OMNI Trading Academy :: Forum

4/15/2007 5:26:49 PM susannah Posts: 0	I hope you find this post interesting... Back last year, I read a free report by a well-known American (celebrity) stock trader. He mentions in his report that traders are born not bred. He believes it's just there, something that is deep inside of people. An intangible and invaluable skill that people have and if they encounter the right situation they will use it to make more money than they ever dreamed of. He says that traders are born not bred and that they just need to be put in a position to succeed. He goes on to say if you take 20 random people and teach them how to trade the same way there is no way of knowing who will be the best. And that there is not a test or anything that will let you know - you can't measure what someone is made of, all you can do is put them in a position to succeed. I would have thought that the truth may lie in the reasons for why a person is attracted to the markets in the first place. Aside from the obvious reason, which is to make money, maybe successful traders are those who trade simply because they love it, are passionate about it and couldn't possibly see themselves doing anything else. For LOVE and MONEY so to speak - not just MONEY! Oscar perhaps being a good example of this. Given the fact that over 90% of traders fail to become successful, is there possibly some truth in this stock trader's statement? Of course, without listing them here, we all know there are numerous reasons for failure. But as far as personality goes, is is possible that some traders give up because of the trading choices they made. Choices that are not in harmony with their personality: Choosing the wrong markets to trade, the wrong time frame, the wrong type of analysis, etc.? I think it's a difficult one to determine. I was wondering if anyone has any thoughts on this or in fact any firsthand experience or stories they can relate to.
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4/15/2007 6:46:26 PM lambro Posts: 0	affinity and those who work hard despite odds to be successful, but its never absolute. Take tennis.. to be successful in tennis you have to work hard to be fit, and you have to deal with many losses, think how many points Federer looses in a 5 set match...plenty, you have to have a plan you have to have the right attitude to move on from your losses, you have to be willing to change things that need improvement. No ones fittness is natural at the level needed to compete, if Rog stopped training he would be steamrolled, yet he is considered the most gifted player of all time and he works his ass off to be the best. It would probably be safe to say that 90% of people would be unsucessful at many different tasks, its all depends on the level of success desired, level of work put in and clearly some basic skills. A lot of people without what I would call basic skills trade and get killed. Because trading involes money, it attracts people who "need" to make money because they have been unsuccessful elsewhere, hence they bring their ingrained problems into their next task and are yet again unsucessful. A more valuable offering form the celebrity trader would be get people of the same age same education same IQ same technical training and most importanty same emotional training and same work ethinc, so you have a controlled study group, then see what kind of success transpires. [b:9cfecaa439][/b:9cfecaa439]
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4/15/2007 7:36:46 PM susannah Posts: 0	Fantastic reply Lambro, what you said makes perfect sense to me. Thanks for your input. It was most interesting what you said about the emotional and psychological baggage one brings to the markets. I have no doubt this is very true which is why I've heard it said so many times that psychology (the right mindset) is so important to trading successfully along with effective money management techniques and a game plan - sticking to one's guns as Oscar says. And...controlling the demon within - the dreaded emotions :twisted: which I assume can only come from being in the trenches. Experiences or past failures affecting ones success in the markets. The solution being to find a way to break the chain with past failures - easier said than done. Obviously, it is very important to set yourself goals and have every aspect of why you want to trade, what you want from it and where you want to be in the future clearly written down before even thinking about trading. In doing so, it must afford us a better chance of surviving. One method I have read for controlling emotions is to attach an elastic band to your wrist when trading. The idea being is that every time you get a losing trade you tug the elastic band and let it go. It will sting of course which is the whole objective of the exercise. Apparently, doing this every time you get a losing trade will cause the brain (subconscious) to associate a losing trade with physical pain. Whether it works or not I have no idea and I wonder if anyone has tried this method and improved their trading using it. Of course Lambro, you and other here are way ahead of me in the game, but I'm doing my best to catch you guys up :wink: I have to say Oscar is a great motivator for me and with the encouragement and shared knowledge I'm getting from you guys in this forum, I'm sure I'll get there in the end. susannah.
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4/15/2007 9:18:08 PM Administrator Posts:	Every hear of the Turtles?
