Stock market collapse in November

[SantaClaus]

I'm not sure why you get wound up?
All I'm saying is that the stock market is random on a day-to-day basis.
If you'd like to debate that in a calm and rational way, bring it on.
It should be an enlightening conversation for most on here.

I'm happy to debate it in a calm rational way, but your idea of debate is slating and mocking people. Very childish in my opinion.

[sasguru]

I'm happy to debate it in a calm rational way, but your idea of debate is slating and mocking people. Very childish in my opinion.

Ok I apologise.

Now what evidence do you have that the stock market is non-random for a day-trader?
Why is it that 70% of day-traders are unsuccesful?

Surely if there was a way of behaving in certain circumstances, as you seem to assume, then there would be many more people making a living at it. But then wouldn't that way of behaving by many practitioners cancel any advantages as everyone did the same thing?

[SantaClaus]

Ok I apologise.

Now what evidence do you have that the stock market is non-random for a day-trader?
Why is it that 70% of day-traders are unsuccesful?

Surely if there was a way of behaving in certain circumstances, as you seem to assume, then there would be many more people making a living at it. But then wouldn't that way of behaving by many practitioners cancel any advantages as everyone did the same thing?

Apology accepted.

It's a big, big subject. I've been studying this for years and its not something you can do justice to in one post.

70% of day traders are unsuccessfull because it seems easy at first. There are no rules or framework like in a job or anything else in life. On the surface, it's as easy as pushing a buy or sell button.

I dont know one trader who has "made it" who hasnt blown 3 or 4 accounts to start with. Most people would give up after one or two failures. But the traders who go on to realise their mistakes and that this business is 90% risk management and psychology are the ones who succeed.

The outcome of any one trade IS random. But if you have a system with an edge, you constantly apply it to your trades and eventually that edge pays, a bit like casinos where their edge is 4%.

USing support/resistance is an edge that most banks use. On Fridays FTSE short that I took, there was a very clear level of resistance on the 4hr chart, combined with a 50% fibonacci. That ws my edge.
Today I applied the same method on the FTSE chart and price blew through resistance. I am not bothered, because my money management means I make a hell of a lot more on a winning trade than I risk on a losing trade.

What most people fail to realise is you can have only 40% winners, and aiming for higher reward to risk ratios, you can still make a very good profit.

[AlfredJPruffock]

dont know one trader who has "made it" who hasnt blown 3 or 4 accounts to start with. Most people would give up after one or two failures. But the traders who go on to realise their mistakes and that this business is 90% risk management and psychology are the ones who succeed.

Interesting potin.

Would you agree that the psycholgy of Day Trading and Gambling are very very similar ?

[SantaClaus]

dont know one trader who has "made it" who hasnt blown 3 or 4 accounts to start with. Most people would give up after one or two failures. But the traders who go on to realise their mistakes and that this business is 90% risk management and psychology are the ones who succeed.

Interesting potin.

Would you agree that the psycholgy of Day Trading and Gambling are very very similar ?

Yes, they are very similar. And as we know, there are pro gamblers too.

In fact, for tax reasons, I would rather be classed as a gambler

[Diestl]

Apology accepted.

It's a big, big subject. I've been studying this for years and its not something you can do justice to in one post.

70% of day traders are unsuccessfull because it seems easy at first. There are no rules or framework like in a job or anything else in life. On the surface, it's as easy as pushing a buy or sell button.

I dont know one trader who has "made it" who hasnt blown 3 or 4 accounts to start with. Most people would give up after one or two failures. But the traders who go on to realise their mistakes and that this business is 90% risk management and psychology are the ones who succeed.

The outcome of any one trade IS random. But if you have a system with an edge, you constantly apply it to your trades and eventually that edge pays, a bit like casinos where their edge is 4%.

USing support/resistance is an edge that most banks use. On Fridays FTSE short that I took, there was a very clear level of resistance on the 4hr chart, combined with a 50% fibonacci. That ws my edge.
Today I applied the same method on the FTSE chart and price blew through resistance. I am not bothered, because my money management means I make a hell of a lot more on a winning trade than I risk on a losing trade.

What most people fail to realise is you can have only 40% winners, and aiming for higher reward to risk ratios, you can still make a very good profit.

By the you notice support and resistance, its too late, its 50/50 whether it will hold or not. You have no idea what you are doing and any profit are pure luck. There is no edge, some one could come in to the market at any minute and place a large order that moves prices up or down, through S/R. You will never know when, why. Just like you will never know the outcome of a roulette wheel.

To think you have an edge by using things like Fibonnaci retracements, MA's etc is crazy. If you look at a chart you will see what you want to, if you actually study it and back test, you will see these tools have no predictive value, even when used in confluence.

[SantaClaus]

By the you notice support and resistance, its too late, its 50/50 whether it will hold or not. You have no idea what you are doing and any profit are pure luck. There is no edge, some one could come in to the market at any minute and place a large order that moves prices up or down, through S/R. You will never know when, why. Just like you will never know the outcome of a roulette wheel.

Go back and read what I wrote again.

Actually, go and look at a 4hr or daily chart, draw line above/under major swing highs lows. Then you will see what I am talking about

Actual entry into trades at those levels is another discussion.

[Diestl]

Go back and read what I wrote again.

Money Managment is just slowing the obliteration of your investment and prolonging the fantasy that you have an edge. Invest your time creating something that people would pay for.

[SantaClaus]

Money Managment is just slowing the obliteration of your investment and prolonging the fantasy that you have an edge. Invest your time creating something that people would pay for.

What, like programming trading systems to make someone else rich

[Andy2]

By the you notice support and resistance, its too late, its 50/50 whether it will hold or not. You have no idea what you are doing and any profit are pure luck. There is no edge, some one could come in to the market at any minute and place a large order that moves prices up or down, through S/R. You will never know when, why. Just like you will never know the outcome of a roulette wheel.

To think you have an edge by using things like Fibonnaci retracements, MA's etc is crazy. If you look at a chart you will see what you want to, if you actually study it and back test, you will see these tools have no predictive value, even when used in confluence.

I think Santa's system works because all investment bankers use automated trading systems based on technical analysis, which make it self fulfilling prophecy.