We Are The Dumb Money!!!!!

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Iron
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If you suffer a significant loss on an individual trade, you must have been over-staking.

But let's say you suffer a significant loss over the course of a series of 500 trades. It might be far from clear which of your entry and/or exit criteria led to the loss.

Here's another example of how things aren't always clear cut. Conventional trading wisdom says that you should offer to the market, rather than take. However, there are cases in Peter's videos where he takes from the market so it is always an error to offer to the market, or does it depend on the situation?

Peter alludes to loss aversion, but I'm not sure that not scratching a trade that's losing money is always a losing approach, providing you stake accordingly. I think it depends on your strategy. Some trades may think, 'I am entering at a value price, so I am going to exit at BSP come what may, as I trust it to be a fair price'.

I am reminded of a thread where Peter challenged people to find losing strategies, and no-one succeeded. Other than taking the back price and vice versa, it's hard to think of a strategy that will lose more money than you'd lose through your bank being eroded by commission.

Jeff
Derek27 wrote:
Fri Feb 16, 2018 3:31 pm
It's not an obvious error at the time, but on reviewing your trading it becomes obvious. Anyone who suffers a significant loss should be able to quickly work out what they did wrong.
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Derek27
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There is a clear difference. I'm an intelligent person with a good understanding of trading but I have occasionally let frustration or carelessness get the better of me, resulting in some fairly amateurish mistakes. This is clearly a mindset/psychology issue.
Iron
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Derek27 wrote:
Fri Feb 16, 2018 4:05 pm
It goes without saying that a lack of intelligence or aptitude will lead to failure. But there are also some fairly intelligent people who will never succeed in trading because they don't have the right mindset.
A lack of aptitude will lead to failure in any endeavour, at least until aptitude is acquired.

A lack of intelligence? Define 'intelligence' (actually, don't - whole books have been written on the subject!).

I once read that traders are in the top 10% of the general population, yet most lose money. Perhaps they partly lose money because of their intelligence, not despite it (if they fall into the 'intelligence trap', for example - numerous examples exist on this forum, and, yes, I'm guilty of it too!). Or maybe intelligence isn't the biggest predictor of success - maybe it's things like discipline.

Someone who is dumb as a rock can watch a trading video, apply the approach being shown, and make money if they are disciplined enough. The intelligent person may spend hours over-analysing the video, and end up with an approach that lacks whatever made the method used in the video profitable. William Eckhart, the guy behind the Turtles, once observed that he could publish his methods in a newspaper, but no-one would use them...

Jeff
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Derek27
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Ferru123 wrote:
Fri Feb 16, 2018 4:17 pm
Here's another example of how things aren't always clear cut. Conventional trading wisdom says that you should offer to the market, rather than take. However, there are cases in Peter's videos where he takes from the market so it is always an error to offer to the market, or does it depend on the situation?
I think it's stretching it to call that conventional trading wisdom - I have always offered and taken from the market, as appropriate. It's certainly not an error and in very volatile markets where somebody places an order at a daft price, you would have to be bonkers not to take it - if you don't somebody else will and the opportunity is gone.
Iron
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OK, fine. But I'd love to see an example of one of these obvious errors I hear so much about. :)

The list of obvious errors so far:

A. Overstaking
B. Backing at the bottom of the spread and vice versa.
C. Erm, that's it. :)

Jeff
Derek27 wrote:
Fri Feb 16, 2018 4:24 pm
I think it's stretching it to call that conventional trading wisdom - I have always offered and taken from the market, as appropriate. It's certainly not an error and in very volatile markets where somebody places an order at a daft price, you would have to be bonkers not to take it - if you don't somebody else will and the opportunity is gone.
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ruthlessimon
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Derek27 wrote:
Fri Feb 16, 2018 4:18 pm
There is a clear difference. I'm an intelligent person with a good understanding of trading but I have occasionally let frustration or carelessness get the better of me, resulting in some fairly amateurish mistakes. This is clearly a mindset/psychology issue.
Personally, I think that's the minority position - i.e. being up there with the Peter's, Dallas's, Jolly's etc.

You've brushed over how you came to that "good understanding" assuming everyone has that - they don't. I reckon 90% don't
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ruthlessimon
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Ferru123 wrote:
Fri Feb 16, 2018 4:23 pm
Someone who is dumb as a rock can watch a trading video, apply the approach being shown, and make money if they are disciplined enough.

Jeff
I must have missed that video, got a link Jeff? ;)
Iron
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https://www.youtube.com/user/betangeltv ;)
ruthlessimon wrote:
Fri Feb 16, 2018 4:36 pm
Ferru123 wrote:
Fri Feb 16, 2018 4:23 pm
Someone who is dumb as a rock can watch a trading video, apply the approach being shown, and make money if they are disciplined enough.

