my journal

[wprins]

Hello Travis. I was reading some of the articles on T2W tonight and came accross one which included a quote I mentioned to you recently, so I thought I'd post it again. (This is not where I read it originally, it was in one of my books somewhere I think, but anyway, that matters not.) The article is here: http://www.trade2win.com/knowledge/articles/general articles/simple-rules-of-trading/page2

The quote is this:

GO WHERE THE STRENGTH IS
R U L E 5​

The objective of what we are after is not to buy low and to sell high, but to buy high and to sell higher, or to sell short low and to buy lower.

We can never know what price is really "low," nor what price is really "high." We can, however, have a modest chance at knowing what the trend is and acting on that trend. We can buy higher and we can sell higher still if the trend is up. Conversely, we can sell short at low prices and we can cover at lower prices if the trend is still down. However, we've no idea how high high is, nor how low low is.

Nortel went from approximately the split-adjusted price of $1 share back in the early 1980s, to just under $90/share in early 2000 and back to near $1 share by 2002 (where it has hovered ever since). On the way up, it looked expensive at $20, at $30, at $70, and at $85, and on the way down it may have looked inexpensive at $70, and $30, and $20--and even at $10 and $5. The lesson here is that we really cannot tell what is high and/or what is low, but when the trend becomes established, it can run far farther than the most optimistic or most pessimistic among us can foresee.

Have a good weekend.

 

[Yamato]

Replying to wprins' messages: first message

Replying as I read:
http://www.trade2win.com/boards/trading-journals/72598-my-journal-88.html#post990116

Reading what I wrote as quoted by you made me thing what a beautiful logical summary I made of everything I think on the subject. Logical, clear and coherent. But now I'll read why you disagree with it.

"Some people like writing, some people like teaching. Some people are in fact, good at trading, but get (maybe more) fulfillment from helping and teaching others". Oh yeah? Then why are they charging you money to feel the pleasure of writing, teaching, helping? You are proving my point again. I agree with you and therefore I mistrust those who are charging money to enjoy the pleasure of writing, teaching, helping.

"...a terribly good trader themselves". Hey, a trader is either profitable or unprofitable. I don't trust anyone selling me advice on how to trade, because it makes me suspect they're unprofitable traders, and therefore unable to sell me good advice.

"...in the area they coach in?" Once again, thanks for the example. You reminded me that in Italian soccer all coaches are former top soccer players, and the same applies in many other fields. Also, once again, I can't conceive how an unprofitable trader could coach a trader to become profitable, and how a profitable trader would charge anyone to coach them. He either coaches them for free, or he doesn't coach them. If he wants money, he can just trade. It's not like for a soccer coach who doesn't have the youth necessary to run after a ball anymore. You can trade at any age.

Thanks for the tip on NLP. You sound reasonable and intelligent and your arguments are logical, but they are not convincing, in the sense that you are not stating true facts in my opinion. Yes they may be true in some cases, but not in general and not in the field of trading. Or could we at least conclude that yes there are trading coaches getting paid who can also coach you to be profitable, but that the majority are charlatans? Can we agree on this?

About this Elder talk. I didn't mean to offend your favorite writer. But remember my favorite book on trading (one of two I read), "Reminiscences..." by Livermore. He was broke, and wasn't a good trader. He had elements of a good even excellent trader, but not everything needed. I also can write great posts, but I am not a profitable trader. I remember writing such good posts almost ten years ago, when I totally sucked, that some asked me for more advice, thinking I was a trading guru, and I had to tell "i am just reasoning out loud but I actually lose all my money every month". Some people can just write a great trading book - even me - just by saying what they shouoldn't be doing, just by saying everything they don't do. It would make sense, it would sound reasonable, but it would be almost worthless, because written by an unprofitable trader. I wouldn't trust it and that is why I always make sure to say to everyone what I do know and what I do not know, in order not to mislead people. I did some good work on automated systems, and I suck as a discretionary trader.

"...it would be a disservice to yourself to distrust anyone else writing on the topic of trading just because you cannot fathom why they might bother to do so...": this would be a good statement if reading a book wasn't as tiring as it is. But given how tiring it is, and given I can only read about one book per year, I won't read it unless I am totally confident that it's worth reading it. I'd rather spend that time talking to you or to real traders on msn, reasoning with you guys, rather than being taught by someone who may be an unprofitable trader. I trust much better a random trader on msn giving me signals and the rationale behind his trades, rather than a whole book by a famous author. From my experience all these teachers write way much more than it is needed. Like all professors. And in fact school totally sucks. And all schools should be abolished, because they have no reason to exist. They just answer questions I am not asking, and in order to support themselves have to make problems more complicated and give you answers you're not asking for. Much like book authors. A good trading method could be summarized in half a post, but since the author doesn't even know one, and he has to sell a whole book, he writes a lot of bull**** to fill up hundreds of pages. I despise and disrespect all those who pose as professors. Yes, sir. Knowledge is much easier, simpler and quicker than they paint it to be.

How about that. Lots of replying needed here.

"Reading bad books will sharpen your snake-oil spotting skills...". How do we spot a bad book, post, idea from a good one? Because they make sense to us, because they agree with what we were already thinking or because they don't. So if I read an author similar to me, who's also unprofitable, but who wrote the same things that I think I could very easily say "this guy is a genius", whereas he's just an unprofitable trader like me. The only thing I can trust is knowing he's profitable, or I might have better luck finding someone profitable on msn, and hearing what he has to suggest to me. Or even forums.

I hope you're not getting offended by my replies. They are direct and sincere and to the point. Of course I may sound arrogant, but how can you stop me from thinking that I am right? Your objections are well argumented and the best I could get but they still do not convince me. But thanks for taking the time to explain your objections clearly, logically and in detail.

"You *will* be wrong more times than most people feel comfortable with. But, this is not something to be avoided or be afraid of": I got no problem following your advice, after losing money for 12 straight years, and jumping into trades as I just made my first trade. I certainly don't think I am afraid of making mistakes.

 

[Yamato]

wprins' second post and my reply to it

Replying as I read to wprins' second message:
http://www.trade2win.com/boards/trading-journals/72598-my-journal-88.html#post990150

The system I talked about got much better later, so look at the last version of it obviously. Now I only go with trend, all day long. No off hours.

First of all, you talk as if my system were profitable. I have no idea whether it is. I hope so. If I proposed to you to work on it together with me, then it is because I am not positive that it is profitable. If I were, I wouldn't have posted it.

If you do want to discuss it in detail, feel free to private message me. Or we could even discuss it here. I don't mind. Of course, the minute I'll realize the system is profitable, we'll have to stop the discussion because I don't want everyone to use it. It's ok to give hints, but I don't want to just post an entirely profitable system on a forum. I have others, and I've never posted them, except when I was developing them. But never the final final fully tested and optimized version.

Spot forex is perfect because this system I want to build is on forex, but beware the system could be ready the way it is. The only risk is that tomorrow I may happen to place an unprofitable trade because of it, and I'll start changing it, and forget along the way the original optimal version. That's how I am. And that happens only because we're talking about a system that cannot be tested nor automated, because of the nature of pivots. If I could test it and automate i just would do so, and add it to my army of automated systems, and set it aside.

But I'm gonna have to keep it discretionary for pivots not being practically back-testable, and also to keep myself both busy and open and alert to markets, which wouldn't otherwise happen if I just traded automated systems (which is both boring, and it ends my learning process).

So if you want to do it here, shoot your questions and suggestions. If you want to do it in private, then tell me so in a private message. I am meeting people who post on this journal all the time on msn, and they gave me some great ideas already.

"How much testing/back testing have you done using this system? What expectancy do you have of this system using the rules you describe?". As I said, I've done none, because pivots make it impractical and unreliable.

