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Most traders fail because of no discipline!

  • #741
  • Feb 4, 2017 5:28am Feb 4, 2017 5:28am
Quoting Shabs19
{quote} I am sorry Dukas Trader, but I still cannot see you furthering your point with this endless bickering. Make your point regarding trading strategies etc. but continuing personal attacks will only reduce your own credibility. I dont think it is your duty to teach anyone, unless you go commercial and open your own thread there.
i did say RR alone is useless. thats the point, but was easy to read often.

and offcourse its not my duty to help and i know that many dont deserve help with their bad mind. but a least you can try. many dont help maybe when you see sammer, faker try to cheat people, i at least try to. for many people other people are not important, i can see this from 90 % of persons in this forum offcourse. but the 10 % likes it and be it worth.

ronda was a little bit extrem case, normally only scammer and cheaters react this style , when they are trapped. i dont know what was his problem, looked like he dont likes to be corrected.
  • #742
  • Feb 4, 2017 5:36am Feb 4, 2017 5:36am
Quoting dukas_trader
{quote} i did say RR alone is useless. thats the point, but was easy to read often. and offcourse its not my duty to help and i know that many deserve help with their bad mind. but a least you can try. many dont help maybe when you see sammer, faker try to cheat people, i at least try to. many people other people are not important, i can this from 90 % of persons in this forum offcourse. but the 10 % likes it and be it worth.


Concentrate on your own trading, scammers and fakers are easy to spot. However, we are all adults here, to make our own choices in this world.
Yes, do report them if you have solid proof but refrain from personal attacks, this will help improve your own mindset & discipline.
Negativity is self destructive.
It never gets easier, you just get better
  • #743
  • Edited 6:33am Feb 4, 2017 6:10am | Edited 6:33am
Quoting Shabs19
{quote} Concentrate on your own trading, scammers and fakers are easy to spot. However, we are all adults here, to make our own choices in this world. Yes, do report them if you have solid proof but refrain from personal attacks, this will help improve your own mindset & discipline. Negativity is self destructive.
but i am allways concentraded in trading and mindset. its very easy when you do this 20 years allready, you have enough time for many thinks to do.
many speak about mindset and concentrate because they are new in trading, then it is important. if you do it many years you have learned it or you are out of the business and dont get it over many decades. its best when trading is your hobby, so you earn money with what you like to do, so you dont work on a day, you just do some hobby for some hours if you like to do. and you have many more freetime then in any other job and can do it from any place from the world.
  • #744
  • Feb 4, 2017 9:40am Feb 4, 2017 9:40am
After a deeper research I came to this conclusion: it very much depends on the strategy but yes RR alone is irrelevant

so I have to agree with dukas and mr.breakout..
  • #745
  • Feb 4, 2017 4:22pm Feb 4, 2017 4:22pm
Myths around the reward:risk ratio

Myth 1: The reward:risk ratio is useless
You often read that traders say the reward-risk ratio is useless which couldn’t be further from the truth. Although, the reward:risk ratio by itself has no value, when you use it in combination with other trading metrics, it quickly becomes one of the most powerful trading tools.
Without knowing the reward:risk ratio of a single trade, it is literally impossible to trade profitably and you’ll soon learn why.

Myth 2: Good vs. bad reward:risk ratio
How often have you heard someone talk about a generic and randomly chosen “minimum” risk reward ratio? Even popular trading books often state that trades with a reward:risk ratio of smaller than 2:1 or 3:1 have to be avoided. This is very wrong and can even lead to a decline in trading performance.
Whenever you read something like that, leave the website immediately. As we will see shortly, the optimal reward:risk only depends on YOUR own trading strategy and YOUR performance, and on nothing else. There is nothing like good or bad reward:risk ratios.

Myth 3: Mental stops and not using stops is better
Once a trader is aware of how the concept of the reward:risk ratio works, he will see that trading profitably without having an exact and fixed price level for his stop is impossible. Only if you know where you will place your stop loss order before entering the trade, you are able to calculate your reward:risk ratio, the required winrate and judge whether a trade has a positive expectancy for you or not . Mental stop loss orders don’t work.

