Why are we afraid of simplicity?

Hi jjk2,
Even if 2 pairs are correlated that mean nothing when you get a signal, if i get a Buy on eurusd and a buy on usdchf, even if they are negatively correlated i take both. If you have a plan, and everything line up, why you should not push the trigger ? if someone in the US need 200m CHF , do he need to buy some EUR too ? absolutly no, the guy dont care if eurusd and usdchf are -98% correlated, he want his 200m CHF. Correlation dont mean 1 pips up, 1 pips down, it can be 25 pip up , 1 pips down and etc.

For what i said about trading more thant 1 pair is realy simple, you cant be 100% right when you take a trade, but with a good strategy , a good way to protect yourself is by trading more pairs. even if your system have 90% win/loss ratio, that dont mean you can't have 20 lost in a row on one pair, but by trading more pair you reduce the risk.

Best Regards,
EricFX

These thoughts are very valuable. However, i've had a question for so long that is "why is 'simple is best?' " .

So far i see no people tell me why simple is best. Usually ppl (newbie or powerbie) just declare 'simple is best' as if it is like earth is round.

my feeling is that those vegas or james16's methods may be simple, but for a newbie to follow and make profit like them? no way 90%. why? because nothing great in this world is foolishly simple.

are those powerbies from very beginning using their "simple" methods to earn? no way! They learned too much stuff during their long way. Too much knowledge/experience combined, interacted, and finally formed a feeling or a view or an instinct for those powerbies. With that kind of view/experience/knowledge, they make a simple move, and get profit.

my guess is that "simple" is not the best. "simple" only looks like best.
if simple is best, just design an automated system based on vegas, james16 etc, and let it run for profits, now that many believe "simple is best".

you must walk a way like:
stupid --> simple(naive)-->seasoned-->simple(clear, reasonable).
for the 2nd simple, a newbie cannot just play in that way from the beginning of his/her journey.

Just my 2 cents.

Could someone just tell me the logical reasoning process on "simple is best"?

before i get the answer, i'll carry on my way being complicated. our oriental thoughts are always like "u don't know how simple is simple without knowing how complicate is complicate first."

good luck, and newbies, don't think about this question too much, hehe.

Simple is best because most people add complexity to create the illusion of increased certainty.


Instead they would be better off taking the simple display of price and beginning the complex process of learning to interpret it directly.

Most start by adding indicators to create illusory certainty and then have to strip back the indicators later to start the process of learning to read price movement. It's hard to perceive reality clearly when you cover it with a complex of indicators. Think of it as akin to the developmental process of pealing back your ego protecting conditioning to uncover your true (Buddha) nature.

Do you think the bucketshops might be wrong? I do not think so, if you look at the argument differently.

The retail market is not referring to the interbank market. You and I are not part of the interbank
market. This retail market is dominated by the bucketshops or is the same as the bucketshops market.
forget about today's bad usage or meaning of bucketshops.

What I am trying to say here is that statistics cannot be wrong, and if bucketshops says
that 95% of people trading with them don't make it, then they are right. Even the 70-80% figure
you suggested is still too high.

If statistics is anything to based our decisions on, it means the methods of trades
of 95% of traders are wrong. This is thread is proof to support my statement. If 95%
of traders are using the right methods there will be no need for this thread.

That is why the brokerage business is lucrative because they know that 95% using
fibo, SMA, EMA, MACD, Gan, name it will not make it because they are using wrong
methods to bet with buckeshops. It is not that 95% of traders are not intelligent,
there is no just other methods available to them. Even where there are some good
expensive methods most people are content with wasting their time and money using
these inefficient methods.


Take this forum for example, we have so many indicators and mathematically sound trading methods
that do not consider the role or behaviours of bucketshops and other market participants in their equations.

That is why they performed today, and tomorrow they are unable to repeat the same feat.

If bucketshops figures are right, it means that trading is
not all about complex indicators, but about having a simple method to beating the bucketshops. And that method is not going to come from
existing linear mathematical methods....because mathematicians or those
who code or develop strategies have not even been able to understand
how the market they are in operates talk less of coming up with method to
beat it.


See one good thread by acidguy

http://www.forexfactory.com/showpost...ostcount=43682

How many people take that thread serious or can come out and say I have a complex
method to detect the problems raised in that thread.

Someone once asked me that he is only looking for a system that will not cost
more than $200 at most he can plugin and he do not need to seat by his pc and watch
the market but comeback in the evening and be profitable.

That is what people refer to when they talk about simplicity - lazy technique that
will not be able to detect the intrigues, dishonesty,and manipulation of the real market players.

Why do traders search for over-complicated systems?

Because they refuse to understand that the key to trading success/failure is within you, your discipline, patience and psychology. Therefore, if they fail to make money with a simply trading system, they can always blame it that they need more high-tech indicators instead of blaming the real reason: they took a half-assed trade when they shouldnt have.

