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Do you still believe in the perfect trading system?

  • #301
  • May 23, 2011 2:22am May 23, 2011 2:22am
Quoting nubcake
did you make an analysis on why you feel this way? remember the holy grail is YOU. blah blah blah. herp derp derp. psychology... koolaid... weeeeeee.

it's pretty obvious that the ones that spew the self-help mantra's without backing it up with something of substance simply have nothing to add. mouth-breathing at it's finest.

self-help is fine. self-delusion and reinforcing ignorance is not.
haha, yeah I get why these psychology threads show up. Cause if people can't figure out how to be profitable, it is easier to say that it's because of wrong psychology than to say it's because of a lack of intelligence or hard work/research.
  • #302
  • May 23, 2011 4:32am May 23, 2011 4:32am
Quoting Custos
haha, yeah I get why these psychology threads show up. Cause if people can't figure out how to be profitable, it is easier to say that it's because of wrong psychology than to say it's because of a lack of intelligence or hard work/research.
Your wrong I'm afraid. It's all about mentality. Firstly it's about your (the trader) mentality and then (Crucially) it's understanding the market's mentality (and then building your trading method around that). Once you've got that you can make a lot of money in this game.

I'll elaborate in my next post

rgds
  • #303
  • May 23, 2011 4:38am May 23, 2011 4:38am
Quoting jmtini
Your wrong I'm afraid. It's all about mentality. Firstly it's about your (the trader) mentality and then (Crucially) it's understanding the market's mentality (and then building your trading method around that). Once you've got that you can make a lot of money in this game.

I'll elaborate in my next post

rgds
I can just speak from my experience: Once I stopped blaming my losses on my mindset, and I started doing serious research, everything turned around and consistency started to kick in.

I never needed to work on a trader's mindset to achieve consistent profitability. Just an incredible amount of researching the markets. Thing is no matter how good your psychology is, if you are not able to exploit an edge in the markets, you will inevitably lose.

But anyways, let's just agree to disagree.
  • #304
  • May 23, 2011 4:49am May 23, 2011 4:49am
mentality is such an open-ended topic that it's easily possible to spin it any way you want.

most members of the circus want to use mentality in a belief fashion to survive their no-stoploss coin-flip trading. you could also spin mentality the opposite direction and suggest custos took the mentality of putting effort into specific forms of market research.

another can say mentality is about keeping a positive mindset. another can say mentality is about keeping a critical eye and using it to eliminate the ill-informed "facts" strewn online.

it's like religion... it's such puff-filled nonsense that is too open-ended and up for far too much interpretation.

mentality is not THE answer. it is not even AN answer. it's pointless mouth-breathing.
Congratulations ScalaFX for coming out of the closet!
  • #305
  • May 23, 2011 9:26am May 23, 2011 9:26am
Quoting tunera
Hi all, after many years of trading, a question come to me, and it make me very curious about what other people think.

Well, the question is, do you still belive in the holy grail?
Be sincere, tnx
Yes of course and santa's going to drop it in my stocking this year!

  • #306
  • May 23, 2011 1:51pm May 23, 2011 1:51pm
OK yes I agree "mentality" is open ended but I really mean your mental approach to trading.

I was reading the very interesting article “Mark Douglas and The Disciplined Trader by Thom Hartle” very kindly distributed by IC Chong. How true what he says about having the right mental attitude. So true that a good “belief system” is far more important then a good trading system.
I had 4 trading accounts and blew them all, in fact blew most of my savings before I realised the cold truth. It wasn't my trading system (and I tried just about all of them!) but my state of mind that was the problem – in the heat of battle it's so easy to lose your head! As Mark Douglas says: Fear dibilitates us and damages our normal sense of perception. I would go as far to say that fear , greed, and trying to “get back at the market” after a loss (overtrading, especially bad or 50/50 set-ups) can destroy one completely as a trader!!
This is the vitally important thing that he says: As traders, if you want to make the most money, you have to create consistency. And the best way to create consistency is to control the process of perception and interpretation so that you operate out of an objective frame of mind and as carefree a state of mind as possible. Carefree in the sense that one is relaxed. Because a mind that’s not relaxed can’t stay focused, you get distracted and make errors. And errors are very costly, especially for traders.

