what important factors can contribute to profit ? - page 2

New comment
 
Hi Dani,

Wow, you've hit the nail on the head with this question. It's tough to pick just one from your list, as all these factors undeniably play a pivotal role in trading. But if I were pushed into a corner and forced to choose, I'd go with 'E. Discipline'. 

You might be wondering, why Discipline? Well, let's look at it this way. You can have the best strategies in the world, you can be a whizz at technical and fundamental analysis, and you might even have risk management down to an art. But all of this would count for nothing if you don't have the discipline to put it all together consistently. 

Discipline is the glue that holds all the other factors together. It's what helps us stick to our trading plan, especially when things go haywire. It keeps us grounded, helps us steer clear of impulsive decisions, and ensures we manage our emotional responses, which are often our worst enemy in trading.

But here's the cool part. Discipline doesn't just act alone; it's a team player. It enhances all the other factors on your list. It ensures you stay committed to your trading strategy, helps you consistently apply risk management rules, and is vital for ongoing learning and effective use of technical and fundamental analysis. 

In a nutshell, discipline may seem like just one piece of the puzzle, but it has a big multiplying effect on your overall trading effectiveness and, ultimately, your success. And remember, like a muscle, discipline gets stronger with regular workouts. It requires patience, persistence, and a laser-sharp focus on your trading goals.

So to everyone learning trading, always remember this - discipline won't guarantee you success, but a lack of discipline is a surefire path to failure.

Best of luck, folks!
 
Yashar Seyyedin #:

I am still learning. But I want to share something.

"No matter how good you read market moves you are most of the time stopped out. Therefore you cannot hope for high win ratio. But you can focus on high Reward/Risk ratio."

I don't know if you came up with that sentence, but I completely disagree.

I'm running a EA that has a risk/reward of 6:1 (loose 6 times what it earns in each trade) but a win percentage of 90%.

Of course this is a very specific EA for a very specific market. It wont work on any forex pair or any country index. Beyond that, it only works on a very specific timeframe, if I change it, the winning percentage will deacrease.

In my opinion the most imporant is to study and specialize in a specific market. Choose what pair/index you want to trade, study the market, develop a strategy on what you see. Preferably learn how to code so you can confidently use your strategy with discipline.

It's a long road. It usually takes years (in my case around 10 years) to learn everything you need to learn, it requires resilience because you will fail a lot. Most people give up. A lot of people keep trying and never achieve success. Only a few people will eventually make steady money from the market they chose to trade.

 
If you're talking about manual trading, then psychology is probably the most important factor. But for automated trading, you need to know your strategy well and not "spray and pray", trying to over-optimize and create delusional expectations. 
 
Yes, psychology is really important
 
traderswithedge #:
Hi Dani,

Wow, you've hit the nail on the head with this question. It's tough to pick just one from your list, as all these factors undeniably play a pivotal role in trading. But if I were pushed into a corner and forced to choose, I'd go with 'E. Discipline'. 

You might be wondering, why Discipline? Well, let's look at it this way. You can have the best strategies in the world, you can be a whizz at technical and fundamental analysis, and you might even have risk management down to an art. But all of this would count for nothing if you don't have the discipline to put it all together consistently. 

Discipline is the glue that holds all the other factors together. It's what helps us stick to our trading plan, especially when things go haywire. It keeps us grounded, helps us steer clear of impulsive decisions, and ensures we manage our emotional responses, which are often our worst enemy in trading.

But here's the cool part. Discipline doesn't just act alone; it's a team player. It enhances all the other factors on your list. It ensures you stay committed to your trading strategy, helps you consistently apply risk management rules, and is vital for ongoing learning and effective use of technical and fundamental analysis. 

In a nutshell, discipline may seem like just one piece of the puzzle, but it has a big multiplying effect on your overall trading effectiveness and, ultimately, your success. And remember, like a muscle, discipline gets stronger with regular workouts. It requires patience, persistence, and a laser-sharp focus on your trading goals.

So to everyone learning trading, always remember this - discipline won't guarantee you success, but a lack of discipline is a surefire path to failure.

Best of luck, folks!
Thanks for this great text. I agree
 
Most people will say that psychology is the most important factor, but everyone should first be sure that they have an edge in the market (strategy, risk management) and then discipline and psychology comes into play so that the edge can unfold successfully. 
 
i think the most significant factors that can contribute to profit on trading are:

- Risk management: Effective risk management is a crucial factor . Traders who manage their risk effectively tend to have higher profit factors.
- Trading strategy: A well-defined trading strategy can help traders to make informed decisions and increase their chances of making profits and don't forget test it on trading simulator too. 
- Market analysis: Keeping up with the latest market news and trends can help traders to identify potential opportunities and make profitable trades.

- Discipline: Maintaining discipline and sticking to a trading plan can help traders to avoid emotional decisions and make rational choices based on market analysis.

 

I think position management is a topic all its own, and even more important than all the various things that go into figuring out what to trade and when. I've seen some demonstrations of making a profitable trading strategy from random trades, with a good position management strategy.

Most traders, most algos, basically boil it down to three things:

  1. Initial stop loss
  2. Trailing stop loss
  3. Exit signals

While there are numerous trailing stop strategies that do better than nothing, or better than a fixed-points trailing stop, there are actually multiple stages to a trade that should each have their own logic:

  1. If the stop loss is fairly large, can the stop loss be tightened before moving to break-even?
  2. Moving to break-even
  3. Locking in profit
  4. Handling pullbacks
  5. Exit strategies (you may have multiple possible exits)

Figuring out how to maximize profit from the trades you do make seems like the obvious most important thing for maximizing profits from your trading, once you accept the premise that you can make a profitable strategy from random trades.

12
New comment