Mengapa Kebanyakan Pedagang Menurunkan Uang dan Mengapa Pasar Membutuhkannya Hari Ini, saya mengambil pandangan yang lebih abstrak dan lebih dalam mengenai isu 8220 mengapa kebanyakan pedagang kehilangan uang.8221 Saat Anda membaca, dan saat saya menunjukkan artikel ini, individu dapat melepaskan diri dari Menggiring perilaku dan menciptakan di atas rata-rata (atau di bawah rata-rata) kembali. Konon, agar bisa melepaskan diri dari kawanan ada banyak hal yang harus diketahui tentang diri Anda, kecenderungan manusia dan bagaimana hal ini bergabung membentuk gerakan masyarakat (yang dipasaran pasar saham). Artikel ini akan menunjukkan bahwa apa yang Anda yakini sebagai jalan Anda sendiri mungkin adalah hal yang tepat yang membuat Anda menjadi bagian dari kelompok, dan dengan demikian selalu memasuki dan keluar dari pasar pada waktu yang salah. Ini adalah artikel yang cukup panjang, mungkin membuat beberapa orang marah, namun dalam jangka panjang menerima dan belajar untuk mengatasi masalah yang dibahas dalam artikel ini dapat membantu Anda beralih ke ranah kecil pedagang sukses. Mengapa Sebagian Besar Pedagang Menurunkan Uang dan Mengapa Pasar Memerlukannya Oleh: Cory Mitchell, CMT Sebagian besar pedagang telah mendengar statistik8230822195 pedagang kehilangan uang, 8221 8220 Hanya 5 pedagang yang dapat mencari uang darinya, 8221 atau 8220 Hanya pedagang yang benar-benar menghasilkan uang. 8221 Apapun jumlahnya dari studi terbaru, kenyataannya, banyak pedagang akan kehilangan uang dan tidak bisa dihindari (untuk beberapa halangan keras, lihat The Day Trading Success Rate, The Thorough Answer). Segala macam alasan diberikan untuk itu, seperti kecelakaan pengelolaan uang, buruknya waktu, kebijakan pemerintah yang buruk, peraturan yang buruk atau strategi yang buruk. Semua ini baik dan bagus, dan beberapa dari mereka pasti memainkan peran dalam kesuksesan perdagangan individu82 tapi ada alasan yang lebih dalam. Alasan yang lebih dalam mengapa kebanyakan trader akan kehilangan apapun metode yang mereka gunakan. Maksud saya, bahkan jika semua trader tahu bagaimana (ingatlah untuk mengetahui dan melakukan dua hal yang sangat berbeda) untuk bertransaksi dengan sukses berdasarkan kondisi saat ini, sebagian besar trader akan kehilangan dalam jangka panjang. Mengapa Sebagian Besar Pedagang Menurunkan Uang 8211 Pasar Tidak Merdeka dari Kita, Adakah Kami Mengapa kebanyakan pedagang kehilangan uang dan apa yang sering gagal direalisasikan pedagang adalah bahwa pergerakan kolektif tindakan dan reaksi mereka terhadap tindakan mereka sendiri dan orang lain8217s Tindakan. Suara membingungkan. Pertimbangkan ini: Anda menenun perdagangan, tutup mata Anda dan pukul 8220enter8221 (buka perdagangan). Anda tidak tahu apa yang pasar lakukan (mata Anda masih tertutup), tapi Anda mulai bereaksi terhadap tindakan Anda. Anda bertanya-tanya apakah Anda telah membuat keputusan yang tepat, jika Anda harus menyesuaikan stop loss Anda atau jika Anda harus masuk lebih awal atau lambat . Itu terus terjadi setelah Anda membuka mata Anda dan melihat bagaimana tindakan Anda (perdagangan) bertindak dalam kaitannya dengan tindakan dan reaksi orang lain. Bahkan trader berpengalaman pun bisa mengalami emosi ini. Dengan kata lain, pasar adalah lingkaran umpan balik raksasa, yang menunjukkan pedagang (dan siapa saja yang melihat pasar) sebuah termometer yang membaca tentang suasana sosial di mana para pedagang, dan oleh masyarakat penyuluhan, beroperasi. Sebagian besar pedagang nampaknya memikirkan pasar adalah sesuatu yang memiliki nilai eksternal diluar harga yang diatribusikan oleh pedagang. Saya lebih suka menganggapnya sebagai ukuran real-time dari pandangan masyarakat tentang kemampuan produktif mereka sendiri atau lebih sederhana lagi. Bila pasar dipahami, gagasan bahwa setiap orang bisa menghasilkan uang tidak hanya tidak akurat tapi tidak mungkin dan menggelikan. Setiap orang menghasilkan uang berarti tidak ada pasar, karena siapa yang akan mengambil sisi lain dari perdagangan Selain itu, kebanyakan pedagang merasa bahwa mereka dapat bergerak dengan kerumunan untuk menghasilkan keuntungan (kertas), dan kemudian keluar sebelum kerumunan, mengubahnya Perdagangan menjadi keuntungan nyata. Secara teori ini terdengar, tapi ingat semua orang mulai melakukan hal yang sama. Ini adalah gerakan kerumunan yang memungkinkan pedagang menghasilkan uang di kali. Tanpa sebagian besar pedagang yang datang ke pasar keputusan yang sama tidak akan bergerak. Dibutuhkan keyakinan oleh banyak pedagang untuk menciptakan sebuah tren, maka dibutuhkan penerimaan euforia bahwa ini adalah norma baru8221 untuk mengakhirinya dan memperbaikinya. Kemudian, dibutuhkan kekecewaan massal untuk menabraknya dengan cara lain. Mengapa Kebanyakan Pedagang Menurunkan Uang 8211 Hanya Individu yang Dapat Mengalahkan Pasar, Bukan Orang Kerumunan (dan orang banyak adalah orang 80-90) Pertimbangkan sejenak jika setiap pedagang mengikuti peraturan yang tidak mempertaruhkan lebih dari 1 akun mereka per perdagangan dan menggunakan yang serupa Strategi yang dilakukan oleh para profesional. Stop loss order akan memicu semua tempat dan harga akan mengembang dan mengempiskan persis seperti yang mereka lakukan sekarang dengan orang-orang yang mengikuti strategi mereka sendiri (dan berbagai tipe) Dengan kata lain, setiap orang yang mencoba melakukan hal yang sama benar-benar menciptakan gerakan pasar yang sama. Karena semua orang melakukan hal yang mereka sendiri. Inilah sebabnya mengapa kebanyakan pedagang kehilangan uang dan inilah pedagang paradoks yang harus diatasi, karena seperti yang diproklamirkan oleh Master Oogway di film Kung Fu Panda 8220Salah satu kali memenuhi takdirnya di jalan yang dia ambil untuk menghindarinya.8221 Untungnya, sama seperti hampir tidak mungkin Untuk meyakinkan seekor banteng untuk menjadi beruang begitu dia mengambil posisi, akan lebih tak terduga lagi untuk meyakinkan setiap pedagang untuk berdagang dengan cara tertentu. Intinya adalah, tidak masalah bagaimana orang bertransaksi sekarang, atau jika semua orang diperdagangkan sama persis, hal itu akan tetap kalah. Upaya massa untuk menghindari hal ini (atau menciptakan keuntungan) menciptakan ketegangan yang akhirnya mereka gantung. Mengapa Kebanyakan Pedagang Menurunkan Uang 8211 Tidak Memahami Sifat Sejati Pasar Dengan pedagang pengalaman dapat belajar untuk bergerak bersama orang banyak, dan juga menyadari sifat-sifat yang berubah-ubah (dan sifat mereka sendiri berubah-ubah juga). Pedagang juga akhirnya bisa mengetahui bahwa mood sosial mendikte pasar dan berita. Hal ini secara langsung bertentangan dengan pandangan umum bahwa berita dan pasar mendikte suasana sosial (lihat: Apakah Berita Buat Mood Sosial, Atau Adakah Mood Sosial Buat Berita) Pedagang yang berhasil menemukan sesuatu yang sesuai dan tetap bertahan, jangan biarkan orang lain menarik diri. Mereka jauh dari strategi mereka. Di sinilah kebanyakan pedagang salah dan mengapa orang banyak kehilangan uang. Meskipun kebanyakan usaha terbaik mereka tidak bisa menarik diri dari kerumunan saat hal itu benar-benar penting. Ketika semua teman Anda membeli saham dan membicarakan tentang minyak yang berusia 200 atau 20 (atau berapa pun jumlahnya hari ini) dan analis di seluruh TV mengatakan demikian, sulit untuk mengambil pandangan yang berlawanan. Lagi pula, jika Anda bertaruh melawan orang lain dan Anda salah, teman Anda menertawakan Anda karena mereka berpikir keuntungan kertas mereka yang terus berkembang akan segera diantarkan ke bank. Anda mengalami penyesalan karena kehilangan uang dan mungkin juga merasa malu secara sosial. Dan surga melarang Anda benar dan orang membenci Anda karena Anda baru saja menghasilkan uang saat mereka kehilangan baju mereka. Terdengar konyol Perhatikan kegemparan publik saat demonstrasi Menduduki Wall Street, atau orang-orang merasa sangat marah atas dana lindung nilai dan pedagang yang menghasilkan miliaran dolar dengan melihat keruntuhan harga perumahan dan mengambil keuntungan darinya. Atau manajer yang merasa tidak senang karena mendapatkan pekerjaannya Sementara beberapa karyawannya dipecat. Pedagang yang menang dan analis yang benar sering kali dikelompokkan 8221 selama pasar utama berubah saat mayoritas kehilangan. (Ingat pasar adalah cerminan masyarakat dan indikator utama ekonomi, jadi ketika saham bergerak ke bawah ekonomi tertatih-tatih atau sudah dalam kemunduran dan oleh karena itu orang sudah menjadi tepi8221 sendiri). Sangat mudah untuk mengatakannya. Saya akan mengikuti kerumunan orang dan kemudian tahu kapan harus keluar.8221 Sebenarnya melakukan itu adalah sesuatu yang sangat berbeda. Itulah mengapa orang banyak bergerak bersama. Ini sebagian besar disebabkan oleh kecenderungan manusia untuk mengekstrapolasi Tren. Trend ekstrapolasi adalah kecenderungan memproyeksikan kondisi saat ini ke masa depan, seringkali dengan asumsi semua hal lainnya akan tetap sama. (Lihat Pasar Saham Bukan Fisika Bagian 1 untuk informasi lebih lanjut mengenai hal ini). Dan jangan salah, sebagian besar hedge fund dan reksa dana tidak berbeda, paling banyak mengikuti investor ritel dan pedagang, walaupun biasanya tidak terlalu ekstrim dari trader yang tidak berpendidikan yang lebih cenderung untuk benar-benar menghapus akunnya saat keadaan menjadi buruk. Yang benar-benar menarik adalah bahwa sementara hedge fund bisa menghasilkan rata-rata 20 tahun selama 20 tahun terakhir, rata-rata investor dalam dana tersebut memiliki kecenderungan tinggi untuk menghasilkan jauh lebih sedikit dari itu. Mengapa Karena mereka berinvestasi dan mengeluarkan dana mereka pada poin yang salah, sama seperti yang mereka lakukan di pasar (lihat video singkat di akhir artikel ini). Dana lindung nilai atau reksa dana adalah pasar (mikro). Dimana investorstrader dapat melakukan deposit dan withdraw berdasarkan bagaimana mereka berpikir bahwa dana akan dilakukan. Catatan samping Pedagang dan investor juga harus sadar akan bias penjagaan 8220.8221 Kita cenderung mendengar lebih banyak cerita tentang orang-orang yang melakukan pembunuhan daripada mendengar tentang orang-orang yang kehilangan segalanya karena orang-orang yang kehilangan segalanya hilang dari pandangan publik dan tidak membicarakannya. Beberapa orang yang menghasilkan uang pasti membiarkan semua orang mengetahuinya dan dengan demikian menciptakan semacam ilusi. Secara sengaja atau tidak sengaja bahwa seseorang dapat melakukan apa yang mereka