I think that this can be illustrated by trading any “demo” account. I can open a demo account on Monday morning with $1000 deposit and I promise you that by Tuesday evening I'll probably have $3000 in that account. If I opened a live account with the same amount why does it not result in the same outcome? What's the difference? One word – FEAR
You see when most of us open a demo account we're a FOX but when we start trading live we suddenly become a HARE - running scared!

Rgds
  • #307
  • May 23, 2011 2:05pm May 23, 2011 2:05pm
Quoting jmtini
OK yes I agree "mentality" is open ended but I really mean your mental approach to trading.

I was reading the very interesting article “Mark Douglas and The Disciplined Trader by Thom Hartle”...
Okay, if trading is so easy and it just requires you to stay emotionally balanced then tell me why most ea's don't work.
I tell you why, cause most ea's don't exploit an edge, and most systems around are just generating random signals. And the funny thing with random signals is that they have streaks of losers and streaks of winners. Now when you jump in with that system and get a really long streak of winners, then you might think, oh how great that system is, when in fact you are just at a statistical outlier.
The simple sobering fact is that most systems are not net-profitable, cause they don't exploit a tendency of the market. Even if you executed each trade flawlessly without any emotions involved, you will lose in the end. You need a net-profitable system first and you need to KNOW that it is profitable. That is the most important.

Well, and trading a demo account up is not hard at all. Let me open 10 demo accounts and go all in on different currency pairs, then I can promise you that one of them will be up significantly at the end of the day. That doesn't prove anything.
  • #308
  • May 23, 2011 2:42pm May 23, 2011 2:42pm
Assuming the holy grail is 100% winrate, while being very profitable of course, then yes such a system almost exists. More like 80-99% winrate exists.

The perfect trading system does exists. The only problem is can you get the perfect trader to trade the perfect system?

The perfect trading system is highly discretionary and thus there will generally be a few losses that occur because of the traders false interpretation of the information and/or see things and opportunities which don't really exist.

But yes, it does exist.
Private message me for a link to my order flow website.
  • #309
  • May 23, 2011 2:47pm May 23, 2011 2:47pm
Quoting grkfx
Assuming the holy grail is 100% winrate, while being very profitable of course, then yes such a system almost exists. More like 80-99% winrate exists.

The perfect trading system does exists. The only problem is can you get the perfect trader to trade the perfect system?

The perfect trading system is highly discretionary and thus there will generally be a few losses that occur because of the traders false interpretation of the information and/or see things and opportunities which don't really exist.

But yes, it does exist.
what average Risk:Reward ratio do you have to achieve that kind of win-rate?
I would assume that it might be a negative risk:reward ratio.
  • #310
  • May 23, 2011 2:48pm May 23, 2011 2:48pm
Winrate is irrelevant.

almost 100% winrate right here:

10 pip take profit

1000 pip stop loss.

Who needs perfect hell just find profitable.
  • #311
  • May 23, 2011 3:21pm May 23, 2011 3:21pm
Quoting Custos
what average Risk:Reward ratio do you have to achieve that kind of win-rate?
I would assume that it might be a negative risk:reward ratio.
The average R:R ratio depends on the trader of course and how well they follow the system. Also the average R:R depends on how many trades you want to place and how fast you want to compound your account.

I know of trading system that have 80-99% winrate that has a slightly negative risk:reward ratio.

I also know of trading system that has a 80-99% winrate using 1:1 R:R

I also know of trading system that has a 80-99% winrate with an average R:R of 2.0-3.0. Although this one doesn't generate as many signals as the other ones.

Of course you could trade all the above systems together and mix all the R:R together and see what you get. They are all highly discretionary especially in the beginning.

You can't really backtest them though. Only forward testing is possible.