"That yes, perhaps, and also perhaps (?) not enough knowledge of your trading systems?". Remember not to mix my trading systems, which are 42 and are all back-tested and forward-tested, and are as precious as gold, with my discretionary systems or rather "methods", where I am like the wright brothers at their flying attempts, and i keep crashing and have kept on crashing for the past 12 years, but sooner or later hopefully i'll take off.

Remember that my problem with automated systems is not that they don't work. It's that I have no capital and I can't use any of them, because they work but their drawdown is so big that i can only trade a small minority of them. If i had 40k, I'd be reaching a million in less than a year.

Instead, with discretionary trading, I am hoping to find a way to make a few hundred dollars every day, so to finally bring that capital to the 20 to 40 thousands dollars I'd need to get started trading the systems. In order to raise such capital with discretionary trading, I am willing to take huge risks, like using all the contracts I can afford, because like this I haven't been getting anywhere for the past 2 years anyway. It's win or bust at this point. I can't stay between 5k and 15k for another two years. Only discretionary trading can take me out of this mess, because it's the only trading with really small drawdown that I can think of. I think I really can do it if I put my mind to it.

 

[Yamato]

wprins' third and final post

Replying to your third and last post:
http://www.trade2win.com/boards/trading-journals/72598-my-journal-89.html#post990392

This quote you posted is good. I could even read a whole chapter by this guy. But on the other hand, all the advice in the world won't do it. You have to find out by yourself what has to be done to be profitable. That post will make sense to me only i have found out it is true all by myself. Otherwise it won't be useful. And if I have found out by myself, then the post is just telling me what i already know. So in either case it's not useful.

I am sure you know what I am talking about. The world is full of idiots quoting great people... and yet still behaving like idiots. We've got to do it all by ourselves, us unknown people, because we're better than all these quotes. One thing you understand by yourself is more valuable than all the best quotes put together.

 

[Yamato]

Just in case, I'll reply to this John Mauldin

Just in case I may miss on something, but I'll only go through the brief sentence summarizing his rules
http://www.trade2win.com/knowledge/articles/general_articles/simple-rules-of-trading/page1

NEVER ADD TO A LOSING POSITION
Ok, this is what I usually do, and he's right. I've blown out many accounts doing this.

INVEST ON THE SIDE THAT IS WINNING
Nope. Haven't done this either. I've always decided it had to go up after a long fall, and I've kept on buying more and more contracts during a deeper and deeper fall. So I am giving him a pass grade on this rule as well.

DON'T HOLD ON TO LOSING POSITIONS
Another problem of course with my trading, seen what I said above.

GO WHERE THE STRENGTH IS
He's starting to repeat himself here... this is just like saying "invest on the side that is winning". Failed, because he's being redundant.

I can't read any further. His following rules are just recycling the preceding ones. That's the problem with setting out to write 10 or more rules. You run out of things to write and you end up recycling.

I had a friend who dealt with this better. He said:

I am going to say "no" to you for three reasons:
1. this is the way i like it
2. it's none of your business
3. three... this is what's important.

 

[wprins]

Re: Replying to wprins' messages: first message

Then why are they charging you money to feel the pleasure of writing, teaching, helping? You are proving my point again. I agree with you and therefore I mistrust those who are charging money to enjoy the pleasure of writing, teaching, helping.

What exactly is wrong with earning a living training others? No coach (whether previous footballer or not) does so for love and charity, and certainly not the top coaches. It is also not true to say that all top ex-top footballers are automatically good coaches. Have you heard of the "Peter Principle"?

"...a terribly good trader themselves". Hey, a trader is either profitable or unprofitable. I don't trust anyone selling me advice on how to trade, because it makes me suspect they're unprofitable traders, and therefore unable to sell me good advice.

My point was that there's a whole discipline and area of study that are dedicated to studying excellence. People who make that their profession, are by definition not experts in the areas that the stars they study are experts in. This does not make their conclusions about what makes these stars special any less true. You don't have to believe this, of course.

"...in the area they coach in?" Once again, thanks for the example. You reminded me that in Italian soccer all coaches are former top soccer players, and the same applies in many other fields.

Well perhaps so in Italian soccer, but I submit that it's rare to find coaches in general as being simultaneously top of their field. And more generally, I still insist that people who coach need to be good at coaching and observing, not neccesarily at the sport they coach, even if it might pose an advantage.

Also, once again, I can't conceive how an unprofitable trader could coach a trader to become profitable,

Well, with due respect, just because you can't conceive of something doesn't mean it's impossible... But also to note, I'm not really talking about traders neccesarily, I'm talking about psychologists, coaches, people studying excellence, studying excellence in traders (disregarding whether they're actually traders themselves). This is a legitimate area of study and expertise in itself. Read a few books on NLP, please.

and how a profitable trader would charge anyone to coach them. He either coaches them for free, or he doesn't coach them. If he wants money, he can just trade.

I don't agree with this premise. This smacks of the beginners idea of trading that trading is like a cash machine. Go to the markets and take money whenever you want. It is of course not that easy. Reality is often that, even if you can trade successfully, you don't have enough capital to do so *safely* in order to live off it. You, in fact, are to an extent living proof of this. One of the major problems with beginning traders are that they're under capitalized. As a result, they become impatient with the returns, so they start over-leveraging. In effect, they require themselves to perform miracles, not just once, but month after month, just to get a meaningful return from their trading.

If you start with,say, a $10,000 account, is it realistic to expect to make $10,000 a month? or even $5,000? No, especially not if you're a beginner! And yet, this is what many beginners expect of themselves. Returning about 4% per month is likely a far more reasonable (eventual) target, but still one that if achieved will place you in the top 1% of money managers world wide! If you say you want to live off your trading, and you need to earn,say $4000 per month, then this implies you need at least $100,000 of risk capital to trade with. This is actually not a small amount of risk capital. And as I say, this will be much less in the beginning, so you need even more capital and more modest goals initially. Anything too ambitious/unrealistic will just set you up for repeated disappointment and failure.

Bottom line is, it's not as easy to "get rich" as you seem to think doing trading, especially full time, and especially in the beginning, so apart from the other arguments surrounding getting some joy from your work (and getting paid for it while doing it), it's entirely reasonable to earn money training as well, even if you trade as well or do other things.

It's not like for a soccer coach who doesn't have the youth necessary to run after a ball anymore. You can trade at any age.

This is true, but as I say, it's not that simple. Having the skill to trade is but one ingredient to be able to live off your trading.

Thanks for the tip on NLP. You sound reasonable and intelligent and your arguments are logical, but they are not convincing, in the sense that you are not stating true facts in my opinion.

OK, well all I'll say is, do some research on NLP. Although I could be wrong (as always), my opinions are not just some sort of idle speculation. Perhaps read Van K. Tharp's book, especially the parts on beliefs. I get the sense you hold onto your beliefs very tightly -- this can be in my experience a very damaging thing for a trader. If your belief about something is at odds with the market, you will get punished for it. In trading (and I've learned from trading, in life) you need to be able to let go and/or at least really consider/try out other beliefs. You might be pleasantly surprised.

Yes they may be true in some cases, but not in general and not in the field of trading.

On what basis can you make that claim and arbitrarily exclude trading? I submit those are ungrounded and unprovable assumptions.

Or could we at least conclude that yes there are trading coaches getting paid who can also coach you to be profitable, but that the majority are charlatans? Can we agree on this?

Certainly we can agree on that. There's indeed a *great* many charlatans and snake oil salesmen out there and I never said that there wasn't. But, and this is the problem as I see it: It is a logical falacy to conclude that because there are *many* snake oil salesmen out there, that ipso facto *all* of them must be snake-oil salesmen and charlatans. Because there are many you need to be very careful when evaluating what they say and charge, but you must always keep open the possiblity and keep in mind that there are in fact some which are genuine.

I know of/can point to at least one, who's also mentored another trader I know. He then went on to enter a trading competition and ended up winning it. Before he took the mentoring he was a losing trader. Since the competition he's also (in the last year or so) doubled his account and in the last month had a return of around 20% (got a little lucky with the dollar being such a one way bet I think...)

