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Why is trading so psychological? >meet Australian guy >trades

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Thread replies: 59
Thread images: 8

Why is trading so psychological?

>meet Australian guy
>trades for a living
>shows me account statements where he makes $15K a month
>shows me his strategy
>tfw I lost $3K before giving up
>talk to him everyday and tells me what I'm doing wrong
>keep doing it

Down $900 this morning. Should I just give up? You have to be born a trader. It's impossible to learn.
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you've been syke'd
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>>981676
8 years in here.
Give me some details, I'll see what I can tell you.
How is your financial situation (savings/debt)?
How much capital are you holding for trading?
What are you trading?
>>
You shouldnt trade short term if you dont know what you're doing.
And you should never trade in businesses you dont understand.
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>>981686

>How is your financial situation (savings/debt)?
I save $500 a month. No debt.

>How much capital are you holding for trading?
Started with $15K. Down to $11K. 5% daily loss limit. Max 1 contract per $10K.

>What are you trading?
Futures. /CL, /ES. /6E, and /ZB.
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>>981696
You may not want to hear this.
Trading tends to work best for people who are already wealthy. Otherwise, the capital requirements and ridiculously steep learning curve bury most participants.
$15K is not enough capital to start trading with, don't listen to the penny stock crowd going into battle with $1200.
Also, the contracts you're trading are extremely volatile, to put it mildly. You're lucky to still be holding 70% of your capital.
How long did it take you to come up with the 15K?
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>>981676
>Why is trading so psychological?
It's not. It's gambling, and you just learned an expensive lesson about odds. Just because one outlier makes money (and he probably lies about it anyway) doesn't mean that you can overcome the crushing probabilities against you.
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>>981709
I inherited $200K about 2 years ago. Have had it in a mutual fund ever since averaging 2.5%. Took $25K out to pay off student loans and try trading.

>>981769
>it's not psychological, it's gambling
>it's not breathing, it's inhaling
>a grown ass man would show fake bank statements in front of his wife
>implying everybody as autistic like you
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>>981779
>inherited $200K
Well, that simplifies things.
You're in a much smaller pool of people, that is, you already have sufficient capital without having to make decisions about work and budgeting. Your problems seem to be that you haven't allocated enough capital toward it, and you're working with instruments suited for advanced traders while a novice. Both are easily fixable. Also, if you're going to take the plunge, you probably want to keep the rest of the money in something safe, so you can earn a small return or at least have it to fall back on if things don't work out.

While the other poster is correct about the odds being against traders, this can be minimized to a large degree by how favorable your financial situation is.
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>>981779
>implying
You're getting pretty rustled for a guy who loses thousands of dollars trading and comes to 4chan for advice on how to fix it.

Maybe time to re-evaluate some things in your life?
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>>981793

What instruments would you suggest? Agricultural futures seem to be far less volatile, but would require trading a larger time frame, which would require paying full margin instead of intraday. I would need to allocate a lot more than $15K to trading if I decide to not day trade.
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>>981802

Oh look, an elitist on 4chan. The hypocrisy in your post.
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>>981805
>Oh look, an elitist on 4chan. The hypocrisy in your post.
It's not hard to be elitist in the face of someone who is being intentionally stupid. You have to know that trading is doomed strategy ... the academic research is pervasive. Yet you somehow think you're a special snowflake destined to beat the odds?

I could be literally brain damaged and still look elite compared to you.
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>>981803
I'd stay out of futures in general, for the time being.
Traders tend to make their own way, so I don't know if there's a right answer on where to start. You can watch how stable, boring equities move over the course of the trading day and eventually move on to more volatile stuff. Time decay doesn't affect you so much with equities (unlike options or futures). Plus, assuming your starting positions are small, you can hold unrealized losses in for a while.
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>shows me account statements where he makes $15K a month

Of course he did, degenerate gamblers always like to talk about the few times they won big. I bet he didn't show you all the months he lost money.
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>>981810
Show me your successful strategy then

>>981815
I traded equities for 6 months at a prop firm. I think now they changed their business model (TowerHillTrading). Made some and lost some. Got fired due to lack of participation (I was working 2 jobs at the time). Spoke to some successful traders there. They mainly focus on the <1M stocks that are moving. They claim it's much easier to see the order flow than a stock like AAPL or FB which their L2 is impossible to comprehend. They also look at option chains to see if any big puts or calls are being transacted. The guy that showed me how to trade futures uses a completely different strategy. He only uses technical analysis.
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>>981825
>traded equities for 6 months
I wouldn't necessarily classify you as a beginner.

