Why wont this work?

[#1]

nope, that is where you are completely wrong, and is the biggest mistake a trader can make. The saying nobody lost money taking profit is absolute bunk! A trader can lose big time taking profits early. The reason is simple, each trade has a risk associated, and the reward (profit) is supposed to outway that risk by a factor. If you are getting it right 50% of hte time, and you are taking profit equal to your risk, you are going to lose. And this business of small consistent profits is also junk - I would like one trader to own up and say they do not owe their profits to 1 or 2 big trades!

[SimonPB]

but then keep it real simple and cheap, use a dart and a coin ..

[SimonPB]

yip, taking profits too quickly is a huge roblem that very few traders recognise .. and the occasional huige profit makes a massive difference ..

[#4]

No the point of the theory is to be doing theopposite of the ultimate retail crowd...the inexperienced newbie. I still dont buy that random entry/proper management strategy. Has there been any testing on it?

[SimonPB]

yip, reasd van k tharps book - trade your way to financial freedom ..

[#6]

Trailing stop.

[#7]

Actually Simon, he never went so far as to prove it, (unless there is a later version) only that he suspected it was possible. I have tried to prove it myself using simple backtesting in Amibroker. I buy randomly at close with a 4% stoploss and 10% profit (to overcome trading costs). Share has to be liquid. I make a 4% return annualy on average. On the contrary, I make a 37% loss annually with the same strategy going short (market is inherently biased towards longs). Conclusion is 1) even a random long entry gives you a 40% chance of doubling your risk and 2) shorting is way more risky

[SimonPB]

a well positioned trailing stop ..

[Wizard]

I lost a lot of money in the past for school fees, but probably a lot of the things that I have changed were reverse on what I'm doing at the moment. The reverse psychology issue and being able to control your emotions are things so difficult to comprehend and even more difficult to practice...

[THRESHOLD]

TRADERS are there to make money. They need, it follows, to make money. Hence the money is important to them. They are more interested in the per share value than the intrinsic value of the share and react to the vacillations in the stock price. If a security tends toward its value over time and you are an investor (or wealthy trader who can carry a position) it is a very different world. For one thing, you are not wedded to the most liquid stocks (often the lowest value.) Not all trades are created equal. The underlying is not "discardable." The logic is - if you don't like a company - don't trade in it. Newbies don't know what they are buying and often make good returns until the market turns on them and then quite understandably run for cover as they have no idea what they are holding.

[Wizard]

Essentially.don't go with the crowd and u will be fine ;)