Nothing works consistently

This is a discussion on Nothing works consistently within the General Trading Chat forums, part of the Reception category; and you'll need another arm.... i can only hold two books..... im off to amazon, appears my library is incomplete...again........

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Old Jul 10, 2008, 8:48pm   #16
Joined Jun 2008
and you'll need another arm.... i can only hold two books.....

im off to amazon, appears my library is incomplete...again.....
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Old Jul 11, 2008, 10:47am   #17
 
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Originally Posted by mehow View Post
When trying to trade breakouts and momentum trades, majority of the breakout turn out to be false. Sometimes prices bounce off the EMA, sometimes they go straight through.

My point is nothing seems to work on a consistent basis. Anyone have any thoughts on this?
The answer lies in your question......
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Old Jul 11, 2008, 10:49am   #18
 
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Originally Posted by TheBramble View Post
Du Toit's "Bird Watching in Lion Country".
This one is of particular interest. I may have the eBook if anyone's interested.......
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Old Jul 11, 2008, 2:38pm   #19
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Scalping is not meant to give you consistent profits because the shortest the time frame you are willing to trade on, the more volatile the market is. The best way to go for consistent profits is long-term trading. But it is also not 100% consistent because even if you have the most perfected strategy, it is never going to be a winner on every trade.
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Old Jul 11, 2008, 6:15pm   #20
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Originally Posted by mehow View Post
I've been trading for approximately six months now. What am having a hard time grasping is what worked yesterday doesn't work the following day.

For instance on one day I was scalping NASDAQ stock anddoing well well, and then using the same method the next day or a week later and I have devastating results. When trying to trade breakouts and momentum trades, majority of the breakout turn out to be false. Sometimes prices bounce off the EMA, sometimes they go straight through.

My point is nothing seems to work on a consistent basis. Anyone have any thoughts on this?




Day in, day out the market is consistant. Buyers and sellers consistantly taking advantage of each other. That's why patterns etc fail!

Your job is to know. Know how 'they' take advantage.

Don't be taken advantage of.

Hope this helps.
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Old Jul 11, 2008, 8:52pm   #21
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On a serious note. S/R prices work, even on a 'blind' basis you can put the odds in your favour, but they are main decision points. Some can see the decision in a candle chart or a line chart, some cannot.

What's on offer, what's the going rate, what's the going sentiment?

Consistently profitable trading is a reality, but can you get everything right?

Should the business of buying and selling anything, wether it be financial instrument contracts or second hand sports cars, be 100% guaranteed profit on every deal?

I suppose it depends.



PS. Just because you can't do something....doesn't mean it can't be done.

Last edited by Paul71; Jul 11, 2008 at 8:58pm.
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Old Jul 11, 2008, 9:45pm   #22
 
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Paul is right.

The core stuff does work consistently. Although evaluation of the situations may change so blindly applied patterns etc are likely to come and go with the ebb and flow of market memes.

I recently read the Trend Dynamics "book" that came from the course. A beautiful thing based on what has worked in the past which works today and because of the way it's taught will still work 30 or 100 years into the future.

Market profile concepts work. Although Dalton's and what's his names original setups probably faded and many people have failed to use it after a brief infatuation. Frank's simple approach to it will stand the test of time assuming the US can provide him with reliable electricity: My.WallSt.net - Blogs

So the core works. You just have to learn how to make it work for you today. Cheers
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Old Jul 11, 2008, 11:55pm   #23
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Originally Posted by mehow View Post
I've been trading for approximately six months now. What am having a hard time grasping is what worked yesterday doesn't work the following day.

For instance on one day I was scalping NASDAQ stock anddoing well well, and then using the same method the next day or a week later and I have devastating results. When trying to trade breakouts and momentum trades, majority of the breakout turn out to be false. Sometimes prices bounce off the EMA, sometimes they go straight through.

My point is nothing seems to work on a consistent basis. Anyone have any thoughts on this?

You've been given advice on how to put the odds in your favour. The hourlies are great for you,.....apparently. Time frames don't reduce risk,....remember that!

You'll just have to rework your capital to make a living,....so it's all relative.