What I was trying to get accross is that your position is completely extreme in the sense you don't allow room for error/alternative interpretations about other people's motives and why people write, train etc. You basically seem to assume *all* writers, trainers and authors are charlatans (based on the to me illogical argument that it can't be genuine since they get paid for it) and consequently you force yourself to do it all yourself. In doing so you rob yourself from being helped, whether for free or otherwise.

Everyone works to earn a living. What exactly is wrong with accepting payment for training/mentoring? It really is true that for some people satisfaction is more important than money. It really is true that some people would rather have a regular paycheck at the end of a month training others, than the stress and unpredictability of the markets, even if they can cope with doing that if they have to. Trading is hard, you're evidence of that yourself! Finally, some people just have an entrepeneurial bent, and will always have multiple irons in the fire, so to speak.

About this Elder talk. I didn't mean to offend your favorite writer. But remember my favorite book on trading (one of two I read), "Reminiscences..." by Livermore. He was broke, and wasn't a good trader. He had elements of a good even excellent trader, but not everything needed.

OK well, just for the record, Elder is hardly my favourite writer (nor do I particularly have one.) What I will say, is that I got a lot of interesting/useful ideas from Elder's book, which is why I suggested you read it. It is however also one of several books I've read. I can only encourage you to read more. Books are cheap. You're an intelligent guy. Your brain won't melt if you read someone else's book. You'll be able to evaluate the ideas presented and decide what you think of them. You'll be able to experiment with them, test them yourself, and see if they hold up. If they do, you've gained immeasurably on your road to being successful. If they don't, then you've confirmed the author's ideas as at least not working for you, and perhaps proved that he's a charlatan. Like I said before, bad books or failed ideas are also positives. Thomas Edison as I recall had something ridiculous like 10,000 failed experiments on the road to inventing the electric lightbulb. Being successful is hard work!

I also can write great posts, but I am not a profitable trader. I remember writing such good posts almost ten years ago, when I totally sucked, that some asked me for more advice, thinking I was a trading guru, and I had to tell "i am just reasoning out loud but I actually lose all my money every month". Some people can just write a great trading book - even me - just by saying what they shouoldn't be doing, just by saying everything they don't do. It would make sense, it would sound reasonable, but it would be almost worthless, because written by an unprofitable trader. I wouldn't trust it and that is why I always make sure to say to everyone what I do know and what I do not know, in order not to mislead people. I did some good work on automated systems, and I suck as a discretionary trader.

I can only read about one book per year, I won't read it unless I am totally confident that it's worth reading it. I'd rather spend that time talking to you or to real traders on msn, reasoning with you guys, rather than being taught by someone who may be an unprofitable trader. I trust much better a random trader on msn giving me signals and the rationale behind his trades, rather than a whole book by a famous author.

Surely this can't be? One book per year? Listen if you have reading difficulties, it really is possible to increase your reading speed. What's your average reading speed?

Anyway, it's much easier to research the background and skills of a book author than it is to do same for Joe Random trader. For example, another book I rate, is by Brian Shannon. It's called "Technical Analysis Using Multiple Timeframes". Now I've done a bit of research on him before I bought the book, precisely because I wanted to know how much I can trust his teaching. This revealed that: he has worked as a broker, he has owned a day-trading firm, he's managed a hedge fund, ran a proprietary trading desk (where he was also the most profitable trader of that firm) and have also taught thousands of traders world-wide as part of a training firm. Again, if you find this unbelievable, I submit to you there's more to life than just money. There is also such a thing as entrepeneurship. Brian currently again still trades etc.

From my experience all these teachers write way much more than it is needed.

Or, I submit with all due respect, maybe not. If the above was really true, then why aren't you succesful yet? (No offence intended.)

Is it not perhaps rather the case that this belief of yours is perhaps not true after all, and that in fact, they do write as much as is needed, but you for whatever reasons, can't or won't cope with what they write and how much they write? I know you may not want to hear this, but I really think you need to consider alternate points of view.

Like all professors.

Really? *All* professors? As in, there's not one single professor that actually knows something about something? ...

Honestly, just take a step back and look at that statement. It's patently not reasonable. I fully accept that you get bad professors and bad teachers. But again, there are always exceptions.

And in fact school totally sucks. And all schools should be abolished, because they have no reason to exist. They just answer questions I am not asking, and in order to support themselves have to make problems more complicated and give you answers you're not asking for. Much like book authors. A good trading method could be summarized in half a post, but since the author doesn't even know one, and he has to sell a whole book, he writes a lot of bull**** to fill up hundreds of pages. I despise and disrespect all those who pose as professors. Yes, sir. Knowledge is much easier, simpler and quicker than they paint it to be.

Well, I challenge you again then, why aren't you profitable by now?

It is true that *some* bad authors pad out books to fill hundreds of pages. This being so does not mean it's always the case though. There is unfortunately no easy way around the problem of not knowing whether a given author is good or bad, and padded his work or not. It does require, unfortunately, hard work.

"Reading bad books will sharpen your snake-oil spotting skills...". How do we spot a bad book, post, idea from a good one? Because they make sense to us, because they agree with what we were already thinking or because they don't. So if I read an author similar to me, who's also unprofitable, but who wrote the same things that I think I could very easily say "this guy is a genius", whereas he's just an unprofitable trader like me. The only thing I can trust is knowing he's profitable, or I might have better luck finding someone profitable on msn, and hearing what he has to suggest to me. Or even forums.

By critically evaluating what is written, that is, by comparing it with your own experience, by what other authors have written etc. You eventually develop a "stereo" picture of viewpoints, and determine your own position/conlusion with far more confidence. Eventually the aberrant/extreme/likely wrong points of view become obvious. Also by testing/trying his ideas. By seeing how specific they are or how woolly.

I hope you're not getting offended by my replies. They are direct and sincere and to the point. Of course I may sound arrogant, but how can you stop me from thinking that I am right? Your objections are well argumented and the best I could get but they still do not convince me. But thanks for taking the time to explain your objections clearly, logically and in detail.

No I'm not getting offended. I'm likewise doing my best to be direct and sincere and to the point. As for being arrogant - yes if I may be so forward, I think you're a little arrogant, though not in attitude towards me but rather in terms of being very attached to your opinions. Moreso than is in my view healthy for your development as trader. I understand however that after 12 years, there are reasons for them to be quite settled and for you to be quite attached to them.

Please Note however: I'm not trying to convince you to *my* point of view. (I'm still after all a relative noob myself, so my views are somewhat fluid and subject to change anyway!) I am however trying to get you to *try* and just *consider* (many) other points of view that you seem to dismiss more or less out of hand based on arguments that ultimately appear based on extreme presuppositions which are in my opinion flawed or unreasonable (for example that "all professors suck" etc. which are, if you take a step back, clearly not reasonable.) "Suck it and see" is what I'm trying to get you to do, not to trying to say "you're wrong and I'm right", that's NOT what I'm saying. Just trying to get you to basically say "OK, then, let's suppose this idea I have is wrong. Let's suppose this guy is mostly right in such and such an idea. What then? What implications would that have for my trading? What would I need to do to improve and how can I test whether this is true?" And to try a few things (written by others) out for yourself to determine if in fact, there might be some truth to whatever issue/writing is being considered/written about.

And on that note... I have to go to bed. :clap:

 

[wprins]

GO WHERE THE STRENGTH IS
He's starting to repeat himself here... this is just like saying "invest on the side that is winning". Failed, because he's being redundant.

Just wanted to say -- I actually thought that referred to entry point, not trend -- the side that's winning is trying to say don't fight the trend. This rule however says, only enter where you've got confirmed strength or weakness. These are not the same things, at least not the way I read it IIRC.

 

[Yamato]

replying to your reply to my reply to your message

Replying as I read:
http://www.trade2win.com/boards/trading-journals/72598-my-journal-89.html#post990454

After writing this whole post, I realized it's so long, that I will now place titles in bold to help readers navigate through it.

