Shortcuts vs knowledge

[new_trader]

2cents

I find it truly amusing in this business just how much emphasis is placed on the tools one chooses to use. Never do you hear a carpenter for example suggest that another carpenter is no good because they use one type of hammer over another. Tiger Woods will use the set of clubs produced by the company that pays him the most to use their clubs. He doesn't suggest Robert Allenby can't be a successful golfer because he chooses to use another brand of clubs!

PKFFW,

I don't want this turn into a long winded debate because I think enough has been said already. However I think your analogies are very poor examples of what the real issue is (for me and others I suspect) and are likely to mislead newbies.

“Never do you hear a carpenter for example suggest that another carpenter is no good because they use one type of hammer over another.”

You are right, I agree. In the same way it is not likely that one trader would suggest another trader is no good because s/he uses a different broker. But a hammer is manufactured for a few purposes and one main purpose is to drive nails into wood. What would you think if someone claimed that they were a professional carpenter and said you don’t need a hammer or any other ‘mystical’ tool because a brick can be used to drive a nail into wood because it works? What about a steel pipe, a heavy shoe or the blunt end of an axe? They all “work” too don’t they? The problem with the analogy you have given is that the general public understands what a hammer is and how it should be used. However, if this wasn’t the case and a fortune could be made from carpentry, I’d say people would be writing books on how you can make money using a brick, a steel pipe a heavy shoe...etc and the public would buy them all.

“Tiger Woods will use the set of clubs produced by the company that pays him the most to use their clubs. He doesn't suggest Robert Allenby can't be a successful golfer because he chooses to use another brand of clubs”

Once again, a bad analogy. What would Tiger Woods think if Robert Allenby walked onto the golf course, tee’d up and then pulled out a hockey stick and struck the ball! The ball would move wouldn’t it? So, it works. Why all this mystical nonsense about special clubs for golf!?

Finally, the way deep understanding is scorned by some is no different to saying that there is no need to understand the tiny mystical mumbo jumbo of Quantum mechanics if all you are interested in is building something huge like an atomic bomb.

 

[wasp]

Whilst there has been some agreements, it seems the majority have slated or dismissed the OP as 'superior' or plain wrong......... No wonder everyone worth listening too left a long time ago. All those old threads he dredged up and not one comment or question! I notice no one thought to try and engage discussion!!!! Reading the threads he posted on, 90% of the replies asked questions in order to learn, yet no one seems to do that on this forum anymore, its 'just give me a system' and let me make money. IMO what he said was right but I'd rather go to citybulls over here these days!

 

[Lightning McQueen]

To be fair the older thread links were only posted up yesterday afternoon, and new members who may not have read them before would take a while to digest them, as they are large threads.

Also the woodland thread they were posted in has some positive comment.

 

[wasp]

To be fair the older thread links were only posted up yesterday afternoon, and new members who may not have read them before would take a while to digest them, as they are large threads.

Also the woodland thread they were posted in has some positive comment.

Fair enough LM, I'll look again next week then!

 

[darktone]

I dont know why but the ego seekers really get me with all the read between the lines BS. Theres nothing hard about trading other than to master yourself imo. The only is way is get the basics under your belt and get stuck in. If your still here in a couple o years you've got a chance.

 

[wasp]

Thanks new_trader. I was contemplating starting a thread on actual 'trading' but it seems no one here is interested and we are the minority.......

.............by making such a comment why not contribute something and see if anyone is interested? You accuse the "newbies" of having no idea about what is really important. That being the case is it any wonder they are asking the wrong questions and wanting the wrong things? Perhaps all that is required for many of those newbies is the gentle guiding hand of one as wise and knowledgable as yourself?

I never actually stated I was knowledgeable. The minority I speak of are those who wish to discuss the markets in depth and understand, rather than discussing a particular setup for a quick route.

Since a large majority of those I mentioned in my journal have contacted me privately, I shall be continuing my discussions with them elsewhere away from those who seem only interested in disrupting threads.

If anyone is interested, they have the option to contact me.

 

[wasp]

I dont know why but the ego seekers really get me with all the read between the lines BS. Theres nothing hard about trading other than to master yourself imo. The only is way is get the basics under your belt and get stuck in. If your still here in a couple o years you've got a chance.

Again, you misinterpret me. I am not ego seeking, and neither did I say it was difficult. The point of this thread was to discuss markets and understand them and the other traders who make up these glorious markets.

