Al Brook's trading course

[NoDoji]

Quote from oilfxpro:

I don't trade t/a or p/a failures , they are low probability except when they happen counter trend .

http://www.elitetrader.com/vb/attachment.php?s=&postid=3665484

You sent a link to a defined trading plan based on technical analysis of price action. Is this a plan that, if followed, produces profit over any 25 consecutive appearances of a qualifying setup, or that it fails?

By the way, your saying "I don't trade t/a or p/a failures" implies that you're able to predict with 100% accuracy what the market is going to do next. No matter what the setup, they all fail some of the time.

 

[NoDoji]

Quote from oilfxpro:

This still does not make it easy to implement , the proof is in trading educators not making money by trading p/a due to their own inability to implement it , but pretending to trade and making money by selling courses on it.

You see all these pretenders on E T with their two pip stops and 6 pip stops , their inability to understand setting stops probabilities.

Just because an educator is unable to trade his/her own method, doesn't invalidate the method.

I spent a year watching a consistently profitable trader call all his trades in advance with entry, stop and target and I was unable to trade his method because I didn't trust the method would work.

I spent a year paper trading the free weekly swing trade calls of a well-known trading education company, with entries, stops and targets called in advance and despite a ridiculous success record over that time, was afraid to take a single trade live because I didn't trust the method.

Both methods were based on technical analysis of price action, but I didn't believe this was a valid method of trading because I didn't understand it at the time.

So I could've taught these methods to someone who could end up trading them easily and make money, but because I was afraid to trade them wouldn't have made the methods invalid.

 

[oilfxpro]

Quote from NoDoji:

You sent a link to a defined trading plan based on technical analysis of price action. Is this a plan that, if followed, produces profit over any 25 consecutive appearances of a qualifying setup, or that it fails?

By the way, your saying "I don't trade t/a or p/a failures" implies that you're able to predict with 100% accuracy what the market is going to do next. No matter what the setup, they all fail some of the time.

It is quite a good set up ,I use it but have never back tested it .Similar trend entries produce over 70 % plus hit rates.

 

[NoDoji]

Quote from Pivotas:

Is it reasonable to assume that in general, institutional trading, along with bots and HFT are net profitable? If so, where are the net gains coming from?.

Is it arguable that if 90% of traders fail, then at any given time the majority of those traders are on the wrong side of the market.

You cannot assume that in general institutional traders/investors are net profitable. Hedge funds go under, mutual funds have negative returns, hedgers are hedging risk, etc. Over a long time frame (years, decades) many institutional investors and investment banks are net profitable. But even these "too big to fail" institutions go under (Bear, Lehman, LTCM). How many other investment banks would've gone under without the corporate welfare bailout?

The 90% of traders that fail figure relates to small retail traders. The majority of those traders at any given point in time are on the wrong side of the market, but with the capitalization of an institutional trader, they could hold through deeper drawdowns, average down, trade multiple instruments/strategies and possibly have better chance of success (though not all that likely).

The small retail trader can succeed and produce much greater returns than the average institutional trader, because s/he can latch onto the backs of the big players who move price and catch many profitable rides in much shorter time frames (seconds, minutes, hours, days).

It's not easy, though, especially if they listen to people on forums like this telling them that trading education is snake oil, that stops are for amateurs, and that you have to go against the herd.

Wake up, noobs, and think about how detrimental these ideas are to a small retail trader.

I assure you that if you study the technical analysis of price action and do the work necessary to develop a plan that proves itself profitable on paper, then test the plan to see if it's profitable in a simulated live environment, then trade your plan with a trader's mindset (casino, not gambler), you will extract money from the market daily/weekly.

 

[ChkitOut]

Quote from Pivotas:


Is it arguable that if 90% of traders fail, then at any given time the majority of those traders are on the wrong side of the market.

this isn't true either, its not that they are on the wrong side of the market the majority of the time, they are on the right side 50% of the time and on the wrong side 50% of the time. Over time all your losses are simply trading fees and the spread.

if all a trader ever did was flip a coin for his trading decisions and set an equal target and stop he would be break even and be down the spread and fees because its just as hard to find a consistently losing system as it is a winning one.

