...only your bottomline should matter to you | Forex Factory

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...only your bottomline should matter to you

  • #1
  • First Post: Mar 22, 2010 11:15am Mar 22, 2010 11:15am
This quote belongs to supremeChaos who posted it on the topic of Scotty and, as I don't want to hijack his topic, I'll continue here.

My opinion that it is important to know how profitable a trader is, as long as he is highly esteemed and he posts trading advices. There are many reasons for this belief of mine.

Time is a resource. I don't have thousands of hours every day to read everything I would like and then to filter the useless junk. Therefore, if I decide to read a trading book, an article, a topic or the posts of a certain user I want to be sure that I'm reading something of quality. Something which will improve my knowledge and will make my capital grow.

How my capital grows is also very important. Maybe the guru whom I'm listening to has some millions and is satisfied with 10% every year, as this amount is more than enough to make a very good living. As I don't have this sum maybe would be better for me to listen to someone who can show a strategy or an approach which brings something like 50%, as compounding 10% every year, even after 10 years, will not make me rich.
It may be very interesting to take trading advice from Warren Buffet but I don't have billions to wait 5-10 years for a profit, after I bought value.

Please consider that these are theoretical values, used just to make a case.

It is clear enough that the profitability of trader X has nothing to do with mine but on the other way, if I take an idea from him and the idea is some discretionary trading which for obvious reasons can't be backtested, without knowing his profits and risks I don't know what to expect.

What is the opinion of the experienced traders, does it make sense what I've just said or am I completely wrong?
  • #2
  • Mar 22, 2010 11:35am Mar 22, 2010 11:35am
I have not yet made a single penny on forex or any other market whatsoever but over the years that I have been reading around this and other sites I have already learned powerful lessons. May be I was a complete ignorant before but it seems to me that in that case we all are. So much so that I have been able to walk away from the subject of trading for months at a time and still feel the progress I am making thru the teachings of people on this and other sites. Thank you, whoever you are.

As far as the numbers you are mentioning this is my take. Being rich or profitable are two different things, yet they are not absolute states. They are relative. Relative to your cost. How much does it cost you to be rich or profitable? Someone could be just profitable on just 10% while someone else might be getting rich on only 5% and with a lower balance than the above.

Again, I might have been a total ignorant back then, but the day I grasped that concept, it was the first day of the rest of my life.

There is a chance some would confirm I was a total ignorant and chances are they would think I still am, but those who don't, will agree the concept is way too simple to be easily understood.
Please pull my head out of my ass, I am running out of oxygen...
  • #3
  • Mar 22, 2010 12:59pm Mar 22, 2010 12:59pm
Generally I think the wisdom (or lack of it) should be in the authors words and not in the authors profitability or personality.

Having said that, for a novice trader it's very difficult to separate the wheat from the chaff, especially on public forums like these and even more so when a poster blocks others from making their own observations and comments!

In this specific instance (ScottyB) there's absolutely nothing to suggest he's profitable, in fact quite the opposite from what I've read. He seems lost and confused and getting more confused by the minute by going off on tangents all the time! Unfortunately he doesn't seem to appreciate any constructive criticism which contradicts him or his sidekick, and that's not a good trait for a trader!

Bottom line, if what you read makes logical sense to you then fine, if not then just ignore it or store it, maybe your time wasn't totally wasted and you'll find it useful at some point in the future.
  • #4
  • Mar 22, 2010 1:27pm Mar 22, 2010 1:27pm
Quoting pipmutt
Generally I think the wisdom (or lack of it) should be in the authors words and not in the authors profitability or personality.

Having said that, for a novice trader it's very difficult to separate the wheat from the chaff, especially on public forums like these and even more so when a poster blocks others from making their own observations and comments!

In this specific instance (ScottyB) there's absolutely nothing to suggest he's profitable, in fact quite the opposite from what I've read. He seems lost and confused and getting...
This is exactly the point I was trying to make. In the end of the day bottom line tells all.
  • #5
  • Mar 22, 2010 1:30pm Mar 22, 2010 1:30pm
Quoting pipmutt
Generally I think the wisdom (or lack of it) should be in the authors words and not in the authors profitability or personality.

