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What are your favorite trading myths?

  • #21
  • Nov 9, 2014 8:47am Nov 9, 2014 8:47am
One of my favorite trading myths is THE MARKET IS ALWAYS RIGHT

Yaaa.... okay.... sure.....

Is that what you're going to say when you're favorite stock, or FX pair (I could give hundreds of examples) gaps up 50 points and you don't even know why?
Please check out my blog at https://from-zero-to-hero . net
  • #22
  • Nov 9, 2014 8:51am Nov 9, 2014 8:51am
Quoting gravitist
Mingary is right. But I have to submit my own contribution =" the trend is your friend". It's a fair-weather friend as best, usually more like the "friend" who always comes over wanting to borrow stuff.
This is NOT a myth, it is a REAL and TRUE trading FACT.

Perhaps you have been spending too much time in the wrong thread (ie: there is one called "The trend is NOT your friend")... lol... such NONSENSE
Please check out my blog at https://from-zero-to-hero . net
  • #23
  • Nov 9, 2014 8:57am Nov 9, 2014 8:57am
Okay, I'll bite.

My favorite myth is that if you're getting a 1-10% increase in your account equity weekly/monthly/yearly, you should be extremely happy.

While that's true for those who have million bucks accounts, it's not if you're let's say trading a 10k account or even worse a 200$ account.

I love this myth so much that I bet I start a S#@!storm behind me once this is posted... But seriously, the sky is the limit
  • #24
  • Nov 9, 2014 8:58am Nov 9, 2014 8:58am
“Profitable traders teach for free because they already make so much money from trading.”

I don't expect Tiger Woods to teach me golf for free. Seriously. And that dude already made shit load of money golfing.

Simple supply and demand, which all traders should already be familiar with.
Everything you can imagine, is real - Pablo Picasso
  • #25
  • Nov 9, 2014 9:09am Nov 9, 2014 9:09am
Trading Expectancy:
All too often you'll find traders/vendors proclaim that being picky and focusing on 1-2 best setups per week/month is the best approach. The fact is the more you trade the more potential net profit you can make. The trick is to find as many good expectancy setups as possible. If you can really only find 2-3 then your PA reading skills are crap. If you can't overcome the fear of losing and the focus on being picky your confidence is too low. Free your mind and trade with confidence finding trades every day should be the aim of every trader.
The purpose of knowledge is action, not knowledge
  • #26
  • Nov 9, 2014 9:15am Nov 9, 2014 9:15am
Preserving Capital:
The primary job of a trader is to make money in a risk controlled environment, never ever do I think my job is to preserve capital. If you approach trading with the mindset that trading is about not losing money and preserving capital... you'll be one of those traders that at best are destined to make small risk/reward gains. The wrong mindset approach limits how much you can achieve. The job of a price action trader is to make money in ALL market conditions, those that can't - and there are tons of them on twitter...are nothing more than glorified system or pattern traders
The purpose of knowledge is action, not knowledge
  • #27
  • Edited 11:17am Nov 9, 2014 11:03am | Edited 11:17am
My favorite myth is when any trader thinks they know better than everyone else on how to trade.

If someone wants to tout their method as something that works, great. But to just shoot down what others say, amounts to no more than a myth in itself, in my opinion. If not a myth to you, then perhaps a myth to someone else.

If any trader is profitable, and whatever methods they employ work for them, that is no myth. But for someone else, perhaps it won't work for them, and they need to employ something else.

As an example, say a trader A has found a method that works, and it goes against what most other traders have told them. So, great, now trader A can go make even more money teaching others how to employ his method, right? Wrong, if Trader A's method only works for them, what good will it do anyone else?

It's my experience trading is a solitary journey. You can learn from others, but if you don't learn yourself, and what works for you, then you'll never be successful.

So, I guess all of this, for me at least, boils down to the greatest myth of all (in my opinion), and that is what it takes to be successful.

Strategy? myth
Patience and discipline? myth
money management? myth
R:R? myth

The above factors are important, but do not describe the overall facilitating factor, which is, being honest with, knowing, understanding, and accepting yourself. Once you learn how to apply this to trading, you'll be a successful trader...
  • #28
  • Nov 9, 2014 11:35am Nov 9, 2014 11:35am
Quoting AlexCy
you could just open a random position every day, set your TP at 60 pips, set your SL at 30 pips, and just sit back and watch the money roll in. Newsflash: it won't work. I know, I tried it!...
This one made me laugh.

Profit targets are not defined by the trader.

Risk/reward is a criteria for entry, for those that use it correctly as part of their strategy. If you need me to explain; stop trading immediately.
  • #29
  • Nov 9, 2014 11:38am Nov 9, 2014 11:38am
NOT a myth but the ONLY truth !

Winners are louder than losers !

But not the loudest wins also.

Is also in other circumstances so.....

...scottish independence election .... do you remember?
  • #30
  • Nov 9, 2014 12:00pm Nov 9, 2014 12:00pm
LOL! So true!


