How Long Does It Take to Become a Profitable Trader?

[swansjr 10]

Here is a short 4-minute interview that answers the question, "How long does it take to become a profitable trader?"

 

I guess I have a few more years to go! Anyway, I found this interesting and it's probably a fair assessment. Trading is hard work. You better love doing it.

[flyingdutchmen 10]

this is an impossible to anser question as it is depending on inteligence,

creativity and many more

factors

 

in short....

 

me is not you

you is not me

[swansjr 10]

this is an impossible to anser question as it is depending on inteligence,

creativity and many more

factors

 

in short....

 

me is not you

you is not me

 

While the question may be "impossible" to answer in the strictest terms, it is useful. Just as “impossible” is the person in his late 20s spends time predicting his retirement nest-egg amount for age 62 (due to of all the unforeseen changes in your life, tax codes and whatever). Yet, such estimates are useful.

 

The usefulness in this video comes in the regards to how most people perceive trading when they are first introduced to it. That is, you can make a lot of money quickly and the process of trading looks easy.

 

Furthermore, while it may be "impossible" to answer for an individual person, given a population of traders we can draw some concludes. In short, most new traders do not become successful under a years time. A lot of work is needed. Probably more than most realizes at first glance. Adjust expectations accordingly.

[Hlm 10]

this is an impossible to anser question as it is depending on inteligence,

creativity and many more

factors

 

in short....

 

me is not you

you is not me

The point of the video is not to quote a specific amount of time. The five years comes from a book (non trading related) that looks at factors that breed success. The main point and underlying truth of the video is that most traders have a very unrealistic idea as to how long it will take.

 

Reminds me of a quote from Thomas Edison....

 

Many of life's failures are people who did not realize how close they were to success when they gave up.

[JBWTrader 10]

Its a good question. One I constantly ask myself..

I guess one answer is ..."As long as it takes.."

The unknown is always painful...

 

All the Best

John

[DbPhoenix 42]

Could be five years. Could be never. Depends in large part on how many detours the wannabe takes, how many dead-ends he winds up in, how susceptible he is to the con. If he's blessed with common sense, a finely-tuned bullshit detector, and a basic understanding of what an auction is, shouldn't take more than a couple of months.

[Tams 20]

Don't argue with the trend.

 

If you understand this principle, the route is shorter.

[thetatrader1520887476 10]

Stupid, stupid, stupid, I just gave back all my profits. I agree with Dp if you can stay clear of all the cons out there the road will be much shorter. Imho and defiantly for me, It is my money management and emotional management that needs the most attention. Trades and setups are a dime a dozen. And most work. Death by Mathematics if you eat like a mouse and sh!t like and elephant. you will never become profitable.

I will have ten winning days in row and one day I will be in a trance and say I am bearish I will start shorting every new high. even though my stuff is saying go long. And just about the time I bust my account I will weak up and say what were you thinking. It is kind of funny I used to get mad, but now I just laugh.

Any How I have been trading for two years futures for almost a year. and I am at break even. I know and have confidence in my setups now. But I still have blow up days that kill my p&l. (on those days I break my rules). The Blow up days happen alot less and I am sure with hard work (hard work) ya thats what I said. I will be profitable shotly.

 

Back to what Dp said. I also wasted about six months of time with the gurus. Makes me laugh. If they could trade they would not be spending so much time selling their junk.

[brownsfan019 17]

The point of the video is not to quote a specific amount of time. The five years comes from a book (non trading related) that looks at factors that breed success. The main point and underlying truth of the video is that most traders have a very unrealistic idea as to how long it will take.

 

Reminds me of a quote from Thomas Edison....

 

Many of life's failures are people who did not realize how close they were to success when they gave up.

 

I agree hlm - most get into the biz thinking it will happen overnight. And for some they apparently think it can...

 

Could be five years. Could be never. Depends in large part on how many detours the wannabe takes, how many dead-ends he winds up in, how susceptible he is to the con. If he's blessed with common sense, a finely-tuned bullshit detector, and a basic understanding of what an auction is, shouldn't take more than a couple of months.

 

 

Give me a break DB. 'A couple months'? Right. Let me guess - the guy who has never shown ANY evidence of trading for real mastered the market in a just a few short months, right?

 

 

And that is why people enter this business thinking it can be done in MONTHS rather than YEARS. You get people who think it can be done or pretend it can be done, but those who ACTUALLY do it know what it takes.

