I'm in agreement with the disclaimer. There are many new traders reading these threads in order to shape their views on trading. In that respect, I think we should also refrain from making gambling analogies, because people regard gambling as a game of luck, and don't realize that professional gamblers constantly make pure statistical analysis in their mind in gambling decisions. The gambler playing blackJack, and makes the decision to stay at 19, did not make that decision because he 'felt' the next card will NOT be a 2, he made that decision because his brain automatically calculated that the statistical chance of getting a 2 was very slim.
I have no problem with referring to trading as Art either. For some traders, I think it is an art. Going on with that analogy, you have to ask yourself how many painters, and artists in the world are making a living from their art, and how many are paying the bills by waiting tables? If you fall in the Art camp, you have to ask yourself, Am I special enough an artist, that I will be part of the few to make a living with their art, or do I have to wait tables to pay the bills. If I don't have that artist gift, do I believe that someone can teach it to me in 6 months, 2 years, 5 years, or at all? Your answer to those question will determine which camp you choose.
I personally believe that artists are born and have a special skill or gift. I believe you cannot pick someone off the street, and teach him to paint like Cezanne. I am not a trading artist, I know I don't have that special something that traders who practice the 'discretionary arts' have (or discretionary voodoo, as someone referred to it in another thread). So, I staked my flag in the mechanical camp, and chose to get myself a 'paint by numbers' kit instead . Each trader must make that decision for themselves.
Unfortunately, too many traders buy into the idea that a $1200 course, giving them 3 discretionary setups, will turn them into Picasso in 6 months. That's why traders have such a high failure rate. When you go back to that vendor and tell him his system is crap, he will tell you no, your discretion is crap, and for every 3 reasons you will give him that you took a losing trade, he will give you 6 that you should not have taken that trade, that is the nature of the 'discretionary arts'. You better own it, you better trust it, because on any given day, depending on how you feel, it will make or break you.
Last edited by monpere; January 31st, 2011 at 10:04 AM.
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I agree, and even though my approach has substantial elements of Statistical Arb there is still no substitute for applying observation, experience and market knowlege for improving profitability. aka Price Action This flies in the face of accepted Technical Analysis Theory and generally accepted trading practice. I think it all depends on whether or not you believe the markets are random and therfore quantifiable, knowing when to step up and have a crack is not programmable, this is where the essential human element steps up to the plate.
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To be honest, if I refer to myself as a trader it is only to be understood within the group I am talking to, generally this would be considered good communication. What I really am is a businessman/speculator who makes many short term business investment decissions and yes I successfully make my living doing this. Everything I do that relates to money is viewed this way by me. I do not use any Technical Analysis Tools in my decission making. I do however use sound business models developed thru skills hard earned and paid for over 30+ years facing challenges that most people couldn't even begin to imagine including all the highs and all the lows several times. I humbly suggest that newby traders gain some of these skills before even attempting to enter the fray. Who knows, they might then decide to give it a miss without paying the forfeit, for the vast majority this would be a smart move. It's surprising how many posts I've read where they stated that if they had known what they were in for they would never had started in the first place. There is no substitute for experience.
I'm not deliberately trying to be a wet blanket, just stating what should be obvious, if people can't accept this obvious reality as displayed on every forum, then how are they going to accept the market realities.
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I'm with the dutchman on this. When I see the markets way out of line you can bet your bottom dollar that I am going to ramp up my size. Like in poker you are only going to get so many premium hands so when they do present you need to get as much as you can for them, successful trading and poker are both about controlled aggression. No refunding of accounts here mate and I've been doing this since probably before you were in short pants.