My over 6-year trading experience in a nutshell
- Thread starter cool 2334
- Start date
Your takeaway is frightening. If I wanted to be a long term profitable trader and this was my takeaway from that book, I hope someone would convince me to take emg's advice and get an education, with an emphasis on statistics and probability.
http://www.cornixtrading.com/2012/07/rats-vs-yale-students-randomness-psychology/
"Inevitable" sounds like at least 99.9999% certainty. Don't you want to be a Market Wizard?
http://theessentialsoftrading.com/Blog/index.php/2013/01/03/more-evidence-of-wrong-way-retail/
Not everyone wins the Super Bowl. Not everyone makes it into the NFL from high school football.
Not everyone makes the cut when it comes to going to medical school and becoming a doctor. Not everyone who goes to law school gets to pass the Bar and become a famous defense attorney.
Why should being a successful trader be any different?
Not everyone makes the cut when it comes to going to medical school and becoming a doctor. Not everyone who goes to law school gets to pass the Bar and become a famous defense attorney.
Why should being a successful trader be any different?
because it's a cesspool of failures?
and as far as failures go
I'm better than most
both at failing and suceeding
hint: You buy low and you sell high
same as the guy who owns the bait shop by the lake
same as the guy who sells hot dogs outside the bar at night.
I don't know how doctors or lawyers make money.
I'm just a merchant.
Quote from cool 2334:
Hi
I'm offering my long-time experience here for everyone for free!
...
I started trading when I was around 26 y/o old and I am now 33 y/o.
This is my testimonial addressed to whom might be concerned.
Thank you,
Cool2334
I would never listen to the opinion of anybody under the age of 35. My cut off age used to be 30 but people are remaining stupid later in life.
This is my testimonial addressed to whom might be concerned.
Thank you,
gtor514
It'd be better off if you just proved to them how much return, if any, on your capital you have made since you first began to trade?
Investing based on fundamental analysis and portfolio theory is a completely different story and everyone knows that. We also can cite many living and successful investors with proven track record like Buffet for example.
Can you do us a favor and prove the same facts as to trading or daytrading?
Please do not refer us to trading books like market wizards. None of those fox ever showed up in public like Buffet and other hedge fund and portfolio managers.
Sooner or later everyone is going to realize that he/she's been just wasting time and throwing good money after bad!
I have given my testimonial as moral obligation I owe to the society. I really feel it would be really bad thing to keep to myself the facts I've ended up with and hide them from the public.
cool 2334,
if you want some humble advice: stop using any TA... . TA should be learned by anyone at the beginning of their learning phase.(only to see with his eyes that is a waste of time).
After one year/ maybe two, TA should be thrown to trash. Period. You will not see any investments firms doing "MA crossover" or... "pin bar pattern on candlestick charts". It's actually funny if you could observe this "techniques" from a bigger picture.
In trading is not enough to know some patterns and other stuff like this.
If you like to trade based on TA, then you should consider going to the next big level, which is QUANTITATIVE TRADING.
Quant have very loose roots from TA(very weak relation! I emphasis this).
But quantitative is the other path of trading. The other path of trading is fundamental/macro/you name it...
For me, I came to conclusion that is a combination of:
- Knowing how market !!could!! react to fundamental/macro information. Basically have a good understanding of Economics or micro economics if you analyze firms and trade stocks.
- Knowing how markets work in general.
- Knowing how to code. (yes, you must to be a programmer too).
- Knowing math/statistics.
First two conditions are self explanatory.
The 3'rd one: In my opinion is a must to be a programmer. And the reason is quite easy to grasp: there will ALWAYS be some uncertainty between the trader and the programmer. The trade would like to make it work "this way" while the programmer probably would not understand completely what do you actually want. Also, the programmer could be "lazy". He will not stick 100% to your rules.
But the major obstacle if you hire a programmer would be the fact that you will need to continuously develop and test different ideas !! Research, Develop then Test!
If you are a programmer, you will start to code immediately, even in the middle of the night if an idea crossed through your mind at that moment
I recommend Java as a learning language. It is "high level /abstract" enough (aka, towards human language and not towards machine language) and it is still a very fast language. Even if it runs on a Virtual Machine. Also it has some nice "security" mechanism. Automated Garbage Collector... bottom line: it's sweet. hehe
And combine it with R or Matlab for the math part and you are ready to go.
4'th: Math/statistics, for what?! Well, two words: RISK MANAGEMENT.
Try to keep your draw down as low as possible, and the distribution of daily returns as smooth as possible!
That funny rule that seems to be floating around internet "never risk more than 2% per trade" is, well: stupid!
That is not risk management.
Risk management consists of calculating correlations, volatility(through EWMA, GARCH, or other models), taking into accounts the amount that you have invested in every asset, maybe kurtosis , skewness and we reach a very powerful model which is ValueAtRisk(with it's different flavours...).