>Got fired due to lack of participation
No shit, me too.

I'm a TA trader myself, although I'd be lying if I said I ignored fundamentals. I don't really use much L2, as the spoofing aspect annoys me.
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>>981837

Any tips for being consistent? I made $8K my first month. Been downhill ever since to almost $4K loss. It's mostly psychological. Anxiety leads to trading with no setup or strategy, especially when it's almost lunch time and I haven't had any signal. I get anxious to trade and make something before I go to work and just becomes 1 loss then 2 then 3 then 4 trying to revenge trade.
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>>981847
Oh, I've been there.
You have to accept that there are days you won't trade. Can't swing at every pitch.
You're lucky in the sense that there's nothing compelling you to trade, you don't have to do it to put food on the table.

Also, have an amount you'll cut your losses at for the day, and stick to it. Revenge trading is a killer. You may have to put some time in observing things before you're confident enough to pull the trigger consistently.
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>>981858

Currently 5% daily loss limit. May instill a daily trade limit as well so I don't overtrade. Thanks.
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>>981825
>Show me your successful strategy then
Ok.
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>>981873

So you went from $50 to $250 in 10 years?
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>>981878
>So you went from $50 to $250 in 10 years?
Why do the balances matter? The point of the graph is that buy-and-hold resulted in sustained, long-term growth by a factor of multiples.

Considering your frequent losses with trading and stock picking, I'd think you'd be more interested in the fact that I have a ten-year track record of gains, rather than focus on the amounts.

But if you can cogently explain why the balances matter, I'll post an unedited screenshot.
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>>981676
He was just real life shitposting
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>>981872
Maybe just do a little more watching, a little less trading, daily.
You've got another gig, right?
If you want, do a percentage of your trades on paper to see if they work out. Then you can deploy more capital.
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>>981886
The balances matter because of the psychological factor.

Now post the unedited screenshot you grumpy motherfucker.
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>>981914
>Now post the unedited screenshot you grumpy motherfucker
You could have also asked nicely.

>The balances matter because of the psychological factor.
No. Just no.

You can't overcome statistics with a positive attitude. Trading is a losing strategy no matter how cheerful you are as you flush your money down the toilet.
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>>981938

Turn your trip off. Knew it was you or that Asian chink. Show me one study that proves trading is unsuccessful.

>inb4 that study from the 90s that uses data from a Korean exchange
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>>981938
I knew I smelled a faggot around here somewhere....
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>>981938
i love this new kind of shitpost iHaz
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>>981946
>Show me one study that proves trading is unsuccessful.
No, I'll show you four.

http://www.econ.yale.edu/~shiller/behfin/2004-04-10/barber-lee-liu-odean.pdf
http://www.investorhome.com/daytrade/profits.htm
http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trading%20Skill%20110523.pdf
http://www.iassa.co.za/wp-content/uploads/journals/075/iaj-75-no-3-ryu-final.pdf

>inb4 that study from the 90s that uses data from a Korean exchange
>implying that the Korean stock exchange is any different than any other market for purposes of evaluating trading efficacy
The denial is real.

Also, let's remember that you're a sullen frogposter with thousands of dollars in trading losses seeking day-trading advice on 4chan. You're not exactly in the strongest position to criticize anything or any one, kid.
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>>981676
are you paying him for these "lessons"?

if the answer is yes he is full of shit.
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>>981696
>Futures. /CL, /ES. /6E, and /ZB.

You should pick one of those, the one that interests you and you feel like you have the best understanding of the price action, and learn to watch and trade a single market. By the time you can trade that market profitably, it will be much easier to apply the trading skills you've learned to another one if you want.

