MightyMouse

Jackb, I agree. It is a bit disturbing and deflating to the ego to be presented with this possibility. However, growth frequently does come with pain. MM

Progress in sports is measurable. You can break down the elements of play and develop each piece to perfection. If you are willing to put the time into it, you can achieve expert level. The average for reaching "expert level" is 10 years. Trading is not completely different, but it is different. Not all great tennis players are good coaches and not all great coaches were good tennis players. Great coaches know how to get you to achieve your potential. They don't necessarily have to be able to play the game well themselves. The same is true in anything you do. Your coach should be a person you trust who can get inside of you and help you achieve the goals you want to achieve. Not to say that there aren't hucksters out there. There probably are. But I wouldn't judge someone simply by if he made money while you were there for a free trial. No one can help you turn the market into an ATM. Trading doesn't work that way.

I am pretty sure that Soros used the fib retracement of the darvas box after the stochastic oscillator crossed over the woody cci index indicating that the heiken ashi 3 line break tested support and failed. Or, it may have been that he thought the BOE would fail at their efforts.

Cory, it is very difficult to make money in the markets, no doubt. It is also easy to begin to believe that our set up is infallible or the time frame we are trading is superior, or that we simply know where the market is heading. I think none of the above and choose to keep my ego in check. Every trade I take I am prepared to take a loss and prepared to win. Either can happen and I have a higher chance of losing on my next trade than I do of winning. However, I am prepared to take advantage of the time when I do call the coin correctly 10 times in a row and will never get taken advantage of when I call it wrong 10 times in a row. Over time, both will happen. Clearly, the large hedge-funds have to manage their money differently than us. But, each firm who had a division that blew up, had a chief trading strategist who failed to call the market correctly. From that perspective, it is relevant. It is difficult even if you have millions of dollars of resources available to you. I do think it is awesome how some people read something that disagrees with what they think and automatically assume it is wrong because it counters what they think. I also think it is awesome how some people will only believe something if they read it from a book; as if someone is going to detail how to make money in a book and sell it to us for $39.95. MM MM

Siuya, it is relevant. You need to plan for the existence of good and bad luck. Most trading plans that I see are designed to have bad luck take advantage of them. Yet they are not designed to take advantage of good luck. In other words, a lot of trading plans are designed with a flaw. So, the unsuspecting trader who trades his flawed plan with discipline will eventually fail even though he is trading what seems to him to be an iron clad plan. But you are correct about separating luck and skill and recognizing it. MM

I never said there was anything wrong with entering a trend while it is underway. Look at who is paranoid and jumping to conclusions. You are also jumping to many different conclusions about how I trade and further that traders who consider luck do not prosper. Nothing could be further from the truth. It apparently bothers you to use the word luck. Trading without considering luck is simply arrogance. I do hope for your sake that you do continue to be lucky with your dominant time frame. If you do run out of luck in your time frame, then by all means come on back and read some of the posts on this thread so that you can get a firmer grip on the relationship of luck to trading. Keep Winning, MM

Kiwi, You missed the point of the same, better, or worse traders. Sure, you can take a trade opposite someone and you both make money. But if you are a better trader then them, then on balance, when they enter against you, you will likely end up making money from them. If they are better traders than you, then you will likely end up, on balance, losing to them. If they are equal traders to you, then on balance if you enter against each other you will both lose. Its a simplification of a zero sum game and I really don't think you thought it through before you searched for flaws. Also, a professional will adapt to an evolving market, if he is able to see it as evolving and not just as a temporary aberration. Professionals frequently fail to discern between the two. Think of LTCM, Goldman Sachs, Bear Sterns, Citi, AIG, Amaranth Advisors, Atticus funds, Satellite Asset management and on and on. All funds run by professionals and all gone bust. Arrogantly, and only after the fact, can we with perfect hindsight pick apart their mistakes. And egotistically, we will say that we would not have done the same. So, can a professional adapt to an evolving market? Some will. Do all professionals adapt to evolving markets before their edge disappears? Not so laughable. MM