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4/15/2007 9:44:25 PM Prisoner Posts: 0	Susannah....... Interesting thread again Hmmmmmm, traders trading and why? It is often cited that 90% of traders fail in the first year, this may well be true. It is also a good point that 90% of anyone fails in trying to undertake a whole range of activites that perhaps require taking complete charge ofcircumstances. Tennis has been given as an example and this, perhaps like trading is another activity where the individual takes full control of their actions and consequences. With trading money is indeed a key factor, afterall people get emotional about money at the best of times let alone when they have just placed a decent portion of that hard earned cash into a trade. I agree that trading certainly attracts a percentage of people who "need" money because of past failures and I suspect these are some of the first to lose it all. Simply because trading really does look easy to the uninitiated.......... A very wrong assumption indeed. Sure........... the mechanics of trading are the easiest principles in the world to figure out. I need to enter market the market in the same direction as trend, long or short and hey presto I close out and money appears. But it's not easy at all for one reason... the mechanics are simple but the psychology required to control the mecahnics is fraught with personal difficulties and fears. For me psychology is everything, it is the very reason why I started trading in the first place. I literally became enthralled with the notion that the daily chart was a given picture of the markets daily emotion. Rightly or wrongly I still feel this is the case, forget the money look at the mood and the emotion of the day. The charts say it all I feel. But theirin lies the catch 22, you need to study the motion and emotion of the market but you need to do it without emotion yourself? How many times have you been sucked into a trade because it looked like your limit was never going to get you in and you were missing out? Right........... we know what happens, invariably you jump in and sooner rather than later that good old limit you cancelled would have got hit and you are in a compromised trade. I once read... although I know not where that there was no such thing as a bad trader....... simply a trader using a system or plan that was bad for their psychological profile. True or not I have no idea, but for me my trading started to improve no end once I started to find my own way and listen to my own confidence or observations. Sure it's even better to see them "chime" with other peoples and indicators, but the best bit of advice/experience I could offer anyone is simply to learn when NOT to trade. Once I learned that and stopped chasing life became a lot easier I do know people that have tried the rubber band idea btw...... It stings! Safe trading Susannah Prisoner
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4/16/2007 12:58:47 AM susannah Posts: 0	Hi Prisoner, another very thought provoking reply - thank you. I think I understand where you are coming from... Watch what the herd are doing and be a vigilant onlooker, one of the audience so to speak and not part of the herd mentality. As I said, I'm still in baby stages compared to many of you, but I've been studying like a spartan for the past year and a half and have gleamed much and hopefully learned from my mistakes. I know trading is a never ending journey and God knows why, but I'm still on the path. Sometimes I wonder why I battle on. Maybe I am 'in love' with the markets (for LOVE and MONEY) but HEY...isn't that what most ladies want out of marriage ':twisted:' Just like me to choose an alternative route! Only joking of course ':wink:' Another interesting thought on what makes a trader successful is to look at the handwriting. A trader with forward slanting handwriting would tend to be more emotional than a trader who's writing leans to the left. Forward slanters are more likely to cry at movies, etc. It's not that traders or indeed anyone with left slanting handwriting are void of emotions, it's just that they appear to be more in control of their emotions. So forward slanters might find it harder to gain control of their emotions especially if accompanied by heavy writing pressure. Also, people with very small handwriting usually are studious and analytical and can easily focus their attention on what they are doing. Whereas people with large, fluffy handwriting are usually live-for-the-moment types, they are swayed by whatever takes their attention at any given moment. Focus may be harder for them. People who's writing you can put a ruler under in a perfectly straight line tend to be perfectionists. It would be interesting to know how much of a bearing the handwriting has on being successful as a trader or in fact any other occupation a person chooses as a profession. Handwriting analysis is used in the hiring process so it must have some validity. The presence of positive handwriting traits would include: Initiative Enthusiasm High goals High self-esteem Self-starter Patience Loyalty Trust There are many more - that's just a few that came into my head. Negative traits might include: Procrastination Greed Low self-esteem Low goals Envy Impatience Aggression Again, these a just a few traits. It's far more complicated than that, but it would be an interesting exercise to analyze the style of handwriting and determine its bearing on the personality type. Traits found, would I feel, inevitably spill over into the trading career of the individual along with psychological and emotional baggage. Maybe if studied, it would be possible to match a trading style to suit the personality of the trader based on what traits are or are not present in the handwriting, as well as taking into account other aspects of the person including...lifestyle, environment, health status, etc. An Holistic approach if you like. Having said that...I have to agree Prisoner when you said that ultimately YOU are the best judge of yourself. It's all interesting stuff though don't you think? susannah.