There is plenty of money in any one of those 4 markets and you're not missing out by only trading one of them. If you watch a 2nd market, say /ES while you are trading /ZB, make sure you are making trades based on /ZB setups and that you're not trying to trade the /ES by proxy.
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jesus christ what a meme
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>>981938
>You can't overcome statistics with a positive attitude.
This. Its a mathematical world kids.
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>>983413
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>>981938
just came here to say that you're doing god's work, iHaz. please never leave /biz/
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>>983625
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>>983625
Oh look more samefaggery. Fuck off iFag you smelly cunt.
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>>983641
oh boy someone's mad :-D
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>>984237
How can you pay attention to sense that with that dick shoved down your throat? >Gag reflex suppression is strong with this one
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>>984244
nice damage control bro
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>>981938
Doing God's work iHaz.

Out of curiousity, whats your CAGR? You've put more money in over time (referring to that graph of your balance), right?
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>>984247
At least you can still type...
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>>982012
Mean trader return = market's return - commission
Plus you need to include the fact you're missing tax breaks from holding it longer
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>>984248
What type of faggotry is this?
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>>982012
How do quants make money from the market?
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>>981676
1. risk and reward directly correlate
2. panic selling is what shitters do
3. continually doing the wrong thing when someone with proven success tells you what NOT to do means you're a moron

in summation, you're a lightweight fairy boy who inherited 6 figures and it turns out you're too stupid to do anything with it. put it in a savings account and stop touching it because you're clueless.
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>>984379
come back when youre a quant you flying faggot
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>>981878
..pfffft

lel, we got a regular Warren Buffet over here
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Stop trying to make quick money, nobody can do that consistently.

Just set up a passive portfolio. Go for indexes and buy and hold for 50 years.
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>>984389
I was simply asking how they profit from the market.

I know that they make the market more efficient for others by providing liquidity when other traders' needs cause a temporary imbalance in the supply and demand for a security. But I'm stumped on how they can capitalize on inefficiencies whenever the market is already efficient.

In regards to your comment, come back whenever you have something to contribute to the discussion. In the meantime, you can go visit /b/.
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Trading based on price action is bullshit. Look, I'm gonna tell you the only reliable method to make money from trading. Pick 4 stocks that you think will do well. Watch the news and rumors and earning calendar like a hawk. If you feel that positive news is incoming, then buy and get out as soon as the news pass. There's no science to trading. It's all about predicting human behavior.
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>>984512
You can profit from price action. Just not with day trading.
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How do I make money on all of the retards ITT who think they're going to make money day trading? I'm going to start hawking strategy eBooks.
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>>984558
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>>984512

The markets have been adjusting to these reports for months before they happen. Buying the news is stupid.
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>>984631
I didn't say to buy the news. I said to buy BEFORE the news. You want to get in before a spike so you can reap the profit. I don't buy into the efficient market hypothesis. It is true to a CERTAIN EXTENT. There ARE inefficiencies to exploit and the inefficiencies are based on unknown information. There's a reason why stocks jump up or down after earning reports.
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>>984248
>You've put more money in over time (referring to that graph of your balance), right?
Yes, which is why simple CAGR isn't the best measurement. I tend to rely on IRR when judging my fund performance because it accounts for inflows.

>whats your CAGR?
Here's my full performance numbers.

IRR
1 year: 0.1%
3 year: 10.7%
5 year: 9.5%
10 year: 7.1%

CAGR (simple)
1 year: 22.38%
3 year: 21.97%
5 year: 17.96%
10 year: 20.32%

CAGR (net) (deducting inflows)
1 year: -1.06%
3 year: 11.24%
5 year: 10.39%
10 year 12.06%

IRR remains the best measurement, though it confuses people who compare it to reported fund performance numbers or index returns and don;t understand why its inherently lower. CAGR is overstated because I have significant periodic and one-time inflows. CAGR (net) is an informative but imprecise measurement because it doesn't account for the timing of inflows.

All three are understated because I treat reinvested interest, dividends, and capital gains distributions as new purchases. Most people would add these to their return figures, but my tracking software follows the GAAP convention of treating them as inflows. So if you want to do an apple-to-apples comparison to returns with dividends included, add about 2% across the board.

Lastly, I should point out these numbers (and the chart above) are ONLY for my funds and ETFs, and not my real estate, private equity, or direct private investing. My PE returns in particular have been astronomical (thanks to a once-in-a-lifetime homerun), but I don't discuss those much here because these investments aren't suitable or available for most on this board.

Hope that was informative.

>>983625
>>984248
Thanks.
Thread posts: 59
Thread images: 8


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