Quoting AlexCy
Myth no 2: I trade pure Price Action Really? Do you? Do you trade Renko charts? No? That's what I thought!
  • #31
  • Nov 9, 2014 12:02pm Nov 9, 2014 12:02pm
Favorite myth/idea is it's all about the entry. Entry is important, but management of trades is more important.
  • #32
  • Edited 12:52pm Nov 9, 2014 12:25pm | Edited 12:52pm
Quoting Mingary
The biggest and most dangerous myth: You can make a living from trading the forex.
Maybe you should hit up the Youtube comments section when you feel like trolling...tool

Posts like this really piss me off, because they specifically target new people who are simply exploring new interests, maybe looking for a way to become financially independent. While trying to expand their minds and most likely are already a bit skeptical, they stumble upon a post like this, (from an author who knows it's not true) and the message they get is: 'you can't succeed, let the people who know what they are doing keep doing that. YOU should just turn around before you even get started, because you will fail.'

People need to be encouraged, especially people exploring fields that are new to them.


Gtfo man...
  • #33
  • Nov 9, 2014 12:29pm Nov 9, 2014 12:29pm
Quoting Mingary
The biggest and most dangerous myth: You can make a living from trading the forex.
//----

that brings to mind my favorite myth....... "you can't make a living from trading forex"....... i'm living proof that's a myth..... h
to trade and code, keep both simple... no call to impress....h
  • #34
  • Nov 9, 2014 1:34pm Nov 9, 2014 1:34pm
Quoting hayseed
{quote} //---- that brings to mind my favorite myth....... "you can't make a living from trading forex"....... i'm living proof that's a myth..... h
  • #35
  • Nov 9, 2014 1:52pm Nov 9, 2014 1:52pm
Quoting gravitist
Mingary is right. But I have to submit my own contribution =" the trend is your friend". It's a fair-weather friend as best, usually more like the "friend" who always comes over wanting to borrow stuff.
A trend in needs a trend indeed, a trend with weed is better
  • #36
  • Nov 9, 2014 2:03pm Nov 9, 2014 2:03pm
Quoting Shug
{quote} Maybe you should hit up the Youtube comments section when you feel like trolling...tool Posts like this really piss me off, because they specifically target new people who are simply exploring new interests, maybe looking for a way to become financially independent. While trying to expand their minds and most likely are already a bit skeptical, they stumble upon a post like this, (from an author who knows it's not true) and the message they get is: 'you can't succeed, let the people who know what they are doing keep doing that. YOU should...
I agree, but Mingary isn't such a bad person and his status even says, "I should be on your ignore list" ... So you have been warned lol

what REALLY ticks me off is this new thread Ullen started, "The trend is your enemy"...

why? Because counter-trend trading is the only style you're good at???

speaking directly to Ullen... gtfo and learn what a trend is
Please check out my blog at https://from-zero-to-hero . net
  • #37
  • Nov 9, 2014 2:07pm Nov 9, 2014 2:07pm
I used to think that trading myths existed, but nowadays I think that paradoxes is probably a more accurate term.

For example, the OP states that simply aiming for high RR trades (as a profitable approach) is a myth. In my experience that’s true, but it doesn’t alter the fact that, if you examine the performance stats of traders who’ve been profitable for more than 5 years, the vast majority of them have bigger size (average) winners than losers.

Similar logic with PA. Outside bars, double tops, breakouts thru trendlines, etc etc probably offer little better than 50/50 directional bias, but that doesn’t stop many traders from using them profitably.

A lot of trading arguably comes down to contextual nuances. For example, higher RR trades will work profitably in markets that trend frequently enough, or at least if the trader is able to filter out entries during periods of sideways movement. Outside bars may have a higher hit rate if they signal a possible resumption of longer term trends from a S/D zone. And so on.

So one trader’s myth can be another trader’s truism — if used skilfully enough, and/or under suitable conditions. The success of trading systems (entries and exits) correlates directly with market behavior; the more that market movement approaches a 50/50 bias (at least from a strictly TA-based perspective), then the less likely that absolute truths, and hence absolute myths, can possibly apply. Whereas, conversely, MM is pure math, leaving no room for opinion.
  • #38
  • Nov 9, 2014 2:16pm Nov 9, 2014 2:16pm
Quoting smash1820
{quote} I agree, but Mingary isn't such a bad person and his status even says, "I should be on your ignore list" ... So you have been warned lol what REALLY ticks me off is this new thread Ullen started, "The trend is your enemy"... why? Because counter-trend trading is the only style you're good at??? speaking directly to Ullen... gtfo and learn what a trend is
Mingary knows what said isn't true. He said it to stand out, so people will follow him... Just another hipster who is too cool for the mainstream.

Trend trading works for people, just like counter trend trading works for people. Just because it doesn't work for him doesn't mean it doesn't work at all...What a blanket statement lol

My trend trading EA banked about 18,000 pips in less than thirty days....
  • #39
  • Nov 9, 2014 2:24pm Nov 9, 2014 2:24pm
biggest myth of them all is believing that you can predict future price movements by analyzing past data or patterns.
piphunt11
  • #40
  • Nov 9, 2014 2:31pm Nov 9, 2014 2:31pm
Hello guys,

I have been reading this thread from the beginning in the last 10-15 minutes.

What I can say at this point is that it looks very interesting to me, as thread direction and the people in here as well as the statements made so far.

A few of you already pointed out the most important things. I believe that even some of the arguments are contradictory at some point , everyone is right to some extent.

I'll try for now not to lose focus on the thread's subject, so here goes:

Myth no1: From my point of view, could be equal R:R (and still be very profitable even in the long term), but Hanover is also right - probably would be better in the long term, if one's trading personality requires it for positive risk reward ratio, at least double.

I'm going to hang around and see where this thread heads to...
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