The Fatal Mistake Traders Make




The deadly mistake traders make is they outline themselves narrowly, and this artificially constrains their possibility set.

For instance, a trader might define himself or herself as a "breakout trader", a "trend trader", or a "bear market trader".  All ensure that the trader will underperform when markets are not breaking out, trending, or moving lower.  The frequent justification for such limitation is that the trader is adapting trading to his or her personality.  But would that work in other performance fields?  Would a quarterback in football last long if he defined himself only as a running QB?  Would a baseball pitcher succeed if he declared himself to be a fastball pitcher?  How about an actress who only played one kind of character? In every performance field, ongoing and elite levels of success require the ability to adapt to the opportunity set, not expect the game to adapt to the performer.

The trader who does one thing consistently in all situations is not a disciplined trader.  He is a one-trick pony.

Let's  take a practical example:
During 2019, the SPY ETF moved a total of nearly 73 points.  During the NYSE day session, total movement up and down was about 303 points.  Total movement overnight was about 272 points.  During all the day sessions, SPY gained about 39 points.  During all overnight sessions, SPY gained about 34 points. In short, declaring oneself to be a daytrader effectively cut the opportunity set in half.

Many daytraders work hard at improving their trading.  Less often do they work at broadening their trading.  As I mentioned in a recent post, there are many markets in which a demonstrated edge *is* present, but not on the day time frame.  Similarly, there are markets in which a demonstrated edge is present, but not directionally.  (For example, volatility may be in a very tradeable declining trend, but the market may not move a lot directionally during that period.  One part of the market may be moving higher, such as large caps, while another is moving lower, such as small caps.  A good long/short trade is present, but perhaps not an overall market trade.)

I consistently find that traders who develop multiple ways to win show the greatest career longevity.  As in the business world, long term success requires flexibility and innovation, not a stubborn insistence that the market adapt to our preferred edge.  In a coming post, I will share how I have been expanding my trading through the integration of quantified models and discretionary pattern recognition.

Further Reading:
Trading With Focus and Flexibility
TraderFeed Home Page and Index

forex trading forex factory what is forex what is forex trading forex market forex scams forex brokers forex com forex market hours forex news forex trading app forex trading for beginners how to trade forex best forex broker forex charts forex signals is forex legit pips forex forex investment ig forex forex calendar forex trading strategies hdfc forex card login best forex trading platform forex brokers usa forex cargo forex demo account forex exchange forex patterns forex reddit forex trading scams how to start forex trading tradera forex what is forex trading and how does it work what is leverage in forex best forex broker in usa best forex trading app forex app forex compounding calculator forex currency forex factory calendar forex profit calculator forex tracking forex trading platforms forex vs stocks learn forex trading lot size forex no nonsense forex td ameritrade forex forex cargo tracking forex definition forex login forex meaning forex pip calculator forex ranks forex reviews forex time zone converter forex time zones forex trading for dummies forex trading hours forex trading reddit free forex signals iml forex is forex trading profitable what is spread in forex best time to trade forex forex calculator forex candlestick patterns forex chart patterns forex com login forex correlation pairs forex day trading forex economic calendar forex for beginners forex session times forex stock forex strategies forex trader salary forex trading meaning forex trading reviews is forex legal live forex charts scalping forex us30 forex what is forex market what time does the forex market open when does the forex market open divergence forex forex com review forex factory news forex for dummies forex hours forex indicators forex market times forex pyramid scheme forex quotes forex sessions forex trading course forex trading signals

Iklan Atas Artikel

Iklan Tengah Artikel 1

Iklan Tengah Artikel 2

Iklan Bawah Artikel