YOU'RE QUITE PATIENT
Well, your arguments are as good and patient as they could be, but I am sorry to say that they don't fully convince me. Maybe I am too lazy to counter-argue again, but I want to list some of the points that make some sense to me even though don't make enough sense to reverse my thinking and decision to stay away from trading books and trading coaches.

SCHOOL SUCKS
For example, I can see what you are talking about when you refer to how in some fields, like human resources and some MBA programs, one could focus on how one can train people to excel at anything, rather than on how one could excel at the things he's training people to excel at. But then we're talking about "schools" and "organized teaching" and part of my prejudice against trading coaches, or coaches on anything, has to do with the fact that I am against all "organized teaching". You could teach me something on a one to one basis, but if you tell me "enroll" in a course, then you're not going to convince me. The lonely profitable trader who volunteers to help me is all right and a great person by me, but the non-trader who wants to teach me something about trading is part of the "organized teaching", of the "teachers by profession" and to me that's very close to "organized crime".

I've been failed in school by stupid professors who ruined many years of my life, making me stay back two years just because they didn't like me, since I had my own independent thinking, and wasn't willing to memorize their stupid lists of notions. Including my dad who was also a professor and an asshole. SO I am against all organized teaching period. But if you tell me: "there's this profitable trader who wants to meet you and tell you stuff", then I'll meet him. But I don't trust him if he says he's going to "teach" me stuff. He has to say he's going to "tell" me some stuff, and also the relationship has to be peer to peer and not teacher to peer, or however you say that. I mean he's not superior to me in any way, nothing must remind me of school in my interaction with whoever wants to "tell" me anything.

Overall, I mistrust "teachers". I met one last night at dinner, at my neighbouress'. I told her about it. I said to her, how do you base your decision on failing people? How can you tell people what to think of an author (she teaches italian literature and latin), a book, how can you even tell someone when he has to read a book? How do you dare to give people answers before they ask a question? Graded should not exist or everyone should be taught one to one basis, because if you have a class of 30 people, and you grade them, the who receiving the best grades is going to feel gifted and encourage to study math for example, whereas the other 29 will be ruined and will think all their life that they are not gifted at math and for the Pygmalion effect and other self-fulfilling reasons, they won't become good. School discourages people from trying and feeling good about learning. School ruins everything it covers, by telling you how to approach a book, an author, an historical event. School is crap, from the beginning to the end.

Home schooling is not as bad. I've never done it though. Self-teaching is best.

As far as trading courses, I trust much more a trader having a chat with some people listening to his trades (even though I never took part in one), than a trader selling his courses, but this for the reasons I said in my previous posts.

IF YOU'RE NOT A PROFITABLE TRADER, YOU SHOULDN'T WRITE BOOKS ON TRADING
"...you don't have enough capital to do so *safely* in order to live off it...": thanks for the sincerity and clarity in stating your points, so I know exactly how much I disagree. Here i totally disagree because for example I don't have enough capital to trade my systems, but that makes me a lousy trader, because i don't have the capital only because of my many past mistakes, that lead me to blow out my account. As soon as I'll know enough about trading, I will have plenty of capital, and then I'll be ready to teach anyone anything, but will not need to charge them. Until them I am neither fit to trade nor to teach about trading. And the day I'll resort to teaching as a means of raising capital I'll be selling out and betraying what I believe in, because I'll be teaching crap to people, unless I clearly tell them "use your stoplosses or you'll have to teach people, like I am doing with you", "paper trade until you become profitable, or you'll have to be a teacher like me"... in Italy we say "chi sa fa, chi non sa insegna": "He who knows does, he who doesn't know teaches".

Oh, I just read how you said "I am the living proof of that". Well, thanks, but no, I am the living proof that I am not fit to teach anything right now. I am not ready to teach. My teaching would be very polluted. You wouldn't know which parts are good and which parts are the cause of my unprofitability. If I were to charge people to be taught stuff by me, I'd be ripping them off, and doing them damage as traders. That's why I am always pointing out, here and there, that I suck, my mistakes, and my 12 years of non-stop losses. Basically on my journal, I am thinking out loud. I am not holding free courses. I am just holding courses on sincerity, and simplicity. I am teaching people on the power of sincerity and simplicity, I am preaching sincerity, clarity. I am advocating thinking out loud. I am promoting speaking your mind clearly, simply and sincerely on a journal.

YOU EITHER MAKE A LOT OR LOSE A LOT
"...Returning about 4% per month is likely a far more reasonable (eventual) target...". Not to say that you don't make sense, because everything you say is reasonable and understandable, but personally I would be thinking more black and white, as usual. If you trade futures, you can make 100% a month, whether with systems or with discretionary trading, so if you don't make it there's still something wrong in your trading. Most likely if you don't make at least 50% a month with futures it's because there's something wrong (like in my case), and then that means you'll blow out your account or not trade, but in no case you're likely to get stuck at making 4% a month with futures. You either make a lot or lose a lot. It's unlikely that you'll make 4% a month consistently.

"...repeated disappointment and failure...". Maybe I was too ambitious and that's why I failed repeatedly for 12 years. Or maybe I was learning to juggle with knives and I'll bring out an amazing achievement at the end. My purpose to achieve, my goal, has always been 100% a month. I think that if you set a huge goal, that sets you above all others, and I won't set out to do anything that doesn't place me above all others, because in general I was taught to think that people in general suck really really badly. I was taught to always go for some amazing achievement. I prefer to fail at some amazing task, and I find it unbearable to fail at reaching a modest goal. Plus, since I am learning to juggle with knives (trading with futures), each time I make a mistake, I'll get cut really badly, but what's good is that it tells exactly where you stand. You either got it or you don't got it. Guess what. Leverage is a tool that magnifies your emotions and your mistakes (your signature quote) and I want to know exactly WHEN I am making a mistake and when I am not. I want leverage to teach me like a ruthless mother****er coach. If I traded stocks, I could even make money for 3 years just by going long here and there on a daily basis (no intraday), and I would go around thinking and saying how great a trader I am, without knowing crap about trading, and one day, the uptrend would end, and I'd lose all my money plus all the money that people entrusted me by then.

THE BEST TEACHING IS FREE
Hey, this is perfect. The clarity and detail with which you explain all the things I want to disagree with:
"Bottom line is, it's not as easy to "get rich" as you seem to think doing trading, especially full time, and especially in the beginning, so apart from the other arguments surrounding getting some joy from your work (and getting paid for it while doing it), it's entirely reasonable to earn money training as well, even if you trade as well or do other things".
Would you want to learn from trader who finds it easy to make money, and therefore doesn't charge you, or to learn from a coach who finds it hard to make money and therefore has to charge, to partly support himself? In one case you learn good stuff for free, and in the other case you learn bad stuff and have to pay for it. I'd say this is a perfect reason to look for traders who are willing to teach you for free, because that's the proof, according to that reasoning above, that making money is easy for them, and therefore they don't need to charge you.

I will now take a break for a couple of hours and come back to reply to the rest of your post later, which itself is a reply to my reply to your message. And sooner or later, I'll have to start charging you for this work you got me into. It's only reasonable, since I am an unprofitable trader.

NOT WORTH IT TO SUBSCRIBE TO ANYTHING
Ok, I was in the shower, and as usual I made a totally amazing excellent discovery. Yes, some profitable trader will want to charge you for his help even though he's profitable, in a sense out of respect for his help. I'll admit to being too strict and black and white in my reasoning. BUT. BUT. BUT. The help will last little time. You should not trust anyone supporting himself via teaching, making a profession of teaching trading. AND. AND. AND. And the help the profitable trader will charge you for (he may still be ripping you off) is readily available for free on elitetrader.com and other forums crowded with profitable traders. AND ALSO. Why do i say that help can come in the form of a short two-sentence post on a forum? Because I know from my automated systems that making money is indeed easy. Systems that make money are very simple and short. Making money with trading cannot be the subject of a long book, because that means they added in that book a lot of extra bull****, in order to actually create a book and make a living out writing books. All you need is a post on a forum, and the posts with those precious ideas already exist if you do the right search lead by the right reasoning on elitetrader.com. I am sorry but in my opinion the automated trading section of that forum is the best there is on the web, so I'm having to advertise it repeatedly.

