Before You Become a Trader You Must Become an Analyst. Do You Agree?

Hi everyone

I was thinking into issuing a blog post to encourage members to blog here as we are experiencing a drop in the number of members blogging and making comments while overall traffic to the site is more or less in the same levels that were before February spike and afterwards spam attack.

I will do that post later on the day, but back to the story.... I was thinking in how to do that blog post while I saw a comment from our dear member Daologic.

Daologic posted in his status: "Before you become a trader you must become an analyst."

The comment left me freeze... is that right? you can not be a trader without being an analyst before?

In one hand it seems pretty obvious as if your analysis is wrong, your trade is going to fail for sure.... but on the other, I do not think that all profitable traders are good analysts too, because if you have a clear methodology and you have the discipline to apply it you can be a successful trader without any need to do good analysis of the market

What do you think? Am I loosing something?

Francesc

Views: 525

Comment by Francesc Riverola on April 30, 2013 at 9:32am

A very interesting concept Max.... learning and then de-learning and de-analyst yourself to find the right path... so getting rid of the noise to focus on key stuff

Comment by Haitham653 on April 30, 2013 at 9:46am

Hi Francesc

I have to agree with you 10000%

Not all all profitable traders are good analysts....
Basically , to be a successful trader, it has nothing to do with market analysis at all

To be a successful / profitable trader, there are 3 conditions:

1- you should have a good trading system that works good and can achieve some profit by end of each month at least..

2- you should have a good money management system that match your technical trading , basically money management is an art , after long study of your trading system , backtesting and forward testing !!

What was the system win rate?

What was the system loss rate?

What was the maximum number of consecutive winners?

What was the maximum number of consecutive losers?

What was the biggest drawdown the system had over the time you researched it?

What was the largest profit shown over the time you researched?

These studies will help us to set the right risk ratio percentage that can be used to achieve the highest possible profit..without risking too much!!!

some traders risk 2%, some 5% some 10% some 20% per trade, as I said , money management is an art

3-The third and the last point ;you need patience and  discipline to apply point 1 & 2 in the real life , here comes the real challenge , where most people fail. because of the lack of discipline and planning which lead to the lack of patience, riskiness -gambling - sometimes people fail because of their bad habits, sometimes circumstances beyond your control make you alway busy so you can't focus on trading !!!

I think I make my point clear, trading successfully has nothing to do with analysing the market ...
I believe a good / successful trader he/she might be able to analyse the market - it not necessary - but the opposite is not right...
A good analysis , can't always be a successful trader, basicly I believe 70% or 80% of analysts are real failure in live trading !!

Best Regard 

Haitham

Comment by Romano on April 30, 2013 at 9:47am

The less u know the better trader u are, other way its like losing virginity ;p ;)

Comment by Francesc Riverola on April 30, 2013 at 9:56am

Hi Haitham653... thanks for your great feed-back.... I am sure Peter JCP will find your comment very appropiated for the e-Book we are putting together ;)

Comment by Marius Ghisea on April 30, 2013 at 10:38am

After became a good trader will become a good analyst..Analysts read from books..Market is different than books..99% analysts failed in market!!

Comment by Francesc Riverola on April 30, 2013 at 11:36am

so for you Marius it is the other way around than Daologic's... first you must become a good trader and then you will become a good analyst... interesting...

Comment by Marius Ghisea on April 30, 2013 at 11:40am

are many analyst who don't trade in market and tell their opinion in media and in books

Comment by Francesc Riverola on April 30, 2013 at 11:46am

and only traders with good track record should be allowed to write books or to write analysis?

this is something I have been giving it thoughts many times the last few years.... only to accept analysis from profitable traders and ignoring analysis from non-profitable traders... even though their analysis is excellent?

Because... you can be an excellent analyst but fail in money management or discipline as Haitham pointed out and become a terrible trader right?

Comment by Marius Ghisea on April 30, 2013 at 11:54am

Agree

Comment by talisman on April 30, 2013 at 12:23pm
All successful traders can be good analysts, analysts that don't trade may have market interpretation skills but it's not a requirement. They just need a little jargon and a little bs and they re good to go. It's Kinda like my old man used to say , if the guy can't cut it on the floor ( so to speak ) better make him an analyst. Probably truth in that.

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