Tradewinds

I think a group effort would be great, but getting people together would be difficult I think. Someone would need to be the champion of the cause, and be able to coordinate and motivate the group. There would need to be a clear incentive, and a way to manage expectations and reward people for the end result. You would need to find people interested the investment product you are looking at, the same time frame, the same style of trading and the same perspective. And you need to be able to convince people that the effort would be worth it.

I have seen a retail trading platform that looks very easy to use for backtesting, and even has options for avoiding certain times of the year, or certain times of the day; when scheduled news comes out. I think it was Trade Navigator™. I don't own it, but I was impressed by the demo of the backtesting.

Trader experience and situational context would be extremely difficult to program. I'm not saying it couldn't be done, but it would probably take a team of people and millions of dollars. Like the program and computing power needed to play Jeopardy. How would a computer program match how you interpret or strategize for a news event? I'm not saying it couldn't be done, but it would be a major undertaking.

My impression is, that most traders are not programers. In order to test rules with a computer program, a computer program needs to be created. I'm not saying that rules can't be tested without a computer program, but without the computer program, user discretion is very difficult to avoid. And if user discretion can't be avoided, then it is no longer a scientific method. If the trader doesn't follow the rules exactly, the data analysis can't really be matched to the rules. I've studies charts for thousands of hours looking for patterns. Then I program rules to match a perceived pattern. Almost 100% of the time, the programed results show me that my perception was extremely flawed. The computer program has no discretion. It does exactly what I program it to do. When I am looking for price patterns, I see what I want to see; I avoid or ignore information that proves my perception wrong. I use wishful thinking. I've been through the same situation probably 1000's of times. I think I see a cause and affect price pattern, and when I program a rule, it turns out to be almost nothing more than purely random. Unless a trader has experienced this, it's hard to believe, but true.

I'm not a fan of trend lines at all. I will not use them. However, I don't discount people's ability to use them and make a profit. My theory is, that when people use trend lines, the trend line provides a framework of comparison. This framework of comparison allows the trader to make relative decisions. So it's not that the trend line has any real statistically predictive value in and of itself, but they provide a framework of comparison for the trader. So the decision making really comes from that framework of comparison. If my theory is true, then the trader could put any lines on the chart, at any place, and the trader would still be able to see relative changes, and make a relatively better decision than not. If the probability for good entries goes over 50% percent, and the trades are managed correctly, then a net win is realized. So again, my theory is that the trend lines don't necessarily have any statistical accuracy in and off themselves, but it's all about how the trader processes that information in front of them. And the plot lines provide a point of reference for contrast and comparison. The the real value is in the contrast and comparison, not in the trend line itself. Regardless of where the trend line is positioned, the trader can compare price action and see price behavior relative to the trend line.

I just opened a thread titled: Random Line Theory http://www.traderslaboratory.com/forums/f34/random-line-theory-9563.html#post115744

From post #38. http://www.traderslaboratory.com/forums/208/how-i-would-charge-trading-course-9505-4.html

Price behavior is designed to prohibit you from entering an order at the optimal price. In order to get a fill, the following must happen: Price needs to go in the opposite direction of your entry order. E.g. price drop for long For a long order, a limit order must be entered above the current price. Use a market order, which will fill at the price above the current price. (long) For a long entry, you must be willing to pay a price that is higher than the current price in order to get into the market. If you enter an order exactly at the bottom of a trend, the order will not fill. For example, if you enter a long order at 50, and the bottom of the trend is exactly 50, the order is not going to fill. If the price is at the bottom, and the price is 50, you would need to enter the order at the next price higher than 50. So if you think that price has bottomed, you could enter a market order, and hope the price doesn't surge up the second you enter the order, or enter a limit order above the current price in order to get an instant fill. If the price hasn't bottomed, but is near the bottom, then you could get a fill when the price drops one last time. It makes sense that price behaves this way. If the price is going to go up, why would the other traders/investors give you a better price? So if the trend really is going to turn, then you must pay the asking price, or no one is going to sell to you. Either you will pay what they are asking, or no one will be willing to sell to you. That is when the price is at the absolute bottom. Now, . . . things can change very quickly, the market could be behaving as if price is at the absolute bottom, and then the market could change it's mind. But here is the problem. Let's say you enter a long order. It doesn't fill, and doesn't fill, and time goes by, and the price is right exactly at your order, but it just won't fill. Now you need to make a decision. If you leave the order there, and price drops, and you get a fill on your long order, it could mean that price is going to continue down. If you are willing to buy, when everyone else thinks the market is going down, then of course you will get a fill. So don't get to excited if you get what you might think is the optimum fill price for a long order. You may have just entered a long order at exactly the wrong time. But it gets more complicated than that, because if you pay a premium for the assurance to get a fill on the long order, thinking that price is at the absolute bottom, and then the price goes down more, now you are in the worst possible situation. You just paid a premium to enter a long order, and price is going down, increasing your losses even more. This is the way the market works.