Discussing the dynamics of price will teach more than any singular setup but each to their own.

 

[PKFFW]

new_trader,

In answer to your questions....

1: If the end product of what the carpenter built using his shoe was no different to what another carpenter built using a hammer then I would not have a problem with him using his shoe, a brick or any other item to hammer the nail and calling himself a professional carpenter while he did it.

2: So long as the hockey stick conformed to the rules of the game, I would have no problem with Allenby winning tournaments using the hockey stick and calling himself a professional golfer while he did it.

In both cases it is the end result that matters. That is my point. It seems to me that many in the trading game put alot of emphasis on what tool is used rather than the end result. If two traders made the same returns over the same period of time why should one not be considered a trader if he uses MACD, bollinger bands or any other indicator to make his decisions?

As to your atom bomb analogy, I do not believe one needs to have an understanding of quantum mechanics to build an atom bomb. Only if one wants to understand the mechanics and principles behind why and how an atom bomb works does one need to understand quantum mechanics. Obviously some one at some time needed that understanding in order to create the first atom bomb, now all one needs is the instructions and materials.

Finally, I do not scorn the idea of having a deep understanding of trading and the markets and how price moves etc. If that is what interests one then by all means work to attain that understanding. I totally agree that it can only serve to improve ones trading ability. However, just like in golf, one does not need to be Tiger Woods in order to earn a living from golf, so with trading, one does not need to be the best, with the deepest understanding in order to make money from the markets. To suggest otherwise is simply not true.

Cheers,
PKFFW

 

[PKFFW]

I never actually stated I was knowledgeable. The minority I speak of are those who wish to discuss the markets in depth and understand, rather than discussing a particular setup for a quick route.

To each their own. You want to discuss the markets in depth, others wish to discuss a more direct method of making money from the markets. Neither is wrong as you have suggested if not actually directly said.

twistedhedgehog]Since a large majority of those I mentioned in my journal have contacted me privately, I shall be continuing my discussions with them elsewhere away from those who seem only interested in disrupting threads.

If anyone is interested, they have the option to contact me.

Fair enough.

Cheers,
PKFFW

 

[mb325]

Thanks new_trader. I was contemplating starting a thread on actual 'trading' but it seems no one here is interested and we are the minority.......

Maybe newbies should think why that is.

Don't forget that a large proportion of the 120,000+ members of this forum are what I would classify as 'lurkers' - people who read only. There's nothing wrong with that, from my post count I suppose I fall into that category too.

My point is that I think there are probably a hell of a lot of people, including myself, who would like to hear your views and see a thread on 'actual trading'. However, you don't hear from them as they don't post. Please don't get put off by a few vocal people, it's unlikely they represent the majority.

 

[darktone]

Again, you misinterpret me.

I doubt that.

I am not ego seeking

Of course your not.

neither did I say it was difficult.

No you didnt say it,better to imply it. That way it gives you room to say "you misinterpret me."

Discussing the dynamics of price will teach more than any singular setup but each to their own.

Another implication?

When price is trending down and becomes short term overbought... sell it
When price is trending up and becomes short term oversold... buy it
Use any setup you like.
If its doing anything else go and do something less boring instead!

Not hard eh! You dont even need a star chamber.... :|

 

[0007]

Don't forget that a large proportion of the 120,000+ members of this forum are what I would classify as 'lurkers' - people who read only. There's nothing wrong with that, from my post count I suppose I fall into that category too.

My point is that I think there are probably a hell of a lot of people, including myself, who would like to hear your views and see a thread on 'actual trading'. However, you don't hear from them as they don't post. Please don't get put off by a few vocal people, it's unlikely they represent the majority.

I go along with that. I find it very interesting to hear all the (sometimes conflicting) views. Isn't that what a forum (Romans had cracked it) is all about, and developing one's ability to take a view and have it questioned by others? No debate stifles progress.

 

[Bladerunner]

Nice to see the old thread links

I dont know why but the ego seekers really get me with all the read between the lines BS. Theres nothing hard about trading other than to master yourself imo. The only is way is get the basics under your belt and get stuck in. If your still here in a couple o years you've got a chance.

"Quote:
Originally Posted by SOCRATES
The ability to spot what is going on inside the bar is the important bit."