lakukan. Sadar juga, semua orang menetapkan untuk menjadi individu dan memperdagangkan dengan cara mereka sendiri, dan dengan berbuat begitu, kebanyakan orang akan sampai pada kerumunan yang kehilangan uang (ingatlah Guru Oogway). Mengapa Karena setiap orang membiarkannya terjadi .. tanpa disadari. Suasana sosial mereka, entah itu optimisme, keserakahan, ketakutan, dll sepertinya didorong oleh mood sosial yang sama lazim di masyarakat. Bukanlah kesalahan bahwa individu mulai menyukai jenis mode yang sama seperti yang dikenakan setiap orang. Dalam usaha untuk mengubah, mayoritas masyarakat akhirnya berubah bersama, bergerak menuju keinginan yang sama dan menjauh dari ketidaksukaan serupa. Karena itu, apa yang ditawarkan pasar memberikan hal yang pasti yang akan memancing pedagang ke keramaian. Misalnya, seseorang yang memiliki sedikit pengalaman berinvestasi di saham ingin terlibat karena orang lain berada di lingkaran sosial mereka, iklan disiarkan di tv dan bahkan penyiar berita malam mereka berbicara lebih banyak tentang bagaimana pasar begitu bagus. Dalam lingkungan ini Anda dapat yakin akan ada banyak bantuan untuk meyakinkan investor ini kepada orang banyak, mengajari mereka untuk menjadi bagian dari kerumunan dan memulai mereka ke dunia orang buta yang memimpin orang buta. Mengapa Sebagian Besar Pedagang Menurunkan Uang 8211 Ekstrim Memerlukan Hampir Setiap Orang Mendapatkan Onboard Meskipun mungkin mulai cerah, Anda mungkin masih bertanya-tanya bagaimana mungkin kebanyakan orang kehilangan uang dan bagaimana mereka tampaknya bergabung dengan orang banyak pada waktu yang tepat. Bila suasana sosial, seperti misalnya, membuat orang atau masyarakat, sangat sulit melihat gerakan untuk apa yang terjadi. Sesuatu yang lewat akan berlalu (seperti suasana hati kita yang terombang-ambing) 8230 seperti pada Menggila bola lampu tulip (lihat: Delusi Populer Luar Biasa dan Kegilaan Orang Banyak oleh Charles Mackay). Jadi orang membeli dan membeli dan membeli, lalu orang lain melihat ini dan membeli dan membeli dan membeli. Lalu ada orang-orang yang bertahan, dan mengatakan tidak, saya tidak melakukan itu lagi. Lagi pula, saya mendengar 80 analis sudah bullish sehingga tidak bergerak menguat.8221 Tetapi pasar terus berdetak lebih tinggi dan beberapa orang yang bergabung dan membeli. Beberapa masih bertahan dan pasar terus berdetak lebih tinggi. Akhirnya, 85 dari populasi adalah bullish, dan masih ada beberapa stragglers8230 dan pasar terus naik. Orang-orang memproklamirkan prestasi mereka dan melantunkan bahwa siklus boom dan bust adalah sesuatu dari masa lalu. Akhirnya, hampir semua orang telah menjadi seekor banteng, memiliki persediaan, dan jika mereka memutuskan untuk tidak membeli, mereka telah menyerah (atau diminta untuk tutup mulut) saat mencoba memperingatkan orang lain untuk tidak membeli dan pasar juga akan menurun. Bagan di bawah ini menunjukkan hal ini dengan cara yang sedikit berbeda. Karena tindakan lebih penting daripada berbicara, ketika manajer dana hampir tidak memiliki uang tunai, itu berarti mereka benar-benar ada di pasar dan itu berarti pembalikan kemungkinan akan segera terjadi. Masalahnya adalah bahwa pasar pada umumnya tidak membalikkan posisi yang rendah sampai dana investor masuk, dan hal itu tidak bergerak secara signifikan lebih tinggi sampai uang ditarik keluar dari pasar dan sebagian besar dana investor memegang banyak uang untuk diinvestasikan kembali. Sumber: Robert Prechters edisi April 2010 dari the Elliott Wave Theorist. Pasar tidak mungkin mundur ke tingkat signifikan sampai hampir semua orang berada di satu sisi. Yang berarti hampir semua orang yang bergabung dengan partai tersebut terlambat akan kalah. Sekelompok orang mungkin saja memutuskan untuk menunggu, tapi begitu juga pasarnya. Dan jika orang terbagi maka pasar akan bergerak dalam mode mulai. Orang-orang adalah katalisator dan tanpa orang-orang untuk menciptakan sebuah pasar yang ekstrem dan akan menjadi ekstrem dan sebaliknya, mengingat pasar tidak bertindak dengan sendirinya, kita adalah pasar. Dengan kata lain, siklus boom dan bust tidak akan berakhir. Kita maju dan mundur dan kemudian maju lagi. Mencoba untuk membuat undang-undang siklus boom dan bust jauh tidak lebih dari sekedar pandering politik, dan merupakan hasil dari proses mental yang sama yang menciptakan ledakan dan kehancuran di tempat pertama. Sekali lagi saya merujuk kembali komentar Tuan Oogway8217 di Kung Fu Panda 8220Satu kali sering memenuhi takdirnya di jalan yang dia ambil untuk menghindarinya.8221 Upaya politik untuk menghentikan mogok kerja tidak lain adalah memenuhi takdir kita di jalan untuk menghindarinya, masalah lain adalah Hanya dibuat atau bubblecrash terjadi di tempat lain. Pasar tidak lebih dari sekedar suasana sosial masyarakat. Peserta mengekspresikan pandangan mereka tentang nilai produktif kolektif mereka sendiri. Hal ini dapat disederhanakan lebih lanjut dengan mengatakan bahwa produktivitas saya sendiri sangat ditentukan oleh keseluruhan suasana hati saya. Jika saya merasa putus asa, saya tidak bekerja sekuat tenaga, dan saya menjual saham. Jika saya merasa baik saya bekerja keras, bermain keras dan membeli saham. Hal ini berlaku untuk hampir semua orang dan sementara pengalaman individu bervariasi, pada tingkat sosial, hal itu dimainkan dengan cara yang sama. Sampai hampir setiap orang (yang memperhatikan kerangka waktu itu, dan memiliki kemampuan dan minat untuk berdagang) dalam tren, ia tidak akan berhenti. Tren akan terus berjalan, menarik lebih banyak orang, dan saat mencapai massa kritis (yang tidak dapat dilakukan oleh hampir semua orang di dalam kapal) terjadi pembalikan. Perubahan keberuntungan ini (semakin buruk) menyebabkan kekhawatiran dan kemudian panik sebagai pembalikan penuh terjadi. Dan seiring suasana masyarakat yang terus tumbuh semakin gelap orang merasa lebih putus asa dan melepaskan gagasan aneh menghasilkan uang dengan aset sehingga aset terus turun. Orang kemudian menyalahkan dan memilih pertengkaran dengan orang lain karena musibah malapetaka mereka dan pedagang sukses yang tidak memiliki kontrol lebih terhadap situasi daripada orang lain. Ini adalah hasil dari kecenderungan manusia lain untuk membingungkan sebab akibat dengan kejadian yang terjadi bersamaan satu sama lain (lihat 8216devil memberi Anda contoh yang bagus di Pasar Saham Bukan Bagian Fisika III dan juga melihat contoh 8216Probabilitas dalam Trading8217 contoh di Probabilitas: Apa kemungkinan Probabilitas dalam Trading dihitung salah Bagian 1). Suasana sosialnya sendiri yang menciptakan situasinya, dan suasana sosial masyarakat tempat mereka (kita) menjadi bagian dari, membantu menciptakan dan membeli. Pembalikan kemudian mencapai titik ekstrim bearish dimana orang tidak melihat harapan, tapi masih ada saham di luar sana dan emas untuk dibeli dan beberapa mulai mulai membeli dan keseluruhan proses mulai lagi menciptakan gelombang tingkat yang lebih kecil dan lebih besar sepanjang waktu. Mengapa Kebanyakan Pedagang Menurunkan Uang 8211 Game Bilangan Sederhana Komentator keuangan akan membuat pernyataan seperti 8220Para manajer keuangan profesional tidak dapat mengalahkan tolok ukur SampP 5008230.blah blah blah.8221 Benar. Tapi bukan manajer uang profesional yang menunjukkan ketidaktahuan mereka, kritikus inilah yang tidak mengerti apa-apa tentang pergerakan pasar. Sebagian besar pergerakan pasar diciptakan oleh manajer uang profesional yang mengelola triliunan dolar dalam aset, dan juga oleh profesional lain yang perlu melakukan transaksi atau melakukan lindung nilai risiko untuk menjalankan bisnis mereka. Oleh karena itu, jika pasar naik 10 dalam setahun, itu karena para manajer dana profesional ini rata-rata membeli pasar naik 10. Oleh karena itu, tidak mungkin sebagian besar manajer uang profesional menghasilkan lebih dari 10 tahun itu, karena akan menjadi Setara dengan meminta seseorang untuk mengalahkan mereka sendiri di permainan tenis. Pengembalian akan disebarkan dari hasil pengembalian negatif hingga tiga digit, namun rata-rata akan menghasilkan sekitar 10, dikurangi biaya pengelolaan dan biaya yang berarti sebagian besar manajer investasi akan mengalami kinerja buruk. Jika pasar naik 10, rata-rata return hedge-fund mungkin berada di rata-rata 8 sampai 9 setelah biaya, mungkin lebih rendah. Mayoritas investor dan trader tidak akan mengalahkan benchmark karena mereka sendiri menciptakan dan merupakan bagian dari benchmark itu. Apakah ini berarti pasar mematuhi Hipotesis Pasar Efisien. Tidak semuanya. Pedagang tertentu berhasil mengungguli secara konsisten. Juga, mengingat bias 82221 singkat yang disebutkan sebelumnya. Banyak pedagang dan investor pemula datang ke pasar dengan beberapa tagihan dan kemudian kehilangannya. Ada arus mantap dan terus-menerus dari orang-orang ini. Mereka memberi makan kitties dari pedagang yang sukses. Juga, fakta bahwa begitu banyak orang menumpuk ke (dari) puncak pasar (pantat) berarti ada peluang bagus bagi mereka yang dapat tetap memandang secara obyektif di pasar. Karena kebanyakan pedagang berdagang dalam kerangka waktu yang lebih pendek daripada investor, pertimbangkan contoh ini. Pada hari pertama pasar naik 1 dan pada hari ke 2 turun 1. Sebagian besar pedagang akan sangat dekat datar dan kemudian mengurangi biaya dan mereka berada di dalam lubang. Beberapa pedagang akan naik secara signifikan, sementara yang lainnya turun secara signifikan. Pedagang mana yang menguntungkan dan yang merugi dapat berubah dari hari ke hari dalam beberapa bulan ke depan karena pergerakan naik dan turun serupa terjadi di pasar. Pecundang yang konsisten akan turun, memberi kontribusi pada sejumlah besar pedagang yang kehilangan uang. Pedagang yang memang menguntungkan kadang kala, tapi tidak terlalu sering, perlahan bergerak menuju akhirnya meluncur dari grid pasar juga. Pertimbangkan juga hal ini. Agar kisah kejayaan terjadi ... seperti pedagang yang menghasilkan 100. 