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Strategy of losers

  • #141
  • Oct 21, 2009 6:45am Oct 21, 2009 6:45am
Yawn.

Is anything in this universe truly 'random'? I can't think of anything bar quantum physics, and I'm not sure that is revelant to anything in the world we live in. The market is a function of the buyers and sellers operating within it. What's random about that? You could state that it is difficult to predict how buyers and sellers behave, but that is not randomness.
  • #142
  • Oct 21, 2009 6:57am Oct 21, 2009 6:57am
If you believe in non randomness then you can only prove it by disclosing an edge you have. Opinions don't matter, or beliefs. You can say I believe whatever or my opinion is whatever, but if you can't show evidence then it really means nothing, in a financial market.

WITHOUT AN EDGE YOU WILL NOT PROFIT. SIMPLE.

This is why an edge is so important, profits. Show me the money. The sole goal of a trader is to make money.

Make money.

If you don't want to disclose an edge that is fine. Nothing I can do. But don't drop in and say "I believe in non randomness, but I'm not going to tell you why I believe that, just that I believe it." Religious dogma developing? Blind faith perhaps?

Maybe you need to consider that you have no edge at all. If you have an edge, why are you here? To tease the people that don't have an edge?

Guys I don't want an argument. Lets stick to the point. Random or not?
  • #143
  • Oct 21, 2009 7:20am Oct 21, 2009 7:20am
Please don't let this thead to turn into argument about whether a market is random or what exactly randomness is.

There are already a few threads about this so they are a much better place to discuss about this. For example this thread is almost only about discussion about market randomness for those interested http://www.forexfactory.com/showthread.php?t=191230
  • #144
  • Oct 21, 2009 7:47am Oct 21, 2009 7:47am
Quoting Ferrari
If you believe in non randomness then you can only prove it by disclosing an edge you have. Opinions don't matter, or beliefs. You can say I believe whatever or my opinion is whatever, but if you can't show evidence then it really means nothing, in a financial market.

WITHOUT AN EDGE YOU WILL NOT PROFIT. SIMPLE.

This is why an edge is so important, profits. Show me the money. The sole goal of a trader is to make money.

Make money.

If you don't want to disclose an edge that is fine. Nothing I can do. But don't drop in and say...
i vote not-random at all...

would be nice to have a poll here to vote and see.
  • #145
  • Oct 21, 2009 7:52am Oct 21, 2009 7:52am
Quoting Ferrari
I 100% agree with Mark Douglas and Trading in the Zone.

If you want to see the hidden beliefs people have, check out the first few pages of the mythbuster fx thread. People go so far as to say their inner selves want them to fail! Hahahaha

Its like a con game, you invest into the con and invest so much you won't believe otherwise.

All the patience, disipline and equity management in the world won't save you if you don't have an edge.
All the edges in the world won't save you if you don't have correct money management, discipline an patience.

Sounds a bit like the chicken/egg: 'what came first' dilemma.

Part of the discussion has now ventured into the 'random or not' question, another part has wondered into 'what's the edge' department.

I think neither are of primary importance to the OP in his thread.

Unless I have misunderstood the OP, the intention of the thread is to discuss a different approach to understanding some of the underlying beliefs/myths/psychological issues that traders (especially newer ones) might face during the process of creating an advantage for themselves in trading.

Also to look at available data that is out there which can be researched and put into context to enhance the above processes.

My suggestion is to let the OP carry on with his intentions - as a discussion and not a p*ssing contest about who is right or wrong.

regards
daytrding
Enter Signature
  • #146
  • Oct 21, 2009 8:43am Oct 21, 2009 8:43am
"Trading in the Zone presents a serious psychological approach to becoming a consistent winner in your trading. I do not offer a trading system; I am more interested in showing you how to think in the way necessary to become a profitable trader. I assume that you already have your own system, your own edge. You must learn to trust your edge. The edge means there is a higher probability of one outcome than another."

Mark Douglas, in the preface section of Trading in the Zone
  • #147
  • Oct 21, 2009 9:44am Oct 21, 2009 9:44am
Quoting Ferrari
"Trading in the Zone [font=Times New Roman][size=3][font=Times New Roman][size=3]presents a serious psychological approach to becoming a consistent winner in your trading. I do not offer a trading system; I am more interested in showing you how to think in the way necessary to become a profitable trader. I assume that you already have your own system, your own edge. You must learn to trust your edge. The edge means there is a higher probability...
Ok, one last post on the matter before it becomes disrespectful to the OP.

While the book you are citing from might contain some valuable advice in terms of his [Mark Douglas] approach, it is by no means the authority on trading and it describes one of many different ways to deal with the pitfalls involved in it. I do own a copy and have not found anything new or exciting which I haven't read in the past twenty years in one form or another - written by different people.

