Why do folks reveal Profitable Strategies, are they NUTS?
- Thread starter aeliodon
- Start date
Here is my two or three and a half bits of wisdom on trading strategy
What is so good about some gurus trading strategy? Whose is the best one? Is there a best one? Yes there is. Whose? Yours, the one that you work out for yourself. Can a trading strategy work all the time in the same way? Not really. There are times when the spreads in the pairs are only one pip. No scalping possible in such a situation. Do not attempt to scalp in such a market. Wait, the market always changes. And see if you can develop a long strategy. You might want to use a pivot point calculator.
I will give you one that is easy to download for free next time.
This is what all strategy must encompass. Know your product-pairs. If you are a scalper you already know this. If you are thinking of scalping pay attention. If you like going in and out frequently you are scalping. Scalping in my opinion is real trading, the best. To do it you have to have a fairly moving (volatile) pair. You just need one pair that moves up and down in a range of 4 pips to make money fast. Milk it for all its worth. Occasionally take a break from that pair and look at another so you don't get bored.
Here are the two most important rules of trading anything: 1. kill of your emotions, really. If you get emotional you will self destruct financially.
2. Never stay in a trade that goes against you,NEVER. If you trade goes against you just a few bucks get out. The get in when it does what you want. Amen.
I use Crown Forex for my trading. I have talked to the owner several times.
His demo is very good for trying out your trading ideas. To sign up for an active account is 300 bucks. But realize this: The less money you play with, the less money you will make or loose. I love the fact that Crown Forex has a one pip spread on about 6 pairs, the most active ones.
If you can, put in at least 2,000 bucks. That way you can trade with a 1000 margin, which is a standard account.
That gives you profit/loss of $10.00 per point or 8.32 a point move. In a mini you get $1.00 and on some .82 per point. That is is quite a difference.
Many brokers recommend 5 to 10 thousand dollars to trade with. Of course. Once you have worked out a fairly profitable trading system for yourself in your demo, you will make money for real.
I hope this info helps some of you. Stay happy and be wise. Common sense is the first stepping stone to wisdom.
almos
What is so good about some gurus trading strategy? Whose is the best one? Is there a best one? Yes there is. Whose? Yours, the one that you work out for yourself. Can a trading strategy work all the time in the same way? Not really. There are times when the spreads in the pairs are only one pip. No scalping possible in such a situation. Do not attempt to scalp in such a market. Wait, the market always changes. And see if you can develop a long strategy. You might want to use a pivot point calculator.
I will give you one that is easy to download for free next time.
This is what all strategy must encompass. Know your product-pairs. If you are a scalper you already know this. If you are thinking of scalping pay attention. If you like going in and out frequently you are scalping. Scalping in my opinion is real trading, the best. To do it you have to have a fairly moving (volatile) pair. You just need one pair that moves up and down in a range of 4 pips to make money fast. Milk it for all its worth. Occasionally take a break from that pair and look at another so you don't get bored.
Here are the two most important rules of trading anything: 1. kill of your emotions, really. If you get emotional you will self destruct financially.
2. Never stay in a trade that goes against you,NEVER. If you trade goes against you just a few bucks get out. The get in when it does what you want. Amen.
I use Crown Forex for my trading. I have talked to the owner several times.
His demo is very good for trying out your trading ideas. To sign up for an active account is 300 bucks. But realize this: The less money you play with, the less money you will make or loose. I love the fact that Crown Forex has a one pip spread on about 6 pairs, the most active ones.
If you can, put in at least 2,000 bucks. That way you can trade with a 1000 margin, which is a standard account.
That gives you profit/loss of $10.00 per point or 8.32 a point move. In a mini you get $1.00 and on some .82 per point. That is is quite a difference.
Many brokers recommend 5 to 10 thousand dollars to trade with. Of course. Once you have worked out a fairly profitable trading system for yourself in your demo, you will make money for real.
I hope this info helps some of you. Stay happy and be wise. Common sense is the first stepping stone to wisdom.
almos
I guess you think Behavioral Finance (BF) is rubbish too. But in fact, your flip dismissal corroborates the truth of my statement, at least in part ... my statement that is.
What do you think of me saying instead that TA is an encapsulation of heuristic predictive rules based on human psychology, which has not changed since the Japanese invented candlestick sharting and Extraordinary Delusions and the Madness of Crowds, which anticipates and are based on exactly the same underlying psychological forces formed the basis of the work of Kahneman, Tversky, Thaler et. al.?
I go by Behavioral Finance in guiding my trading, which is more fundamental than any single system of TA. My post was intentionally provocative. Thanks for the reply. But my statement about the pitfall of the overconfidence of arrogance is illustrated very well in your reply.
For an introduction to BF, see http://en.wikipedia.org/wiki/Behavioral_finance and http://www.investorhome.com/psych.htm .
Happy Trading!
