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The Trader's Academy - by Traders for Traders

  • #1,381
  • Edited 11:36am Aug 3, 2017 10:58am | Edited 11:36am
Quoting BBalazs
{quote} Yeah, as it has already been said in this thread: "It's an ego thing - nobody wants the simple solution that gets handed to them, everybody wants to be the genius that solves the unsolvable problem."
I agree to a point, and then I disagree. When it comes to trading, it is true, we all tend to think we are smarter than the next guy, it's human nature. This leads us to make things more complicated than they need be, whilst thinking in our own minds that we are making them simpler.

The part I disagree with, is that there is a simple solution that can be given to someone who then only has to trade it the way it is to make money - if only trading were that simple, but we all know it isn't. Over complicating things is one mistake we tend to make, especially in the early days, but that is only because there is nothing simple about trading to over complicate - it is incredibly difficult from so many angles, which we can see, and so we somehow imagine that the only way to figure it out is to devise some genius strategy that no one else has thought of before.

With time, and much hard work, what happens is what happens to all profitable traders eventually - they start figuring it out for themselves, and then, and only then, does what was so complicated begin to unravel itself so that we begin to really understand what we are looking at and what we are doing.

But maybe that's just me, maybe I found trading so much harder than the majority of other people, as I really can only speak for myself. Perhaps it really is that simple. I've been doing it for that long that perhaps I've forgotten.
  • #1,382
  • Edited 1:09am Aug 4, 2017 12:57am | Edited 1:09am
Quoting nummularius
{quote} I think the primary determining factor is discipline and not a winning strategy. This is such a clich thing to say but consider this: {image} And the thing is this... It's true... I have given out my trading strategy (which totally works for me) to friends and family... I have sat with them for hours and coached them... And by the end, they want to change things, and make it their own. As soon as a strategy, system, or method gets in the hands of another trader it mutates. Here's the most simple of approaches... At any time you wish, click...

Cat has shared tremendous amount of information on this thread, if only we were disciplined enough we all would have been profitable traders by now. But unfortunately to learn to trade consistently is not as simple as copying someones method from A to Z. Conviction in yourself that your doing the right thing at the right time is crucial in you becoming a consistent trader. Would you bet 10contracts on DAX based off of someones method ? How would you know you're doing it the right way ? Maybe on your first try you'll be brave enough to bet that 10contract if you're lucky you might bet it again on your second try until you hit a roadblock (I've been there many many times ) which is inevitable (thats why systems don't work) because market is dynamic - it is alive - it's not mechanic - it shifts and changes its behaviour from time to time.

Only experiencing that change of nature with your own eyes, and only after taking 10 or even 50consecutive losers if you make enough effort to find out what you're doing wrong after years of trial and error you will finally start to learn to dance along with the market. To me it appears to be a skill to be learnt and mastered not only to forecast market movement but most importantly to "feel your way" (as cliche as it sounds it seems to be the case , we've talked about intuition or habit on this thread), rather than simply copying systems to hit buy or sell. Thats why its so damn hard !! I can't even count the times where I was on the verge of giving up - it seemed almost impossible to crack this thing. I can't say I've got this, I was hopeless just few days ago, but something seemed to have clicked recently with me I don't know yet if I was just lucky but deep down I want to pad myself that I was able to "feel my way" , at this point it just feels too good to be true. I know no other days going to be the same so a system will not make you money day in and day out unless of course you learn to "feel the market" - it will take years of hard work and frustration.
...
  • #1,383
  • Aug 4, 2017 1:03am Aug 4, 2017 1:03am
Quoting Piquant
{quote} Cat has shared tremendous amount of information on this thread, if only we were disciplined enough we all would have been profitable traders by now. But unfortunately to learn to trade consistently is not as simple as copying someones method from A to Z. Conviction in yourself that your doing the right thing at the right time is crucial in you becoming a consistent trader. Would you bet 10contracts on DAX based off of someones method ? How would you know you're doing it the right way ? Maybe on your first try you'll be brave enough to bet...
agreeeee
  • #1,384
  • Aug 4, 2017 2:19am Aug 4, 2017 2:19am
Quoting Piquant
{quote} Cat has shared tremendous amount of information on this thread, if only we were disciplined enough we all would have been profitable traders by now. But unfortunately to learn to trade consistently is not as simple as copying someones method from A to Z. Conviction in yourself that your doing the right thing at the right time is crucial in you becoming a consistent trader. Would you bet 10contracts on DAX based off of someones method ? How would you know you're doing it the right way ? Maybe on your first try you'll be brave enough to bet...
Well said, although I have yet to experience this state in which I can "feel" the market. To be honest, I tend to think it is nothing but the mystification of probabilistic thinking. It takes years of screentime to get a "sense" for price movement, to be able to identify likely turning points and to find entries with a relatively low-risk. During those years when you are sitting hopelessly in front of the screen, trying to become the next Forbes success story, your unconscious mind is hard at work, storing pieces after pieces of information. After years, you will start to see the market's tendencies and discover the oh so "obvious" truths that were in front of your eyes the whole time, yet you were too blinded by the billions of dollars to spot them. And voila, you are the market whisperer. At least that's my experience.

