Kiwi

That's really something that is said to protect people. All trading, be it 100% systematic or 100% discretionary is based on the assumption that the past is a good "guarantee" of future events but guarantee is obviously too strong. The adaptive systems or discretionary trader (never forget that a lot of those failed after the 1990s bull market finally topped) realizes that markets change, sometimes in cycles or waves, sometimes in ways that have never happened before. At that point your predictors fail and you have to adapt. Darwin didn't say "survival of the fittest" he said "survival of the adaptable." Carrying on with evolution many people think that natural selection creates perfect creatures - but in fact it is a satisficing mechanism and it simply creates a creature now sufficiently adapted to the current conditions. The lessons we might take from evolution are: - the past is a good predictor of future events (but sooner or later it won't be so think adaptation not perfect for ever) - the traders job is to satisfactorily fit his niche picking out bucks often enough to survive and procreate but the job spec doesn't need you to be perfect or to be best. Good enough is good enough.

The difference is that I think that he has an edge that is the original edge. His adaptation results in continuous improvements to the edge. Without the initial edge the adaptation might just result in his flapping in the wind. I feel that I'm saying that a sailor has a edge from his sail and an edge multiplier by way of adjusting the sail to the wind strength and minor directional changes. And you might be saying that his edge is only the second part (what I define as an edge multiplier).

OK. Moving on from "is a CTA's return a good goal post for an independent trader" to which all can agree that CTAs have one hand tied behind their backs by the need to keep and make happy customers. The issue of edge. MM. It seems that we agree but don't agree (which feels weird). You agree in the above that you can take something that historically worked (say, trading 123 breaks at some point that has a higher level of chart meaning like S&R or longer trend resumption and applying an exit strategy) and have an edge that works for a time. You agree that markets vary over time in a way that frequently means tuning edges to match market conditions. But then you say that the traders only edge is the ability to "read the changing circumstances." And thats where we depart. The trader had an edge. The edge became less efficacious so he either retires it or adjusts to (say) greater or lesser volatility. Even if, for a time, an edge stops working that doesn't mean it was not or is not again an edge. It just means that it isn't one that self adapts to market conditions. And given traders tendency to shift their behaviours in terms of round numbers (small not the big necessarily) its not surprising that manual tweaks work better than ATR or AR based self adaptive systems. Sometimes the edge itself doesn't change (thale's breaks for example or pullbacks in trends) but it is still necessary to adjust to the market. That doesn't mean that thales technique lacks an edge. Or that thales edge is his ability to adjust. His edge is in his perception of the market and its activity translated into Context plus the Break. The truth of trading is that the majority of people could be given a valid edge, taught how it fits into market context, taught how to adjust it over time if macro context varies and they would still lose money. Why? The truth, as MD explained in The Disciplined Trader, is that the interaction of the markets movements with money committed and peoples wants, needs, fears, hopes, schemas and habit building would cause them to act incorrectly despite the best edge in the world.

MightyMouse, I see what you are getting at but I have a sligthly different view. Let me try to explain why. I think that 15% would suck for an active short term trader. OK. CTAs usually trade in some form. But here are some differences from me in swing trader mode (using daily or H4 charts for a 1-10 day hold): - the majority of them are not short term traders so they don't get the benefit of compounding possible by "high" frequency risking X% of their equity with a 1.Y expectancy. the reason I went short term was to work my money harder. - they are working for a customer who is scared of equity variations so they have to focus on smooth growth or they lose the customer. a good trader understands their strategy, drawdowns, and can keep on keeping on despite (bad traders and retail customers can't) - the standard of excellence for CTAs is "doing better than the other CTAs in this market situation" not doing well. hence in 2008 they were all going "we were not awful even though your money went down 30%" because his did too. So I'm saying that a CTA isn't trading to trade well ... they are trading to satisfy their customer base, keep it and grow it. And that means they can never be what I would consider great traders. You said "Once again, if you are doing 15% you are doing great!" but you should have said "Once again, if you are doing 15% you are doing better than all those CTAs who are trading with a boat anchor around their feet and one arm tied voluntarily behind their backs!"

