You Are Wrong. Deal with It!!

[TheNegotiator 13]

A post in another thread has me thinking about this point again and it is a big big road block for many traders. The ability to identify, accept and embrace their own failings. If a guy can't make money trading levels, does it make it something which doesn't work? Of course not. But often you see this sort of thing and people claim therefore that the idea is invalid. They look everywhere but in the mirror for reasons of failure. These are probably the same types who don't take their losses as part of the business too. Or that as a discretionary trader you can and will f&*k up no matter how hard you work. Obviously putting the preparatory effort in is a must, but there is a point of diminishing returns for this kind of work (and actually the relationship inverts). But losses and times when you mess up are information and data to be looked at to ultimately improve your trading. Be humble, accept your own mortal weaknesses and leverage this to move forward in your trading.

[Tams 20]

My perspective is,

trading is not about theories,

or systems

or methods.

 

Trading is about execution -- how you can convert a concept into action.

 

There are many valid ways to trade,

including many that are freely and generously disclosed on this forum.

 

Some make money,

some don't.

 

It's all in the execution.

 

So don't beat the system up,

but instead, ask yourself why.

[TheNegotiator 13]

My perspective is,

trading is not about theories,

or systems

or methods.

 

Trading is about execution -- how you can convert a concept into action.

 

There are many valid ways to trade,

including many that are freely and generously disclosed on this forum.

 

Some make money,

some don't.

 

It's all in the execution.

 

So don't beat the system up,

but instead, ask yourself why.

 

It's about so much more than just the method you use. It's about doing your homework before you trade, having a clear plan which you can follow, being able to follow your plan through thick and thin, being able to step up and be "on your game", knowing where to look for new trading ideas and how to develop a plan to test and trade those ideas, it's about not losing the plot when you have a few bad trades/days in a row or becoming euphoric when you have a winning streak, it's about protecting against potential unseen problems, it's about staying ahead of the game.

 

If you have a method which loses all the time, you won't make any money even if you have everything else covered, but then if you can't get past that first hurdle you need to ask the question of why that is. Is it because the strategy sucks or is it because I'm not using it very well.

[Obsidian 10]

maybe it is the unnecessary risk (i.e. trading size) people take makes it hard to deal with. if the market pinches you, you can still act as if nothing happened but if the market punches you right in the face, you may lose all your discipline

[Colonel B 10]

I recently had an interest in trying out a new trading ladder. So I started contacting a list of retail brokers that allowed for the specific data needed for this ladder. I was talking to one of the perspective brokers and we got into a conversation. I simply asked him about his clients and what that actual percentages were. He informed me that he had short of 500 actual clients personally. I asked how many were active traders and he told me that a little more then 200 were what he considered active. Does anyone have a guess out of these 200 how many were up for the year? Take a guess. 2

That is right only 2. That means that only 1% of his active clients are up for the year. And that .004% of his total clients were up for the year. Now I have heard many stories about 75%-95% of traders lose money. And according to this broker its 99% for his clients. Realize this is a very small sample size and that other brokers may have different numbers. But I hear the same crap all the time about how there are many ways to trade. This is true. There are lots of ways to trade but I am willing to bet that 75%-99% don't make money. Or at least wont make you any money in years like this year. The simple notion that some make money and some don't is a flat out LIE. Lets set this straight once and for all.

 

MOST DON'T MAKE MONEY SOME DO!

 

Its all in the execution is flat out wrong. The chances that you are the problem and you have a good strategy are not good. Chances are that your strategy sucks and your main problems come from ignorance and less from self discipline. I think the idea that most systems work is wrong. The idea that its so much more then the method is false as well.

 

Consider a system that consistently gets you stuck long or short. You will not be able to turn a profit to compensate for your losses. Consider a trading strategy that takes 40-60 tick losers every times its wrong and only 5-10 tick winners when its right. You wont be able to turn a profit to compensate for your losses. No amount or homework, self discipline, or a clearer plan will change these truths.

 

"If you have a method which loses all the time, you won't make any money even if you have everything else covered, but then if you can't get past that first hurdle you need to ask the question of why that is. Is it because the strategy sucks or is it because I'm not using it very well." Soooooo true but how do you tell a good method from a bad method? For a person who doesn't know the first thing about a good system then they fall into the situation of not knowing what they don't know.

