Are systems really the key? | Forex Factory

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Are systems really the key?

  • #1
  • First Post: May 19, 2010 12:46pm May 19, 2010 12:46pm
I was googling around for strategies today, not to copy but just to see how other people have set up their systems.

And I found the site called AceTrader, Which looks interesting but I would rather learn to do it all myself.

But the chief market analyst there, W. Leung said:
"We don't employ any system as we have not found any systems which can provide
consistent profitable results under trending and ranging markets. Therefore, similar to the
majority of professional bank dealing operations, we train our analysts to study the market
dynamics (previous day's price range, the main factors which dominated previous day's
price movement, today's technical outlook, forthcoming major economic releases,
events/speech and intra-day gathering of forex market intelligence - market moving
news). Therefore, you can appreciate how much work a professional analyst/trader has to
go through before taking a position or giving buy/sell or stand aside trading
recommendation."


Now I would like to know:

1. Why is such a experienced trader saying systems are bad?
2. If systems did work, Why is 95% or 90% of all traders losing? Systems are very easy to follow and I think more people would be successful if they worked.
  • #2
  • May 19, 2010 1:36pm May 19, 2010 1:36pm
Quoting Proffesor Pi
But the chief market analyst there, W. Leung said:
"We don't employ any system as we have not found any systems which can provide
consistent profitable results under trending and ranging markets. Therefore, similar to the
majority of professional bank dealing operations, we train our analysts to study the market
dynamics (previous day's price range, the main factors which dominated previous day's
price movement, today's technical outlook, forthcoming major economic releases,
events/speech and intra-day gathering of forex market intelligence - market...
What he does on a daily basis (IE "previous day's price range, the main factors which dominated previous day's price movement, today's technical outlook, forthcoming major economic releases, events/speech and intra-day gathering of forex market intelligence - market moving news"), Sounds quite a bit like a system to me. It might not spit out magical buy or sell numbers but it sounds like a solid checklist to ensure that their traders are aligned with the market on a daily basis.

Quote
2. If systems did work, Why is 95% or 90% of all traders losing? Systems are very easy to follow and I think more people would be successful if they worked

Maybe they havent found the right one yet or arent employing it properly.
  • #3
  • May 19, 2010 1:46pm May 19, 2010 1:46pm
Is this a reference to the people - or the system? - cause if you are talking about the people - then i agree - you got to work hard at this business. Sounds like W. Leung is saying they teach their people to think - not just click buy/sell. Novel approach more traders ought to model that example.


Quoting Proffesor Pi
2. If systems did work, Why is 95% or 90% of all traders losing? Systems are very easy to follow and I think more people would be successful if they worked.
In trading, there is no bullshit. You either make money or you don't.
  • #4
  • May 19, 2010 2:12pm May 19, 2010 2:12pm
Damn, this trading malarkey sounds like hard work! I fecking quit!!

Living the adventure in my head.
  • #5
  • May 19, 2010 2:40pm May 19, 2010 2:40pm
Let me ask you this, Mohammed...

Are the keys, in actuality, a system?
  • #6
  • May 19, 2010 3:06pm May 19, 2010 3:06pm
Quoting Proffesor Pi
I was googling around for strategies today, not to copy but just to see how other people have set up their systems.

And I found the site called AceTrader, Which looks interesting but I would rather learn to do it all myself.

But the chief market analyst there, W. Leung said:
"We don't employ any system as we have not found any systems which can provide
consistent profitable results under trending and ranging markets. Therefore, similar to the
majority of professional bank dealing operations, we train our analysts to study the market
dynamics...
You really have to apply some logic here...

Proposition:
I can generate trading signals which consistently make money.

Options:
A. I can trade my signals and make a lot of money.
B. I can set up a crappy looking website and sell my signals for money.

Now go into a dark room and sit on a chair with and adopt your best 'the thinker' pose and don't come out until you have resolved this apparent conundrum.
The breaking of a wave cannot explain the whole sea.
  • #7
  • May 19, 2010 3:09pm May 19, 2010 3:09pm
Quoting Craig
Now go into a dark room and sit on a chair with and adopt your best 'the thinker' pose and don't come out until you have resolved this apparent conundrum.

http://anita-baruwa.sulekha.com/msto...hinkingMan.jpg
  • #8
  • May 19, 2010 3:18pm May 19, 2010 3:18pm
Quoth the article found here: http://www.acetraderfx.com/eng/other...ith_wilson.pdf

Inserted Code
8. What operating systems support your applications?
We don't employ any system as we have not found any systems which can provide
consistent profitable results under trending and ranging markets. Therefore, similar to the
majority of professional bank dealing operations, we train our analysts to study the market
dynamics (previous day's price range, the main factors which dominated previous day's
price movement, today's technical outlook, forthcoming major economic releases,
events/speech and intra-day gathering of forex market intelligence - market moving
news). Therefore, you can appreciate how much work a professional analyst/trader has to
go through before taking a position or giving buy/sell or stand aside trading
recommendation.