Maybe doing some portfolio optimization/ stress test scenarios. Monte Carlo simulation (maybe integrate cholesky decomposition) Use maybe a Black Litterman model or Markowitz(although this is... quite old). etc etc etc
Math and programming is a must when it comes to risk management!
So, as you can see... TA is child play relative to what I wrote above.
What surprise me is the fact that even after 6 years you are still studying TA. I went through this phase after about 2 years of trading.
I saw this "pattern" on many good traders.
It is a natural process... you start to have a lot of "evrika moments" and realize that markets are actually driven by some real data, not by a fibonnaci level on the chart. (I could write a lot about what drives market: TA or fundamental info. But on short is smth like this: markets reacts to macro information because an imbalance OCCURED so that the market needs to adjust, and the market adjusts because this adjustment will lead to a reaction back into economy ! It is a closed loop. ) (this is a frame thinking if you do global/macro trading).
Now, try to include TA in this loop. It doesn't fit. It is so simple, I don't believe that so many people can't understand this. It amaze me continuously.
In the near future I'm thinking of starting a Journal thread on this forum. You could check from time to time to see if I started that thread and read what I will write there, in case that you find this stuff interesting, of course.
I wish you the best.
if you want some humble advice: stop using any TA... . TA should be learned by anyone at the beginning of their learning phase.(only to see with his eyes that is a waste of time).
After one year/ maybe two, TA should be thrown to trash. Period. You will not see any investments firms doing "MA crossover" or... "pin bar pattern on candlestick charts". It's actually funny if you could observe this "techniques" from a bigger picture.
In trading is not enough to know some patterns and other stuff like this.
If you like to trade based on TA, then you should consider going to the next big level, which is QUANTITATIVE TRADING.
Quant have very loose roots from TA(very weak relation! I emphasis this).
But quantitative is the other path of trading. The other path of trading is fundamental/macro/you name it...
For me, I came to conclusion that is a combination of:
- Knowing how market !!could!! react to fundamental/macro information. Basically have a good understanding of Economics or micro economics if you analyze firms and trade stocks.
- Knowing how markets work in general.
- Knowing how to code. (yes, you must to be a programmer too).
- Knowing math/statistics.
First two conditions are self explanatory.
The 3'rd one: In my opinion is a must to be a programmer. And the reason is quite easy to grasp: there will ALWAYS be some uncertainty between the trader and the programmer. The trade would like to make it work "this way" while the programmer probably would not understand completely what do you actually want. Also, the programmer could be "lazy". He will not stick 100% to your rules.
But the major obstacle if you hire a programmer would be the fact that you will need to continuously develop and test different ideas !! Research, Develop then Test!
If you are a programmer, you will start to code immediately, even in the middle of the night if an idea crossed through your mind at that moment
I recommend Java as a learning language. It is "high level /abstract" enough (aka, towards human language and not towards machine language) and it is still a very fast language. Even if it runs on a Virtual Machine. Also it has some nice "security" mechanism. Automated Garbage Collector... bottom line: it's sweet. hehe
And combine it with R or Matlab for the math part and you are ready to go.
4'th: Math/statistics, for what?! Well, two words: RISK MANAGEMENT.
Try to keep your draw down as low as possible, and the distribution of daily returns as smooth as possible!
That funny rule that seems to be floating around internet "never risk more than 2% per trade" is, well: stupid!
That is not risk management.
Risk management consists of calculating correlations, volatility(through EWMA, GARCH, or other models), taking into accounts the amount that you have invested in every asset, maybe kurtosis , skewness and we reach a very powerful model which is ValueAtRisk(with it's different flavours...).
Maybe doing some portfolio optimization/ stress test scenarios. Monte Carlo simulation (maybe integrate cholesky decomposition) Use maybe a Black Litterman model or Markowitz(although this is... quite old). etc etc etc
Math and programming is a must when it comes to risk management!
So, as you can see... TA is child play relative to what I wrote above.
What surprise me is the fact that even after 6 years you are still studying TA. I went through this phase after about 2 years of trading.
I saw this "pattern" on many good traders.
It is a natural process... you start to have a lot of "evrika moments" and realize that markets are actually driven by some real data, not by a fibonnaci level on the chart. (I could write a lot about what drives market: TA or fundamental info. But on short is smth like this: markets reacts to macro information because an imbalance OCCURED so that the market needs to adjust, and the market adjusts because this adjustment will lead to a reaction back into economy ! It is a closed loop. ) (this is a frame thinking if you do global/macro trading).
Now, try to include TA in this loop. It doesn't fit. It is so simple, I don't believe that so many people can't understand this. It amaze me continuously.
In the near future I'm thinking of starting a Journal thread on this forum. You could check from time to time to see if I started that thread and read what I will write there, in case that you find this stuff interesting, of course.
I wish you the best.