 

[oilfxpro]

Quote from Pivotas:



Is it arguable that if 90% of traders fail, then at any given time the majority of those traders are on the wrong side of the market.

Most traders are betting on unknown outcomes on lower probability trades , and unprepared for unpredictable volatility .This is what does the damage.

 

[Pivotas]

Quote from NoDoji:



The small retail trader can succeed and produce much greater returns than the average institutional trader...

It's not easy though...

And therein lies the problem. A part of my comments were related to the notion that regardless of the efforts made and quality of the education the large percentage of retail traders will ultimately fail. If 90% fail regardless of methodology then the cause of failure cannot be seen as specific to the methods but is perhaps more related to qualities common to the group ie: human behavioral characteristics such as ego driven cognitive bias.

It is surprising to me when neophytes refer to trading as a business. As though it were like a franchise where you pay your fee, go through training and given a favorable location, hard work and luck, you will still be around in a few years and making money. Accepting this perception you must then acknowledge that when it comes to TradersAreUs, 90% of the franchises will fail within 2 years.

 

[NoDoji]

Quote from Pivotas:

If 90% fail regardless of methodology then the cause of failure cannot be seen as specific to the methods but is perhaps more related to qualities common to the group ie: human behavioral characteristics such as ego driven cognitive bias.

This is indeed a major contributor to failure.

There are positive expectancy trading methods available to anyone at no charge right here on ET, on many other web sites, and in books you can check out at the library. There's even been free mentoring offered by (allegedly*) successful ET members.

So why do so many fail even with these resources readily available? Mindset. Psychology.

I taught profitable methods to others and they couldn't bring themselves to trade the methods.Their cognitive biases overrode the rules of the system.

* I say "allegedly" because even someone as big as Madoff hoodwinked investors and regulators across the spectrum with manufactured statements of consistent profitability.

 

[Pivotas]

Quote from ChkitOut:

this isn't true either, its not that they are on the wrong side of the market the majority of the time, they are on the right side 50% of the time and on the wrong side 50% of the time. Over time all your losses are simply trading fees and the spread.

All of what we say in this discussion is true or false relative to our perceptions of the way we think things are. Given the complexity of the electronic marketplace I don't believe it is possible to know what exactly what is going on. Individually, traders can certainly be on the wrong/right side of the market more than 50% of the time. Collectively does the losing trader group manage to average out at 50/50 and give up only fees and spread? How does one figure that out?

Quote from ChkitOut:
[B
if all a trader ever did was flip a coin for his trading decisions and set an equal target and stop he would be break even and be down the spread and fees because its just as hard to find a consistently losing system as it is a winning one. [/B]

Not to be picky but this assumes the coin does not give a long run of Heads while the market is coincidentally moving higher. With the logical error known as the Gamblers Fallicy we think that because of an event occurring in one direction (like obtaining heads in a coin toss) the next event must go in the opposite direction (tails). Coin tosses are independent, one trial has no effect on the other. In theory, with a fair coin the H/T ratio will approach 50% in the long run. But while in the long run you can get hundreds of Heads before the first Tail and get yourself into hole larger than your account.

But assuming 50/50 is true then we should be able to look at an account balance and divide it by spread+fees and determine the number of trades it will take to go belly up.

 

[Pivotas]

Quote from oilfxpro:

Most traders are betting on unknown outcomes on lower probability trades , and unprepared for unpredictable volatility .This is what does the damage.

I agree.

Another way to say the same thing is that most traders don't know what they are doing and this supports NoDoji's assertion that you have to have an open mind to learning. My feeling is that we all are looking at the same problem from different perspectives. Because of that we devise different solutions to the problem. All that a teacher/mentor can do is try to get you to see the problem from their perspective and show you the methods that have served them well. If you can see what they see and understand why their approach works, then you have a chance of making it your own. If it just doesn't ring true with you, then you need to move on. When you decide it is your time to take on the problem and develop your own solution, studying what others before you have tried, their successes and failures, can only help you.