Myth 4: Don’t justify bad trades with large reward-risk ratios
Often, traders think that by using a wider take profit or a closer stop loss they can easily increase their reward:risk ratio and, therefore, increase the expectancy of their trading performance. Unfortunately, it’s not as easy as that.
Using a wider take profit order means that price won’t be able to reach the take profit order as easily and you will most likely see a decline in your winrate. On the other hand, setting your stop closer will increase the amount of premature stop runs and you will be kicked out of your trades too early.
Amateur traders often justify “bad” trades where they are not trading within their system with a larger reward:risk ratio. Your trading rules are there for a reason and a bad trade does not suddenly become acceptable by randomly hoping to achieve a larger reward:risk ratio.
You came here for the truth and let me unveil it for you
  • #746
  • Feb 4, 2017 5:50pm Feb 4, 2017 5:50pm
@Ronda and Dukas lets stop this never ending debate about RR, let us respect its others opinion, we have to admit that we cannot imposed our ideas and beliefs to other people, so lets just leave things as that, you already both express and explain your side so its up to other members to decide who has the better point of view. Lets admit that trading is a very tough profession and it takes more than just intelligence to make a living in trading. We are discussing here to help each other improve our individual performances.
  • #747
  • Feb 4, 2017 8:07pm Feb 4, 2017 8:07pm
Most traders fail because they have no edge. Great discipline, psychology, and money management will not turn a losing system into a winner.
  • #748
  • Feb 4, 2017 8:21pm Feb 4, 2017 8:21pm
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  • #749
  • Feb 4, 2017 8:27pm Feb 4, 2017 8:27pm
Quoting forextrades
Most traders fail because they have no edge. Great discipline, psychology, and money management will not turn a losing system into a winner.
A-B-S-O-L-U-T-E-L-Y!

Great post my friend, right on the money!
  • #750
  • Edited 10:47pm Feb 4, 2017 10:22pm | Edited 10:47pm
Quoting forextrades
Most traders fail because they have no edge. Great discipline, psychology, and money management will not turn a losing system into a winner.
Even if you give publish your strategy that has an edge on FF, most people will be losing traders. There is nothing you can do for a losing trader.
You cannot bring a donkey to water and make it drink.


so what are the reasons for traders failing even when given an edge?
You came here for the truth and let me unveil it for you
  • #751
  • Edited Feb 5, 2017 1:13am Feb 4, 2017 11:01pm | Edited Feb 5, 2017 1:13am
Quoting RondaRousey
so what are the reasons for traders failing even when given an edge?
Very simple : poor or no money management.

That's the second most important reason why most traders fail.

They trade, trade, trade, trade, trade (making small profits along the way) and then one day they let a small loss turn into a HUGE 75% drawdown or more, for example.

Now they have a big problem, right?

So the next thing they do is risk an even great percentage of their account on the next trades, so that they can at least get their money back ("Hey, no problem, the market will come back...").

And then BAM, they blow up their account, because at that point it only takes a couple (or even a single) losing trade(s) to empty the remaining of their trading account.

That, my friends, is the typical behavior of an undisciplined, uninformed trader.

In fact, most traders (especially new comers) do not even have a clue what money management is. For example, risking no more than 2 or 3% of trading capital on each trade (a sound money management habit by all means) is a concept unknown to them. Risking "only" 2 or 3% on each trade is extremely boring for them, they want the big bucks now.

Then one day, sooner or later, they bet the whole farm on a couple of cannot-lose, "foolproof" trades and they lose everything.

Always remember this important mathematical fact folks : It takes only one (1) bad losing trade to lose 100% of your capital, no matter how much money you earned before.

