The Big secret to trading success

This is kind of it, from a hobby trade standpoint...ie, my EA accounts.

Why put all eggs in one basket, when there are a lot of eggs and a lot of baskets?

I am not trying to take away from others who are learning the market on a micro scale lot size as hobbiests...hell, even as demo traders, taking live trades to help build up systematic logic and confidence is all good by me.

I don't think that everybody needs to have the same view of trading, risk:reward, lot sizes, profit ranges, trade ideology...

This is something that should be individually specific.

Where and how we find our success and failures in market is what will define us as traders.

Yes indeed. The awful truth about a platform which I do not use nor am affiliated with hurts.

I don't actually see any platform being able to effectively mimic live in a backtest report.

Given widening spreads, market liquidity, broker lag and latency...show me any platform that will do this, again, within a reasonable margin of error and I will drop MT4 and migrate.

Thing is, and I really do agree with a lot of what you say, if you do study the markets and charts and are creating the code or logic of an automated trader, seeing the strategy test in action to confirm that the triggering for entries and exits is as was intended, is actually enough.

It's only the data obtained from these that I believe to be worthless.

Great posts though, dude!

Just backtest with a spread wider than normal. By "lag and latency" you obviously are with a crappy broker. As for liquidity and slippage, it can be positive or negative so it wont affect the results very much. I honestly get almost the same results.

No one will share his/her holy grail. But as you can see here systematic works. You just can't be profitable after 100-200 RANDOM entries, unless you're using martin gale or trading without stop loss, spread is killer !

Must be your crappy broker!

I call bullshit on this, son.

Otherwise, you would be posting live vs backtests.

If this were the case, how many FF EA Backtest Zillionaires are there?
ZERO.
That's how many.
NONE!


But, ya know...keep trying to make it seem like you know what you are talking about.

Thanks for the "son", makes me feel younger. Whatever.

Exactly....As someone earlier posted....its not the backtest that is a problem ...its the person doing backtesting.
Lets say you are on some set of datasets and you keep tinkering with systems and parameters until you find profitable combination. In short more complexity you try to achieve , more chances are its curve fitted.

Now to prove validity of backtesting ...the systems which i have currently on my journal ..which by no means i claim to be outstanding . But it clearly is out performing bactesting results..which i just currently performed for same period of last 1 year.
In backtesting i have already blown account.

To prove my point i will post that EA on my journal within a day for anyone to check it out for them selves.

This thread is more entertaining than reality TV! Pleasae don't stop the drama, infighting, bickering, ranting, and ego posting. About the only thing that would distract me from this thread would be naked lady mud wrestling.

Maybe I misunderstand your wording, but I am sure a lot of people are Backtest billionaires ... just not in forward testing

Excellent deduction Cat. Pity your thread is now being side tracked by the dross the losers and deluded leave in their wake.

Am new to this forum and really enjoying all chats. Respect to CAT and others like Alphaomega. To me news is the best trading guide if patience, discipline and money management mentality can be applied. Nice trading !!!

You mean in forward testing ? I have to clarify that, IMO backtesting is useful only if you look at fully formed bars. I've never used tick data for backtesting.

This thread, although not surprisingly-as it is FF, has devolved into a pile of utter ridiculousness.

"You can not define a trend". Am I being punked? Of course you can define a trend. And the possibility that one time frame can be in a DOWN TREND while another higher or lower time frame is in an UP TREND does not alter the ability to define a state of trend.

There is of course the base level definitions of trend:

1. UP TREND: Higher highs and Higher Lows.
2. DOWN TREND: Lower lows and Lower highs.

While these base definitions are "universal", they are not the only way to define trend. In fact, many traders use trend definitions that make not reference to the base definition. For example, some define a DOWN TREND as price closing below a moving average. Others might define an UP TREND as when momentum is positive.

That all traders do not define a trend the same way, does not in any way mean that a trend can not be defined. Nor does it lessen the ultimate importance of trend.

The trend is not just your friend; it's your lover.

For the retail trader, the fact that markets trend should be at the essence of a trading strategy. Most retail traders can not move the market. Therefore, there is far greater utility in trading in the direction a market is already moving. Forex markets have the greatest propensity to trend of all the markets. The retail trader who does not follow trend, put himself at a great disadvantage. Note I did not say the non trend follower is destined to lose. But the non trend follower makes something that is already hard even harder. In many ways trend "levels" the playing field. Why would you take such a powerful tool out of your arsenal?

Take a look at the charts below.

These are not "cherry picked" examples. In fact, the first two were chosen because they were already shown in this thread. The third one was chosen to show a different trend than the previous two.

Want what the market wants: Inertia.

"In a way, the most interesting principle that Isaac Newton pointed out is that bodies have inertia; that is, that they tend to keep doing whatever it is they're already doing, unless some force acts to change them.

If a body is at rest, it tends to stay at rest. If a body is moving, it tends to keep moving-in the same direction and with the same velocity that it already has.

Einstein referred to this as 'laziness'. That is, a body tends to do the laziest thing possible-and the laziest thing possible is to continue to do whatever it's already doing....

The market is exactly the same way. It tends to keep on doing whatever it's already doing. If it's going UP with a certain velocity it will tend to keep on doing that unless some force (buying or selling pressure from the Smart Money) causes it to accelerate or decelerate.

