1. It's called reality-and unless you have a black box-which will work for a short while before meltdown-and you have to understand when it is melting down, not the why.Choose any method you like- there are more skint forex traders than ....... you make up the saying.
2. I have just explained the numbers-you will miss many of the winning trades,beat yourself up about it and take the next 4 losers,then lose your nerve. You will take profits too early too. so P&L will be negative.
3.my last 3 months' trades all small winners- typically 5% ROCE,plus one that is 25% ROCE, same for ther last 36 months-but 2010 I had a losing year and lost the plot somewhat
I think way different, most people simply don't understand TA, they read books which gives them someone else's idea on how TA should work, but as far as studying it many hours and self learning what to do with an indicator, what the indicator should do when Price moves in a certain way, finding the changes you can't normally see with Price alone. Price is king, indicators can give a quicker view of Price at a slower speed, and to me, slow is golden whether intraday trading or on monthly charts. I laugh at all the times someone wants something faster, but that gives way too much overtrading of false moves. Like a 21 EMA, it is very much like a trendline waiting for price to come and bounce off of it cause so many others are doing the same, it is like Fibs, nothing special about those but cause so many are doing it, it tends to work, self fulfilling. Trading with the trend seldom works in ES, by time you have a trend, it is almost over, but markets like Crude or Russell are runners. Trends work much better on longer timeframes, but going against the trend works as well IF it is part of your gameplan. You can only have so many HH's and HL's before highs start rounding to show it is going to retrace.Daytrading almost never works unless you have a read edge that doesn't rely on directional bets to make money, also TA applied to the lower time frames (1min, 5min, 10min, etc) almost never works because there is just too much noise in those time frames.
Trend following still works when there is a clearly defined trend on the higher time frames, just never ever try to fade the trend (going short when you see successive HHs and HLs) or predict a trend reversal before you see one. Those trades rarely work out, the payout is rarely worth it even if they do work for you.
I like most of your thoughts. I think people do over complicate things. I think the reason for that is the massive amount of "Trade Gurus" out there. And we think if we listen to all of them, then we will get an edge and never loose. The truth is the "Trade Gurus" are actually "Marketing/Sales Gurus" and they all give you vague info but don't teach us how to actually trade sucessfully. If you really think about it, if the trade sucessfully, why would they be going through all this trouble of selling you something. For example, did Lebron James quit basketball because he is so good that he want to give other people the knowledge of basketball instead of play himself?
You are right, the trick is that you have to trade with the trend, we all hear it so much and we ignor it. Some of us go on mission imposible and try to find a bottom or top of a trend.
I disagree about forex, I find it more predictable, in the long term (I swing trade on daily charts).
I'm in the same boat for about ~6 years or so. I was laid of on September 5th 2013. I actually made a profit that year, but happened to give it all back and then some this year. I have developed a strategy which is kind of weired and probably laughable to some. I actually now feel there is an aspect of gambling in trading, and I had to find a way to tip the scales in my favor using math just as a gambling house does. However I have to understand I will suffer losses, but over time I will win. A gambling house has the same mentality. BUT YOU DO NEED A STRATEGY THAT WORKS ENOUGH TO BE PROFITABLE! From my back testing I estimate I will be right a minimum of 40%.
My first rule: STAY AWAY FROM "TRADE GURUS". If there system worked so well, why are they working so hard to sell it?
Wow! Its like we are twins, I couldn't say it any better.
Trading with the trend seldom works in ES, by time you have a trend, it is almost over, but markets like Crude or Russell are runners.
When your winning in the market, Your suppose to set money aside to replenish your account. Im planning on leaving my job, however I will have at least enough capital to fund my account 2x over.
So true brother, I remember staring at my computer with a blank stare for over 30 minutes because I came to that realization of trends. Then I had to rethink what trendlines were, when to augment them and rethink/rework when to enter and when to get out. The "Trade Gurus" always point out (past data ofcourse) how to buy at the bottom of a trend and sell at the high. And everytime I followed this:
1. Price break out of the trend taking my stops with it
2. Trade works for a while but do not follow the trend fully and then retrace for a loss.
LOL, yeah Handle, so true.
Yes, this is true, but what I am planning on doing is diversify: stock, business, realestate....etc...
Next on my list is actually "Tax Certificates".