Why do so few succeed?

New,

Sorry for the confusion by my post. The system I traded was done solely as as exercise in compliance with the suggestion in Douglas' book - Trading in the Zone. He recommends taking a simple system which is completely mechanical and following it for 25 trades. The point is not so much to make money with it but to develop discipline and to develop an awareness that trading is about probabilities; to demonstrate that any one trade is not important, etc. So, I developed a very simple moving average cross over system which could be traded without discretion as part of that exercise. No back testing involved, just mechanically trading the system. That's what I was trying to convey.

My style is not to trade mechanical systems but to trade a method which utilizes discretion. But, to develop awarenesses that Douglas speaks of, I traded that system for the exercise.

Bramble,

Thanks for the suggestions. I am looking for better triggers to entry. However, I don't think it's just a question of finally finding the right system or set up is it? If so, then that would encourage one to forever be looking for the correct system and never really sticking with one method long enough to learn it. I think my general method is sound: trade in the direction of the major trend, enter on a pull back (ie against the minor trend) when that pull back has completed.

Regarding stop loss, everything I have read indicates that for position traders, as opposed to day traders, a 2% stop loss is a reasonable stop loss. O'Neal recommends 8% which is too large IMO. However, I've not read anywhere that indicates 2% is too large. Perhaps with your type of system it is, but I'm not sure you can say it is for everyone. But, I'd be interested in hearing the reasons why you might disagree. Apparently, you are a full time, successful trader. I am not, so I would not begin to assert that I have the answers. Just opinions but without any emotions attached to them.

Again, I wouldn't go so far as to say that my "system" is crap. I trade a discretionary methodology, rather than a mechanical system. I think the basic method is sound, but I need to work on better triggers. I appreciate your help.

tunnel

Tunnel, I'm afraid you missed the point entirely. Or almost entirely. Yes, the "exercise" is partly to develop an understanding of the nature of probability in trading, of loss, of being sensitive to what the market is telling you.

However, there's a "Part A" that you missed, which is the development of the system in the first place. Taking 20 or 25 or 30 trades that are not prompted by a consistently profitable trading system/strategy is useless. You have to initiate the development of the system, THEN test it by implementing these trades, then re-working it, then trading it again in a closed loop until you have something that is consistently profitable.

So, as suggested earlier, the problem is not you but your system, or rather lack of a system. Contemplating your navel isn't going to be of much benefit. Of greater benefit will be to buy a package of lined paper and a box of pencils, a cheap/free software program (preferably with replay), a cheap/free data feed, and several pounds of coffee.

No, how does it end?

Isn't it interesting how the more experience one has, the better able he is to tell the future?

As a sticky mess on the pavement ( sidewalk )

{a helpful analogy hopefully]

It depends, for all we know he might have a parachute concealed and as yet unopened that only he knows about. I will never forget a stunt that someone played in a busy shopping area bursting with people on a busy weekend.

This joker attached a handful of gas filled balloons to a dolly in a pram, that was planted among the crowd and appeared to be unattended. The whole thing was set up so that a few minutes later whatever anchored the dolly and the balloons disengaged.

The crowd went beserk when they saw what they believed to be a baby lifted many feet into the air and drifting away......

Not everything that is seen is necessarily what it is.

......................And.....................not necessarily everything that is ........... can be readily seen.

DB,

Respectfully, I do not think the process you outlined is what Douglas talks about at all when he talks about going through the exercise. He states that the reader should consider the exercise to be "tuition". Get a simple mechanical system and trade it. If I remember right, he says that it's not important if the system is profitable. If it turns out not to be profitable, that is tuition for the education you will receive by the exercise. I don't believe the point of the exercise is to develop a winning system, but to develop the right mental framework. However, it's been almost a year since I finished reading it, so I will go back and review those chapters discussing the exercise to see if I missed the point, as you suggest. Thanks.

By the way, are you a completely mechanical systems trader or do you exercise discretion in the setups you trade?