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What are your favorite trading myths?

  • #41
  • Edited 5:56pm Nov 9, 2014 5:42pm | Edited 5:56pm
Quoting piphunt11
biggest myth of them all is believing that you can predict future price movements by analyzing past data or patterns.
I'm not looking to pick a fight, but you're wrong. You CAN do this. It's called stochastics. And there are many, many others.

I'm guessing you don't know how though. Right?
Please check out my blog at https://from-zero-to-hero . net
  • #42
  • Edited 6:06pm Nov 9, 2014 5:48pm | Edited 6:06pm
Quoting Shug
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....
Hey sorry for the delayed response, I'm finally at my computer now.

Mingary isn't a bad person and I've read a number of his posts and some of them are actually quite funny.

My point about the "trend trading" (and this is also the same point I will make on Ullen's useless/garbage thread) is that it is much easier, more simpler, much more effective, much less time consuming, and frequently, much more profitable than counter-trend trading. That is, for the average person or trader.

However, when I say that, I'm actually implying that one becomes more of an investor than a trader. There is a difference. For beginners, trend-trading is definitely the way to start and approach trading!

I am a good counter-trend trader as well, but I realize still that it is not as rewarding as finding a good trend, and milking it. Plus, it is significantly more difficult... in the sense that it requires a much broader range of skills. I'm not saying counter-trend trading can't be done. But I am saying that it's not for most people.

18,000 pips or thereabouts is AMAZING! in 1 month, and now I will definitely look into your TE and strategies more, Shug (however, read my statement below). Also, I remember your message from a while back, and I would love to discuss trading stuff, automation, and some other stuff (internet marketing? hah! JK) with you in the future, even compare EAs.

Stay well everyone, and GREEN.

PS: Trends exist on ALL time frames, even 1 minute charts. You just need to find them.

PS (2): Shug, FYI, the "pip counter" on Forex Factory is not entirely accurate. If you initiate 10 positions all at the same price, and close all 10 positions at the same price, let's say for a profit of 10 pips per trade, then Forex Factory counts that as 10 position X 10 pips = 100 pips. I, personally, only consider it 10 pips still... So you're 18,000 pip estimate is likely over-estimated. No offense, just sayin'... it's still pretty damn good
Please check out my blog at https://from-zero-to-hero . net
  • #43
  • Nov 9, 2014 6:02pm Nov 9, 2014 6:02pm
Quoting smash1820
{quote} Hey sorry for the delayed response, I'm finally at my computer now. Mingary isn't a bad person and I've read a number of his posts and some of them are actually quite funny. My point about the "trend trading" (and this is also the same point I will make on Ullen's useless/garbage thread) is that it is much easier, more simpler, much more effective, much less time consuming, and frequently, much more profitable than counter-trend trading. That is, for the average person or trader. However, when I say that, I'm actually implying that one becomes...

I'm sure he is an alright guy, bit it's a pain when people deviate from mainstream beliefs (the mainstream belief here at ff.com being traders can/do make money) for no reason.

I completely agree with you about trend and counter trading. I use both, (trend following more frequently) but there is no question that both work. These blanket statements on FF are hilarious. I think a better mentality for approaching trading and life in general is, 'not everything that works for you will work for me, not everything that works for me will work for you, and guess what? That's perfectly okay.' To each his own.

Yeah man, hit me up anytime.
  • #44
  • Nov 9, 2014 6:09pm Nov 9, 2014 6:09pm
Quoting hanover
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...
Hanover has the most brilliant mind in all of Forex Factory!!!

So articulate, too
Please check out my blog at https://from-zero-to-hero . net
  • #45
  • Nov 9, 2014 7:51pm Nov 9, 2014 7:51pm
Quoting smash1820
{quote} PS (2): Shug, FYI, the "pip counter" on Forex Factory is not entirely accurate. If you initiate 10 positions all at the same price, and close all 10 positions at the same price, let's say for a profit of 10 pips per trade, then Forex Factory counts that as 10 position X 10 pips = 100 pips. I, personally, only consider it 10 pips still... So you're 18,000 pip estimate is likely over-estimated. No offense, just sayin'... it's still pretty damn good
Yep yep...If you are referring to the TE's linked to my account, all trades have been initiated by my EA, which is running 27/7 on a VPS. It makes 1 trade per signal, so there have been 0 instances of multiple trades being made all at the same price (unless a signal occurred at the exact same price as a previous signal, but that still wouldn't count, because it would have been a separate signal, which would have occurred some amount of time after the previous).There have also been 0 instances of multiple trades being closed all at the same price either.

Don't worry, i would know if the pip count was over estimated, or not. Just want to make that clear.