Jeff
I must have missed that video, got a link Jeff? ;)
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Derek27
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Ferru123 wrote:
Fri Feb 16, 2018 4:27 pm
OK, fine. But I'd love to see an example of one of these obvious errors I hear so much about. :)

The list of obvious errors so far:

A. Overstaking
B. Backing at the bottom of the spread and vice versa.
C. Erm, that's it. :)

Jeff
Derek27 wrote:
Fri Feb 16, 2018 4:24 pm
I think it's stretching it to call that conventional trading wisdom - I have always offered and taken from the market, as appropriate. It's certainly not an error and in very volatile markets where somebody places an order at a daft price, you would have to be bonkers not to take it - if you don't somebody else will and the opportunity is gone.
...not paying attention to the start time and missing the off, forgetting to cancel an unmatched bet which gets matched just before the off, getting distracted by the beauty of Priscilla Schmidt, just a few examples of where I've gone wrong.
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ruthlessimon
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Ferru123 wrote:
Fri Feb 16, 2018 4:27 pm
The list of obvious errors so far:

A. Overstaking
B. Backing at the bottom of the spread and vice versa.
C. Erm, that's it. :)
This again furthers my point. It's extremely easy to point out the error, but solving the error is completely different.

I was just reading this: https://www.tradeciety.com/common-trading-mistakes/

& I hate it!!

stuff like "keep a journal" - Keep journal of good porn? "don't change a strategy after (x) losses" - so what's your protection for the development of what turns out to be a random strategy? "adapt to changing markets".. just make sure you don't before 5 losses in a row etc etc :roll:
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Derek27
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ruthlessimon wrote:
Fri Feb 16, 2018 4:28 pm
Derek27 wrote:
Fri Feb 16, 2018 4:18 pm
There is a clear difference. I'm an intelligent person with a good understanding of trading but I have occasionally let frustration or carelessness get the better of me, resulting in some fairly amateurish mistakes. This is clearly a mindset/psychology issue.
Personally, I think that's the minority position - i.e. being up there with the Peter's, Dallas's, Jolly's etc.

You've brushed over how you came to that "good understanding" assuming everyone has that - they don't. I reckon 90% don't
I would have thought that anyone who consistently profits from trading is either extremely lucky or has a good understanding of trading - I don't regard myself as an exception, I would presume many on this forum have a good understanding of trading. Haven't a clue where you get 90% from.
Iron
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OK, so now we have:

A. Overstaking
B. Backing at the bottom of the spread and vice versa.
C. Getting distracted by attractive TV presenters (not sure that's a mistake, but I'll keep it in!). :lol:
D. Missing the off
E. Forgetting to cancel unmatched bets

I would add:

F. Doubling down when the market runs away from your position.
G. Not cutting your losses when it's prudent to do so (if you are employing a strategy where you use a stop).

Not making those Homer Simpson like errors means I won't lose my shirt as quickly as someone who does (but unless I have a lot more in the tank, lose it I will).

Peter talks about the gap between not making mistakes like the above and profitability as being small, but unless you have some way of generating repeatable alpha, aka an edge, then it might as well be a mile-wide chasm.

Jeff
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Derek27
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Backing at the bottom of the spread or laying at the top isn't necessarily a mistake, there will be instances where you feel the market will sharply move in that direction.
Iron
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Derek27 wrote:
Fri Feb 16, 2018 5:02 pm
I would have thought that anyone who consistently profits from trading is either extremely lucky or has a good understanding of trading - I don't regard myself as an exception, I would presume many on this forum have a good understanding of trading. Haven't a clue where you get 90% from.
Having a long-term edge doesn't mean that you need to have a good understanding of trading.

This forum shows that many traders disagree strongly about the market.

All you need is to have a long term edge. It may well work despite what you think is going on in the market, rather than because of it.
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ruthlessimon
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Derek27 wrote:
Fri Feb 16, 2018 5:02 pm
I would have thought that anyone who consistently profits from trading is either extremely lucky or has a good understanding of trading - I don't regard myself as an exception, I would presume many on this forum have a good understanding of trading. Haven't a clue where you get 90% from.
I've heard this before, & yes I think it's true. But the Sunday league footballer could absolutely learn something from Harry Kane. Does the Sunday league footballer have a good understanding of football? Imo, to the right person, but it's a tricky one. To a spanking new newbie to football, yes - but at the same time he's only Sunday league. Eventually, if the newbie wants to continue his development - he needs to find Harry Kane
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