Like most of time psychology plays important role in trading sometimes we get so sure about market that particular thing will happen and we keep waiting for that thing to happen but exactly opposite happens and we are not ready to loose our opinion
What do you think trading in team of two will provide any advantage in trading like one focused on buying and one on selling?
How to loose your opinion at right time?
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For trading, better not to have any opinion or team but to have a set of price based rules to play the dice which can make you profitable over thousands of treads!
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This is a very interesting question.
Tagging a few more of our experienced traders & community members to get their views on.
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First of all nothing is certain or sure in market or life. Everything has just a probability of success attached to it.
Whatever strategy u are running some objectivity will generate confidence and trust in it. I code, backtest and deploy systems. So before I start live trading I have a fair picture of accuracy, risk-reward, drawdowns, losing and winning streaks, max and avg win & loss etc. So neither am I too excited with a winning streak nor am I distressed with a losing streak. I am at peace as long as the system live operating region is within safe operating region defined by the backtester.
Note that backtesting is an involved process and should be done well to define a realistic safe operating region.
Losing trades are part of the trading process. The most defining chara of a profitable trader is that willingness to cut out of a losing trade quickly. All the classic support resistance plays work 60-65% of the time. So holding on to losing positions with a hope to win or averaging down of losing positions work 60-65% of the time. But when the market trends, break through resistances and falls through supports these typical retail instincts will blowout the account. Its ok to win just enough with a good risk reward ratio and proper risk management to make money from the market. There is no need to be perfect and always right to make money from the market.
Also capital in trading account should be something that you don’t mind losing or atleast you don’t need in the near future. It must also be adequate to absorb the drawdowns in the strategy you are running relative to your position size. This is key to keep fear and consequent mistakes in check while trading.
If both are aligned and trading similar strategies it may help. If not it’s likely to be a distraction.
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Well i’m a profitable part-time trader for the past couple of years and know a couple of profitable trader friends who are also part-time. This is not our primary set of income and we continue to build our primary skill set in our respective jobs since I feel that can give exponential returns.
The one thing that i see common among all of us is somewhat a detachment from the money. It’s not that i’m saying that we don’t want to earn/gain money but the money which we earn from trading is not changing/ upgrading our lifestyles as such. Even though my monthly returns is > 50% of my monthly salary - it’s just a alpha return which doesn’t excite me much. It’s just some more money in your account which is giving one stability/ reassurance financially.
I think that once a trader gets detached from money and the emotions which it carries then it becomes easier to book losses if the trade doesn’t go in your favor. And we just accept the fact that if the trade wasn’t in our favor, move ahead and take the next trade (not a revenge one) but a calculated one.
On your question of trading with a partner; i feel is too complicated as such- different personalities and different ideologies with decisions that have immediate outcomes may cause rift easily b/w the two partners. (This is just my opinion- never thought of a trading partner)
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Diversifying trading partners and strategies can be advantageous in a larg-scale operations, as I’ve witnessed their success. During my time in proprietary trading, we operated several desks, each specializing in different strategies. I was handling the strangles and short boxes desk. On volatile days, some desks would yield profits, while others would incur losses. Nevertheless, when taken together, our overall performance was consistently profitable.
Short box was always profitable as it was a completely arbitrage strategy so mostly it was algo based.
Strangles were mainly rules driven. We initiated positions by selling options at a minimum of 2-SDs away from the spot. If the premium reached 3x-4x the premium we initially collected, we would cut our losses and exit the position with no second thought. Additionally, we would take profits on strangles if the premium erosion reached approximately 85-90%. The fundamental principle we adhered to was maintaining trading discipline at all times.
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