Hi guys,
I have been a long time member and trader but post very seldom here. But well, it's weekend, so not start a thread for a change?
If you want to participate in this thread, you should have at least a few years of real money trading under the hood and preferably made a net profit over your career. Of course, there is no way to prevent others from posting but keep in mind that this thread will be most useful if the people posting have at least a slight clue what they are talking about.
So, let's make a collection of the most stupid trading advice ever.
Okay, now the first one. This is one of my all time favorites:
'You should only use this strategy in a trending market' or 'You should only use this strategy in a range bound market'
What the fucking... while it sounds somehow quite logical, this is stupid beyond belief. One the foremost problems in directional trading is that it's extremely hard to know when a market will trend and when it will be range bound BEFOREHAND. Yes, one can easily identify a trend or range bound market, even by eyeballing the chart. Problem is, as the more experienced one of us know, the market will change its behavior on the turn of a dime. A method to identify the increased likelihood that a market WILL (NOT has) trend or the increased likelihood that it will be range bound IS actually the most important part of a directional strategy. A strategy without such a method actually is no strategy at all, it's simply gambling. And if one has such a method, the rest of the strategy is a piece of cake. If I can predict that the market will trend for some time, I will simply enter in direction of of the trend. If i can predict that the market will be range bound for some time, I will simply fade the market at the extremes.
Newbies, if someone is handing you a 'strategy' accompanied by this advice, it's not actually a strategy at all. It's like the icing on a cake without the cake.
I have been a long time member and trader but post very seldom here. But well, it's weekend, so not start a thread for a change?
If you want to participate in this thread, you should have at least a few years of real money trading under the hood and preferably made a net profit over your career. Of course, there is no way to prevent others from posting but keep in mind that this thread will be most useful if the people posting have at least a slight clue what they are talking about.
So, let's make a collection of the most stupid trading advice ever.
Okay, now the first one. This is one of my all time favorites:
'You should only use this strategy in a trending market' or 'You should only use this strategy in a range bound market'
What the fucking... while it sounds somehow quite logical, this is stupid beyond belief. One the foremost problems in directional trading is that it's extremely hard to know when a market will trend and when it will be range bound BEFOREHAND. Yes, one can easily identify a trend or range bound market, even by eyeballing the chart. Problem is, as the more experienced one of us know, the market will change its behavior on the turn of a dime. A method to identify the increased likelihood that a market WILL (NOT has) trend or the increased likelihood that it will be range bound IS actually the most important part of a directional strategy. A strategy without such a method actually is no strategy at all, it's simply gambling. And if one has such a method, the rest of the strategy is a piece of cake. If I can predict that the market will trend for some time, I will simply enter in direction of of the trend. If i can predict that the market will be range bound for some time, I will simply fade the market at the extremes.
Newbies, if someone is handing you a 'strategy' accompanied by this advice, it's not actually a strategy at all. It's like the icing on a cake without the cake.
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