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Proof and tape fighting...

  • #1
  • First Post: Jun 29, 2013 9:10am Jun 29, 2013 9:10am
Why do traders insist on proof of trades?

What I mean to ask is, if one posits a system, and gives entry and exit points, would it not be up to the trader to prove for themselves if a systems does or does not work?

If it works, great, you have something to add to your tool belt. If it does not work, lesson learned, move on. I do not understand this behavior especially considering the existence of demo accounts these days. Why not just test the system and make your own proofs? It costs nothing but time.

Also, I have noticed there are lot of tape fighters around here. Why do people fight the tape? What is the point in averaging down?

I participated briefly in the Sonic R thread, and they are teaching people to average down over there. Nanningbob also has a "recovery system". They both get a lot of traction. I am respectful of what they are doing, and I understand it actually, so maybe I just need to get over the aversion to fighting the tape. I need some input. In my trading career, I was taught that if price is rising, buy. If price is falling, sell. How hard is that? Maybe I am missing something?

Thoughts?
If you are good at something, never do it for free--Joker
  • #2
  • Jun 29, 2013 2:13pm Jun 29, 2013 2:13pm
Quoting jmn5611
Why do traders insist on proof of trades? What I mean to ask is, if one posits a system, and gives entry and exit points, would it not be up to the trader to prove for themselves if a systems does or does not work? If it works, great, you have something to add to your tool belt. If it does not work, lesson learned, move on. I do not understand this behavior especially considering the existence of demo accounts these days. Why not just test the system and make your own proofs? It costs nothing but time. Also, I have noticed there are lot of tape...
Some people average down because they're stupid. If that hurts a person's feelings it means that they probably can't handle taking a loss and I'm willing to bet that they're a long term loser because of it. They value winning over profiting. Not my problem I guess, I'm glad to take their money lol...as for the systems proof, it's always going to be there. People are skeptical especially when it comes to cash and if someone is hawking an idea I don't think it's unreasonable for them to explain why it should work or if it does. That said almost every trading idea on this forum is utter garbage, but the key can be found it you sift through enough of it.
  • #3
  • Jun 29, 2013 10:28pm Jun 29, 2013 10:28pm
Quoting Kanzler
{quote} People are skeptical especially when it comes to cash and if someone is hawking an idea I don't think it's unreasonable for them to explain why it should work or if it does. That said almost every trading idea on this forum is utter garbage, but the key can be found it you sift through enough of it.
Averaging down means tying up capital that could be working elsewhere. Amazing that so many people do not understand this. As far as proof of trades go, I think a trader has no more obligation than to lay out the system. Actual trades is up to the individual that wants to try the system. And yes, the key is here at FF.
If you are good at something, never do it for free--Joker
  • #4
  • Jun 30, 2013 12:21am Jun 30, 2013 12:21am
I will have to agree with Kanzler. There should be no reason to average down to an already losing trade. Newbie traders can't accept the fact that their trade was a loss. They can't accept a loss and the notion that they were wrong. That is why 95% of traders fail. Pure psychology that many traders will never overcome.

Averaging down makes sense when come to investing, NOT trading. Trading and investing are totaling separate practices. Amazed that some people just can't explain the difference.... More reasons why 95% fail. LOL...
Trade what you see, not what you think!
  • #5
  • Jun 30, 2013 1:12am Jun 30, 2013 1:12am
Quoting OMGtrader
I will have to agree with Kanzler. There should be no reason to average down to an already losing trade. Newbie traders can't accept the fact that their trade was a loss. They can't accept a loss and the notion that they were wrong. That is why 95% of traders fail. Pure psychology that many traders will never overcome. Averaging down makes sense when come to investing, NOT trading. Trading and investing are totaling separate practices. Amazed that some people just can't explain the difference.... More reasons why 95% fail. LOL...

Well since I came to FF I have voraciously read all the threads. Mainly to get up to speed with MT4. I have noticed that the Sonic thread in particular has stayed pegged at the top of the views chart. But they average down. I found it inappropriate to badger tah about this practice. He did give an explanation.

I started this thread to ask others what I am missing. Averaging down is eventually going to blow you up. If it does not blow you up, you will have to trade so small as to make gains marginal.

Recovery trades is also something I found interesting. Perhaps I just do not get it. I am not so big headed as to think I cannot be wrong in my views. I do not understand why a trader does not close out a lost trade and move along. I am trying to get a discussion going on this.

