Is leaning on 'psych issues'/'newbies chasing' etc. a bit too convenient?
Its way too convinient..
This isnt a conspiracy theory, its simply a fact that there's a massive industry built on juicing traders (and T2W certainly plays its role in helping to achieve that aim). There's a lot of disinformation out there, and this thread is a great example of the way in which people who are actually ignorant, regurgitate stuff that sounds reasonable, but is simply not true when subjected to rigorous testing
Most people really dont appreciate just how MASSIVE a task it is overcoming transaction costs. Add in a bit of slippage, and some outright theft and it becomes almost impossible to beat a broker.
I've already mentioned the asymetry in gains needed to overcome losses, but for most traders there are also problems of asymetric leverage, being unable to round up or round down due to lot size constraints etc.
Then you have the tricks brokers play with the tools they provide. If they give you a facility, for example like a trailing stop, its because its going to do you more harm than good.
You have a non stationary time series, applying trivial technical analysis tools is pretty much pointless. Just look at the junk optimisation routines provided by charting providers. I find it rather amusing that if you determine an optimum set of parameters by walk forward optimisation for something basic like a MA cross, then you can pretty much guarentee that you'll get better results by fading the signal (and I know people who do this very successfully). Its almost like the markets applying a tax to the terminally stupid.
Hardly a week goes by without an intellectual pygmy suggesting that swapping the buy and sell signals for a losing EA will make them rich. The other argument is that you'd become rich by fading the calls of inexperienced traders.
Having said all that, I do believe that there is an element of psychological pre wiring that makes people lose. Ive taught my method to a few people, and in almost every case, initially when they are asked to trade with discretion, they do worse than random. This stuff is just inbuilt bias's, we dont like to be wrong, we want instant gratfication, we cant handle conditional probability and uncertainty etc etc. We play a negative sum game, and once you add in all of the stuff The Bramble raised, its little wonder that people fail.
If the reason that people failed was something that was inherently built into the structure of a market, then finding an edge would arguably be easier. You also have to remember that whilst the markets ****ing some guy taking 5 minute scalps, its also ****ing the guy taking 30 minute micro swings, and its ****ing the guy who's swing trading, and simultaneously ****ing position traders. Its a whore, and its objective is to **** as many people as it can, as quickly as it can. Thats partially why people get ****ed, but mainly its cos the games rigged that way.
