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Some lessons from the real world

  • #41
  • Mar 9, 2010 8:41am Mar 9, 2010 8:41am
Nice to know that you enjoyed The MAX Lite course. When applied with commitment and conviction, it's very profitable. And yes, if and when you take the Standard Course, the cost of Lite will be deducted from the tuition cost..........

Quoting Hedginghog
Conclusion

The Lite course was exceptional value for money and one of the only courses I have seen that really does provide support and guideance, aside from the actual "teaching" component. There is nothing 'revolutionary' about what I learnt (for me) though I have 8 years trading experience, and would guess that for novice or struggling traders it may be quite a different different story. The method is based on sound logic (identifying and exploiting the trend) and allows for customisation based on the profile of the trader,...
  • #42
  • Mar 9, 2010 2:48pm Mar 9, 2010 2:48pm
Quoting Hedginghog
Hello alter - thanks for sharing your situation with us. In reality I know very little about you or your situation, or what you are even trading, and with what basic method, so it is not appropriate to even try to "diagnose" what is going on - and in any case this would be biased by my own experiences.. But any way, a couple of brief points that may (or may not) be relevant, based on your comments:

- For as long as you believe luck plays a part in trading success it is less likely that you will develop the capability to achieve that success...

So if u believe there is no place for luck , what is it? U want to say that if 1000 people will work equally hard they all will be successful?
  • #43
  • Mar 9, 2010 3:37pm Mar 9, 2010 3:37pm
Quoting alter
So if u believe there is no place for luck , what is it?
The longer one trades for the less effect good luck, or bad luck, will have on their profits and losses. In a trading context, the only time any kind of luck will make a big difference is if you are risking more than you should.

Quoting alter
U want to say that if 1000 people will work equally hard they all will be successful?
This is tougher. If 1000 people work equally hard AND smart, which is very unlikely, then in theory they should all have the same results in whatever they are doing. Distinguishing whether the cause of an outcome was luck, intelligence, or hard work sounds difficult.
Living the adventure in my head.
  • #44
  • Mar 9, 2010 7:15pm Mar 9, 2010 7:15pm
Quoting Hedginghog
Reality #1 - If you want to become a life long, profitable trader, you need to "learn how to learn." (See everything below)

Reality #2 - Consistent, profitable, and sustainable trading is achieved through years of hard work, and is not realised after a few "good months"
Reality #3 - You will NOT realise consitent profitability

Reality #4 - It is highly unlikely that you will become a consistently profitable trader (for years to come)

Reality #5 - Consistent profitability is nothing more than...
Hallo Hedginghog. I have been reading your posts with a big lot of interest but have noticed that they are starting to sound like cliches. All the general things NOT to do. That is not a criticism, but you are taking the time to write long posts about general trading cliches which is interesting but could you be more specific about how you trade
Can you take the time to set out your system in clear steps of what to do and how you trade.
  • #45
  • Mar 9, 2010 10:11pm Mar 9, 2010 10:11pm
Quoting cyberfx
Hallo Hedginghog. I have been reading your posts with a big lot of interest but have noticed that they are starting to sound like cliches. All the general things NOT to do. That is not a criticism, but you are taking the time to write long posts about general trading cliches which is interesting but could you be more specific about how you trade
Can you take the time to set out your system in clear steps of what to do and how you trade.
Hello cyberfx - thank you for your honest feedback. If you read the first post again, and think about the key messages contain therein, you will have the answer to your question.

Keep in mind that the purpose of my thread is NOT to discuss detailed mechanics of trading set-ups, but to talk about the stuff that I believe is tremendously neglected in trading in general, and indeed in these forums. In my thread I am choosing to discuss process, method, learning, and some of the major pitfalls to avoid. If I provide just one post showing one single set-up, no matter how small - then there entire theme of this thread will change, and it will turn into everything else you see in the Trading Systems area of FF - my strong view is that the opportunity for useful and practical discussion, and for real learning, will be lost.

