Successful traders keep silent because trading is so simple...

Discussion in 'Trading' started by ion, Jul 3, 2007.

  1. indexer


    1.) Yes, discretionary traders must use simple methods because you cannot trade if you have analysis paralysis. In trading you are like an athlete, you need to see and act.

    2.) There are no secrets, everything leaks out.

    One method may have a great edge for three months or a year, but then loses money after that. If you were to back-test that method for 3 years you would say, hey, this has no edge, but for six months it was like printing money.

    The people who were in on the "secret" from the beginning of the move most likely stumbled onto it. At first they are too busy to share their secret and besides, they don't think it will last. Then if it keeps working, some will start sharing it with their close associates or family/friends. Then when it starts breaking even or losing, some people sell the method to the general public. Finally when it is a confirmed loser, it leaks out for free to everyone.

    So, the "secret" simple method is really only 5% of what you need to know. I think Larry Williams once said that you can use almost any tool successfully if the market is right. The rest is money management, personal psychology, getting comfortable with randomness and recognizing changing markets and exploiting them.

    Hedge funds will run multiple systems that are optimized for different market conditions. If one starts showing profits, they throw money at it. Discretionary traders need to have that same flexibility.

    If I were a systems trader, instead of trying to find the holy grail that works over a 5 year period (which might be impossible), I would optimize several systems for many market conditions and then run them all real-time and see which one is showing profits and start putting my money there.

    Of course there is no guarantee that a new market condition will have any staying power. Conditions that last 6 months to a year (like the tech bubble or the 2008 swinging market) are rare.

    Anyhow, thats my two cents worth.

    #231     Nov 8, 2009
  2. jjf


    You seem to uncovered the roots of ET
    #232     Nov 8, 2009
  3. Great analogy.

    In comparison a lot of traders attempt to learn to drive a car for a few weeks and find it impossible so they give up and devote their lives to telling other people that taking a bus is the only safe way to travel and people that drive cars successfully are just pretending to do so. Then they want you to produce your driving record to prove you can't drive.
    #233     Nov 8, 2009
  4. Yes, many of the successful ET traders got tired of being told they were liars and ignorant by full time posters who have no idea how to trade.

    My main use for EliteTrader is to gauge trader sentiment and measure the wind. Of course for use as a contrarian indicator. There is hardly anything useful for my trading here. Almost purely for entertainment purposes.
    #234     Nov 8, 2009
  5. tim sykes is super sucessful and he tells you his system
    #235     Nov 10, 2009
  6. lakai


    While I am in total agreement with the topic title itself, you are way off on your reasoning about why successful traders dont talk for selfish reasons.

    Fact is that you can try your best to explain to people who can't see how easy it is but they will not understand on explanation alone. It is my opinion that most new traders go into it with "trading is difficult" embeded into their minds.

    They waste too much time and effort on 3 things.

    1) looking for "holy grail" indicators
    2) reading trading books
    3) trying to follow so called "gurus"

    they solidify in ones mind that trading is supposed to be complex. They can create a false sense of confidence.

    Until someone has been gone through enough pain to be able to admit to themselves that the things they looked for is not working. They will then throw all the BS out the window. It takes people years to be able to completely throw something they are so used to doing out the window.

    Bottomline, trading is not something that you can read about and be good at. Just like anything else, you get better with experience.

    "The name of the game is to figure out what DOESN'T work... there could be tens of thousands of items on your list, and what you do is to throw out the items one by one, until you're down to the last 2 or 3 items that really stays there..."

    That part is so true..

    to be successful at trading you only need to do 4 things.

    #1 Learn how to read a chart
    #2 Learn Technical Analysis
    #3 Don't have a bias
    #4 Trust yourself

    IF one can do those things, you will then be able to execute and make money. Everything else is just a distraction.

    Edit: I just realized how old this topic crazy
    #236     Nov 14, 2009