Catch 22

[JumpOff]

Rhody,
When I get this figured out, and can make my account go up consistently - no way am I going to blurt it all so that any knucklehead can use my efforts for their own pleasure.

It seems to me that a trader who is able to reliably compound an account would gain the capacity to do great good or great harm. It is not a surprise that those who have made the effort to learn how are reticent about the exact details of their methods.

It might be a little bit like sleight-of-hand. There are people who know the tricks and are dying to share them, but have trouble finding an able, reliable apprentice. - One who is willing to do the grunt work required of an apprentice and has a passion for the art.

Or it may be more like Zen - the master tries everything to get the all students to understand, but only a very few are ever willing to do what is necessary so that they will be ready to hear the truth..

JO

 

[dbphoenix]

I was about so say I disagree with this statement, but then it dawned on me that in fact most traders really won't share their methods.

Perhaps most won't, but many will, including Raschke, Lo, Graifer, Smith, Farley, Landry, and so on. Unfortunately, there are a great many novices who complain that the methods discussed by these traders "don't work" and that the traders themselves are charlatans. But if the method "doesn't work", it's most often because the method doesn't belong to the novice. He didn't create it, so he naturally has less understanding of it than the creator. One could also apply the same statement to the creators of the most well-known and widely-used indicators: Lane, Wilder, Appel, etc., i.e. MACD (for example) "doesn't work".

Methods don't come in dreams. And using somebody else's method is not the shortcut most novices believe it is. Yet hope springs eternal and the money flows into the coffers of those who would supply easy answers.

 

[timsk]

Db,
"If you don't want personalised responses, then don't make personalised attacks".
I wasn't attacking you and I apologise if that's how my comments came across. I was merely offering advice on ways in which you could communicate more effectively to all those who enjoy and benefit from your posts. I include myself in this group, except when you're giving me grief!
Tim.

 

[dbphoenix]

As I was offering advice on how to learn what trading is. But none of this belongs in a public forum. If you want to continue, do so privately.

 

[Rhody Trader]

Perhaps most won't, but many will, including Raschke, Lo, Graifer, Smith, Farley, Landry, and so on. Unfortunately, there are a great many novices who complain that the methods discussed by these traders "don't work" and that the traders themselves are charlatans. But if the method "doesn't work", it's most often because the method doesn't belong to the novice. He didn't create it, so he naturally has less understanding of it than the creator. One could also apply the same statement to the creators of the most well-known and widely-used indicators: Lane, Wilder, Appel, etc., i.e. MACD (for example) "doesn't work".

Methods don't come in dreams. And using somebody else's method is not the shortcut most novices believe it is. Yet hope springs eternal and the money flows into the coffers of those who would supply easy answers.

Exactly my point. I can give someone the best system in the world, but chances are it won't work for them, at least not in the same way it does for me for exactly the reasons you stated.

 

[dbphoenix]

Exactly my point. I can give someone the best system in the world, but chances are it won't work for them, at least not in the same way it does for me for exactly the reasons you stated.

I seem to have misunderstood the point you were trying to make. If it is true that most traders won't share their methods but it's also true that some do but it doesn't make any difference whether experienced traders share their methods or not, it doesn't necessarily follow that the next best thing is to avoid the workings of the market entirely and instead focus on economic cycles, the EMH, and MPT.

Perhaps if you were to call your course "Investing", you might have something, even though I'd suggest that EMH and MPT really don't have anything to do with investing decisions, either. But that's neither here nor there. They clearly don't have anything to do with trading, at least in the short-term or even intraday sense.

As for "psychological" issues, I used to spend a lot of time on this with novices and not-so-novices. But I eventually came to understand that nearly all of these so-called "psychological" problems were a direct outgrowth of the lack of an edge, i.e., a consistently profitable plan, or, usually, no plan at all. Once a consistently profitable plan was created, the "psychological issues" pretty much evaporated.

Therefore, I suggest, again, that anyone taking a course in "trading" ought to expect that he will be taught how to create a consistently profitable trading plan. This may take as much time as unknotting the hope/fear angst, perhaps even more, but at least there will be a recognizable and longer-lasting result, whereas the mutual commiseration regarding failure to execute, failure to cut losses, failure to take profits, etc, etc, etc can go on indefinitely.