Always searching for the latest, flashiest indicator eases their conscience so they can blame it on the "crappy" system rather than on the "crappy" trader.

Hi WTB,

REALY nice post. Like you said, its easier to put the responsability of a bad trade to the trading system rather than just say "well, my bad".

To much people just want a system to have free money, they dont want to understand how it work mathematically, they dont want to monitor each trade and dont want to know how the currency market realy work. What they want its a EA who will do everything for them.

The lack of knowledge make thing over complicated. Too much people see some publicity who talk about "fast money", "low risk high reward" etc and think they can make a easy living with just some indicator and a 500$ account. They dont have any mathematical background and dont know how a indicator realy work and how it react with different type of market but continue to think they will make a living out of it.

EricFX

You have a very nice profile

I had a thought (wondering across my simple mindscape) that I might be seeing this wrongly from being in the game a while. I see price as simple. A newbie doesn't. To a newbie price testing and retesting a support probably looks like so much complex noise. But a stoch going down and then turning back up is simple.

So maybe the problem is that what's simple to a trader who's spent a few years watching markets and seeing how price and prior price interact is very complex for a newbie. So they seek simplicity (and increased certainty) in indicators and systems.

They are not afraid of simplicity ... they are desperately seeking it.

But its in the wrong place.

simple is not easy is not lazy, they may be in the same word, but still has different meaning....

Learning Forex, I believe, is about the same as doing a University Degree.
The only difference is that you have to pay for lessons without any Teachers!
The first year is always the most expensive as you learn where all the classrooms are located and,more importantly, you discover the Library. The science Lab has lots of indicators and systems to test, being a good 1st year student, you probably test them all.
The second year is somewhat less expensive, this is when you spend a little more time in the classroom marked MM.
If you make it to the 3rd year, and passed all subjects to date, the cost of lessons should reduce to almost nil, by now you are concentrating most of your effort on your inner self, your belief systems, and temperament.
You will know at the end of the 4th year if you have obtained your degree by the fact that you are now in the process of recovering all the fees you paid in those early years, and if you have Honours degree, you actually may be ahead in terms of $$$$$.
Now, and only now, you get to throw out 90% of what you learned, and go back to KISS. (Keeping it simple stupid)

Roy

I have been trying to keep it simple with barriers and occasionally fibs. Sometimes it works, sometimes it doesn't. especially in consolidating markets. I've got burnt so many times.

Can u guys share your methods?

Hi Pip Monkey,
There plenty of trading system in this forum but if you want my opinion,build your own from what you understand right now. Using X type of indicator with X timeframe, waiting X time before taking a trade, etc will only wast your time. Think in this way, what will happen if you use a trading system build by others and after 4 month you see it dont work very well finaly ? do you wasted 4 month, sorry but yes.

Build your own from what you understand and know. If you lack of knowledge to do that there no problem, keep learning and when your ready start to build from what you learned and discovered.

If you run a buiness, you will not let anybody tell you what to do. Its the same with Forex, your own money, your own account, your own strategy.If a guy dont know how to run a buiness, he should learn how to manage one, or simply not run any buiness at all.

Best Regards,
EricFX

I disagree with this statement. The more pairs you track, the more options you've got.

Unresolved insecurity




.

Alright now!!! How the hell did you get your hands on my template?

Almost forgot.

Not sure why simple is best... but here's a nice link that explains why keeping it simple is... well, not so simple.

Enjoy.

http://www.seykota.com/tribe/TT_Process/index.htm

my trades are just based on break of trendlines. i think when something its too simple..

most people will choose to ignore simplicity..most people believe that the more complex things are...the better they should be..just my 2 cents

Hey guys,

I just swung by this thread and thought I would clutter it with my ramblings

I trade for a living. I win I lose I learn.

Fear I THINK comes from thinking this is a big scary intricate job that will eat you alive and you MUST have a complex method/system to BEAT the market. This IMO becomes a self fufilling prophecy I THINK. at its core a lack of knowledge.


I will take this out of trading and maybe put it in another light...

Take this as a career a skill/art whatever, but work with the assumption you are not born with it necessarily, but you can be taught it.

this might not be valid but lets just use it..

Take John and Tom. Both want to be a pro chef. Get some michelin stars and live that life. They both Have thought it out and love the idea and can turn it into a life's passion.

Both suck from step one , but have drive and work ethic

Tom and john make their "plans

Tom looks at restaurants, pours over menus go on a culinary whirlwind trip around the world actually so does John to get a feels for the thing as a whole

Cooking on a world class level can be very complex and daunting to the neophyte

Tom and John get back the are ready to rock! scared excited , broke! all these things!! hehe

Tom decides he is going to take the world by storm and immediately sets out to cooking class and gets cookbooks and secret recipes to learn the most gourmet, delicious dishes imagineable! He busts hump !

