Today I was musing over the differences between professional and retail (stay-at-home) traders, and what obstacles pose in the way for retail traders.
It's pretty safe to assume that professional traders have a strong advantage over retail traders. From what I've gathered:
1. Professionals have a support team behind them, from market analysts to more-experienced mentors.
2. Regarding fundamental analysis, professionals have access to a myriad of contacts and information sources that provide them with a distinct edge over retailers.
3. Professionals pay less spread (if any at all).
4. Professionals have quicker and deeper access to forex markets.
5. Professionals have access to proprietary tools and indicators that retailers will never access.
And so on and so on...
For many months now I've been trying to design trading systems that can stand toe-to-toe with the professionals but I just don't think I can do it, at least in the medium-term.
Should I give up?
While thinking about strategy, my mind drifted over the different doctrines that the various militaries used in World War 2. Germany had blitzkrieg, using highly-trained stormtroopers and quality armour to quickly overwhelm the enemy, while the Soviets depended on endless human waves of inferior conscripted infantry to defend itself.
In the end, the Soviets won.
As a retail trader, I am the Soviet Union. My troops suck. I will never be able to fight Germany (the professionals) toe-to-toe. But what I can do is design plenty of mediocre (but still profitable) systems and trade all of them on the market. In effect, I can unleash human waves on the enemy.
This relates to the concept of "expectunity". Low expectancy can be compensated with high opportunity, which will occur if I use a multitude of low-expectancy trading systems simultaneously.
I have to accept my reality as a retail trader and fight with my strengths, not my weaknesses.
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