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I discretionary trade price action via a course I learned from I want mention the person name because I do not want to bash anyone. Am I consistent profitable trader, NO. Going on year 5 and nothing. Lucky, I been SIM trading and not lose real money besides a few Trading Combine fees from TopStepTrader and no please do not bash TST, I love them. great service. But I lost time and mental roller coaster. Yes, I have a alot of chart experience, but the goal is to make money.
Is it my fault? Hmmmmm, Yes it is my fault. But where did I go wrong.
Hmmmm, let's have a discussion something does not sound right about day trading.
Question:
How in the world is anyone profitable day trading who trades discretionary?
Here is why its my fault I am not profitable day trading yet?
It is not that I am not smart, I have a math degree so I understand stats and logic. Many will say take some mental trading class. hmmmmm, No I disagree with this. I can read Mark Douglas book until I am blue in the face. If what I am doing does not have Edge, I am pretty much screwed.
1. I did not ask the right questions from the person I bought a trading course from.
2. I did not verify that the person teaching me how to trade, was a proven profitable trader his/herself the past X amount of years.
3. I did not ask for this person to show me a trade log the past XXX to X,XXX amount of trades. I just took other reviews on him/her as legit, but I have no clue is this person with all the video courses and books even makes money. That is not good business sense on my part.
4. I did not ask this person to demonstrate an edge to me that I can somewhat believe in and have high odds of my trading business making money. There is no holy grail, but a back test sure helps calms the mental.
5. I did not personally back test (manual or automated) methods taught in the course. The course does a poor job of exiting methods to even test. Very vague. Why did I not manual back test? Cause as I was manually backtesting, there is too many ways to exiting a position. How do I know which one to start with. You see that is the gotcha with trading, anyone at anytime can say do this or try this, but the person telling you this never provides any proof of doing this or that is actually profitable.
I see why many fail at this day trading business or trading in general. It is not that a person is not smart, they are just not trained correctly by credible trading teachers. You know the reason I never post on a thread...It is because in the back of my mind "How can I help someone if I am I not making money". I personally feel I have no business giving someone trading advice. All I can say is back test it.
To sum up my thoughts,
1. I think discretionary trading without verification of an edge through a series of back testing is the worst thing on earth for a trader. It is not concrete, and you will always question what you are doing is profitable over the next XXX to X,XXX amount of trades.
2. I will never again buy a trading course from another teacher who can not provide me broker statements of atleast 1 year of trading AND demonstrate that what they plan to teach was profitable in history. Yes, I know noone will provide this, but oh well. Not getting my money and time if you can not prove it.
3. I will start programming my trading ideas and using automated trading platform to confirm if my trading ideas of what I see on the charts daily were profitable in history. For myself, I believe this is best. At least I know I stand a greater chance of success if a back test shows edge.
4. Recently, I was thinking about buy a trading system from a algo developer. I go to a website, and Bam many traders posting their equity curve. Within 5 minutes I saw Edge. Why the person, I bought this trading course not show me this? That is my Fault. Lesson Learned.
I think if you are struggling trader, take a step back and ask yourself "Whoever taught you, how do you know this person is credible?" How do you know the person was ever profitable? How do you know if what you doing every single day has high odds of making money in the future? And if you manual back test, did you go back a few years.
Just my thoughts. I hope it helps someone else or atleast start a kind conversation.
I agree with you on those supposedly teaching others to trade... that they should be willing to demonstrate the ABILITY to trade profitably. I came to this realization many years ago, and have not purchased another course since.. although I may have been tempted several times.
In a similar vein to the commentary I have quoted above, I cannot state this with certainty(like you I typically keep my mouth shut also), but I believe it mostly through a process of elimination... and that is, that I think one's success with trading will come down to how your brain works.
Not necessarily in the Mark Douglas sense, but just the way you THINK about the markets.
I actually find the brain part of trading the most interesting aspect of it now. I have written all types of ridiculous data gathering software, all types of indicators, machine learning algos in Matlab... and honestly I don't have much thought about any of it more. I mostly do it for fun sometimes, but not thinking it is going to make any money.
I don't really think there is any creative organization of indicators, lines on a chart, or anything else that can be coded that will be profitable long-term with directional trading. I think profitability will come down to the user's ability to decide WHEN to take a given signal, and WHEN not to.