Therefore, if you want to know what the most likely thing is that a market will do in the future, take a look at what it is doing right now." Adam theory of markets, J Wells Wilder jr. p 56-57.

I do not want to get into "techniques" here. I want to focus on trend. For me, a DOWN TREND is when price is closing below the BPL and Chart Mode I is red and Chart Mode II is red. The second best evidence (VSA is the first) that a market is going to go DOWN is that it's already doing so............

An UP TREND is when price is closing above the BPL and Chart Mode I is green and Chart Mode II is green. The second best evidence(VSA is the first) that a market is doing to go UP is that it's already doing so...........

This thread started out talking about the "big secret to trading success". Well just because something falls on deaf ears, or is read by blind eyes, that does not make it a secret. But here goes:

Get rid of your ego. Learn to surrender to the market. Be the salmon egg. The salmon eggs flows the way the river flows. It does not try to predict where are when it will turn. It simply allows itself to go in the direction the river is already going. All the while knowing that the end of the journey brings new life. Don't be the adult salmon. The Adult salmon swims against the current. It struggles to do the opposite of the river. It is at odds with the river. All the while knowing that the end of the journey brings death.........

I have been investing in my 401K for 20+ years. Although I invested paltry amounts of my paychecks early on as I have become more successful I now contributed the maximum allowed by the tax laws which includes catch-up contributions as I am over 50. Because of DCA I have often invested at lower points in the market (times when many are usually selling at a loss). My portfolio is highly diversified but weighted towards the US total stock market. If you take a look at a chart of the DOW or similar indice over the last 100 years or so you will notice one thing. It has always gone up. I remained 100% invested in the market during all major declines during those 20+ years including the housing/mortgage crisis around 2008-09 when my portfolio value declined nearly 45%. To top that off I went through a divorce and gave my ex-wife 45% of what I had left in my 401K. Despite these "calamities" my 401k has prospered and in 6 years I will retire and live quite comfortably off the interest only that my 401K will throw off from income producing investments. So I guess in this case the trend has definitely been my friend.

Really its funny here to see all the traders with their views. Sadly hardly anyone know the correct answer. Well good luck on Monday all of you.

Interesting thread. Made me want to write something after a long time. I have a few questions.

a) For those in favor of trend following - How do you define trend without time frame? Is it a weekly trend you are chasing, daily, monthly, yearly or what?

b) For those against trend following - If you are trading counter trend then aren't you pretty much trading with the trend on a lower time frame?

Those who are showing a trending chart of 20 years forget that to reap that benefit you need to have foresight worth of 20 years and a deep pocket to sustain the emotional turmoil of seeing all your profits vanish and turn into a loss after four years of being in a trade. Those who are showing a ranging chart to suggest that there are no trends are neglecting the fact that there are at least a dozen trends within that chart.

Both the above rhetorical questions were simply to suggest that a trader should know which time frame he is trading and by extension how long he should wait to reap profits or cut losses. Trend is just a derivative of the above information (In a sense we are all trend followers. In another sense, we are not). And the way a trader should decide which time frame to choose is to know how much capital he has and what kind of stop losses he can afford. The next best thing for the trader is to understand key levels where the price is expected to react. That's all. The key levels are usually moving average support or resistance (not MA crossover please), candlestick formations that have repeatedly shown certain follow-through (and there are certain patterns that you never see discussed in any book), S/R, 50% retracements, whole number, 00 levels and time of the day all considered together. Remember, even if the big boys are colluding then they would want to collude at these levels. Let me explain. Suppose the big boys know that a certain support level will be breached by them (I know the counterparty in this thread will say that not all big boys would 'agree' to breach a support level and therefore no such collusion exists, but I will come to that later), even then they will wait for a bounce before they start selling BECASUE it is in their interest to short from as high a level as possible.Now, their collusion could be in buying a little to fake apparent strength before shorting it from a little above. You can also think of such fake PA as stop loss hunting or by some other name - the name changes according to the player (MM/banks/hedge funds - they are all different type of big guys) and direction. But what matters is that you witness a bullish yet short-lived strength. Regardless of how big the guys are they cannot fake price action. How good of a trader you are is expressed in your ability to read the strength of the movement and manage your expectations accordingly. Therefore, it is not the trend that is important but the levels and gauging how price reacts at these levels. Waiting for the price to hit levels and then placing the trade as you would expect it to be and finally, yet most importantly, moving trades to break even or managing expectations as you see fit is the way you can succeed EVEN IF THE BIG BOYS ARE COLLUDING. And if they are not, then you have an equally difficult/easy (depending on your skills) task. In this case, the S/R levels are sure to show many false breakouts and much more choppy action. However, once again levels and not trends show the way and your expertise helps you forge ahead.

In the end, the big secrets are discretionary trading and individual trader skills (oh yes, and capital - it never hurt nobody!) My 2 cents.

OK, so if this is a fact, how then this happens?

Quote

Disliked

Profitability also improved, with weighted averages revealing that 36.4% of US customers were in the black during Q1

from

http://www.financemagnates.com/forex...s-and-profits/

Quarter after quarter profitability is about 35% and not 5%.