I am a few years in and fell off the bike a few times and would just say


The ability to spot what is going on inside ones own head is another important bit, its possible to spot whats going on inside the bar or bars then ~


<<<<<<<<<<<<$%^&********"""(((^^%%$$$$ not compute correctly from then on



Andy

 

[wasp]

When price is trending down and becomes short term overbought... sell it
When price is trending up and becomes short term oversold... buy it

Bloody hell! Yet people still lose money in the markets, there must be some unlucky people in the world... its so simple

Oh, care to define overbought and oversold to a newbie? Please do not say when stochastics are below/above 30/70

 

[darktone]

Bloody hell! Yet people still lose money in the markets, there must be some unlucky people in the world... its so simple

The price action part is simple, ask a 5yr old to identify a trend, they will get it every time..... The emotional side isnt so simple! Woulda shoulda coulda!

Oh, care to define overbought and oversold to a newbie? Please do not say when stochastics are below/above 30/70

You cant define OB OS completely, price wont always hold true S R / fib level or any other BS indicator. The best way i could describe it would be a significant counter trend move in relation to current PA against the overall trend. Not rocket science eh!

 

[trader_dante]

Twistedhedgehog, I understand what you are saying and respect that. Fact of the matter is I spend from 6am to 9.15pm Monday - Friday watching almost every tick that the market makes and how much size is traded at what price in what way. But unfortunately, not many people have the opportunity to watch the market in this detail and need a simpler route into trading. In my opinion teaching simple setups like pin bars and inside bars and the concepts of taking them at high probability turning points derived through an understanding of technical confluence is a much better beginning than ploughing straight into the complexities of market dynamics. Contrary to what the elitist out there believe, you don't need to have that deep an understanding of the market as some of Socrates threads try and teach to be able to make money day in and day out. I know this for a fact. I know a guy who studies price and volume all day long and has an uncanny ability to pick the turning points in the market. When I ask him how he does it he will often go on about watching the chart, reading the price, understanding the volume and watching the tape to see what the strong hands are doing and how the weak hands are reacting before he picks his point and enters. Problem is, the guy will use a 5 tick stop and take 20 ticks time and time again. Which to me is really no different than me at the time who knew none of the above but used a 50 tick stop to make 200 ticks again and again. You just need to find your edge, whatever it may be and then hone your emotional skills so that you can trade it systematically. Just my opinion but if you really want to learn some of the traits that will help you make it in this game, trade a 50-100 EMA crossover system. You are unlikely to be profitable but you will, without a doubt, learn patience, discipline and understand the rewards of ignoring noise and letting trends play out. And that will place you leaps and bounds above the pros I know that play for a few ticks.

 

[new_trader]

new_trader,

In answer to your questions....

1: If the end product of what the carpenter built using his shoe was no different to what another carpenter built using a hammer then I would not have a problem with him using his shoe, a brick or any other item to hammer the nail and calling himself a professional carpenter while he did it.

Yes, but you need to add the caveat "If the end product of what the carpenter built ". I wasn't asking what you would think, the question I was asking is what would another professional carpenter think of someone who claims to be a professional but does not use a hammer in the way it was intended and insists a brick works just as well? Why don't you find out? Talk to a few carpenters and tell them that you know a professional who uses a brick instead of a hammer to drive nails into wood.

2: So long as the hockey stick conformed to the rules of the game, I would have no problem with Allenby winning tournaments using the hockey stick and calling himself a professional golfer while he did it.

In both cases it is the end result that matters. That is my point. It seems to me that many in the trading game put alot of emphasis on what tool is used rather than the end result. If two traders made the same returns over the same period of time why should one not be considered a trader if he uses MACD, bollinger bands or any other indicator to make his decisions?

The problem is the way you talk about "the end result". What is the "end result" of someone who flips a coin to make their trading decisions? I'm sure you will say something like, If they make money consitently then flipping a coin is a valid system. Where do you draw the line between an "end result" being plausible or ridiculous? I could just as easily argue that if the "end result" is flight, then flapping your arms like a bird works. What is the "end result" of your trading system? Where is the end? Is it now, tomorrow, next year? Is your system future proof?

so with trading, one does not need to be the best, with the deepest understanding in order to make money from the markets. To suggest otherwise is simply not true.

Cheers,
PKFFW

Like has been said, the focus most people have when entering this profession is the money. The focus is not understanding, it is not on being right, it is not on acquiring knowledge and skill. That would be like saying the focus of a pilot is not to takeoff and land safely, it is on making money. As long as the pay check arrives each month s/he is a good pilot. Let’s imagine, the pilot takes off and 2000 feet up one of the engines fail, this is reported to the passengers and their main concern is not whether he can land the plane safely, they just want to know how much he makes each year because it is the "end result" that matters.

