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People say systems don't work (only pure price action does)

  • #21
  • Nov 17, 2010 4:47am Nov 17, 2010 4:47am
Quoting Razzle
I knew one day someone would surprise me. This is probably the most sensible advice that I've ever read here.
Except a proper contrarian tends to end up shit creek without a paddle. A sharp mind will jump between the two sides as it suits him or her. The best entry in trading is contrarian, but the best exit is made after running with the herd for some time, only pulling out just before the cliff's edge.
  • #22
  • Nov 17, 2010 8:54am Nov 17, 2010 8:54am
Quoting Mr J
What is the discipline? We either choose to make good trades, or we choose to be a bad trader. Discipline implies we're acting against our nature or desires, and that is certainly not necessarily the case.
Discipline in trading simply means executing your system* flawlessly each and every time.

* System defined as your trading method, money management, and your rules.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #23
  • Nov 17, 2010 9:33am Nov 17, 2010 9:33am
Quoting Petar_Serbia
Every system can be profitable if you know how to control emotion and greed...
are you sure about that?

If that were the case then no automated trading system would fail as a computer program will trade according to the rules to the letter.

but we find that isn't the case just program an ea to trade with all your rules as well as built in money management and you'll find your a/c dry after a while.

Fact of the matter is most systems simply don't work despite trading in a discipline manner simply because they do not have an edge.

If a system has no edge aka statistical advantage all the emotional control and discipline and even money management will not make it profitable.
  • #24
  • Nov 17, 2010 9:35am Nov 17, 2010 9:35am
Quoting fugly
If a system has no edge aka statistical advantage all the emotional control and discipline and even money management will not make it profitable.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #25
  • Nov 17, 2010 9:39am Nov 17, 2010 9:39am
Quoting Mr J
Except a proper contrarian tends to end up shit creek without a paddle. A sharp mind will jump between the two sides as it suits him or her. The best entry in trading is contrarian, but the best exit is made after running with the herd for some time, only pulling out just before the cliff's edge.
Haha! I like that.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #26
  • Nov 17, 2010 11:35am Nov 17, 2010 11:35am
Quoting Mr J
Except a proper contrarian tends to end up shit creek without a paddle. A sharp mind will jump between the two sides as it suits him or her. The best entry in trading is contrarian, but the best exit is made after running with the herd for some time, only pulling out just before the cliff's edge.
But a contrarian will always bail out of a trend before the herd does, thereby he's always a contrarian, both when he enters and exits.
  • #27
  • Nov 17, 2010 12:49pm Nov 17, 2010 12:49pm
Quoting Dopey
But a contrarian will always bail out of a trend before the herd does, thereby he's always a contrarian, both when he enters and exits.
Some are asking what I meant by "System" Im sorry to confuse anyone. I didn't mean an EA that does everything for you. I meant x+x+x must line up in order to enter. Lets say the stochastics has to come out of oversold, the macd has to cross above the 0 line and you have to have a candlestick reversal pattern.

By Price action I mean support and resistance and candlestick patterns.

So far I'm liking what you guys are saying! Pretty much as long as you trust in it, you will be profitable! You must be diciplined and trade how you believe. The markets are random and you don't really know what's going to happen so you just have to throw probabilities in your favor and use good money management! Thanks for the responses everyone! keep up the arguments some people are having some great advice!!!
  • #28
  • Nov 17, 2010 12:55pm Nov 17, 2010 12:55pm
Quoting Dopey
But a contrarian will always bail out of a trend before the herd does, thereby he's always a contrarian, both when he enters and exits.
And how did that contrarian get to that exit? By hanging with the herd.

Quoting LasVahGoose
Discipline in trading simply means executing your system* flawlessly each and every time.
I'd define that as skill, rather than discipline. I don't think much of discpline because I don't need it - I either trade well, or I don't. I don't force myself to trade a certain set of rules, but that was my aim when becoming a purely discretionary trader.
  • #29
  • Nov 17, 2010 1:19pm Nov 17, 2010 1:19pm
Somebody who always bets against the trend is going to be right 50% of the time.

Somebody who always bets with the trend is going to be right 50% of the time.

Somebody who knows how to use his style (or mixture of styles) to correctly read the market is going to be right >50%.

Stop worrying over what's better than what, trend-following? contrarianism? systems? PA? fundamentals?

There ARE successful system/algorithmic traders, there ARE successful PA traders, and so on, and they all have one thing in common: they're VERY good at their style/niche.

Are you?

That's the question you should be asking.
  • #30
  • Nov 17, 2010 7:45pm Nov 17, 2010 7:45pm
Quoting Mr J
I'd define that as skill, rather than discipline
I'd say that trading is the skill and executing your trades consistently each and every time is the required discipline.
To each his own definitions I guess. Peace.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #31
  • Nov 17, 2010 7:46pm Nov 17, 2010 7:46pm
Quoting beehivesjoe
Is this true? I've been trading a system that I've been profitable with for some time (on demo) before I move live should I learn to trade with pure price action?

Everyone says over time your method will fail unless you're using pure price action. EX) Support/Resistance, trendlines, candlesticsk. I guess my questions are

1) Can you trade long term with a system and be profitable
-Bolinger Bands, Moving Averages and stochastics
2) Are there any profitable traders that have been trading 3+ years profitably with the same strategy (not pure price...
To my mind it is not a question of "system" vs "price action" (however you want to define those two terms), but more a question of a static and indiscriminate method versus a flexible, adaptable and evolving method.