I'M BEHIND, BUT I AM RUNNING A MARATHON
So, ok, one will object, trading is simple according to travis, so why is he unprofitable? Because systems have a big drawdown, and if I traded all of them, I could be at 100% profit in a few weeks, but I could also be at zero in two days. But that kind of back-testing is what made me understand that trading profitably is all about quality and not quantity. Luckily my simplicity in thinking, being orderly, it was all useful. You quoted Einstein saying to keep things as simple as possible but not simpler. Well, those guys writing books aren't doing it. All knowledge necessary for profitability can be kept within one short post. They're not doing it because they want to write books. I don't trust people who enjoy writing books. Because writing and reading is sick, and if you have money, and a profitable trader should have money, you should be having a good time outdoors. If instead you're a profitable trader and are writing a book, you're either sick or you're unprofitable and in both cases I shouldn't read your book. No wait this is too much. I don't read books, because as I said all profitability can be contained in one post, so anyone writing a book on how to become profitable is a master of bull****. And also, if you have enough money to do anything you want, you shouldn't even be trading, let alone writing books on trading.

Down with books. Down with school. Down with teachers. Learning has to come from within, step by step, question by question. There should never be a person who just specializes in teaching. Nor a person who specializes in trading. One trades to make money, and makes money to buy things, and do things, and avoid other things. Once you have the money, then you should also stop trading.

Hmm.. and then do what? Then do the things I always wanted to do but that no one let me do. Like first of all, quitting my job. Second of all, living where I want to live. And then I'll see what comes to my mind. Freedom from having to work is the number one thing.

----

So, where were we?

"This is true, but as I say, it's not that simple. Having the skill to trade is but one ingredient to be able to live off your trading".

...[...to be continued...]

18.00 CET

LESS POLEMICAL AND ARGUMENTATIVE FROM HERE ON
Ok, from here on I am going to try and be less argumentative and polemical. I'll only step in when I feel I strongly disagree, without having to differentiate myself just for the sake of it. I didn't sleep well, and I don't have the energy to disagree on everything you say.

"hold on tightly to my beliefs"... yeah, damaging but also good. I am strong. True that i lost money for 12 years, so I will give up the counter-trend behaviour as soon as possible.

"there are in fact some which are genuine": for the benefit of readers could you list some names? Would you agree that the fx500club is one of the genuine ones? Not that I would enroll in their course anyway, because I've realized that I actually enjoy learning on my own, without being told everything by someone else.

INDEPENDENT THINKING CAUSES ARROGANCE AS A SIDE-EFFECT
"...your position is completely extreme in the sense you don't allow room ...": you might have a point, but when someone is developing his own independent thinking, understanding and ideas he has to go by his own beliefs and cherish them, carve them in stone - he can't just be open to whatever everyone else tells him around him. My beliefs is that in general what's popular is crap. Like madonna, and all the other rockstars and movies... all the popular ones are crap, so I always go by the assumption that by avoiding what's popular I generally do things efficiently. So if the crowd buys elder books I tend to spit on that, even without knowing anything about elder. And this guy seems to be quite popular, so I was assuming he's worthless. I may be wrong about this elder guy (but reading him won't change my life), but in general it is a good principle to follow: stay away from the crowd. On the other hand, if the crowd of people on this forum is all formed by smart people like you, weighbridge and gladiatorx, then this principle doesn't apply and I am doing things all wrong. But I am ready to accept your advice. But don't tell me to read a whole book unless you promise me that book will make me a millionaire. I can read maybe one chapter. Books do not change your life. Unless it's a book on building explosives and so on. You get my point. Elder is into the psycho-babble. That's the worst part of trading coaches. Tell me about a book that recommends a system because statistically works, and then I might even read that. Don't tell me about non-quantifiable help from elder.

WHAT IS INTERESTING IS NOT ALWAYS USEFUL
You have to be calm... you have to breathe so and so... I've read enough of this stuff. Tell me what moving averages you have to use, what things work. Tell about a book that lists important data.

Even Jesse Livermore didn't teach me anything, even though it was a fascinating book, but I wouldn't recommend it to anyone who wants to read a book that will help him trade better. And that's one of the few books I've read on trading.

"Everyone works to earn a living. What exactly is wrong with accepting payment for training/mentoring? It really is true that for some people satisfaction is more important than money. It really is true that some people would rather have a regular paycheck at the end of a month training others, than the stress and unpredictability of the markets, even if they can cope with doing that if they have to. Trading is hard, you're evidence of that yourself! Finally, some people just have an entrepeneurial bent, and will always have multiple irons in the fire, so to speak".

You sound very wise, reasonable and knowledgeable and I can't argue against your elaborate, and detailed arguments any more, at least when they make sense. You know much more stuff about this business than me and show patience in listening to my reasons and replying to me. You don't deserve all my counter-arguments.

You could be right. I'll think about what you said. I was used to people writing me "you're a fool, what the hell are you talking about". I wasn't used to such good replies to my objections. Thanks for taking the time to explain so clearly your point of view.

INTERESTING THINGS MAKE YOU WASTE YOUR TIME
"Books are cheap. You're an intelligent guy. Your brain won't melt if you read someone else's book. You'll be able to evaluate the ideas presented and decide what you think of them. You'll be able to experiment with them, test them yourself, and see if they hold up."

Books are even free on emule, and actually I already downloaded all trading books before, but I've only read E.P.Chan's on automated trading (which was interesting but not useful, since the two things are not synonyms). Books are free, but what is precious is my time. What's precious is my basic knowledge and even ignorance that has to be kept like this. My mind has to be free from all the jargon and trash they want to fill it with. I studied charts before I knew there was a thing called "technical analysis". I knew that it was the way to go. Nobody told me.

BETTER AN EMPTY MIND THAN ONE FILLED WITH NOTIONS
I watched taxi driver before going to a film class where they'd tell me what to think of it and ruin it for me.

Ignorance and lack of notions is precious and has to be preserved.

Knowing how many things you do not need is precious knowledge. Self-confidence at the risk of being conceited is precious.

One night i decided I'd learn how to juggle. I thought about it for a few hours, practiced all night until 8 am with a few socks, and taught myself how to juggle non-stop for up to 20 seconds, with three balls.

I didn't go and buy a manual. I despise manuals.

If you can do it by yourself, it's much better. I get very uncomfortable with people trying to teach me stuff or trying to tell me what to do.

Reading a book would not only make me waste a month in my life, while entertaining me. It would make me go in the wrong direction. It would put a bias in my head, in favor of the author's ideas, or against the author's ideas, because i tend to go against what I am told to do. So in case the author is right, he would make me go the wrong way. So I can't read anything, nor hear anything. Maybe I went against the trend when i started reading people who were saying "the trend is your friend". Or maybe as I said i do it naturally for everything in my life, being a rebel and so on. I told you before: I had a father who was trying to force me to do everything his way, and this really screwed up my mind, and made me a rebel forever. That asshole.

"Surely this can't be? One book per year? Listen if you have reading difficulties, it really is possible to increase your reading speed. What's your average reading speed?"

I can read fast like everyone else, but I stop and say to myself "what is this mother ****er saying?". I get upset pretty quickly and I just stop reading. Only one book a year has my approval enough to be read. The rest I consider all idiots. Especially novels. With those I don't even read the title.

YOU LIKE READING? SUMMARIZE WHAT YOU READ
"Brian Shannon": good to know. But how did his book change your trading career? What's the great advice he gave you? I repeat: interesting is not the same as useful. I also find many books interesting but I don't even start reading them because they'd take away a chunk of my time. Like the flying simulator. I installed it and was flying and shooting like a mad man for two years. So I uninstalled it and stayed away from it. These things are dangerous and addictive, and will steal your time: so are books.

