SIUYA

no problems - I thought you were pushing the concept of not using stops and reversing with your previous comment. I do know there are some that advocate cut and reverse systems - I have never really looked into them, but it still seems that you are advocating not using stops at all......now clearly hindsight will allow us to be able to say "with this large stop we would have maxmised profit" but in reality live time dont you agree you need some sort of stop (mental, hard stop that is automatically traded, or a combo of both), otherwise you are not really trading and asking for trouble?

The do you always reverse question is an interesting one. Just because you are wrong (or right), and wish to exit a trade certainly does not mean you should reverse. It might mean your timing for a particular trade is not great and the market might go against you for a bit first - causing pain/anguish/frustration whatever. I think Kiwis point about the method/system used is more important - ie; size of ticks, size of edge. It seems predictor that you are advocating a no stops system - as far as I can tell this must be a reversal system - otherwise if you are on the wrong side of a trade and something really trends you are stuffed - is this the case?

as with what Kiwi said. Often a hard stop maybe used to say - this is the level I definitely know I am wrong and hence can price my position sizing on this, however, if the trade does not do what I think it will do I may stop myself out earlier than expected for a smaller loss. However, depending on method, you ideally might need to have a mechanism that gets you back into the trade again should it look good again This is often the catch - what if i miss the trade that makes the money?....Well that is why you might get out when the trade does not do what it you expected before your hard stop in order to lessen the loss, and probably allow you to go at it again should it start to become favorable. Would you rather then times at a trade where you loose 10 pips or one time at it where you loose 100 pips? plus have you ever heard the rule - I must let my stop get hit? (as opposed I am prepared to let my trade have room to breathe)

Zdo - thought you might like this comment from the article Australia “There’s too much froth in the Australian currency,” which economic fundamentals indicate ought to be worth 90 to 95 U.S. cents, Ridout, outgoing head of the Australian Industry Group, said in an interview in Sydney yesterday. She said “speculative” buying stoked by rate differentials had spurred the local dollar, which traded at $1.0791 late yesterday. so is it speculative buying OR the interest rate differentials pushing the AUD.....I would have thought that the interest rate differentials where part of the economic fundamentals. I love when the two get intertwined to push a barrow. and this doozy..... "The so-called Aussie has appreciated 54 percent since the end of 2008," yeah after collapsing first.

Rande - as per chance I stumbled across this book review - I have not read or bought it yet but I might. Amazon.com: The Folly of Fools: The Logic of Deceit and Self-Deception in Human Life (9780465027552): Robert Trivers: Books I often think the mind that brought you to trading is not the mind that works in trading as we are often too interested in being right, and when found out often lie to ourselves - the market is manipulated, if I only did this, it was not my fault, etc; and too often the reason why trading in markets seems difficult is that rather than the fear of loosing money, its the fear of being wrong - ie; you cant hide the deception in the markets. anyways - I was wondering what your thoughts were given you often talk more about the money narative someone might have and their approach to money, rather than say a biological/evolutionary/in-built propensity to lie to ourselves to survive. thanks.

An interesting article on markets and movements from a thought experiment and resoning point of view for those interested. http://www.bloomberg.com/news/2012-02-07/a-bar-may-be-best-place-to-understand-markets-commentary-by-mark-buchanan.html and the link in the article to about inductive reasoning and how it can apply to markets.....and forum threads/posts http://phys.ubbcluj.ro/~zneda/edu/mc/minority-game2.pdf

While stops are particularly useful and highly recommended, and there have been a few occasions where I not used them and regretted that decision, however you seem to be talking more about a trailing stop - "to lock in profits" ---- very different to an initial stop - which is highly, highly recommended. However as food for thought, there have been plenty of times whereby having a trailing stop can cause you not to stick to your original plan as you get taken out at a small profit and miss the larger one. If your plan is to build positions the aim is to get as many on as possible - and not get taken out by trailing stops hence the reason why sometimes they might not be used. Additionally some traders like to just give an opportunity more room than a predetermined ATR stop (as an example) preferring other setups to occur. (I used to have some examples showing this and it completely changes the profitability of certain systems - using the same entries, but a trailing stop or not - I will try and dig them up if I have time - I think they are on an old computer though as I recently moved countries) If you can use mental stops thats fine - many people cant pull the trigger and keep hoping when it turns they will get out hence the need for auto stops. However mental stops are fine, if you stick to them, they are often used when you might have a get me out worse case stop, but you allow a stop a little more room as the price action might seem a little choppy but at the same time you dont want to miss a trade IF you happen to get the timing right and your view of potential chop is incorrect and yes often mental stops will protect you better than an automatic stop, especially when using limit stops that might not get executed. As per everything - there are many ways to skin a cat and it depends on matching the best entries with the exits and then matching you with the system and you view of how the market works and how you can best make money from it.. (As an aside so as not to distract too much...... I think there is a big difference between auto trading and levels of discretionary trading that gets missed a lot here. To often advice is given that applies to either - - fully automated trading - which can be back tested and modeled and shown exactly where this occur - here you can work out which exits/entires ideally fit best together - historical analysis of trades - either auto traded or discretionary traded using some fairly rigid rules - discretionary trading using loose rules - next to impossible to test, and can only be analysed using the above methods as a best guess.Usually unable to be taught, or analysed and only really gained through experience. IMHO Its this middle one that offers the most grey areas when it comes to seemingly offering answers on forums such as this - and hence readers need to determine where the poster may be coming from.)

