Tell me why I can't grow my account to $1M in 12 years

[S-Trader]

if trading were that simple - throwing a few indicators together and wala the money falls from the sky.... why do 95% lose... it's a true stat.

basically these things fall into 2 categories - trend follow or counter trend... all that ATR blah blah is just smoke... sure you can make money in certain market phase for so long until it starts to bleed and then you are out.

I've said many times - trading is not about finding something 'hidden treasure' that somehow all the other guys have missed.... you see the front page - 'found and edge'... 'found an edge now what next'.... lol.... people haven't found shit.

check my thread 'trading is easy'.... you are sitting at a poker table dealing with ever dynamic situations.

Well, I never said trading was "that simple." But from a factual standpoint (to the best of my knowledge -- I've only seen some of their brokerage statements, tax returns, traded live with them, etc.), the long-term, consistently profitable traders I'm referring to *do* use indicators such as VWAP, MAs, ATR, etc. Obviously, there's much more to their method than just solely relying on those tools/filters. But in a sense, their *approaches* (not *"trading"* in general) are also "as simple as that."

As far as edges -- I'm personally of the opinion that there are an infinite amount of edges that can work successfully... including many of the purported "edges" that are sold out there. IMO, the devil is in not just applying the edge, but knowing and doing all the other things that are necessary -- understanding context, using proper risk management, having discipline, proper execution, managing psychology/emotions, etc., etc.

 

[jeffbader]

if trading were that simple

trading is not about finding something 'hidden treasure' that somehow all the other guys have missed

I'm curious dozu, which do you think is more difficult: discovering a plan that would work if perfectly followed - or perfectly following that plan?

I'll hazard a guess that finding a good plan / strategy / edge / method is really not the hardest part. Nor is learning how to read price action. Not that either of those are simple or easy (rather I'd assume they are pre-requisites that are difficult to achieve and/or discover in their own right), but I wouldn't be surprised to find out that the most difficult part for most people (big fat finger pointing right at myself here) is actually sticking to the plan while losing money (even a well-proven plan that is well-suited to their personality and time constraints) consistently enough and long enough for the statistical advantage of that plan to bear fruit.

I agree with your statements and sentiment. I agree that it's foolhardy to continue trading based on a belief that there is some external information that can turn a bad trader into a good one.

I've read through portions of your 'trading is easy' thread, but I'm going to read through it again more carefully. While I don't love the poker analogy because there are many break-downs, such as an ante (blinds) and the entire bet / call / raise structure, it certainly has merit when considering that your are playing people, not cards alone or price alone (if you were, then any good algo would be 100% effective). I also seem to remember that it was geared more toward swing instead of intra-day. Regardless, I'm going to go through it again more carefully.

 

[dozu888]

I'm curious dozu, which do you think is more difficult: discovering a plan that would work if perfectly followed - or perfectly following that plan?

I'll hazard a guess that finding a good plan / strategy / edge / method is really not the hardest part. Nor is learning how to read price action. Not that either of those are simple or easy (rather I'd assume they are pre-requisites that are difficult to achieve and/or discover in their own right), but I wouldn't be surprised to find out that the most difficult part for most people (big fat finger pointing right at myself here) is actually sticking to the plan while losing money (even a well-proven plan that is well-suited to their personality and time constraints) consistently enough and long enough for the statistical advantage of that plan to bear fruit.

I agree with your statements and sentiment. I agree that it's foolhardy to continue trading based on a belief that there is some external information that can turn a bad trader into a good one.

I've read through portions of your 'trading is easy' thread, but I'm going to read through it again more carefully. While I don't love the poker analogy because there are many break-downs, such as an ante (blinds) and the entire bet / call / raise structure, it certainly has merit when considering that your are playing people, not cards alone or price alone (if you were, then any good algo would be 100% effective). I also seem to remember that it was geared more toward swing instead of intra-day. Regardless, I'm going to go through it again more carefully.

yes it is more swing trading.. because narratives/stories don't unfold in a day... mine is more around news stories/eco-political events/earning cycles...there are some other write-ups on price action trading and the good ones are similar, but maybe around different themes such as institutional ownership/monthly quarterly bonus... I have not seen anything intraday that is legit... there is the Brooks stuff but the words are himself is not profitable... simply reading the bars is like tea leaves... there is not much there... a trader really needs to develop a sense of the entire market.... this means even though somebody may be profitable intraday, that profit comes more from the over all feel of the market, instead of isolated reading of 5 minute bars.

so to answer your first question IMO the skill is the bigger piece of the puzzle... the execution/psychology stuff IMO comes naturally after the trader has experienced winnings over and over

 

[jeffbader]

Good grief, how do any of you have time to work on your trading with all this stimulating conversation?

