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Been "trading" three years...


Hi Everyone! :-)
been trading for three years E-minis (YM, NQ).
Started with sim, then live, then sim again, then live and so on.
Good news is, I didnt loose a lot of money.
I studied lots of books about trading psychology, analyses, positive thinking, etc.
I consider myself as a very disciplined and positive person.
But I noticed something and I would like to know your opinion.

Every of my strategies worked for maximum one or two months. I always adapted the volatility or current "mood" of market, but it didn´t help.
But after few weeks, I always ended up on B/E or worse.

I discovered that some of my internet friends on forum, who claimed to be full time traders, have got trading web pages, when they offer mentoring to trade and selling trading books and strategies.
It seems that there are just two groups of traders:
1) guys who make money by selling books and "know hows" and do not trade.
2) guys who loose money by trying to trade by those books and know hows.

It is quite dissapointing not to make any money after three years of keen studying. So my final question is:

Is there around the world a guy, who makes money of trading from home?
Because I think I tried everything (trend line breaks, moving averages, triangles, flags, etc.) and nothing worked...

Bless you, Sanderson
Originally posted by Sanderson

BeyondMP

"Studying the same thing over and over is not the same as studying different subjects sequentially."

Sequentially- how should I understand that please?

S.


In an early post you said:
"I was just thinking, that if I had studied the last three years a distance school, I would have have already a degree."

Your "studying" of trading was, probably, not done in a structured way, with one lesson leading to the next, like you would experience in a school.

Unfortunately, almost all the Technical Analysis methods available are based on the same false assumptions. Thus, you just learn one "bad" method after another.

Every method or trading strategy you have studied works.....SOME OF TIME!!!!!

The key is to find out under what circumstances they are successful. (See P.S.)

Instead, the struggling trader is convinced there is something "wrong" with themselves, when they can't make it work. And, go on a journey of self discovery....You said,"I studied lots of books about trading psychology, analyses,positive thinking, etc."

P.S.-(After much searching, if you can last, you will find: All those methods work under same circumstance. You will then realize, to be successful, you just have to trade when those circumstance occur, regardless of method.)

P.P.S.-(Please don't be offended by my "tone". I'm just trying to administer a little "tough love" and give you an alternate position to consider.)
Lots of great advice coming through here. I particularly enjoyed BeyondMp's last comment although all the advice and comments have been fantastic on this thread !!
BeyondMP:

First of all, I am not offended by your tone... I think you are really trying to help. Also glad that replies of you guys impressed the others too:-)

"If you are not getting the results you want: STOP TRADING until you figure it all out. I can tell you from personal experience, it takes longer than 3 years, only because of all the bad, misleading and down right false information you have to wade thru until you figure it out."

How did you manage to keep trying longer than three years? You could not have known whether you finally succeed or not... Me personally, I somehow feel deep inside, that this can be a job for me. I learned to take the stress of this job, not to expect regular income, etc.
But lately I think I just ended up in a blind alley. But I do not want to give up now... What if am I just "in front of the gate" - if you know what I mean...

"(After much searching, if you can last, you will find: All those methods work under same circumstance. You will then realize, to be successful, you just have to trade when those circumstance occur, regardless of method.)"

Obviously, I do not know what kind of circumstance you talk about, but I feel that this can be the last piece of puzzle I am missing.
This sentence drew my attention, because this is it - all basic stuff (TL breaks, flags, channels) work for me just sometimes and I am kind of struggling to find it out.

S.
Dom993:

1) what is your personal experience with backtesting?
First two years I was backtesting during every night - I spend more time back testing then sim trading first two years. I finished to do so, when I realized, that every strategy worked for example just 0,5 year back, or just certain months. So then I started to trade more what I see, pattern which I thought I knew - but the P/L result was the same.

2) what are your concerns with backtesting?
I think the biggest concerns of mine was that I never discovered a strategy which would work good enough (averagely 500 US in NQ)

3) do you believe a trading method / system which will work in the future would not work on past data?
I think that markets do have some repeating patterns, but because obviously those patterns have some nuances or small differences, I was unable to make profit of them. And it seems to me, that all patterns work just in 50% of the time.

