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Trading is NOT a business


It is amazing how many people fall into this trap of trading month after month. I have been back testing and forward testing numerous different trading systems and strategies for more than two years. My focus however was on index futures and currency futures. Spending more than 6,000 hours with analysis for this venture, I did not find anything that would nearly be reasonable to call a somewhat viable solution.

Her are just a few systems and indicators of my testing including any possible combination of them:
- MACD
- Stochastics (fast and slow)
- CCI
- Woodies CCI (incl. Woodies trading patterns)
- Moving Averages (SMA, EMA, WMA, TMA, HMA)
- Opening Range Breakout
- 1-2-3 Reversal patterns
- Trader Vic's 2B method
- different price action patterns with and without any indicator
- classic trendline/trendline breaks
- etc., etc.
None of the systems actually generated more profits than losses over time, even by reversing buy and sell orders against the signal/pattern. I have become suspicious that this is nothing but a monkey business, because trading systems strangely seem to be profitable only when paper/simulated trading instead of actual money.

Finally, I have come to the conclusion that one cannot generate any profits by trading. This is an expensive and very time consuming hobby which comes with a daily agony. I do admire the industry and its marketing machinery, as it continues to lure people into this fruitless business for a sheer endless money supply.

Greetings,
TF Trader
I didn't know there was a way to back test price action? Since all price action is is the movement of price over a given amount of time. Forget indicators Money mang. is where the money is. Take for instance a sorry 50/50 system before commish (this is best with stocks and forex) and double up on WINNERS say at a specific $ amount. Start with 1 10K lot and then double @ 1$, add 2 10k lots when you are +2$, add 4 lots when you are +3-5$, 8 lots when +10$ 16lots when your +20-30 then exit all out at +$150 around +5pips from last entry. Set a $ amount stop something that is rational for each level. Experince has taught me that if the trades does not take off the moment I enter I am wrong. This method keeps the 50 out of 100 losses very small only a few bucks and the profits +$150 better than 20 to 1 meaning I only need one trade to be profitable to make money. I can do this 100 times an hour on the euro/usd, usd/jpy

Trust me take a break from the buy/sell calls and guru systems and study MM.
Originally posted by richphxaz

It is amazing how many people fall into this trap of trading month after month. I have been back testing and forward testing numerous different trading systems and strategies for more than two years. My focus however was on index futures and currency futures. Spending more than 6,000 hours with analysis for this venture, I did not find anything that would nearly be reasonable to call a somewhat viable solution.



richphxaz:

I understand how you feel. I was exactly in the same situation 12 months ago - although it had taken me 3.5 years to get there.

When I was a young kid, I used to build a lot of things I couldn't buy ... back then, I was using cardboard, scissors & tape as my only construction materials & tools. I recall building myself a pair of skis, a (small) house, an airplane ... luckily, I couldn't launch the airplane from the roof of my parents' apartment building, else I wouldn't be here to write this...

...but in the beginnings of aviation, a lot of people actually died in trying to build and fly their own aircrafts.

Look where we are now - thousands of jetliners fly every day, still no-one alone would be able to build and fly one - even a seasoned engineer from that very field.


I started my own trading "career" exactly like I would have if I was still age 7 ... then I added some engineering sense to it, and started on the path of automation / backtesting ... after 3 years, my best trading system was generating - in backtesting - a mere 1-tick average outcome per trade - and I knew it was over-optimized, and it would not reach that performance level live.

That was the time I realized I needed some help. Some serious help. I tried a couple of education services / mentors, and settle with one I thought would really give me the markets & trading knowledge I had to admit I was totally lacking - despite all the books I had read so far.

(I won't mention its name in this post, but if you are interested you'll find more info on me in my trading journal on this website).

It was only after a couple of months of intense study - at that point, I had covered only ~20% of the materials) that I truly realized how little I knew up to that point. That was about a year ago.

In this last year, I have learned a ton on the markets and trading, developed 3 more automated trading systems (last one went live today !), and despite some serious psychological issues that still impact severely my manual trading, I have no doubt at this point that I am finally going to make it.


Originally posted by richphxaz

Finally, I have come to the conclusion that one cannot generate any profits by trading. This is an expensive and very time consuming hobby which comes with a daily agony. I do admire the industry and its marketing machinery, as it continues to lure people into this fruitless business for a sheer endless money supply.



I sincerely believe you got the wrong conclusion from your experiment. Professional traders have been at it for over a century, using computers for now at least 50 years, and their tools and techniques have degrees of sophistication you cannot even remotely imagine at this point.

I suppose you would reach the same conclusion if you attempted by yourself to go to the moon - it is not doable. Yet, it's been done.


Good luck,
Dominique
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Chaos For The Win
I have come to the conclusion that one cannot generate any profits by trading.


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Daily Performance
Since most people don't make money trading it is more gambling then a business. Since most people love to gamble they will continue trading even if they are losing money. The professional traders need these people to keep trading since that is their source of income so of course they will encourage you to continue trading. They will sell you another system so you will keep trading.
Trading should be systematic based on our rick tolerance, account size and most importantly pyschology.
Recently I was in the store and a man told the lady; " I will trade you this $5.00 for the cookies"; the lady agreed and the "business" of trading was complete.

Later a woman told the lady " I will trade you this $2.00 for the cookies" but the lady said no; and the "business" of trading was not complete.
Originally posted by redsixspeed

Recently I was in the store and a man told the lady; " I will trade you this $5.00 for the cookies"; the lady agreed and the "business" of trading was complete.

Later a woman told the lady " I will trade you this $2.00 for the cookies" but the lady said no; and the "business" of trading was not complete.


This just goes to prove what I've been saying all along "WOMEN CAN"T TRADE"

You will notice in the first example it took a Man in the mix to ensure that business would be conducted, but in the second example when there were only women involved it resulted in mindless prattle and a failed business transaction!

Now don't everyone go voting me down IT WAS A JOKE!
Originally posted by myptofvu

Originally posted by redsixspeed

Recently I was in the store and a man told the lady; " I will trade you this $5.00 for the cookies"; the lady agreed and the "business" of trading was complete.

Later a woman told the lady " I will trade you this $2.00 for the cookies" but the lady said no; and the "business" of trading was not complete.


This just goes to prove what I've been saying all along "WOMEN CAN"T TRADE"

You will notice in the first example it took a Man in the mix to ensure that business would be conducted, but in the second example when there were only women involved it resulted in mindless prattle and a failed business transaction!

Now don't everyone go voting me down IT WAS A JOKE!


=====================================================================
LOL

The man was @ Walgreens where price is fixed...The lady was @ Wal-Mart where she thought they would roll back price
It is a Statistical Fact by the National Futures Association (NFA) that 95% of traders lose or break-even. But there is a 5% group of traders that make a very nice consistent income year after year. As an Analogy, just like in any other Industry, 95% of the people are considered just "average" and then there is this 5% group again of people who just excel & blow their peers away. We all know it to be True. It took me 20 years to finally figure out the Futures Market & I'm going to share a little tip to all the traders who are struggling out there. "Over-Analysis Causes Paralysis". I wasted 20 years on experimenting with everything in Depth, when the answer simply reveals itself on the Surface of an Intraday Chart. That is all I will say...
I make a reasonable amount of money in the currency business. I usually don't go for big investments. I use this field as a secondary money source. I too think tof Forex as an unreliable income source. But it is not a fake system too. It is risky as hell though.