In scalping, reliable fills are crucial. I don't think it's possible to scalp and make money without getting reliable fills. So you either need to use a market order, and have a system that is good enough to deal with slippage, or place limit orders such that fills are very likely. Limit orders placed in such a way to insure a fill, may decrease your profit per trade, but increase your profit overall. For example, if you are long, and place a limit sell order below, the current price, it will fill immediately. I'd like this thread to focus on getting reliable fills for a scalping strategy.

Reminds me sort of like The Serenity Prayer: "God grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference." --Reinhold Niebuhr The issue in trading is having the wisdom to know what you can change and what you can't change. And that is a very murky place for most of us. It's difficult to see through the fog. It starts with defining what an acceptable loss is.

I continued this discussion at thread: http://www.traderslaboratory.com/forums/f18/fear-greed-9058.html

Well, I don't want to add more discomfort or pain, but . . . . . "No Pain, No Gain" as the saying goes. There is pain that comes from healing, and pain that comes from injury. Two different types of pain. An analogy would be when you have a knot in a muscle and the knot needs to be massaged with a lot of pressure to get it to loosen up. It's very painful, but it needs to be done to get the knot out of the muscle.

There is also the issue of getting a feel for live trading. It's like learning to ride a bicycle with training wheels attached. I guess that's kind of a "wimpy" image for the macho and egotistical world of trading.

I see this in myself, that I look outside of myself for self-worth and meaning. Looking to myself for self-worth and validation seems wrong. I can't accept it. It seems like the viewpoint of looking for external validation is permanently cemented in my mind. To me, life has meaning only if there is right and wrong. And life only has meaning if I'm on the side of good. If I'm on the side of evil, then eventually, evil will self destruct. But, I guess I'm self-destructing if I look outside of myself for self-worth and validation. So if good is defined as ultimately being constructive, then I should seek what is ultimately constructive for my life. And if giving myself internal validation is ultimately good for me and will lead to good things in life, that would be doing what is good and right. Okay, I've devised a logical proof in order to make myself believe. So now I just need to believe it on some deeper level rather than making it an exercise in logic. How do I transfer the meaning of my logic from the rational part of my brain to the feeling part of my brain? Do they have a pill for that? :rofl:

This is something I would think lots of people, especially beginners, would be interested in. Is your screen projected in real time so that viewers could just follow your trades and do exactly what you are doing?

Post #21 In response to MM's post. http://www.traderslaboratory.com/forums/62/daily-stop-loss-profit-targets-3024-3.html

Post #20 http://www.traderslaboratory.com/forums/62/daily-stop-loss-profit-targets-3024-2.html

When I read a really good post, I wish that all the best posts were put together into one place. I'd like to suggest standards for what a really good post is: Another person's post. Not your own. Something you would like to have memorized. Something you would consider printing out as a personal reminder. Something that could have saved you a lot of trouble. Something you now know for certain, and have seen countless times. Something that you think is fundamentally critical to know. If you see a great post made by someone else, and it meets the above standards, re-post it here with the appropriate reference. Please don't post your own comments. Only quote posts from other people, and make sure their username is in the quote. If we are referencing other people, that gives more legitimacy to the post. Recognizing another person's contribution will hopefully make the thread 5 star quality. The goal is to have the best of the best advice and information for a real quality thread. The subjects don't need to be related except by quality of the information.