PS: There are a couple software tracking the accounts and TE pip counter has actually been pretty accurate so far. (at least for me it has)
  • #46
  • Nov 9, 2014 9:17pm Nov 9, 2014 9:17pm
Quoting smash1820
{quote} I'm not looking to pick a fight, but you're wrong. You CAN do this. It's called stochastics. And there are many, many others. I'm guessing you don't know how though. Right?
thats right i dont know. please educate me
piphunt11
  • #47
  • Edited Nov 10, 2014 12:19am Nov 9, 2014 9:26pm | Edited Nov 10, 2014 12:19am
Quoting piphunt11
thats right i dont know. please educate me
I'm sorry, but I will not "educate you", as you would like (unless you want to pay me for that privilege?). There is far too much to learn.

However, what I can do, and will (because I am nice), is point you in the right direction.

Some of the people that helped me the most on this forum (and without a single direct contribution... this guy has been "retired" for a long time and no longer posts here) is Mr. Spudfrye.

I do not say or list or talk about or give away this information much because it is simply so powerful. Spud's threads are extremely powerful concepts (although I have expanded upon them).

Also look up Alien's Alien thread.

And Nihilist's thread (which I have expanded upon GREATLY). You can find it here: Nihilist Forex Indicators

All of the indicators I've written so far are based upon one of the above three threads. But ultimately, they are still all my own concepts, as I have had these ideas and specific methodology for years.

To be more specific, for trends, use Nihilist's thread. For everything else, use everything else.

I'm sorry, but that is the most I will say. I have probably already said too much.

You're welcome

--------------------------------------------------------------------------------------------------------
PS: Stochastics is THE BEST indicator there is... and I dare anyone to prove me wrong...

PS (2): Three letters is all you really need to know... They are M-T-F

PS (3): Please do NOT start a new thread based upon this information, UNLESS you want to make me very, VERY angry... (And even that is unacceptable)

PS (4): You can even check out Mr. Hanover's profile (which I link to above). He is a true genius and has served this community very well over the years, and is the best programmer I know. Check out his "Recent Strength" and "Recent Candles" threads.
Please check out my blog at https://from-zero-to-hero . net
  • #48
  • Nov 10, 2014 2:07am Nov 10, 2014 2:07am
Quoting smash1820
{quote} Hanover has the most brilliant mind in all of Forex Factory!!! So articulate, too
MYTH: if a programmer has typed 5911 posts on FF (5912 now), then he must also be a consistently profitable forex trader.
  • #49
  • Nov 10, 2014 2:16am Nov 10, 2014 2:16am
Quoting hanover
MYTH: if a programmer has typed 5911 posts on FF (5912 now), then he must also be a consistently profitable forex trader.
LOL. Guess what? I still don't care. You're STILL the best programmer I know!

And probably on all of Forex Factory (except you've got some real competition with FerruFX, and Hayseed, and, of course, ME now!)

No, but seriously, the reason I know you are THE BEST is because of your ingenuity. Your ideas are so original, and I really appreciate that. Plus you can really speak the English language well...
Please check out my blog at https://from-zero-to-hero . net
  • #50
  • Nov 10, 2014 2:37am Nov 10, 2014 2:37am
As much as I like stochastics, I find the TDI (which is essentially an RSI and a few moving averages) far superior, I'm sorry
  • #51
  • Edited 4:33am Nov 10, 2014 2:49am | Edited 4:33am
Good talk!

And hanover is as brilliant as ever with a post that summarizes much of my own feelings on myths, truisms, paradoxes etc etc.

If I may add some "favorite" myths AKA pet peeves that have bothered me no end when I see them mentioned anywhere:

  1. The implication that bank traders actually go out of their way just to hunt retail traders' pathetic "little" stops. (FALSE)
  2. The implication that institutional FX option expiry and size information "matters". (FALSE)
  3. The implication that the order flow information that one has is "complete", and is therefore a fair representation of market supply and demand. (FALSE and FALSE)

I won't debate any of the above here... my opinions on these constructs are pretty well-known.

I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #52
  • Nov 10, 2014 3:36am Nov 10, 2014 3:36am
My favorite one it that you can acquire financial independence starting with a broken piggy bank because we all of us wish it were true.
No greed. No fear. Just maths.
  • #53
  • Nov 10, 2014 11:11am Nov 10, 2014 11:11am
Quoting hanover
MYTH: if a programmer has typed 5911 posts on FF (5912 now), then he must also be a consistently profitable forex trader.
//-----

hey hanover..... and the inverse of that would also apply..... so many of the seemingly best trade-for-a-living members never make it to triple digit posts.... unfortunate but equally understandable.....

