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Not my Body, Not my Mind...Only Machine Trading 0 replies

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Van Tharp's article on "trading is like a business" 4 replies

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Trading as a business 3 replies

Trading is not a Business

Quoting duyk20

it's not simple like sitting on a beach, buy a bit, make money; then later on, sell a bit, make money...
Damn, I guess it's all down to plan B then......
Quoting bigblue
Very good point - it's a serious as brain surgery or being a 747 pilot - but please do not compare it with business, the comparison does not stand up.
For you, through all your experience, you've learnt a thing or two from it. However, for the n00b, it's totally different, they are being lured by Brokerage that it's goldmine trading forex. Sitting at home and make 10k a month, most of them think it's get-rick-quick thingy. Therefore the wisdom: "Treat trading like a business", so that the n00bs have a better mindset when taking their hands into the game.
Quoting bigblue
Marketing (the art of lying) is the key to business success
Indeed. Although I prefer to call it the gift of the gab. If you can breathe confidence into your clients, it's a home run. I observed it for 10 years. No business plan required.

The odd monkey here and there in a little brown envelope helps as well when securing the bigger contracts. There is always some punk who says the yea or nay with his hand out.
Nothing worth having is easy.
Quoting bigblue
Marketing (the art of lying) is the key to business success.
It is and it isnt.

Marketing is all about creating a NEED out of thin air...an art in itself tapping into the mindset and praying on subconscious beliefs, whatever they may be.

Excellent marketing + Deception = Short term huge gains /// Long term unsustainable.

Excellent marketing + Truth = Short term small gains /// Long term huge gains.

Some friends of mine (related to timeshare) went on to make huge amounts of money. A friend of mine in particular ran a cold call telemarketing firm in the UK, he literally made millions in a matter of a few months. A year later? Out of business. Onto the next best thing...

So yes, marketing is the main pillar to business success (coupled with excellent service/produce). But not all marketing is about lying...

Then again, my mates career description is "Selling Hope To Wishful Buyers".
Quoting bigblue


3. Only when you can forward test a trading strategy and see consistent returns should you consider trading it. Back testing means almost nothing. (Forward testing is the application of a trading strategy/idea to data that you have not looked at before - without modifying the strategy).
Actually, forward testing it may be as irrelevant as back testing on a sim. The market could change fundementally at any given minute, making your forward testing invalid.

I would personally implore anyone to back test in a reliable sim rather than forward test. Forward testing can take a very long time and lead to massive amounts of frustration. If you must forward test, do it with a small account and build from there.

Also, you mention being open minded to ideas and then go on to tell people to risk 2% of their account per trade. Isn't this a bit of a contradiction?

Not trying to be a smart arse, just some things that jumped out at me.
Quoting bigblue
Ninety per cent of businesses go bust in the first year. Of the remaining ten per cent about ninety per cent of those eventually go bust or the owner just scrapes by. So please do not treat your trading as though it was a business. And you should certainly not think of yourself as a business person - business people are typically not all that bright (read Taleb) and are generally control freaks (I should know I built and sold a successful business).
To succeed at trading you need to be something different. It is well known that business types who...
Hi

First off, I must say that this is the worst post I have ever seen. The first part i.e. basically dont treat it as a business is completely incorrect.

First off:

1- Every business requires research of the market place and development of a business plan.
So your first step for profitable trader is basically the first step of every business.

2- You require a control-freak nature for forex, otherwise how do you control yourself from trading opportunities which dont fit into your business plan.

3- Every successful trader will tell you, it is about scraping by during bad months, same as every business person who grows capital.(Aim being to increase business and not your spending)

4- Every business fails..wow..a business needs to change strategy for profits/business every few years same as any trading strategy i.e. evolve/change according to market conditions.

5- In conclusion, you need to be a very good business person to be successful at trading.

All your points about a way to make gains by trading are basically steps of successful business para-phrased

As for the books, webinars et al. Please make a note the person doing that is giving you information and explaining a thought process, what you take away from it or how you apply it is upto you.

Two students taught by the same teacher may take away positives and negatives from the teachings and be successful or fail based on the take away and application.

Anyway your opinion is yours. Just worried by so many people agreeing.
Quoting tech_dream
Hi

First off, I must say that this is the worst post I have ever seen.
lol
Quoting tech_dream
Hi

First off, I must say that this is the worst post I have ever seen.
Well at least I'm famous for something.
Irregular
Quoting Trotty
Actually, forward testing it may be as irrelevant as back testing on a sim. The market could change fundementally at any given minute, making your forward testing invalid.

I would personally implore anyone to back test in a reliable sim rather than forward test. Forward testing can take a very long time and lead to massive amounts of frustration. If you must forward test, do it with a small account and build from there.

Also, you mention being open minded to ideas and then go on to tell people to risk 2% of their account per trade. Isn't this...
We are talking about different things. I use machine learning technologies to develop systems - sounds fancy but the principles are the same as any other method - and I'm certainly not saying this is the only way to develop systems. The standard approach when developing models is to use a fairly large historical data set (I use 20 years up to 2007) to train your model. The problem with training (manual or computerised) is that you curve fit. Things keep getting adjusted until a profitable system emerges. SO to make sure that the resulting system is not just a curve fit you forward test (2007 to current) to see if the model still holds up. If it does then there is a very good chance the model is valid. The same applies to manual system design. Backtesting a system requires modification of rules until you find something that works - but is it just a curve fit. The best way to find out is to use the system on data it has not seen before - so the term forward testing does not mean waiting for five years to see if it works - you just reserve some of your historical data for the forward test (or out-of-sample testing as it is often called). Hope this clarifies.
The 2% is just what I am comfortable with - I'm really not trying to tell anyone to do anything. After five years of wondering in the wilderness I have at last found something that works - all I'm doing is relating what that is. But as I point out in the first post not everyone will agree/find it useful
Irregular
Quoting tech_dream
Hi

First off, I must say that this is the worst post I have ever seen. The first part i.e. basically dont treat it as a business is completely incorrect.

