Trading Sayings: Fact or Fiction
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Thread: Trading Sayings: Fact or Fiction

  1. #1
    There are plenty of small sayings in trading such as trend is your friend, grab a falling knife and these. I am curious to how a lot of folks are able to think of and if they think that they are useful or completely useless.

    Here is a few

    The Trend is your friend : Certainly, its much better, especially for new trader to go with the flow and momentum compared to try and predict a change and second guess the market.

    Buy Low, Sell High : Nice in principal, but it's quite hard to accurately predict bottoms and tops of market. Often when you believe the market has reached the top and is going to reverse only to see it go higher, so perhaps Buy high, sell higher is more accurate.

    Grab a falling knife If you try it, usually you get hurt, either in trading and in real life lol.

    What others can folks think about, and is there any truth in these expressions?

  2. #2
    The trend is your friend but you haveta earn on the turn too!

  3. #3
    You can not buy low and sell high and exchange with the trend in exactly the exact same time.

  4. #4
    Just heard another one.

    You can not get paid, till you depart the trade!!

  5. #5
    When you proceed with trend - the trend will probably end and
    if you go against trend - the trend will probably last.

  6. #6
    Quote Originally Posted by ;
    Just heard another one.

    You can't get paid, till you depart the trade!!
    Don't like that one. Unrealized PnL remains PnL.

    I mean when you are down 100pips its actual,
    so the same is true on the upside.

  7. #7
    Quote Originally Posted by ;
    Don't like it. Unrealized PnL remains PnL.

    I mean when you're down 100pips its real,
    so the same goes on the upside.
    Its not a expression I composed, one I discovered yet another trader state. I think what it's implying is that you will need to have the ability to exit a trade to really profit from it. You can have a trade making a wonderful profit, but without a decent exit egy you run the risk of giving back it.


    Another I discovered, which can be used for almost anything including trading would be.

    Struggling to program, is planning to fail.

    Which is basically saying in the event that you don't have a egy when trading, there is a good chance you will fail. (or something like this).

  8. #8
    Quote Originally Posted by ;
    Do not like it. Unrealized PnL is still PnL.

    I mean when you're down 100pips its actual,
    so the same is true on the upside.
    I respectfully disagree.

    Let us think concerning purchasing power. If you've got a 200 dollar account and therefore are down 100 pips (suppose 1pip=1 dollar), then your buying power is cut in half. That nice dinner you wished to take the wife to is currently out of reach.

    Even in the event that you remain in the position, the money is gone. When it's all said and done, you may lose even more. What is more, that 100 dollar reduction represents 100 dollars not available to take another position (that of course, could be the 1000 pip homerun trade). That's why a trader has to be worried about capital preservation foremost.

    On the other side, suppose you are in a winning position up 100 pips on
    your 200 dollar account. Can you go to Ruth Cris Steakhouse and show your PnL to buy the meal? Of course not. They need actual money. Along with your profit isn't actual money till you close out the situation. Only ask you broker to send you a check for your 100 dollars while the position is still open. They wont course. So that your buying power has not increased even as your account equity has improved. Yet when your equity fell, you buying power fell in line. Thus they aren't the same.

    It's true that one may be able to put in on and raise leverage based on
    that the 100 pips at the winning trade, but this isn't the same thing. Being up 100 pips or dollars in this case, doesn't pay the lease. Closing out a winning trade for 100 dollars does.

  9. #9
    As soon as you find yourself in a hole the first thing to do is quit digging!

  10. #10
    I agree that the trend is your friend but the secret lies in your ability to recognize the trend in the beginning. If you are entering trades in the last stage of this trend, you will be murdered by the reversal.

    As for buy low sell high, what I do would be to buy the dips in an uptrend and market the rally at a downtrend.

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