4) what can you rely on, outside of backtesting, to assess the value of any trading method / system / rule / etc ?
I was hoping that my experiences (more than a thousand sim and live trading hours) could give me some clue how to trade every day differently and less mechanically as I have experience, that what worked yesterday does not work today. I was wrong.

S.
S.

I will answer your post in 2 parts.

I was born and raised in Chicago. Through my professional life, I knew several successful commodity traders. So, I knew it was possible to make money trading(at some level).

I always viewed trading as an intellectual challenge, a problem that had a solution I could find. Consequently, I questioned everything; every book, expert and method I came across.

I noticed that every method, expert or room I followed would 'cheer and holler' every time there was a successful trade. However, when there was a loss, little was said or discussed. To me the failures of a method were more important to analyze than the successes. After all, the point was to have profits, they were the expected results and losses weren't. It quickly became apparent, to me, that something else was "going on" in the markets. And technical analysis was only reporting what was happening; not the cause or reason for movement in the markets. So, I decided to spend my time figuring out what was actually happening as opposed to trying to follow any type of indicators.

This brings me to the second part of your post. The "circumstances" part. To answer this, I need some info on your level understanding and expertise.

If you are sincere in finding out my answer, please answer this question-

What, in your opinion, is the single most important factor needed for a trade to be successful?
BeyondMP:

"What, in your opinion, is the single most important factor needed for a trade to be successful?"

I had to think about this question the whole day to be honest. I figured out lots of answers - I do not know if this is what you expected me to write, but I would answer your question this way.

For a trade to be successful is important to follow the rules of the strategy. It depends of trader´s expectations - for one trader a small profit is enough so he takes few bucks and the trade is successful. Another trader aims higher and therefore he can end up on SL or B/E without the success. So I would say the most important factor is expectation.

Sorry if I am completely wrong with the answer:-)

Sanderson
IMO, this is a GREAT question for a new topic ( see the question in blue)
========================================================================
This brings me to the second part of your post. The "circumstances" part. To answer this, I need some info on your level understanding and expertise.

If you are sincere in finding out my answer, please answer this question-

What, in your opinion, is the single most important factor needed for a trade to be successful?
Originally posted by Sanderson

BeyondMP:

"What, in your opinion, is the single most important factor needed for a trade to be successful?"

I had to think about this question the whole day to be honest. I figured out lots of answers - I do not know if this is what you expected me to write, but I would answer your question this way.

For a trade to be successful is important to follow the rules of the strategy. It depends of trader´s expectations - for one trader a small profit is enough so he takes few bucks and the trade is successful. Another trader aims higher and therefore he can end up on SL or B/E without the success. So I would say the most important factor is expectation.

Sorry if I am completely wrong with the answer:-)

Sanderson


I won't judge your answer. However, I will offer mine.

I will quote a nearly 100 year old book, since I think Richard D. Wycoff said it best in "The Day Trader's Bible" originally published in 1919. By the way, when you read his book you find out that all the books about trading that follow his, simply, repeat the same concepts he put forth(not the method but the concepts).

He defined a Day Trader: "as one who follows the immediate trend. This means that he pursues the line of least resistance. He goes with the market--he does not buck it."

My answer is-

The market must move in the direction of your trade for it to be successful, plain and simple.

Most TA traders act, as if, TA is the cause of market movement. TA is just a reporting method, not the cause. So, to elevate your trading from just hope for movement, you need to understand the forces that move your particular market.

This is not as difficult as it might seem. I will give you a simple example from the current market. Yesterday, we saw major movement after the Fed's statement. Observers of the indices know the pattern of movement after a major Fed announcement. There is always a 3 pulse move, the direction of the first move(up-yesterday) is the direction of the third pulse. So, you saw the first move up, waited for the pullback, then entered your trade. It didn't matter what method of trading you were using, the results would have been the same, a move up.

Again, this is a very simple example. However, there are identifiable "causes" that can be observed and used in intraday index trading. And, remember, watch the market movement after you enter, let it tell you what to do, not your TA. Or, some preconceived action that may or may not be the correct one.