the government, the brokers, the tax man, your partner if you win or loose! I would hate to think that my local store owner thinks himself as a robber and us the customers as his victims. You can justify your existance anyway you like I guess. There was one guy who was a good trader, but ultimately a complete prick of a human being. He actually used to say and acted on this belief - "I was brought up to believe that you are trying to screw me over and hence I will do it to you first - and you are the fool for not stopping me, or beating me.....life is a competition" I hope he is happy.

you will probably still loose by switching the buy and sell buttons..... as it is also argued that its more about trade management than anything else. who knows. The one thing that I think a lot of people miss is this. The vast, vast majority of trades in a market today are not actually done by traders - it is done by benchmarking institutions, arbitragers, market makers, portfolio adjustments......their measures of win loose might be different to yours/mine/ours as pure speculators to them. (dont you love it when you mutual fund says we outperformed and only lost 15% when the market was down 15.5%) Often when someone says they are a trader and they work at a bank/institution they are actually an operator of orders or a market maker of some sort. Maybe this site and others should be called Speculators laboratory. Anyway for how/why this might change the numbers slightly and put a different perspective on it.

thanks.... this says it all. [ame=http://www.youtube.com/watch?v=RAKsMnAM8vk]Poof it's gone! - YouTube[/ame]

ahhh the great conundrum..... never trust a banker or a politician etc; etc; But then how do you play the game. Get on the merry go round and at least give yourself an opportunity to win a prize - or get on the production line and watch the world go by.

Thanks Rande for the offer, I would definitely take it up if I choose to re-visit any mental conditioning/improvement help. As for a recent invite to something I declined as while interested I was not trading and moving countries, so it would not have been appropriate to try and comment on my flawed emotional memory .....as such I am now getting back into the trading again (as well as a few other related projects) and so might revisit things as we get going. Interestingly enough I have manged to automate a large section of the trading process that was giving me - lets call them - "m...fer" thoughts to do with admin - which I find more distracting than most trading decisions. As well as improving some entry ideas via automation that I was toying with to make things easier that just having to watch the screen and wait - now I can wait, watch if needed and listen, and just make decisions based on trade management.....for those who interested I took a slightly opposite approach to what seems to be the norm....while most systems automate your exits, I prefer to automate the entries (they are not so systemised as to be backtested very well however) and then manage the trade - we shall see how it goes..... Plus having a chunk of money locked up with MFGlobal has also given me unhinged thoughts of sticking a fork in John Corzines eye.....but that has nothing to do with trading really.

Sierra Chart offers cheap access to automated trading - a very good system at a cheap price. Improving its back testing at present and hooks into IB You will likely need to combine systems to get everything you want, which is always a bugger.