50082302000 kembali (entah dalam satu hari, satu tahun atau beberapa) berapa banyak pedagang harus kehilangan baju mereka (atau melepaskan keuntungan) agar hal itu terjadi Banyak Lihatlah Dengan cara yang berbeda. Pedagang hari itu yang menghasilkan 6.000.000 tahun lalu mendapat uang itu dari suatu tempat. Karena pedagang eceran kecil sebagian besar terdiri dari pedagang (jumlahnya tinggi, kecil nilainya dibandingkan dengan profesional) kemungkinan 6.000.000 orang diambil dari pedagang eceran beberapa ribu dolar setiap kali. Seseorang kehilangan uang (memberikannya kepada trader yang sukses ini) atau melepaskan keuntungan (membiarkan trader sukses mendapatkan keuntungan). Bagi seorang pedagang harian untuk menghasilkan 6.000.000 dalam setahun, itu berarti sekitar 120 orang kehilangan 50.000 orang dan masing-masing memberikan 50.000 masing-masing keuntungan potensial. Tentu saja ini bukan hubungan langsung, lebih dari itu. Tapi memang memberikan perspektif yang tidak sering dipertimbangkan. Dengan kata lain, hal yang mendorong orang berbondong-bondong ke pasar (keuntungan besar) ironisnya berarti sebagian besar orang akan kehilangan keuntungan dari pertukaran itu. Dengan sentuhan ironis yang lain, ketika orang-orang terusir ke pasar sekaligus karena keserakahan dan keyakinan bahwa sebuah era baru telah dimulai, hal itu membawa kebalikannya. Sebagai Individu Terlepas Dari Orang Kerumunan Orang banyak bukanlah orang banyak sampai sebagian besar terlibat. Massa tidak bisa menciptakan tren yang kuat sampai sebagian besar terlibat. Tren tidak akan berhenti sampai hampir semua orang naik dengan kerumunan. Saat semua orang naik, itu akan berbalik. Karena kemungkinan uang 8220big8221 (yang harus diperdagangkan) yang memulai tren dan kemungkinan akan menjadi yang pertama, sebagian kecil pedagang dengan kantong terbesar cenderung bertahan di lingkaran pemenang, bahkan jika itu berarti membuat pasar Hasil rata-rata. Sejumlah besar pedagang kecil (persentase yang sangat tinggi dari semua pedagang) yang terjun dengan tren terlambat (atau terlalu dini) dan kemudian cenderung keluar terlalu terlambat (atau terlalu dini) akan menciptakan persentase pedagang yang tinggi yang kalah. Karena itu, sebagian besar pedagang kehilangan uang tak terelakkan di pasar keuangan. Hanya segelintir orang yang mengerti konsep ini, yang menerima bahwa apa yang terasa alami dan bagus kemungkinan pilihan yang salah, bisa berhasil menghasilkan uang di game ini. Meskipun artikel ini memberikan konteks yang luas, namun juga berlaku untuk skala kecil. Pedagang hari terjebak dalam perilaku orang yang sama tanpa menyadarinya. Stok yang tidak lagi berhenti, yang mereka saksikan sepanjang hari sebelum akhirnya melompat hanya untuk memilikinya bergerak sebaliknya adalah fenomena yang sama dalam skala yang lebih kecil. Pembeli dan penjual bisa kelelahan, gembira atau tenang pada kerangka waktu. Mereka mengalami singkat dan ledakan panjang emosi yang berakibat pada reaksi tindakan jangka pendek dan jangka panjang, yang semuanya mengarah pada pola yang terlihat pada semua kerangka waktu. Ada juga tingkat bullishness dan bearishness di seluruh kerangka waktu, yang berarti pada saat berjalan dan pembalikan akan agresif dan pada saat lain lebih tenang bergantung pada seberapa banyak pedagang (dan masyarakat) terlibat. Pertimbangkan juga bahwa jika rata-rata patokan di suatu tempat di dekat apa yang dibuat oleh para profesional rata-rata 8211let8217s katakanlah 15year8211 pedagang eceran rata-rata berusaha membuat lebih dari ini, dan kemungkinan mempertaruhkan terlalu banyak untuk melakukannya. Bagi orang-orang yang ingin mencari nafkah dari perdagangan, sulit untuk melakukan hal itu dengan membuat 15 tahun di akun perdagangan 30.000 orang. Oleh karena itu, investor ritel cenderung melakukan over trade dan kehilangan sebagian besar dari apa yang mereka miliki. Secara langsung berkontribusi terhadap rata-rata 15 rata-rata manajer hedge fund yang konsisten. Bagi beberapa manajer hedge fund untuk menghasilkan 15 miliar dolar berarti BANYAK pedagang kecil perlu memberi makan kucing itu. Satu-satunya saat kemenangan mayoritas adalah ketika terjadi pergeseran kapasitas produktif masyarakat secara keseluruhan, seperti rally saham yang mengesankan dari tahun 808217 dan 908217 8211 8211 bagian terakhir yang lebih banyak euforia (gelembung). Menurut pendapat saya, ada beberapa kemajuan besar dalam teknologi selama masa itu yang berpotensi melakukan banyak kebaikan, dan dengan demikian kenaikan itu diperlukan. Sayangnya, sebagian besar kita menyia-nyiakan potensi potensial itu terutama untuk menciptakan produk dan layanan yang menurunkan produktivitas, bukan meningkatkan produk yang memberi kita pelarian dari dunia nyata sebagai lawan untuk membantu kita memanfaatkan dunia nyata. Pergeseran fundamental utama ini tidak sering terjadi, yang berarti bahwa di tengah-tengah persinggahan antara kebanyakan pedagang dan investor akan kehilangan uang. Mengapa Sebagian Besar Pedagang Menurunkan Uang 8211 Bottom Line Intinya adalah bahwa pedagang harus berpegang pada rencana dan perdagangan yang terdefinisi dengan baik yang merencanakannya walaupun tidak nyaman (dan akan sering terjadi). Sebagian besar penduduknya, dan dengan demikian sebagian besar pedagang, terjepit di bawah tekanan tidak nyaman ini dengan cara yang sama seperti yang mereka dapatkan untuk membeli cokelat daripada wortel. Karena sebagian besar penduduk lebih dari senang untuk bergabung dengan orang banyak. Dengan memiliki beberapa disiplin dikombinasikan dengan strategi yang layak adalah mungkin untuk menjadi salah satu dari sedikit pedagang sukses yang benar-benar dapat meninggalkan kerumunan sebelum meledak dengan sendirinya. Saya menyambut komentar, sanggahan atau pertanyaan yang masuk akal, apakah setuju atau tidak setuju. Ada beberapa bacaan bagus tentang bagaimana biologi kita tampaknya dihubungkan dengan perilaku orang banyak. Robert Prechter telah menyusun sebagian dari bukunya 8220 Prinsip Gelombang Perilaku Sosial Manusia dan Ilmu Pengetahuan Baru 8220. Seperti yang dijanjikan, inilah video singkat tentang bagaimana investor hedge fund biasanya masuk dan keluar pada waktu yang salah, bahkan Ketika hedge fund berhasil. Video: Prechter on Hedge Funds and Herding Perhatikan deskripsi mengejutkan tentang bagaimana investor hedge fund bertingkah laku: Cory, saya tersandung ke halaman ini sambil mencari angka berapa persen populasi investasi memperdagangkan Futures, untuk sebuah buku yang saya tulis. Tidak beruntung menemukan angka itu, tapi terkadang saya suka membaca artikel yang orang posting tentang menghasilkan uang. Biasanya saya menemukan humor dalam komentar para nabi palsu yang menunjukkan bahwa mereka dapat menunjukkan kepada Anda bagaimana menghasilkan uang. Saya mulai membaca artikel Anda dan harus mengatakan pujian kepada Anda karena berbicara dengan jujur. Teman bertanya kepada saya secara teratur bagaimana menghasilkan uang, dan saya selalu memberi tahu mereka bahkan untuk tidak mencobanya. Investasikan saja, perhatikan efisiensi pajak Anda, karena biaya dan keuntungan adalah satu dan sama, dan seiring waktu berharap untuk yang terbaik. Satu hal yang saya tidak setuju dengan meskipun adalah komentar Anda tentang penyimpangan statistik. Ini tidak benar sebagai fungsi interval waktu yang Anda gunakan dengan interval 1 tahun. Seorang trader profesional yang aktif dapat ditinjau setiap tahun dengan kinerja 250 interval, rata-rata dan standar deviasi. Ketika saya memikirkan kinerja perdagangan pribadi saya, begitulah saya selalu melihatnya, berapa persen dari HARI yang saya tukar secara positif. Selama karir saya yang memberi saya beberapa ribu poin data. Dua komentar lain yang bisa saya buat bagi siapa saja yang masih ingin bermain game ini, permainan saya tidak lagi bermain sendiri. Aturan 1 8211 (dari nomor aturan 97 18217s) 8211 Pedagang hebat bukanlah seseorang yang melihat masa depan dengan benar, itu adalah seseorang yang mengelola risiko mereka dengan benar. Jika Anda bermain game yang pada dasarnya adalah 5050 dan Anda mengambil keuntungan dengan cepat dan membiarkan kerugian Anda berjalan. Anda sekarang menciptakan distribusi skala yang tidak merata antara pemenang dan pecundang Anda, dan Anda sudah mati sebelum memulai, waktu akan segera menyelesaikannya dengan cepat. Ini membutuhkan kontrol emosional yang serius, yang hampir membutuhkan kepribadian sosiopat. 2 - Beberapa orang benar-benar hanya pedagang spektakuler yang berpikir bahwa Anda dapat bermain melawan orang-orang ini adalah setara dengan saya yang berpikir bahwa saya dapat berbaris di Tendangan Serangan Lurus melawan Akhir Defensif 300lb. Hasil akhirnya tidak akan bagus. Semakin canggih produk 8211 pikirkan pilihan 8211 semakin buruk kerugian yang Anda dapatkan. Tidak ada yang membaca pilihan perdagangan ini. Sekali lagi, terima kasih atas kejujuranmu. Ini langka. Matt Williamson mengatakan: Tidak ada yang membaca ini yang seharusnya bisa diperdagangkan. Pilihan keduanya jauh lebih mudah dan jauh lebih sulit untuk diperdagangkan. Bila terstruktur dengan benar, perdagangan yang menguntungkan bisa didapat saat salah arah, timing, dan volatilitas, tiga komponen utama harga pilihan. Singkatnya, hanya karena ANDA tidak bisa melakukannya, jangan biarkan selimut dispersi Anda pada semua orang. Saya melakukannya dengan sukses sebagai pedagang eceran. Hal itu bisa dilakukan. Ini sangat sulit untuk mengetahuinya. Matt, Dengan segenap hati hatiku, aku berharap yang terbaik. Saya tidak tahu saya telah membalas secara otomatis, jadi saya menerima komentar Anda hari ini di e-mail saya. Saya akan berdiri dengan apa yang saya katakan dan memberi tahu Anda bahwa ini berasal dari seseorang yang memulai karir mereka di sebuah perusahaan derivatif butik dan kemudian memegang gelar sebagai kepala perdagangan di tiga perusahaan perdagangan terbesar di dunia. Kompetensi inti saya adalah derivatif non linier dan penataan sintetis, dan saya sangat suka berdagang dalam 1.000 klip banyak, namun tidak memikirkan penurunan 10 sampai 50 ribu sekaligus, dan telah membawa risiko pemogokan kadaluarsa lebih dari 200.000 pada beberapa Kesempatan, yang agak gila, bahkan menurut standar saya. Saya juga anggota NYMEX, COMEX, AMEX, CBOT, CBOE, dan CME sebelum saya berusia 27 tahun. Saya pensiun pada usia 34 tahun karena saya benar-benar terbakar habis dan tidak dapat melakukannya lagi. Saya juga tidak pernah mengalami bulan yang hilang dalam karir saya karena arbitrase menghilangkan variabilitas yang saya yakin Anda lihat mencoba untuk berdagang opsi secara terarah. Saya berharap Anda baik meskipun. Salam, - wrldtrst Hei lagi Cory, saya baru saja membaca artikel ini dan itu benar-benar berdering benar dengan saya. Saya mencoba untuk mengerti mengapa semua orang di sini di Inggris sangat terkejut dengan Trumps menang. Analis investasi di seluruh papan semuanya menggaruk-garuk kepala mereka dan berkata, "Tidak ada yang