Regarding systems, I believe that you need to have a system that you trade. Preferably one that you create yourself. Although I like to call it a method or an approach. You need to have a clear signal to enter the market, otherwise it is really easy to sit out a trade because of initial hesitation, especially when you are not a pro yet. You could probably trade a random system you find on the net if you don't follow to signals blindly, but evaluate the current sitation and override the signal if necessary.

These are just my opinions, it is not a black and white matter.
Invincibility lies in the defence; the possibility of victory in the attack
  • #1,385
  • Aug 4, 2017 3:28am Aug 4, 2017 3:28am
Quoting BBalazs
{quote} Well said, although I have yet to experience this state in which I can "feel" the market. To be honest, I tend to think it is nothing but the mystification of probabilistic thinking. It takes years of screentime to get a "sense" for price movement, to be able to identify likely turning points and to find entries with a relatively low-risk. During those years when you are sitting hopelessly in front of the screen, trying to become the next Forbes success story, your unconscious mind is hard at work, storing pieces after pieces of information....
I haven't heard any psychic becoming a profitable trader. So you're probably right with probabilistic thinking kicking in after years of screen time and burn outs. As for system, its hard to go by once this crosses above or below and after that or this candle formation you buy or sell kind of rules. There should be rules in which you should play by but like I said market is dynamic no other day will ever be the same. So if you're set on strict rules then you're probably going to be disappointed many times. You have to have rules but you should also be prepared for the uncertainty. Trading isn't a science degree (to me at least) its an art degree, if it was a science degree figuring it out would have been a lot easier. But that's not meant to say science is easy in any way.
...
  • #1,386
  • Aug 4, 2017 3:50am Aug 4, 2017 3:50am
Quoting cat
{quote} With time, and much hard work, what happens is what happens to all profitable traders eventually - they start figuring it out for themselves, and then, and only then, does what was so complicated begin to unravel itself so that we begin to really understand what we are looking at and what we are doing. But maybe that's just me, maybe I found trading so much harder than the majority of other people, as I really can only speak for myself. Perhaps it really is that simple. I've been doing it for that long that perhaps I've forgotten....
"they start figuring it out for themselves"
this is pure gold.

Hopefully before they flush out all their savings and determination down the toilet.

My bit of advice for any struggling traders including myself try trading DAX an hour after its open, if you're fed up with currencies like I have.
...
  • #1,387
  • Edited 10:35am Aug 4, 2017 10:05am | Edited 10:35am
https://www.2knowmyself.com/why_do_people_hesitate

One of my weaknesses, and believe me I had a few, was that I was prone to hesitation, and as a trader entering trades on time frames of 10 or 20 seconds, there were many missed trades due to my hesitating when I had the signal to press the button, the price often moving quickly away and beyond my risk tolerance, and because I am a very self-disciplined person generally, I would never chase. Yes one can always wait for a second chance, but believe me, there is nothing more frustrating than seeing a trade race away that you should have had had you not hesitated. Once I overcame this tendency to hesitate, my results improved considerably.