 

Often times traders beat themselves up unnecessarily and for no good reason other then its their fault. What about the 50%+ of snake oil salesmen calling themselves "educators" that taught you to buy at the top and sell at the bottom? Some how its part of trading conditioning that its all your fault for following the guidance and counsel of an educator in a non-moral venture. This is not true in that they do bear the blame, but unfortunately you have to bear the consequences.

 

Deal with it!!! Ok hear are some suggestions. If you take the 75% or the 99% number that has been put out about how many traders lose money and use it as a metric for all things trading it works out to this. 75%-99% of paid educators are wrong and are not up in their trading for the year. 75%-99% of posts on this forum are wrong and will not help you to be up for the year. 75%-99% of people on this forum are wrong and are not up for the year. If you try to invent your own system chances are that you are going to fail and by now I don't have to post the percentages of failure. In all honesty you should find out who is currently in the top 1-25% and learn from them . And the top 1-25% are easy to identify because they are the ones that are up for the year. Don't beat yourself up and just understand that this industry is full of failure. You are better off being more skeptical then just "jumping in feet first." Rest assured that there are people out there that are watching and trying to figure out where your stops are and how to get your money out of your account and into theirs. I am one of those guys that looks for where the stops are and how I can get them hit so I can feed my family and pay my bills. You are just a number on my footprint that just got run over.

 

Get a good coach and a good mentor because every pro anything has the best coach. Do you think that Bob Bowman is a part time high school swimming coach? Not a chance. I think if you are going to compete at the highest level you are going to need a coach like that. I bet you wouldn't even think to even get into the pool and compete with his best swimmer because you know you would get smoked. What pro swimmer or pro football team or pro anything got to be pro or stayed pro with out a pro coach? Let alone you getting and staying pro on your own. My suggestion is that you get a Bob Bowman type for a trading coach because its not about just being the fastest in this pool. Realize that at the bottom of the pool of trading there are sharks and in trading you could lose more then you started with. Stop with the idea that you can invent a solution to the bleeding of your trading account when the sharks in the water can smell the red of your DOM. Especially when the sharks have been eating trading accounts for many years and were trained by sharks that were eating accounts for many years before them.

[horace 10]

I recently had an interest in trying out a new trading ladder. So I started contacting a list of retail brokers that allowed for the specific data needed for this ladder. I was talking to one of the perspective brokers and we got into a conversation. I simply asked him about his clients and what that actual percentages were. He informed me that he had short of 500 actual clients personally. I asked how many were active traders and he told me that a little more then 200 were what he considered active. Does anyone have a guess out of these 200 how many were up for the year? Take a guess. 2

 

 

.

 

A very interesting read from you Colonel B, but what if a good Mentor is nowhere to be found.

What do you suggest then to a learner trader. How is he/she going to develop a tradeable system for making money.

[zdo 20]

In the posts above, and actually in posts in all forums, and in developing traders’ thinking all over the world, mistakes and losses tend to get mished together…

Each trader, for his or her own sake, needs to work to make the distinction between losses and mistakes as clear as a high quality cut diamond.

Continually analyzing what you did wrong is a mistake. Get over it!

But the “getting over it” of the nearly angry, etc, dismissive type won’t really get you over it!

That level of “Get over it” will not get you to genuine ‘probability thinking’ (and accompanying mindsets)

 

One way to do this is to take the attitude that it is impossible to make a mistake on the entry. Obviously, this is more apropos and seamless for certain edges than others…still…regardless of the degrees of discretion - weigh this and that, factor in whatever, etc. etc. and accept your decision … “get over it” beforehand!

When you ‘get that’ ie can ‘execute’ it internally and consistently, then progress to take on the attitude that it is impossible for you to make a mistake on the exit. For most, the one unbreakable rule becomes to ‘get over’ the ‘risk seeking in losing positions’ bias… but each individual has other traps in this area too …

anyways , for each edge progressively remove the ambiguities in your own rules of factoring and weighing … however simple or complicated it is.. ( and complicated / many conditionals is ok btw. )… to where you really “Get over it!” - by getting over it beforehand

Then you’re left with a mind rarely occupied with mistakes… the losses are just losses – trades that simply did not work out as they might have. (but btw !!!!!!!!, I’d be lying if I told you truly getting to where you were very predominantly ‘opportunity seeking’ instead of ‘threat vigilant’ is simply a mental process … but that is beyond scope of this thread) …

 

And then you’re left with the sizing issues / mistakes Obsidian was discussing above. Anecdote: I mentor already successful traders with 5+ yrs experience… my easiest ‘mission’ ever was accomplished by suggesting to and helping one trader simply custom shape a sizing algo to his edge probabilities consisting of

a larger, fat bottomed, geometrically thinning, pyramid (looks like some of the reactor cooling towers) for his with trend entries; and

a smaller/shorter, inverted, pyramid for his contra trend trades.

