Agreed 100%. Why do people trading losing systems? Because they don't know that they're losing systems. For example, some "guru" tells them that this system makes money and gets them to believe that the problem lies with them rather than with the system. So they keep going on, thinking that they are doing something wrong when in fact it is the system that is not profitable. Or because they're testing in real time and they don't yet know it's an unprofitable system. Strongly, strongly disagree (assuming we are talking about TA based systems. I am not talking arbitrage, averaging down, etc.). Maybe the traders you spoke with are in the 1%. That is so absolutely bizarre to me. I have the mindset to trade but do not have a winning (TA-based) system. I have a profitable system as many people here know because I have posted every trade before hand or in real time for years, but as I admit all the time it's basically at the mercy of the market. I cannot predict direction (all non-random trading is prediction whether "gurus" want to admit it or not), and would be much, much happier with a TA-based system that allowed me to trade profitably. So just to be clear, when I say "system" I am talking about TA that retail traders can do from their homes. I'm not talking about arbitrage. I'm not talking about how market makers trade, etc.
Are you interested in a trade? I will give you one winning trader (myself) in exchange for a system that trades profitably with no ambiguity. I will give you 51% of the net profits for the first 5 years. In the event that the system loses money, you will reimburse me the losses. As the system is profitable and without ambiguity, this should be a non-issue.
wait what Oh I see...that was meant to be a joke.. edges come and edges go.....a system can be hot for months or even years and then ultimately fail....of course you knew that already
From most important( required have *) to lesser important. *treat market as a system. * all market variables are granular, therefore the mathematics is limited to the application of vey few types of mathematics. *classify turns in one of the three types. *classify trends into one of the four types. *in analysis, use OOE's *work deductively form independent variable to dependent variable. *Do not measure (suppress measurements) when the market is not in translation. Trend following does not work, therefore, trend monitoring and analysis is the substitute. To this end consider: Use bar by bar analysis to always know that you know. In approaching the market it is important to use the mathematics the market dictates. Trends fall into two classes: incomplete and complete. Once a trend has fit the complete definition it can go past the expected ending by drifting. when it dies it always has an even number of turns when counted from the begining turn to the ending turn inclusively. In bar by bar analysis several things provides aditional edges. The window of analysis does not extend back beyond the current forming of the current trend. Measuring the current bar's definition cannot be determined before the bar reaches an irreversable state. (most bars can only move forward in their formation. Once a milestone is set it cannot be reversed. It is always required the the reference for the definition of a bar be the prior measurable and defined bar. Any intervening bars do not matter and have to be surpressed from a measurement point of view. *no complete methods of examining the market can be done without having suppression components. I have looked at markets for about 55 years. Less than half of my trading has been done since the advent of the PC. I have used the Scientific Method exclusively for doing my deductions. To examine he system of otperation of the market is the best foundation from which to work. The invention of PC's is a good example of how to discover the system of operation of the markets. Markets flow information. So do PC's. If you wish to simulate the market flow for the independent variable a closely related device would be the die. Keep rolling it and log the relative results as if the peaks and troughs of volume were following an Order Of Events. Coin flipping is used in dialogs only because the bar to enter trading is so low most people just think in simplisitic unreal terms. I know this post is too focussed and too sophisitcated. anyone who has a method could check off the items I posted and then quickly realize they are nowhere even close to beginning to develop an approach with any utility. As you saw in the sarcasm of stock 777, he cannot even envision the SEC citing him or anyone like him ever. Above you see what may be called "edges" by any reader. I use all of these things in combination. The result is beyond the imagination of the SEC. I take money out of Wall Street continually and the SEC considers it an offence to the public. The public is just not competitive with some traders.
Now hold on a damn minute, Iâm not the one making googly eyes at Austin â although As for NASCAR being a real redneckâs sport â not since DE was killed Not sure I want to know what pocket pull is :eek: +1 RN
Right, that is all we need to know to win in a losers game. Just develop something that places the odds of whatever you use in your favor. Even though the public falls short in knowledge, that does NOT mean anyone has a hold on the rest which prohibits many of us to get some of the action. Discretion allows us to be flexible and decisive when needed. Automation at best can mechanize parts of the process. Parts of any day will allow some of us to pocket some cash. Knowing our weakness is not to admit defeat, instead it is a way to move forward. A knife has an "EDGE" but in the wrong hands can cut. In trading a little knowledge will also cut. PS: A touch of America's Cup newest toy. http://www.youtube.com/watch?v=ItiZuU64pnc&list=TLI9KiJgou0OI
Of course profitable systems will eventually fail. For example, many ET members that had traded prop has discussed such here at the forum in-depth about their own edges no longer working after something critical changed in the markets. Yet, a few of them were able to adapt their methods while others stubbornly go down with the ship without (or refusing) adapting their methods for current market environments. This is one of the reasons why some profitable traders have more than one profitable method or use a method that's easily adaptable. Another solution, some profitable traders trade more than one trading instrument because sometimes when a method is under-performing on one particular type of market...it out-performs on another particular type of market (e.g. switching from Emini TF futures and Crude Oil CL futures or vice versa). So yeah, the edge doesn't last forever but there are ways a trader can adapt their methods whenever market conditions changes for the worst.
I already shared my highest conviction price action strategy with you. It's up to you to study it with the instrument of your choice, compile the stats for various levels of entry (close of pullback bar, price turn off key pullback level) and styles of entry (limit or stop entry), and decide what you're most comfortable with. This strategy is based on price action, therefore the edge cannot disappear unless the market disappears or becomes so illiquid that the spread simply costs too much to make trading worthwhile. The only adjustment required is the size of the risk:reward unit as volatility contracts and expands. You are already a winning trader, so I assume your ongoing ET quests for the holy grail of TA are based on disatisfaction with your current consistently profitable system.
You're a profitable trader and you spend a lot of time here at ET trying to learn or understand the trade methods of others including you starting threads like this one @ http://www.elitetrader.com/vb/showthread.php?s=&threadid=267968 In contrast, your trade journals show you as swing trader or long term trader. Yet, you've recently been asking a lot of questions about methods by those that are primary day traders or scalpers. 1) You've decided to become a day trader, scalper or want to add short term trading to your trading plan that involves long term trading ? 2) You're just trying to find another profitable method to add to your existing profitable method or you're just bored with your current profitable method ? What am I missing here considering you seem to know what is already working for you. If it ain't broke, don't fix it.