Why trading system don't work

Ya Cryten I didn't follow that response either - made no sense to me. Well I guess I am just too frickin stupid to understand those deep thoughts. That probably explains why I can't make a pip to save my life. Maybe I should rethink my career choice.

See ya in the bee's nest!

NOFX

Who let the dogs out??

Arctic, this has been discussed many times before on this forum.

See http://www.forexfactory.com/showthread.php?p=1492382

Dr Van Tharp is a psychologist and author. He is not a trader.

I wonder how many of the 1KT traders here use a coin toss entry method. If it could be shown to work as profitably as anything else, it's a safe bet that they all would.

If all that was required was MM and discipline, then every EA would work profitably.

David

The Dragon took me off my leash and let me go outside to play in the grass. Just trimming the edges now.

this is not about a system
it about an understanding of Money management
this is a test that is sometimes used on new traders

teb

Hi Folks !

First of all thanks for this bunch of posts
It seems that there are a lot of different opinions on this subject...
My intention was to provocate a little bit ....
Until now I think that the ones I'm thinking of are still behind the curtain..
Cryten, Gnat you have some background regarding this stuff.....
I have met some bigger traders during my summer vacation in southern france.
They are settled in Monte Carlo.
One guy worked for Citigroup and the other for BNP Parisbas in France.
I've visited their trading office and the only thing I saw were screens
with bar charts and horizontal lines on it.
I asked them : What are these lines ?
And they answered with a big smile "Support and resistance my friend".
The magic was that they forecasted the price targets with an uncanny
accuracy....
It was only an observation for a business day and of course they
didn't share their secret
So I think there must exist some information about order flow.........
stops and options seem to be the magnet which cause order flow
every day....

Just my 2 cents

Bernhard

Oh, my mistake.

I think he was referring to people on FF maybe. Just a guesstimate from reading so many threads on here, I'd say the majority of "old-timers" preach trading naked.

I also know there are plenty of pros that use indicators, Rob Booker for one.

i apologise you thought i was talking to you but yeah there are many ways to butter your bread in this business. Lucky for me I know a few very succesful traders who appraoch the market in completely different ways. 5 minute charts, asian sessions, counter trend, trend trading, supp/ress, fundamentals, you name it. But they are good traders they don't have magical systems.

Using Support and resistance can be a very powerful method but it's still a method. They don't know where price is headed, maybe they have a bloody nice edge in where it might go 70 or 80 or even 90% of the time but if they knew for a fact where price would hit I doubt they would still be traders they would have compounded and bought a couple of galaxies by now and be ruling them all

Traders are losing and losing big because of one simple thing,

volatility.

People keep trying to fight fire with gasoline, you simply cannot do that, gambling and smart gambling is what this game of trading any commodity is all about, not hopes and dreams.

PS- Support and Resistance is just an illusion, everytime you see it, try to pen point it, you keep going on an endless loop of guessing games. Which way, which way?! Don't even try to use this stuff, real profits have nothing to do with S and R.

err this "volatility" is brining in the pips for me...why state your little opinion as fact it really is irratating. foxtrot oscar.

I have to agree with some of the statements... especially the ones that say there are people out there who could trade without charts... I'm one of those who is getting to that level...but then again...I'm a newbie and sometimes I mess up...

I disagree with the statement that you can only make multi-million $$ if you know which way EVERY pair is going... all you need to do is spend some quality time with ONE pair... and get to know it's habits and patterns very well... and you will win ALL the time...on that pair... it's no rocket science... but what is difficult for most to understand is that PRACTICE makes perfect...in every case... they teach that in elementary school.. and it's true in FX trading as well...

Most traders are failing not because they cannot trade...they fail because they want to be in a trade all the time... winning all the time and the more trades they make the more they expose their capital to loss...

This week I made less than 10 trades... that's it... but of those 10, all were winners... with very very nice profits...

Happy trading everyone...

Professional traders working for investment firms A) do not know where price is going, B) they do have losing trades like everyone else and C) many use the same stuff most retail traders use (MAs, S/R, trendlines, etc)

I talk first hand experience.

It's always amusing to hear someone (who apparently can't do something), tell people (who are already doing it), that "they" can't do it......

...in addition to not offering any supporting basis for their claim....AND....not offering any supposed alternatives of value!

I can't be bothered wading though this whole thread, trading systems can (and do) work and trading systems are not necessarily about predicting the future, plus what the previous poster said.

well, i still try to understand the market's system, some called it economic...

Craig,it's oxymoronic statements like this that make my blood boil.

1) Your apology for being lazy is accepted. A drive by posting when you admit to not even knowing what a thread is about always goes down like a lead baloon.

2) (quote) trading systems can( and do) work (unquote)
I must admit that I spend my entire day looking for Gems of information like this. Do you have something to offer, something simple like some proof.

3)(quote)trading systems are not necessarily about predicting the future.(unquote)
I think it would be safe to say any trader who has ever taken a trade would dissagree with you on this point.
Have you ever taken a long trade and prayed for the price to fall?
I was under the impression that when you take a long trade,you actually want the price to rise. If you THINK price will rise are you not PREDICTING where price will go?
If as you say trading systems do work, what does your system tell you? Where it thinks price WILL NOT GO.