Having said that, for a novice trader it's very difficult to separate the wheat from the chaff, especially on public forums like these and even more so when a poster blocks others from making their own observations and comments!

.....
In my personal experience one can benefit from public forums just as easy as get completely lost. IMHO novice trader's bottomline should be learning how his thinking process could be adjusted to what's happening in the markets. As much as guidance/advisory could help it is the personal abilities that make the trader. Think about it - all traders are in it for the money. How many of them follow their own path? Probably less then 5%. Now that's one popular number, isn't it?
The bulk go out there and read about other people's strategies albeit there's rarely any proof whatsoever of a system being profitable on the long run. People simply tend to believe when they see someone posting a chart and saying - this is how it's done. It's funny how most of the people think they can predict (which is in a way control) what markets will do and hope this will work all the time.
Further more - the Factory rarely goes under 3K users online. How many of them do you know for sure are profitable? Now tell me what's the chance that you run into one of those few who is willing to share how the job is really done and can actually prove it?
  • #6
  • Mar 22, 2010 1:38pm Mar 22, 2010 1:38pm
Quoting spekkiefx
This is exactly the point I was trying to make. In the end of the day bottom line tells all.
Absolutely, it's all about the money! There's no point in having some convoluted clever-sounding strategy or market understanding if you can't make money with it! Great for impressing friends at dinner parties but not much use at the grocery store!

To demonstrate the point I know a trader who comes across as being thick as a plank, he knows jack about the market, he just plods on with his own simple strategy day after day.....and makes money! It could explain why some novices initially make money when they start out, then they try to get clever.
  • #7
  • Mar 22, 2010 1:45pm Mar 22, 2010 1:45pm
Trade your plan and plan your trade and the results will accrue to the bottom.

Anything else is spinning wheels and spinning tales.

Sorry if I sound all knowing. I am most definitely not, although I have learned finally from many, many costly mistakes over the years. I think.

Positive attitudes are good but the market doesn't care, now does it.
  • #8
  • Mar 22, 2010 2:23pm Mar 22, 2010 2:23pm
Here's the problem with this line of thinking...

An account I started about a year and change ago.
http://www.darkstarforex.com/pnl1.png

Heres one a started a few months ago.
http://www.darkstarforex.com/pnl2.png

What does this tell you?

Other then the fact that I can show that I make money... nothing. You don't know if these are photoshopped. You don't know if these are the only 2 profitable accounts out of 600 that I have. You don't know if I got really lucky on a trade or two in each. You don't know if I have changed my system between when I started and when the screenshot was taken... etc etc etc...

Is this any better then telling you I am profitable? Is any of it better then me saying nothing on the subject?

Pretend for a second that I had the slightest desire to "prove" that I am a profitable trader. How would I go about dong that? Would you want my brokers phone number? Audited financials? To sit with me 24-7 for a month while I trade? At what point would all doubt be removed from your mind?

The problem with these type of inquiries is that they never lead anywhere useful and I think that was the point of SupremeChaos' comment. Does scotty telling you he is profitable really matter? Are you going to believe him? If he can somehow prove it, without you having traveled his path, will it even matter?

There is a wealth of good info on this forum sprinkled amongst a ton of useless crap. Finding the good stuff is a matter of analyzing what is being said in the context of your own trading experience. If what is being said fits with your worldview, then use it. If you think it's crap, then skip it for something else. Short of requiring audited financials to start a thread, thats really the only thing you can do.
  • #9
  • Edited 3:06pm Mar 22, 2010 2:52pm | Edited 3:06pm
Quoting Darkstar
What does this tell you?
As we can't see the trading period or interim risk/drawdown not a lot, apart from that you trade with Oanda, use 50:1, and by the looks of it are overleveraged!

On the other hand they could be photoshopped and be a promotional tool to garner interest in your upcoming book!

....oh and that you're not showing other accounts, I'm sure I read somewhere your long Eur/Usd position was 2mio....


