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What are your favorite trading myths?

  • #101
  • Quote
  • Nov 12, 2014 7:07am Nov 12, 2014 7:07am
Quoting Chicky
{quote} This is the only trading myth that I respect: The Market Can Remain Irrational Longer Than You Can Remain Solvent
That aint no myth at all.
Let it turn and find your entry.
  • #102
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  • Nov 12, 2014 10:58am Nov 12, 2014 10:58am
"What I found fascinating is the average win of 7pips! I doubt he is trading H4 charts for this, but his results are still good.
Also..average loss of 37 pips!
My guess is, if you started any thread on this forum, and suggested a system with those average win and loss parameters you would be laughed at!
Food for thought.... (?)"

but but the "experts' say you need a better R:R to be a succesful trader.
Too many pedantic myths have become doctrine..
  • #103
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  • Nov 12, 2014 11:13am Nov 12, 2014 11:13am
my favourite is "risk 1-2% per trade".
  • #104
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  • Nov 12, 2014 3:22pm Nov 12, 2014 3:22pm
Quoting Anusragger
1. Trend is your friend. True, if you are not a trader. 2. Price can be predicted. True, if you are Gandalf, Merlin or some other wizzard. 3. Wins should be bigger than losses (win loss ratio). True if you have a shitty system. 4. One can learn how to trade listening to big mouth FF members. Not true.
Price cannot be predicted is a myth. You might not be able to predict very far into the future, but you can plausibly predict the next few ticks and be profitable. You just need to find the right information set that allows you to predict it. There are patterns alright... see recent papers on this subject i.e. high frequency trading, genetic algorithms

and no, it's not curve fitting...
Build good relationships with others.
  • #105
  • Quote
  • Nov 12, 2014 3:29pm Nov 12, 2014 3:29pm
Risk 1% of your account is my favourite.

Wow, if the way in which you trade means you have to stick to that, I'd just give in trading...
  • #106
  • Quote
  • Nov 12, 2014 5:22pm Nov 12, 2014 5:22pm
Quoting shellsnail
{quote} Price cannot be predicted is a myth. You might not be able to predict very far into the future, but you can plausibly predict the next few ticks and be profitable. You just need to find the right information set that allows you to predict it. There are patterns alright... see recent papers on this subject i.e. high frequency trading, genetic algorithms and no, it's not curve fitting...
You can have a higher probability but you cannot predict the future.
  • #107
  • Quote
  • Edited 8:17am Nov 13, 2014 5:48am | Edited 8:17am
Banks/Big Dogs/Big Players/Market Makers aren't out to get you, they aren't manipulating the market, stop being paranoid and just admit you're a bad trader

Just read this latest piece of news, forwarded to me by username Antal:

http://www.cftc.gov/PressRoom/PressReleases/pr7056-14

Here's a more sobering account of what happened:

http://www.bloombergview.com/article...ou-can-t-teach

However the overall message is clear: MMs do manipulate prices (as if everyone didn't already know that)...
  • #108
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  • Nov 13, 2014 1:09pm Nov 13, 2014 1:09pm
largest myth: 99% of traders lose money.
Bulls are stupid Animals!especially when Im short!
  • #109
  • Quote
  • Nov 13, 2014 1:12pm Nov 13, 2014 1:12pm
Quoting Anusragger
{quote} You can have a higher probability but you cannot predict the future.
Yes I can! all I have to do is looking into my crystal ball muhahahaha

btw, did I tell you Harry potter is my cousin?
Bulls are stupid Animals!especially when Im short!
  • #110
  • Quote
  • Nov 13, 2014 2:12pm Nov 13, 2014 2:12pm
Quoting roughtrader
{quote} Yes I can! all I have to do is looking into my crystal ball muhahahaha btw, did I tell you Harry potter is my cousin?
No way, he was in my twirling class. The coincidence! He's quite the stuck up wizzardy type though, didn't really like him. He always wore some stupid black robe where everyone else was in a pink tutu.
  • #111
  • Quote
  • Nov 13, 2014 2:19pm Nov 13, 2014 2:19pm
Quoting Anusragger
{quote} You can have a higher probability but you cannot predict the future.
Surely if I could guess the lottery numbers right 50% of the time I do not need to "predict the future" lol

What's the difference anyway? Sounds like just playing with the words...
Build good relationships with others.
  • #112
  • Quote
  • Nov 13, 2014 3:18pm Nov 13, 2014 3:18pm
Quoting Chicky
{quote} Looking at it from a different angle. Unlike adequately capitalized traders, under-capitalized traders lose it all in a bid to preserve their capitals. A prudent trader is not expected to set Stop Loss so tight that it gets hit in even a normal market movement. If one does, is taking a blind chance and this chance taking is completely against the primary aim of capital preservation. Generally, trades with tight Stop Losses are taken not to preserve the capital but to gain more than amount risked. A good r/r trade provides no assurance...
Solid post.....
  • #113
  • Quote
  • Nov 13, 2014 5:18pm Nov 13, 2014 5:18pm
http://www.bloomberg.com/news/2014-1...stly-lose.html
Wealth comes from what you keep, not what you earn
  • #114
  • Quote
  • Nov 13, 2014 11:56pm Nov 13, 2014 11:56pm
By using a simple corel of 95% failures in this forum, the obvious answer would be that 95% of what is being "taught" or propagate here is purely nonsensical and b.....it.