Roy

Hi Roy,

It seems I've stuck a raw nerve, so I'll try and lay it out point by point.

1) Not knowing what the thread is about.
How you get this from my post mystifies me. 'I can't be bothered wading though this whole thread' (emphasis mine) does not mean I have not read some of the thread, I politely suggest your reasoning is flawed on this point.

2) Proof of working systems.
Proof of working trading systems are common on the internet (say for instance, the recent MQL completion, in fact many brokers run automation completions), so in my view the premise of the thread is simply false.
'Systems' do work.

3) Not predicting the future.
As for not predicting the future, I suggest Goggling the term 'Statistics' and see what comes up, I don't care if the price goes up, down or sideways as long as I'm happy with my profit stats at the end of the month, so no, I don't site around torturing myself over individual trades, sorry. You could split hairs over this and say that I'm 'predicting' market conditions are not going to change, but that would be infantile, any argument can be infinitely regressed to the point of being meaningless. To put it another way, I don't sit around drawing stuff on chart looking for patterns, I just run the numbers, I don't even look at the chart.

How this amounts to an 'oxymoron', I'm not exactly sure...I would call it 'a statement of my opinion', there is nothing remotely self contradictory about it.

Hi behof and others on this particular thread.

I dont often comment on FF pages, well havent for a while.

But just to let you know, i did once work at an investment bank, and I know how the system works, and Behof, as much as you tried to make sense of it, and you were close to the mark, it simply doesnt work that way.

Go to my thread i posted on market makers - which gives you an insight on how investment banks work
http://www.forexfactory.com/showthread.php?t=5809

But could i firstly say. And this is something that needs to be corrected, cause its giving false information to hopeful traders out there. The stat is actually thi.s.

95% of all traders fail within the first 6 months of trading.

NOT

95% of all traders lose, fail or are unprofitable all the time.

I for one can say that im a relatively successful trader - not hugley successful, but im slowly working my accounts to a point that im happy with. I trade from home, and I know many more who are the same. It is possible, it comes down to you as an individual and your experience behind the screens. Same with any other occupation.

Apprentices are apprentices for 4-5 years for a reason. To learn the trade. I think if you were a full time trader, it would take between 3-5 years to become totally proficient. Some more, some less.

Investment Banks as a single entity cannot move the fx markets alone. On stocks its a little different. But with fx volume and sheer size, there is no one major banking institution in the world that can move any of the MAJOR PAIRS, by themselves. some of the smaller pairs, maybe, but it is out of question to consider it a reality on the majors.

If they did, it would need to be a collective effort. Banks in the past have been known to move price action, but usually there is a collective amount of funds behind such moves. The real institutions with the most damage potential are major Central banks. The major central banks in the world that have potential for damage are - the fed, the ECB, the Bank of Eng, the Reserve Bank of Australia, and the Bank of Japan. There are some others, but generally these central banks are behind to moves on the majors.

Investment bank traders, do use, technical and fundamental analysis. When i was working on the desk, we did use these tools. We also did have collective information on who was buying what, and when - in terms of our own client base. Which is also helpful.

However, the FX market itself, on a MAJOR PAIR, is too large to be dominated by one single bank.

This is the simple reason why i myself decide to trade in this particular market.

Now - systems work. A system that is very similar to my own, is the 4 hour MACD system that Phillip Nel have very respectfully taught dozens of traders to trade on his thread here on FF. I admire the mans work, cause trading full time, is somedays a 14-16 hour job, and to have time to trade and to teach is remarkable - and is definately a thread worth visiting.

Keep your systems simple, keep your trades simple, and you can be successful in the market.

It isnt impossible, but I think the best advice that can be given, and what was given to me when i first started was. Be realistic. Be realistic with how much you need to lose before you begin to learn, and become profitable, be realistic with your lifestyle and if you can fit trading in.

Trading for a living is a total lifestyle shift. Your life revolves around markets - and at the end of the day, you just need to be passionate about trading itself to get anywhere. Not the money that you will make, but trading itself. You gotta love the dynamics involved and the game that it is.

Money is a bi-product of success. Success is achieved through your passion for each and every single trade you place in the market.

And not only that, the most successful traders out there are always by the markets side....they are following the market 24 hours, through their own lives - through marriage breakups, bringing up their kids, doing their hobbies. etc.

If you truley want to be trading for a living, you need to be prepared to sacrifice and this is what you need to do.

People who trade large time frames, and trade 2-3 hours a day, are either building themselves up so they can become full time trades, doing it for a second income or have a lot of money to play with that their returns will be substantial anyway.

But for someone to be a successful, passionate trader. You need to give it 100%.

If your just in it for the money, and always concentrate on your account total at the end of the day.....forget it. Thats not what tradings all about.

It is possible. Its going to hurt, your going to wish you never took up trading in the first place sometimes, and sometimes your going to be on cloud 9.

Probably why i love it so much. Its just a massive game!

Happy trading, i hope what ive written really hits home - cause i do honestly not enjoy others placing a false reality in what people can really achieve in this game.

cheers

Rusty