What is that one thing that has been a game changer for you?

[SimpleMeLike]

try talking to @NumberZ about this point.

Hello maxinger,

I spent 2 years bullshitting ass around with Brooks. Brooks is full of shit man and makes no money trading AT ALL. I wasted alot of time with him.

There is a grown man on this forum name Padu who admits to 14 years studying Brooks and still not making money.

I do not know @NumberZ, but if he wants to study Brooks study, that is his own business. It is many of people bullshitting with damn course.

I said my peace on this Brooks guy here to conclude my point.

https://www.elitetrader.com/et/thre...-mes-mnq-and-mym.336259/page-159#post-5469095

 

[David's faith]

I have to insist - there is simply no better PA course then those of Brooks. If you find PA not to be working, then combine the parts that you find working with others like indicators, macro decisions, expectations or whatever. I do not trade simply on PA but PA is amongst the decision points I have and they work damn well when combined. If you do not believe me, i called the top last month exactly. What made me do so? Combination of PA and macro expectations combined with money inflow charts and other stuff. He is teaching you PA as a tool. Use it. If you want to trade solely on PA and don't find an edge it is up to you to make a sharper tool with the toolbox provided.

And to his honor he teaches you one thing most beginners do ignore - the market has inertia and is most likely to continue doing what its doing. At least THAT should make you more money then most other courses do.

 

[virtusa]

I don't see why a simple system won't work. You might gain a bit of an edge with a complicated system but a simple system will still perform.
You obviously trade way more than I do.
I have a very simple rules based system to trade stocks. (Buy stocks increasing in price and sell the when they stop)
My return year to date is 28%. 45 trades with a max drawdown of 4%.
win rate of 60%. (It's a good year usually under a 50% win rate)

I never said that simple systems don't work. I say that simple systems are not the best performing ones. More complex systems will, if the system is build well, outperform by far any simple system.
You see everywhere in your daily life samples of things that got more complicated but are performing much better than before, when they were build in a simple way.

• Cars now versus 20 years ago improved a lot but became more complicated.
• Computers now versus 20 years ago improved a lot but became more complicated.
• Printers now versus 20 years ago improved a lot but became more complicated.
• Domotica now versus 20 years ago improved a lot but became more complicated.
• Chips now versus 20 years ago improved a lot but became more complicated.
• Mobile phones now versus 20 years ago improved a lot but became more complicated.
• Batteries now versus 20 years ago improved a lot but became more complicated.
• Internet now versus 20 years ago improved a lot but became more complicated.
• Planes now versus 20 years ago improved a lot but became more complicated.
• All military equipment now versus 20 years ago improved a lot but became more complicated.
• Internet now versus 20 years ago improved a lot but became more complicated.
  
• Etc...

Almost in every technology things became more complex but are performing much better.

"Gaining a bit of an edge with a complicated system" is in many cases a huge underestimation of reality. All depends on what you trade, frequency of trading, leverage, compounding... These things together, can make that small gains result in a huge increase in performance.

I did simulations on trading the ES ( simple system versus complex system) and the performance can increase by a tenfold, depending on the specifics of your trading system. Increasing your performance ten times is not "gaining a bit of an edge". Most people don't realize how big the impact of even small changes can be.

 

[virtusa]

I have a recently complicated system too, running several lengthy algos simultaneously, but the rules are simple, it needs to be simple otherwise it would take too long to decide whether buying or selling.

Each small rule on it's own is indeed fairly simple (although the calculations for that rule can be complex). So the result of the calculations is simple, but the creation of the formula can be complex.
The real challenge is not simple rules, the challenge is to know in which order rules apply (which rule first), and also which rules should match with each other at critical points. The interaction and or co-relation between the rules.
With the actual computers you can do very complex calculations in milliseconds, so the time to decide is no problem at all.
Knowing whether to buy or sell never happens in the last seconds as a good system can see already before the actual signal if the trend is long or short. So the decision to buy or sell is already clear long before the actual trade is done. The exact timing is the problem; buy at the best price and try to avoid that prices still go too far in the opposite direction when being in a position.
I daytrade and I see in general already 15-30 minutes before a signal which direction it will go.

 

[Dr_Trade]

Each small rule on it's own is indeed fairly simple (although the calculations for that rule can be complex). So the result of the calculations is simple, but the creation of the formula can be complex.
The real challenge is not simple rules, the challenge is to know in which order rules apply (which rule first), and also which rules should match with each other at critical points. The interaction and or co-relation between the rules.
With the actual computers you can do very complex calculations in milliseconds, so the time to decide is no problem at all.
Knowing whether to buy or sell never happens in the last seconds as a good system can see already before the actual signal if the trend is long or short. So the decision to buy or sell is already clear long before the actual trade is done. The exact timing is the problem; buy at the best price and try to avoid that prices still go too far in the opposite direction when being in a position.
I daytrade and I see in general already 15-30 minutes before a signal which direction it will go.