Interestingly I have received a lot of comments from other experienced and traders (some of which you see in the thread, some of which you don't) telling me that my practical discussion of method is a refreshing change from the usual cliches and impactical stuff that is littered all over FF - though I am a fan of FF of course. Sure, I tend to be quite an 'elaborative writer' (and I make no apologies for that!) but if you read between the theatrics in the first post and some of the subsequent ones, you will indeed see a lot of highly practical discussion of trading method, with the same messages repeated over again (again no apologies for that!), but in different contexts... If you are already working with a system, and wanting to improve it, then perhaps some of the discussion of my own learning may help, but I suppose if you are looking for the basics of a new "system" then you will not find it here, and will need to look elsewhere in the forums - for sure there is plenty of that to be found!

By the way - can you point out one of the "cliches" to me - I'd be happy to try to put it into more brief and practical terms for you. (That is a genuine statement, not a dig at you!)

Thanks again for your comments, and all the best..
  • #46
  • Mar 9, 2010 10:17pm Mar 9, 2010 10:17pm
Quoting alter
So if u believe there is no place for luck , what is it? U want to say that if 1000 people will work equally hard they all will be successful?
My friend, if you genuinely believe that luck plays a role in sustainable profitability, and cannot be convinced otherwise, then I can only suggest that you give up trading and start buying lotto tickets..

My only real suggestion for you now, is to read the first post again - carefully, and slowly - and think about what that might mean in the context of your current trading system - ask a tangible question if you wish, based on something you have read in this thread. But if you come back at me with the "luck" issue again, I will be suggesting you look elsewhere.. with respect, of course.
  • #47
  • Mar 9, 2010 10:45pm Mar 9, 2010 10:45pm
Quoting BeachBum
Nice to know that you enjoyed The MAX Lite course. When applied with commitment and conviction, it's very profitable. And yes, if and when you take the Standard Course, the cost of Lite will be deducted from the tuition cost..........
Hi Jerry, I saw the thread in the commercial section and was glad to be able to provide an unbiased review from the perspective of someone who has actually done the course! I am a big fan of the MAX Lite course - you are WAY ahead of most others out there - and will happily recommend it to others.. Cheers.
  • #48
  • Mar 10, 2010 2:09am Mar 10, 2010 2:09am
Quoting Hedginghog
My friend, if you genuinely believe that luck plays a role in sustainable profitability, and cannot be convinced otherwise, then I can only suggest that you give up trading and start buying lotto tickets..

My only real suggestion for you now, is to read the first post again - carefully, and slowly - and think about what that might mean in the context of your current trading system - ask a tangible question if you wish, based on something you have read in this thread. But if you come back at me with the "luck" issue again, I will be suggesting...
Actually my question was very simple. So I will try one more time. What is it that makes people succeed and fail (ok it is not the luck)?
  • #49
  • Mar 10, 2010 3:47am Mar 10, 2010 3:47am
Quoting alter
Actually my question was very simple. So I will try one more time. What is it that makes people succeed and fail (ok it is not the luck)?
OK - fair enough:

See realities #1-#11 in the first post of my thread. This describes the some of the major errors I made and some things I did to correct these situations, both in terms of practical activity and also basic realisations. That is the summary of what made me "successful" and not fail, but everyone is different.. and this may or may not be valuable for you. That's a decision for you to make. I'm pretty sure that answers your question in very plain and simple terms.

I could be wrong, (my apologies if I am as I don't like making assumptions about people), but reading between the lines in your posts, I sense you are looking for a very simple and singular answer to what makes a trader succeed or fail - and I can assure you that you will not find any "silver bullet" answer in my thread, or anyone else's for that matter, because successful trading is about a combination of factors, some of which I have tried to outline in my thread, strangely enough! Will I be able to cover them all? Absolutely not. Do I intend to cover the ones that have had the biggest impact on me? Yes.. Will it be the same situation for you? Unlikely. Will anyone other than YOU be able to turn you into a good trader? No. Are you free to ask any questions about the specific statements in my thread, and will I attempt to answer them to the best of my ability? Yes.