The reasons why we hesitate, over anything in life not just pulling the trigger on a trade, are fascinating, so some of you may find the attached analysis interesting and useful.

ps -I like this. It isn't mine, I got it off Quora. The analogy is obvious. Each time we see a trade opportunity, we are faced with a decision - do nothing and avoid any possible pain, or pull the trigger, knowing we may get burned. But this is not just once, this as traders can be several times a day, even after consecutive losses. This is one of the things about trading that make it so hard. Here it is...


Imagine you have two paths in front of you.

The first path looks serene. A casual stroll across a luscious field of grass, and an effortless climb up a hill where you can enjoy a view of the surroundings . A lovely breeze that would caress your face flows through this field. Nothing spectacular, but you would be content with this tranquility. You would come down feeling peaceful and grateful, ready to continue in your life as you usually do.

The second path is fraught with peril. An ominous mountain awaits you. Treacherous terrain and frosty temperatures will tax your body and mind, and cruel gusts of icy wind swirl through cracks and crevices, waiting to lash out at your soul. A majestic view, one to fill you with awe, awaits at the summit. You are guaranteed to descend with a hardened perseverance and greater appreciation for hardships, as well as a story to tell.

You stand at the junction of these two paths with all the provisions for either journey. Both are viable options, which do you choose?
  • #1,388
  • Aug 4, 2017 10:29am Aug 4, 2017 10:29am
Thank you! Hesitation after some winning trades was really a problem for me. I was afraid of giving it back, instead of hoping that the next one will be a runner. But I am still working on this...
  • #1,389
  • Aug 4, 2017 10:39am Aug 4, 2017 10:39am
Quoting Wachturm
Thank you! Hesitation after some winning trades was really a problem for me. I was afraid of giving it back, instead of hoping that the next one will be a runner. But I am still working on this...
Yes, most people assume it is only difficult to take another position after losing trades, but as you rightly point out, it can also be difficult after winning trades as well for fear of giving back that which we have won.

This is why it is so important never to be over-leveraged on any one trade. Keep the loss size to a minimum, and taking trades is that much easier.
  • #1,390
  • Aug 4, 2017 11:20am Aug 4, 2017 11:20am
Quoting cat
{quote} This is why it is so important never to be over-leveraged on any one trade. Keep the loss size to a minimum, and taking trades is that much easier.
Yes, thats crucial!
If I have a loss of 2% I stop trading for that day. I always use the same position size (0.5%).
Imo the problem with consecutive losses is that we want to force a win, instead of getting more picky.
  • #1,391
  • Aug 9, 2017 1:23pm Aug 9, 2017 1:23pm
There is a great deal of information to process when making a trade. The less time we have spent studying and trading the markets, the greater the number of mistakes we are going to make. This is why it is so important to manage risk levels and keep losses small, because as long as we do this the greater chance we have of finishing ahead at the end of the week. Even a 50% win rate, sometimes even less, can still result in a healthy profit provided we keep our losses small and let our winners run.

As we become more experienced and knowledgeable, our brains become much better, not only at processing information, but importantly, processing the right information.

Trading, like anything else, is a learning process, and it should not be viewed any other way.
  • #1,392
  • Edited 12:18pm Aug 31, 2017 11:59am | Edited 12:18pm
Being a retail trader is one of the loneliest businesses in the world, doing something few people understand, alone, with no shoulder to cry on when things go wrong. It requires massive self-discipline, perseverance and unwavering belief in our own ability, not only as traders, but as human beings. Trading exposes weaknesses we never even knew we had, and our success as traders is in direct proportion to how well we are able to turn these weaknesses into strengths. Those who win this personal battle make it in the end, and it is essential that we understand that the mortality rate is high not just because trading requires so many different skills, but because the majority of those who fail ultimately fail themselves.
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  • #1,393
  • Aug 31, 2017 12:15pm Aug 31, 2017 12:15pm
And then you have to contend with that fat little NK launching a missile on a Monday night causing the market to gap down, blast 90 pips through your stop loss at break even and virtually wipe out a months profit.
  • #1,394
  • Aug 31, 2017 12:48pm Aug 31, 2017 12:48pm
Quoting tomase
And then you have to contend with that fat little NK launching a missile on a Monday night causing the market to gap down, blast 90 pips through your stop loss at break even and virtually wipe out a months profit.
Yes, but thankfully, these random events are rare, but there is always that risk when exposed to the markets.
  • #1,395
  • Sep 2, 2017 3:19am Sep 2, 2017 3:19am
There are so many lessons to learn as a trader, most of which I and others have covered on this thread, but I just want to return to one of the most important ones, and that is aggression, not recklessness, but pure aggression when it is needed.