Ok....deeper than what people may wish to divulge on a public forum then. oh, dont worry.....i have the baggage attached to money I can assure you - I actually think this baggage helps me. It means I want to keep what I make.....I freely admit my biggest issue is that I probably limit myself in terms of how much I make and how aggressive I am, but it also means that I will probably never go broke.....in life I think everything is a trade off and this is one that I am more than happy to live with. To gain a comparative/competitive advantage too often people think they need to improve on their weaknesses - I would think the opposite, you need to focus on your strengths and maximse them and exploit the weaknesses of your competitors. I guess this is where a lot of people get irked with your profession.....how do you know its most, how do you know what the problem holding them back is, if people have significant issues, maybe trading is not for them.......Personally I see a lot of value in the work of someone like yourself, but I also see that too often there is this theme of "yes you can do it, you can be anyone, you can be the greatest, unleash the best you can be" - it is a bit to much.....and while I dont put you in this category Rwande (sorry my typo - just as my name is SIUYA, not SUIJA ) there is a lot of complex double word speak and jargon and often more - you have an issue and I will fix it, rather than - here are some tasks and ideas to help you......remembering that you are offering paid services on a public forum and hence might be subject to some scrutiny.....Often the financial, accounting and particulalry the legal world is just a guilty, its like calling "thinking things through" philosophy just to complicate the matter. How many people have you told - sorry buddy - trading is not for you and I suggest you give up and try other things.....how many firms have you worked for and said - candidate A, F, and H we can work on, the rest you might as well fire? Do you stand up and say at seminars - many of you will fail, some of you I cannot help, for those I can you might find some value in my services......do you offer a money back guarantee if the person cannot be helped (much like manufacturers have to fix faulty products).....all food for thought But you suggest people bare their souls, inner monetary narrative baggage.....you have lost me on the logic here. actually I think on a public forum that is designed to help others then yes - just as you are free to advertise, be scrutinised and I (and many others I am sure) would hope you see this as a learning experience yourself. To a large extent you should be getting some good feedback for your teachings, and for possible responses to sceptics, to help hone your own teachings, and this should help maybe spruik those more interested in seeing you....maybe you should be thanking us for helping you market and for those of us that trade it might give some extra insight into things....but thats fine - its a free internet forum for discussions. yes its scrappy, yes its messy, and most 300 page books can probably be summarised down into 10 pages but where is the fun/understanding in that. Clearly some will see value in things, just as others will see no or negative value in things. you do need to be a smart consumer, smart marketer and smart trader, and I thank you for your participation here and hope you dont get too annoyed/despondent by the continual dissention - there is always the ignore button - but then again isn't that like putting the blinkers on the marketing mind? (JohnW - dissenter - free thinker - they kind of have to be the same IMHO, and thanks my aim is to entertain. I like to have my opinions change and I think TL has certainly clarified some things, and changed my mind on others. What a wonderful world without group think and yet there is wisdom in crowds.)

thanks makes more sense..... dont forget that you have to have a link with your market philosophy and you need to match this with what you are looking for..... I think this is an important issue many traders/educators miss. (ever seen the dancing bear advert.... ) [ame=http://www.youtube.com/watch?v=Ahg6qcgoay4]Test Your Awareness: Do The Test - YouTube[/ame]). I should have said if it hurts the PL dont do it (my bad)....and we are not talking about taking losses, we are talking about the sequence of trades and there are simple things that traders repeat that hurt the PL - get rid of some of these and I can tell you a lot of the fear, stress, anxiety will go away and you might even see more clearly. The PL is the best measure you have, and so if it is hurting thats what you should be listening too. Far better traders have always said that the best trades are often those that are the hardest mentally to do...... I now wonder if the idea of trying to eliminate discomfort is all that good and idea.....? Reducing unhelpful anxiety yes.....but you need to keep discomfort. A lot of this stems from the beliefs in forming a market philosophy and strategy - well before working out how to enter a trade and manage a trade.....these are additional skills. yeah drop the compassion and talk in trading terms - if you want to sell something to someone its best to talk their language..... Plus dont underestimate (I mean I am sure you can understand and see) that some people actually react well to beating themselves up in trading....that is what drives them.....different strokes for different folks..... I am a dissenter by nature and like discussions, it is a public forum and I am quite fascinated by certain things. I did not think it a pre-requisite to have issues to discuss such things? Who is to say I dont have some issues, I just may have less, or other ways of dealing with them. I wouldn't want a discussion to be lopsided.... Surely a public open forum is for discussion, pros and cons, ideas.....from there as you say they might follow up but not publicly For those that need help, I am sure putting it on a public forum is not the best way to help --- that I would have thought should be obvious --- and I probably would not wish to do it either if I was doing deep self analysis..... however if you think that a public forum is a good way for people to minimise their anxieties or shortcommings for tradings then maybe you can answer other posters questions of why is it that very few testimonials come forward publicly? or so few offer more than simple techniques for self soothing etc; etc.....of course we all know the answers to that (depending on who you are, as some already have their own pre-concieved ideas)

so Tams thats you in the Bikini? (Tams I thought I might beat others to this )

