AHG - Profitable Strategy for Struggling Traders
- Thread starter Anekdoten
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I can see and understand all the patterns in the left and middle section of the chart. Its the right edge I have trouble with. I can always see reasons to go long or short. When I pick one, I don't have a disciplined exit strategy I believe in (positive expectancy).
I've changed my screen name to the type of trader I want to be.
I need to go code my ideas and backtest to take the emotional element out of my trading.
I've changed my screen name to the type of trader I want to be.
I need to go code my ideas and backtest to take the emotional element out of my trading.
Im sorry you had a rough day, but think of averaging down as wishing, praying or hoping. As Anek has said, averaging down is a common mistake, and it is the emotional desire of being right in the long run. Keeping your losses small is paramount in this business, averaging down is doing exactly the opposite. If you ever find yourself wishing, praying or hoping run out of a trade cause you will get bit.
Have a limit and stick to it no matter what, in the long run that is capital conservation and without capital you cannot trade, so if you blow up your account game over. Learning takes time so use the minimum you can to go over your learning curve. Unfortunaely not all of us have an unlimited account when it comes to staring out in trading so take good care of your money. Dicipline as it has been stated before is VERY important. You cannot avoid losses but keep them to a minimum.
Bbox-
My experience has been that backtesting, if not done properly, will just lead to curve-fitting.....
I've backtested countless strategies for years and years and years, only to realize that what I was really doing was simply adjusting and massaging the trades to "tell me what I wanted to hear"....then backtesting becomes curve-fitting......
anytime you change the results of a system to try and make it produce a high-percentage of winning trades, you are curve-fitting....trust me, you don't want to go down this road...you'll end up wasting years of your life...
Curve-fitting never works because markets are constantly changing....when you try and trade the curve-fitted system on the market of today, the system just falls apart.
The laws of probability INSURE that regardless of your approach, you will inevitably suffer some long strings of consecutive losses.
Cut your losses short, trade with the trend, and let your profits run....no matter how painful it may be.....
Daily Mantra 2
"The amateur assumes that he can conquer the markets through superior analysis. He spends nearly all his time looking for effective ways to predict where the markets are likely to go next. Believe me when I say that the markets are not predictable in the sense most traders use the term. Luckily, it is not necessary to predict the markets to make money from them.
The professional has had enough experience to learn the limitations of analysis. While there is a repetitive similarity to market behavior, there is just enough uncertainty to make predicting the future an impossible task.
The professional knows the importance of a consistent approach to the markets. He has a concrete plan of attack. He seeks to follow existing trends rather than predict future trends.
Almost all traders fail to exploit the statistical advantage of following trends in the futures markets. They do not trade their system religiously, they choose a poor group of markets to trade or they overtrade their capital and are forced to quit too soon. An essential thing to avoid is trading with an over-curve-fitted system. Nearly every system is curve-fitted to some extent. The minute you test an idea and then change it at all to improve performance, you have engaged in curve-fitting. The more you bend your system around to improve performance on past data, the less likely it is your system will trade profitably in the future. This is very hard for inexperienced traders to accept. They expect that methods which worked well in the past will probably work well in the future. Past performance will only APPROXIMATE (and I emphasize approximate) future performance to the extent the system is not over-curve-fitted." - Bruce Babcock
Internalize these words folks...
"The amateur assumes that he can conquer the markets through superior analysis. He spends nearly all his time looking for effective ways to predict where the markets are likely to go next. Believe me when I say that the markets are not predictable in the sense most traders use the term. Luckily, it is not necessary to predict the markets to make money from them.
The professional has had enough experience to learn the limitations of analysis. While there is a repetitive similarity to market behavior, there is just enough uncertainty to make predicting the future an impossible task.
The professional knows the importance of a consistent approach to the markets. He has a concrete plan of attack. He seeks to follow existing trends rather than predict future trends.
Almost all traders fail to exploit the statistical advantage of following trends in the futures markets. They do not trade their system religiously, they choose a poor group of markets to trade or they overtrade their capital and are forced to quit too soon. An essential thing to avoid is trading with an over-curve-fitted system. Nearly every system is curve-fitted to some extent. The minute you test an idea and then change it at all to improve performance, you have engaged in curve-fitting. The more you bend your system around to improve performance on past data, the less likely it is your system will trade profitably in the future. This is very hard for inexperienced traders to accept. They expect that methods which worked well in the past will probably work well in the future. Past performance will only APPROXIMATE (and I emphasize approximate) future performance to the extent the system is not over-curve-fitted." - Bruce Babcock
Internalize these words folks...
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