I have not seen anything intraday that is legit

Either you haven't looked hard enough, or I'll be here in few years telling you that you were always right all along, in which case I hope you stick around long enough for me to eat some crow for you. For now, I'll let the fear of holding overnight keep me scalping while I learn the market, which is a good segue:

narratives/stories don't unfold in a day... simply reading the bars is like tea leaves... a trader really needs to develop a sense of the entire market... that profit comes more from the over all feel of the market... so to answer your first question IMO the skill is the bigger piece of the puzzle

Man I love your answer so much. That skill you're referring to is not an indicator, a plan, a strategy, or a mindset. It's like you're saying that the only "holy grail" of trading out there is to just f-ing be a good trader.

 

[S-Trader]

a trader really needs to develop a sense of the entire market.... this means even though somebody may be profitable intraday, that profit comes more from the over all feel of the market, instead of isolated reading of 5 minute bars.

The successful traders I described would never trade say, a 5' bar pattern in isolation, without any other context. But most of that context came from multiple timeframe alignment with higher TF charts. Naturally, there are other filters -- the indicators mentioned, familiarity with how certain stocks trade, liquidity/spread, relative strength/weakness, time of day, etc., etc. The more additional filters they could apply based on experience, generally the better their results are.

I have seen other traders with a more scalpy, momentum style of trading do so successfully based primarily on just two timeframes -- say, a 1', 2' or 5' chart and the daily -- without much other "context"... albeit using a number of filters/rules to qualify whether a trade setup is good or not, and reading the tape/L2. I guess you could call all that other stuff "context" too. Again, possibly a semantic argument.

 

[dozu888]

Good grief, how do any of you have time to work on your trading with all this stimulating conversation?



Either you haven't looked hard enough, or I'll be here in few years telling you that you were always right all along, in which case I hope you stick around long enough for me to eat some crow for you. For now, I'll let the fear of holding overnight keep me scalping while I learn the market, which is a good segue:



Man I love your answer so much. That skill you're referring to is not an indicator, a plan, a strategy, or a mindset. It's like you're saying that the only "holy grail" of trading out there is to just f-ing be a good trader.

it's not counter productive... some might be able to save some time otherwise wasted...

I have been around since 2001... overnight 'fear' is legit, many have been there done that... but isn't it just another form of 'numbers game', as you are playing a 'numbers game' in the intra-day.

yeah, you will find many experienced guys agree, the only 'edge' is YOU... you read others' cards better than they read yours.

 

[dozu888]

The successful traders I described would never trade say, a 5' bar pattern in isolation, without any other context. But most of that context came from multiple timeframe alignment with higher TF charts. Naturally, there are other filters -- the indicators mentioned, familiarity with how certain stocks trade, liquidity/spread, relative strength/weakness, time of day, etc., etc. The more additional filters they could apply based on experience, generally the better their results are.

I have seen other traders with a more scalpy, momentum style of trading do so successfully based primarily on just two timeframes -- say, a 1', 2' or 5' chart and the daily -- without much other "context"... albeit using a number of filters/rules to qualify whether a trade setup is good or not, and reading the tape/L2. I guess you could call all that other stuff "context" too. Again, possibly a semantic argument.

yes partly semantic... once you go daily/weekly, you can't get ignore the economic calendars, geo/eco/political events, earnings calendar... and that's the stuff I talk about in the 'trading is easy' thread... sure some guys might slap on a few indicators, but I can say from experience once you read the context stuff, a naked chart won't perform any less.

for the 'scalpy' guys... yes I actually know some people do this, and profitable consistently, so it can be done, but this space is more and more invaded by the robots and has no long term future I don't think.... and for the guys I know seems they somehow box themselves into this mindset of couple of ticks a trade they can never scale up to make some big money..

 

[jeffbader]

it's not counter productive... some might be able to save some time otherwise wasted...

lol, you son of a gun.

overnight 'fear' is legit, many have been there done that... but isn't it just another form of 'numbers game', as you are playing a 'numbers game' in the intra-day?

Good point. That may be what leads me back here in three years to eat my plate of crow. But we'll see. I've often thought that this 'numbers game' is also a good argument for 'averaging down.' As long as it's included in the statistical model, and proven successful, who cares? Even averaging down should be able to be incorporated into a successful strategy (although at this time I wouldn't be caught dead trying it), at which point I'd sooner call it averaging 'in' instead of 'down.'

In any case, rest assured I'll continue snooping around reading your archives. In my field of engineering, you either got it or you don't. It's "easy" to get your degree and a job and make a salary. It's not "easy" to actually be a really good EE. You've really gotta crush it with a sledge hammer. I can only conclude that trading is the same.

 

[TommyR]

some people lose all sense of reality they forget the scarcity and holiness of money that is central to the judeo christianity of the western globalists. its a costly mistake.

 

[ironchef]

'found and edge'... 'found an edge now what next'.... lol.... people haven't found shit.

But sir, you have: I read you thread: trading is easy!