Brain adapts "us" in the form of pattern based beliefs into creatures who anticipate the future based on experience in the past. This becomes familiar pattern and shapes our sense of identity. When we "redevelop" the brain, we are sitting in the discomfort of old memories that generated historical pattern, and bringing into the discomfort self compassion for the arrested development (the historical dialog) that arose out of that adaptation. It is this self compassion that actually teases the old meaning of self associated with the adaptation so that it can be reformed into new, more life affirming, beliefs. This happens simultaneously on a biological, emotional, cognitive, (and I would say spiritual) basis. As we develop the capacity of the observer to become witness to our beliefs, we also devleop the capacity to embed new beliefs into the very substrate of the brain. This is actually the basis of the reactive attachment theories that I practiced in the 90's. Is that far enough from Denise -- just feel the emotion and not act from it? Rande Howell screw Denise.....Rande - if I may - trying to translate this into English for those of us who only use one syllable words like, buy and sell, long and short.....is what you are saying basically.....? our sense of identity is shaped by our past memories, and in order to change in built patterns of behaviour that stem from our past we need to view ourselves from a third persons point of view and that third person (which of course is us) must view our past patterns of behavior in a compassionate way? If so - and for continuing the discussion without getting sidetracked - why is there the assumption that this is discomforting or that our beliefs are discomforting.....what if I quite like myself already? This does sound a little like the religious dogma of some groups that - you are flawed and the only way to salvation is through us..... ....additionally i thought it was well recognised that our memories are flawed, and therefore wouldn't our perceptions of ourselves be flawed as well to an extra degree (maybe two negatives make a positive ) To take this into a trading context - only really evidence based real time recordings - ie; via a journal would be required and appropriate to actually view what happens when we trade. Then to change this behavior that is unprofitable would not require all the self analysis and mindfulness. Rather it takes a simple more methodical approach of it "if hurts dont do it."

actually you dont.....you just end up with a different system.......the key is developing a system for you - that you can live with, based on underlying philosophy and ideas that work/make sense and are generally universal. Everything becomes a trade off - from which MA, which X days, which number of filters to which filter.....the question is three fold (maybe more) - does this change make sense, and does this change make more money, and WHEN does this change perform best...... all tires are round, some are built for driving on snow, some gravel.....some for trucks, bikes, buses......

i forgot to add - beware of those who do things behind the veil of secrecy and this is too complex for most, and I dont want to feel the public gaze for fear I reveal too much, I dont want to open myself to public scrutiny for fear I may be shown 1...a fraud, 2...it does not work all the time, 3....not everyone may agree with me. If religion and 5000+ years has taught us anything .....There is no holy grail, release to the world your secrets and you will still find division. so what.....:helloooo: traders who legitimately teach know that their methods should be open to scrutiny and that they might actually learn from others and low and behold, they might actually improve their own systems or flaws not obvious to them (or maybe not relevant to them) might be highlighted. Public forum,.......post and be judged or sulk in the corner. (too many martinis this afternoon)

so is it 40% of trades are profitable, or is it 39% (call it 40%) of traders/trading accounts profitable?

This above quick non-pc talk gave me a great coffee spitting moment - thanks. Last week I was introduced to two new things. 1....as it too long and varied to put in here.....google "Goldman Sachs elevator talk" for some great non-pc one liners. mainly - http://twitter.com/gselevator 2....for those not easily offended, if you can watch/go see the musical the Book of Morman from the guys at south park. Hilarious and offensive.....and yet strangely uplifting and spiritual. (If you are easily offended dont - there is no discussion to be had here)

which came first..... the guru who wants to sell his wares, or the suckers (ahem... customers) who want to buy them? if there is a demand, there will be a supply I dont think we should ever stop legitimate sales people (scammers yes) but sales people are not scammers. If they are terrible at trading but great at teaching then they still have a place. It really boils down to as Neg says - your own responsibility. Understand what you are trying to get, buy, offer, learn. It might be better to part with your money in the real market. However, my issue becomes with this whole "mentor" process. A mentor (guru) does not charge - they transfer knowledge A teacher charges and it should be based on how well they teach A salesman charges to sell. So like many who promise large returns look out for things such as - "the secret", the only way, the right way, join the big boys, join the insiders, guru, sales pitches such as was $99 now $49....etc; etc. The best knowledge is freely available and will only be learnt when you understand and not just know.

