Phew..... [wiping sweat off brow] I thought you were going to say, buy high and sell higher with size.... which is my "secret" system.... oh oooops. I let it out of the bag. Darn!
Thanks, I like your Dow Theory as well. Hmmmm... Vacuums? I think that's Nitro's cue. But Nitro, I watch you on live ET chat every day, I already know your system. I'll say it again, as a guy who's been trading for many many years: I haven't found one system that has not been done before by someone else, and I haven't seen anyone present anything, even a vague idea, that makes me think anything revolutionary is even out there. Every "great" new discovery is a rehashing of something old, renamed and optimized to sell magazines and courses. It's like the number of 150+ IQs on the Intelligence quiz in chit chat. Everybody CLAIMS they are special, but statistically speaking, I highly doubt it can be possible. Having a trading idea (generally at age 25, after quickly reading a Ken Roberts book) that nobody in the world has come up with yet in the last few hundred years is like having a 4000 IQ. Extremely Unlikely. I honestly haven't seen a TA system in years that has impressed me beyond the quality of the optimization. And that's not a bad thing. Boring old systems CAN and DO work. You may have heard of breakouts, trendlines, support/resistance? Keeping your work secret isn't helping you reach your elusive goal of profitability. But it is hurting. You are losing out on an exchange of knowledge which could be the difference between success and failure. The people who are making money are the guys who can pull the trigger on a simple system when everyone else in the world thinks they're nuts. It isn't their "MA crossover with an oversold MACD divergence" system that's making them rich, it's their discipline and massive amount of screen time waiting for perfect signals that's making them rich. They, the traders themselves, are the secret of their success. THEY are the Holy Grail. Money management techniques have been examined to death. Technical Analysis of all kinds has been done to death. Arbitrage tricks, scalping techniques, every crossover or divergence of every indicator with every other indicator has been done to death and automated. The only place that is not completely covered, besides scams and illegal tactics, is the "art" side of trading. While the TA side is "scientific" and objective, and has thus been done to death, the Fundamental Analysis side is still an art and has the potential for new discoveries and untapped veins through contrarian viewpoints. But since it's an "art", it's very difficult for us to read The Alchemy Of Finance and become the next George Soros. People wonder why 90% of traders fail. Here's why. 90% of traders are afraid to work with others at all, even to the point of telling which indicators they use, and thus stagnate in their own childish incompetence without allowing anyone to throw them a life preserver. Here's what our "screw the other guy over, it's a war of attrition" Elite Trader culture gets us: we have a culture of secrecy, distrust, and deception which ensures that we duplicate efforts endlessly; we have no quality peer review of our work, thus leading to flawed systems which destroy us when tested in the real markets; we cannot learn from others mistakes and "stand on the shoulders of giants" (yet a group of young Chinese traders gathers two blocks from my house to teach each other and learn how to kick our white asses); we cripple this website, since there's no point in visiting a website where nobody talks about anything useful and the porn guy just quit. I'm sure you can think of more. But basically, the failure rate could be 50% if people worked together to actually teach and learn something. There have been piles of book reviews here, but has anyone posted their notes from any books? No, because we all hope you fail and we don't want to share the fruits of our labour with anyone else. If you fail before we do, then that makes us feel good because we're that much closer to being in the 10%. How's that logic? We read a book, and we're not going to trade our notes for the notes of that book you read, because we think that we can outlast you if we don't help each other. Now we've doubled our workload by refusing any division of labour, and we're happy about it for some reason. Meanwhile, the big companies have division of labour down to a science. What an edge we have given them. They are trading against dullards who are killing each other rather than helping each other succeed. I know that there's a theoretical difference between posting actual systems and posting general knowledge, but I find that nobody wants to post either here. I trade the Japanese Yen, the Euro, the British Pound, and the Swiss Franc. Tell me which members of ET (or all of them together) are swinging a line that can ruin my entries and exits in those markets, especially since I'm primarily a longer-term trader. Gimme a break. Anyone who'd blow 100 million dollars to move those markets 50 pips to try to blow my stops is an idiot, and Darwin will take care of them soon enough. Just as soon as he finishes with us.
cable, an extremely thoughtful rant. thanks for the exacting criticism. i'm trying to remedy the situation slightly on my journal. I am reluctant to share my "edge" with the trading community but I am posting real-time trades that exactly mirror the system I have "optimized" from old boring indicators that never seem to work. From the looks of my p/l ledger I've hit a sweet spot inthe cycle!
Big thumbs up for you, Cable. I couldn't have said it any better! There is no secret, there are just trading ideas with different combinations of technical indicators. I personally use EMA, MACD, DMI, and one particular indicator in addition to weekly, daily, and intraday charts. My success is rooted in hardwork, usually 7hrs of combing through thousands of stocks manually to get 2-3 potential trades. Trading can be financially rewarding but can also be strenuous. At least, mine is streanous! I enjoy the manual work though.
Those are all solid indicators. Use them together to weed out any false entries, take only the best setups, watch out for trading too much size so one mistake can't kill you, and keep up your discipline and hard work. I think you just gave away most successful people's secret systems. I'd add "keep a journal" -- so when you ask yourself "What on Earth was I thinking?", you'll know. Learn from your mistakes every day and you'll be in the 10% of winners.
Cable, Good to have a confirmation. Glad to tell you that I first alerted the trading industry on a particular setting for EMA in 1997. The likes of Welles Wilder, George Lane etc found it unbelievable. I did not develop any indicator but I have mastered the art of using the said indicators to generate gargantuan profits in buying outright options (what most Turtle traders have not been able to do) albeit hardwork was/is involved but being minimised by several traders who work with me. I can to some degree of authority say that team work helps.