U have renewed my enthusiasm.....

Lacking in the brain department.....

Seriously, the less brains we use , the more objective our thinking will be, the more we use our brains, we start to second guess our signal....hmmmm... signal to buy but rsi overbought.....cnbc says range bound, so I will not buy

Compared to dumb trader....signal by system to buy....yippee I have a signal , lets buy!

Thats the way to follow the system....no using brains to second guess the system

 

[kkseal]

Brains, if any, should go into the system (not the trading) so that the end result is a nice KISS (of profits) over and over again (for the trader off-course).
In fact if you have to think at every step throughout your trade, the system isn't user(trader)-friendly enough.

It's like Windows over Unix ... former user friendly ... all intuitive ... nothing to think ... no commands to remember ... just take backups regularly ... in case it crashes (discipline) ... result : more mkt share ... more KISSes(profits) for Bill ... BUT .. more work for programmers, testers ... more brainwork for system designers.

(Style last line ... courtesy: Oilman )

Regards,
Kalyan.

 

[oxusmorouz]

Brains, if any, should go into the system (not the trading) so that the end result is a nice KISS (of profits) over and over again (for the trader off-course).
In fact if you have to think at every step throughout your trade, the system isn't user(trader)-friendly enough.

It's like Windows over Unix ... former user friendly ... all intuitive ... nothing to think ... no commands to remember ... just take backups regularly ... in case it crashes (discipline) ... result : more mkt share ... more KISSes(profits) for Bill ... BUT .. more work for programmers, testers ... more brainwork for system designers.

(Style last line ... courtesy: Oilman )

Regards,
Kalyan.

Kalyan, this duel reminds me of a poem from the Buddhist literary work : The Sutta Nipata. Allow me to quote the poem:

The Enquirer:
"Fixed in their pet beliefs, these divers wrangers bawl - 'Take this, the truth is yours; reject it and you are lost'.
Thus they contend, and dub opponents 'dolts' and 'fools'. Which of the lot is right,when all as experts pose?"

The Blessed one:
"Well, if dissent denotes a 'fool' and stupid 'dolt'. then all are fools and dolts - since each has his own view. Or if each rival creed proves lore and brains and wit, no 'dolts' exist - since all are at par. I contend not that as true, which those affirm , who call each other 'fools' - They calll each other because each deems his own view of 'truth' "

The Enquirer:
"What some style 'truth', the rest call empty lies; strife reigns. Pray, why do anchorites not speak in unison?"

The Blessed one:
"There's one sole 'truth' (not two), to know which bars men's strife. But such a motley crowd of 'truths' have they evolved, that anchorties, perforce speak not in full accord"


How true does this hold good in trading?

 

[kkseal]

Kalyan, this duel reminds me of a poem from the Buddhist literary work : The Sutta Nipata. Allow me to quote the poem:

The Enquirer:
"Fixed in their pet beliefs, these divers wrangers bawl - 'Take this, the truth is yours; reject it and you are lost'.
Thus they contend, and dub opponents 'dolts' and 'fools'. Which of the lot is right,when all as experts pose?"

The Blessed one:
"Well, if dissent denotes a 'fool' and stupid 'dolt'. then all are fools and dolts - since each has his own view. Or if each rival creed proves lore and brains and wit, no 'dolts' exist - since all are at par. I contend not that as true, which those affirm , who call each other 'fools' - They calll each other because each deems his own view of 'truth' "

The Enquirer:
"What some style 'truth', the rest call empty lies; strife reigns. Pray, why do anchorites not speak in unison?"

The Blessed one:
"There's one sole 'truth' (not two), to know which bars men's strife. But such a motley crowd of 'truths' have they evolved, that anchorties, perforce speak not in full accord"


How true does this hold good in trading?

To me that one sole truth is the market dynamics. The more you understand it the closer you get to the truth. And the 'motley crowd of 'truths'' that have evolved and their 'anchorites' (Elliott trader, Wolfe trader, this trader, that trader) 'perforce speak not in full accord' ( expected, as they are in reality the bits & pieces but each thinks it's the whole - and hence 'strife reins').
But even a realization of the whole, sole truth though necessary is still not a sufficient condition. It still needs to be captured into a methodology. Till then we are all* 'fools' and 'dolts' basking in the intermittent glory of those mere fractions, the bits & pieces (and perhaps the graciousness of the lord - the markets).

Regards,
Kalyan.