surprised no one has mentioned the myth 10v's and red parallelograms are a measure of consistent profitability..... now that's a true myth......h
to trade and code, keep both simple... no call to impress....h
  • #54
  • Nov 10, 2014 11:35am Nov 10, 2014 11:35am
Buy low / sell high, one of the better myths, as it usually works ok... until it does n't

Inserted Video
  • #55
  • Nov 10, 2014 11:53am Nov 10, 2014 11:53am
Quoting hayseed
{quote}..... surprised no one has mentioned the myth 10v's and red parallelograms are a measure of consistent profitability..... now that's a true myth......h
  • #56
  • Nov 10, 2014 12:20pm Nov 10, 2014 12:20pm
Quoting alifari
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...
I couldn't agree more!
Let the market comes to you!
  • #57
  • Nov 10, 2014 12:47pm Nov 10, 2014 12:47pm
Quoting alifari
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...
Excellent said. If a trader is indeed trading (forex, stocks, whatever...) and he/she knows what is doing, then preserving capital is coming along by not having very large losses and entering trades with high probability of success.

Imagine a rally driver preserving gas and still wanting to win the race.
  • #58
  • Nov 10, 2014 2:17pm Nov 10, 2014 2:17pm
"That your capital is tuition money", or "you should expect to lose your capital (or first bank roll) when learning".

If you've read any of the Market Wizards or Kathy Lien's equivalent book (Millionaire traders I think), most of the traders there have lost fortunes before finding profitability. So there is a lot of truth in this statement. However, it is my belief that it certainly doesn't have to be the case before finding profitability!
Follow me on twitter @FxLester
  • #59
  • Edited 2:45pm Nov 10, 2014 2:27pm | Edited 2:45pm
Quoting smash1820
LOL. Guess what? I still don't care.
I appreciate the honorable mention, but I’ll continue to post in self-effacing fashion, for as long as folk continue to give me praise.

Quoting hayseed
//----- hey hanover..... and the inverse of that would also apply..... so many of the seemingly best trade-for-a-living members never make it to triple digit posts.... unfortunate but equally understandable.....
Sure. Why would pros earning 6 digits upward annually want to share their ideas with amateurs?
Without wishing to be unkind to anybody, I think that Joel Rensink sums it up accurately:

"Most people think that communities like this forum make it easier to learn how to trade, but I am certain the opposite is true. If most of the posts are from non-winners the only logical reaction for an individual who wishes to win is fade the advice you see in these forums.

Everyone posting has a motive, even me. Most motives are simple self promotion, aspiring traders trying to make themselves feel good, look smart. A few posters have the motive to help others. Many figure that if they can't win, maybe they can help someone else and that makes them a winner somehow. Maybe so. But likely it is a case of the blind leading the blind.

I'd bet you'd rather make money from trading the markets the way things really are, not the way some very literate, but non-winner says they are. Think of that the next time you read a "helpful" post. 99.9% odds the post is from a non-winner." (source)

Quoting alifari
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
After interviewing all of the supertraders in his Market Wizards books, author Jack Schwager observed that one thing they all shared was that the notion that preservation of capital was of the utmost importance.

However, from what I've read in these forums, and if I may generalize, this kind of risk management is unimportant if a trader is going to start with something like $500, and try to turn it into a million in a few months (e.g. threads like this this and this). If a $500 account is lost, the loss can easily be shrugged off, the account refunded, and the exercise repeated.

However, in my view, a successful trading method should be scalable up to any amount of money. Hence I'll toss my hat into the ring with the market wizards on this one.
  • #60
  • Nov 10, 2014 3:06pm Nov 10, 2014 3:06pm
Quoting hanover
{quote} After interviewing all of the supertraders in his Market Wizards books, author Jack Schwager observed that the one thing they all shared was that the notion that preservation of capital was of the utmost importance. However, from what I've read in these forums, and if I may generalize, this kind of risk management is unimportant if a trader is going to start with something like $500, and try to turn it into a million in a few months (e.g. threads like this this...
IMO here is how a typical retail trader thinks about preservation of capital.

They focus too much on finding the A+++ 2-3 trades per week/month and when they finally get into a trade and as soon as market starts turning in their favor they often move to break even cause they think it's a free trade now and that their ultimate job is to preserve capital and most often their trade ends in breakeven and they feel good about it cause they didn't lose any money on that trade. Well if they were so afraid of losing money, why did they placed a trade in the first place.

They focus too much on preserving win rate at the expense of risk/reward which in my opinion is the ultimate gauge of long term profitability. They think the higher their win rate the more profitable they would become and as a result they put their stop loss too wide to avoid losing money and preserve capital and in doing so their risk to reward ratio is way to low and after trading for few months or years they realize that they are stuck with same capital as before with no real financial progress.

I used to think the same way few years back, but thankfully I got out of this mentality.
The purpose of knowledge is action, not knowledge
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