I used to trade mech systems and am going to again. An old gold standard was "start trading from a bit of a drawdown" because they have them but if they're robust then thats just a periodic swing where the market briefly doesn't suit them. Of course you may have overoptimized or maybe not allowed enough commission + slippage.

Dean is an internet marketer spamming for customers Siuya. All is bait and bullshit.

Yes you are. Thats what I mean about programming computers being on a par with speech and visual recognition. As you mechanically execute you'll find issues with your plan. And the issues should lead you to suspect "context." So rather than acting on intuition you build a hypothesis, then you go back and test it, and then improve your rules. Then you continue trading ... and find out if you improved or otherwise. At the end of that process you will be profitable (if you are ever going to be) and there will be no intuiting in your trading. There will be guesses about issues - but rather than act on them in real time you take the guess, build on it, test it and improve your process. Its scientific method at its simplest and best.

I find to my horror that I must support blowfish. The "those who win intuit; those who don't get hammered by losing setups" argument is appealing but essentially wrong. Mark Douglas identified in TDT the real issue - those who got hammered picked and chose amongst entries and exits because of actions caused by painful emotional reactions to the market. Or they didn't have a decent set of rules in the first place. Sure an experienced trader operating in their zone can improve by skipping some now recognizably weak entries - but that's not usually how they reached that point. First, learn to execute mechanically while you wait for your emotions to decline and learn to trust the right things. Until you do the noise of your emotions will overpower any valid intuition. Then, and only then, you may intuit with some reason to hope it will improve your results. Second, as an experienced programmer I must take you up on the "if you could define setups then machines could execute them." This is also untrue. If it was true then speech recognition would be listening and typing for me and computers would be doing excellent visual recognition just like you and I. And after billions of dollars and decades of work they are not.

Jeez guys ... I thought that of all the conversations here this would be one of the most civilized. Why can't you bring this passion to the scammers who turn up here trying to sell us stuff? An interesting discussion despite the emotion though so thanks

I think that brownsfan might just have another one nailed to the floor. The correlation is between suckers who might be exploited and junior members of trading boards (sorry to those who are 1:1 on this). The great returns are to another spammer selling managed accounts and forex training courses. Lucid of course means "characterized by clear perception or understanding" which is what Brownsfan and I are displaying for all to see. We are your shining light.

In the past primarily index futures; for minutes at a time. At present primarily forex but some futures contracts; for hours at a time.

Get the job. That'll take pressure off (but do it before August 1st please). Then pick 6 forex pairs that are relatively uncorrelated and trade them on H4 charts that line up midnight with either London or Globex (Greece for the globex open/close).

You don't mean you get suspicious when you get fake female names and bs posts do you brownsfan?

Its like Soccer guys ... bloody hard to tell what's going to happen. Especially if you get an Italian referee.

In few words .... Some things are pretty easy to code .. basic price patterns, relationships to mas, fibs on the last swing ... etc etc. Some things are bloody hard to code ... which swings matter, what is the overall picture, how many times has it tried at a high (when some times it comes within x and other times it breaks slightly each time). Where is SnR and how does it relate to big round numbers ... The hard stuff is context

Ahh well ... I'll be the naysayer in this one. This is another example of someone describing what happened to them and how its worked for them. But it is typical of the problem. And the problem is that people describe their current perception of what works for them. They are not skilled at analysing what they are doing. They are not skilled at teaching. And as with sports and other performance fields, the players ability to translate their experience into something taught to others is a rare thing to behold. The markets are a wonderful thing with a myriad of ways for people to succeed and/or fail. And two people using the same method will usually have different results. Beware

Ain't that the truth We had a guy like him over at T2W once ... self-aggrandizing ... putting everyone else's approaches down ... a legend in his own mind. Turned out he was living in a trailer park in Texas. Isn't the internet a wonderful thing :haha:

stpips. 2 out of 3 of your posts have been promotions for Nail Fulcher's site (don't go there newbies ... there are better places to waste your money). Stop posting about him or you will be banned. Also, feel free NOT to correct the spelling ... that would be a further spamming of Traders Lab.