 

[erierambler]

As for "psychological" issues, I used to spend a lot of time on this with novices and not-so-novices. But I eventually came to understand that nearly all of these so-called "psychological" problems were a direct outgrowth of the lack of an edge, i.e., a consistently profitable plan, or, usually, no plan at all. Once a consistently profitable plan was created, the "psychological issues" pretty much evaporated.

Therefore, I suggest, again, that anyone taking a course in "trading" ought to expect that he will be taught how to create a consistently profitable trading plan. This may take as much time as unknotting the hope/fear angst, perhaps even more, but at least there will be a recognizable and longer-lasting result, whereas the mutual commiseration regarding failure to execute, failure to cut losses, failure to take profits, etc, etc, etc can go on indefinitely.

Excellent post, I can identify with that.

erie

 

[Rhody Trader]

I seem to have misunderstood the point you were trying to make. If it is true that most traders won't share their methods but it's also true that some do but it doesn't make any difference whether experienced traders share their methods or not, it doesn't necessarily follow that the next best thing is to avoid the workings of the market entirely and instead focus on economic cycles, the EMH, and MPT.

Did I suggest or imply that it would be best to "avoid the workings of the market entirely and instead focus on economic cycles, the EMH, and MPT"? If so, I certainly didn't intend that at all. I was merely stating that since the class is being developed for use in a university environment it, per force, must include elements of financial theory.

Perhaps if you were to call your course "Investing", you might have something, even though I'd suggest that EMH and MPT really don't have anything to do with investing decisions, either. But that's neither here nor there. They clearly don't have anything to do with trading, at least in the short-term or even intraday sense.

I differentiate "investing" and "trading" in the following way: Investing has an open-ended holding period, meaning that one buys without necessarily having a predetermined exit in mind (buy and hold). Trading includes a predetermined exit plan or time scope (day trade, swing trade, etc). That's just my personal thinking. Others are free to use different definitions.

Therefore, I suggest, again, that anyone taking a course in "trading" ought to expect that he will be taught how to create a consistently profitable trading plan. This may take as much time as unknotting the hope/fear angst, perhaps even more, but at least there will be a recognizable and longer-lasting result, whereas the mutual commiseration regarding failure to execute, failure to cut losses, failure to take profits, etc, etc, etc can go on indefinitely.

I can definitely go along with that.

 

[dbphoenix]

Did I suggest or imply that it would be best to "avoid the workings of the market entirely and instead focus on economic cycles, the EMH, and MPT"? If so, I certainly didn't intend that at all. I was merely stating that since the class is being developed for use in a university environment it, per force, must include elements of financial theory.

The class I am developing focuses on turning the student in to an educated trader. By "educated" I simply mean answering the type of new trader questions we all see posted in the newbie sections of this forum and others - real basic stuff: how to actually execute trades, what margin is and how to use it, how to calculate p&l, the market mechanisms and how external events can impact prices, simple elements of money management and trading psychology, introductions to analytic/trading methods. This is stuff not handled well within the standard university finance cirriculum because it focuses so much on the institutional side of the game (rather than the individual).

The class is not intended to create traders. It's design is to introduce trading. As db has discussed, once the basics are sufficiently addressed, the onus is then put on the student to actually learn how to trade the markets through personal experience.

Anything you can do to reconcile these two posts will be appreciated.

 

[Rhody Trader]

Anything you can do to reconcile these two posts will be appreciated.

Where do you see the conflict?

 

[JumpOff]

So trading 101 would have a title like : "Introduction to individual trading" Your class is a 100 level introductory class, designed to give a broad overview? My 101 science and math classes were interesting, but no one expected to do any worthwhile math or science after completing them. I was assumed that they were a stepping stone to 200, 300, 400 level classes and then on to grad school if it turned out to be the major area of study that was chosen.

JO

 

[Rhody Trader]

So trading 101 would have a title like : "Introduction to individual trading" Your class is a 100 level introductory class, designed to give a broad overview? My 101 science and math classes were interesting, but no one expected to do any worthwhile math or science after completing them. I was assumed that they were a stepping stone to 200, 300, 400 level classes and then on to grad school if it turned out to be the major area of study that was chosen.

JO

I would call that a pretty close parallel.

Maybe it would be a better to liken it to a PhD program. There is some required coursework serving to ensure a minimum threshold of knowledge. After that is assured, the student then becomes almost entirely responsible for her/his own completion of the program. There is some guidance, along the way, of course, but the student must do the research, evaluate the results, come to conclusions, and put them forward to be judged. We can liken this to the trading method/system development process with the market being the recipient of the trader's dissertation.