 

[mb325]

Any carpenters reading this thread are wondering how their profession can attract so many analogies and re-analogies and analogy corrections and analogy revisals.

 

[PKFFW]

Yes, but you need to add the caveat "If the end product of what the carpenter built ". I wasn't asking what you would think, the question I was asking is what would another professional carpenter think of someone who claims to be a professional but does not use a hammer in the way it was intended and insists a brick works just as well? Why don't you find out? Talk to a few carpenters and tell them that you know a professional who uses a brick instead of a hammer to drive nails into wood.

Yes I add the caveat "if the end product of what the carpenter built" because that is exactly my point. Quite obviously you do not agree with the point. It seems that to you how a trader makes his decisions is more important than the results of those decisions. So if a trader read price action and volume only but lost all his captial through bad trading he would be considered a professional but another who used MACD and consistantly made money would not be a professional?

Let me ask you this. You have two carpenters, one uses the best hammer money can buy but his work is shoddy and all his buildings fall down. The other uses a brick but his buildings stand up and are praised by all for their excellence. Which professional would you rather build your house?

I don't care if the "professional" using the hammer scoffs at the other carpenter for his lack of "professionalism", I know which one I'd be choosing.

The problem is the way you talk about "the end result". What is the "end result" of someone who flips a coin to make their trading decisions? I'm sure you will say something like, If they make money consitently then flipping a coin is a valid system. Where do you draw the line between an "end result" being plausible or ridiculous? I could just as easily argue that if the "end result" is flight, then flapping your arms like a bird works. What is the "end result" of your trading system? Where is the end? Is it now, tomorrow, next year? Is your system future proof?

As you yourself have mentioned on so many occassions, trading is about more than just the entry technique. It is about how you manage the trade, how you exit the trade, your position sizing, how you control yourself, all those things.

So why now, when it suits your purpose, do you attempt to distill successful trading down to how one chooses an entry point?

As for being future proof, you mention on so many occassions the need to be adaptable to the market in order to be a successful trader right? So if someone develops a system that works(makes money) that is based on MACD for instance, doesn't it stand to reason that when that system stops working they would be able to develop another one? They have done it once, why do you assume they can not do so again? This is adapting to the market. It is simply doing so in a way that is different to how you chose to do it. One day you will learn that different doesn't acutally mean wrong.

Like has been said, the focus most people have when entering this profession is the money. The focus is not understanding, it is not on being right, it is not on acquiring knowledge and skill. That would be like saying the focus of a pilot is not to takeoff and land safely, it is on making money. As long as the pay check arrives each month s/he is a good pilot. Let’s imagine, the pilot takes off and 2000 feet up one of the engines fail, this is reported to the passengers and their main concern is not whether he can land the plane safely, they just want to know how much he makes each year because it is the "end result" that matters.

That is the most retarded analogy I've ever heard. Mods, please note, I said retarded analogy and am not calling n_t retarded.

To the passengers in the plane the "end result" is only about getting to the ground safely. No one gets on a plane because they want to know how much money the pilot is making. No one believes a person can fly a plane simply because the make alot of money. If that were the case then every CEO of a large multinational company would automatically be considered a professional and competant pilot. Just as I didn't say how much money the carpenter makes is the determining factor in whether he is a professional, it is whether his buildings are well made. In the case of the pilot the determining factor of whether he is a professional is whether he can fly the plane properly.

In trading there really is no other measure of competance other than if you are making money consistantly or not. All the talk in the world about knowledge, understanding, skill, picking tops and bottoms, knowing everything in advance is just talk. Someone may know all that and be the most skilled person in the world at picking turning points but still may not be able to trade. They may still lose money. Are they professional just because they can pick an entry point using only price and volume?

Who would you rather have your money managed by if you did not trade yourself? Someone who used price and volume only and had a deep understanding of the markets and was losing money every week or someone who used MACD but made money every week. In the end I would lay any odds you like that every single person on this forum board would rather have their money managed by the person who was making money consistantly. All the other talk is just that, TALK.

Cheers,
PKFFW

 

[littlemog]

I think it all boils down to that, REALLY. Good point.

... In the end I would lay any odds you like that every single person on this forum board would rather have their money managed by the person who was making money consistantly. All the other talk is just that, TALK.

Cheers,
PKFFW