'Same meat, different gravy' as we would say over here.

Although certain aspects of trading will of course remain timeless and the same (the importance of an edge you referred to, etc.), there are many different path that may lead there. Whether someone chooses Douglas, Williams, Crabel, Tharp, June, Schwager or anyone else for hat matter as a guide is a personal decision; so is the choice to read this thread on what could be a slightly different approach (without any prejudice, of course).

All the best.

regards
daytrading
Enter Signature
  • #148
  • Oct 21, 2009 10:11am Oct 21, 2009 10:11am
Quoting daytrading
All the edges in the world won't save you if you don't have correct money management, discipline an patience.
Very key, we have to work in all aspects of trading but most focus only on one department and foget about all the other important traits. When someone has a strong belief in something they will do anything to protect it and will argue non-stop until they get their point accross.
Trading goes further then arguing with the markets and/or others it goes as far as constant arguing with ourselves... constant self-evaluation.
  • #149
  • Oct 21, 2009 10:54am Oct 21, 2009 10:54am
Well allow me to retort.

Can you work to develop yourself as a trader without an edge? What would be the point? Why would you apply discipline, follow the rules, apply good money management etc to a system that does not give the trader an edge over the market? The bottom line is they will lose over time if they take this approach. Its about making money after all.
  • #150
  • Oct 21, 2009 11:12am Oct 21, 2009 11:12am
Quoting Ferrari
Well allow me to retort.

Can you work to develop yourself as a trader without an edge? What would be the point? Why would you apply discipline, follow the rules, apply good money management etc to a system that does not give the trader an edge over the market? The bottom line is they will lose over time if they take this approach. Its about making money after all.
As far as I can gather, that particular aspect was never in doubt.

regards
daytrading
Enter Signature
  • #151
  • Oct 21, 2009 11:15am Oct 21, 2009 11:15am
Quoting daytrading
All the edges in the world won't save you if you don't have correct money management, discipline an patience.

Sounds a bit like the chicken/egg: 'what came first' dilemma.
Never in doubt? Do you read what you write?
  • #152
  • Oct 21, 2009 11:16am Oct 21, 2009 11:16am
Quoting Ferrari
Never in doubt? Do you read what you write?
Do you understand what you read?

regards
daytrading
Enter Signature
  • #153
  • Oct 21, 2009 11:21am Oct 21, 2009 11:21am
Quoting daytrading
Do you understand what you read?

regards
daytrading
I am very open to the possibility of missunderstanding you. How have I not understood what you said?
  • #154
  • Oct 21, 2009 11:36am Oct 21, 2009 11:36am
Actually I could care less. What you said is plain for all to see, same with what I said.

We have actually hit a very important point here.

Endroute said "This is kind of like a theological debate there is a god, no there isn't, but yes there is, but no there is not."

But Endroute thats the 'why we are here question'.

In a financial market we are here to make money. This is clear. This is known to us.

SHOW ME THE MONEY!!!
  • #155
  • Oct 21, 2009 11:44am Oct 21, 2009 11:44am
Quoting Ferrari
I am very open to the possibility of missunderstanding you. How have I not understood what you said?
Just consider the amount of people who are in possession of methodologies that have a perfectly viable edge - but depend on a certain amount of discretion (partly mechanical trading models), and end up losing (in spite of the edge) because they lack the 'other' essential traits that ultimately make a trader profitable in the long run.

The saying 'give a mediocre trader a workable system and he will still lose money' is all too well known and I have witnessed it many times over.

While I don't ever dispute the point that an edge is necessary, I also strongly advocate that the edge alone will not turn each person into a successful trader - in fact, I would argue that it is harder to develop the 'other' factors besides the edge for most.

Concluding this I would say the following: after two decades of trading (most of those twenty years profitable), I believe that it is much easier to find a workable edge than it is to find candidates that bring enough discipline, patience and aptitude for good money management to the table necessary to turn the edge into many years of consistent profitability.

Please feel free to agree or disagree with my personal views and experiences, but let's not waste any more time and space on what could easily be described as a simple mater of different opinions at worst.

regards
daytrading
Enter Signature
  • #156
  • Oct 21, 2009 11:55am Oct 21, 2009 11:55am
Quoting daytrading
Just consider the amount of people who are in possession of methodologies that have a perfectly viable edge - but depend on a certain amount of discretion (partly mechanical trading models), and end up losing (in spite of the edge) because they lack the 'other' essential traits that ultimately make a trader profitable in the long run.

The saying 'give a mediocre trader a workable system and he will still lose money' is all too well known and I have witnessed it many times over.

