"90% of the traders lose money, But do they lose it all the time?"
Most of them do make money, its just that they give it all back.
Lets analyze why and how a trader makes and loses money
[Thread]:
Most traders do make money, but they give it back to the markets .
Because of trading errors.
What are trading errors?
I am not making this up, check your P&L, 90 % of your losses would have come from less then 10% trades.
Most of these happen because of No knowledge, No plan, bad position sizing .
1. Learn the Basics first-
If you don’t get the basics clear then how can you make money?
Learn How to use Support and resistances
Learn How to use trend lines
Learn about trend, it will solve 90% of your problem
The number 1 problem is that you don’t have a plan,
And by plan I mean set of written rules.
If you don’t have a plan then you really aren't serious enough to consider making any money.
So, Make a plan.
How does a plan looks like?
Money management is that part of your system that answers "How much?" throughout the course of the trade.
How much essentially means how big a position you should have at any given time throughout the course of a trade.
https://t.co/H9UBHy0CSt
you can see that risking the appropriate amount of money is necessary for your equity curve growth.
There are two type of position sizing strategies,
1. Martingale
2. Anti-martingale
How position sizing can affect your trading performance-
— Trader knight (@Traderknight007) December 1, 2020
Assuming that you are trading a Trend-following system with Big RR and low win-rate.
For example, assume that you risk one percent per trade on a 100,000 account
and you have 20 straight losses.
2. Anti martingale strategies increase risk per trade when equity increases.
There are further many anti martingale strategies
Tip-
When you start to trade ,trade small for the first 20-30 trade , at-least 1/3rd of the risk what you think you will trade.
4. Be ready for Black swan events.
What are black swan events?
Big gap-downs, Flash crash, Big news, Market or stock hitting Upper or lower circuit.
If yes, then correct the parameter due to which you can have big draw-down.
4. Next is psychology, Read the book trading in the zone, that will cover all your psychology related problems.
Thread on law of large numbers-
https://t.co/Hg0BnWGYrV
Tweets on psychology-
https://t.co/1CJT0sZcUs
https://t.co/8rIYnkLKTa
These are some of the things that can help you become a better trade.
Thank you for reading till here.
"Don't change the trading rules after every trade."
— Trader knight (@Traderknight007) November 29, 2020
If you do change them frequently then this thread is for you.
Let's talk about the law of large numbers and how it benefits traders to be profitable.
[Thread]\U0001f447\U0001f447\U0001f447 pic.twitter.com/pEUr0wH354
@PharmaBull20_22 - Best short term trader
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Thanks to Dr. @nicolefv, I was able to interview him for an upcoming episode of the Idealcast! 🤯
It was a very heady experience, and while preparing to interview him, I was startled to discover how much work he's done in healthcare, aviation, spaceflight, but also innovation.
I've read 4+ of his papers, so I thought I was familiar with his work. (Here's one paper: https://t.co/7X00O67VgS)
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This model was created Dr. Ron Westrum, a widely-cited sociologist who studied the impact of culture on safety
Thanks to Dr. @nicolefv, I was able to interview him for an upcoming episode of the Idealcast! 🤯
It was a very heady experience, and while preparing to interview him, I was startled to discover how much work he's done in healthcare, aviation, spaceflight, but also innovation.
I've read 4+ of his papers, so I thought I was familiar with his work. (Here's one paper: https://t.co/7X00O67VgS)
I was startled to learn he has also studied in depth what enables innovation. He wrote a wonderful book "Sidewinder: Creative Missile Development at China Lake"
Dr. Westrum writes about China Lake Research Labs: "its design and structure had one purpose: to foster technical creativity. It did; China Lake operated far outside the normal envelope... Sidewinder & others were "impossible" accomplishments,
I love this book because it describes traits of organizations that routinely create and maintain greatness: US space program (Mercury, Gemini, Apollo), US Naval Reactors, Toyota, Team of Teams, Tesla, the tech giants (Amazon, Google, Netflix, Google)
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