 

If I am wrong DB, please prove it. Join the p/l thread and show us how you have mastered the markets daily. Show all those noobs following your work and buying your e-book how it's done. You don't have to worry about calling out trades in real-time (since you reused to do that in the chat room). You can post a blotter at the end of the day.

 

Once again we are back to the theme of - be careful whose advice you listen to when they refuse to show you that they can actually do this job. While you may typically associate that w/ a vendor selling a $5000 course, it's just as useful to those giving out 'free' information.

[diablo272 10]

1. To expect everyone who shares information for free to give proof that they are a master of their field is utterly ridiculous. Think about that for a moment in the context of fields outside of trading.

 

2. The fact that someone is not a master of their field does not mean that the information they're sharing is not useful. Just because you show a P/L at the end of each day, does that mean that someone should listen to every bit of trading advice that you give? Does it mean that you're always right? By the way, no disrespect, but posting a P/L like you guys do in that thread doesn't prove anything. I could fabricate one of those in an image editing program in about 5 minutes. And NO, I'm not saying your P/Ls are fake, I'm not saying that at all. I'm only saying that if you look at them objectively, they really don't mean anything. The fact that you post P/Ls on the internet does not prove that you are profitable.

 

3. What you're doing is very offensive. I don't blame Db for not showing you proof of his trades. If a random person came up to me on the street and demanded that I show him proof that I make money trading, I wouldn't give him the time of day. Have some respect.

 

4. Re his e-book: I couldn't even find a way to buy his e-book (though I only looked for a few minutes). And before you mentioned it, I didn't even know he was selling one.

[thalestrader 14]

Could be five years. Could be never. Depends in large part on how many detours the wannabe takes, how many dead-ends he winds up in, how susceptible he is to the con. If he's blessed with common sense, a finely-tuned bullshit detector, and a basic understanding of what an auction is, shouldn't take more than a couple of months.

 

I agree. I was one who did fall for the cons. My bs-detector was so maladjusted that I spent an amount equal to several times my inital grubstake on systems, software, seminars, books, courses, etc etc etc. I was fortunate enough to manage to muddle through, marginally profitable, for years.

 

The few things necessary to know to trade profitably are susceptible to easy and quick communication. What is usually, and unfortunately, neither easily nor quickly accomplished is the belief that those few necessary things is all that is necessary to succeed.

 

Elsewhere, I posted the following:

 

Now, as to the question as to when a new trader can expect to be breakeven or profitable, well, that depends entirely on that trader's psyche. In the end, the only thing standing between any trader and either incredible income and wealth generation or terrible financial ruin is whether he or she is able to cut losers quickly while not cutting profits short too. If you can master your emotions, the rest if a piece of cake. Some may be successful right away. Others may forever be net losers. Near the beginning of Wyckoff's Studies in Tape Reading, he compares two traders, both of whom started out together in the same brokerage office watching the same ticker machine trading 10 share lots. Years later, one of these traders was still trading 10 lots while the other, in addition to having amassed a great fortune, was now trading an account equity of 100K. Some have it, and others never will ... The answer ... is going to be unique to each individual, and can range on a scale of immediately profitable to perpetually unprofitable.

 

So, I would say that if anything, perhaps DbPhonix is being a bit too pessimistic as he implies that several months is perhaps the minimum necessary. I think that the right person, with the proper respect and tolerance for risk, could, like a young Livermore, show proficiency and profit immediately. However, that would be an exceedingly rare individual indeed.

 

Far more common is the experience most of us have when we decide to participate in the markets with the hope of profiting from our speculative encounters. We approach this new activity with so much emotional and psychological prejudice and misconception that we allow ourselves to become the prey of the dream vendors. We struggle.

 

From our repeated defeats and our lackluster victories we imagine that the key to success is even more complicated and elusive than we initally believed. We seek new indicators, ever certain that somehow the mathematics of these criss-crossing lines will carry us to profits.

 

We vacillate between "technical" and "fundamental" analysis.

 

First we want to day trade, and then we convince ourselves that such is a fool's errand, so we focus on longer term swings. Failing there, we are back to day trades. Or worse, we come to have an account filled with day trades that "became" swing trades or "long term holdings" because we did not cut our loss short with the first few minutes of the inital trade.

 

We are, unthinkingly, drawn to the blinking and flashing red and blue and green lights of fancy software systems as the instinct driven insects are to our glowing and flashing backyard bug zappers, and with not unsimilar results. Our egos fried, and our equity burnt to a lifeless crisp, we retreat from the market's battlefield, defeated.