First off:

1- Every business requires research of the market place and development of a business plan.
So your first step for profitable trader is basically the first step of every business.

2- You require a control-freak nature for forex, otherwise how do you control yourself from trading opportunities which dont fit into your business plan.

3- Every successful trader will tell you, it is...
Maybe we are just using different words for the same thing. I like your mapping of my steps to your own. The point I'm trying to make about business is that real business (something I have much experience of) is not about plans and excellence. Crappy products can become successful through good marketing, and as one contributor to this thread points out much business is done by offering little brown envelopes (bribes) to buyers. Unfortuantely trading for the ordinary Joe requires skill which business does not - if you have 'the gift of the gab' as one person has put it the you'll probably be successful in business - but gift of the gab carries no weight in trading (unless you are trying to sell training courses).
Irregular
Quoting bigblue
Maybe we are just using different words for the same thing. I like your mapping of my steps to your own. The point I'm trying to make about business is that real business (something I have much experience of) is not about plans and excellence. Crappy products can become successful through good marketing, and as one contributor to this thread points out much business is done by offering little brown envelopes (bribes) to buyers. Unfortuantely trading for the ordinary Joe requires skill which business does not - if you have 'the gift of the gab' as...
If you indeed have a lot of business experience, I am amazed.
For a crappy product to be successful it needs the marketing to be planned and executed to perfection. Again similar to trading.

What do you call a "real" business? Name one crappy product which has been successful over a number of years?

Also, if I am mapping the steps of your process and naming them as per business steps then why would you post such a thread.

To say trading is not a business is like saying I don't know how this business works(or any other business for that matter) so I am going to say its not a business.

Seriously read a couple of books about entrepreneurship and business and then we can talk.

Edit:

Done enabling you. Have a happy non-business trading day ahead.
Quoting tech_dream
Seriously read a couple of books about entrepreneurship and business and then we can talk.
I think you have just dug your own grave.

PS One crappy product that has done very very well - Windows - there's lots more.
Irregular
Lots of great points from posters and alot of crap too. Lots of broad and bad assumptions from Blue and very few useful points too.

I have owned and built many small but successful businesses over the past 30 years and I categorically say trading forex should be treated as a business.

You need to be driven, disciplined, single minded, hard working and totally focussed to succeed at trading forex for a living, much the same as running your own business. Delegation is also necessary for running a good business, something not required with trading of course.

Many small business owners I know are one man bands and earn four or five times the national average wage but they aren't control freaks, psychopaths or thick, they work hard and they work clever, niche businesses or highly skilled people.

Admittedly big businesses might require greedy, psychopathic people to get to the top but it is not a given, it is just something we have read about somewhere (who give a toss about taleb btw? I don't. I prefer to think for myself).

As for trading 2% on multiple instruments at the same time you are just compounding your risk, you may win big but you may also lose big too. Stupid thing to suggest IMO.

The gift of the gab alone will not make you a successful business person, people like that generally crash and burn cos they didn't manage all the back end stuff or pay taxes etc, they are generally the thick ones.

Most liars and cheats I know start well and then go the same way as the bull*h*tters , they fail to maintain credibility long enough to succeed.

Trading forex should definitely be treated like running a profitable business.
Quoting bigblue
I think you have just dug your own grave.

PS One crappy product that has done very very well - Windows - there's lots more.
Last reply to your posts:

Somebody please stop him.
Quoting jag1966
Lots of great points from posters and alot of crap too. Lots of broad and bad assumptions from Blue and very few useful points too.

I have owned and built many small but successful businesses over the past 30 years and I categorically say trading forex should be treated as a business.

You need to be driven, disciplined, single minded, hard working and totally focussed to succeed at trading forex for a living, much the same as running your own business. Delegation is also necessary for running a good business, something not required with trading...
Well said.
left and right and up an down we are abmonished by the gurus to believe that "trading is a business" and that's the door to the forex millions
Therefore in order to really succeed it is more than certain that trading must not be treated as a business.
simple. What's up is down, what's wrong is right.
This is my take on what Bigblue is saying.

Maybe instead of saying Trading is not a bussiness you should say don't treat trading like a failing business or if you want to be a successful trader then do what successful business people do.

All of the points mentioned in the first post except a part of point 3 would be steps to be taken if you want profits from business. I would change point 3 to say that back testing as well as forward testing is important.

I don't believe business should be the focus here. Like he said in the first post, it's about researching.
Some people clearly hold the business model up as something to be aspired to. It's probably time to wind down when personal abuse starts so farewell. I've started a thread on a formal approach to building trading systems - but nowhere is the word business mentioned I'm afraid.
Irregular
By the way I'm long Apple - entered 25/6 and will exit 6/9.
Irregular
I agree that most traders fail, being risk averse and doing your research will put the odds in your favor, but trading is 100% a business and that's exactly why most people fail....

They don't treat trading like a business. It doesn't matter what 'business' you dive into, you as the sole owner of your business (unless you have a partnership in your business) have lots of hats to wear....True you can outsource whatever you want and you personally do what you are best suited for, but at the end of the day you are trying to make a profit....unless you truly are trying to just lose money, than in that case you're just an idiot

Trading is a business.
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