melihat ini." Alasannya adalah bahwa semua jajak pendapat dan pers memilikinya di kaleng Hillary. Ini hanya memperkuat bahwa pasar ADALAH perpanjangan dari orang-orang sebagai sebuah massa. Wawasan ini dapat membantu saya untuk memahami bagaimana pasar cenderung berperilaku, apakah Anda menggunakan model itu atau apakah Anda melacak dari pemikiran arus utama ke perilaku pasar, di mana Anda menilai Terima kasih Cory Mitchell, CMT mengatakan: Ini adalah pertanyaan sulit , Karena itu berubah. Sebagian besar waktu untuk mengikuti kawanan sampai batas tertentu. Saya adalah trader tren kebanyakan, jadi ketika hal-hal naik saya adalah pembeli (hanya pada pullback sekalipun). Tapi ada saatnya ketika sentimen itu menjadi terlalu kuat. Jika tren telah naik dan naik turun, akhirnya semua orang mulai menerima begitu saja. Pada saat itu hampir semua orang yang ingin membeli, miliki. Dengan tidak ada pembeli yang tersisa, harga mulai turun. Atau kita juga melihat sentimen ekstrem di sisi negatifnya. Seiring turunnya minyak awal tahun ini dan akhirnya menguntungkan untuk bertaruh pada penurunan tersebut. Tapi begitu Anda mulai membaca media arus utama yang membicarakan tentang lenyapnya minyak, dan hampir semua orang yang Anda ajak bicara mengatakan bahwa minyak telah selesai, biasanya ketika saya mulai membeli (saya juga mulai membeli karena kami berada di dekat posisi terendah 2009 di oil8230bang waktu buruk lainnya dalam sejarah Tapi minyak bersatu secara agresif dari posisi terendah tersebut). Jadi saya melihat sentimen sedikit, tapi biasanya Anda bisa melihatnya dengan melihat grafik jangka panjang (untuk investasi). Anda melihat area jangka panjang di mana harga telah berada di puncak (sentimen terlalu bullish) atau terbawah (sentimen terlalu bearish). Di antara saya biasanya tidak mencari investasi saat orang lain membenci mereka, tapi sejarah yang menentukan adalah saat yang tepat untuk membeli. (Kadang-kadang penyesuaian perlu dilakukan untuk inflasi, pertumbuhan perusahaan, dll.) Perdagangan jangka pendek benar-benar sama, tapi biasanya saya tidak melihat atau memikirkan sentimen sama sekali. Saya hanya memperdagangkan tren dan melakukan perdagangan berdasarkan pahala yang menguntungkan: rasio risiko dan penilaian apakah tren tersebut akan berlanjut atau tidak (berdasarkan tindakan harga baru-baru ini8230 yang memberi gambaran apakah pembeli atau penjual cenderung lebih kuat di atas jangka pendek). Jadi, kebanyakan saya mengandalkan bagan saya, tapi untuk tujuan investasi ketika saya mulai mendengar banyak proklamasi yang sangat bias di pasaran, biasanya saya mulai berdagang ke arah yang berlawanan dengan klaim semacam itu. Hai Cory, terima kasih atas tanggapan yang bijaksana, ini sangat membantu. Juga sebuah posting baru yang bagus hari ini dari Anda, saya berharap saya sudah siap untuk daytrading untuk memanfaatkan wawasan Anda Eric Martin mengatakan: Hai Cory, artikel Nice. Anda berkata, 8220 Menurut pendapat saya, ada beberapa kemajuan besar dalam teknologi selama masa itu yang berpotensi menghasilkan banyak kebaikan, dan dengan demikian kenaikan itu diperlukan. Sayangnya, sebagian besar kita menyia-nyiakan potensi potensial terutama untuk menciptakan produk dan layanan yang menurunkan produktivitas, bukan meningkatkan produk yang memberi kita pelarian dari dunia nyata sebagai lawan untuk membantu kita memanfaatkan dunia nyata.8221 I8217m penasaran dengan produk 8220escape8221 mereka. Saya menduga video game8230 tidak pasti. Bora Yagiz says: what a depressing article. just what i needed8230 Cory Mitchell, CMT says: Or liberating. Each person can forge their own path. Just depends on how you look at it. an article telling you have basically ZERO chance of making can NOT be liberating sorry8230 not more than the motto written on the gates of a concentration camp (8220work makes you free8221). unless, of course, you have a different definition for that word. censoring those who disagree, and leaving only positive comments, eh maybe its depressing because the points the article is making about how traders loose to the markets hit sensitive points within you. maybe you just don8217t want to do the work to investigate these points so become a better trader. how do you think it happens. you wake up one morning and you8217re a great trader. no. it takes your work. most traders have an idea of wht they think the markets are. they romanticize it so they can be the winner. but reality hits and the market doesn8217t care what a trader thinks. its being the market 100 and if you want to capture profits. get in the flow of the markets. This is such a great article and the comments and your replies are worthy of a post in themselves, perhaps you could elaborate on the theme in your reply to Abhi8217s question, there are some real gems there to be polished The whole article has really got me thinking. I have been seriously following investment blogs and websites for a few years now as I find it an intriguing subject matter which straddles many other subjects including behavioural and group psychology and social anthropology (which was actually my subject at university). There are some incredibly bright and interesting people talking and writing about this field and I love to follow these intelligent guys, I wish I could meet them too and listen I also enjoy podcasts, which I would love to hear, if you have one. But, strangely, I am not actually invested in the market as yet. Ha I may be a late straggler and lose everything I am enjoying the debate and insight and often philosophical humour that prevails in the articles, there is a depth in this field which is difficult to find in political, economic or business blogswriting. I8217m in it for the wisdom, philosophy and humour and the personalities of the people behind the blogs. Having said that, naturally I would consider investing and I have a number of fantasy accounts to play with strategies. I have friends who day trade but I would not previously have considered that as a viable way to earn income. But on reading this article, I am thinking day trading would be a very rapid way to learn the reality of trading and the stock market. I feel bad for commenters Fab and Sarbinson8217s accounts of their losses after decades in the market. Would day trading be a kind of microcosmic method of learning about how markets work and how to best read them and work in them for a profit Cory Mitchell, CMT says: Thanks for the feedback. Yes, day trading is like the microcosm of investing. It will show how prices move. Typically patterns that play when day trading also play out over longer time frames as well. While my investing strategies are different than my day trading method, they are based on similar concepts. If the ultimate goal is to just invest, then learning to day trade8211which takes considerable time and effort8211seems kind of pointless. Better off just to focus on learning how to invest. But if day trading is the goal, then by all means focus on that. Whether day trade, swing trading or investing a person only needs to learn one strategy that works for them in order to make money. All other knowledge is excessive, and not required for making money8230but may be accumulated for the sake of interest, or to sound intelligent in conversation Gud Evng Every One, Mr. Cory Mitchell Sir, it8217s v. insightful amp inspiring article, its cutting the noise and provides smart ideas. Thnx kudos to u, for detailed explanations, its v. rare . My name is Amit, a independent research student and rampd pro from India, Apart from research and work i am having passion in Investment Management, Applied Behavioral Finance amp Analytics, Behavioral Science for Investing. writing, reading, learning new things etc i want to utilize my research:analytical, due diligence, attention for detail skills for doing investment analysis and do research based trading aswell, but after reading ur article now i want to adjust the focus i have 1 question in 2 parts - a) sum people says 8220MIMIC 8216ACTIVIST8217 INVESTOR8217S MOVES8221,what ur take on this idea b) whr to find the (activist8217s) foot prints, in India as well Thank you for your time and consideration. Leadership is not about ur title, its about ur behavior. A Wise Man Cory Mitchell, CMT says: a) MIMIC ACTIVIST INVESTORS MOVES, what ur take on this idea People can do this. But ultimately they still need to follow what the successful trader is doing. This is quite hard. It is no different than just following a winning strategy (following a strategy or a person are the same thing). Most people can8217t do it, and end up deviating. So basically no matter what approach you take to the market, assuming it can theoretically produce profits, the ultimate success of that plan relies on the individual8217s ability to follow the plan. If you follow what a winning trader does, exactly, you should be profitable. Yet few who take this approach are8230see video at end of article. b) I do not know the successful traders in india, nor do I follow much about the Indian stock market, so I can8217t offer any guidance there. Cheers, Cory Great article. Now the even greater irony. Even without reading the comments above I would imagine the overwhelming majority of such commenters will indicate they totally understand what makes a trader successful. Cory8211 Thank you very much for your insightful analysis The more I use behavioral analysis in my investing, the more successful it becomes. 