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Things Newbies need to consider carefully.
Started:May 27th, 2010 (02:51 PM) by Jaguar52 Views / Replies:5,855 / 25
Last Reply:February 21st, 2016 (12:24 AM) Attachments:0

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Things Newbies need to consider carefully.

Old July 14th, 2011, 06:15 AM   #21 (permalink)
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Yes, a lot of people develop systems that could net 7-8 figures a year, but instead they sell them for $3999. I mean, why wouldn't they?

They are selling the potential in an ideal world to an assumed disciplined and experienced trader who very well might get the results. However, the reality is that you probably have a 50/50 chance of garnishing the potential of the system, hence the realistic price.

Unrealistic prices of anything more than that would mean some kind of special knowledge. Selling the "secret" immediately suspects the system... it is no longer a valuable secret when you are selling it unless you sell it in private auction and to one buyer.

Before you plunk any money down on anything, get a trial version. If there is no trial version, get references you can verify. If no references, get the statistical performance records of past users, or get a refund clause of some kind. Or, see if there is a pay as you go clause so you can cancel IF YOU CANNOT MAKE IT WORK FOR YOU.
Keep in mind that some people can trade well with only a trend line or a moving average; and there is nothing special about that ... it is the trader's successful application of the knowledge and experience he has gained that defines the bottom line.

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Old July 22nd, 2011, 10:50 PM   #22 (permalink)
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To save many years, newbs need only rely on the use of two key tools: reductionism and deductive logic. Success in markets is easy, yes, easy, but not at all easily found. Everyone is looking for solutions without sufficiently understanding the problems. Nobody asks the right questions early on, because they are busy canvassing others for answers. Market mastery is nothing more than a problem-solving exercise coupled with requisite practice. Resolve to understand the puzzle that are markets, set out to solve said puzzle, and simulate until you've forgotten how to lose money. Ready? Go for it.

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Old July 22nd, 2011, 11:14 PM   #23 (permalink)
Fortitudo et Honor
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I agree with everything except the myths about indicators and systems.

"system" is a fairly obscure word....I wouldn't trade someone else's "system" but if you think that there aren't profitable "systems" of trading (or strategies) out there, then you're foolish. Similarly, if you think that all systems and strategies are equal...well then that's foolish too.

The same goes with indicators. Some indicators are leading, some are lagging. Some indicators have a high degree of spurious indication, others do not. Predictive and leading indicators are aggressive and indicate where the market is "more" likely to go. Obviously, the tradeoff is accuracy for prediction.

Lagging indicators simply tell the story of where the market is already been (and what's occurred) in order to glean what the market is more likely to do next. Obviously again, the tradeoff is accuracy for prediction.

Show me an indicator that's predictive, and I'll show you one that has a lot of false alarms. Show me an indicator that's incredibly accurate, and I'll show you one that's printing yesterday's news.

It is possible, through combinations of indicators, to develop a statistical edge from which to trade. It's very similar to predicting weather patterns.

A meteorologist may tell you that a rising barometer means better weather ahead (and the opposite for a falling barometer). A sailor may tell you that a crimson sky in the morning means rough weather ahead (and a red sky at night means favorable conditions). Are those laws? Of course not, are they infallable? No. But when you begin to combine "indicators" you can gain at least some sense of what the market is MORE likely to do, than not do.

Identifying trend is easier than identifying strength or duration. And thus the various strategies play out with trying to figure out ways to take advantage of these elements.

What most trader's don't realize, is that you have to have an edge, not only to beat the market, but also to overcome the broker and the "angel's share." (the angel's share in distillation is the amount of alcohol that evaporates during the aging process through permeable containers). The angel's share in trading is slippage.

I agree with the intent of the statements about indicators and "systems"....many traders become fixated with expensive, 3rd party, prop indicators, and systems.

But to argue that there's not indicators (or combo's of indi's) out there that are better than others is inaccurate. The same goes for strategies and systems.

From a logic standpoint, you have to be consistent. If what you say is true, that for every trade there's a winner and a loser, and if what you say is true, that most retail traders will continually lose money over the long term, then logically speaking, SOMEONE is earning a living off the people that are losing.

Those SOMEONEs are using a "system" or strategy that involves the use of some predictive metric (call it price action, call it volume, call it any form of indicator). It doesn't necessary mean that it's mechanical, (although I submit that virtually all successful trader's have rules based approaches).

This thread comes down to the timeless argument of whether or not people can and do make money from trading.

A more accurate statement would be that there's no magical indicator or system that's likely to make you profitable. (at least none that are accessible to the vast majority of retail traders).

In the end, educating yourself and gaining the necessary trading experience and developing your own successful edge (through your own indicators) and your own successful strategy is what makes people successful.

"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
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Old July 23rd, 2011, 01:18 PM   #24 (permalink)
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zer0 View Post
key tools: reductionism and deductive logic. Market mastery is nothing more than a problem-solving exercise.


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Old February 20th, 2016, 02:25 PM   #25 (permalink)
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