It is up to you, my friend.. no other way to put it.
  • #50
  • Mar 10, 2010 11:44am Mar 10, 2010 11:44am
Hi Hedginghog and any others who can help me. I've been trading demo for a few months now and came across an issue today that causes me concern. I'm hoping someone can shed some light or point me in the right direction.

Essentially, I made a trade yesterday that by every chart I look at should have made me a profit. When I check my broker platform (MT4, Activtrades) I see I got stopped out.

When I check the charts the pair never came close to that level.

Is my broker seeing my stops and then stopping me out even though the charts show it never getting that low? Or is something else going on?

Trade.

BUY CADJPY 2010.03.09 15:38
entry at 87.51
TP was at 87.81
SL was at 87.31

Broker stopped me out at 2010.03.09 17:08 at 87.31

My chart says the lowest it hit was 87.42

Any insight into this?

Thanks again
  • #51
  • Mar 10, 2010 2:43pm Mar 10, 2010 2:43pm
I don't know the spread on that particular pair but i would wager that it is high. Also, spreads will really widen around bank settlement time and I have seen 11 pip spreads at that time.

I don't know Activtrades so i have no idea what time zone their server is at and what 17:08 means from a bank settlement timeframe.
  • #52
  • Mar 10, 2010 3:46pm Mar 10, 2010 3:46pm
Thanks Flyer

Interesting about the bank settlement... so much to learn.

As for the spread Activtrades says it's 7.

It was my understanding, however, that I don't need to apply the spread to a BUY order, only the Sell order. Is that not true?
  • #53
  • Mar 10, 2010 4:20pm Mar 10, 2010 4:20pm
Quoting Hedginghog
Hello cyberfx
In my thread I am choosing to discuss process, method, learning, and some of the major pitfalls to avoid. If I provide just one post showing one single set-up, no matter how small - then there entire theme of this thread will change, and it will turn into everything else you see in the Trading Systems area of FF - my strong view is that the opportunity for useful and practical discussion, and for real learning, will be lost.

..
Hallo HedgingHog, I have read the thread about three times and I am having difficulty seeing what your trading system is. You have been trading for 8 years and you said that psychology is useless so I assume that you have a more mechanical than discretionary system.

Can you please take the time to set out your system in clear steps of what to do and how you trade.

I am liking this thread but it would be more valuable and useful if we can see your system and you use your system to be successful.
  • #54
  • Mar 10, 2010 5:58pm Mar 10, 2010 5:58pm
Quoting cyberfx
Hallo HedgingHog, I have read the thread about three times and I am having difficulty seeing what your trading system is. You have been trading for 8 years and you said that psychology is useless so I assume that you have a more mechanical than discretionary system.

Can you please take the time to set out your system in clear steps of what to do and how you trade.

I am liking this thread but it would be more valuable and useful if we can see your system and you use your system to be successful.
Hi Cyberfx - Post #45 responds to this request. Cheers.
  • #55
  • Mar 18, 2010 8:58pm Mar 18, 2010 8:58pm
You don't need patience or to control your emotions if you write your high probability method into a code and run it. That's because I think your computer is more powerful than your brain to trade, think that our brain is not designed (by evolution) for trading, but for surviving in a jungle or into a society, the human brain is overrated...

The better way to always follow a trading method is let a computer with no emotions run it. It will be disciplined until the end
  • #56
  • Mar 18, 2010 9:50pm Mar 18, 2010 9:50pm
Quoting Trad3r
You don't need patience or to control your emotions if you write your high probability method into a code and run it. That's because I think your computer is more powerful than your brain to trade, think that our brain is not designed (by evolution) for trading, but for surviving in a jungle or into a society, the human brain is overrated...