8211Steve RUB1G (RUB1G) says: In the end, it8217s all about identifying the kind of market your trading in and recognizing it when it shifts to a different type of market and being able to change strategies that work given the market you8217re trading in. To get to that point, you have to have inherent, God given traits of perception, patience, intellectual capacity and nerve and years of experience. Most don8217t have the innate ability and those that do, usually lack the staying power. That8217s why there8217s so few who are truly profitable. This is a great article. People are so obsessed with numbers they forget the market is entirely psychological and largely qualitative and it8217s why I find markets fascinating. I realized the keep up with the Jones8217s thing ends in doom every time if you stick on that too long. Sell sell sell buy miners. Hi everyone, I keep studying and learning and trying different strategy but none really seems to work I have done courses read books and still I can t find anything that really give me an hedge, so I start wondering do they really exist a profitable strategy I have done long term trading( holding up to 6 month) for 2 years and did well 30 average return per year, I have been day trading for 1 year I m down 10 Cory Mitchell, CMT says: That is a respectable day trading return in your first year. Many people lose all their capital in the first year of day trading. You are likely doing some things right, it is just a matter of continuing to fine tune your approach. Look through your trades, and spot areas you could improve. For example, is there a way to make your losses slightly smaller Does the price tend to run a bit further after you get out If it does you could seeks to expand your profits slightly. Very minor changes over many trades can take you from being a losing trader to a consistently profitable8230but it takes constant monitoring and adjusting to current market conditions. Your other option is to stick to longer term trading, as that seemed to do well for you thank you, yes many times I get out and price keep going up I went from 70 winner to 70 loser since i m studying technical analyses Cory Mitchell, CMT says: In what way The market operates as a leading indicator for the economy. There are times where there seems to be a disconnect though8230. and we will shall see if it continues to act as a leading indicator in the future as more and more central banks interfere with the market. But markets (more accurately: traders and investors) buysell based on what is expected in the future, which means markets move in anticipation (lead), and then based on the trader8217s conditioningbeliefs they buysell based on what they think will happen next, and so on. Very insightful article. Indeed market is irrational. Oil went up yesterday when it seem that oversupply is still rampant in the market. Lost money by betting against it Cory Mitchell, CMT says: Losing trades happen. That is part of trading. But believing oil will fall because of oversupply on a particular day is not a prudent strategy. Oil has been rising for weeks in spite of oversupply. Successful traders trade off things they have tested and that have proven to reliable over and over again. Also, oversupply was the reason for the decline that took oil below 30 in the first place. That information was already priced in. It8217s old news. Almost everybody was on-board with that idea, and that is why oil fell so much. But as the article states, when everyone is on-board the trend can8217t continue. Oil prices had to go up (in the Canadian Investing Newsletter I have been buying commodity stocks since January). Markets move ahead of the news. They started dropping as oversupply became a potential problem, and then fell heavily when it started getting some publicity. But markets are forward thinking8230so the price rises in anticipation of supply eventually dwindling because some oil companies will go bankrupt and as oil producing countries get squeezed financially there is an increased chance of conflict which would further increase oil prices. The drop was priced in, everyone was onboard, which means there was no one left to keep pushing the price lower8230.so it had to go up. As it pushes up, everyone who sold at the bottom is forced to buy and get out of their losing positions, pushing the price up further. Ultimately though, none of this matters. Study the charts and find patterns that work over and over again. They are there. Then don8217t let the news of the day distract you. Trade the pattern when it occurs, and you will find greater success in the markets. Hi mitchell, I have created a simulation chart based on random numbers, resultant chart look very similar to our real market charts, there will be trends small, major and all kind of, now seeing that trends also form in randomized charts and today most trading happen by algo hft machines, which are not following trends in most cases rather selling buy to capture the spread, so it confuses me whether the trend formation happen due to conviction of many tradors or some other reason behind it. Cory Mitchell, CMT says: Great point and question Abhi. I think your question relates to the fact that something appearing similar is different than cause and effect. Mari saya jelaskan. If you go into a casino, you can track whether the roulette ball falls on black or red, or if baccarat hands come up player or banker. If you chart this, you will see trending periods, as well as choppy periods. It will look like a stock chart. Yet we know that the results of the ball falling on red or black or the cards dealt in baccarat are random (assuming fair play). So you have a good question8230if the random charts generated above look like stock charts8230are stock charts actually random I say no. What creates the random charts above can8217t be controlled or impacted by the players in the game. Yet with a stock chart, the players do impact what happens on that chart. I can buy and buy and buy, causing an uptrend. But in the casino it doesn8217t matter what I do, the cards are already determined. So while your random charts may look like a stock chart, the cause and effect are different. Stock charts may appear random, but the underlying driver is fear and greed. On a random chart (or in the casino), fear and greed can8217t affect the outcome of the cards or spin. Stock movements are created by thousands or people (or few) buying and selling based on their future expectations, but then reacting as their expectations come to fruition or not. While I have never tried, it, I doubt the strategies I use would work on random data. They work on real markets because there are moments when you know emotion will kick in, and the market (other people) will react in a very specific and predictable way. I do view markets as random much of the time though8230I can8217t make sense of many of the movements. Yet, trading is about finding those specific criteria and moments where the next move becomes quite predictable. You don8217t have that on truly random charts (or games), and therefore, comparing markets to randomness is likely a fruitless endeavor. The real market is about thresholds and conviction (and other people8217s lack of conviction or changing their convictions), and that is often what drives trends. For example, say I decide to start buying a stock. I don8217t even need a reason, I just start buying. Other traders notice this, and also start buying. Anyone who sold to me is now in a state of pain as I continue to push the price up. Eventually they start buying (or covering their short positions) because they fear missing more upside, or their short positions are becoming too costly. As more buyers step I become the seller, unloading my shares on those people. That8217s the power of markets8230one person or a group of people8217s convictions can drive the price (changing other people8217s convictions, and thus creating a somewhat predictable outcome), which then brings more people into the fray. Then, as the conviction changes again, the same thing happens the other way. The chart may look random, but we collectively affect the outcome8230which makes it not random. This is why most people lose. They chase the price, and then person or group that started the whole move unloads their shares on these people. The way to make money is research and practice ways of spotting where emotion will be high, and a thus a predictable outcome is likely to follow. Most people don8217t know that, and so they buy or sell and hope (with little conviction) they are right8230.and those are the exact people who will create the high emotion trades that make successful traders money. Hi Mitchell, thank you so much for the detailed reply, your blog is eye opening, I agree that, chart look same but the causes are different and in trading it is greed and fear, which a trader can know, until the trader knows about it, stock market is similar to random number chart btw we hear all the time that algo trading in majority, how much the greedfear factor play here I deploy some of the high speed order placing mechanism through the robotic softwares that i8217ve developed but i have no idea on exact mechanism that large autohft trading corp use, it is mixture of man and machine btw you can take a look at apps. techfiedstock for random chart, just need to refresh or press redraw, funny that you will sometimes see very clear support and resistence lines. Although chart is based on pseudo random numbers but i think its not going be radically different from true random generators made using hardware. Cory Mitchell, CMT says: Interesting8230those randomly generated charts do look like a real stock chart. But yes, the causes behind them are different. As for mechanical trading, there is technically no greed and fear on the part of the machine, but it is still impacted by greed and fear since other participants in the market are driven by these emotions. Also, even if the market was all mechanical, the bias and strategies of the traders making the robots would create chartsmovements that look like what we have now. The market is still a zero sum game. Regardless of the input (mechanical or man) the end result stays the same8230the best tradersprograms win, and those that don8217t know what they are doing will lose. right, you are always to the point, I am yet to see any profit thru my frequent scalping8230. but i hope things will be different now on. Excellent article Cory Mitchell, thank you for sharing it. It has been really helpful. Took a day off from trading and came across this article. It8217s certainly one of the best articles on trading I have read. The key takeaway (of many) that I got reading this is that the market is a living organism and is a reflection of the 8220mood8221 of the traders in that particular marketinstrument. What I am beginning to understand and dread is that in a market like futuresES for example, even a single contract bought or sold can have a ripple effect on the market. What I have seen trading a simple suppresis strategy recently seems to support this hypothesis. My results in SIM are much better than in real trading. This leads me to believe that perhaps there are algos running that tracks open positions and number of contracts being traded. For example, if