LOL. Good reply. Yes, I am bored with the current crop of "new" posters displaying cynicism about various methods. If you read your post prior to mine you might spot that superior cynicism that irritates - seem to be a few recent posters with similar themes. As long as one does that one will fail to recognize that success or failure comes from within - most methods can be successful for someone and I've seen traders win with a variety of methods while others fail with the same. mschey, the floor trader method is described in that link but is simply a strategy for reading markets and buying pullbacks of varying depths at various stages. I first ran into it a couple of years ago and it is the basis for all my current trading (zlrs etc without the cci).
I thought TD's complaint to BLB in another thread and BLB's reply says it all. If you take the NQoos links and select the FTS or another simple strategy then you can pursue the path. Simple (low risk) money management. Work on reading the market with a simple framework and on developing a traders psychology. Best of luck - I sincerely hope that you are still here in 18 months.
This is a very interesting quest you have taken upon yourself. With a three day weekend, I'm spending some quality time myself following a different tack than yours. Over the next few months we will probably cover the same turf by going in opposite directions. It will be interesting to see where our paths cross as we keep posting. In the last couple of years, I have been focussed part of the time on gaining an understanding of how to deal with what a person has to go through to get to expert in a given paradigm as a consequence of stepping out and away from the conventional orthodoxy. So I am travelling, methodically, back to the that convention checking out how far it is necessary to go into to find a starting point to, then , step out and away. About the third major step, I checked out 100 books that enveloped the conventional orthodoxy. I did it in a context that I built by analysis/synthesis. I did analysis to find the subordinant subjects (700) from 5 expanded searches in the order of programs, data supply, economics, authoritative TA and authoritative market theory and trading theory. The synthesis was to place these 700 subjects into the outlines of four books that deal with two trading approaches, how any method or approach can be made more effective and efficient and a guidebook on the trader's business plan (provides for constructing a 400 page busines plan). As an amatuer for about 50 years, I have been informally handing off what I do and it appears that over the last 20 to 30 years there has been an upwelling of a a broader interest by what may be deemed a more general public. One aspect of this phenomena is a plethora of sales oriented materials and software products to service those hoping to make money in the markets, all from the traditional and conventional orthodoxy of the financila industry. You can see that the sector of cut rate commissions and electronic platforms is designed to sweep service profits from a broader and broader sector of the public. The trader failure rate is a terrific demonstration of how products and services have been successful in moving money to the few who take it away from the many (servicing charges included) So my travels from my paradigm back towards and to the beginnings of where people start and how they are characterized is filled with setting up the scope and bounds and the depth of this spectrum of people trudging towards some conventional orthodoxy goals. It is a trudge because of the repeated learning of failure and the meager limits of success that these people get to. The conventional orthodoxy only leads to the financial growth that allows most people to tread water in the true value sense. Observe that the big money does not exceed the indexes and the index growth is the definition of treading water. The four books do not do the job and that is easy to recognize. A multimedia requirement is apparent from the platform to the final transference product: the expert trader. The learning model is a core requirement because acquiring knowledge, skills and experience turns out to be a process, without exception. Google "paying dues" An archive is required for easy of reference, books are serial and indexed and not easily torn apart and recompiled into the traders plan. There is no adequate glossary that is in a high utility form anywhere. One has to be built from the design that emerged. The compromise required to allow anyone from any orientation to either learn, serach, retrieve , or adapt partial solutions to personal methods had to be designed and built as well. It is affectionately known as the "oil change chart". Any one can go to an Auto Zone with an empty oil can of any product (think trading method*). At auto zone the clerk looks up or the customer looks up the list of SKU's that are equivalent so he can buy any product other than the one he used before (think going to another method). He also gets to enter our world of trading via a learning model; an archive of knowledge and skills; a three level glossary with links and nodes of related subjects; and a five level concentric subject orientation mechanism. So you have posted an interesting quest and it is a challenging experience to go through. I haven't gone through what you will. At the time I began I was lucky to have been able to create from scratch more or less. I did read Magee fourth edition as an authoritative resourse. And what I found out was that money could be made all the time because price change was always available. I just made it my business to find the most reliable and repeatable way it worked and I kept doing it from the beginning. At the time, Darvas drew the same conclusions. He did not follow the conventiional orthodoxy nor did I. Here in this thread you are getting a lot of support and resourse information on the conventional orthodoxy. The traditions of the financial industry are severely and deeply imbedded in the literature and the multimedia offerings of today. If you follow that route you will get those results. The expression that describes the lock and hold that the conventional orthodoxy has is "What else is there?" It is a question, thankfully but it is darn near impossible to turn the question into a demand for better; if it did happen it would be: "What ELSE is there!!!!!" A common way to deal with most of this that I mentioned is to shoot the messenger. Being shot is very bearable for me and many people know why at this point. * we chose 10 primary common profitable conventional orthodoxy methods to cover the bases.