But the mother of it all is the Probability Theory which is a pure and complete cover-up or excuse for its ineptness/inefficient of one ability to trade profitably. Even if your methodology is 99% probability ratioed, there is still a 1% chance that the methodology is flawed which simply means that the method is not fully efficient or robust yet. Of course it can be re-engineered with other factors to turn the probability in their favor which is completely a different ball game all together. The fact remains that it can be tweaked often blurred and muddled the definition of a efficient methodology vs a mediocre and failing one. 99.9% of all Financial analysts use this Probability theory to cover their asses. Which is why I daresay that none of those so called analyst is a profitable forex trader.

I myself have never try to promote or vouch for any successful methodology BUT I did briefly mentioned all the necessary/integral factors which would make a robust trading plan in order to succeed in this extremely challenging business.

I wish you all success in every endeavours.....

Now let the flaming begins.....

GS
  • #115
  • Quote
  • Nov 14, 2014 5:35am Nov 14, 2014 5:35am
Quoting genghistar
By using a simple corel of 95% failures in this forum, the obvious answer would be that 95% of what is being "taught" or propagate here is purely nonsensical and b.....it.
genghistar, I assume you are refering to the "myth" that 95% of all the traders losing their money, yes that is right, it is just a myth or a marketing trick to make people feel so dumb about them selfes they are willing to buy one of those worthless forex classes you see everywhere on the net now days.

I think this 95% looser statement originally came from 1 or 2 so called bucketshop brokers who claimed that traders lost 95%, so even if they did, it is only reprecenting a tiny blip of all the traders in fx, and I mean who wouldn't loose being with a bucket shop with poor trading conditions.

if you think about it, the foreign exchange is really large and is world wide, it's not anqored in any places like a exchange where you can look into and see all the traders acounts history, it's just impossible! so there is no way anyone could back up such a statement, therefore it should not be taken for granted, there is a lot of exellent traders teaching great stuff here on FF

any one can become successful trading, but it isn't easy, it takes a lot of dedication education and hard work.
Bulls are stupid Animals!especially when Im short!
  • #116
  • Quote
  • Nov 14, 2014 5:38am Nov 14, 2014 5:38am
Quoting Anusragger
{quote} No way, he was in my twirling class. The coincidence! He's quite the stuck up wizzardy type though, didn't really like him. He always wore some stupid black robe where everyone else was in a pink tutu.
Bulls are stupid Animals!especially when Im short!
  • #117
  • Quote
  • Edited Nov 16, 2014 3:32am Nov 15, 2014 10:19am | Edited Nov 16, 2014 3:32am
99% of forex traders fail to make money

While this isn't an absolute myth, the context in which it is said is misleading.

What is the misleading context? It's comparing trading to ordinary (paid) jobs: paid workers make money about 100% of the time I would assume (otherwise they wouldn't be workers, they would be unemployed), whereas most traders fail to make money.

But why lump trading together with paid jobs? After all, we've heard it said countless times that trading is, and should be treated, as a business.

So, if we compare trading to businesses instead of paid jobs, what do we get?

Well, you've probably heard it said that about 80-95% of new businesses fail in the first year. Here's a link:

http://www.forbes.com/sites/ericwagn...sinesses-fail/

I included this link not because it mentions the statistic, but because it also offers 5 reasons why businesses fail. Ring a bell? For me it does, it reminds me of "top reasons why traders fail" (lack of discipline, jumping from one system to the next, lack of patience, lack of a rule-bound strategy, etc.) Where businesses or traders or marriages fail, everyone's bound to come up with their favorite 5 or 10 reasons!

It's hard to come by accurate statistics, but the failure rate in forex is probably closer to 75%, and I'm not even sure if they mean "lose money" or "fail to make money".

It's also not completely certain what % of businesses fail, but from the statistics I've read it seems fairly accurate to say that not more than 25% of new businesses survive after 10 years. Isn't this roughly the same as with trading?

Trading is a business, and might be more or less perilous than other kinds of businesses, but it's certainly not a paid job (at least not the way we here do it), so why compare it to one?

A 75% failure rate is not abnormal in the business sector in which trading really belongs. You'd have the same failure rate if you opened a new restaurant. Should that discourage you? Not if you're a businessman. It just comes with the territory.
  • #118
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  • Nov 18, 2014 8:47pm Nov 18, 2014 8:47pm
I trade with Price action system. Still i am new trader and trying to learn. At this time my concentrate to learn well price action system
  • #119
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  • Nov 19, 2014 3:22am Nov 19, 2014 3:22am
This is actually one, as it's hugely misleading:

"Nobody ever goes broke closing their trade in profit"

Ok. So, supposedly average profit is 7 pips and average loss is 37 pips. If this is the general case for many traders, then where is that going to get them?

Yes, technically the 'profits' aren't going to lead to your loss...but the profits are so minimal compared to your losses that they are virtually irrelevant. You are actually letting your limited profits undermine your trading success and letting the losses eat away your capital. Eventually, you will have too little left to trade or have to add more funds.


That line also undermines the idea of "Let profits run and keep losses short." If you ensure it applies to closing a profitable trade before it goes against you...yes, potentially wise. However, I expect people use it to rationalise jumping out of a reasonable market far too soon, just because it retraced slightly "Phew, saved my trade. Well as they say 'No one ever goes broke closing trades in profit', so I'm being smart..."

I've also noticed that many people post about their winning trades, but they are quite often in the 5-40 pip range. Just average that out and consider how often they may have to eat 10-20 pip SL's and it's not going to be easy turning a profit.
  • #120
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  • Nov 21, 2014 4:02am Nov 21, 2014 4:02am
That the learning curve will be shortened because you are really really smart and determined.

That if you trade 15 hours a day for a year, you'll have the same experience as somebody who has traded one hour a day for 15 years.
si hoc legere scis nimium eruditionis habes
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