"why aren't you successful yet?" Ok, because until now I've played around. I was just warming up. I will show you in the next few weeks how I'll get from the 6k i have now to 20k, and then let my systems trade for the future. And if it doesn't happen, as usual, I'll come back here and admit I was wrong. I have proven that I don't have any problems saying I made a mistake. The problem of my non-profitability until now is that I didn't really want to do it. Now I know pivots, that gave me some extra help as well. With pivots and those two moving averages I wrote about, and my intuition, I am going to be unstoppable.

Really. Watch me next week. I'll take my money to 8k at least. And if I won't, I'll let you know.

"alternate points of view": I did consider them, because I know i needed to change. Number one, a friend told me about pivots, and I considered them and they do work. Number two, I have decided (i think - we'll see next week) to stop going against the trend by staying within those two moving averages I talked so long about in my other posts, and even tested on tradestation.

"Well, I challenge you again then, why aren't you profitable by now?"

I already answered. I am going to show you, in the next few weeks, one profitable week after the other and you know I don't lie. If it won't happen, I'll admit it didn't happen.

It's funny but as I am reading your replies to my reply, I am starting to think by how you quote me that after all I might have made some sense to you, and that you might stop reading books altogether. Value your own thinking. Despise other people's thinking. Your own logical thinking is precious, and reading other people's thinking conflicts with preserving it. Trust me: reading books is a waste of time.

"By critically evaluating what is written"... look if you really insist on telling me to open up, I'll tell you what compromise we could reach. I enroll in a chat like fx500club.com and we see what comes out of that. That's opening up and i think it could be useful to me, very much. That's a good risk reward ratio, and I am opening up to others. Books are not a good and efficient way to open up, because I am telling you: this guy was told by the publisher he had to fill up 140 pages or the book wouldn't get published, and any serious profitable trader will refuse to write in 140 pages what can be told in one page at the most. But even more than this: the profitable trader will refuse to tell you his method. And as I said, I won't do it either. I'm going to take off as soon as I realize that I am totally and permanently profitable. Or maybe I won't take off, but I won't write everything about my method either. But also, once I reach a given capital, I really will stop writing because I want to be outdoors at the sea, swimming... similar natural places and not in front of a computer (with a bigger capital I can use my systems).

I KEEP FAILING BUT I'VE BEEN RUNNING FOR PRESIDENT
"...I understand however that after 12 years, there are reasons for them to be quite settled and for you to be quite attached to them...": as we approach the end of your long reply, and therefore of my reply to your reply, i have to say something in my favor. I said I suck and I am unprofitable, and so on, but it must be stressed that there's different types of unprofitability, like there's different types of failures. There's failing to graduate from high-school and failing to become president of the united states. As i've said before, I am running for president as far as trading. I have built dozens of systems that work in automated trading, fully automated. When they'll start working, with the necessary capital, I'll make so much money that I will be able to quit my job overnight.

To get to that needed capital, I would need a little patience, which i didn't have clearly, and that's what made me go back to discretionary trading, with the results of decreasing my capital, instead of increasing it. As soon as I'll be able to increase it instead of decreasing it, I may win the presidency. I've got great potential, but haven't expressed it at all, due to undercapitalization and psychological limits, and trading limits altogether. But it takes nothing to reverse this, just like it takes nothing to stop losing money by not going against the trend anymore, and conversely start making money instead.

"...which are in my opinion flawed or unreasonable (for example that "all professors suck" etc. which are, if you take a step back, clearly not reasonable.) "Suck it and see" is what I'm trying to get you to do...": yes, and i thank you for that. And if you are trying to help me, I'll ask help from you: summarize it and i'll suck it. Don't make me read the whole book. Summarize it for me.

You and the other patient readers of this journal have been of great help already. Besides the trading advice that you all gave me, there's the psychological support, and there's the fact that by caring about me, you made me want to be a profitable trader (several readers are concerned about my compulsive gambling), in the sense that I'll probably turn profitable in order to tell you about it and make you happy for me. And to thank you all, I'll probably even tell you how i did it. Which for a large part I always do, because i always report here most of what i do as far as trading and even showering.

 

[Yamato]

back-testing pro-trend discretionary pivot system

Short break from answering the posts above, in order to test my famous PRO-TREND intraday system. Well, pretty good so far.

I've managed to set up "data2" on tradestation, after fighting with it for an hour. So now that mentioned system of mine is testable, except for pivots, which are not going to be easy to be back-tested also because I don't trust the data I have to be the same IDEALPRO data I have on IB's TWS.

In simple English it read like this:

ENTRIES if:
1) the 15-period 15-minute ma is in favor
2) the 15-period 1-minute ma gets crossed by price (in favor)
3) your entry and your take profit are both 1/5th away from any pivot lines
EXITS
Bracket order of 20 ticks. You can exit early if you wish, but not increase the distance of the stoploss.

In easylanguage, after getting rid of pivots and having a non-discretionary exit but just a bracket order (which should be worse than what I can do), it looks like this:

If marketposition = 0 and c crosses above AverageFC(c, 15) and c of data2 > AverageFC(c of data2, 15) Then Buy("Long") This Bar;
If marketposition = 0 and c crosses below AverageFC(c, 15) and c of data2 < AverageFC(c of data2, 15) Then Sell("Short") This Bar;

If Openpositionprofit > 0.0020 or Openpositionprofit < -0.0020 then ExitLong("X Long") This Bar;
If Openpositionprofit > 0.0020 or Openpositionprofit < -0.0020 then ExitShort("X Short") This Bar;

The system quoted above backtests pretty well for 2007. Despite tradestation's limits that certainly do not allow to test anything a discretionary trader could add with his better timing and intuition, the system is slightly profitable.

View attachment intraday_pro-trend_2007.XLS

This tells us (various tests I made) that the slow average is good because it gets rid of unprofitable trades, so going with the trend does work better in general.

The system trades on average a bit more than twice a day, which is more or less what I'd like to do.

If you add that I'll be able to help my trading with pivots, then you can see how I'll be able to make money pretty much every day from now on: because you can make money even executing the system as it is and without pivots helping me. As long as I remember this, that a systems like this one makes money without efforts, I shouldn't be tempted to go against the trend and will add my intuition only where it helps.

As long as I stay within the rules

1) the 15-period 15-minute ma is in favor
2) the 15-period 1-minute ma gets crossed by price (in favor)

I can't lose money. If I add to it my intuition, I can make money every day.

WHY I ALWAYS LOST: BECAUSE I AM ANTICONFORMIST
Until now I lost because I felt the desire to fight the system, just like I fight everyone who posts here. Just like I am being disputatious all the time with people, I did the same with markets. And trust me in the markets it's just like in my regular life: it's not a pleasure being this way, going against the current on general principle. You get failed by teachers, you're considered heavy and unpleasant by your friends, you spend your whole time arguing (look at my replies to wprins). Nonetheless, I have a tendency to do this, regardless of why this happens. Well, when you do this with trading, you lose money for 12 straight years. There's my answer to my problem, right there, plain and simple.

Why am I like this? I don't know, I think it's my father's fault again. He taught me in many ways to never take shortcuts, to always do things the hardest possible way, to always challenge myself and others. He's the same. Whenever you talk to him and say something to him, his first word will be "no", then he might even agree with you, but he starts every sentence with a "no". Same with me: the market is going up? No, it's gonna start going down soon. You tell me to read a book or watch a movie? No, books suck, and movies recommended are never good. No, no, no. Always the hardest life, always working hard, inventing work when there's no work available. When work is not needed, destroying things to build them all over again.

