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Why do we make things more difficult than they are?

Supply, demand and the trend, be it a 5 minute time frame or weekly, its all the same and thats all that matters. Why make things any more complicated? and why does it take so long to realise it?!!!!
 
Why do we make things more difficult than they are?

Supply, demand and the trend, be it a 5 minute time frame or weekly, its all the same and thats all that matters. Why make things any more complicated? and why does it take so long to realise it?!!!!

Dont remind me! The time ive wasted prating about!:LOL:
 
Why do we make things more difficult than they are?

Supply, demand and the trend, be it a 5 minute time frame or weekly, its all the same and thats all that matters. Why make things any more complicated? and why does it take so long to realise it?!!!!
Ah, what do you mean by supply and demand though?

or in other words:

Vot is point supply? Hmm? Vot is point?

(apologies if you don't listen to Down The Line)
 
Why do we make things more difficult than they are?

Supply, demand and the trend, be it a 5 minute time frame or weekly, its all the same and thats all that matters. Why make things any more complicated? and why does it take so long to realise it?!!!!

Absolutely !

All you need to make a fortune trading is to do what any kid in kindergarten could do, grab a chart, eyeball where the path of least resistance is, jump on board, cut your losses when and as they occur, and otherwise ride that trend all the way until it bends.

Kenneth Grant, in "Trading Risk: Enhanced Profitability through Risk Control", depicts his experience as risk manager for some of the best and most successful hedge funds, amongst others Paul Tudor Jones funds and Steve Cohens SAC Capital, that:

"ACROSS ALL TRADING STYLES, TIME FRAMES, MARKET CONDITIONS AND TRADERS, ONE RULE HOLDS TRUE:

10% OF ALL TRADES INEVITABLY ACCOUNT FOR 90% OF PROFITS !"



It is totally OK to lose as a trader, it is just a cost of doing business !

systemquote.gif


Trading - like most things in life - is simple enough once you succeed in seperating the chaff from the wheat, the noise from the few, truly success relevant factors.

It's almost always lack of understanding or ego that leads to complex, inferior problem solving.

Lack of understanding explains itself.

Ego driven efforts at problem solving make you want to be right over wanting to be successful.

I always run away very quickly when people aren't able to explain in a few words what constitutes the relevant essence of what they are on about, what the 20% of their effort that generates 80% of their results is.

Jack Welch) said it, and he "dun" it, Business is simple, undue complexity is almost always an attempt to camouflage lack of true understanding, or an attempt to hoodwink some gullible souls into believing that they're about to be granted the incredible privilege of forking over loads of their hard earned money to purchase the Holy Grail. ;-)

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Many people who are severely lacking in the wisdom department demonstrate great skills at in-depth analysis of individual trees while failing with great aplomb to even realise, let alone see, that there is an entire forest out there.

The definition of what an Idiote Savante is, in other words.

There is a rather well known complexity experiment that Harvard did where two groups of students had to come up with explanations to simple problems. The first group got the correct evaluation from the professors, ie if they had come up with the correct explanation they received a "correct", if not they got a "wrong", while the second group got random evaluations, so that even if they were right they might have received a "wrong" and vice versa.

The first groups solutions were all admirably simple, while the second groups explanations became increasingly complex as they tried desperately to force the inexplicable facts to fit the theory.

The same goes for trading.

As William of Ockham very rightly observed in what came to be known as Occams Razor, "All other things being equal, the simplest solution is the best."

All other things in trading are very equal, and you'll make more money than you can ever spend by being right no more than 30% of the time provided your winners average out at 3 times the size of your losers.

Bill Lipshutz who was featured in the "New Market Wizards" was for his 8 years at the then Salomon Brothers their biggest and most profitable FX trader, earning, on average, US$ 250 K / day for his employer, before he started his own hedge fund, and the way he did that was by going for excellent risk / reward levels where he was right no more than 20 -30 % of the time, but by vigorously cutting his losses short while letting his gains run.

As in the Harvard experiment in trading you can do the right thing and still end up with a losing trade, I suspect unpredictable markets and uncertainty coupled with an absolute unwillingness or even incabability to accept that losing is just a cost of doing business as a trader is what throws most people off track to a degree that they never end up becoming net profitable.
 
Eckhardt is one of my favourite smart people.

An internet friend of mine is in the process of realising he's failing as a trader after several years trying.

The problem is that what you need to do is very simple:
- recognize the probable trend in your timeframe
- enter on a retracement or breakout (yeah ... so simple :))
- have a worst case wrong exit and a strategy for managing your trade if you don't get back to it.

but doing it over and over is really hard. I can now do it fairly consistently but, over the internet I don't seem to be able to help others to do it. People try to add extra markets, extra indicators, internal market factors etc etc in an effort to get a degree of certainty - but in the end the only certainty is that this trade's outcome is unknown. Win or lose, I must enter, and win or lose it doesn't matter because its the next 20 trades that earn me money, not this one. So, I have watched people fall away, with just a few surviving, growing and prospering.

My best wishes to all who try. Even if you fail you'll feed the rest of us and learn a lot about yourself in the process. If you succeed you'll have an enviable lifestyle and as much money as it needs. Good luck.
 
Why do we make things more difficult than they are?

Supply, demand and the trend, be it a 5 minute time frame or weekly, its all the same and thats all that matters. Why make things any more complicated? and why does it take so long to realise it?!!!!

Occam's razor - N'est-ce pas?
 
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Oui, absolument !

:)

occam_razor.gif


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PS, I love and very much concur with your signature line,

"A Gentleman should not be seen before mid-morning unless he is returning home from the night before"

Bloody marvelous !

