why [most] systems fail?
it is because the market keeps on giving buy and signals one after the other.
Which signal to take?
The one which is most likely?As Brooks and many others say CONSIDER THE CONTEXT?
This is what confused me for a decade and confusion appears, to the the prime by product of markets and also the prime reason reason why 95% of traders, including myself, lose.
Where do these conflicting signals come from? i suspect from a different time frame.
This is why many traders watch more than one time frame and only when they line up, do they take a trade or signal.This however results in long periods of waiting,and also makes you miss trade signal in the time frame that is being watched.
In the same chart, i have drawn one trend line showing an series of higher lows [a up move] and on the same chart[and same place] i have drawn another trend line,showing a series of lower high [a down move] and it is possible, one trader will say up move, another will say downmove, one will say the other is wrong, but both will make money, if they manage it.It is quite possible a third will say range and he MAY TRADE IT AS SUCH and he too will make money.
A fourth trader may say triangle and a fifth say "NO NO NO IT IS N0ISE"
So in this situation-markets do not stay in one situation-you have 3 [or more] bias and, if the trader is convinced that the bias he sees is correct and if he trades it, according to that conviction and with confidence, he will make money.
In fact all 3 traders will make money. So it is not true if one trader makes money the other will lose:this is the wonder of the markets.
In fact it may be one of the few activities that always rewards excellence.
This could also be the reason behind Brooks comment that it does not matter in which direction you trade,if you manage ,you will make money
excellence
it is because the market keeps on giving buy and signals one after the other.
Which signal to take?
The one which is most likely?As Brooks and many others say CONSIDER THE CONTEXT?
This is what confused me for a decade and confusion appears, to the the prime by product of markets and also the prime reason reason why 95% of traders, including myself, lose.
Where do these conflicting signals come from? i suspect from a different time frame.
This is why many traders watch more than one time frame and only when they line up, do they take a trade or signal.This however results in long periods of waiting,and also makes you miss trade signal in the time frame that is being watched.
In the same chart, i have drawn one trend line showing an series of higher lows [a up move] and on the same chart[and same place] i have drawn another trend line,showing a series of lower high [a down move] and it is possible, one trader will say up move, another will say downmove, one will say the other is wrong, but both will make money, if they manage it.It is quite possible a third will say range and he MAY TRADE IT AS SUCH and he too will make money.
A fourth trader may say triangle and a fifth say "NO NO NO IT IS N0ISE"
So in this situation-markets do not stay in one situation-you have 3 [or more] bias and, if the trader is convinced that the bias he sees is correct and if he trades it, according to that conviction and with confidence, he will make money.
In fact all 3 traders will make money. So it is not true if one trader makes money the other will lose:this is the wonder of the markets.
In fact it may be one of the few activities that always rewards excellence.
This could also be the reason behind Brooks comment that it does not matter in which direction you trade,if you manage ,you will make money
excellence
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