The better way to always follow a trading method is let a computer with no emotions run it. It will be disciplined until the end
Thanks for your contribution. There is an interesting assumption built into in your post; when you work out what that is (if you haven't already) you may very well be in for one of those "aha" moments in your trading journey. All the best.
  • #57
  • Mar 21, 2010 7:33pm Mar 21, 2010 7:33pm
Reflection for this week:

The tremendous value of record keeping and documentation

This post was inspired by a recent question elsewhere the rookie forum - the poster was an absolute novice and wanted some basic tips. For the absolute novice I could come up with just one:

DOCUMENT EVERYTHING!

My 'loose theorum of sustainable trading' is built on the foundation that you need to firstly learn how to learn - see reality#1.

It goes without saying that everyone's learning process will be different, and while I do not believe that there is a singular formula to follow, it is likely that there are some common elements in what the journey to successful trading might look like.

I suggest that one of the most important of these "common elements" might be the value of good record keeping and documentation. The two most obvious areas for this record keeping to follow might be:

1) The documentation of ALL of your executed trades, be it demo, live or otherwise.

2) The documentation of your points of learning and discovery.

The value of this documentation, within the learning process is easy to define:

Point 1, first and foremost, might assist you to stay brutally honest with yourself - essential if you are going to succeed in this business - and to stay away from the temptations of the "I wont record that trade, because it was an exception and I wont do it again" syndrome. Here I am not just talking about the Account History tab in your MT4 platform which looks after itself, but also a manual description of each trade. For example:

- What was the logic behind taking this trade? Why did I enter when I did?
- When did I exit and why (or why not!)?
- What was the outcome?
- Am I satisfied with my performance in executing that trade?
- How could I do better next time?

When you record EVERY trade, be it good bad, or ugly, certain things just jump out at you and your P&L screams out certrain truths about what you are doing. The quality of your actions and the consequences of those actions start to become crystal clear, thereby feeding the learning process.

Point 2, is in part about capturing the learning outcomes from point 1, but it is also about documenting your wider study of the markets, at both the macro and micro level. For example, at the micro level it might help you to record realisations that indicator XYZ is probably useless (for you), and should therefore help to prevent you from coming back over the same ground, and wondering why your frustration levels are on the rise because you have somehow 'been here before..'

While the above might might seem quite obvious, I still find it quite amazing the number of developing traders I have come across over the years that do not maintain any discipline in this area - yes, I am talking about my past performance too!

Good record keeping, if nothing else, can help to force you into the learning process, and keep you out of the self denial and self-delusion process that destroys many trading journeys.

This is not so much about psychology, this is more about tangible PROCESS, and a good starting point to force you into a good methodology development process might be to first check the quality and discipline of your documentation and record keeping - I fail to see how a developing trader could ever hope to improve, let alone succeed, without it.....
  • #58
  • Apr 27, 2010 1:31pm Apr 27, 2010 1:31pm
Hey Hedginghog,

Great post... it really hit home. I've been reading and learning about forex for a little over 2 years now. I've been demo trading for almost 2 years and have already blown through one live micro account. I couldn't agree more with several of your Realities, especially #3, #5, #6 & #7.

Given that I'd like to follow in your footsteps and become consistently profitable, do you have any suggestions about how to best learn forex trading and develop a profitable system? I get quite frustrated with a lot of the material online. Seems like everyone is trying to sell something and a lot of the information I come across doesn't seem to be worth the 10 minutes I spent reading it. I don't mind putting in the time and effort, unfortunately, I'm struggling with finding the best way to allocate my time to learn effectively. I also don't mind self-teaching, however, already having blown throw one account makes me think that there must be some less expensive ways to learn what I need to know moving forward.
Any tips and suggestions would be very much appreciated (any feedback from other members would be great as well)

Thanks,

wmhanson
  • #59
  • Apr 27, 2010 6:27pm Apr 27, 2010 6:27pm
Quoting wmhanson
Hey Hedginghog,

Great post... it really hit home. I've been reading and learning about forex for a little over 2 years now. I've been demo trading for almost 2 years and have already blown through one live micro account. I couldn't agree more with several of your Realities, especially #3, #5, #6 & #7.