We are our own worst enemy. At some point, if things are going bad, we can start to self-destruct. And human beings have a very high tolerance for self-destruction. We can almost kill ourselves before we get tired of it. So I guess the answer to the question, "How Much Pain Before Change?" is; A LOT! So what's the solution to this problem? I don't know. We need to push ourselves to a new level. Get out of our comfort zone. Be willing to take a brutally honest look at ourselves and our strategy. Part of the solution is testing your strategy in live trading, or the equivalent. If you are practice trading in "sim", it's crucial to have a sim system that fills orders the same as in live trading. If your platform does "touch fills" in sim trading, then it's almost useless. In fact it can actually be damaging to your trading ability, because you can develop trading habits that will cause you to get "killed" in real trading.

Good point. For the seller of the trading indicator to be completely transparent and honest, they would need make it very clear to the buyer what the dangers are. So there are two separate issues. The reliability of the system or indicator, and the reliability of the user of the system or indicator.

Hopefully scientist will find the "fool" gene and foolishness can be breed out of human beings. :rofl: Until that happens, the inferior humans with the predominant fool gene, will need to learn from pain and hardship.

Now we are getting into the realm of how a product should be priced, marketing, value and consumer perceptions. Personally, I now tend to buy mid-range priced, high volume products. That comes from experiences of buying high priced products, thinking that I was getting something superior, and having reliability issues with the product. Some performance products will have better performance, but break down more often. I still need to fight the urge to buy something because it is priced higher. I tend to automatically assign a higher value to a higher price. I don't know what percentage of the population does that, but it is a real phenomena. If a money back guarantee was going to be offered by the seller of a system or indicator, the cost would need to factor in how many returns would be generated. Many people buy junk, and then they never return it when it breaks. Some businesses probably know this, and sell junk, knowing that many people will never ask for their money back. Then there are situations where the consumer is promised some compensation, and it never gets delivered. If the product cost $15 dollars, and it would take 40 hours trying to get your money back, most people just "write-off" the $15 as a loss. If they could make $2,000 in 40 hours of work, but they are only going to get $15 dollars back for 40 hours of work, then they won't bother trying to get their money back. So, a seller of an indicator could price their product very cheaply, then make it almost impossible to get your money back.

Buying or selling and indicator or a system is neutral. It's not ethical or unethical. A common mistake that people make is to automatically assign black/white - right/wrong - good/evil to something, when in reality it's just neutral until intentions and desires affect the balance of give and take. I'm not trying to imply that the act of selling a system or indicator, in and of itself, is automatically ethical or unethical.

The topic is interesting because there are extreme conflicts. Why would anyone with an excellent system want to sell it? That doesn't make any sense to me. It brings up issues having to do with the intentions of the person selling the system, indicators, services, subscription, etc. One motivation a successful trader might have to make information available to others, would be a way to boost their ego. But there may be a certain degree of goodwill also. And I have read posts from people who stated that they had been helped in the past, and wanted to "give something back" to the trading community. So what motivates someone to put together a blog, subscription, indicators, or a system, could be a mix of motives and intentions. Effort needs to be exerted, and some wisdom employed, in order to determine what a person's intentions are. One point that I am trying to make, is that for me personally, I want to have good intentions and a high standard of behavior. On the surface, having a 110% money back guarantee seems naive, and doomed to failure. And obviously, under most situations, a 110% money back guarantee would be foolish to offer. But consider if the sale were combined with a method of trying to filter out people who were not good candidates, plus a mentoring system, that might be a basic foundation for a way to increase the odds of success. I don't have any plans to sell a trading system or trading indicators. What I'm saying is, that IF I were going to do that, then I would want to do business at a very high moral and ethical standard. That's the way I want to live me life, and that's the type of person I want to be.

As soon as I enter an order, I determine the price targets. But I will often adjust those targets. And I will absolutely exit every order on a "strength signal". When one of my indicators shows a strong move into profitability, I exit the order at a profit. If the original target was not hit before the strength signal, and I need to adjust the profit target down, then I will. My point here, is that I have two ways to set my exit targets. Previous price levels Indicator maxing out If one of my indicators is hitting it's max limits, then I exit, regardless of what price is doing. If my indicator shows a max being hit, or unusual strength, and the price did nothing, then I don't wait to see if price is going to move. I just exit. If price is going to turn back in the original direction and move more, then chances are I will get another entry opportunity. If price reverses, then I avoided a sudden, steep loss. I wanted to mention this because it is working very well for me, and I just started using this method. I'm not saying what my indicators are, or what they are based on. I'm just providing a generic concept here. Hopefully the concept will give you some ideas.