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The Reason why 95% Traders fail

  • #241
  • Jan 2, 2010 3:55pm Jan 2, 2010 3:55pm
Quoting Turveyd
Well no and yes..........

You can calculate the probability of a setup working to see if a setup is worth taking, ie under the correct market conditions M1 200ema has a 80%+ chance of holding and the price going in the current direction further.
How exactly do you calculate that "under the correct market conditions M1 200ema has a 80%+ chance of holding and the price going in the current direction further"? In other words, can you prove this statement? Can you prove that you can calculate trading probabilities?
  • #242
  • Jan 2, 2010 3:57pm Jan 2, 2010 3:57pm
Quoting hanover
@Steve: it's true that we can't assign accurate probabilities to price movement.
Thank you.
  • #243
  • Jan 2, 2010 4:53pm Jan 2, 2010 4:53pm
Quoting hanover
@Steve: it's true that we can't assign accurate probabilities to price movement. The best we can do is back-test and use results, within appropriate statistical margin for error, as a rough guide.

!
I agree with you Hanover. One point that I have learned from being in Jacko's group is the % rates that certain price movements will react.
I have not seen any discussion of it anywhere else, including on FF.
Jacko has the percentages of how often a price movement will bounce off 50% fibonacci lines, Support lines and Resistance lines. This gives the percentages of how often it will break through those lines. I have used his percentage probabilities for some good trades.
For example, say you see a price movement moving towards a 38.2 Fibonacci number. If you know that, based on historical statistics , that it will only bounce off it say 20% of the time, why would you trade it?
  • #244
  • Jan 2, 2010 5:01pm Jan 2, 2010 5:01pm
Quoting steveshelby
How exactly do you calculate that "under the correct market conditions M1 200ema has a 80%+ chance of holding and the price going in the current direction further"? In other words, can you prove this statement? Can you prove that you can calculate trading probabilities?
Back testing on charts, simply add up all the times it would of worked and failed, in trending markets avoiding news times and market open / about to close times where direction change is likely it's 80%+ seriously.

Yes thats is a lot of BUTS there sadly.

Overall it still gets 60%+

I have a 3-4 pip buffer either side and consider that area to be the 200ema, so it's a 7pip range say rather than a exact number.



Do your own test, you won't believe mine and go back a few weeks before Xmas low volume reduced it significantly.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #245
  • Jan 2, 2010 5:04pm Jan 2, 2010 5:04pm
Quoting steveshelby
How exactly do you calculate that "under the correct market conditions M1 200ema has a 80%+ chance of holding and the price going in the current direction further"? In other words, can you prove this statement? Can you prove that you can calculate trading probabilities?
How can you calculate trading probabilities? The same as any other probability calculation. Back test and use the results to give a result, with an appropriate statistical margin for error.
I believe that it is one of the main reasons for Jackos success rate. He knows when to hold and when to fold, using probabilities of his trend lines and fibonaccis.
  • #246
  • Jan 2, 2010 5:11pm Jan 2, 2010 5:11pm
Quoting hanover
@Steve: it's true that we can't assign accurate probabilities to price movement. The best we can do is back-test and use results, within appropriate statistical margin for error, as a rough guide. However, if we make an assumption that, on average, there's approximately a 50/50 probability of price rising X pips, or falling X pips, then the numbers I quoted are accurate to the extent that the assumption holds true.

The smaller the pips your aiming for with the right system then the nearer you can get to 100% win ratio, I've acheived 90%+ win ratio over some reasonible periods with a average pips ~12 area I think it was as you have more control and your basically gambling less.

If you set your TP at 100 and your SL at -100 random entry you've got a 50/50 chance ( well 49/51 due to Spread ) ofcourse, but with a good entry you can gain some ground so to speak and improve your odds on hitting the TP rather than the SL, but even at 100 you'll need to be good to get much past 55W/45L ratio. ( Discounting the crazy days where 100 isn't much )

200SL and 200TP your looking at 52W/48L.

Thats the downside of bigger targets the downside of smaller targets is you can win 90% and just as easily lose 90% of the time.