I hope your lucky streak continues for you this way you can continue to believe the things you believe. Once again, if you are trend trading and waiting for the trend to be confirmed, then you are likely entering when the trend is also partially underway. There is no reason that the trend can't cease when you enter and go revisit the support or resistance created by the trend reversal. While revisiting, there is no go reason that it has to resume the direction you are in. There are plenty of times when a trend confirms and reverses. A lot of times the sole purpose of confirmation was to trap trend traders into thinking that it was trending. You should already know this or you will learn it at some point. If you want me to believe that you know definitively that a market is going to continue trending, you will have better luck selling me a bridge. You have been fortunate enough to be in trades that have continued in your direction more often than they have reversed. It does not take luck to be a good trader. I never implied that and that is probably where you may be struggling with what I say. You can have bad luck in the market and still be a good trader. And you can have good luck and be a poor trader. To make a lot of money in the market, you are going to need to be either very lucky or be a good trader with good luck. MM

It's also luck that your edge continues to be an edge before you have drawn down your account because of bad luck. The best and biggest thought they had an edge and the market proved otherwise. Fortunately, for some of them they have a central bank that is sympathetic and willing to bail them out of their failed trades. You and I do not have that luxury. If you take 10,000 traders of equal ability and let them trade in a market amongst themselves. The average trader will lose a little because of trading costs. But at the extremes, there will be about 4-5 traders who consistently win and at the opposite extreme there will be about the same number of traders who consistently lose. Each of these 10,000 traders has equal ability. The winners will pat themselves on their backs for being so brilliant, and the losers will be questioning their ability to trade. The group of traders will experience a net loss of equity at the end of the period. The losses will be born by the losing traders. If you do this again, the same situation will develop, but it won't necessarily be the same traders at the extremes. Luck is entirely responsible for wins and losses in these two scenarios. When you relax the assumption of equal ability, you have more of a realistic trading environment, but not devoid of the need of luck to come out ahead. What you also add into this scenario is the unknown of if the people you are trading against are better, equal, or worse then you. For your edge to hold, your edge has to be better than the edge of the person you are trying to take money from. Can you win from someone who is a better trader than you? Yes, but you are going to need good luck to beat him. Can you lose to a trader who is a worse trader than you? Yes, but he is going to need good luck to beat you. Clearly, you want to trade against traders who are worse traders than you and avoid trading against traders who are better than you. The market is an excellent reminder of the virtue of humility. MM

A trader waiting for a few more contracts to hit the bid is an everyday occurrence and not a black swan event. If you think monthly time frame trends are not vulnerable to strange occurrences, you haven't been trading that long. It sounds like you are a trend trader, which means that you will have to take multiple stabs to get it right since there are a lot of times that trends have a false start. If you haven't experienced that occurrence, you have, plainly, been lucky, but you choose to attribute its absence to your careful analysis. It could very well have been that when your started to take your trades, each time you took an entry, the market entered into a period of chop and took you out at your stop, depleting your capital before you got it right. Denying the possibility is foolish. You were lucky to survive. Luck alone won't do it, but you are doomed in the absence of good luck. I attempt to discern between good luck and bad luck all the time. My big winners, almost all the time, have elements of extraordinary good luck and I know it to be good luck. I also know what I am doing but knowing what I am doing is not going to line up a series of events that will bring me extra good fortune. Assuming such would be nonsense. I will take all the good luck you want to get rid of. Good Luck MM

I beg to differ. If it wasn't for me last night watching at home, the New York Jets would not have won.

Not to directly poke at anyone, but it is a very silly notion to assume that you can control luck. Luck plays a very big and direct part of whether you make money on your next trade or not. It does not matter who you are, or how many times you back tested your set up. The next trade you take is completely unique to the set of trades that you are comparing it too. Order flow needs to be in your direction to make money and it needs to continue to be in your direction until your target is hit. When you enter a trade and order flow is in your direction, you pat yourself on the back for being so brilliant. If order flow counters your entry, then you end up with a loss if it doesn't stop before your stop. You need to be lucky enough to have order flow in your direction. When you get it right, you make money, when you don't, you lose. Order flow can continue or change direction at any time. You can have a great read on what is going on and enter long and somewhere across the globe someone is thinking: " if I see one more contract hit the bid, I am going dump my 5000 contracts and call it a day". That contract comes, and bam all hell breaks loose and the market free falls and hits your stop no matter where it is only to turn back in the right direction 1-4 ticks after it takes you out. You're pissed because if your stop was just a few more ticks away, you could have survived. You had it right, but the stop was just a little too close. Similarly, a floor broker in Chicago who cares less about his job and more about his Johnson, gets off his cell phone with a hot girl he met last night who agrees to meet him for lunch in 20 minutes. He has orders to fill before he cuts out for the day. You, in front of your screen see an excellent short opportunity that you have rigorously back tested, you enter short, the floor broker dumps his contracts so he can split. He sets off a selling frenzy and you benefit. He may lose his job and not get laid as he hopes, but his stupid actions lead to money in your pocket. This time, you pat yourself on your back for being so brilliant. MM