ONLY ONE!
  • #752
  • Feb 5, 2017 1:48am Feb 5, 2017 1:48am
Quoting forextrades
Most traders fail because they have no edge. Great discipline, psychology, and money management will not turn a losing system into a winner.
I say both are important, a good strategy will only be effective if the trader has the skills or ability to follow its trading rule consistently and observe proper risk management, otherwise it will yield the same bad results.
  • #753
  • Feb 5, 2017 2:02am Feb 5, 2017 2:02am
Quoting anax
So the next question should be: Can we build the perfect Robot ?? That's the million dollar question..................
Human traders can potentially use a wider variety of analysis types -- e.g. FA, context (session/time of day, news exploitation/avoidance, correlation, MTF analysis, ....), line studies, visual abstracts and patterns, pattern quality assessment, etc etc, which are anything from difficult to impossible to code.

Hence EAs tend to rely more heavily on mathematical tools and approximations, technical indicators, grids, and dubious MMs like martingale variants -- i.e. a significantly different approach.

Their lack of qualitative intelligence is compensated for by a number of obvious benefits. I listed some of these in this post. Yet despite all of these benefits, very few long-term profitable retail EAs exist. That suggests to me that the discretion is an important ingredient in successful trading. These days I prefer a semi-automated approach, although it's still a work in progress.

Daniel Fernandez is an expert on creating mechanical/robotic trading systems, as well as being a prolific author on this topic. You can find a vast number of his articles here.
  • #754
  • Feb 5, 2017 2:04am Feb 5, 2017 2:04am
Quoting techboy46
{quote} I say both are important, a good strategy will only be effective if the trader has the skills or ability to follow its trading rule consistently and observe proper risk management, otherwise it will yield the same bad results.
True.

But even if you apply good money management techniques and are 100% disciplined, how do you know if your trading system has indeed a trading edge to begin with?

More than 90% of traders, here on FF or elsewhere, are totally unable to answer this simple question.

Sure, some of them will say something like "Hey look, my system made 200 pips last week!"

Big deal, so what? What does it really prove?

Nothing, just that you made 200 pips last week, nothing more.
  • #755
  • Edited 3:51am Feb 5, 2017 3:05am | Edited 3:51am
Quoting Mr Breakout
{quote} True. But even if you apply good money management techniques and are 100% disciplined, how do you know if your trading system has indeed a trading edge to begin with? More than 90% of traders, here on FF or elsewhere, are totally unable to answer this simple question. Sure, some of them will say something like "Hey look, my system made 200 pips last week!" Big deal, so what? What does it really prove? Nothing, just that you made 200 pips last week, nothing more.
A good question, finding a strategy that has an edge will be up to the individual trader to find out and at what criteria that he can finally say hey this system has the edge. That is why it is important to be disciplined during the testing period of a particular trading strategy so that he can assess the full potential of such strategy, but if a trader is inconsistent in the implementation of the rule,their is no way to know that such system has an edge, so this is also an aspect that should be look upon by traders, before a trader say hey this is such a bad system, he has to ask himself first, did I do it right? did I follow the rule exactly as it was describe or written, otherwise he has to do it all over again.Commitment is also one aspect that must be done when testing a particular strategy, so say I will test this strategy for 3 consecutive months with discipline and if it gives me profits then I will keep it, but the problem to most traders is the moment it gives 2 or more consecutive loses he will began to doubt his current strategy and may jump to another strategy so the psychological aspect will always play a big factor during testing period. It is also important to know during testing what is exactly what you want in a winning system? something that gives you winnings all the time or 6 consecutive winner with 1 or 2 loses or anything as long that it gives positive profits at the end of the month or year, there will be different definition that may come out from a trader's mind and to me this is a critical aspect during the testing period, a trader must be very clear of what results he want from his trading strategy.

Another thing some traders may already possess a good trading strategy or methodology but they cannot implement its trading rule consistently so they were not getting positive results.
  • #756
  • Feb 5, 2017 3:46am Feb 5, 2017 3:46am
Quoting Mr Breakout
{quote} True. But even if you apply good money management techniques and are 100% disciplined, how do you know if your trading system has indeed a trading edge to begin with? More than 90% of traders, here on FF or elsewhere, are totally unable to answer this simple question. Sure, some of them will say something like "Hey look, my system made 200 pips last week!" Big deal, so what? What does it really prove? Nothing, just that you made 200 pips last week, nothing more.
Exactly.