I am looking for a reversal after a run up (I identify my areas of interest premarket and use order flow) and short 10 contracts at my resis area, can these 10 contracts in real trading actually affect the movement Are there algos that track that there are now 10 extra (vs SIM) open short positions and continue to push price higher to set off stops Let8217s say it does push price higher to set off stops, and another trader jumps in to short 5 contracts, will that 5 contracts affect price to move higher Machine learning at it8217s finest happening here Cory Mitchell, CMT says: Yes, on small and large scales that happens. Your orders do affect the market, because someone else is on the other side of the transaction and doesn8217t want to lose. Whether it is one person or hundreds, there is a collective action of those on the other side of the trade to do everything they can to make you lose (and others on your side of the trade as well). And you, and other trades on your side of the market, are trying to do the same to the people on the other side8230whether we like to admit it or not. Here8217s some food for though. I used to trade thinly traded stocks. I would watch the level II and see if I could spot bids and offers which looked like short-term traders. I would then take their shares (whether they were bidding or offering) and then continue to push the price offside on them. The goal was to force them out of their position when they bid or offered to get out of their position at a loss, I would exit my trade at a profit. It is a zero sum game, if I made money, the other trader(s) lost. This is a small scale version of every single transaction that occurs in every market every day8230whether a market is liquid or thinly traded this type of action is going on. It is easier to picture though when talking about only a couple traders battling it out in one stock. It8217s not manipulation, it8217s not unfair, it8217s how the market is set up. Now imagine I and the other trader have millionsbillions of dollars to trade with. Other people may see us going at it, buying and selling to each other like crazy trying to force the other guy out at a loss, but it has nothing to do with technical or fundamental analysis. Other traders may join in, not knowing what is going on. Now you have a scenario which reflects every liquid stockmarket. That is why I only trade off the price action. My goal is to join a trade as soon as I see one side taking victory over the other, then the other side is forced out and I can ride that price wave. The premise is the same as what you talk about. Analysis (in day trading) matters but not as much as most people think. It is more about adaptation. I (or others) can push the price for no reason at all except to make you exit and produce a profit for myself. Other traders can do the same to you or me. I now trade liquid instruments because I didn8217t like picking on other individual traders, but trading something liquid isn8217t any different. I am still trying to take positions where I know the other person is likely to lose. Otherwise I lose. That8217s the game. That doesn8217t mean it8217s impossible to make money though. There are still patterns that develop. If someone noticed what I was trying to do in those stocks, they could have smoked me, I did get smoked from time to time. Trading is much more dynamic than most people think..you are up against thinking and learning peoplemachines. They will not politely let you take their money, they will fight back, and try to take yours. Longer-term there are factors which drive large scale social mood changes which affect prices over the long-term. But in day trading it is more like chess match8211you see what your opponents are doing and they see what you are doing, and both of you are trying to do what you can to win and outsmart others. For example, some days there are may be patterns where traders are triggering false breakouts and then taking the price back the other way. Instead of getting angry and calling the market unfair, notice the pattern and adapt to it. ES is probably one of the best markets. I really like it and it is one of the better ones to trade. But make no mistake, the person who fills your order to get into a trade does not want to lose either. It is not cause for dread though. It is an opportunity. When the price action dictates that buyers or sellers are winning the battle, a fairly consistent price action follows because the losers are forced out. That doesn8217t mean you win every trade8230I only win about 60 to 65 of the time, but more often than not if you watch price action you can see the shift of who is winning. Sometimes you will be wrong, and that is fine, but align yourself with the trend and those who are in a stronger position and the odds will favor you. If you find yourself on the losing side more often, look at the charts8230spot the trend and which traders whereare in a stronger position. Consider why you were fooled into picking the wrong direction (or enteringexiting too early or too late), and then adapt. The Trader Mentoring page has some examples of charts with trades from ES: vantagepointtradingtrader-mentoring showing the types of price spots where the odds shift back into the trendingstronger player8217s favor. What if all traders just went long when their trades went against them Just wait it out. Your cash will be useless until that time but at least it won8217t be a loss. And do some traders not use limit stops OK, I8217m not a trader but am trying learn how to manage risk better. Cory Mitchell, CMT says: Lots of traders make 10 or higher each year. But the vast majority don8217t, even if the hedge fund or long-term average gain of stock market is 10. As the video at the end of the article describes, even if a hedge makes 10 a year (or more), most investors within that fund actually lose money, because they deposit money and pull it out at the wrong times. Hi, what if everyone understood that and stopped trading 8211 forever And started being productive instead What if it was against the law to trade accounts below 500 000 Oh, and side notice 8211 the big money goes bust to from time to time, not only retail. And PS. the answer to these questions is probably a world war or spoliation, plunders like in the old days. There must be the transference of capital goods from small to big, weak to strong 8211 no matter what 8211 so pay your dues and thank almighty you don8217t have to kill to eat. I must add something I noticed recently. Brokers have been putting out comparisons for how profitable their traders are. Like discussed here: forexmagnatesexclusive-q2-2013-us-forex-profitability-report-35-of-retail-clients-gain Beware such numbers, as they don8217t tell the whole story. In a given quarter about 35 of traders may make money, but 65 are losing. Span that out over several quarters and the statistic indicates that many of the profitable traders will gravitate to the negative sphere. Yet it may not show up in the quarterly stat which will usually stay around 3565. Unless it is the same 35 staying profitable, the statistic is useless. To stay in that 35 you need to be consistently profitable, but this stat doesn8217t address that. The 35 that are profitable could be different every quarter and in the quarters they aren8217t profitable they are part of the losing group. We also need to consider survivorship bias. The stats considers trader accounts that are active during the quarter. If you completely draw down your trading account this quarter you are counted in the losing 65. But since you will be inactive next quarter (no money and no trading) you aren8217t counted as a loser again. But this tidbit throws a wrench the idea that 35 of the traders are profitable. Because it doesn8217t count all the guys who went broke in previous quarters. The stat that needs to be divulged is this: Of all the accounts opened since the brokerage began, how many are showing a profit today (or a profit when the account when the account was closed) You ask that, and I am sure you will get a much much smaller of profitable traders. A vast majority of the accounts opened will be inactive due to depleted funds. Here is an example to make this clear. While I was a trader on a trading floor we had about 30 full-time traders. In a given month at least 25 were profitable (but they were all profitable overall, otherwise they wouldn8217t have a job). A high percentage of winners. But what the stat doesn8217t tell you is how many traders tried to make it onto the floor and failed. Over the course of 6 years we probably had about 10 guys a month come in for training and attempted to make money. That is about 720 potential traders. They all failed eventually or a few became part of the 30 full-timers and other formerly profitable traders fell out. So instead of 25 out of 30 being profitable (this is the type of stat the brokers are divulging, which is bullshit), we need to count the guys who blew up. The real stat is that 25-30 out of 750 were profitable, or about 4. If anyone has a historical brokerage account stat like that I would love to see it8230especially if it proves me wrong. helen senior says: FYI trading is not a zero sum game. Most traders are under this massive delusion. Market makers have an obligation to provide liquidity. The odds are extremely high that your broker is providing the opposite side for your trades. When you lose, that money becomes their profit, plus the commissions. So with their variable spreads and your stop losses, their software aims to take as much money out of your account as possible. Once they8217ve made their quota, the traders who are lucky enough not to have gotten stopped out might make a profit although this is nothing compared to what the brokers will have made in the process. Why don8217t you ask your broker who their liquidity provider is and how their variable spreads are calculated. If you8217re with a market maker or dealing desk broker, chances are you8217ve got no chance of making consistent profits. Your success or more likely, failure as a trader has much more to do with this than any strategy you implement or psychology you adopt. I don8217t think this is the case helen because if you open different charts from different brokers the price movements are the same, to say a brokers softwares is hunting stop losses would