Why do 5% of Traders Win?

I’m not falling for this shake out of the weak hands. They’re just running it up to hunt all the stops…

 

Who are the morons buying this POS???

 

See the attachment to understand why only 5% of traders win. The market rewards what is difficult. Trend-following programs dominate and they don't give up easily. The easy money is in the direction of a strong trend. Trying to pick tops and bottoms is best left to the "professionals".

 

Great illustration. Love it.

Can you explain "scalpers short setup" comment. The succesful scalper would or wouldn't go short at the point of the failed breakout? I would have likely taken the short after the red bar on the failed breakout.

 

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Great- points NO-Dogi;
except instead of ''Whoa, you can predict??''

It more like ''No, you can NOT predict''

As the moving average ribbons[mars].. Mr Guppy [old timer]wrote;
''NEVER confuse a high probability with infallibility''
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Great quote;
not that allprofitable trend traders/investors use high probability.. . Wisdom is profitable to direct.

 

When a strong run breaches a key level by just a few ticks and you see some real size hit DOM as the large collection of counter-trend traders' stops trigger into market buy orders (or sell orders in a down trending move), providing a lot of liquidity to sell into, a quick CT scalper can immediately sell short with a stop of 8 ticks or less for a very low risk/high reward scalping opportunity. I think my friend got short with a 4-tick stop and scalped more than 20 ticks in very short order.

It's especially high probability when the key S/R level is near a round number and is an "older" level. If there's a well-defined trend in progress, you wouldn't go shorting a few ticks above the previous high because that's a with-trend breakout and will likely run much farther than a few ticks.

But as you can see on the chart, the 108.99 high from near the pit open resulted in a strong selloff that eventually broke the pre-market low. When price finally makes its way all the way back up to that level, there are a lot of old longs looking to "escape" near break even or for a profit. Price is not at that point in an uptrend on the 5-min chart by any means until that high breaks with conviction and price comes back down and finds support at or near that level. So when the high breaks by a few ticks and size hits hard there, a quick CT trader can get in for miniscule risk.

 

nodoji, I echo the thanks for the great example. I also would have thought that in keeping with the "no prediction" mindset, one might have shorted at the failed breakout, then seeing the reversal failing @10:45, get out, then next seeing that the resistance is breached @11:00 one might go long at that point. Wouldn't that be less "predictive" than going long at 108.87? it could have easily bounced again for a triple confirmation of the top too...

 

Thanks for your answer. Good info.

I also find it interesting that you chose to wait until 109.47 to go long. Seeing three red hammers in a row in an up trend, I would have immediately gone long if the next bar opened green, with a stop equivalent to the open of the previous green bar at about 109.15.

 

If you look at the two pull backs you will see once a green bar reverse pivots towards the trend there's a sweet gain to be made.This is very common. I Set stop below the support of the previous pullback bars and let the trade ride with a good r:r trade.

I agree intraday trading can gain momentum and you can continue to buy higher. Personally though after a couple reverse pivot trades with the trend and some money in the bank. I like to wait for some true confirmation to short instead of buying higher. If confirmation never presents itself i don't trade.


That's just how i trade. Not at all saying it's the right way to trade. Everybody trades differently and perceives charts in a different way. Also people know how to trade there own setups.They have a good idea when to take em and when to leave em.

hopefully you don't mind me re posting your nice charts and great commentary just wanted to illustrate an easy entry.

Just a quick question. What do you think about scalping Forex verse scalping futures? I have never traded futures nor have i looked at futures charts.

Any opinions would be highly appreciated

 

That pretty much sums up everything you need to know.