Is it just me, or did he not answer the question at all? My suspicion is this interview was either faked or otherwide made up.

Or perhaps I'm just reading too much into this.
  • #9
  • May 19, 2010 3:21pm May 19, 2010 3:21pm
For what it's worth, a the best trading systems are not really that mechanical.

When trading, I have my own system, but then there are several exceptions to the system, e.g.

 

  1. Spikes
  2. News
  3. Gaps
  4. Close-enough entries
  5. etc.

A lot of the exceptions are based on context--something computers are not very good at determining just yet.

  • #10
  • May 19, 2010 3:29pm May 19, 2010 3:29pm
Quoting Sim
http://anita-baruwa.sulekha.com/msto...hinkingMan.jpg
Naked? Improves thinking? I've got an exam next week!
Living the adventure in my head.
  • #11
  • May 19, 2010 3:32pm May 19, 2010 3:32pm
I had one yesterday...
  • #12
  • May 19, 2010 3:36pm May 19, 2010 3:36pm
Quoting Craig
Proposition:
I can generate trading signals which consistently make money.

Options:
A. I can trade my signals and make a lot of money.
B. I can set up a crappy looking website and sell my signals for money.
A + B = more money than just one option


Also, I found this on the site as well:

"The financial markets are dynamic in nature, one cannot set a few pre-defined rules and expect the market to obey and follow them. The market is always right, it sets its own rules. A trader’s success lies in closely observing the market and adopting the appropriate trading strategies that would enable him / her to be on the right side of the market. "


And thanks Ron, Your input is valued.

Remember I'm not taking any sides on systems being good/bad.
That's why I made this thread so I can pick one.
  • #13
  • May 19, 2010 3:48pm May 19, 2010 3:48pm
Quoting Proffesor Pi
A + B = more money than just one option
(Buzzer sounds) Wrong! If he has signals with a positive expectancy he would be able to make much more money trading than running a subscription service (without the additional hassle of web hosting and customers complaining about crappy signals etc.) Another counter example, If we assume you are correct, why don't hedge funds sell their signals? In fact why don't all successful traders sell their signals? I can't really belabor the point much more, if you're determined to dig for nuggets on a pay for signals site the best thing I can say is happy hunting!
The breaking of a wave cannot explain the whole sea.
  • #14
  • May 19, 2010 3:48pm May 19, 2010 3:48pm
Well not to throw a wrench into the subject but...

What if instead of a system you looked into a trading methodology? Muahahahahah (moniacle laughter is always needed here) LOL

But on a more serious note a system is more black box Green Buy, and Red Sell setups.

A methodlogy applies rules but allows a certain amount of discretion.

For instance my trading method provides for me a way to determine market rythm which defines the trend (up, down, sideways). After I determine the trend I then look for price action to to find setups and eventually a trigger. I also apply some discretion and determine whether or not I should put on the trade based on news market times etc.

Just my 2 cents which could be worth many thousands :-)

Traver V
Nothing is impossible, with a willing mind!
  • #15
  • May 19, 2010 3:55pm May 19, 2010 3:55pm
Quoting Craig
(Buzzer sounds) Wrong! If he has signals with a positive expectancy he would be able to make much more money trading than running a subscription service (without the additional hassle of web hosting and customers complaining about crappy signals etc.) Another counter example, If we assume you are correct, why don't hedge funds sell their signals? In fact why don't all successful traders sell their signals? I can't really belabor the point much more, if you're determined to dig for nuggets on a pay for signals site the best thing I can say is happy...
One of the most well put paragraph's I've heard since... elder year.
  • #16
  • Last Post: Edited 4:40pm May 19, 2010 4:18pm | Edited 4:40pm
Quoting Proffesor Pi
A + B = more money than just one option


Also, I found this on the site as well:

"The financial markets are dynamic in nature, one cannot set a few pre-defined rules and expect the market to obey and follow them. The market is always right, it sets its own rules. A trader’s success lies in closely observing the market and adopting the appropriate trading strategies that would enable him / her to be on the right side of the market. "


And thanks Ron, Your input is valued.

Remember I'm not taking any sides on systems being good/bad.
That's...
It's easy for me to explain what you should do; Find real and identifiable triggers for market movement.

You can do this in two ways:

  1. Find a recurring pattern (not necessarily on a chart) of price movement.
  2. Study specific possible 'triggers' for price movement in the hopes of finding one, or a combination, which works.

The difference between the two is that the second entails initially identifying possible grass-roots reasons for price movement, and the first, searching out predictable price changes without knowledge of how they come about.

This can be viewed as either looking for (possible) causes or (possible) effects first.

EDIT: NOTE: Whether you call something a system, method, strategy, plan, whatever is irrelevant; have rules for what you do.

Living the adventure in my head.
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