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4/16/2007 1:16:35 AM Administrator Posts:	(trading isn't what you think it is) I believe Mark cook said that Richard Dennis strongly believed that trading abilities could be broken down into a set of rules that could be passed on to others. WilliamEckhardt believed trading abilities had more to do with innate instincts. Eckhardt lost the bet with Dennis.
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4/16/2007 9:06:39 AM Prisoner Posts: 0	Willie..... I completely agree with that
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4/16/2007 9:12:44 AM futuresanalysts Posts: 0	I will add this to your most eloquent posts. If you are either trading from the seat of your pants, a tested winning set of rules or a successful black box system your emotions should be the same when you have losing trades as they were when you had your winners. If your approach usually works, when you hit a losing period YOU DO NOTHING to change your rules except reduce down to one contract (if you trade multiples) and trade through the storm. It's the emotional decisions to make changes to your style after a loss or two that keep you in perpetual 'trying to find the winning system' mode. How do we know if we have a winning overall approach unless it's tested the exact same way through the losing period as you did throughout the winning? You simply can not know testing it any other way. You are not supposed to interfere, for better or worse. Emotions are nothing more then the excuses we convince ourselves of to reanalyze the market and change your orders once the pressure is on. Then you can look back and rationalize why you should have won if you just would have....I had something personal going on, my dog bit the mailman this morning, my wife had a fight with me right before the market opened . These are all excuses we use to justify our emotional decisions to make unnecessary adjustments to our trading strategy during the day. Traders need to stay clear of the "excuse" trap. It's just emotional trading in disguise. Oscar
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4/16/2007 11:32:20 AM susannah Posts: 0	Thanks to all who replied. It's all been very interesting. All being said, I too have to agree with Willie-Trader. I guess it's like Oscar said, no matter what you trade or how you trade, everything comes back to emotions and that's what makes the difference between success and failure - profit or loss. So...as always...it's back to the MANTRA... "STOPS ARE IN, EMOTIONS ARE OUT!"[i:4ab16a4230] Thanks Oscar. susannah.[/i:4ab16a4230]
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4/16/2007 12:32:12 PM DonCorleone Posts: 0	"Stops are in, Emotions are out" is an excellent slogan if you know 2 things: 1. Reason/s for being in a trade; 2. Where to place stops. If one of the above two is missing, then emotions will return due to failing win rate. P.S. And even if emotions do not return, then the Mafia will get you
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4/16/2007 1:18:58 PM joeblack Posts: 0	The problem with having the emotions, is they may interfere with one's ability to know when to stop. This may have been the mafia's biggest weakness.
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4/17/2007 10:04:30 AM futuresanalysts Posts: 0	And the PAYOLA begins... Nobody's safe.
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7/22/2009 2:33:54 PM maxk Posts: 0	I want to add my 2 cents into this. Let's take tennis as an example again. Or any other sport (profession). let's say you train 3 hrs a day 6 days a week every week. that's 18 hrs a week= 936 hrs a year. You repeat that for 10 years. That will give you 10,000 hrs of experience. That's what takes to master your sport (profession). if you have a great coach/mentor on your team to guide you along the way who gives you the right advice, that is the way to make it to the top. And I think Oscar is the man to guide us all.