So you can throw the darts, just make sure you throw them at a target you know, and not somebody elses target,......they may be wrong.
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Old Jul 23, 2008, 10:15pm   #24
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I think one of the problems is the question. nothing works consistently. what is that? consistency is winning month after winning month. not winning trade after winning trade. one of the toughest mental skills to aquire is being indifferent to losing. its part of winning, after all. why work out what works only to be discouraged when your looking at negative p&l. i guess its all down to fear and greed management.
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Old Jul 23, 2008, 10:27pm   #25
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seeing as this thread has gone this way...slightly off topic... was talking with a long term successful trader today, we were talking about time and effort. We both think that the time and effort we have put in to knowing when not to do the thing that looks like the right thing to do is the key to keeping what we get lucky and make all the other times!!!!
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Old Jul 23, 2008, 10:28pm   #26
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for time and effort read money! lol
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Old Jul 24, 2008, 8:00am   #27
 
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PS. Just because you can't do something....doesn't mean it can't be done.
"It always seems impossible until its done."
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Old Jul 24, 2008, 11:56am   #28
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Originally Posted by davedavethetrader View Post
consistency is winning month after winning month. not winning trade after winning trade.
That in a nutshell is what trading is all about, at least for those that trade for a living.

Certain woulda-coulda-shoulda-artists living a make-believe parallel life of pretense on boards to help them forget their real existence which consists to a large degree of asking customers if they want fries with their order will inevitably voice vociferous opposition to said simplicity, albeit with the small but pretty relevant blemish that they will never be able to back up their bragging.

;-)

But back to real life.

As I've said here many times, Mark Douglas is spot on in his analysis that anything can and will happen at any time in the markets (think, all it takes is one massive order that can be anything, a hedge, a position being covered, somebody entering the market with a view diametrically opposed to yours, but that will all have the same effect of throwing all of your clever analysis overboard and triggering your stop loss).

The very simple reason why markets cannot be predicted consistently is based on the fact that markets are made up of a conglomeration of huge numbers of participants all following totally different objectives...

You have hedgers, you have speculators.

You have fundamental traders, you have technical traders.

You have scalpers, daytraders, swing traders, position traders.

You have participants that see the same price levels, yet for some price is too high, for others it's too low.

Etc etc.

Every participant in markets has a different perceptive, different objectives, and different risk parameters.

That is why the notion of predictable markets that follow some inner system is nonsense.

The market is composed not of an inner logic or system that would be seperate from it's constituting participants, no, a market is nothing but the sum of it's constituting participants, each of whom has his own agenda, doing his own thing.

Thats why a quest for consistency is largely nothing than an irrelevant brain fart.

Not only is such a search for a holy grail a total waste of time, far worse, systems that are right more often than they are wrong are decidedly less net profitable than their lower hit rate brethren:

Brett Steenbarger:

"...As a rule, maximizing batting average/minimizing drawdown comes at the cost of lowering overall system profitability...."


"William Eckhardt:

The Win/Loss Ratio
“One common adage on this subject that is completely wrongheaded is: You can’t go broke taking profits. That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chance of a gain. The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance. …

What really matters is the long-run distributions of outcomes from your trading techniques, systems, and procedures. But, psychologically, what seems of paramount importance is whether the positions that you have right now are going to work. Current positions seem to be crucial beyond any statistical justification. It’s quite tempting to bend your rules to make your current trades work, assuming that the favorability of your long-term statistics will take care of future profitability. Two of the cardinal sins of trading - giving losses too much rope and taking profits prematurely - are both attempts to make current positions more likely to succeed, to the severe detriment of long-term performance.”

Market Wizards

If you want a high hit rate system you can very easily achieve that through having stop losses that are larger than your take profits, that is all there is behind high hit rate strategies.

They do no more than provide psychological comfort at the cost of lowering your net profitability, and making it much harder and eventually impossible to keep compounding due to eventual liquidity issues.

The following is probably the single most important insight on the way to wealth and fortune through trading:

Kenneth Grant, in "Trading Risk: Enhanced Profitability through Risk Control", depicts his experience as risk manager for some of the best and most successful hedge funds, amongst others Paul Tudor Jones funds and Steve Cohens SAC Capital, that:

ACROSS ALL MARKET CONDITIONS, TRADING STYLES, TIME FRAMES AND TRADERS, ONE RULE HOLDS TRUE:

10% OF ALL TRADES INEVITABLY ACCOUNT FOR 90% OF PROFITS !


Truly grasp that and you're on your way.

Have problems with that path that simply needs to be taken on the way towards your objective of net profitability and it's next to guaranteed that you'll end up as one of tradings 95% net losers, and you'll need to keep on asking customers what they want with their order.

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Last edited by BSD; Jul 24, 2008 at 12:18pm. Reason: Changed pic of two fat girls stuffing themsleves with fries, really was a bit to unsettling must admit ;-)
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Old Jul 24, 2008, 12:02pm   #29
 
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Was that image really necessary?! I'm about to have my lunch! Urgh!

Otherwise, good post.
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Old Jul 24, 2008, 12:10pm   #30
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Hehe

Thought I'd make some unpaid advertising for Super Size Me while I'm at it, and point out the inevitable correlation between certain eating habbits and certain changes to ones physique, ahem.

;-);-);-)

Bon appetit nevertheless
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