Just my thoughts since this is a discussion. Sometimes I feel like Monpere is typing out my thoughts on these particular matters.
One Day, I am going to create a post somewhere, probably in the psychology section about every supposed method I've purchased with regards to trading, and my thoughts on that method. I think this above portion in red is key!!!!
There was this one system I purchased, and luckily I never lost a dime trading it live.... as I did just what Monpere suggested here. Not only did I spend probably several hundred hours backtesting it over historical data, I walked it forward for a many weeks and achieved about the same results.
What were those results? Complete and utter b.s.!!!! I was sooooo frustrated. The system was clearly defined and unmistakable about what to do. But the performance was atrocious. Now indicators on different machines, with different data feeds are never going to line up. You just have to deal with your flow of signal. So I didn't expect everything to line up with what they were claiming. BUt the problem was my results were literally 180 degrees out of phase with what they were claiming. They were obviously giving themselves the best possible fills, leaving things out etc. They would have a day claiming the system made $500 for that day. My results where -$340 or so.
And sure our entries and exits could differ slightly, but that type of CONSISTANT disparity I saw was frustrating.
Now, while I had obviously wasted another $1500 on this method, luckily it was all I wasted. I was able to verify that this system was completely useless. So, this is just my experience.
If you can prove to yourself that a method works via historical backtesting, and then walking it forward for a time..... that's what you probably need more than anything else.
I had similar worries as you, but I may have come to a different conclusion a long time ago as to what my problems are. I started a thread HERE in an attempt to solve one of those issues. Which was OBJECTIVITY in my trading. The conclusion that I had come to a loooong while ago where 2 main issues........
KNOWING what to do in any situation, and KNOWING how your method performs imo are the two things that you have to sort out. Everything else is just noise.
Last edited by forrestang; July 21st, 2011 at 05:13 PM.
WOW!! Monpere, I don't think anyone can say it better- Thank you for getiing to the crux of the issue with laser precision.
Too bad this setup I have returned to can not be backtested automatically, cause as you have explained; if it can not be coded, it can not be auto backtested. I did take about 200 Sim trades with it a while back with good results.
From what your telling me, lots of Vendors who's system is mechanical with a dash of subjectivity have the perfect "out" for not giving you your money back. Cause if it can't be auto backtested, then they can say that "you are the problem not the system"
You know, Traders international, R. felton, etc all have systems that are almost all mechananical, but with a sprinkle of subjectivity, thats whey they can not just give you a manual, they have to show you the NUANCE of the system(subjective)
So when it does not work, the problem is you!! OUCH....
Exactly, the moment a vendor mentions the word discretionary, then if you make money, then it is because of their awesome system, but if you lose money, the problem will always be you, not their system. It is a win-win situation for them.
You should approach any discretionary system you buy as a learning opportunity, not as a money press. Even though a system may not make money for you, you may be able to learn a couple of good nuggets from it, that you might use in your own personally derived system later on. I didn't pay $10k for systems, I only paid $2500 for one system, and it was a piece of crap, but I did learn a couple of things in the process of learning and attending the associated trading room. Everything else I learned was on free trials to various rooms, where I learned different market concepts. I am mainly a divergence trader, and I was introduced to divergence in a Felton webinar, and learned the basics of it in the Felton free trial. I never did pay a dime to Felton... I guess I should send him a thank you card now or something
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No, what it means is stop looking for an indicator setup to make you profitable. Stop looking for a system to make you profitable. Stop looking for a handbook to make you profitable. Stop looking for a chart template to make you profitable. Stop looking for a trading room to make you profitable.
What it means is start looking at yourself. Look at your own actions. How about starting with the obsession of chasing the holy grail. How's that working out for you? I would suggest you lay it all out. Get a piece of paper, start a word document, or whatever and think back to the first day you started trading. Then start writing stuff down that you've done, decisions that you've made. Write down what you thought was going to happen, and what actually did happen.
At the end of the paper you will likely find that you've not done much at all for yourself, but instead you've been searching and searching and searching to find someone else to do it for you. Let me be clear, reading books is not doing it yourself.
Working on yourself means to know yourself, your personality, your traits, your strengths, your weaknesses. Devise a trading method that is your own. Know your method. Know what you want to avoid, know what you want to capitalize on. You don't need vendors for this, you are simply trading their method - not your own.
Ask yourself, are you able to trade in sim mode profitability? Have you even tried recently, or has everything been cash? That itself is a sign of a major problem, if after huge losses you are still trading cash. But, if you have tried sim and you are profitable, then you've proven that the weak spot is on your execution - and not on the combination of methodologies being used.
Focus on execution. The best way to do this is to start a trade journal. I do not mean a spreadsheet full of statistics. I mean that when you place a trade, you write down instantly your reason for taking the trade. I'm talking about 5 or 6 words, it will take 5 or 10 seconds. Then when you exit the trade, write down why you exited. It is important to do it as quickly as possible next to the actual entry/exit.