Very well explained!

 

[deaddog]

Treynor/Bagehot's paper, "The Only Game in Town". This video is a great explanation of it:
Who Makes Money in the Stock Market (The Only Game in Town) - YouTube

An excellent video!

I'll have to rethink my contention that I know what I'm doing.

 

[deaddog]

I never said that simple systems don't work. I say that simple systems are not the best performing ones.

I believe you said "With a few, simple rules that is impossible to do."

You see everywhere in your daily life samples of things that got more complicated but are performing much better than before, when they were build in a simple way.

• ..............

Almost in every technology things became more complex but are performing much better.

This is true but the operation of the systems has become much simpler. that's not true with a discretionary trading system.

"Gaining a bit of an edge with a complicated system" is in many cases a huge underestimation of reality. All depends on what you trade, frequency of trading, leverage, compounding... These things together, can make that small gains result in a huge increase in performance.

I did simulations on trading the ES ( simple system versus complex system) and the performance can increase by a tenfold, depending on the specifics of your trading system. Increasing your performance ten times is not "gaining a bit of an edge". Most people don't realize how big the impact of even small changes can be.

I'm well aware of how a small change in returns can impact your bottom line over time. Increasing performance 10 times should result in you becoming very wealthy. Well I guess it depends on where you started from.

 

[virtusa]

I believe you said "With a few, simple rules that is impossible to do."

I was referring to the statement from people that the best performance comes from KISS. To me KISS can never beat complex trading systems. And surely not with the performance that I mentioned.

I don't want to show the performance of my system, but can you give some details that show the superiority of complex systems. The last 17 trading days I did 107 winning and 12 losing intraday trades ES. From all the profits generated in the winning trades, I gave back in losses 1.23%. The maximum drawdown was 8.01%. I had not a single losing day.
With a few, simple rules that is impossible to do.

This is true but the operation of the systems has become much simpler. that's not true with a discretionary trading system.

My personal experience, going from zero knowledge 25 years ago till today, is that the discretionary part has become much easier then what I was trading in the beginning. So that contradicts what you say. I saw and still see the difference. Signals much clearer, almost no losing trades and signals are faster/sooner clear than it was in the beginning. I am now most of the day waiting, while in the beginning I had to watch and analyze the whole day what was going on. I went from crazy, chaotic to calm at a much lower pace. Discretionary does not always have to be complex or difficult.

I'm well aware of how a small change in returns can impact your bottom line over time. Increasing performance 10 times should result in you becoming very wealthy. Well I guess it depends on where you started from.

The first 10 years I lost (a lot of) money. When I started trading the ES I would have signed for 1 point net every day. Now I am happy I did not. I limit my trading account to a decent size. All the profits are transferred to other accounts for other investments. So I will never be filthy rich, but I will also never go broke as I took already so much profits out of my trading account that I can wipe out my trading account 10 times in a row and still have enough cash to start again or to stop trading. My trading account represents only a small percentage of my net worth. It happens every now and then (especially since last year) that I double my account in 1 trading day (50 points at $50 for a margin of $2,500) thanks to the increased volatility.

 

[deaddog]

My personal experience, going from zero knowledge 25 years ago till today, is that the discretionary part has become much easier then what I was trading in the beginning. So that contradicts what you say. I saw and still see the difference. Signals much clearer, almost no losing trades and signals are faster/sooner clear than it was in the beginning. I am now most of the day waiting, while in the beginning I had to watch and analyze the whole day what was going on. I went from crazy, chaotic to calm at a much lower pace. Discretionary does not always have to be complex or difficult.

Different personal experiences for sure. My trading improved drastically when I went to a rules based system. Like they say find a system that fits your personality. I went from chaotic to calm because I had rules to follow. No decisions to make on the fly, just follow the rules.

The first 10 years I lost (a lot of) money. When I started trading the ES I would have signed for 1 point net every day. Now I am happy I did not. I limit my trading account to a decent size. All the profits are transferred to other accounts for other investments. So I will never be filthy rich, but I will also never go broke as I took already so much profits out of my trading account that I can wipe out my trading account 10 times in a row and still have enough cash to start again or to stop trading. My trading account represents only a small percentage of my net worth. It happens every now and then (especially since last year) that I double my account in 1 trading day (50 points at $50 for a margin of $2,500) thanks to the increased volatility.

Again different perspective. My liquid net worth is my trading account. If I follow my rules I will never go broke. My main focus is on preservation of capital. On the other hand I'll never double my account in a day.

You do what works for you. For me a simple rules based system does the trick.

 

[virtusa]

I went from chaotic to calm because I had rules to follow. No decisions to make on the fly, just follow the rules.

I do exacly the same, but with a more complex system.

My main focus is on preservation of capital.

That was my main focus too, and the reason why I limited the size I trade. I must admit that at the start I took a risk till the moment when I could take the profits out for the first time. From then on I was trading with my profits, not with my capital.
I started small with money I could afford to lose.