-
  • #10
  • Mar 22, 2010 3:01pm Mar 22, 2010 3:01pm
Quoting Sauron
This quote belongs to supremeChaos who posted it on the topic of Scotty and, as I don't want to hijack his topic, I'll continue here.
I think it's great you started a new thread to continue a discussion on a specific topic without trying to hijack a thread. This should serve as a good example for folks.

Quote
My opinion that it is important to know how profitable a trader is, as long as he is highly esteemed and he posts trading advices. There are many reasons for this belief of mine.

A trader maybe profitable and his advice maybe sound, BUT that advice may not 'fit' your personality or view of the market. A person maybe all the above and trade without a stop loss using a mental stop or a very very large stop loss. This may work for them and maybe good advice to a particular style of trading, but not apply to you or other styles of trading. (this just as an example)

Quote
Time is a resource. I don't have thousands of hours every day to read everything I would like and then to filter the useless junk. Therefore, if I decide to read a trading book, an article, a topic or the posts of a certain user I want to be sure that I'm reading something of quality. Something which will improve my knowledge and will make my capital grow.

Starting at day one it will be difficult to figure what what is valid or invalid, I think someone already stated this point as well. One thing to maybe consider is that what is useless junk to one trader maybe a treasure to another. Fibonacci is good example, to some it is a treasure to others junk. If you read the market wizards books you'll see top traders all doing something different and what works for one wizard won't necessarily work for another and those folks are the best of the best.

As far as time goes and filtering things out, I personally don't think there is too much that can be done. You may a read 300 page book and only pull out 1 sentence that helped you and that sentence may have been totally useless to someone else.

Quote
It is clear enough that the profitability of trader X has nothing to do with mine but on the other way, if I take an idea from him and the idea is some discretionary trading which for obvious reasons can't be backtested, without knowing his profits and risks I don't know what to expect.

Even if you did know the profits and risks and they were 'the greatest thing since sliced bread' you may not be able to use it for how you will trade. I think over time everyone takes bits and pieces and builds their own way of trading and looking at the markets. It's all personalization and customization.

At the end of the day each traders journey is unique, the issues traders run into maybe the same, but I doubt any two traders arrived to the exact same conclusion the exact same way.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #11
  • Mar 22, 2010 3:02pm Mar 22, 2010 3:02pm
Quoting pipmutt
As we can't see the trading period or interim risk/drawdown not a lot, apart from that you trade with Oanda, use 50:1, and by the looks of it are overleveraged

On the other hand they could be photoshopped and be a promotional tool for your upcoming book!
If someone was writing a book the last thing they'd want to do is post false account #'s on the same forum they promote their book on, it would be a recipe for disaster for anyone with half a brain, and it seems DS's brain is quite full and operating well.
You should agree those #'s are impressive no matter which way you look at them......
Biggest joker
  • #12
  • Mar 22, 2010 3:11pm Mar 22, 2010 3:11pm
Quoting baron193
You should agree those #'s are impressive no matter which way you look at them......
How can we tell? Those could be trading accounts spanning years, and we don't know the risk taken to achieve those returns or other positions in other accounts he may have.

They demonstrate the point though, posting statements or claiming profitability on a trading forum is meaningless (and pointless) in the scheme of things.
  • #13
  • Mar 22, 2010 3:17pm Mar 22, 2010 3:17pm
Quoting pipmutt
As we can't see the trading period or interim risk/drawdown not a lot, apart from that you trade with Oanda, use 50:1, and by the looks of it are overleveraged!
And thats exactly how it starts. So now I need to post my tradelogs so they can be analyzed for drawdown and consistency over time. Next it will be questions about the quality of the data.. was it photoshopped? Did I conveniently remove losing trades? Before long we end up with requiring audited financials and live monitoring. And that says nothing about the motives question you raised...

There is always going to be doubt, so why bother looking for proof at all? Either you see value in someones post or you don't.

