Words of Wisdom from our experience...


Well-Known Member

Markets are complicated and our thinking during mkt hours is complicated. When you add the two things you compound the complications. To say we lose money because we guessed the direction of the move wrongly is to simplify the matter a bit too much. To make money in the markets, you have to get three things right: direction, length of the move and the time within which you get the move. When you get all the three right, you make money.

How many times have you got the direction right and still lost the money? Because you waited too long(lenght of move), because you waited too less(length of move), because you exited too early(time), because you exited too late(time)?

If you believe that you are losing money only because you got the direction wrong, you have to test it out this way. For the next 20 sessions just predict the open of the market for the next day and take a small position say in MNF. Next day at open close the position irrespective of the direction. See how many times you got the direction wrong. And see if you made money when you got the direction right and close the position.

We search for systems to make money, if you can identify a system, a complete system with defined entries and exit rules which loses money consistently, then you have a winner on hand. Because then you can take opposite position.

We lose money for a variety of complex reasons in the market, and it is dynamic, it changes with each trade. But people who make money make it for the same simple reasons that they have identified.
Happy families are all alike; every unhappy family is unhappy in its own way. - Leo Tolstoy

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