actually i was being rhetorical. (maybe next time i should put it in a big font with all caps)
is in direct contradiction with statements you made earlier that all we need to know about trading can, and has been by you so boldly in this thread, written down in a few simple rules. i wish that were true.
Hey guys I just finished reading the thread and have some comments.
Pier: I once was doing like you, backtesting everything. I first met TRO over a year and a half ago. I didn't know how to trade so I was trying to backtest and automate everything. I couldn't backtest his ideas so I discarded them. Now, a year and a half later, I realize that I wasted 1.5 years trying to automate and backtest everything, when trading is really simple. I now trade several markets without any indicators, just trading price and sometimes volume. You can see my trades posted in various threads. I firmly believe that if I told you exactly what I do (BTW it's not a secret I tell people what I do all the time) and you were to backtest it, you'd prove it "doesn't work".
Ok, the rest isn't directed at Pier but to everyone..
In fact, I once tried to backtest a system I developed (developed = the rules & trading plan, talking conceptual here). My tests were always negative. But my manual backtesting using historical charts showed it was profitable. So I traded it and guess what? It was profitable, despite my backtests saying it wasn't. I traded it for 2+ months with a 68% win rate. Yet I couldn't get a profitable backtest! Now you may say that I don't know how to backtest. Maybe that's true. But I'm a professional software developer (15 years experience) and I spent hundreds of hours backtesting every idea I could find, so if I couldn't do it then few people can!
As TRO says, it doesn't matter where you draw the line. He draws the line at the daily high. I draw my line around trading ranges and swing pivots. The truth is you can draw your line anywhere and trade it. It doesn't matter! By using the high of day he's using a line that he can easily run some statistics and come up with probabilities. I can't easily do that with swing pivots because they're not always mechanical (i'm sure someone could try though).
Here's an exercise:
Look at ES and pick a random price between yesterday's high & low. This is your line. Now trade it. When price comes close to your line you trade it. Do whatever you want, but the easiest is to go long when price goes above and short when it goes below. You have 50% chance right? So if you cut your loss to 10 ticks and let winners go to 20 ticks (for currencies, for ES maybe use stop 2 pts and target 4 pts).. if you do that you could theoretically be profitable. The hard part is learning to trade price. To see reversals, to cut your loss asap. Once you learn this you can trade any line you want. If you pick the current day's open then it's even easier. This is what TRO calls Buy Zone. I once wrote a backtest "showing" that it doesn't work. Now I know better!
Today I was trading Euro with some other traders and we all went long at the same time (we use the same entry). Price went up around 15 ticks and came back down I was out at +2 ticks. One guy got out at +7. Another guy got out at -20!!! This is the art of trading. It's what no one can teach you. You have to learn for yourself. It's what makes or breaks you as a trader. It's an art. It's something that cannot be backtested and cannot be taught. Cannot be automated. This is why no automated strategies work. Cause if they did, Goldman would be automating it and taking all our money.
Listen up guys, I didn't listen to TRO when I had my first chance 1.5 years ago. now I'm listening and taking notes. He may be a bit extreme but the guy is telling you EVERYTHING you need to know to learn to trade profitably. Most will run away and go back to their indicators. A few will work hard at it for several months and take money away from those using the indicators. It's that simple. I've never met a professional trader who used more than 1 or 2 simple indicators. Simple as in one oscillator and one moving average at the most. Never.
I've tried to get people here to use volume. I get very little response. Why? I imagine cause it's hard work reading, practicing, and learning how to use it. Why bother when there are tons of indicators to tell one when to enter. I've talked about how mechanical indicator systems don't work I post charts showing profitable trades without any indicators. I'm giving it up now. Anyone who searches for the truth will find it, we've left enough clues.
TRO - Thank you for this thread. Please keep it up. Some real trade examples showing your entry and exit would be most helpful to me. I'd like to include your setup in my trading. I don't trade forex but I trade Euro futures which move really close to spot.
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