Ive never seen a profitable strategy or system that can be packaged and sold, because it would seem the most profitable strategy that has served the test of time is the individual trader himself and his successful ability to follow the markets using everything at his disposal.
Not one thing or one set of things ever follows it correctly for to long because it changes and the system doesn't, but of course decent traders themselves see the change and go with it.
Systems cant see change.
Everybodies' truth is different. I know that some traders do make use of technical analysis and make tons of money. Others do not. I personally do not need technical or fundamental analysis. I do not condemn them. I just use my own experience that I have carefully accumulated and still am testing. One a should never get stuck in a rut of any type. I am a scalper trader and I enjoy it successfully. Now I am getting ideas about creating a long strategy that will bring in 10 to 100 pips at least. This is a trickier thing to create than daily in and out fifty or more times. But I enjoy it and that is why I am successful.
Nice meeting you.
Almos
Nice meeting you.
Almos
Hey almos,
Welcome to ET...we need a voice of successful reason around here...Thanks!
Good Trading to You.
Michael B.
Welcome to ET...we need a voice of successful reason around here...Thanks!
Good Trading to You.
Michael B.
Glad to see this thread is back on track.
xiaodre-- I think you are right in the stock market, but as I understand it, in some other instruments like futures and options it is actually zero-sum.
http://www.investopedia.com/terms/z/zero-sumgame.asp
I think what it boils down to is that sharing strategies that are based on exploiting inefficiencies (card counting in blackjack) will always lessen the "edge" because the inefficiency can be "fixed."
But sharing strategies that are based on efficiencies (understanding how things actually work) will rarely if ever lessen the edge. To relate it to gambling, look at poker. You make money at poker if you understand the game (and the other players) better than the next guy. It's just a matter of who is more knowledgeable and experienced. There have been countless poker books released (some good, some bad) and there is an immense amount of knowledge openly shared online, and the game is as profitable as it has ever been. For sharing strategy like this to ever hurt the game's profitability, EVERYONE would have to find, study, and successfully use the strategy. This simply will NEVER happen, especially not in the stock market/trading world. And the online poker world is proof of this.
Another poker analogy that I think can be made is that if you make a rule based strategy (i.e. always go all in when you have AK and a certain player 3bets you), it will not work for you very well in the long run. Instead, you have to be able to evaluate the situation based on our data set and come to a logical conclusion for how to proceed. Maybe I will "just call" his 3bet because I am in position and will have an advantage later in the hand, or maybe he is overly aggressive and will pay me off if he flops top pair 2nd kicker with his AQ. Also, what types of hands has this player played like this in the past? What % of the time does he raise preflop? What % of the time is he in the hand? What does this tell me about his range of possible holdings? Does he go to showdown too often, or does he give up easily in the face of aggression? Has he recently lost his stack and might he be on tilt, or do I perceive him to be a solid player? Poker, like trading, is a thinking game that to be truly profitable you have to develop a fundamental understanding of the game and the people that play it to adapt to each new situation and extract the most money from every opportunity.
If I teach someone how to win at poker, I'm not giving them a rule set or a "strategy." I'm teaching them how to think, and how to evaluate situations in a smart way. The same can be said for people who successfully teach others to trade. They don't hand the student a rule set, they teach them how to think.
But sharing strategies that are based on efficiencies (understanding how things actually work) will rarely if ever lessen the edge. To relate it to gambling, look at poker. You make money at poker if you understand the game (and the other players) better than the next guy. It's just a matter of who is more knowledgeable and experienced. There have been countless poker books released (some good, some bad) and there is an immense amount of knowledge openly shared online, and the game is as profitable as it has ever been. For sharing strategy like this to ever hurt the game's profitability, EVERYONE would have to find, study, and successfully use the strategy. This simply will NEVER happen, especially not in the stock market/trading world. And the online poker world is proof of this.
Another poker analogy that I think can be made is that if you make a rule based strategy (i.e. always go all in when you have AK and a certain player 3bets you), it will not work for you very well in the long run. Instead, you have to be able to evaluate the situation based on our data set and come to a logical conclusion for how to proceed. Maybe I will "just call" his 3bet because I am in position and will have an advantage later in the hand, or maybe he is overly aggressive and will pay me off if he flops top pair 2nd kicker with his AQ. Also, what types of hands has this player played like this in the past? What % of the time does he raise preflop? What % of the time is he in the hand? What does this tell me about his range of possible holdings? Does he go to showdown too often, or does he give up easily in the face of aggression? Has he recently lost his stack and might he be on tilt, or do I perceive him to be a solid player? Poker, like trading, is a thinking game that to be truly profitable you have to develop a fundamental understanding of the game and the people that play it to adapt to each new situation and extract the most money from every opportunity.
If I teach someone how to win at poker, I'm not giving them a rule set or a "strategy." I'm teaching them how to think, and how to evaluate situations in a smart way. The same can be said for people who successfully teach others to trade. They don't hand the student a rule set, they teach them how to think.