 

[Yamato]

Oh wow, ok... ok... there's a universe out there that I ignored. I was reading Indiana's new journal and read his profile and it says about this... fx500club. Then I went on their web site and browsed a little, watched two videos, and it seems like actually these people are selling stuff but know what they are talking about and are not charlatans, so apologies to wprins: there's exceptions, or it could even be half and half out there (half honest and half charlatans). Then I kept on browsing, dns searches, and so on, and I ended up finding out that the head of the web site is a fellow journal writer on this very forum, danarm. No wonder he was getting all those views. Number 1 most viewed journal. Ok, next time before talking I'll think twice.

However, after considering for a few minutes even subscribing to this fx500club, I said to myself... First of all, this stuff, drawing lines all over the chart, listening to those chats... it looks like a whole lot of work, plus I'd have to pay the fee, plus.. no way, man. On top of everything if they told me all the secrets at once, first of all I would be overwhelmed and second of all they'd spoil the game for me. I don't like to be taught, I like to learn on my own and have people answer my questions when I ask them. I enjoy the learning process. So, point taken: there's people selling stuff that works, and courses that work. Because I can tell these people are honest (college degrees, etcetera... people who follow the chat making money... keeping a journal here in front of everyone... etc). But still, I have to say: screw all this. I want to do things by myself. Some tips, I wouldn't mind, but in small quantity, here and there. Like someone from this journal who told me to look at pivots, and he was right.

In general, a chat, a place where I have to be a student, is not for me. I am not a follower. I am either leading or I'd rather be on my own. I don't like to be told what to do.

 

[Yamato]

third red week for automated systems...

Third red week for my automated systems and first red month: November. Since I began the forward testing on July 20th. These are the weeks I've had, rounded by the hundreds, to preserve some privacy. In red the red weeks. Last week was short due to thanksgiving, but I still count it as a week obviously.

1,500
5,900
1,100
-800
4,300
2,000
500
1,400
4,700
6,000
500
4,900
-2,900
6,700
12,100
2,900
-1,000
-7,400
-2,700

Now you see why I say that I can't run my systems with a capital of 10k. In the past 3 weeks they've lost 11k. Now imagine what that means in terms of drawdown. It means you still need a capital as big to still allow you all margin necessary even with that drawdown of 10k. If the drawdown (the biggest so far) is 10k, it means at its worst it might have been 14k or so. It means in the future the drawdown could be 20k at its worst. With a foreseeable drawdown like that, I need at least 40k before starting to trade all systems. Because were they to fall to 20k I'd still be able to trade them all. Of course my money management formulas are much more complicated than that.

Overall, knowing there's dozens of systems producing these results, one can tell this stuff is pretty good. But still, I do need that capital, and that capital is very far away unless my discretionary protrend system will produce something good, week after week. I think I am ready for it. I have the will and the ability to make it happen, starting next week. Also, because I clearly see the need for it to happen. There's no other way out of my job, and I really want to get out of that job.

These weeks of "minus 8 thousand" tell you that my system cannot use all the leverage available, because the drawdown could blow out my account. If I used all leverage available with a capital of 40k, that 8k could turn into a -20k. So I basically need a lot of money to trade all the system but at the same time I cannot use it, because I always have to be ready for a semi-disaster to happen. I don't know much about formulas, but I can tell that things would have been better if I had had no red weeks, and much lower returns, because then I could have invested twice as much, and returns would have doubled, without incurring any extra risk. With a rough estimate, half of the profit with no drawdown would have been better than what I am having, 40k profit, with 11k drawdown.

Suddenly I don't have that I have much in life and this might be what i needed to get serious and start making money. Trading cannot be just entertainment to me, let alone compulsive gambling. My situation is serious. I cannot stay much longer at the bank. I can't keep saying "next summer I won't be here" year after year. I need to knock off the bull**** now, and grow my capital to that 40k I need.

The least I am going to make is 100k per day. The most I can count on is 500k per day. But once I'll get to 20k my systems will start helping me as well, the ones with smaller drawdowns will all be trading.

But 20k is very far from 6k. How do i reach it?

Realistically, I can count on an average of 200 per day, at least while I am trading a contract, which I will be doing for the first month, to be safe.

Those 1000s I was making on my lucky days, quite rare, too, only happened because of daring reckless counter-trend trades, which condemned me to losing everything a few days later. Those big wins will not take place anymore. I'll have more secure wins now.

I am not going to go from 6k to 8k in a week, even less to 10k, as I said a few hours ago.

I can definitely get to 7k. Either that or I am going to lose, because with futures, you can't make less than that if you're doing something right. And if your system is wrong you're not going to lose a few dollars either.

We'll see anyway. I finally got tired of imagining huge returns and calculating my way to a million.

 

[Yamato]

Can't sleep.

 

[Yamato]

Maybe this laptop is causing the problem, because I don't have to get up and can use it from my bed, or maybe my resumed discretionary trading is making me nervous. Remember: if I'll follow the moving averages, I can't lose. If I can really start making money consistently most of my problems will be solved.

 

[Yamato]

Maybe I need to read Elder or something, so I can distract myself from my own life, and that will make me relax. But I don't have a printer and reading on my desktop will not be a good idea. But maybe I'll relax enough to go back to sleep.

Usually my main interest is focusing on myself, but now I am feeling the need to turn the focus away from myself. So much so, that I clicked on the advertisement on top of this page, IG Forex Spread Betting, I never click on ads, much better to read a book. Better than clicking on ads to distract myself. From myself.

Investors Gold Index, that's what IG stands for.

 

[Yamato]

Alexander Elder

http://en.wikipedia.org/wiki/Alexander_Elder

Alexander Elder, M.D., is a professional stock trader, living in New York. He is the author of Trading for a Living, Come Into My Trading Room and Entries & Exits, best-selling and well known among traders. First published in 1993, these books have been translated into Czech, Chinese, Dutch, French, German, Greek, Japanese, Korean, Polish, Portuguese, and Russian. He also wrote Rubles to Dollars — a book about the transformation of Russia.

Dr. Elder was born in Leningrad and grew up in Estonia, where he entered medical school at the age of 16. At 23, while working as a ship’s doctor, he jumped a Soviet Union ship in Africa and received political asylum in the United States. He worked as a psychiatrist in New York City and taught at Columbia University. His experience as a psychiatrist provided him with a unique insight into the psychology of trading. Dr. Elder’s books, articles, and software reviews have established him as one of today’s leading experts on trading.

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official website

http://en.wikipedia.org/wiki/Special:WhatLinksHere/Alexander_Elder

Swing trading (links)
Talk:Alexander Elder (transclusion) (links)
Force Index (links)
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Swing trading
Swing trading is commonly defined as a stock, index, or commodities trading practice whereby the instrument is bought or sold at or near the end of an up or down price swing caused by daily or weekly price volatility.[1][2] A swing trade position is typically open longer than a day, but shorter than trend following trades or buy and hold investment strategies. Swing traders engage in prospecting changes in an instrument's price caused by oscillations between its price being bid up by optimism and alternatively being bid down by pessimism over a period of a few days, weeks, or months. Profits can be sought by engaging in either Long or Short trading.[3]

Swing trading strategies
A Predictive market trading algorithm or Trading System is defined as a calculable set of trading rules that uses either technical analysis and/or fundamental analysis and results in entry, exit and stop loss trade price points. Trading algorithms are not exclusive to swing trading and are also used for daytrading and long term trading. Investment in researching trading algorithms/systems has skyrocketed, particularly by investment banking firms like Goldman Sachs which spends tens of millions on trading algorithm research, and which staffs its trading algorithm team more heavily than even its trading desk.[4] The goal of trading algorithms is to remove the subjective decision making from swing trading and can be as esoteric as extrapolated biology theories like neural networks applied to derivatives trading by Rutgers University's Gang Nathan Dong[5]. Simple approaches include Alexander Elder's strategy which measures the behavior of an instrument's price trend using three different moving averages of closing prices. The instrument is only traded Long when the three averages are up, and only traded Short when the three averages are down.[6] Trading algorithms/systems may lose their profit potential when their strategies obtain enough of a mass following to curtail their effectiveness: "Now it's an arms race. Everyone is building more sophisticated algorithms, and the more competition exists, the smaller the profits," observes Andrew Lo, the Director of the Laboratory For Financial Engineering, for the Massachusetts Institute of Technology.[7]

Identifying whether a market is currently trending higher or lower, or trading sideways and when this will change is a challenge for many swing trading and long-term trend following trading strategies. Swing traders do not need perfect timing - to buy at the bottom, and sell at the top of price oscillations. Small consistent earnings that involve strict money management rules can compound returns significantly. Most important is to understand that there is no foolproof mathematical model or algorithm that will always work so only use them as research tools not decision making engines.