mean prices with that broker are not consistent with market prices with other brokers, but that is not the case, i once thought my broker hunts my stop losses but i when i opened different charts the price movements were all synchronised. The point that trading is most definitely not a zero sum game is correct. It is a negative sum game. The buyer and seller bring X dollars to the table but some of that gets raked off due to commissions and spreads and other ancillary costs (data feed, subscriptions, etc). A zero sum game would be a game of poker at your friend8217s house. In 1990 I went through membership class with 19 other people. After six weeks, I was the only person still standing. The 95 rule seems to hold. I would say that of every 100 people that lasted maybe 3-4 were truly standout, raking in the money, hand over fist, traders. Now if you go to a top Ivy school 8211 or equivalent 8211 and get on a top trading desk at a top investment bank, your odds invert and you probably have a 95 chance of success. Success being seven to eight figures a year. So if you want to be a successful trader start thinking about it when you are about 10 years old. Leave a Reply Cancel replyWhy Traders loose money Trading Index and Stock Options 90 of option traders lose money Even people who are highly knowledgeable about the financial markets and work in the industry do poorly. There is evidence all over the place that losing money in options is normal and everyone in the know knows it. I never got good at options trading, but I never encountered anyone else who was good at it, either. Some people admitted that they lost money overall, while others, although they spoke readily of their wins, were evasive about losses and totals. This was less surprising when I discovered, to my disappointment, that many of the people who traded options were also gamblers. Most people who continue trading options lose ALL the money they allocated, if they were smart enough to allocate an amount. Trading options was the one activity at which I could not improve by studying or practicing If I study hard and work at something, I get better at it. Two years of effort and study did not improve my results at trading options. When study and practice bring no payoff at all, it is a red flag indicator that the activity might be one at which it is not possible to improve. The possibility must at least be seriously considered. Option purchases are a limited-risk speculation but the limit is 100 The same is true of stocks, but you will almost never lose 100 on a stock. The limited risk feature of options only distinguishes them from futures contracts, where you can lose much more than you invest. Your loss in an option is limited to 100, but you can lose 100 over and over again. To offset those losses, your gains, when they occur, must be very large. They can be, but they rarely are. Options lose time value from the moment you purchase them Your stock must not only move (assuming the option follows the stock, which it doesnt always do), but must move in time for your option to overcome its time-value loss since you bought it. Options markets lack liquidity In India, except Nifty most of the Stock Options lacks liquidity and there are wide difference between Bid and Offer Price and Brokerage can make Succesful Option trade less profitable forget about Loss making trades Commissions on option transactions are high Your options must make a significant move in the right direction just to overcome your commission costs. Options are short-term, and they expire You are forced to trade often. You cannot simply buy and hold. If you want to stay in the market, you must replace expired options with new ones, incurring repeated commission expenses. You cannot use a long term strategy to wait out setbacks. If a stock makes a big move against you, your chances of it recovering before expiration are small. Option prices are not formally related to the price of the underlying stock From the emphasis that is so often placed on formulas that supposedly calculate the value of an option, you would think that there must be a formal relationship between the price of a stock and the price of an option on it, but there is not. Like everything else, the value of an option is whatever someone is willing to pay for it at a particular point in time. If its hot, its hot, if its not, its not, and an underlying stock and the options on it dont always fall into and out of favor at the same time. Option prices move independently of the price of the underlying stock, and sometimes track the stock surprisingly poorly. Option prices reflect the expectations of options traders about what the stock is going to do. As soon as a technical move looks likely, the options will often move in anticipation of it, to the point that they would be worth after the move has already occurred. If the move doesnt happen, the options drop. If the move does happen, often the option has already made its move, and wont budge any further. If you wait for a signal, others (like the specialist or floor traders) will get there first. If you anticipate a signal, youre going on nothing. The real fair value of an option is probably its market value. Trading strategies are arbitrary, contradictory, and only work in retrospect There are many trading rules such as Cut your losses, but let your profits run, or Sell after any 5 retreat, Always use limit orders, etc. They all sound like good strategies, and they all are good strategies in one situation or another. Unfortunately, you dont know ahead of time which strategy will look good in hindsight, and they are all so vague and contradictory that they have no use except in hindsight. You might just as well complain, Oh why didnt I buy low and sell high like I knew I should because most trading rules are of little more use than that one. They are fine for looking back, but they dont help going forward. After a bad trade, you can always go back and see where you went wrong, discovering how some particular strategy would have saved you, but the same strategy that would have saved you this time would kill you another time, so what use is it In options, perfection is required, but something always goes wrong You must correctly predict the stocks move and the time during which it will make that move. You must buy the option at the price your calculations are based on. Then you must sell at the right time, in the right way, having chosen the right method (stop-loss, limit order, or market order at time of sale), and your order must be executed rapidly and correctly by your broker and the options exchange. In too many option trades, some part of it goes wrong. I am not saying that you cannot make a killing in options. You can. But its extremely unlikely, and if it does happen, its not because you are good at it. People Made Killing during May 20 2009 in Nifty calls after election results, but its like once in a time kind of phenomenon. To some this will sound like a sour grapes story, but I know that there is a difference between an activity that I cannot become good at and one that no one can become good at. Lets compare forms of gambling as a somewhat appropriate analogy. I do not like gambling, and if I thought thats all that options trading was, I never would have had any interest in it. There are games like poker that require skill and that it is possible to become good at. Newcomers usually lose, but their results improve as they gain experience. I would be a bad poker player because I dont have the skills. However, experienced and consistently successful poker players do exist. On the other hand, there are slot machines, state lotteries, and roulette. They require no skill, do not reward skill, and are mathematically impossible to become good at. I would be bad at those games not because I am unskilled, but because no one can be good at them. Its in the nature of the activity. My conclusion about options is that because of the factors described above, I cannot become good at it, and neither can anyone else. Its in the nature of the activity. HOW TO LOSE 250,000 IN THE STOCK MARKET Friends For Life I recently had the pleasure of having dinner with an OEX trader, Floyd, from OEXOPTIONS. com. whose on-line advisory service has been rated in the top five by Stocks and Commodities Magazine for two years running. Floyd flew in from Florida to have dinner with my friend Johnny and his wife. A trading friend and I were happy to tag along. During our conversation Floyd mentioned to me that his most popular article is about his losing 250,000 in the stock market over a 6 month period . He certainly got my attention. I suggest you read the article in its entirety for it may just offer some important clues about how to make 250,000 in the stock market. What follows is an amended version. I lost 250k trading options in a 6-month period. 