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7 thoughts on “Why Most People Fail at Trading”
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Please note: I reserve the right to delete comments that are offensive or off-topic.
Comments are closed.
It took me too long to understand this concept. I had to change myself before I got it. Whether you like it or not…what you eat, see and hear all has impact on your success…and no matter what teenager thinking you may have “it does make a difference” its all about the three monkeys!
one thing i disagree with…it says the pros know that the price tells the truth…i have read that many times…people keep saying the price doesn’t lie and it is mostly accepted as a simple unassailable truth..actually, the price lies most of the time and i figured that one out myself
Brad – thanks for your thoughts. In the context that I’m using it, price captures the sum total of everything factual and fantastic at any given time. You very well may have developed a way to bifurcate fact from fiction for your trading style and ethos.
Hi. I didn’t expand on that thought much, but to explain a bit more, as I read trading advice from the internet, one of the seemingly unquestioned bit of advice I read from time to time is that price doesn’t lie…which seems like an obvious and true statement, which I guess is why I easily absorbed that piece of advice into my thinking..but recently I’ve come to realize that for me, that isn’t true…and if it was true, it would make trading a lot easier…the way I think of it is, sometimes price is forced to tell the truth…but it will lie and deceive whenever it can…one of the things i ask myself when trading, is “do i think the price is telling the truth right now” …if a trade is going against me and it looks like it’s telling the truth, it makes it easier to get out with a small loss and wait to watch the price for more information, to see what it’s going to do next…also, if the price has lied to me recently, i will look at any move within that area or timeframe with more skepticism, as i consider the price to still be in the “lying zone”, which to me is an area more likely than not to take my money…occasionally i will jump in a short term trade that has jumped down, thinking…a-ha!…caught you in a lie!…anyway, i find that thinking of price with that perspective rather than just allowing the “price does not lie” statement to go unchallenged is better for me. I just cannot accept the “price does not lie” advice anymore.
Best Regards;
= Brad
Hi Brad – I think it’s important to surrender to the fact that that market at large has greater wisdom than any of us and that it’s not the price that’s lying, it’s that we are wrong when the price moves against us. At least that’s how I feel myself.
You might be trading with short-term parameters, set-ups, or intraday charts. If that’s the case, then I totally agree that you are being lied to – but not by the price. You can’t make money with short-term trading unless you are subscribed to an AI service. Short-term data are too random to count on to be reliable enough to trade with. If someone has sold you that as a belief system, then “yes,” you’ve been lied to.
In the context that I’m using the expression, I’m thinking in terms of weekly and monthly charts, and daily charts being the shortest time frame that you’d downtime to. Anything shorter, and you’re in the realm of HFT and action-junkies who feel that by down-timing their data, they are in turn giving themselves some sort of trading edge. That’s not the case.
I think you can get to the “truth” so to speak by uptiming your data to weekly time frames. That eliminates much of the noise around the price signals as weekly and monthly data are less random. Hope that helps.