While I don't ever dispute the point that an edge is necessary,...
Ok this is were our beliefs differ. I personally regard discretion as a blackhole of sorts. I can see why we're having this discussion now, its pretty clear.

discretion: the result of separating or distinguishing.

seperating and distingushing based on what? if a trader cannot define it and measure it, it is an unknown and it cannot really be called an edge. how can a trader apply consistancy? how can a trader judge his discipline? his patience? how can a trader do the right thing 100% of the time to get his result of 80% (or whatever) when its unclear what the right thing to do 100% of the time is, ie its left to 'discretion'?

i believe this to be the biggest con in the trading world. i believe that the bigger the discretion gap, the more the door is left open to all the emotional problems we hear so much about.

so I see where you're coming from, I don't believe it however.
  • #157
  • Oct 21, 2009 1:27pm Oct 21, 2009 1:27pm
Quoting mikkom
Just noticed this thread - I want to point out something, EURUSD has not been the pair it used to be last 9 months.
Hi Mikkom, this is where I wish I'd have started this a couple of years ago - 9 months is better than nothing, but...
This made me think hard about what defines the characteristics of a market when just dealing with time and price. Ignore the fundamentals behind some of the changes recently; how do you measure different market conditions?
The only things you can measure with time and price are the amount of trend/range and volatility. Granted there are different ways of going about this, but at the core of all charts, that's it isn't it?
I did think on a different but way of measuring volatility - looking at the proportion of movement : distance travelled (ie h-l : o-c), but all pairs gave me roughly the same figure in the past 10 years.
So all I'm left with is that the key difference to EURUSD must be (other factors discussed discounted) the price patterns which people are trading off are less successful. TA on a short timeframe (retail) is least successful on EURUSD.
I know you say your strat hasn't worked for 9 months or so as well on EURUSD but to make any firm conclusions we've surely got to be looking at some very generalised measures to take into account how everyone trades right?
  • #158
  • Oct 21, 2009 1:50pm Oct 21, 2009 1:50pm
Quoting Ferrari
Ok this is were our beliefs differ. I personally regard discretion as a blackhole of sorts. I can see why we're having this discussion now, its pretty clear.

discretion: the result of separating or distinguishing.

seperating and distingushing based on what? if a trader cannot define it and measure it, it is an unknown and it cannot really be called an edge. how can a trader apply consistancy? how can a trader judge his discipline? his patience? how can a trader do the right thing 100% of the time to get his result of 80% (or whatever) when...
I must admit, I was nodding off for a while there reading the whole random argument (birdt summed it up perfectly I think) and mikkom and DT, cheers for trying to bring it back on track. And I thought Ferrari, please don't give it the prove your edges spiel. Then, just as I was dozing:
"i believe that the bigger the discretion gap, the more the door is left open to all the emotional problems we hear so much about"
I love this. And I totally agree. For me personally, I realised a while back my discretion wasn't up to much. Every time I have a discretionary feeling I think about it, and boil it down to a rule - that rule needs to be tested. Sometimes it's right, sometimes it's wrong. Most of the time, it's absolutely random.

On the flip side of course, there are plenty of people who can't articulate exactly what makes them want to enter or avoid a particular trade but they're still successful. Could it be they've had so much screentime they've memorised millions of discrete patterns? Built up a solid fundamental stance without consciously recognising it? Who knows. But on balance, I'd say most traders think their discretion is adding to their strategy when at best it's doing nothing and at worst, it's crippling any edge they had to start with.
  • #159
  • Oct 21, 2009 2:08pm Oct 21, 2009 2:08pm
Maybe there is a reason that Financial institutions hire the Mathematic/ scientific type over Artists and Actors?

Living the adventure in my head.
  • #160
  • Oct 21, 2009 2:10pm Oct 21, 2009 2:10pm
Quoting Ferrari
Ok this is were our beliefs differ. I personally regard discretion as a blackhole of sorts. I can see why we're having this discussion now, its pretty clear.

discretion: the result of separating or distinguishing.

seperating and distingushing based on what? if a trader cannot define it and measure it, it is an unknown and it cannot really be called an edge. how can a trader apply consistancy? how can a trader judge his discipline? his patience? how can a trader do the right thing 100% of the time to get his result of 80% (or whatever) when...

I agree with this. If you don't have a rule for an action then you are breaking your rules and not trading according to your plan allowing the potential for emotion and human error to screw things up.

But I believe when most successful traders talk about discretion they are simply refering to their way of thinking that has not been placed into a set of rules. It does not mean it can't be. For the newbie trader I think to try and copy this is dangerous given the fact that they are more prone to human error and emotion. Their discretion must be rule based and incorporated into their trading plan.
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