250k Thats a lot of money. Heres the sad story, and pleaseits worth your reading, as it could have been or could be you. For many years I traded stocks very successfully, and built a strong nest egg. My methodology was simple. I bought what made sense, and had no loyalty, selling on big moves up. I trained in the Wyckoff Method, was a student of CANSLIM (Investors Business Daily), and used the point and figure charting philosophy. They served me well, and I became a success story for investing. Mind you, not a yacht and 9 cars success story, but a middle-aged man with a sizeable nest egg. I for years had been reading about option trading, and had tried numerous times to play options around my stock investing. Sometimes with success, and sometimes with losses. If I ran a tape to what I did with options within this time period, including subscribing to many services and buying many books, Im sure I made a bit of money, but not enough. At that time I began studying the new ETFs and index funds, and reading the logic of using index options as an investment tool. Every part of it made sense, and still does. Off I went to become a trader in index options. I started with the S and P 500 (SPY) and the Nasdaq (QQQ) and began trading index options, simple puts, calls, and straddles. Self employed, I made sure I took time each day to study, and work the various subscription services Id paid for, and I began trading daily. My successes mounted, and confidence built. During the upswing markets I first traded in I began to actually DO WELL . and make money. My option time increased, and my profits at first mounted, then fell. Again, if I took a tape to it, at that time I was making money, but not as much as I thought I was making . As I forayed into the OEX, the most stable of the index options, I began thinking I understood patterns, charts, and that this could be my way to riches. My trading time became more fevered, with more emotional time buying the ups and downs, and increasing the size of my investments. I began subscribing to a number of services and systems, and saw that I could become a full-time trader, making real money at this. Unfortunately, I was deceiving myself, and things were taking a serious turn for the worse. Youve read that 80-90 of all option traders lose money. Youve probably even been to websites and explored services that selling options is the way to gosell to the idiots like me that buy them, right And youve read many claims of foolproof systems, mechanical trades. ways to learn to consistently make 50 to 150 returns on options. What happened to me over one year of trading was making money, sometimes big money and losing money, and finally. putting more money into the market to make back money. It really doesnt matter the amount I lost, but it was 250,000. It could have been 50,000. It could have been a retirement account. What it was, and Im being honest here, is multiplying mistake upon mistake, continuing patterns that I thought were working, and they werent . It took me some time to really figure this out, obvious as it seems. I continued to try again, to hone approaches, to read different OEX subscription alerts, or trade tips, or call spreads, etc. Good at none, doing all. All the time I continued to read about the great successes in options, and just knew that I could make money, too. I figured out the problem finally . 250, 000 poorer. It was me. Not the OEX. Not the charts. Not the subscription services (though most had bad advice and confusing lies on how they really performed.) It was how I traded, and what I didnt do. Pure and simple. It was me trying to act natural in an unnatural environmen t. So what changed What did I do If youre patient, and you really read this and really do what is going to be suggested, youll learn, and youll know what it takes to be a successful trader, someone who times investments. But, if youre typical youll just scan this article, note a few things, and promptly do nothing with it. And, in the end, whenever that is, youll lose money trading options, or stocks, or any investment vehicle. You know all about FEAR AND GREED . right Its the traders lament. But its really only a small part of why a trader can do poorly. As I bottomed out in trading, realizing the losses, I suffered from classic pessimism. (Its bad now, and it will only get worse) to even more classic arrogance (I get it Look what I just didokay, it will get better now.) Does any of this seem familiar to you so far I began keeping a journal . This took a lot of time and was hard to do. My journal tracked the trades I made, how I did, and what happened, and had a column for the events and emotions that took place as I traded. Heres what I learned about me: Euphoric, when successful. Irrational with despair, when not. Consistently repeated the same losing strategy over and over again. On downdrafts tripled or quadrupled the bet to get the price right, with no structure. When a bad month or week occurred, took money from other good investments to add to my option bank, only to lose more. Read a lot of books, studied charts, but only enough to get half information. Subscribed to lots of option services, but never really read all the instructions, or did any of the real research. Unbelievable, but true, never really perfectly analyzed just how many options I lost money on. Pretended I did, but didnt. Created opportunities to buy, even when none existed. Huge despair when I lost, usually then tried to read something else and do that, but never really did change my lack of method. I learned that to trade successfully I needed to TRADE AGAINST HUMAN NATURE The emotional trader lives in peaks and valleys of pufferfish (over confidence), fear, and sorry Charlie (regret). This is where online instant trading, with instant news, fuels the drug of the emotional trader. Trading plans, if one even has them, evaporate. I found that both experienced and inexperienced traders have emotional outbursts, fueled by input, and react without reason. As I began working with a journal that tracked my trades, and my emotional patterns, I found, in studies, that a number of other methods helped me control my emotions . Music. I use headphones and listen to alphabetatheta sounds (left and right brain equalizing music. This music is a type of biofeedback, and extensive research has been done proving its equalizing and calming effects. After I place an order to buy or sell, I take a break. From the computer, from myself. I set calm and stop the input. My journal identified to me the triggers where I made mistakesI took an actual inventory of my errors, and noted the times of the day, excitements that caused me to become fearful, greedy, pessimistic, and arrogant. I wrote these triggers down, and made sure, as I traded, that NONE of them were present. Identified what is most embarrassingwhere I self-sabotaged myself. This, I found, is a typical issue with many tradersI kept repeating what wasnt working, over and over again. I actually had patterns and rituals for failure. I began analyzing my consistency in preparation, order size, sell prices, and stop losses and found I had no real rules of engagement even th ough I told myself I did. I HAD NO PLAN . Began to see trading as a business. Options are just inventory. Some inventory doesnt sell, and you sell at a loss, and other inventory sells well. You learn what sells. Just as a sport, it is the GAME of finding the right inventory. I wasnt seeing it this way and expected all my inventory to sell profitably. Business doesnt work that way. I quit focusing on what I was doing wrong, and started focusing on what I was doing right . I found out what I was doing when problems were not occurring . I eliminated too much study. I found in my journals that I was studying many approaches, subscribing to services, studying chartsand really was on many different paths. I had always said Ill do things differently, but before the journal and the analysis of my personality type, I never really knew what I did wrong. Once I identified my emotions, and what I repeated over and over again in error, I set rules of engagement. The journal showed me I had patterns to my emotions. The way I broke these was by talking out loud, almost acting as a commentator or newscaster recanting out loud what I was doing. Busy bees tend to be calm pre and post market, and crazed during the market. Many traders are busy bees with good methodologies and structures, until they trade. Patterns emerged from my journal that when I was steady and reliable in my thinking I made money, and when excited became irrational, falsely exuberant, or pessimistic. Being a busy bee I never took time to process the market that is, learn to read the shifts and momentum that occurthe actual flow of the market. By slowing down and stepping out of myself I began to actually feel the flow. In all of this self-examination, I began to set real rules of engagement. And stuck to them, and began making money. THE RULES OF ENGAGEMENT How much I was willing to lose on a trade, and setting mental stop losses exactly at that point. How much I wanted to profit, and setting limit orders to sell at that point, and NOT canceling out to HOPE for more, only to see the price deteriorate. Setting my charts up with just the indicators that mattered to me (see No Noise Charting on our website). Once I began watching the charts, I talked out loud and NEVER let myself vary. Setting time limits. On all trades I set rules of how long Ill hold the option, and unless special conditions exist (our Alerts detail this) I NEVER VARY. Invoke The Silent Witness. Going outside yourself and watching your behavior. Its like sitting in a room and watching another person without their knowing it, except the person is you. See what you are doing as if you are not doing it. WHEW. This simple technique took me time, took deep breathing and learning how to gain calm, but crazy as it sounds. THIS REALLY WORKS Dont be like the typical trader reading this and nodding your head, but then do nothing with it. Otherwise, youll lose your ass, as 90 of option traders do. Its so sad. Option trading is no different than owning a business in which you buy and sell inventory . You go broke if you buy wrong, sell wrong, or have the wrong inventory. Its easier with inventory, or so it seems, as you LEARN what sells. With option trading, however, the emotion takes over and you soon forget that its just this inventory. So, I lost 250k. It really hurt. Actually it traumatized me. But, I got serious, and I researched, thought, and began following rules. But before I began setting the rules of engagement I learned about ME, and what I did. Emotion is good . I did best when I got outside myself and watched my behavior, the silent witness. I saw patterns to what I did wrong, over and over again. Taking a simple psychological test helped me understand my emotional style, so I could see what I had to work from. Learning how to break those emotional patterns, acting unnaturally, and controlling the input helped me succeed. What stands out to me is Floyds emphasis on rules and simplicity, while ignoring all the none-sense and noise in the markets. Check out his site and sign up to receive his free blog posts. You may just learn something or find reinforcement in what you already know to be the truth. Disclaimer: I am in no way paid or reimbursed to discuss Floyd andor his site. He did not ask me to share this article. This is unsolicited for informational purposes only. I simply welcome his market studies and the opportunity to share it with others who may benefit from his years of market wisdom. Email him and let him know that you appreciate his honesty for it is not easy to admit your mistakes. Floyd has done so without disgrace or regret. We should all benefit and be like-minded.
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