I think backtesting can be a path towards a better realization, at least in terms of confidence. But I think your question that I emboldened above is the point, that it has to be DISCRETIONARY.
I actually wish this psychology section was something we focused on more on this site.
Other thoughts...
People are essentially educated for a minimum of 12 years like cattle... and we all generally think the same way in the aggregate because of it. The markets are traded by people. The charts are a reflection of people's perceptions.
There is a reason the world is the way it is. Despite the increase in the standard of living in life for all, the rich will always be rich, and the poor will always be poor. I think the markets are the same. In the zero-sum portions of the markets... for them to function the way they do... the wealth MUST flow from the MAJORITY to the MINORITY. For if this were not the case, what would be the point of it all?
We should be able to trade profitably knowing this?
I have recently become interested in philosophy more so than typical studies to understand trading. One passage I have mulled over from Montaigne and the education of the masses is the following:
"To return to my subject, there is nothing like arousing appetite and affection; otherwise all you make out of them is asses loaded with books. By dint of whipping, they are given their pocketful of learning for safekeeping; but if learning is to do us any good, we must not merely lodge it within us, we must espouse it."
This post is a perfect start to heading in the right direction. You now realize its on you and only you to find an edge.
Now is the harder part...go pick an instrument to study and break it apart every way you can until you find that darn thing.
Contrary to what some believe, they do exist and there is more than you think.
Once you find one, they start becoming easier. I believe the reason for this is not really just your understanding of a particular instrument or some kind of luck...but just the simple fact that you better understand the procedures in finding an edge. (Although I do believe knowing a market intimately does help a little)
So I would start with learning good methods of finding an edge. JMHO.
Please do not pay someone to teach you how to find a strategy/edge. Use this forum as a resource and combine that with some good old common sense to develop a method on your own.
Like you, I once came to the same realization...The light bulb turned On moment. LOL
Yes thats the very basic method but there is more detail to the madness than that. I would start by building a bubble diagram of your method. You will need some checks and balances as there are many things that can effect the outcomes.
I also would watch the word optimize...this, most of the time, is a bad word when creating a strategy. JMHO.
Thank you for this interesting thread. I guess, a lot of us will see part of your journey as ours. I certainly feel some similarities
I just would like to offer perspectives and different thoughts.
I am also a discretionary day and swing trader. And I don't believe that coding will help much. At least, coding and automate a strategy will give you a sort of confidence. I really think a small guy at home, simply cannot compete with big guys and HFT with home made algos. Also, "edge" with algos are very temporary and always bring huge drawdown, with probably few exceptions.
I will be very cynical about vendors: Coders, writers, publishers, coaches, etc. they all can make money selling their work, just not so much with their trading. It just require different skills. Can we find exceptions? Sure, but are we certain that "she or he will give us all"? Being able to write a book is one thing, being able to write a book every other year, is much better, to make a living.
Perhaps, looking for part of the solution to help us to create our own solution, could be the approach that we should have.
And just think about that: After all these years of losses and work, finally one is successful. At the same time, just check the results of the pool "If you needed one-on-one help with any trading issue, how much would you pay?" So... Why a reel successful trader will coach for $500?? At that point of the journey for the successful guy, it became very emotional, and to begin now a new career or a new way to make money would be weird and make no sense.
After about 100 books, 1 seminar, 2 courses, 2 paid algos, and of course trying to code, I decided to look for patterns, with all kind of charts and DOM at the same time, for only 2 to 3 different Futures. I did it for .. A long time.
I am not talking about head and shoulder kind of patterns, just repetitive patterns reflecting the perception of traders. I think these "behavioral patterns" are more perceptible with other kind of candles than time based Japanese candles.
Another perspective: We think that 90% of Day traders are losers. Actually, more than 90% of all traders are losers. But how many of those 10% of profitable traders right now, are still profitable after few months and after few years? 1%? How many successful trader for so many losers can we really find?
Just that kind of questions made me a contrarian thinker (not necessary a contrarian trader): We could try to challenge all kind of certainties and other approaches of how we can extract money from the markets. After all, it is the goal, right?
Do you know how many losers think "KISS"? A better question to ask would be why they like the Kiss concept?
Sell in May and go away?
No emotions when trading is the key?
An algo will be better than me... But I programmed this algo myself with my losing programmed mind?
Let your winners run.. It doesn't hurt to cash in our winners..
Etc.
I was not trying to argue, just to give different thoughts.
Happy thinking!