Why can't you backtest them? Because if it was so simple to gather chart, price and technical indicator data, then the supercomputers at goldman sachs would of figured it out already and closed the inefficiency.
Private message me for a link to my order flow website.
  • #312
  • May 23, 2011 3:29pm May 23, 2011 3:29pm
Quoting grkfx
The average R:R ratio depends on the trader of course and how well they follow the system....
wow, I have not come across a system yet with a high winrate and high R:R. If you don't mind me asking, what is that discretionary part based on. Is it price action, or fundamental analysis, or something different?

I personally think, that technicals paired with fundamentals can give a high win-rate with high R:R, though I am not sure yet, since it is impossible to backtest fundamentals (mechanically). It is possible to do it manually, but that is of course highly subjective and I might subconsciously influence my own results when researching that manually.
  • #313
  • May 23, 2011 3:38pm May 23, 2011 3:38pm
Custos check the mans sig
Time hides Nothing
  • #314
  • May 23, 2011 3:40pm May 23, 2011 3:40pm
Quoting CindyXXXX
Custos check the mans sig
okay, so it must be pa then, since we don't have proper volume and an orderbook in fx. Interesting
  • #315
  • May 23, 2011 3:40pm May 23, 2011 3:40pm
Quoting Custos
wow, I have not come across a system yet with a high winrate and high R:R. If you don't mind me asking, what is that discretionary part based on. Is it price action, or fundamental analysis, or something different?

I personally think, that technicals paired with fundamentals can give a high win-rate with high R:R, though I am not sure yet, since it is impossible to backtest fundamentals (mechanically). It is possible to do it manually, but that is of course highly subjective and I might subconsciously influence my own results...
"Order flow" *cue music*
  • #316
  • May 23, 2011 3:49pm May 23, 2011 3:49pm
Quoting CindyXXXX
I will end this now by just saying... ok

...and that its an art not a science...
well, how else to do orderflow trading in fx. I am really curious. I actually read the orderflow threads out there, but they somehow always seem to be quite theoretical and just show which kind of orders are in the market.
But in the end, when it gets to the practical point, people often refer to pa.

I personally think that the futures markets are much better for this kind of trading, cause you have PA, real volume and an orderbook you can look at.
  • #317
  • May 23, 2011 3:54pm May 23, 2011 3:54pm
Quoting Custos
well, how else to do orderflow trading in fx. I am really curious. I actually read the orderflow threads out there, but they somehow always seem to be quite theoretical and just show which kind of orders are in the market.
But in the end, when it gets to the practical point, people often refer to pa.

I personally think that the futures markets are much better for this kind of trading, cause you have PA, real volume and an orderbook you can look at.
Orderflow in its most general form. It's looking at price, at current events, current interpreted context and predicting future price movement. That's all it is. Hence the heavy discretion involved. Its a mix of fundies, techs, and everything else thats all it is.
  • #318
  • May 23, 2011 4:01pm May 23, 2011 4:01pm
Quoting Custos

I personally think that the futures markets are much better for this kind of trading, cause you have PA, real volume and an orderbook you can look at.
Agree, but apparently its not even needed.

Do I believe in the perfect system? No I believe in the perfect mind set, one that focuses on opportunities and the identification of which. The only systematic part of it is that it systematically adapts to the current situation of the market...

This is what I believe in
Time hides Nothing
  • #319
  • May 23, 2011 4:08pm May 23, 2011 4:08pm
Is the question Do you still believe in the perfect trading system? Or is it Do you still believe in the holy grail? Because I think they are two different things.

The turtles traders proved this. They were all given the same system with the same rules. Some were very successful and some were not yet both supposedly using the same rules.

I think the holy grail exists but is mainly down to the individual to use some intuition. Some people have this naturally, some will learn it but most will fail.
  • #320
  • May 23, 2011 4:08pm May 23, 2011 4:08pm
Quoting grkfx
Assuming the holy grail is 100% winrate, while being very profitable of course, then yes such a system almost exists. More like 80-99% winrate exists.

The perfect trading system does exists. The only problem is can you get the perfect trader to trade the perfect system?

The perfect trading system is highly discretionary and thus there will generally be a few losses that occur because of the traders false interpretation of the information and/or see things and opportunities which don't really exist.

But yes, it does exist.
Brilliant post, I couldn't have said it better myself. I agree 100% and I KNOW it is the truth.
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