(an example only! … this was specific to his system and ways and capitalization!)

But generally speaking - sizing mistakes can be ‘gotten over beforehand’ too! Highly capitalized or not… ANYONE can do it! OandA

… all my mentorees (sp) ‘regress’ to OA’s infinite sizing for a time…

 

negoc8r, re: “point of diminishing returns for this kind of work (and actually the relationship inverts).” Got time to explain that further? thx

 

 

A very interesting read from you Colonel B, but what if a good Mentor is nowhere to be found.

What do you suggest then to a learner trader. How is he/she going to develop a tradeable system for making money.

 

study the markets (including via trading) and change your representations of the auctions until you find an edge…or two… or three … or four

then seek the guidance of others who have a very similar edge(s)…

THEN and only then seek a mentor

 

so re: “…no where to be found”

diligently prepare, and when you are prepared, then diligently seek a mentor..

“When the student is ready the teacher appears”.

… and that is not just ‘spiritual bag’ bulsht….

btw ‘diligently’ = just keep asking

[Colonel B 10]

study the markets (including via trading) and change your representations of the auctions until you find an edge…or two… or three … or four

then seek the guidance of others who have a very similar edge(s)…

THEN and only then seek a mentor

 

so re: “…no where to be found”

diligently prepare, and when you are prepared, then diligently seek a mentor..

“When the student is ready the teacher appears”.

… and that is not just ‘spiritual bag’ bulsht….

btw ‘diligently’ = just keep asking

 

This is that stuff I was talking about earlier. If you plan on staying in sim and if you don't really care about making a living then follow this guys advice and just skip to the next post.

 

I associate trading to swimming. They can both be dangerous. Swimming can be physically dangerous and trading can be financially dangerous. I actually did alot of swimming in college so I know a bit about it. I was a lifeguard during the semester to pay the bills. I saved a few folks who were self taught and who "studied" swimming and "thought they had an edge." I was there to help recessitate them and call the EMTs. So I guess this guys advice holds true. I am just guessing that you would rather be the guy that mans up and takes the class on how to swim then the guy that I give mouth to mouth to and gets taken out the side door to the hospital in your swim trunks. Getting a margin call on your 5000 dollar account is far less humiliating but is no less psychologically damaging.

 

For some reason no one goes down that do it yourself and figure out your own stroke with out learning some basics bullshit with swimming. I mean we all know you can properly learn to swim by reading stuff off of a forum. The folks that lead you to believe successful traders do it with out help or encourage you to invent until "you find your edge" are wrong. Why don't you go out and invent a new swimming stroke? Go on and go invent something new. Oh wait you don't want to do that? Why not? Oh is it because you don't need to? Oh you are not going to risk your life to "find" a new stroke? Well that is how every one learns right? You want to learn how to swim or to trade you just jump in and figure it out right? So if you want to learn how to swim and to swim good just hook up with a bunch of other failing do-it-yourselfers and your in business? Um NO. Hopefully I have made a few points here that make sense.

 

The main problem in the retail community is that I bet 75%+ of the educators are not going to teach you correct principles or enough things to help you break even let alone turn a profit. Some of these guys are so bad you are better off doing it on your own compared to them. If 75% of swimming instructors didn't actually show you how to swim and instead taught you ways that would for sure get you into trouble then more people would drown. Seriously if 75% of red cross certified instructors taught incorrect principles or told 4-6 year old kids to "figure out there own way" parents would revolt. I totally disagree with Mr. ZDO in this regard (I don't disagree with all of his stuff on other posts). I think most of your time should be spent finding a teacher or mentor and less on looking at markets unless you like wasting time and forming bad habits that will be more difficult to unlearn. I bet that if you look for the best trainer/coach it can take weeks of searching. You could just start with this forum. I bet its backed with tons of people wanting to sell you something. I bet most of them are garbage but who knows. This shouldn't stop you from going through and evaluating them. Seriously I got in my email today an advertisement for "Setups R Us!" presented by Joe Baker & David Dube of Trade Pilot Pro." Setups R US come on WTF. You are going to have to sift through countless hours of this crap to find anything useful. These clowns call themselves pros? Do they use correlating markets? I bet not. Do they even have multiple DOMs for different markets up? I bet not. I bet they have computer science degrees and are or were computer programmers. Good educators are going to teach principles on how markets work and skip all that "big guys move the market" and "lets get on the side of the big guys" crap. They are not going to go for these wild ass 20 point moves but rather teach you how to build size. A good one will teach you about correlating markets and how to read multiple DOMs, I mention these characteristics because they are completely void in everything I see in the retail market.