Have I missed something? Why do traders do this?
If you are good at something, never do it for free--Joker
  • #6
  • Jun 30, 2013 1:32am Jun 30, 2013 1:32am
Quoting jmn5611
{quote} Well since I came to FF I have voraciously read all the threads. Mainly to get up to speed with MT4. I have noticed that the Sonic thread in particular has stayed pegged at the top of the views chart. But they average down. I found it inappropriate to badger tah about this practice. He did give an explanation. I started this thread to ask others what I am missing. Averaging down is eventually going to blow you up. If it does not blow you up, you will have to trade so small as to make gains marginal. Recovery trades is also something I found...
Do you not find it an interesting coincidence that the vast majority of "traders" here are losers and that the popular threads are the ones advocating such poor advice? Most people who attempt trading are going to end up donating their money to the people who know what's going on, it's always been like that and always will be like that, which is why this profession is so lucrative. The reason it appeals to these people is because, as I said before, they like to win. They like to see a spotless trading record with nothing but winners, and feeding their ego becomes more important than rational risk management and long term profit. Sorry if that explanation is disappointing but I really don't believe it's any more complicated than that....if you're trying to save them by bringing this discussion to light, let me say that I'm certain you could explicitly tell these same individuals how to trade profitably and they wouldn't be able to do it anyway because they simply aren't capable of tolerating what this job requires. You have to become comfortable with the knowledge that the reason your bank account grows is because theirs is shrinking. Oh well, tough luck.
  • #7
  • Jun 30, 2013 3:11am Jun 30, 2013 3:11am
Quoting jmn5611
I was taught that if price is rising, buy. If price is falling, sell. How hard is that? Maybe I am missing something? Thoughts?

if price is rising, buy. If price is falling, sell = retail trading = 100 % losers.

Example: GOLD:

http://www.forexfactory.com/showthread.php?t=435089
  • #8
  • Jun 30, 2013 3:15am Jun 30, 2013 3:15am
averaging down is caused I believe from a defective gene.These traders are very important to the market ecosystem just like prey are important to predators.Every one has use, even to provide meat to the other.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #9
  • Jun 30, 2013 3:27am Jun 30, 2013 3:27am
Quoting Mingary
{quote} if price is rising, buy. If price is falling, sell = retail trading = 100 % losers. Example: GOLD: http://www.forexfactory.com/showthread.php?t=435089
I was thinking about this earlier, people are still holding their losing positions though.
  • #10
  • Jun 30, 2013 3:31am Jun 30, 2013 3:31am
Quoting Kanzler
{quote} I was thinking about this earlier, people are still holding their losing positions though.
Yes they are but soon to be caught on the wrong side again = retail trading ==> Sell Low / Buy High.
  • #11
  • Jun 30, 2013 4:20am Jun 30, 2013 4:20am
Quoting Mingary
{quote} Yes they are but soon to be caught on the wrong side again = retail trading ==> Sell Low / Buy High.
I have found this awkward tendency to be true on myfxbook positions.Mom and pop traders are almost always on the other side of the move,I guess they are cost averaging.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #12
  • Jun 30, 2013 5:46am Jun 30, 2013 5:46am
If price is rising, buying will ensure you catch whatever move is coming or may not come. If price is falling, selling will catch whatever move might come. It really is that simple.

What kills retailers is system jumping, over leveraging, and denial when price makes an adverse move relative to thier position. Everything else related to trading is selling shovels to gold miners in my mind.

I still like to learn. It is fascinating to see the sophistication put into such a simple game.

For me, my "system" is not complicated. At the beginning of the week, I wait for the standard ZZ semaphor to give me an alert. When it does, I take a position in the direction of the alert, with a stop at the new high or low for that week. If price breaks that high or low, I stop and reverse with a stop at the other extreme. I add positions as I deem appropriate. My win rate I would guess is around 30% percent.

I did go thru the indicator phase when I was younger tho, and I still find it amazing to watch.
If you are good at something, never do it for free--Joker
  • #13
  • Jun 30, 2013 9:21am Jun 30, 2013 9:21am
Quoting jmn5611
If price is rising, buying will ensure you catch whatever move is coming or may not come. If price is falling, selling will catch whatever move might come. It really is that simple. What kills retailers is system jumping, over leveraging, and denial when price makes an adverse move relative to thier position. Everything else related to trading is selling shovels to gold miners in my mind. I still like to learn. It is fascinating to see the sophistication put into such a simple game. For me, my "system" is not complicated. At the beginning of the...