 

I do not know DbPhonix, but I have been a visitor to his blog here at TL for some time. There is enough technical information there provided free of charge to give anyone all the knowledge necessary to trade successfully - whether you are a day trader or a trader who plays for the bigger swings or longer pulls.

 

In the end, the key to success in trading is much more a matter of will and emotional control than any amount of technical knowledge.

 

Such technical knowledge as is necessary as well as descriptions of the emotional and psychological control necessary is available either free of charge or in rather inexpensive books by authors with names such as Lefevre, Wyckoff, Schabacker, Baruch, Darvas, and O'Neill. I would also add Sperandeo, Buzzy Scwartz, and Stanley Kroll to the list.

 

Perhaps Brownsfan could set up amazon links to these books somewhere here on TL where the purchase would benefit the Leukemia & Lymphoma Society. That would be a great way to benefit both struggling and aspiring traders as well as a worthy orgnaization striving for the benefit of all people.

 

Best Wishes,

 

Thales

[jonbig04 10]

Yea, yea nobody knows, every one is different etc etc

 

I figured it would take me a year to get from not knowing what a future was, to trading cash profitably (notice I didn't say getting rich). I'm coming up on that mark, and I think I should be pretty close.

 

A year from that point and, well lets just say the expecs are high lol

[programmer 10]

Requirements :

 

A) Mental Intelligence + Discipline .

 

B) Finance to allow learning.

 

C) Proper Wife ( Best with a job [Nagging value diminishes exponentially]).

 

D) Good house with an Iron room to keep the wife out.

 

E) Kids....well...see point D.

 

F) Programming ability.

 

G) Yoga / Classical music (No Mozart(Drama queen) and No Screaming opera

singers, Bach Piano is best).

 

H) Must be calm, thus "Go forth and multiply" however this may be a problem

with the Iron Room VS the wife, unless you have other means to releave

yourself .

 

I) Food , Proteins,Fibres, fruit, less coffee is better.

 

J) Train : Gym, or Swim.

 

K) Avoid chat rooms and "mentors".

 

L) Know thyself.

 

M) Do not trade while Drinking, especially Vodka which tends to make you go

short all the time for some reason, no idea why.

 

Well if you have all the above, I think that :3-5 years will do.

[BlowFish 10]

this is an impossible to anser question as it is depending on inteligence,

creativity and many more

factors

 

in short....

 

me is not you

you is not me

 

Absolutely, though I believe it is inversely correlated to the attributes you mention!

[DbPhoenix 42]

While I appreciate diablo's and thales' kind words, brownsfan has been so very interested in this for so very long. So here ya go, brownsfan:

 

I like to be done by 1100.

 

.

[jonbig04 10]

I've been ignoring this tussle for a while now, but IMO

 

You all have valid points. DB has been very helpful and informative, but one can never be too careful when taking advice from someone on the internet. How long it takes to "make it" as a trader probably has a lot to do with whose advice you take and whose advice you leave. One of the very first things I ever read on trading was DB's E book, and God knows how much time it took off of my learning curve. I was skeptical at first because I did have to pay for it. I believed then, and still do, that if you are a great trader the few dollars for an E book really won't mean much. I've been tutored for free, and I see now that I was right. Great traders make so much damn money that one should be skeptical when it comes to buying something. Yet I knew there was a lot of BS to sort through and I really wanted to get to what mattered. DB helped me do that, and if I had to do it again I would spend 10 times as much.

 

However, I don't care for the particular sanctimonious way in which he often addresses many others. I think his teaching would be more effective if he was a little less dismissive in the way he answers questions and speaks to us noobs. We realize it took you a long time to get to the place you are at DB and we respect that, but that doesn't mean it will take us that long-thanks in large part to people like you. So give us a break, cut us some slack and remember you are never to old to learn.

 

Also, IMHO ( and I do mean humble) a lot of the information you give, while great stuff, isn't immediately necessary for becoming a profitable trader. it would be nice if you prioritized it so noobs could focus on the most important stuff first.

[diablo272 10]

Decided that this post was a bad idea.

[DbPhoenix 42]

 

However, I don't care for the particular sanctimonious way in which he often addresses many others. I think his teaching would be more effective if he was a little less dismissive in the way he answers questions and speaks to us noobs. We realize it took you a long time to get to the place you are at DB and we respect that, but that doesn't mean it will take us that long-thanks in large part to people like you. So give us a break, cut us some slack and remember you are never to old to learn.