Edited October 10, 2012 by Colonel B

[steve46 12]

take a breath man

 

First, there aren't many retail traders left...most of you have already blown your accounts to hell long ago..

 

Then those who still have two nickels to rub together are so afraid to lose that they can't really trade because they are undercapitalized...

 

This is an adult game folks.....you have to be an adult and have adult mentality to play...and most here simply don't have it....

 

Systematic approaches that work are mostly behavioral these days....on a daily basis, people are simply trying to figure out what does and does not represent fair value...the rest is folks (and computer programs) jockeying for position...interestingly if a person can become a skilled observer, it is possible to watch price move and over a small sample, determine which direction the parade is headed.....once you obtain that skill, its essentially over and what you do from that point on is wait for your opportunities to present themselves....

 

Agree with the gentleman as far as vendors go...how many have we seen here over the last few months....all looking like used car salesmen.....my two cents....if you want to teach people how to do this.....first you have to find a way to screen the adults from the "adult children", then you simply display your skills so that they can see what it takes to win this game...I think most folks would be surprised at how much preparation it takes to have a winning game...but then thats what separates winners from losers in a number of endeavors....

 

Good luck folks

[Tams 20]

Lol !

 

 

 

 

 

disclaimer: the LOL was not pointing at any specific person or posts.

Edited October 11, 2012 by Tams

[steve46 12]

Lol !

 

 

 

 

 

disclaimer: the LOL was not pointing at any specific person or posts.

 

 

What is this world coming to, that a person has to worry about offending someone by simply "lol'ing".....don't worry man......"lol" as much as you want....knock yourself out...."lol" yourself into a coma.....

[SIUYA 11]

The main problem in the retail community is that I bet 75%+ of the educators are not going to teach you correct principles or enough things to help you break even let alone turn a profit. Some of these guys are so bad you are better off doing it on your own compared to them. ....... I think most of your time should be spent finding a teacher or mentor and less on looking at markets unless you like wasting time and forming bad habits that will be more difficult to unlearn. ......... Good educators are going to teach principles on how markets work and skip all that "big guys move the market" and "lets get on the side of the big guys" crap. They are not going to go for these wild ass 20 point moves but rather teach you how to build size. A good one will teach you about correlating markets and how to read multiple DOMs, I mention these characteristics because they are completely void in everything I see in the retail market.

 

....and there in lies the issue ColB -

This is of course the chicken and egg - IF you can get a mentor early on then great - but good luck in finding that. I would guess that a like minded trading buddy who can be straightforward and honest with you might be just as good a bet. The type of person who says - why are you shorting, you told me you were bullish 5 mins ago.

 

Finding a good mentor is very difficult, and even then, finding a good mentor that can teach you something that actually suits your personality style is even harder....and even when you do find one - or are lucky enough to be able to be taught by a multitude of different people/styles - you will still most likely have to work things out for yourself - in finding your own way, i think it can be summerised for me as basically working out what works for you - doing more of it, and less of those things you are not good at, or its an inefficient waste of time.

 

its good advice to spend time trying to find a good mentor, or a series of them, and you often dont need to pay for it.....but there is no substitute for hard work and working it out yourself as well - a cliche - but cliches have their basis of truth and are often ignored.

 

The retail market is a very different beast to the institutional world - very very very few institutional traders actually take specualtive risk, or trade their own money, rely purely on it for income or sit by them selves, or have no risk controls.

 

If you are a retail trader and you are losing and you have not first

a...tried to understand the market you are trading in terms of the basics,

b.....developed a philosophy for how it moves, and the best way for you to make money, c....developed some sort of plan,

d....tested it, and

e....review your trades

 

....if you have not first done this then i would guess that finding a mentor for this person is much like trying to skip certain things in order to get around doing the work.