If I may comment....good comments iwshares..... and all of this is just personal opinion Many years ago I could not get past the issues with MAs and in much the same way worked out for me at least visually spotting the high and low swings worked best.....unfortunately these are always really lagging, but they do seem to give for me a better perspective on changing market moves. I also have found that range bars give a clearer picture of this - however in testing in some backtests it appears that using a roughly equivalent time bar - eg; for me a 5min bar in FX equates to a 10 pt range bar - depending on the currency, and this is also a moveable feast - that the time based bars actually might test better in hindsight.....non the less I stick with visually spotting my swings by and large. (when you have a 80-100 pt range in a day and 50 of that occurs in 5 mins which does happen it can be an issue) This is an important point as ideally it does allow you to pyramid - and can build quite large positions (if not closing out) as you are mentally only really risking a small amount each time - leaving open PL on the table is not an issue once a real trend develops. This also seems to work quite well with manually moving stops via visual swings and lows.....with the aim being not to get stopped out at break even too often, but instead to get as many trades on as possible when a trend develops. It can be very frustrating at times, but once on board, very rewarding. there are many other ideas as well and ideally as mentioned by zdo - they are system specific and everything ends up being a trade off between being not on a trade, missing out on capturing open pl, win v loss ratios etc; etc; Much depends on what you are trying to achieve and how comfortable you are running positions etc; etc; Ideas as extra food for thought. - rather than use MAs, use the mid lines of the donchian channels. These also give a feel for 50% retacements and often are flatter than a MA. Ultimately they often get you out at a similar spot but seem less jittery - after a strong move, dont take the first trade, look for a small loosing trade first, or - after a strong move only then apply a filter - personally i like to just trade with the trend that already exists in my framework as it makes it easier - modify your entries dependant on what is happening - eg; if the instrument rallies into strong resistance in a down trend, do you have a sell limit order sitting right at resistance just in case, do you wait for a resumption of the trend down before entering, do you wait for the MA to cross.....again all personal preferences that work for you.....the idea being to capture the next move down with as little risk as possible per trade. - do you think a an instrument such as FX trades the same way as a commodity, or a share index.....forget about a system needs to be robust.....think about more that a system needs to make money, and I can live with that system. - take into account the rumpled ones idea of only taking a trade in the top/bottom 20 pips of the day. so what....there are lots of ways to skin a cat, and you have to do what works for you.....especially when it comes to discretionary trading.

oldies..... The Grim Reaper came for me last night, and I beat him off with a vacuum cleaner. Talk about Dyson with death. A mate of mine recently admitted to being addicted to brake fluid. When I quizzed him on it he reckoned he could stop any time.... I went to the cemetery yesterday to lay some flowers on a grave. As I was standing there I noticed 4 grave diggers walking about with a coffin, 3 hours later and they're still walking about with it. I thought to myself, they've lost the plot!! My daughter asked me for a pet spider for her birthday, so I went to our local pet shop and they were $70!!! Blow this, I thought, I can get one cheaper off the web. I was at a cash point yesterday when a little old lady asked if I could check her balance, so I pushed her over. I start a new job in Seoul next week. I thought it was a good Korea move. I was driving this morning when I saw an RAC van parked up. The driver was sobbing uncontrollably and looked very miserable. I thought to myself 'that guy's heading for a breakdown. Statistically, 6 out of 7 dwarves are not Happy. My neighbour knocked on my door at 2:30am this morning, can you believe that, 2:30am?! Luckily for him I was still up playing my Bagpipes. Paddy says "Mick, I'm thinking of buying a Labrador . "Bugger that" says Mick "have you seen how many of their owners go blind?" Man calls 999 and says "I think my wife is dead" The operator says how do you know? He says "The sex is the same but the ironing is building up!" I was in bed with a blind girl last night and she said that I had the biggest p* nis she had ever laid her hands on. I said "You're pulling my leg!" I saw a poor old lady fall over today on the ice!! At least I presume she was poor - she only had $1.20 in her purse. My girlfriend thinks that I'm a stalker. Well, she's not exactly my girlfriend yet. I woke up last night to find the ghost of Gloria Gaynor standing at the foot of my bed. At first I was afraid.......then I was petrified. Went for my routine check up today and everything seemed to be going fine until he stuck his index finger up my @rse! Do you think I should change dentists? A wife says to her husband you're always pushing me around and talking behind my back. He says what do you expect? You're in a wheelchair. I was explaining to my wife last night that when you die you get reincarnated but must come back as a different creature. She said I would like to come back as a cow. I said you're obviously not listening. The wife has been missing a week now. Police said to prepare for the worst. So I have been to the charity shop to get all her clothes back.

.....just came across this elsewhere which might make for interesting reading, I have not read it myself but apart from the "cooking offal handbook", or the "The art of nipple sucking and MILFs" it might make a good read. Amazon.com: Thinking, Fast and Slow (9780374275631): Daniel Kahneman: Books