 

Also, IMHO ( and I do mean humble) a lot of the information you give, while great stuff, isn't immediately necessary for becoming a profitable trader. it would be nice if you prioritized it so noobs could focus on the most important stuff first.

 

I don't think of trading price as a religion, but it does make sense to me.

 

Sanctimony aside, however, once it becomes clear that a trader -- beginner or otherwise -- and I are not on the same wavelength, I don't pursue it. There are many ways to make money in the market, and if someone chooses another path, there's no need for me to argue the point. It is not, after all, my money. Therefore, when it became clear last summer that you and I had very different views on trading, I didn't pursue it (see the Edge vs Mentality thread). Nor have I posted to your journal. There's no point. Only your own success or failure will convince you as to whether you've been right or wrong.

 

As for what's immediately necessary for becoming a profitable trader, you (as you say) are not yet a profitable trader. Perhaps if you'd followed the steps I suggested in the Trading Journal, you would be. Or maybe not. As I said, there is more than one path to profitability. But if I'm reading your posts correctly, you have not yet established an edge, you have not yet defined your setup in a way that can be tested, you don't like to do backtests, and you don't like to keep detailed records. And this is only a part of the process I've suggested. It may not be the path to profitability for you, but it has been for many. To say that I haven't "prioritized" anything or put "the most important stuff first" is inaccurate.

 

Again, you may find that different steps are better for you, that the priorities are different, that something else may be "more important". The only way you have of knowing for sure is to do the work yourself and to examine the results you've achieved. You've been at this for around 18 months, and perhaps you are at the point where you can reexamine how close or how far away you are to achieving your goals and whether your views on trading and the markets have aided or impeded your progress. If you believe that you're on the right track and you're happy with your progress, then what I think is completely irrelevant. It's your money and your time.

 

I go into this here because this thread is about how long it takes to become a profitable trader. And as I said in my first post, it "depends in large part on how many detours the wannabe takes, how many dead-ends he winds up in, how susceptible he is to the con. If he's blessed with common sense, a finely-tuned bullshit detector, and a basic understanding of what an auction is, shouldn't take more than a couple of months." The flip side of this, of course, is that if the beginner takes many detours, is easily conned, has little or no common sense, has no idea how an auction market works, and has "psychological issues" playing Monopoly, much less trading the markets, then he will very likely spend years trying to cobble something together, at least until he runs out of money.

 

The trust that beginners place in what they read in books and online and hear in seminars and courses and on CDs and DVDs astonishes me. Without having the least idea whether Joe or Mary is a successful real-time trader or even can trade at all, the beginner will invest years of his time following these messiahs, and often invest thousands of his dollars as well. He can't or won't apply his own intelligence to the task and determine for himself whether what he's being fed is twaddle or not. He will, for example, believe with the fervency of the zealot that expectancy is critical and that entries don't matter, even though Van Tharp can't trade his way out of a paper bag.

 

Brownsfan regularly and often fans the flame of his obsession over my failure to provide "proof" that I not only trade but that I am successful at it. But the fact is that neither has he provided any proof that he trades and that he is successful at it. Do I bring this up again and again? No. Why? Because I couldn't care less whether he trades or not, much less whether or not he is profitable. He may be a complete and utter failure, or he may be wildly successful, but what is that to me? It doesn't affect my bottom line in the least.

 

The beginner cannot trust anyone, regardless of who that anyone is, how many posts he's got, how many thanks he's got, how many times he's been nominated for POTM, whether or not he's a moderator, how long he says he's been trading, what kind of or how much experience he claims he has, what he says his results are. That guru the beginner follows so devotedly could very well be a teen-aged girl posting messages with her parents' laptop. But the beginner doesn't have to trust anyone or anything but himself. What with replay, the beginner can test any idea he encounters and determine whether or not there's anything to it in no time at all. If he is intelligent and sensible, he may make that determination in even less time than that.

 

It is ironic that those who want the most the fastest with the least amount of work wind up with the least and spend the longest time getting it, usually with more work than if they'd had a proper start to begin with. There is simply no getting around the fact that the beginner must have an edge. There is no amount of work or dedication or counseling or expenditure that will turn a losing strategy into a profitable one. Nor can the beginner assume that if he instead chooses to buy something that is purportedly successful for somebody else that it will be successful for him, even if he has indisputable evidence that that somebody else is in fact successful with whatever system or indicator or strategy it may be.