Smaller Targets + HARD Work is where it's at to get rich in a short period of time in short!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #247
  • Jan 2, 2010 5:14pm Jan 2, 2010 5:14pm
Quoting Turveyd
Back testing on charts, simply add up all the times it would of worked and failed, in trending markets avoiding news times and market open / about to close times where direction change is likely it's 80%+ seriously.

Yes thats is a lot of BUTS there sadly.

Overall it still gets 60%+

I have a 3-4 pip buffer either side and consider that area to be the 200ema, so it's a 7pip range say rather than a exact number.



Do your own test, you won't believe mine and go back a few weeks before Xmas low volume reduced it significantly.
Sorry, but your answer shows you do not understand probability. A coin toss has a 50% chance (probability) of landing on heads. If the last 10 tosses were tails, the probability for the next toss to be heads is still 50% and will always be 50% no matter what happened previously. You can not calculate probabilities for trading based on the definition of probabilities. What you are calculating is called something else.
  • #248
  • Jan 2, 2010 5:14pm Jan 2, 2010 5:14pm
Quoting kenkomo
How can you calculate trading probabilities? The same as any other probability calculation. Back test and use the results to give a result, with an appropriate statistical margin for error.
I believe that it is one of the main reasons for Jackos success rate. He knows when to hold and when to fold, using probabilities of his trend lines and fibonaccis.
See my last post.
  • #249
  • Jan 2, 2010 5:16pm Jan 2, 2010 5:16pm
Quoting Turveyd
The smaller the pips your aiming for with the right system then the nearer you can get to 100% win ratio,...
Your signature, 95% of traders lose, because they go onto Forums and get taught how to lose, is a very accurate description.
  • #250
  • Jan 2, 2010 5:19pm Jan 2, 2010 5:19pm
Quoting steveshelby
Sorry, but your answer shows you do not understand probability. A coin toss has a 50% chance (probability) of landing on heads. If the last 10 tosses were tails, the probability for the next toss to be heads is still 50% and will always be 50% no matter what happened previously. You can not calculate probabilities for trading based on the definition of probabilities. What you are calculating is called something else.
Okay it's the probability of the trade setup working which is basically what everyone is trying to do wether they understand it or not, likely help if you don't doesn't over complicate it.

With a 80% win rate doesn't mean I can't / don't sometimes take 5 losses off this in a row ofcourse
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #251
  • Jan 2, 2010 5:23pm Jan 2, 2010 5:23pm
Quoting steveshelby
Your signature, 95% of traders lose, because they go onto Forums and get taught how to lose, is a very accurate description.

Yep fraid so, no one would come up with :-

H4 tells the trend below is noise.
Fib Lines.
Use of any indicator.
Various others I'm sure.

If they didn't come on Forums and get taught the CORRECT way to trade and view the market ( see above ) and they'd like do much better, Statistically none of those works there just bad logic passed on and taught as gospel!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #252
  • Jan 2, 2010 5:25pm Jan 2, 2010 5:25pm
Remember even a coin toss is slightly biased towards landing with the greatest mass downward ( Which you then might reverse to see the result ).

Why I always bet tails, 51% win rate unless it's a catch in hand then reverse to the other hand job then I go heads ofcourse.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #253
  • Jan 2, 2010 5:33pm Jan 2, 2010 5:33pm
Quoting steveshelby
See my last post.
Let me try to be more concise.
How can you calculate trading probabilities or , as Turveyd said, the probability of the trade setup working which is basically what everyone is trying to do wether they understand it or not ?
The same as any other probability calculation. Back test and use the results to give a result, with an appropriate statistical margin for error.
I believe that it is one of the main reasons for Jackos success rate. He knows when to hold and when to fold, using probabilities of his trend lines and fibonaccis. I have not seen any discussion of it (the % rates that certain price movements will react. ) anywhere else, including on FF.
  • #254
  • Jan 2, 2010 5:45pm Jan 2, 2010 5:45pm
Quoting kenkomo
Let me try to be more concise.
How can you calculate trading probabilities or , as Turveyd said, the probability of the trade setup working which is basically what everyone is trying to do wether they understand it or not ?
The same as any other probability calculation. Back test and use the results to give a result, with an appropriate statistical margin for error.
I believe that it is one of the main reasons for Jackos success rate. He knows when to hold and when to fold, using probabilities of his trend lines and fibonaccis.[b]...

