DislikedInstead of telling us all what trading isn't, how about you tell us what trading is?Ignored
As I’ve stated several times in this thread the numero uno task is positive expectancy. This means having a system that wins more money than it loses. I started another thread to explain how this is achieved - here is the link http://www.forexfactory.com/showthread.php?t=374498 - strange that not many people seem to be interested.
I’ll give you a simple example. One of the US stocks in the IT sector displays the same signals to buy and sell year after year for the last thirty years - almost to the day every year - and there are several of them. I’m not going to say which one cos it cost me too much in time and money to make these discoveries.
So with a fairly solid positive expectancy I can be confident that around two out of three trades will win and that winnings will be about fifty per cent larger than losses - and confidence is key. My own experience is that hard numbers and repeatable behaviour instil confidence. This stock has been a money spinner for me. I would have used a forex example but they are much more complex (I only trade daily bars by the way).
I’m happy to risk 2% of my account on a trade, but may have anything up to 20 trades on poorly correlated instruments at any time.
Since I’ve analysed past behaviour I know what drawdown for any instrument is acceptable and when it’s going belly up.
As far as I’m concerned there is nothing more to it. As some famous trader said - there is much less to trading than meets the eye.
So to summarise:
1. If you are rigorous building your trading models and have studied how to do it (it’s almost an engineering problem - although I’m not an engineer) confidence will permeate throughout your mind.
2. When you are confident then discipline, patience, risk management and so on are pretty well automatic. These things become a problem when confidence is missing.
3. Trade execution becomes a matter of ‘Devise a mechanical trading system & eliminate fear & greed. Fixed stops & targets, set & forget. Trade like a machine.’ - the signature of jag1966 on Fx factory.
For me there is nothing more to it apart from continual development of systems. I don’t know where a plan would fit into this or even what it would do.
Irregular