I certainly agree with you Ditch and its exactly what I said in my post. It will only work in a nicely trending market which is hardly ever the case day in and day out. For every 20 or 30 point move that you might capture, will you have lots of 4 or 5 point losses which will wear you don't emotionally and financially. To improve the odds you gotta know which are true pullbacks in a trend and which aren't, but once you add in all these filters, it is no longer the same method.
Did SLA Ever Work?
- Thread starter kut2k2
- Start date
And people are STILL talking about DBPhoenix and his strategies? I would think that if people had their own method(s), they'd simply say what they have to say about the guy and continue on with whatever they're doing. However, people continue to devote an insane amount of energy and effort towards debunking one guy's method. What exactly were you all looking for in reading his material? It seems like some of you were looking to put his method into practice, failed at doing it and the constant trash talking is your way of striking back.
Have I read DB's work? Sure...but my strategy comes from reading the original work of Wyckoff. DB's work was his own interpretation of Wyckoff...that's it. Has it worked for me? Yep. My only problem has been not capitalizing on all of my major calls (I even called the recent crash a month ago from it's very top using this method).
Have I read DB's work? Sure...but my strategy comes from reading the original work of Wyckoff. DB's work was his own interpretation of Wyckoff...that's it. Has it worked for me? Yep. My only problem has been not capitalizing on all of my major calls (I even called the recent crash a month ago from it's very top using this method).
Actually.. this is exactly what I'm looking at. Most of my problems at the moment are psychological because its incredible how often price bounces off from either previous day highs or lows, overnight highs or lows, or some other major swing point. I just cannot seem to work out a proper entry that works well enough, nor can I seem to hold onto winners. But trading S&R really is I think all the edge that is required to become consistently profitable.
This thread illustrates why I have worked hard to get a mechanical trading system. With a discretionary strategy, some will get it and others won't. That's a recipe for a lot of drama. Trading is hard enough without a lot of drama layered on top.
Thanks to all who gave informative feedback about their experiences with SLA. Good trading to you.
Thanks to all who gave informative feedback about their experiences with SLA. Good trading to you.
I was, and continue to be, extremely supportive of anyone who advises aspiring traders to develop a personal trading plan. DB had a comprehensive document about how to go about doing this which he had posted on another trading site back in April of 2008. I saw his link to that document a year or two ago. If I had seen that back in April 2008 and bothered to read and follow it, I'd have saved myself many tens of thousands of dollars in losses.
That said, I never studied the SLA method. As I said earlier, I only noticed that the entries the SLA method seemed to indicate were similar to many of my own trades, so I assumed it was a decent price action method.
Any core trading method requires rules for trade management and risk management. There's a delicate balance between risk/reward ratio and "win rate". Without a set of rules guiding what happens after entry, a trading method with an edge under a set of rules can easily become a consistently losing system.
I think we're all familiar with journal after journal containing postings such as, "I took a small profit because it looked weak", "I skipped that trade because of my new rule about trading after 9:30", "I moved my stop to break even plus 1 tick because it wasn't going anywhere", and on and on. These factors have nothing to do with the trading plan and consequently they tend to result in at best a break even system and usually a losing system.
This lack of trade management rules or inability to follow one's rules could be why Bro Surf and others here think none of the price action trading methods has positive expectancy.
In another thread, @Handle123 has mentioned the work of John Hill. A few of Hill's thoughts that seem pertinent here come to mind: First, the point that "a person's trading psychology can make or break a trading plan." All the rules and the best laid trading plan won't make you money if you lack the discipline and ability to adhere to those rules and follow that plan.
Second, and more directly relevant to this discussion, is the distinction between what Hill calls a "precisely defined algorithm" and a "loosely defined algorithm." A precisely defined algorithm "would and should" result in similar overall results amongst those individual traders trading that method. A loosely defined algorithm has no exact parameters, and as a result, "if two traders were to follow this approach, their overall result would probably be quite different." These quotes can be found in chapter 8 of Hill's Ultimate Trading Guide, along with examples of a precisely defined and a loosely defined algorithm.
While I know nothing of this "SLA" method other than what I have tried quickly to gather in order to understand the backstory to this thread, my impression is that its advocate/author was presenting a "loosely defined algorithm." The fact that he/she seems to have placed great stress on the need for each individual to proceed to test the method and develop an individual trading plan indicates that he/she was well aware of the loosely defined nature of the "SLA algorithm." While he/she was aware of this fact, it would seem many are/were not.
Those who do not accept or understand the distinction between precisely and loosely defined trading algorithms, and who expect all algorithms to perform "out of the box" in a precise manner, would likely fail any attempt to apply a loosely defined algorithm without first developing rules, as @NoDoji suggests, for trade management, e.g. not only when/how to enter, but where to place one's stop, when and where to move one's stop to reduce open risk or capture open profit, when and where and how to take profits. So as to whether the SLA algorithm has "worked" or not is really not the proper question, as its working or not working is going to depend entirely on the abilities of the individual attempting to "make it work."
Excellent post.
So ...
Precisely defined algoritm = mechanical trading strategy ;
Loosely defined algorithm = discretionary trading strategy.
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Anybody get the feeling this is DbPhoenix himself?
10 posts... account only a few months old, etc.Don't get me wrong, its an excellent post, and I can't fault any point, but at the same time, its also a great way to escape the fact that nobody is making money. When a system gets "loose" enough, its not much better than buy low and sell high, along with be "be scared when everyone else is greedy" and vice versa.