I would speculate that most of us lose too often because of…
A lack of money.
It’s as simple as that.
You sports fanatics: Big deal today about the NFL Draft, right?
Teams jockey for positions that they need help in filling, replacing tired, injured, low value players, free agents, etc.
The Big Boys who have lots of money provide “Liquidity” and aren’t as obsessed with every little tick of the market. They have learned over the years to “average-in” scalping trades, so they don’t have to be as precise as you and me.
It’s like having a need for lots of back-up pitchers in baseball, not just one or two pitchers.
Multiple positions, multiple $ for multiple trades.
Size matters to us.
Being imprecise is therefore a requirement to trade; we need to get the concept right and then apply rules to keep us from being too rigid and inflexible. We also need an uncle point, so we are not stubborn and let the market run against us to the point we get badly hurt in any one position.
Today in the afternoon, a number of traders wanted the break down. Although it was possible, I felt it would hold and bounce a little.
Many traders, like me, often miss the “psychological implications” of the business as we recently discussed. Trap late shorts, trap late longs.
One trader suggested tick charts condense the overnight range and make charts easier to read. Agreed. The problem is that there is no one perfect chart; we need a variety of them to reveal different insights.
I hate the globex chart during RTH, I just find it works a lot so I always keep an eye on it, especially as the day wears on and it becomes more relevant again.
Another wanted the 56 stop,but I have found the aggressive trades work maybe 40% of the time and conservative ones about the same, so as usual, it is a guessing game.
I had the 58 test likely in the late afternoon as resistance, and called the Woodie pivot at 59.25 as likely also. It turned out this was the right one. This does not mean that I am smarter than any of these players, most likely I am not. I may have just had one more tool in my tool box, or was just plain lucky.
We just never know; all we can do is give it a shot.
Kudos to all those brave souls who take the risk of calling out their opinions; most lay low and don’t want to appear “wrong”.
We are all right, and wrong, a lot. It comes along with the territory, until we get more money in our account and can hedge with a few more positions, or get better at analyzing.