The former may work for a few months if you're lucky, but the latter is required for sustainable profitability. Apply the right principals and improvement processes within your evolving trading method (whatever that looks like), and the probability of success, while never guaranteed, is at least higher.
  • #32
  • Nov 18, 2010 12:31am Nov 18, 2010 12:31am
Quoting Mr J
And how did that contrarian get to that exit? By hanging with the herd.
You and I have different understandings of what contrarian trading is. I posted a piece by a guy who was a contrarian trader for PTJ, who is also a contrarian trader. That's my definition.

You're definition doesn't work because you are working from the assumption that a contrarian trader always has to be going against the trend, which is obvious from your above comment. It doesn't work that way. But feel free to try it and let us know how it works.
  • #33
  • Nov 18, 2010 12:34am Nov 18, 2010 12:34am
Quite simply contrarian traders buy when prices are dropping and sell when prices are rising (by definition)

The aim is to get a lower buy price and higher sell price overall
Time hides Nothing
  • #34
  • Nov 18, 2010 12:42am Nov 18, 2010 12:42am
This thread is ridiculous

"People say systems dont work only pure price action does"

What people? What systems?

Such a generalised statement... Secondolly do the people that say this know all there is to know about the possibilities in the market with either system?

Ridiculous....

Its hard to have a civilised conversation on this forum these days... Nothing grows here just endless circles of nothingness, it increasingly seems like another language that is written here, and that is the language of confusion...

Questions are so open ended thats its just too hard to put into words a feasable answer. ..

People that succeed in trading leave here not cause they are "too good" for this place they leave here cause talking to the walls just aint fun.

I actually get headaches reading some of the shit on here its seriously a real head fuck
Time hides Nothing
  • #35
  • Nov 18, 2010 12:46am Nov 18, 2010 12:46am
So according to your definition, we all are contrarian traders. Imo, almost everybody wants to buy low (when price are dropping) and sell high. IMO, prices are always dropping or rising in a higher/lower timeframe except if you are trading a BO on all time highs/low in a instrument.

At the end aiming to get a lower buy price and higher sell price is a matter of perspective from your timeframe. So even a BO trade in a daily chart can look awfully contrarian from a monthly pespective ....

sisse

Quoting CindyXXXX
Quite simply contrarian traders buy when prices are dropping and sell when prices are rising (by definition)

The aim is to get a lower buy price and higher sell price overall
Pending conversations? PM for a chat...I am mainly in OTM now
  • #36
  • Nov 18, 2010 12:50am Nov 18, 2010 12:50am
Quoting sisse
So according to your definition, we all are contrarian traders. Imo, almost everybody wants to buy low (when price are dropping) and sell high. IMO, prices are always dropping or rising in a higher/lower timeframe except if you are trading a BO on all time highs/low in a instrument.

At the end aiming to get a lower buy price and higher sell price is a matter of perspective from your timeframe. So even a BO trade in a daily chart can look awfully contrarian from a monthly pespective ....

sisse
I dunno thats just the text book definition , make of it what you will... Just something I learnt recently in my studies at UNI.

I think the general concensus is that contrarian traders go AGAINST the "herd" and sell the hype and buy the depression.

The aim is simply to average out a lower buy price and higher sell price respectively
Time hides Nothing
  • #37
  • Nov 18, 2010 12:51am Nov 18, 2010 12:51am
Quoting CindyXXXX
This thread is ridiculous

"People say systems dont work only pure price action does"

What people? What systems?

Such a generalised statement... Secondolly do the people that say this know all there is to know about the possibilities in the market with either system?

Ridiculous....

Its hard to have a civilised conversation on this forum these days... Nothing grows here just endless circles of nothingness, it increasingly seems like another language that is written here, and that is the language of confusion...

Questions are so open...
Well said Cindy. To much negativity and idiots arguing for the sake of it too.
  • #38
  • Nov 18, 2010 1:29am Nov 18, 2010 1:29am
Ok, from a theoretical definition I do agree contrarian traders go AGAINST the "herd" and sell the hype and buy the depression. In practice for small traders, IMO, we all have something of a contrarian.

About averaging down that's a different question. That applies mostly for very long term investors (mutual funds and stocks) in very liquid, capitalized and solid companies that are under-performing according to valuations.

However, that's actually an aberration (except very very few institutional trades) that will lead to death sentence for small trader in fast, highly leverage markets like Forex.

In any case, that a topic for a different thread. Good luck with your trading

sisse

Quoting CindyXXXX
I dunno thats just the text book definition , make of it what you will... Just something I learnt recently in my studies at UNI.

I think the general concensus is that contrarian traders go AGAINST the "herd" and sell the hype and buy the depression.

The aim is simply to average out a lower buy price and higher sell price respectively
Pending conversations? PM for a chat...I am mainly in OTM now
  • #39
  • Nov 18, 2010 1:32am Nov 18, 2010 1:32am
Quoting CindyXXXX
Quite simply contrarian traders buy when prices are dropping and sell when prices are rising (by definition)

The aim is to get a lower buy price and higher sell price overall
No, it really isn't that simple.
  • #40
  • Nov 18, 2010 1:38am Nov 18, 2010 1:38am
Quoting Dopey
You're definition doesn't work because you are working from the assumption that a contrarian trader always has to be going against the trend, which is obvious from your above comment. It doesn't work that way. But feel free to try it and let us know how it works.
I didn't mention the trend, I mentioned the herd. And not always, but usually. That is, by definition, a contrarian.

Why would I try it? It's a ludicrous suggestion given that I did not express interest in it, and in no way implied it was a good idea.

Quoting CindyXXXX
I think the general concensus is that contrarian traders go AGAINST the "herd" and sell the hype and buy the depression
Yes, but while the points of entry and exit are contrarian, the trader may actually spend most of the trade with the "majority".
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