 

So coming full circle, how long does it take to learn how to trade? Again, "it depends in large part on how many detours the wannabe takes, how many dead-ends he winds up in, how susceptible he is to the con. If he's blessed with common sense, a finely-tuned bullshit detector, and a basic understanding of what an auction is, shouldn't take more than a couple of months." If he isn't but rather prefers to take what appears to be the easiest and quickest and surest route, it could take five years, or ten, or twenty. Or more.

[Tams 20]

for some, the pleasure is in the journey, not the destination...

 

enjoy !

[DbPhoenix 42]

for some, the pleasure is in the journey, not the destination...

 

enjoy !

 

Only if they're making money. If they continue to lose it throughout the journey, they'll never reach the destination.

[jonbig04 10]

I'll keep this somewhat short as to not jack the thread completely lol. I don't think we hold different views on trading, at least that I'm aware of. The thread that you mention, I will be completely honest about it now, as I really wasn't then. I was really trying to figure out what seperated the traders that make a little from the traders that make a killing. I don't know how much you make, nor is it any of my business, but what I learned and what the point of that thread was is this: if you are well capitalized and have and edge and have been trading for years, there is no reason you shouldn't be making millions all the time, daily weekly etc. The the fact that you charged me for your e-book led me to believe, rightly or wrongly, that you weren't. I'm speculating here, but I would venture a guess that maybe, just maybe, the reason you didn't take kindly to that thread is because you still have some mental barriers to overcome yourself. I could be dead wrong, you could make $10mil a week, but thats my guess. I don't say that to be an ass, but it was the conclusion I came to. It is my honest opinion that the departure you mentioned was me brining up a valid point that perhaps you didn't want to hear. I could be wrong though, thats just the feeling I got. So many great traders with so much knowledge, yet they only take a pittance of what is available to them if they really have an edge. Why? Because its mentally difficult. That is why I started that thread. Now, trading with Anek I've been able to see first hand just how much money people can and do make on a consistent basis. Not just because of how much they know, but because they are disciplined and fearless too.

 

I am not a cash profitable trader. My setups are easily defined, I could do it in just a couple lines. I have changed a few things over time. The biggest (and best) change I made was to look for the same setups in a larger time frame. As far as backtesting, man oh man have I done my share. However just to illustrate a point I will explain why I'm not raking in the cash haha. I've been SIM profitable for a while, so why not live? Easy, the answer is confidence. Not to get too personal, but since I delved into your mental arena its only fair that I explain mine. I used to be the most confident person around. I graduated high school and spent some time as a broker, learned the finance ropes and then got involved in real estate. Anyways because I was tenacious, knew finance and lived in a bubble area I was able to leverage the hell out of what money I had and make large gains. Blah, who cares right. anyways, long story short when everything melted down I lost a $700,000 house, a car, ruined relationships with family members, and was left by a girl I thought I was going to marry. now I have to spend quite a bit of time convincing myself that I'm not a complete failure lol. I'm only 21, but understand I was used to a 6 figure income now I'm down to 0 lol. Anyways, worse things have happened to better people but my point is that the reason I'm not making money this second is because I lost confidence in myself. It's mental. I knew, from that thread, that the market would sniff out any weakness I had. I had one. Obviously this is not the kind of thing I put in a log, and may perhaps answer a lot of questions for the people who have been reading it wondering what the hell I'm doing SIM lol. Now I have been live a few times for fun, and I was fine. But when I'm 100% sure of my edge and I have been doing it live for a month or so, I consider the journey almost complete. I may have lacked confidence before, and it may not be so great now, but I know myself. I know that when I have the advantage and am sure of myself there will be no limits to how much I can make. Just as I did as a teenager. Now I won't be a millionaire overnight, or within the first year-but it won't be long after that. Because I'm conquering my mental demons now.

 

The last few months have been about me gaining the confidence I once had, because as you always say sometimes trading involves mental therapy. I had to sort out issues with myself. This has set me back quite a bit. I'm pretty sure I started a year ago, but it could be slightly more. But as I said before, besides my pysche problems, I'm pretty sure I have followed your steps. Our main departure is that I believe (based on what I learned and saw with Anek) that one only needs a simple edge, a simple advantage and the confidence and discipline to trade it. Does that make us so different?

 

I do wish you would follow my journal, at least the last few pages. I'm not killing it yet like I'm sure you do, but I think I'm darn close (damn entries). I would love your feedback on how to improve my entries. Whew its late and I've rambled for long enough.