I learned how "poor" and how good candle patterns could be by writing Sierra Chart paintbars to show them. The point about a pattern is that it is showing something. A pin bar or a BUOB say show price rejection. An inside bar or pair of IBs shows indecision, pause, potential reversal. And the bars that follow confirm etc the pattern. The issue is that although the pattern can be valid in that it shows you a price is rejected ... as you can imagine rejecting a price in the middle of nowhere is quite probably meaningless ... a temporary overextension returning to value say with little chance of profiting much from it. But a rejection of "key" prices might be meaningful. So testing a pattern in isolation of context (see my last post) is likely to be an unsatisfying experience for the tester.

Good post MMS. I rate every trade with 3 numbers (1-3); the first for the entry; the second for the initial adjustment of stops and limits; and the third number being for any trade management required after that. So an ideal trade is a 333. Here is my take on the #1 trading rule. I wonder if it is a rule at all. I think the number 1 thing in trading may be something that I haven't truly mastered myself. The most important thing is to love your money losing trades and your drawdowns as much as your winners and winning periods. If you can achieve that then fear can disappear and all the discipline issues become much much easier. So, the golden rule of trading: Love your losers and your winners equally .

Context = Support and Resistance Context = back to key mas Context = fib retracements otherwise they're amusing noise.

I think you guys are too stuck on one meaning of holocaust and perhaps trying to keep it sacred. Back to the definition used before: "hol·o·caust  /ˈhɒləˌkɔst, ˈhoʊlə-/ Show Spelled[hol-uh-kawst, hoh-luh-] Show IPA –noun1.a great or complete devastation or destruction, esp. by fire. 2.a sacrifice completely consumed by fire; burnt offering. 3.(usually initial capital letter) the systematic mass slaughter of European Jews in Nazi concentration camps during World War II (usually prec. by the). 4.any mass slaughter or reckless destruction of life. Origin: 1200–50; ME < LL holocaustum (Vulgate) < Gk holókauston (Septuagint), neut. of holókaustos burnt whole. See holo-, caustic —Related formshol·o·caus·tal, adjective hol·o·caus·tic, adjective —Synonyms 1. inferno, conflagration, ruin, havoc, ravage." The primary meaning is a great or complete devastation or destruction, esp. by fire. and a financial meltdown could meet that criteria. Great destruction of systems, social structures, and political structures could happen. It says especially by fire but it doesn't say only by fire. 3. is a later usage and an example of how events or social moves capture words (hero, gay, professional). So I would argue that a financial meltdown of sufficient impact can be a great or complete devastation or destruction. Personally I hope that none of us or our children experience such a meltdown and, thus, the original author is guilty of exaggeration to sell the story.

I am with the previous two posters. You also need to find something that you personally can do well. There are lots of ways to make money in the markets. But in many cases you will also find detractors and in all cases you will find that there were many who couldn't use them successfully. So be prepared to have some failures. And don't necessarily blame the idea. You need to find the ones that work for you. At the risk of irritating James while he's losing sleep you might want to look at a couple of forex factory threads as well: - no brainer trades - james16 - TEB 5ema ... - Strat's Stress free trading. All ideas for possible success. In Thales thread don't just look at his ideas. Some alternatives are presented, at least one of which I can attest is very good.

When you have had enough of MB and decide that 50:1 might be enough you might consider Interactive Brokers. I've never traded with MB but I always get the feeling that they are a step on the way like ameritrade or something. I could be wrong.

Here is some free advice that could save you a lot of money. The human mind collects patterns and sees them when they are not really there. You know this if you've looked at charts and discovered great patterns that don't test out. Adding 3 or 4 other indices etc is a great way of giving your mind something to chew on - and spit you out. If you don't have a tested intention for other data then DO NOT ADD IT. If it didn't work reliably in the past then it sure as hell doesn't predict the future. So just look at things you have tested or trained in.