Given that I'd like to follow in your footsteps and become consistently profitable, do you have any suggestions about how to best learn forex trading and develop a profitable system? I get quite frustrated with a lot of the material online. Seems...
G'day wmh
Thanks for your comments. I probably can't give you a comprehensive answer in just one post, but will blurt out a few things that come to mind over my morning coffee as I look at the S&P chart from last night's big drop and consider what this might mean for the Asian indices today!

Firstly if you have been trading demo and live for 2 years+ then you might be coming close to completing one of the important phases of your trading education: screwing up and loosing money. As I mentioned in an earlier post, I have become a better trader through learning from my own costly mistakes, and it would be nice if it could be done otherwise though I can only go on my own experiences and that of others I know. (Yes, you're right - there is a lot of crap on the internet and much of it is not to be believed). So if you have not done well so far then you might be on the right track!

Secondly and more importantly, what are you going to learn from your last 2 years? Surely you need to get something tangible out of all those bad trades; after all there's no point screwing up unless you are going to learn something from it. If you have not done so already, I would suggest trying to analyse and document as much as possible about your trades in the last 2 years - what was the decision-making process behind taking the trades that you did; what were the assumptions that you were working with; was each trade taken on its merits or were there previous trades fresh in your mind driving your decision-making for the next trades? You need to be brutally honest with yourself here. In short this is about taking a good hard look at what you have done in the last 2 years, why you have done it, and what has been the outcome. ACTIONS & CONSEQUENCES. It can be a painful and boring process, but it can also provide some critical points of learning... you mention being a self learner and wanting to allocate time correctly, then my suggestion would be to forget about taking any new trades for a while and focus on crawling up your arse with a microscope - a sort of trading colonoscopy, and documenting EVERYTHING along the way. This is what I call "learning how to learn," and depending on what your time is otherwise worth, it may cost you something, but generally I consider it to be free.

Thirdly - wouldn't it be nice if at the end of the above process you had all the magic answers to becoming a life-long profitabale trader! Well, my own experiences tell me that you probably need to go through several invasive and uncomfortable self-examination cycles over a number of years before getting it right! And then that ongoing cycle never really ends, though from time to time you may choose to drift in and out of it, as I do.

OK, if you have completed the first full cycle of the second point, and don't have enough "learning" to begin to start trading with a better method, then you may wish to pay a small sum for some GOOD trading education. I am quite a fan of the MAX lite course (see previous post), and perhaps there are other good ones out there too - but regardless I think you need to be prepared to work with a learned method/system, and improve and tweak it to your liking and to your preferred style of trading - to my reckoning, "out of the box" trading is highly unlikely to deliver the results most people are after.

Finally, if you really are prepared to put in the time and effort, and if you realise, as you seem to, that consistent profitability not about the acquisition of a system, but about the development of your own trading methodology, then you are a looong way ahead of the pack. You just need to apply those principles to what you are doing, be prepared for some hard knocks, be patient, go through several more cycles of learning, and realise that the consistent profitability you seek might be another 12 months or few years away yet...

Sorry - the above points are quite general, but I have tried to pick up on a the main things mentioned in your post and throw back some general words of advice.. fire back any questions if you want to (I am in a good mood this week!)

Cheers
  • #60
  • Apr 27, 2010 9:48pm Apr 27, 2010 9:48pm
I know this particular post isn't about a system... but I think part of my problem is that I haven't found the ideal system to suit my personality as a trader. I've tried a multitude of things including various indicator based systems, numerous EAs, support & resistance trading and candle stick pattern trading. Pretty much all of these methods were successful at one point or another, but not consistently. I read all over the place that you need to identify the method and system that works for you and your personality, however, I'm having a very difficult time doing that. I'll do as you advise and review my trade logs to see what I can extract from them. Apart from that I guess I'll keep plugging away... hopefully to find my place someday :-)
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