 

(I would also add IMHO - a mentor does not charge money for this, they do it for other reasons, either corporate, responsibility to pass on the baton, educational, pure enjoyment

from the web....

Mentorship is a personal developmental relationship in which a more experienced or more knowledgeable person helps to guide a less experienced or less knowledgeable person. However, true mentoring is more than just answering occasional questions or providing ad hoc help. It is about an ongoing relationship of learning, dialog, and challenge.

 

It involves more than just showing some one the ropes.....lets not mix educators and mentors.)

 

.............

Edit : sorry it was off topic.....

Back on topic - what else is there to say.

Trading is the ulitmate when you are wrong you know it, there is no one else to blame, and even if your pet monkey hit the buy key by mistake, you have to deal with it. If you prefer politics, the blame game, hogging credit or any other coportate strategies trading is not for you.

Edited October 11, 2012 by SIUYA

[Raleigh Lee 10]

My favorite quote: "That that is, is." :doh:

[zdo 20]

Colonel B, I understand your disagreement about the order of progression. I even wish you were 'right'. And don’t worry, your position is safe in the big crowd… only a tiny few will ever consider challenging it. However, across many years and in many contexts, I have been exposed to and have observed with ongoing curiosity the paths of over 2000 developing traders – and I’m reporting that the preponderance of that small percentage who do survive and thrive do it close to the way I described above for Horace, et al,

…and, btw, for sure you won’t find them “just hook[ing] up with a bunch of other failing do-it-yourselfers and your in business” (or falling for similar traps being alluded to in the distractions and ‘discounting’ attributions made in your post and elsewhere.)

For the most part, those who make it tend to go through a ‘playful’, open, beginner's mind, experimental phase, then rather quickly progress to settling in to seek and find their own way first, then add in ‘continuing education’, tips, tricks, insights from teachers who use similar methods, then they are ready for a mentor.

 

The rest are losers – period. They wouldn’t be saved even if the “main problem in the retail community”, loser trading education vendors suddenly all vanished and were replaced by excellent ‘beginning swimmer’ instructors. Starting them in ‘trading kindergarten’ won’t help – because they can never ‘start’ inside themselves. The equivalent of a trading ‘lifequard’ (or even a high quality instructor in the basics beforehand, ) won’t help them survive. For these reasons (and others), I continue to challenge any and all guidance leaning toward attempting to apply parallels btwn trading education and the paradigms of ‘normal’ education.

 

Again, don't worry - only a tiny few will ever disagree with you.

 

All the best,

 

zdo

[TheNegotiator 13]

negoc8r, re: “point of diminishing returns for this kind of work (and actually the relationship inverts).” Got time to explain that further? thx

 

I simply meant that for some, the more preparation they put in the more fixated they become on a particular outcome and the less likely they are to focus on what the market is actually telling them as it trades.

[johnw 10]

I simply meant that for some, the more preparation they put in the more fixated they become on a particular outcome and the less likely they are to focus on what the market is actually telling them as it trades.

 

 

I quite agree ...less is often more.

 

I get the feeling here at TL that people think that if they do the prep and keep the journals and logs and generally add work, then a profit pops out the other end.

 

This is a singular game for which the vast majority are ill equipped and will perish without knowing how it happened.

 

Trading requires self reliant clear thinkers, who will do what ever it takes to succeed.

Since most people here at TL would say they posses these attributes, the problem they face becomes abundantly apparent.... they have created a paradox for themselves ... with no solution because they think they are the person that they need to become.

[wmck6167 10]

Change is not easy. My experience is the thinking process just like a linear equation, most of time, the solution is set, so the variable is fixed. My past thinking process is like this way, so I was easily trapped in a loop! I felt trading behavior just like a one dimensional thinking, you easily stuck on the root and cause. You may need to find out the possibile solution in 2 or more dimensionas in order for you to find a better choice. I like Dr. Edwards Deming said, “A system cannot understand itself. The transformation requires a view from outside. “ Cheers,

[TheNegotiator 13]

Trading requires self reliant clear thinkers, who will do what ever it takes to succeed.

 

Very important. Planning, observing the developing market and any developing opportunity, deciding on a course of action and then taking it with focus shifting to the management of the position (from the opportunity) encapsulates the way a trader should be. Clear thinking, clear acting.