I can have a system that only does 10% win rate and still able to make a profit, why because that system probably has an incredible RR ratio of more than 10:1. Win ratio doesn't matter a damn bit. It is about being profitable.

Trading is 70% psychology, 20% risk management, 10% strategy.

Most retail traders fail the psychological part of trading. Enough said.
Trade what you see, not what you think!
  • #14
  • Jun 30, 2013 9:50am Jun 30, 2013 9:50am
Quoting OMGtrader
{quote} I can have a system that only does 10% win rate and still able to make a profit, why because that system probably has an incredible RR ratio of more than 10:1. Win ratio doesn't matter a damn bit. It is about being profitable. Trading is 70% psychology, 20% risk management, 10% strategy. Most retail traders fail the psychological part of trading. Enough said.

Win ratios of 10:1 really are not that incredible if you think about it. Consider this: At the time of this post EJ has a daily range of 179 pips on average over the last month. If you risk 20 pips per attempt and catch the daily low or high and ride that, there is your 10:1. What happens if you do that and hold for a week? How about a month? What happens if you add positions in the direction of the current trend?

I guess that is why averaging down is inexplicable to me. It ties up capital that can be used to add position in the RIGHT direction. In one thread averaging down has become a religion, complete with authorized and unauthorized uses of templates. That's their thing tho, and I respect that.

Another popular thread uses indicators that get one into a trade incredibly late, because the rules say you have to wait till all the boxes line up.

Then there is one where you have to guess the angle of a momentum indicator. I think all of this is to avoid taking losses. I wonder how it got to be that losses were such a bad thing.
If you are good at something, never do it for free--Joker
  • #15
  • Jun 30, 2013 9:53am Jun 30, 2013 9:53am
Quoting jmn5611
{quote} Win ratios of 10:1 really are not that incredible if you think about it.

I am pretty sure at least 99% of traders on FF have less than 10:1 RR.
Trade what you see, not what you think!
  • #16
  • Jun 30, 2013 10:05am Jun 30, 2013 10:05am
Quoting OMGtrader
{quote} I am pretty sure at least 99% of traders on FF have less than 10:1 RR.
simply put many of the thread starters on the Trading Systems thread are mostly brokers, their agents or some sore losers who have lost their pants in the recent past and hope to get some gullible newbies to believe they are experts and them sell them crazy EA's.
  • #17
  • Jun 30, 2013 10:10am Jun 30, 2013 10:10am
Quoting Mingary
{quote} Yes they are but soon to be caught on the wrong side again = retail trading ==> Sell Low / Buy High.
It would not be that way if they SAR at their stop. Then they would be buying low. It's not rocket science.
If you are good at something, never do it for free--Joker
  • #18
  • Jun 30, 2013 10:11am Jun 30, 2013 10:11am
Quoting OMGtrader
{quote} I am pretty sure at least 99% of traders on FF have less than 10:1 RR.

If they held longer than two seconds they could have that.
If you are good at something, never do it for free--Joker
  • #19
  • Jun 30, 2013 10:13am Jun 30, 2013 10:13am
Quoting Makavell
{quote} simply put many of the thread starters on the Trading Systems thread are mostly brokers, their agents or some sore losers who have lost their pants in the recent past and hope to get some gullible newbies to believe they are experts and them sell them crazy EA's.

Really? I thought they had the commercial section for that.
If you are good at something, never do it for free--Joker
  • #20
  • Jun 30, 2013 2:13pm Jun 30, 2013 2:13pm
Quoting jmn5611
If price is rising, buying will ensure you catch whatever move is coming or may not come. If price is falling, selling will catch whatever move might come. It really is that simple. What kills retailers is system jumping, over leveraging, and denial when price makes an adverse move relative to thier position. Everything else related to trading is selling shovels to gold miners in my mind. I still like to learn. It is fascinating to see the sophistication put into such a simple game. For me, my "system" is not complicated. At the beginning of the...
Sorry jmn5611, I can't agree with you here. Buying after a rise in price and selling after a decline is the hallmark of a novice and those types are the ones who fill the orders of big banks and institutions who are more than happy to do it for them. After all, who wants to have a trade involving high risk and questionable reward? Trading is more involved and requires an understanding of market micromechanics to be successful in the long run. These micromechanics are hardly complex but it does require using a brain. If there's no rational reason in terms of order flow for your "system" to work then there should be some serious red flags in your head.
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