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9/23/2009 2:51:56 AM spiderman Posts: 0	I don't believe traders are necessarily born. SOme have the natural temperment for trading. I think of Paul Tudor Jones or Marty Schwartz. SOme folks I believe are ill suited to trade. But I also belive those with the WILL to learn from their mistakes, and continue to learn as much as they can about trading and eventually learn to recognize higher probability set-ups combined with good risk management can work their way to becoming a winning trader...and with each successive step...build on those small successes to become good traders. Richard Dennis's Turtle experiment proved you can teach people how to trade. His long term trend following method of trade entry is a difficult style for most people to learn because of the larger initial risk in each trade, not to mention the whip saw action experienced. Overall he was successful, (Though not all the traders remained successful.) The mindset is important. One must be determined and persevere with the attitude that one can and will become a successful trader. A trading journal or diary is essential to record each trade. Why you took the trade. What elements (charts: weekly, daily, interday) and studies or indicators you used to make the decision. Once you decide on the trade. Enter your stops and your profit objective. Remeber, in most short term trades, you must have have a profit objective. especially if you are swing trading. Long term trend trading requires realistic trailing stops. (wider stops, ie: 4 times Average true range) Short term trades require objectives, lets say on par with recent market swings. Or, lets say in a swing trade, your initial risk is 4 S&P points. Go for 2 X 4 = 8 as your profit objective. But the important thing is to know where you are getting out after you enter, whether you are stopped or, take profit, or get out at Break even. There is a lot of good free stuff out on the net to learn from. Watching Oscars videos is an excellent resource. Take advantage., Have a plan, and in time, most reasonably intelligent people can succeed. (end of rant) spiderman
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9/23/2009 4:15:06 AM Tradz618 Posts: 0	What makes a great trader? As mentioned above, not the desire for money, but the passion, or love of trading. Great traders are not born! It is learned behavior. Some may learn quicker than others, have motivation, or have the right opportunities, or successive events to foster trading success. To be a successful trader, one must be constantly working at continuous improvement until they get trading & analysis perfected to the point of being a consistently profitable trader. This also means in the process of achieving this goal, continuous improvement is the evaluation of losing trades, and taking corrective action for each successive habit, or shortcoming identified. Winning trades do provide some useful information/data for improving trading, but by far the best information is the losing trades. What you do with your evaluation of your own trades refelects the true desire of the success you are seeking as a trader. Another facet of this is being mentally tough, having a plan for your trades, and being confident in ones own analysis. Being mentally tough is having patience while in a trade, and attitude to not give in to not following your entry plan, as well as knowing that if you miss your trade, there is always the next one, and there is always tomorrow. Attitude is almost a nonchalant way of not caring if you miss an entry into a market because it didn't hit your target for the entry. Hence you are not chasing. When you enter properly, then your plan keeps your emotions in check, since you should have already figured out critical aspects of the trade like: stop placement, profit objective, risk determination, # of contracts based on account size, etc.. You've made the first step in achieving success...you are here at the Omni Trading Academy... Tradz618
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9/23/2009 5:59:04 AM spiderman Posts: 0	Well, all of the above is true. It is the desire for money that probably gets most of us into the game. However, I agree, that the passion must surpass greed. Constant self improvement in all facets of trading is necessary to maintain an edge. A well balanced life. (Emotions are OUT!) I'm getting better. I put my trades on. I have a time element ( or a time stop) This is relatively new in my trading, because I used to hold and was "into wishing"rather than "intuition". Watching the market daily I believe is key to success, even if your a trend following position trader. (You work with O/H/L/C prices in that case). Recent Example: I shorted TIE last week. (puts)It fell to under $10 yesterday AM (9.61)...then traded up to 9.80, 9.90. rather quickly. It ahould have closed near it's low, Today it closed above 10 bucks. That rejection of 9.60, 9.70 told me that there a lot of buyers looking to get in. (It had a recent breakout move). I had two puts. I could have held (and hoped), but I'd rather pocket a small profit and move on to the next trade. (MET calls) I'm finding myself more at ease. just trying to go with the flow. Now, MET moved favorably after my call purchase..but I will need to see a continued up move by thursday...if not, this fair weather friend will part company.
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9/26/2009 7:06:38 PM mcserdwar Posts: 0	It's no mystery: it takes a lot of hard work to become an expert trader, and the learning part never ends. To make it to that *10,000 hour expert level, though, requires an unquenchable desire to compete and to succeed in the market. Then you have to use all of your intelligence to harness that desire (emotion) and contain it. Notice how Oscar starts each video with much emotion and enthusiasm, and then he contains it in the end with the most succinct trading advice ever uttered: "Emotions are out, and stops are in." *I note that the 10,000 hour expert level is explored in depth in the book Outliers. It's an excellent book that I think you would all enjoy.
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