Tom has no ability to cook but these recipes are proven and they were on ALL the best restaurant's menus. He has already retired in his mind a wealthy man.

John, thinking it over realizes, like Tom, he can't cook but need to learn. He is scared excited driven and has michelin stars in his eyes. world by storm whatnot

John thinks differently then Tom. He ate at the same places same menus same end goals , but he sees things differently. Instead of learning the best french recipes out there day 1..

John figures he better get a handle on the BASICS... what do ingredients taste like ?and how do they combine? what causes bread to rise... how to use a knife...etc.. you know start at the start like the pro chefs did.

Fade that Tom says! He has spent a fortune ,but has a menu that LOOKS mind blowing. The Fat duck is in his sights. Wealth and fame!

You know where this goes... neither Tom nor John could cook a world class meal right now. Difference is Tom THINKS he can.

Tell you what though ,John will slowly build confidence in his cooking and continually grow as a Chef and lose all fear with experience and mastery of discipline and basics.

He can fix bad dishes and can create his own new ones from his own experience...in fact he uses all he own recipes or personal variations.

John has a good , rewarding and eventually very profitable career.

Tom, opened his restaurant and then promptly closed it. The food was off. He was following the recipes like he had but it was just not up to par! on night off nights concistancy nope... overall blech. Chef Ramsey gives him a vicious beating and burns his restuarant down in disgust.

Tom doesn;t quit though. he goes out and gets a new set of recipes and does his own tweaking and repeats the cycle and always complains about how this business is so tough.

If only he could get some good recipes!!
or a better hostess... ?
some better adverts?
Maybe the whole theme was off... ??
maybe it was the wrong city for his genius!
These recipes are gold they work! what is wrong?
he hears some French wizard with three stars has some genuis recipes... maybe those will help?


Truth is Tom has no clue whats wrong and probably will never know. He will amp up and burn out until he goes broke or changes his thinking or Chef Ramsey will get him

In that same time, John has become very handy and has his own menu and is doing quite well always learning and researching. He has good and bad dishes and learns from both and knows why they were either.
He gets his star eventually.

Over time John realized that cooking was simple and got very EASY after A LOT of HARD WORK! it was a mastery of the basics( wihich took time and work and it follows was the HARD part), mixed with experiance and some personal technique thrown in.

His most favored dish is a simple roast chicken that would peel your face off it is so good.

He CAN make all the fancy dishes aswell but realized the majority of the best ones are just simple things in different clothes. He couldn't see that before he knew HOW to cook.

John's fear steadily decreases with his experiance and knowledge, Toms fear ranges from panic to calm with restaurant cycles. new one working ...calm ,...now it failing it is shut down CRIPES!! AHH!



Last thing.

Do you know why your indicators /system is/are giving you a buy sell signal?
Do you understand what the market is doing/did to trigger them?
Can you trade without them?
if it stopped working could you fix it? would you know why it failed?
Does it work better for you or the creator?
Do you / can you take personally responsibility for all your wins and losess?

If you answered no to any of these you MIGHT be Tom. If you are consistantly profitable who cares though? Not me.


I THINK people would be better served to learn HOW to trade( which I feel to be a universal skill across all pairs and markets), not to learn how to trade a SYSTEM. IMO

This is just my opinion and you shouldn't ever take anything at face value. Do your own research be open to anything , but test everything or not.


Sizz.

if i may just jump in here and say...I was reading the beggining of this thread and got a bit frustrated and skipped straight to posting my reply....Let me begin by saying that I am a total newbie to this and have only traded demo for about 6 months to no avail what so ever....My problem as a newbie is not whether I want a ton of indicators or simple price action but I want what works...every where on these forums there are so many conflicting information on what is correct and what is incorrect that it seems that it would be impossible for anyone to attain the correct information in order to become succesful....I saw alot of people bashing people who simply want ea's and dont want to do all the hard work...I have no problem with the hard work what so ever but by that rational would you turn down a million dollar gift if presented to you because you feel you didnt work hard for it? cause I sure as heck wouldnt and If i ever. they tell you to remove emotion and trade like a robot. By that rational one would be lead to beleive that an ea would be the best way to go...not too be lazy but assure your removing your emotions and trading your plan without deviation....Like i said I am totally new to this and my apologies if my opinion offends anyone...So how does that 5 % become profitable...I dont care how much work it takes , stear me in the right direction and I assure you that i would have more than enough preserviernce....how ever sometimes i get the feel that the 5% that are actually making it are probably on these posts and forums . Only not to help but to purposely mislead the other 95% so that they could continue taking our money.......phew...I feel much better now......

das bullshit jelado.
look at her and look at me
look at her
and look at me