To be fair, most probabilitys are very hard to calculate due to the subjectiveness of the setup where as 200ema +/- 3.5 pips is fairly objective.

I'm a Stat's guy I spend all my time trying to better improve my odds and every improvement generally has a down side so it's not easy.

Run the Stat's on Fibonaccis lines there junk totally sub 30% reversal rate.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #255
  • Jan 2, 2010 5:46pm Jan 2, 2010 5:46pm
Quoting Turveyd
If they didn't come on Forums and get taught the CORRECT way to trade and view the market ( see above ) and they'd like do much better, Statistically none of those works there just bad logic passed on and taught as gospel!!
There is a reason to keep this stuff going - money!
  • #256
  • Jan 2, 2010 5:49pm Jan 2, 2010 5:49pm
Quoting kenkomo
Let me try to be more concise.
How can you calculate trading probabilities or , as Turveyd said, the probability of the trade setup working which is basically what everyone is trying to do wether they understand it or not ?
The same as any other probability calculation. Back test and use the results to give a result, with an appropriate statistical margin for error.
I believe that it is one of the main reasons for Jackos success rate. He knows when to hold and when to fold, using probabilities of his trend lines and fibonaccis.[b]...
Trade setups do not have probabilities.

Quote
In any probability problem, it is very important to identify all the different outcomes that could occur.

You can not do that with trading.
  • #257
  • Jan 2, 2010 5:51pm Jan 2, 2010 5:51pm
Quoting steveshelby
There is a reason to keep this stuff going - money!

Definately, these bad teachings where taught before forum's, there merely being passed around via forums these days.

As said, all the trading houses make $$$'s, loads of them and those $$$'s only come from 1 place if there all making, yes US!!

The entire you need BIG Money to trade or don't bother is also part of the Con, trying to convince newbies to put 100K at risk which they then lose with more never to return, where as us small time traders with our $500 accounts which lose $100 per month TOPS don't really help them and we keep plugging and a fair few of us ( well ~5% ) end up taking there $$$$'s
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #258
  • Jan 2, 2010 5:55pm Jan 2, 2010 5:55pm
Quoting steveshelby
Trade setups do not have probabilities.



You can not do that with trading.

Ohhhhhhhhhh yes they do, your viewing the market as to random there dude if that was the case it would be impossible to make $$$'s from the market, which is not the case.

the 200EMA works quite simply because the BIG Players use computer systems to enter and exit there positions, watch the selling / buying pressure as the price nears it then reverses even the big players trade of very simple rules cause well nothing else works.

55ema and 500ema also have high reversal rates.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #259
  • Jan 2, 2010 5:58pm Jan 2, 2010 5:58pm
Quoting Turveyd
Ohhhhhhhhhh yes they do, your viewing the market as to random there dude if that was the case it would be impossible to make $$$'s from the market, which is not the case.

the 200EMA works quite simply because the BIG Players use computer systems to enter and exit there positions, watch the selling / buying pressure as the price nears it then reverses even the big players trade of very simple rules cause well nothing else works.

55ema and 500ema also have high reversal rates.
If you look at the definition of probability then you will understand why I say they do not. Probability is never based on history.
  • #260
  • Jan 2, 2010 6:04pm Jan 2, 2010 6:04pm
Quoting steveshelby
If you look at the definition of probability then you will understand why I say they do not. Probability is never based on history.
Errrrr No, maybe it's the wrong word if so what's the correct word ??

History is the only way to assess if something has merit or not which is viewed as statistical probability.

The bigger the sample the better the test kinda, I prefer small sample and frequent retesting to ensure it's still working though personally.

A setup with a high probability 1 day can and often does turn into a setup with a very low probability the next day, the big boys change there rules to sucker us in then kill us.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
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