Very few people do any real backtesting on this forum. No optimization. No Monte Carlo analysis. They have something that may look good visually on the charts, but offer no stats to back it up.
  • #757
  • Feb 5, 2017 5:20am Feb 5, 2017 5:20am
Quoting hanover
{quote} ...although it's still a work in progress.
Then we should team up. Make a close working group of 5~10 ff traders in order to achieve our goal.
I have 10 years of trading fx experience and 5 years on algos development.
Who's on board ?
  • #758
  • Edited 5:48am Feb 5, 2017 5:34am | Edited 5:48am
Quoting hanover
{quote} Human traders can potentially use a wider variety of analysis types -- e.g. FA, context (session/time of day, news exploitation/avoidance, correlation, MTF analysis, ....), line studies, visual abstracts and patterns, pattern quality assessment, etc etc, which are anything from difficult to impossible to code. Hence EAs tend to rely more heavily on mathematical tools and approximations, technical indicators, grids, and dubious MMs like martingale variants -- i.e. a significantly different approach. Their lack of qualitative intelligence...
I think all systems, EAs have a lifespan of usefulness. Edges have a lifespan and a use-by date. You cannot patent an edge so sooner or later someone else will have a similar edge and then another and then another. Eventually the edge is gone. There are a lot of smart people trying to beat the market, guys with Nobel prizes, PhDs etc, and they can easily work out what your edge is and erode it. Having an edge is one thing, protecting the edge is another.
You came here for the truth and let me unveil it for you
  • #759
  • Feb 5, 2017 5:39am Feb 5, 2017 5:39am
Quoting RondaRousey
{quote} I think all systems, EAs have a lifespan of usefulness. Edges have a lifespan and a use-by date. You cannot patent an edge so sooner or later someone else will will have a similar edge and then another and then another. Sooner or later the edge is gone. There are a lot of smart people trying to beat the market and they can easily work out what your edge is and erode it.
Wrong. There are algorithms out there who are trading stable & successfully for the last 20+ years. I admit however is not an easy task at all.
  • #760
  • Feb 5, 2017 7:14am Feb 5, 2017 7:14am
What is wrong with most ea's is that they actually have no connection with the market. To design an effective indicator or ea you first have to understand the rules that drive the actual price movement. Far from being random price has rules that it does follow.

I would be more than happy to work with a couple of people on this to design an indicator based on this idea, I will however give an example of this in real time. This is just one of the rules I have found that price obeys. Gann I think mentioned it but never actually stated the rule, so I don't know if this is what Gann was stating or was it my own discovery.

Gann "When price and time square a change is inevitable".


My rule "When the price a market moves is related to a root relationship correctly adjusted for the market and time frame you are trading within a certain degree of error, a change is highly lightly".

Here is the example

Attached Image (click to enlarge)
Click to Enlarge Name: Price_time_move.png Size: 73 KB


The maths in this case is simple

Duration of the move in price is 366 points multiply this by root5 you get 818.40 divide by 10 and you get 81.81, the move down was 79 bars but the actual upthrust came in on the 82 bar which is spot on.

The top value is 2303.37 divide this by root 2=162.87 divide this by 2 and you get 81.44 which is the duration of the move down in hours. I have discovered other very powerful relationships like this but I am not going to go into them all here. But the idea that price is random is without merit, no indicator based on following price could give you a price and time with such accuracy, however one that monitored price and applied the correct rules would allow very precise locations of turning points within a error of about 1%.

My current calculation points to a top in the SP500 as of Friday with a decline from here.
Attached Image (click to enlarge)
Click to Enlarge Name: top_in_sp500_05_feb__2017.png Size: 70 KB
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