After you've done this dozens or hundreds of times, you will have so much information that you will likely have several major epiphanies on how to move forward. You'll see all kinds of behavior patterns, strengths, weaknesses, based on your own reading of the market. You'll see patterns that you won't believe and never previously considered. All of which is where you can work on yourself to improve your trading.
You are also still trading futures, and apparently 3 contracts, if I understand correctly. Why? Go open a mini or micro forex account with MB Trading or another very reputable brokerage. Set your risk to $1/pip at maximum. Don't for an instant think that you can't make money this way. What we need you to do is stop losing money. Making money is a long way away from where you are today.
Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.
Need help? 1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first. 2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses. 3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make. 4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance. 5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers. 6) Help using the forum? Watch this video to learn general tips on using the site.
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A lot of traders called themselves "Professionals" and wanted money in return for their knowledge.
A few traders I found to be very good teachers but live they couldn't trade profitably.
And many traders called themselves "Professionals" who didn't want money in return for their help just pure attention.
I read many forum posts, ebooks, courses, video courses, software, twitter, market profile.
I tried many instruments. Such as equities, options, forex, futures, interest rates, stock indices, etc.
And after wasting pretty much thousands of hours on all that I was ready to give up until I decided to give it one more shot and this time do it on my own from scratch. No indicators, no software, no outside help what so ever.
And in the end do you know what it was that helped me?
Jesse Livermore once stated that you can put all your ideas on index card and give it to someone else. But one thing you can't give to someone else is experience.
Now I flip through the various currencies and commodities that I trade and when I see something that I like, I just take the trade. Its pretty much almost automatic or you can call it woman's intuition, I just see a setup and I tell myself "I just have to take this trade, i just have too".
I take losses all the time but I can pretty much have 5-6 loses in a row and it would take 1 winners to put me back into profit. I just jump in, and if the trade doesn't move immediately, I bail, losing spread and commission usually.
You know that old saying how a woman decides in the first 60 seconds if she will end up in bed with you at the end of the night? Well that's pretty much how my entries are. Usually within the first few seconds I can tell if this trade will end up working out or not, and will I make little profit or a lot of profit on this trade.
Everything I have learnt up until this point I have learnt on my own throughout my own experience. Now I can pretty much trade in any market and under any conditions. From the boring choppy Asian lunch markets to the fierce volatile Greek Austerity debate.
When I try to help out a few newbies I simply tell them to observe the market live, 16 hours a day and find a way how to profit but they keep saying the same old, "can you put that in an ebook", "can you post your trades live", " can you post your live statement", "can you make an EA", "what is the name of your system", etc, etc.
I really don't think trading is at all that difficult. It's much easier, cheaper, and faster to get into than any degree or business. I think the reason why most struggle is because they are not willing to put in the effort. Like Mike said, they pretty much don't want to gain the experience on their own they would much rather pay to learn about someone elses experience. And the problem what that is that most of those courses, ebooks, programs are all pure scams. Because I know for a fact I would not waste hundreds of hours designing a PDF to sell for $49.95, and go through all that hassle of promoting that eBook since I could make the money much easier and faster by trading myself.
Last edited by adaseb; July 21st, 2011 at 09:17 PM.
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Yes for some people that can mean to do exactly these things. What I am trying to tell people is that trading begins with yourself. If getting in better physical shape by working out 3 times a week will make you more focused and alert then you should do that, reading some Tony Robbins books to help find your strengths and weaknesses then you should do that. I can't write out an exact plan that will lead you to successful trading because it is not black and white, because we are all different inside and out.
Just as I said and Big Mike did, and that is that successful trading starts from within with your strength and weaknesses. Don't just look at yourself ask people who know you well about your strengths and weaknesses.
inspiration is exactly what you need to help you in this game. A trader without inspiration is someone who will have a hard time picking themselves back up after having a bad run.
bobbyacim you said that after years of numerous indicators, methods and system you never found success, then try working on yourself. I can give suggestion but I can't do it for you.
I will tell you that my mentor that taught me this game over 17 years ago told me to learn about my self first and write a paper explaining all my personality traits, strengths and weaknesses and how to deal with them before he would start teaching me, I also took the Myers Briggs personality test and if anyone knows about it I am an ESTJ with a strong J, it just so happens that he was an ESTJ with a strong J.
So ladies and gentlemen if you think this is an easy game of opening a brokers account and learning chart patterns, oscillators, price action and any other indicator you want to throw in there, then why is there so many people that fail. This is High Finance and you are playing against some of the smartest people in the world and believe me when I tell you that everyone of them knows their strengths and weaknesses, so take my advice for what it is worth and continue down your road if it has been working for you, if not then think about why it is not working or working like it should and take a step back to take two steps forward.
And that's all I have to say about that.
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