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| When you go back in market history--stock market too--you find that market tops often come when fundamentals are strong.
Conversely, you find that market bottoms often occur when the fundamentals are bearish, or very bearish.
The explaination is: "Markets look ahead and discount the future. Or they'll say that's (certain fundamental data) is "already in the market."
When it's all said and done you can't possibly time your entries and exits using fundamentals and when to get in and get out is what it's all about!
After a few years of playing (in a real sense) with the markets I decided I wanted nothing to do with the fundamentals and all I had to do was buy dips and sell buldges and keep my losers small. I became a believer in "market momentum" too but still have the self-discipline to buy or sell ONLY dips or buldges. You learn that if you'll buy dips and buldges you can usually place your stop-loss closer and start the trade with much less risk. Important concept.
I also learned to not look to others for their opinion. To do so can cause one to lose their game plan or self-discipline. Nearly always the other guy doesn't know any more than you do about what the markets are really going to do. "Do your own thinking." I've read that this is one of the traits of the successful trader--and I believe it.
I've learned the importance of how to lose. We all want to read about how to win but it's just as important to be a good loser in the speculative markets or too many of your losers will be big and you won't stand a chance. You must expect many losers and keep them small. After each loss you're that much closer to a winning trade.
The importance of consistency. Consistently keeping your losers small and consistently adhering to your game plan or proven entry/exit signals/patterns. Without consistency you won't stand a chance of winning --over the long run.
Once you have a valid game plan then the great battle is with yourself. You have to have the self-discipline (trader's psychology) to consistently trade the game plan. Much easier said than done.
So that's it: Valid entry and exit signals (a viable game plan) and a trader's psychology. Both can be very hard to come by and I've read that the psychology is the hardest part. I can tell you for sure: In the heat of battle I've often done exactly the opposite of what I should have done!
I've read many times that 90-98% of people who try to succeed at futures trading--lose. I believe it. I recall one broker/book writer saying that of his over 100 customers--NONE succeeded in the long run! I believe 98% is a more accurate figure than 90%.
To me that means that farmers farm and leave the trading to the very few successful traders. It also means that those who chose to become successful traders have a long hard road ahead of them--and they'll probably fail in the long run.
We would not consider playing professional sports against the pros and expect to win but we think we can trade against the pro traders and win. I've been as big a fool as anybody. Yet, I have learned along the way.
Don
Edited by getitdone1 1/3/2008 10:07
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Some Trading Thoughts