I don't trust swing trading. It's gonna make me engage in top and bottom picking again. I'd rather focus on getting in and out during the swing, identified by the moving average.

Force Index
The Force Index (FI) is an indicator used in technical analysis to illustrate how strong the actual buying or selling pressure is. High positive values mean there is a strong rising trend, and low values signify a strong downward trend.

The FI is calculated by multiplying the difference between the last and previous closing prices by the volume of the commodity, yielding a momentum scaled by the volume. The strength of the force is determined by a larger price change or by a larger volume.

The FI was created by Alexander Elder.

Don't care about this. Volume never made any sense to me. Could never figure out how to use it. So I am either stupid or volume is useless, and I'd rather think it's useless. But then again I thought that about pivots as well, and now I've changed my mind.

http://www.elder.com/

"... You can be free. You can live and work anywhere in the world. You can be independent from routine and not answer to anybody ..."
[Trading for a Living]

- Dr. Alexander Elder

Palm tree? Am I supposed to trust this guy? Where did he learn this marketing stuff? It doesn't look like a serious Columbia University professor to me, but like a scam. Let's keep on reading since he was recommended by wprins.

http://search.columbia.edu/search?c...=any&as_dt=i&as_sitesearch=&sort=&btnG=Search

TRADING FOR A LIVING

Introduction

You can be free. You can live and work anywhere in the world. You can be independent from routine and not answer to anybody..."

I agree with everything he said, but he didn't impress me. Let's watch this other "related" video.

Yes, more interesting. I am more like the second example. I thought fundamental traders didn't make any money. It is about a formula however, it's like a precise recipe you need. Let's watch this other "related" video.

Liking it (of course none of these videos are changing my life).

I have a feeling that when people become successful, success ruins them, but also that, even if they didn't change at all, they'd still lose all appeal to me. It happens to me with everything: movies, songs, and trading authors. If I were the one to discover them, I'd like them. But if others tell me about them, if everyone is talking about a movie... I am not even going to watch it. That's because I've usually noticed how the worst things are the most popular. Or because I dislike people in general. Or for other reasons.

But, as I first said, also - not movies because they can't change, nor songs - but people, sognwriters, actors, and trading book authors do change, after reaching success. The actors, like Robert De Niro will start accepting poor scripts because they're being offered a lot of money, like De Niro did Heat and Ronin, crappy movies. Success will change songwriters as well. And success will turn Elder, who didn't lose his accent, into a marketing expert, who will gain schmucks because of the palm tree on his web site, but will lose people like me, who would have preferred a guy without a web site, or would have trusted better a web site written in russian.

All these people: Elder, Williams, Schwager became successful because their work was good, undoubtedly. They are not like Paris Hilton. Why else woud a Russian doctor become a famous trader, or Larry Williams? They all became famous because they did something good, and not because of marketing it well.

I am liking it again. But this only applies to discretionary trading. But since I'll be doing it, it could be useful. Interesting for sure, I don't know how useful. But let's read a few more lines.

Yes, this is exactly me.

I am liking it a lot, but how is this going to help me?

 

[Yamato]

I'm going to print the first 3 chapters, and see if they turn me into a profitable trader. The rest I already know... I'll read the fourth on indicators, maybe. No, just the first three. No more than that. I have all the tools to be profitable, and if the first three chapters of this book don't make me profitable, then I don't have to go any further. Because my only problem is a psychological one.

 

[Yamato]

[... reading...]

I am liking it a lot, but I don't see how this is going to change my trading.

 

[Glenn]

Travis
Seems to me that you rebel against all the things that would make you succesful, as if somehow you know better, despite your 12 yr performance.
In your discretionary trades, you appear to act like one of Fowlers pidgeons, constantly pecking away for random rewards, which is typical of gambling addiction.
Even discretionary trading can be mechanical in that it can be done using fixed rules. The discretion arises in knowing when to use them and when to stand aside. e.g. markets are not technical all of the time, so don't trade technically (or at all) at those times.
Maybe if you imagined that your trading pot is someone elses money, someone important to you like your mother, then you would control and behave yourself and do the right thing for her, instead of trying to endlessly prove to yourself that being a rebel is a good thing.
You have to take the 'you' out of all this, otherwise nothing else can change. Your mech systems are telling you that.
So let me really wind you up by patting you on the head and saying "there there, be a good boy and make your Ma some money". That should make you both angry and confused, but it might open a different door in your mind.

Glenn

 

[Yamato]

Yeah, it's fine advice. It seems like pretty correct analysis of how I feel. But I can also tell that my precise rebel's problem is this: top and bottom picking. I am always looking to predict when the ongoing trend will end and reverse. And when it does, I stay with the new trend for a bit, and then start looking for the opposite reversal. So I think that if I can trade only within those moving averages I wrote about (both pro-trend), I'll have solved my problems.

One thing you said that made me unsure is this:

The discretion arises in knowing when to use them and when to stand aside. e.g. markets are not technical all of the time, so don't trade technically (or at all) at those times.

On the one hand, alowing exceptions could be profitable, but I am pretty sure that I am NOT ready for it, because all my trading so far has been about not having ANY rules, and if I had them it was about breaking my own rules. So I would try to have a few rules not to be broken in any case, because the possibility of exception in my case can always lead to removing my stoploss and blowing out my account.

Recapitulate these are going to be my rules:

ENTRIES if:
1) the 15-period 15-minute ma is in favor
2) the 15-period 1-minute ma gets crossed by price (in favor)
3) your entry and your take profit are both 1/5th away from any pivot lines
EXITS
Bracket order of 20 ticks. You can exit early if you wish, but not increase the distance of the stoploss.

The discretionary part I am allowing is that I can discard entry signals, and that I can exit early, in terms of both profit and loss.

Right now I am reading Elder, to see if I can get any good advice.

 

[Yamato]

Elder book was written in 1993. Compared to then, trading has become much easier. So far I've only read the Introduction. He speaks in detail of slippage and commissions as huge costs. They used to be. And back then getting market data was also a problem. Everything now has become much easier, even compared to when I started, in September 1997.

I really have to become profitable, because I definitely can do it, and because I owe it to myself, and to everyone I bothered so far, also the readers of this journal. I will then tell you a lot about what I am doing right, after spending 800 posts telling you about what I was doing wrong.

Out of all the interesting things Elder says in the Introduction, I have found only one good piece of advice (because I already implemented on my own the rest of his advice, on getting a cheap broker and so on): get off the emotional roller coaster and postpone the short-term pleasure from thrills you get by gambling in the markets. In synthesis, that's his advice: stop trading and being in denial about how your trade is going. He's right about the description of my psychological state after I make a trade, and even before: impulse trading, looking for thrills.

After I make the trade: if it goes well, I am happy, and if it goes badly, instead of acting, I start feeling bad. I don't close it... I never used stoplosses, and when I had them in place, I often removed them.

You could still trade a whole day with stoplosses and lose in ten trades as much as you'd lose without them in one trade, but if there's trend, and you go with it, you will make more money than you lost on those bad ten trades, which you could have avoided to begin with. If you use this method, with these strict rules, you will at least break even. Instead what I've done until now is losing in days with trend as well, which is unforgivable, because it can be avoided with simple rules.

Now I will read chapter one, and write down, as I read, the advice he's giving me.