Buzz Aldrin, the US astronaut who was also a fighter pilot in the Korean war, once said that in man to man combat, if the other pilot was flying defensively, then he had him licked even before the first shots were fired.

It is the same with trading. When you get the signal to pull the trigger, act immediately. Do not then start wondering whether you have made a mistake, because as long as your method is tried and tested, and you have waited for the correct set up, then the chances are that you haven't. If the trade is going for you, and you get a good chance to increase your size, then as long as you have already locked in some profit, then go for it every time.

One of the biggest enemies of the trader is timidity. Measured aggression is a quality you will find in every single successful trader out there. It doesn't come naturally to most though, so it is likely that this is something most aspiring traders will have to work on.
  • #1,396
  • Sep 2, 2017 4:17am Sep 2, 2017 4:17am
Quoting cat
There are so many lessons to learn as a trader, most of which I and others have covered on this thread, but I just want to return to one of the most important ones, and that is aggression, not recklessness, but pure aggression when it is needed. Buzz Aldrin, the US astronaut who was also a fighter pilot in the Korean war, once said that in man to man combat, if the other pilot was flying defensively, then he had him licked even before the first shots were fired. It is the same with trading. When you get the signal to pull the trigger, act immediately....
This is a good one.

especially the part "as long as your method is tried and tested".


Quoting cat
It doesn't come naturally to most though
it comes 100% naturally as long as you're trading according to your preferred risk profile.
  • #1,397
  • Sep 3, 2017 4:31am Sep 3, 2017 4:31am
Quoting cat
Being a retail trader is one of the loneliest businesses in the world, doing something few people understand, alone, with no shoulder to cry on when things go wrong. It requires massive self-discipline, perseverance and unwavering belief in our own ability, not only as traders, but as human beings. Trading exposes weaknesses we never even knew we had, and our success as traders is in direct proportion to how well we are able to turn these weaknesses into strengths. Those who win this personal battle make it in the end, and it is essential that we...
It's awesome, isnt it? Earning money by fighting yourself, by fighting with your own psychology. Noone to blame but you.. The market can never be perceived objectively, it's just a mirrow of your own beliefs, so if you can be mindful you can learn something new about yourself every day.
  • #1,398
  • Edited 5:24am Sep 3, 2017 5:14am | Edited 5:24am
Quoting Wachturm
{quote} It's awesome, isnt it? Earning money by fighting yourself, by fighting with your own psychology. Noone to blame but you.. The market can never be perceived objectively, it's just a mirrow of your own beliefs, so if you can be mindful you can learn something new about yourself every day.
"The only thing in my way is me". The truth of any person's life. I attached something that might inspire you to keep fighting.

Inserted Video
You cannot be extraordinary by being normal
  • #1,399
  • Sep 3, 2017 5:46am Sep 3, 2017 5:46am
Why does a bull candle appear in a bear rally and why does a bear candle appear in a bull rally?
A trade should be based on an assumption based on facts
  • #1,400
  • Sep 3, 2017 5:50am Sep 3, 2017 5:50am
Quoting Wachturm
{quote} It's awesome, isnt it? Earning money by fighting yourself, by fighting with your own psychology. Noone to blame but you.. The market can never be perceived objectively, it's just a mirrow of your own beliefs, so if you can be mindful you can learn something new about yourself every day.
Yes, though for most people it's losing money by fighting yourself, which only highlights the extreme difficulty we all have in winning this battle. It is there to be won though, and it can be won. It is all up to us.
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