[Tams 20]

that's one smart girl.

[jonbig04 10]

that's one smart girl.

 

Nice, thanks for that. I do hope it made you feel better.

[sevensa 10]

that's one smart girl.

 

Amazing how all the good you have done and respect gained so far on here can be undone in 4 words...

[DbPhoenix 42]

I'll keep this somewhat short as to not jack the thread completely lol.

 

snip...

 

A. That I charge for my ebook appears to bother you something fierce. My question to you is why should I go to all the time and trouble of putting something like that together and then give it away? My time is, after all, worth something, and even if I were to compute it based on 10 cents an hour, the book would amount to considerably more than $30.

 

If you believe that Connors trades, or Elder, or Raschke, or Nison, or anyone else who has compiled a book, ask them to send you a copy gratis. If you don't believe they trade, why bother to ask?

 

Enough with the book.

 

B. As for your trading, we went through all of this a year ago, but at the time you wanted to make what I believe you called "boatloads" of money and you wanted to make it fast. This did not sound promising to me, at least in terms of my time. Plus you got a mentor, and too many cooks, etc.

 

But I'm afraid we do not see trading and the markets in the same way, though that is not necessarily a bad thing. I don't think the market is fractal, either, but no one is required to agree with me. In any case, I don't see that you've followed the steps I suggested in the Trading Journal I referred to above. Not that that is necessarily important. As I said earlier, there's more than one road. I would not have brought it up had you not said that I didn't "prioritize" the information nor place downstage center what I thought was the most important. The most important element of a consistently profitable trading strategy is an edge, and I say so at the very beginning after which I get into the process of developing one.

 

As for the present, whatever issues you have with your trading are really between you and your mentor. If you're satisfied with how things are going, then there's no problem. I do suggest, however, that you look over at least the last couple of days' or so entries and read everything as if it were someone else's journal. Are you really listening to the help that members are trying to provide?

 

This has probably drifted into the realm of the off-topic by now, and I don't want to hijack the thread either. I do hope that those who are interested in the subject of this thread can get past the personalities and focus on the central issues that determine how long it takes to become a profitable trader. Contrary to some remarks that have been made, whom one listens to -- much less whether or not that someone is a successful trader -- is not a central issue. If one believes that everyone from Velez to Homma is a crook and has made it all up, he can learn most of what needs to be learned by getting a cheap or free charting program and data and sitting down in front of the screen with a stack of legal pads and a box of pencils and figuring it out himself, which is what the pioneers such as Dow and Wyckoff and Livermore and Gann had to do. Doing this takes at least a brief familiarity with the scientific method, but there's nothing especially difficult about that. However, since the schools may not be teaching it any more, below are the essential steps:

 

The essential elements of the scientific method are traditionally described as follows:

 

- Observe: Observe or read about a phenomenon.

 

- Hypothesize: Wonder about your observations, and invent a hypothesis, (sometimes one's hypothesis is initially nothing more than a "guess"), which could explain the phenomenon or set of facts that you have observed.

 

- Test a hypothesis

 

- Predict: Use the logical consequences of your hypothesis to predict results (e.g., measurable experimental values) that must be found if the hypothesis is to be judged correct -- whether it is 'complete' or not.

 

- Experiment: Perform experiments to test those predictions. (Note that great precision regarding a negative result might not be required to falsify a hypothesis.)

 

- Conclude: Failure to see the predicted results from a well designed and implemented experiment is clear indication that the hypothesis is defective. Try again. Seeing the predicted results is an indication that the hypothesis is acceptable though not 'confirmation' or 'proof' of its correctness.

 

- Evaluate: Search for other possible explanations of the result until you can propose no better account of your data. Formulate a new hypothesis which may better explain the experimental data and the original observation.

 

- Repeat

 

If one has trouble applying this to the markets, perhaps the following will be of help:

 

1. Study price movement.

 

2. Develop a set of preliminary hypotheses which take advantage of these movements and test them according to standard methodology.

 

3. Decide what strategy (breakout, retracement, reversal) will best take advantage of what you think you've found.

 

4. Decide what tactics you're going to employ to implement it.

 

5. Carefully define the setups which put these tactics in play.

 

6. Develop a trading plan around this strategy, these tactics, and these setups.

 

7. Evaluate the results.

 

8. Rinse and repeat.

 

Note that there is nothing abstract, theoretical, philosophical, cosmic, or ethereal about any of this. It's just work. Lots of it. And no one can do it for you.