I agree with NoDoji to some extent, but.. Trading is psychologically hard because it is uncertain. All you can do is get better at statistics and math that goes with it. Once you have that model you need to be able to mentally accept that this model will have drawdowns and to prepare for the distribution of returns and negative periods that ensue. Most traders either don't have a model or enough statistics to prepare them for the drawdowns they will inevitably run into, and those that do are often not mentally prepared for them. When the bad spells happen, they think they're loosers and want to quit. This is especially true if a new model is developed (and a strategy based on it) and you hit a negative period first time going live, like the first month. Traders need to understand that you really need to trade a strategy for a year in order to have enough statistical significance on wether it works or not. Hopefully, you wouldn't have done something catastrophic enough to go bankrupt by then. If this mental hurdle is accepted, trading with a good model can really be satisfying. It took me a lot of time to prepare for my drawdowns and I wimped out a few times, i admit. But every time, especially with my newer stuff, the equity curve rebounded and outperformed the markets on a risk adjusted basis. I won't say i'm a good trader until i have at least 5 years of track record, and maybe not even then. Any line of work we do as humans with an ego, requires a confirmation feedback that we are doing a good job. If you're a medical intern, you don't care so much about the pay as when a doctor tells you you did a good job, etc. As a trader, there is nobody there to tell you that for a very long time, and that is tough. That's another reason not everyone can make it. I personally live in my statistical models and have pictures of them printed and stuck on my wall. They're the only friends that can tell you "you're doing good" when times are tough.
If anyone doesn't understand the root of this problem, which is market unpredictability, then he either believes that humans are completely predictable or is an idiot or both.
I also agree with NoDoji that this trending counter-trending system can be applied with ease but most people on ET seem to trade like 3 or 4 instruments. I've seen models with systems such as the one posted by NoDoji (similar) put in a portfolio do significantly better than a lot of hedge funds. How? Diversification. I would never trade less than 30 underlyings and corresponding systems. I prefer 60 at least. For that you need capital, at least 100k and you're stuck with stocks. Whoever trades futures with less than 2M is a fool in my book (spreads might be ok). Diversify enough, learn about creating portfolios that are not equal-weight (use volatility, correlation matrices, etc) and even with the simple trending systems if you trade all asset classes you will get good risk adjusted returns. So while there are a lot of hurdles for the retail trader stemming from a limited capital, it's not impossible at all I assure you.