You might not have a problem at all. Buying the high and selling the low is a perfectly viable strategy if done properly. If you are buying the high or selling the low and do not want to be buying the high or selling the low, then that is a problem. If you are intentionally buying the high or selling the low and hanging onto it far longer than you should be holding onto it and then covering it at a loss, then that could be a problem too. Keep in mind that the only way a trader can make money off you is by making you buy high and sell low. So, you are doing exactly what the market wants you to do. Of course, you can buy low and the sell lower or sell high and buy back higher. If you do either, then you are once again doing what the market needs you to do. MM

Kohtro, You can definitely trade with $5000. Its going to depend on how you are going to trade and what you are going to trade. The fact that you are asking, tells me that you probably aren't ready for prime time. Reading is not going to get you ready no matter how much you have read. You should paper trade to get a feel for the markets you want to trade. I have been doing this for a while and when i want to trade a market that I haven't been watching, I first sim trade it to get comfortable with it. Good luck! MM

If JL traded today he would likely go down in a blaze of glory like Ivan Boesky or other current day hedge fund managers who are being investigated for insider trading activities. Unlike, the current day cowboys, JL went broke while trading on inside information. That tells me that he relied a little to much on the information he garnered than on the information that the market was showing him at the time. In other words, he thought he knew that the market for a stock should be going up because of a looming favorable news announcement, instead of down as a different market participant might conclude by observing price and volume or whatever else it is that one uses to determine trend. It seems like he may have bought into one too many false rumors and relied on that information and was ultimately done in by his poor judgment. There is a little too much of the do as i say and not as I do aspect to the book. Sort of like taking advice on how to be a good, sober dad and husband from an alcoholic, abusive skirt chaser. He is probably just assuming that the opposite of what he did was better than what he did. That doesn't help me much. MM

I am really glad you posted this and not me.

You can estimate volume (relative volume) with Market Profile if you are hell bent on trading currencies.

It's delusional for a trader to blame his system, broker, neighbor, dog or cat when deep down he knows that only his wife is to blame.

Siuya, I almost feel like you are calling into question my manhood. God knows I need to defend that. MM

With all due respect, you have it completely backwards. We are born with the skills to trade and through social interactions and a moral upbringing, you unlearn the skills and mindset that are best for trading. Look at a preschool and you will see some of the best traders you will ever see. The level of selfishness they possess is far closer to what is needed to trade than that of a developed adult. As a simple example: if a toddler/child sees another child with a toy that he wants he may simply go over and take it because he wants it. The child will then be taught that you don't do that to others and eventually he will " correct" that behavior. However, that is one of the types of behaviors a trader needs in the market. You see it, you take it. You would be appalled if you were at a party and I approached you and took your drink from you because i wanted it. because we have learned that this is socially unacceptable behavior. If you are taking for selfishness or need, there is no such thing as fear. If you are uncertain about why you are taking, then you have fear.

The irony is that the low rates of return are not low rates of return at all. Traders who are skilled can make money to the extent that other traders trade irrationally. If everyone were rational, no one would trade. So, technically, traders need for there to be traders who have irrational beliefs about trading.

No. I have no idea of where it will be. I need to guess if someone is going to be there in the next 5 to 120 minutes to pay me if I am in a trade or if I am going to be the one paying.

I don't trade either of these, but, generally, you have to throw away small winners to get to the big winners. You'll end up with BE or losers when you could have taken a small winner and it will suck no matter how accustomed you get to doing it. Consistently trying 1:3 trades will eventually lead to break even or worse. fesx is a little short on volatility these days to trade what I am suggesting. 6E might be better suited for a large move.

Good Job. This time around it will be exactly as hard to guess as it was last time around. Good luck.