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Strategies & Market Trends : Classic TA Workplace

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To: bcrafty who wrote (77628)	7/19/2003 3:46:35 PM
From: High Country Trader	Read Replies (2) of 209892

.....>>>>> "the real money from trading the longer timeframes" one has to have almost perfect entries and/or some pretty wide stops to successfully to so, and getting these entries requires more foresight than many realize....<<<<< bcrafty, I don't necessarily disagree with you but to show another side I'm going to quote LeBeau and Lucas authors of Computer Analysis of the Futures Market >>> "It has been our observation that traders spend entirely too much money and effort searching for methods of timing entries into the markets. Somehow, a very mistaken belief has developed that success depends on entry timing and that, if the entry is done precisely, everything else will follow....... Unfortunately, the truth is that the entry is probably one of the least important ingredients in a complete and well-designed trading system. We assert the real key to profits is knowing how to exit. We have seen many traders who make money in spite of their absurd entry methods, not ever realizing that their most prized entry strategies have very little if anything to do with the outcome of their trades." The authors then go on to discuss a trader who received his entry signals from what he claimed were mysterious beings from outer space, yet made money because he had a knack for exiting his trades correctly. My experience both personal and observing other traders is that most traders don't properly maximize their winning trades. Minimizing trades is easy and a one decisional process, you simply don't hold losers. But winners are another matter. Lots of decisions on what to do with your winners such as how long to hold and if and when to add. I find too often traders are way too quick in taking profits. And that's just another form of their aversion to risk - taking the quick profits. The professionals on the other hand seem to aggressively add to their profitable trades (when the novice seems to be exiting their winners) as the market move in their favor. Aggressively increasing your line as a trade moves in your favor is a risk management principle that the risk averse just can't seem to master. All this of course are just one trader's opinions and based on trading beliefs developed over many years. Others of course have different trading beliefs.

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