To be fair, I do understand what Sp89 was getting at in clm's thread, pretty much same as dejavu who used to post here, and I used to be a counter-trend fader and had a 90% win rate but no proper risk management and the occasional losers wiped out all the profits. I personally found price action trading fit my personality once I spent half my trading life learning to trust it and get over my mental blocks about buying high selling higher, etc. I think the strategy is valid, but requires strict risk management. I found that type of trading in my case was based on opinion and bias, which caused me to ignore proper risk management. I think Aquarian understands exactly what I mean. I found the easy money to be price action trend-following, and I take counter-trend trades only with particular confirmation setups and then I use very strict risk management with those trades. Have a great weekend everyone!
don't believe bloto and tonka, there is no such thing as a guru or holy grail,even doj will tell ya that,have a good w.e. mfb
true. a 90% win rate won't guarantee stable profit if trading as a counter-trend fader. my win rate over past 12 months is well beyond 99%. over thousands trades, only less than seven losing trades which resulted from miscalculating buying power and mistakes were non-fatal. damages were minor comparing with profit and total P/L never went red. i don't trust trend since trend can reverse any time. i don't trust price action and ACD method as well since those method are too basic in my view and the advantages from those methods in term of statistics is too minimal and far from enough to achieve high win rate. i use complex statistical modelling combining many factors to trade which has been yielding extreme stable profit since i trade oil. having said that i think price action and ACD method might be still good for beginners as first step.
ACD method is used by most traders as risk management tool and reference points. As Mark Fisher himself says it's just another tool to add to ones existing method. As far as ACD system just for beginners, I would say it's one of the best method for new traders to get going in right direction as they improve and refine. Not everyone is naturally skilled or trained to run statistical analysis etc.. How do they become successful traders ? A good example is 75 prop. traders who work at Mark Fisher firm. Most of them can not spell statistics but they are very successful and that's where the beauty of ACD method is. It is not a trading system. It just give enough reference points and perspective that traders with discipline and risk management trade successfully year after year. However, traders who are skilled in statistical analysis etc.. definitively have edge provided they have other things which traders without statistical analysis skill sets have. George Soros and Paul Tudor Jones as reported to have 40% win rate. Why they are successful beyond wildest dreams with that kind of win rate? They know how to bet with right position size when they are right. As Stanley Druckenmiller said that key thing he learned from George Soros that one can never have big enough position if one is confident about a trade. For me 2% of portfolio on any bet all I can handle as i know my limitations not in terms of desire but in terms of skill set. As Mark Fisher says it is important to know who one is as a trader. He knows he can never be George Soros and is happy with his $20 million or so yearly take. He never said , man i have all the money and leverage , let me make a billion a year.
Street Stories: Managed Futures Stanley Druckenmiller Market Wizards Index: +37% Compound annual over 12 years Fund or affiliation Quantum Fund, Duquesne Fund Methodology Holding a core group of stocks long and a core group of shorts, then use leverage to trade S&P futures, bonds and currencies. Research Techniques Employed Focused his analysis on seeking to identify the factors that were strongly correlated to the stock price movement as opposed to looking at all the fundamentals. He also used technical analysis. Trading Techniques Employed He never used valuation to time the markets. He use liquidity analysis and TA. Valuations only tells him how are a market can move if there is a catalyst. To attain truly superior l-t returns is to grind it out until youâre up 30-40%, and then if you have convictions, go for a 100% year. If you can put together a few near-100% years and avoid losing years, you can achieve really outstanding l-t returns. Soros taught: "when you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig." As far as Soros is concerned, when youâre right on something, you canât own enough. If a trade doesnât work, Soros is confident enough about his ability to win on other trades that he can easily walk away from the position. Philosophy and beliefs When you earn the right to be aggressive, you should be aggressive. A philosophy reinforced by Soros. The way to build long-term returns is through preservation of capital and home runs. History and other facts At the age of 28 Druckenmiller launched Duquesne after a person offered him $10,000/mo. just to talk to him. In 1982, after losing all his money, he landed a client who had sold out his software business. This individual account allowed him to start using shorts and leverage. The queen in chess, which can move in all directions, is a far more powerful piece than the pawn, which can only move forward. [analogy: hedge funds vs. pension funds] Examples Was dead wrong entering 19 Oct. 87 with a leveraged long position. Market opened over 200 points lower, liquidated his entire position and went net short; and made a small profit. Long Deutsche mark right after the fall of Berlin Wall in anticipation of expansionary fiscal policy and tight monetary policy. Performance Record 37% over 12 years: "The longest-running measure of Druckenmillerâs performance in the markets is his own Duquesne fund. Since its inception in 1980, the fund has averaged 37% annually."
A real treat from a master trader and educator. http://www.cmegroup.com/education/steidlmayer-volume-strips-video.html