:D
 
The big problem is we see what we want to see and can justify taking a trade. It's only when you understand who wants what from the market and on what timeframe that it gets easier

When it starts to go wrong we should be out quickly, (I WAS WRONG), you can admit it no-one's going to ridicule you, you're only up against yourself here. If it goes right then we should know 'roughly' where it's going to go, or it may go, and plan for that. Be ready to change your plan aswell coz things always change. Give yourself a pat on the back when you do get it right, coz no-one else cares!

All the best
 
Absolutely !

All you need to make a fortune trading is to do what any kid in kindergarten could do, grab a chart, eyeball where the path of least resistance is, jump on board, cut your losses when and as they occur, and otherwise ride that trend all the way until it bends.

"ACROSS ALL TRADING STYLES, TIME FRAMES, MARKET CONDITIONS AND TRADERS, ONE RULE HOLDS TRUE:

10% OF ALL TRADES INEVITABLY ACCOUNT FOR 90% OF PROFITS !"




Lack of understanding explains itself.

Ego driven efforts at problem solving make you want to be right over wanting to be successful.

I always run away very quickly when people aren't able to explain in a few words what constitutes the relevant essence of what they are on about, what the 20% of their effort that generates 80% of their results is.

As William of Ockham very rightly observed in what came to be known as Occams Razor, "All other things being equal, the simplest solution is the best."

All other things in trading are very equal, and you'll make more money than you can ever spend by being right no more than 30% of the time provided your winners average out at 3 times the size of your losers.

Bill Lipshutz who was featured in the "New Market Wizards" was for his 8 years at the then Salomon Brothers their biggest and most profitable FX trader, earning, on average, US$ 250 K / day for his employer, before he started his own hedge fund, and the way he did that was by going for excellent risk / reward levels where he was right no more than 20 -30 % of the time, but by vigorously cutting his losses short while letting his gains run.

Good point about winning %'s. 40% wins at 3:1 R:R is approximately equal to 80% wins with 1:1 R:R.
 
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Trading - like most things in life - is simple enough once you succeed in seperating the chaff from the wheat, the noise from the few, truly success relevant factors.

so where can I learn more about your strategy for trading Chaff futures ? That's where I've been going wrong !! Long Wheat these past 3-4 months when really i should have been in Chaff !!!
Thank you guru-Markus for showing me enlightenment !!
 
so where can I learn more about your strategy for trading Chaff futures ? That's where I've been going wrong !! Long Wheat these past 3-4 months when really i should have been in Chaff !!!

LOL !

The secret is that you are only allowed to engage in incredibly lucrative Chaff futures trading if you have a blue jacket like these great guys:

KC%20Board%20of%20Trade%20copy.jpg


BUT

the problem is, they artificially limit supply, they just don't make them anymore.

:D
 
LOL !

The secret is that you are only allowed to engage in incredibly lucrative Chaff futures trading if you have a blue jacket like these great guys:

KC%20Board%20of%20Trade%20copy.jpg


BUT

the problem is, they artificially limit supply, they just don't make them anymore.

:D

No problem, I get new blues every day - I just hand my wife a pristine white shirt for washing, guaranteed to come back a shade of Blue !!:eek:
 
but doing it over and over is really hard. I can now do it fairly consistently but, over the internet I don't seem to be able to help others to do it. People try to add extra markets, extra indicators, internal market factors etc etc in an effort to get a degree of certainty - but in the end the only certainty is that this trade's outcome is unknown. Win or lose, I must enter, and win or lose it doesn't matter because its the next 20 trades that earn me money, not this one. So, I have watched people fall away, with just a few surviving, growing and prospering.

I posted in another thread that perhaps 1-2% of the people I've worked with will go so far as to make the effort to develop their own systems. The rest insist on being told what to do, and they will spend months and years searching for that system -- developed by somebody else -- that will do it for them. I suspect that a large part of the reason has to do with avoidance of responsibility for failure. After all, if they're following somebody else's system and they fail, it's not their fault: it's the fault of this a**hole's system.

And so they prowl the net in a never-ending search for the greenest grass, and before you know it, six or eight years have gone by and they're no further along than they were at the beginning, though considerably poorer.

But this has been the situation for centuries, and it's not likely to change anytime soon.
 
I suspect that a large part of the reason has to do with avoidance of responsibility for failure.

Very true, most people in life will forever be doing everything in their power so that they will never have to accept responsibility for anything.

If they get what they want they credit their superior intellect.

If they don't it's always someone elses fault.

Anything but acceptance of personal responsibility for outcomes.

And pretty soon people are just too shell shocked by failures and they stop getting back on the hosre again after falling off, instead of understanding that you can only become a great horse rider if you're not afraid fo falling off, but instead of doing what needs to be done and just getting on with it, they will instead prefer to spend the rest of their days in a negative stupor whingeing on about an allegedly unfair life that never gave them a chance.

What happened instead is that they never gave themselves a chance, because they never believed that they could.

You can if you believe you can, you can't if you believe you can't.
 
All other things in trading are very equal, and you'll make more money than you can ever spend by being right no more than 30% of the time provided your winners average out at 3 times the size of your losers.
Hi Markus,
You're right - of course - but this is one of those often quoted stat's that's a tough one to implement in practice. How would you feel after a straight run of 7 consecutive losers out of the last 10 trades or 70 out of the last 100? Your confidence in your methodology and your ability to trade it would have to be supa, mega, ultra hard rock solid. And that's quite solid! My guess is that most traders who take directional trades want an outcome that is at least equal to a 50:50 coin toss. Much less than that can easily start to mess up your head.
Tim.
 
"Enter here"..LOL ,do you mind if I just buy the dip before I go blind !
 
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