kiwi_trader - thanks for your follow up posts - I really appreciate it. jack hershey - I think I understood most of what you wrote. You said "You can see that the sector of cut rate commissions and electronic platforms is designed to sweep service profits from a broader and broader sector of the public." I think you could say simply "sweep profits from a broader... sector of the public." The more I research, the more I am noticing a pattern (like chart patterns) of how the industry itself is designed to absorb money. I was away from the investing "world" for six years and, while I was no pro back then, one thing I am noticing as I come back to it is how the most common mantras have changed. Six years ago you did not see nearly as much mention of "trader psychology." If you cruise various "systems" for sale, today the pitch is essentially "are you man enough?" - saying that "90% of traders fail based on their own psychology" is clearly a challenge designed to lure the headstrong. I'm not saying it isn't true - but many things are true and this one is good marketing. Six years ago the primary focus (during a crazy boom market) was "Are you part of the new wave?" You know what book I would LOVE to read? I would love to read an interview book with the traders who FAILED. We spend so much time focusing on the people who are successful - but I suspect many of the people who failed would have most of the same qualities and theories - but if there were differences, those would be the ones I would want to know about. I'm very new and absorbing everything, looking up all the words I don't understand, reading things over twice or more - and I very much appreciate everyone's willingness to share their thoughts. I'm definitely getting to know my own strengths and weaknesses - for example - why can I not understand a paragraph describing a pattern unless I read it four times, but when I see it visually - it makes instant sense and I don't forget it. Maybe that's true for everyone - I dont know. I also know that probably my biggest challege will be overcoming fear and pessimism. Whoops - did I just refer to trading psychology?
I'll stick with "sweeping service profits".... the broker industry is making money from services and not from being in the markets. The service groups to the financial industry make profits from services related to volume of activity. If you want books on failure, do what I do, track individuals in ET. Some have 30 ET pages of posts. I have made three ring binders of some persons to see how they went terminal. There are some good clues on the types of things it takes for getting breakthroughs, too. If you run into a post from a person who says "it takes a few years to.....etc...", then go and see when he got to breakeven and what was before that and after that. Also check out what "doing okay" means in relation to particular themes. "Price only" is one of the better themes for checking out "limitations". Once you see a price only person telling "how it is"...then take a look at the limitations of his performance. He may not even being seeing the market as yet. Do blow outs too. This is an indirect one. You will read in one thread how someone mentioned in that thread blew out. My classic is Nitro and the methods he almost used. I keep track of methods that can be tweaked by using a factor from another trading method. This is sort of a spectrum going from marginal to better. There is a great range of performance but it is only documented up to a cedertain point and after that it deemed to be not in the realm of possibility. Why it isn't posible as expressed by a person who isn't "seeing" it as possible is good to note. You can see this expression as a limitation that the talker is unable to fathom a way around. Finally, Do the "boring" people list (those people who talk about boredom of trading). See how they are bored and what they are missing.
Here is an interesting EasyLanguage Program for Tradestation: Inputs: Length(35), StdDevUp(2.0), StdDevDn(-2.0); Vars: UpBand(0), DnBand(0), Ave(0); UpBand = BollingerBand(Close,Length,StdDevUp); DnBand = BollingerBand(Close,Length,StdDevDn); Ave = Average(Close,Length); if ( MarketPosition = 0 ) and ( Close > UpBand ) then Buy("BE") tomorrow at market; if ( MarketPosition = 0 ) and ( Close < DnBand ) then SellShort("SE") tomorrow at market; if ( MarketPosition = 1 ) and ( Close < Ave ) then Sell("LX") today at close; if ( MarketPosition = -1 ) and ( Close > Ave ) then BuyToCover("SX") today at close;
Steve recommended this on another thread and I spent the 45 bucks required to have a look. Its a short term scalping system plus some extra stuff. If I didnt have a strategy I'd certainly try it and I'm testing adding an extra position to my current HSI trading using the basic NQ strategy. The strategy, psychology and support look like one of the best deals around Much easier to understand than Jack.
If you set Length=80 and ignore commissions, slip and roll, and test on continous futures contracts, you'll find that the backtest is surprisingly close to the commercial aberration system. Saved you 3k right there!