Asking them to validate your thought investment for you is an abdictation of your responsibility as a functional human being.
  • #14
  • Mar 22, 2010 3:20pm Mar 22, 2010 3:20pm
Quoting LasVahGoose
...
I hate to admit it LVG but that was actually a lucid, well thought out post!
  • #15
  • Mar 22, 2010 3:21pm Mar 22, 2010 3:21pm
Quoting Darkstar
And thats exactly how it starts. So now I need to post my tradelogs so they can be analyzed for drawdown and consistency over time. Next it will be questions about the quality of the data.. was it photoshopped? Did I conveniently remove losing trades? Before long we end up with requiring audited financials and live monitoring. And that says nothing about the motives question you raised...

There is always going to be doubt, so why bother looking for proof at all? Either you see value in someones post or you don't.

Asking them to validate your...

Absolutely agree, no argument here!
  • #16
  • Mar 22, 2010 3:31pm Mar 22, 2010 3:31pm
Well, you missed the point. It is not a screenshot which I require or some attached document which proves beyond any reasonable doubt that X is a very profitable trader. This would be necessary only if X would sell a system or would pretend money for access to his forum/site/whatever.

What I consider to be enough is simply more information about the profitability of one's approach. In your case, for example, you could say the following: hey guys, I'm risking 10% on every trade, I take 30 trades every year and I'm not losing more than 2. I know that you have a lot of experience and want to help others for free (here I don't want to sound cheap) so I would believe that what you say is true.

It would be nice that anytime some experienced trader shares his knowledge to share also some hard facts about his profitability. If that trader remains long enough here you can see if he is lying or not.

Worse, you could have guys like fti, maybe a very important person and experienced trader. But if you know nothing about him and he isn't coeherent you tend to dismiss him automatically. I don't think that there is a person on this forum who is now convinced, after reading the whole thread, that technical analysis is crap.
  • #17
  • Mar 22, 2010 3:41pm Mar 22, 2010 3:41pm
Quoting Sauron
It would be nice that anytime some experienced trader shares his knowledge to share also some hard facts about his profitability.
Ah I see what you're saying, and I agree that would make sense and save wasting time on a strategy which may be totally unsuitable for us personally (ie wrong time frame for someone, bigger drawdown/smaller return than required etc etc). If we know a strategy might not be suitable for us then we'd save time and not pursue it in the first place. Yes that makes sense.
  • #18
  • Mar 22, 2010 3:48pm Mar 22, 2010 3:48pm
I think you are looking for a sound common logic in a business where it is up to the individual to make his way to the Profitland. As Darkstar pointed out there are gems of knowledge one can possibly use in the Factory, but they are buried under a pile of crap. And it is again up to the individual.
As to the fti example - you have either just tried to read the thread (a hint - the core is within the first 300 pages) or simply misunderstood what he was all about. Furthermore - his thread is not in the trading systems section - you won't find the holy grail of trading examples and rules there
  • #19
  • Mar 22, 2010 3:59pm Mar 22, 2010 3:59pm
Yes, in the end I'd like more transparency from the experienced traders. Not their names, their secrets, their bank accounts or actual jobs and positions, which I agree, prove nothing.

And if I must show an example, let's use my dear DIBS system. The guy who first described it failed to mention that trading more than one pair you could very soon find yourself having 40-50 losses in a row. More than this, he told that you shouldn't backtest it, as the whole idea is trading it!
Looking at how many vouched for him or consider him a guru is really scary.
  • #20
  • Mar 22, 2010 4:02pm Mar 22, 2010 4:02pm
Sorry, I tend to aproach conversations like a chess game.. thinking several steps ahead. I may have jumped the gun...

Your absolutly right here in that people should share some basic statistics.

The problem ofcourse is that the thread were talking about discusses a highly discretionary system where profitability is predicated on ones personal experience and skill. Theres a theory and practical application components that are related but distinct. So even if the theory is sound, one or more traders may never become profitable while applying it.

I don't know if Scotty is profitable or not. What I do know is that he has a pretty firm grasp of the theory that I use to make money. Dismissing the theory he advocates (or him as an advocator) because he hasn't been able to turn it into cash is probably not a great way to use your BS filter.

Lets not forget that by applying the same criteria to other information sources, we would have long ago relegated "Reminisences of a Stock Operator" to the dust bin of history...
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