* From 'all' i exclude those 'blessed ones' who have already attained (mkt)'Nirvana'

 

[Saint]

Saint:

Thank God brains are not necessary to trade succesfully....

I had lost all hope of making it as a trader....

U have renewed my enthusiasm.....

Lacking in the brain department.....

lol .....from your posts,sincerely doubt that.

Seriously, the less brains we use , the more objective our thinking will be, the more we use our brains, we start to second guess our signal....hmmmm... signal to buy but rsi overbought.....cnbc says range bound, so I will not buy

Compared to dumb trader....signal by system to buy....yippee I have a signal , lets buy!

Thats the way to follow the system....no using brains to second guess the system

Couldn't agree with you more,my friend........although many would beg to differ.The sad part is while the intelligentia amongst us theorises,analyses,forecasts,anticipates.......the trader simply trades his system and laughs all the way to the bank.

As Tharp puts it,depends on what you want.......Do you want to be right,or do you want to make money?

Analysts want to be right,traders want to make money..............so are we analysts,or are we traders.Saw a big signborad in Bangalore recently...".....Brains make money always." Lol.....not true at all.Not done a study though,but probably the opposite could be true.

Discipline,not brains,make the trader's bank acct swell.

Some nice posts from you Ratan........and looking fwd to more.

Saint

 

[kkseal]

What's the great conflict between being right & making money??
Can one happen without the other? (I mean can you be consistently wrong in your calls & still make money?).

I don't discount the importance of discipline either If i'm a little indisciplined i see it as a vice rather than a virtue (Actually lack both in the brains & discipline dept ).

Regards,
Kalyan.

 

[Saint]

What's the great conflict between being right & making money??
Can one happen without the other? (I mean can you be consistently wrong in your calls & still make money?).

No conflict at all,my friend...........the important word missed is the all important word of "want".To make money,one has to limit one's risks and let the profits ride........to make money,one may be wrong many times but so long as losses are small,and profits allowed to run as long as possible.

If one truly wants to make money,one should give up the desire....the 'want' to be right all the time.Conversely,those whose attention is on the 'want' to be right always tend to take many small profits,and few huge losses....the exact opposite.Their batting averages are fantastic,but not their profits/losses.

Therefore,before we get confused and flustered,we need to realise that all important word "want"............can we be wrong all the time and make money.Definitely not.Can we be right most of the time and have huge losses?Yes.

So we look for a system ,backtest it,paper trade it......We can't make money by being wrong all the time,but we can make money even if we are wrong 60% of the time.Therefore,the question:Are we in this to be right,or are we in this to make money?If our focus is on being right,we do things that are not necessarily beneficial to our trading account.If our focus is to make money,then our focus is on big wins and small losses.......and from what little I know,truly beneficial to the trading account.

I don't discount the importance of discipline either If i'm a little indisciplined i see it as a vice rather than a virtue (Actually lack both in the brains & discipline dept ).

Regards,
Kalyan.

lol,Kalyan.........I don't think you lack in either.And neither do you lack in the heart dept as well(after reading your post on charity in Karthik's thread).

Saint

 

[ratan jain]

Thanks for the compliment Saint.

Coming from such a Senior member, I am honoured.

Thanks again.

As regards discipline........its VERY hard to come by....even harder than a good winning system...

I have been struggling to take my trades on signals generated, but .......fear strikes out of no where......even though I know and trust my system.

Also noted that the signals hardest to take work out immediately, and make good money, but without us.

Maybe its because the same picture ( chart) is in front of thousands of traders and only a few are able to bring up the guts to trade that particular signal.

Compared to a very smooth looking, all parameter satisfied signal, which all the thousands of people see as a good signal, all of them take the signal, there is some combined buying, a little favorable movement, but because now there is no one left to buy, it falls?

I would appreciate comments on the above, because then I would like to stop taking such textbook signals as the chances of their failure are on the higher side, and would concentrate on difficult signals generated by my system

Difficult by my standards means the market ( bse) is 200 points up and there is a buy....I would be terrified a s a daytrader to enter anything.

Smooth by my standards is the market ( Bse )is 150 points down and there is a buy....everyone would jump in.

Sorry for the long post.

 

[kkseal]

No, no Saint - i seriously lack discipline (& also wish had more brains)! But i do have one 'virtue' - i do let my profits run. As for booking losses - i do give my stocks some leeway but when they get too 'indisciplined' i just sell.

And yes - i love being right! (that's half the reward for me, the other half being the income). That i'm sure will remain with me whether virtue or vice

Regards,
Kalyan.