Is trading that hard? Or are people that stupid?

[Specterx]

Quote from CaptnDustball:

well, sorry to keep the questions newbie-ish. But a lot of people speak of keeping your emotions in check when trading. It seems to be a big issue. So my question is, what about using a black box? A program that makes all the decisions for you. Do experienced traders do this? And if so, does it work?

I looked into this and spent about a month of 20-hour days trying to put together a profitable ATS. I assume it's possible and have read that others on here use successful ATS systems, but I dropped the project when I realized that I could have spent years and years on it, with nothing to show but steep losses (I never did try my auto-strategies with real money; imo my rationale for eschewing manual paper-trading doesn't apply when a computer is doing the trades, because the computer doesn't know whether its using real or play money). I like to think I'm good with computers and programming, but I could tell pretty quickly that automated trading just wasn't the right path for me to take. Manual trading is no more time-consuming imo, but it's certainly less tedious, with fewer external factors to worry about, and I feel like I'm much more in control of my fate.

I also think (in retrospect) it's not worth trying to automate a trading system until one has trading skills to begin with. OTOH, I think as you learn more about trading, the task of automating it seems to get harder and harder...

 

[PJT]

Quote from Anekdoten:

Successful trading is very similar to the end of the movie "The Matrix".

When Neo finally realizes he is "The One" he can see through the Matrix and a whole new door of opportunities opens up for him.

Very similar in trading, when you "get it" you will get a similar feeling and it will be so clear you won't doubt this the way you did before you "got it"

Anek

The above is absolutely brilliant IMHO.


The two most important things my mentor told me and I follow to this day:

1. NEVER hold (a "trade") into earnings

2. Read and make "trading in the Zone" by Mark Douglas your trading bible



Other than that, anything can happen at any time, to anybody.


Cheers

 

[rcanfiel]

Quote from Specterx:

Nothing but put-downs and ego-stroking, but I guess that's par for the course for ET .

If you are going to set yourself up as a wackamole game...

 

[mgabriel01]

Quote from CaptnDustball:

I just started posting on ET and have never traded in my life. I've only recently started studying how to trade. A lot of people on this board talk about how hard trading is. But as I look around at some of these threads, many of these traders seem like morons. They did no homework when it comes to trading, jump in the waters too early, bet way too much of their capital on single buys, don't seem to know even the most basic of practices/rules. And a lot of them seem to come from gambling backgrounds - which pretty much assures that they'll self-destruct.

It seems like if you're smart, do a ton of research studying (for 1 or 2 years), play conservatively, don't get greedy, stick by your plan, etc., that it's not very hard to be good at this game. What do you think?

Also, how big of a percentage are these people in the trading world? I've been told that in order to succeed you need to be better than 95% of the traders out there. But if these people constitute 50% of all traders, then I only have to be better than 45%.

analogies abound in this - thats one of the reasons its such interesting stuff

heres one:

can you read Jack Niclaus 'Golf My Way' and then go out and swing a golf club like Jack Niclaus?

not without a rare natural gift or a whole lot of practice

 

[CaptnDustball]

ugh, that's a terrible analogy. jack nicklas is one of the greatest golfers of all time. I might not be able to swing like him. But if I have some natural ability and put some time into it, I might be able to swing like one of the local golf pros.

 

[JBTrade]

CaptnDustball,

Aside from politics and religion, nothing is more plagued with bull shit than books, videos, products, and seminars about trading. Trading knowledge is not cumulative, what’s not totally repetitive is either going to be contradictory or out of context. Trading is hard, and yes some people are that stupid, but mostly people fail because they listen to the stupid people who publish the above mentioned media.

The failure rate is high because traders, from the very beginning, attempt to master useless skills and irrelevant techniques. Trading is more of mind game than anything else, and the market is more or less insane. The shorter your time frame becomes, the more that trading becomes a game of hustling the psychology of other traders, and the less it has to do with the underlying company.

I’ve never once found a truly good book on the subject of trading, but there are plenty of books that have taught me what all the other idiots are trying to do. It finally clicked for me when I realized that this is all that these books had ever been teaching me all along, and in that sense, they become useful.

Fundamentals are basically worthless to a trader, quarterly earnings aren’t going to change how the next candle forms on a two-minute chart, and nobody cares about that trend line you drew on your chart except for other people who drew the same line on their own charts. Its ridiculous, and when trading finally clicks for you, you’re going to spend a great deal of time trying to rid your mind of this type of garbage.

A stock’s value is not established by any law, regulation, or economic mathematical formula. It’s a freely traded market, a stock’s value is only a matter of opinion, nothing more. Master your own emotions while learning how to properly interpret the emotions of other traders through price action, because human emotion is the only thing that truly effects price, and only price action serves as a true audit trail of the transactions made based on those emotions.

And never forget, the market is always right, it might be insane, but its never wrong. If enough people are wrong about something, and enough of them act upon their misconception simultaneously, no matter how ridiculous their misconceptions are, they can drive price towards that end, and turn out being right. Don’t be fooled, question every concept you hear about, and always ask yourself: Am I relying on the hope that enough other people will behave just as stupid as I do at the exact same time in order to make this work?

 

[libertad]

Excellent Post
................................................................................................

And this will never change....as the typical mind demands easy logic....

 

[robbie380]

Quote from JBTrade:

Fundamentals are basically worthless to a trader, quarterly earnings aren’t going to change how the next candle forms on a two-minute chart, and nobody cares about that trend line you drew on your chart except for other people who drew the same line on their own charts. Its ridiculous, and when trading finally clicks for you, you’re going to spend a great deal of time trying to rid your mind of this type of garbage.

A stock’s value is not established by any law, regulation, or economic mathematical formula. It’s a freely traded market, a stock’s value is only a matter of opinion, nothing more. Master your own emotions while learning how to properly interpret the emotions of other traders through price action, because human emotion is the only thing that truly effects price, and only price action serves as a true audit trail of the transactions made based on those emotions.

And never forget, the market is always right, it might be insane, but its never wrong. If enough people are wrong about something, and enough of them act upon their misconception simultaneously, no matter how ridiculous their misconceptions are, they can drive price towards that end, and turn out being right. Don’t be fooled, question every concept you hear about, and always ask yourself: Am I relying on the hope that enough other people will behave just as stupid as I do at the exact same time in order to make this work?

fundamentals are not worthless to traders and "the market" can be wrong. granted, new traders shouldn't worry about when "the market" is wrong but finding these situations can be very profitable if you can find ways to attack them.

 

[CaptnDustball]

jb, I enjoyed reading your post. It is a little confusing. So for these books that successful traders have written (not talking about the pseudo-successful; but real successful), they're all b.s.? Are you saying they don't know what they're talking about or that they're lying to you (maybe to keep their advantage?). If there's nothing to learn from books, where should I learn? I guess from other traders, right?

I will get a chance to watch other traders in action, but not always. In the meantime, how do I keep advancing my knowledge?

 

[RhinoGG]

Quote from CaptnDustball:

jb, I enjoyed reading your post. It is a little confusing. So for these books that successful traders have written (not talking about the pseudo-successful; but real successful), they're all b.s.? Are you saying they don't know what they're talking about or that they're lying to you (maybe to keep their advantage?). If there's nothing to learn from books, where should I learn? I guess from other traders, right?

I will get a chance to watch other traders in action, but not always. In the meantime, how do I keep advancing my knowledge?

search for the "zurich axioms"