Success in Trading

We often read it and listen to people saying that trading is a losing game and 90% of the traders lose money. Now we have not heard about any actual conclusive study about the percentage of successful traders but yes many people lose money in trading. On the other side there are number of traders who are very successful in it and earning their living out of it and if they can do it you can do it too.

Ari Kiev in his book “Trading to Win”, states “believing that an outcome is possible, makes it achievable.” He quotes the example of famous runner Roger Bannister who was first to break the barrier of running a mile under four-minutes. After he achieved this feat people started believing in this possibility and soon many other runners accomplished this once considered “impossible” feat.

If you are doubtful of your winning, how will you be able to put your 100% effort in it? (Please note I have said 100% effort and not 100% capital.) Trading gains are certainly not as easy as those young supposedly MNC workers in web ads claim to make by trading forex just part time. Trading can be very rewarding businesses provided (1) you are dedicated to first learn trading (2) you have a robust system (3) you are disciplined to follow the rules. (4) You treat it as a business.

Readers are welcome to share their own experiences about success in trading.

(Contributed by Jitender Yadav)

Winning against the Quants

You can read the full article Here.

Nicholas Colas, group chief market strategist at ConvergEx, recently attended an algorithm-themed conference, and discovered — to his surprise — that quants aren’t really like regular people.

I was a stranger in a strange land, but there’s a strong case to be made that adoption of this quant-first approach to investing is set to accelerate.

Most computerized trading models try to either do something faster than a human trader/investor, or do it more consistently. We can’t beat them on speed, so forget the first one. But can a human investor learn what these new algorithms will look for, and then base an investment style around front-running the machines? Or at least stay out of their way.

There is a lot of money to be made adding fundamental and news inputs to what are still pretty brute-force high frequency trading strategies. This will happen, and quickly. The second is that this approach is very rules based, and is subject to the same fad-chasing practices as the “Traditional” money management community.There will still be outperformance to be had as this transition occurs – you’ll just need to be a step ahead of the machines.

My Notes: Nicholas Colas says that computerized trading models and high frequency trading is here to stay. Yet, individual traders can outperform because of a simple reason: Most models will start doing the same thing – the herd mentality. The Trader can shift focus, change tactics and do better than the herd of computers. Sounds good to me.