GladiatorX
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Hello, i am someone who trades for a living, i'm still young in the trading game, i haven't 10 years experience but i feel that the depth of mental energy and time and effort i have put into trading is enormous. I don't think i could have worked any harder. My hard work = Money, others claim this not to be so in trading but i personally believe these particular people aren't focusing their hard work on the REAL HARD WORK, that most people avoid. Hard work isn't reading a trading book, applying to a broker, opening a chart and spending hours backtesting an EMA crossover, sitting for 12 hours per day testing it on different markets and then sitting 4 hours waiting for the signal to emerge because in the backtest your found it to be 'high probability'.... Your wasting your time, spinning your wheels without moving. Avoiding the true facts of trading;
That you must face ambiguity and thrive in it. Its not about an EMA crossover, three-higher closes for entries, waiting for pin-bars @ support.
Pin-bars @ support may work, especially for Tom, but imagine, he can give you all his system, the reason you are un able to replicate is because the setup isn't even the most important part, Tom has built a mental map of understanding of the markets, built his concept based on this, he takes into consideration a multitude of things in taking setups that would be very difficult to explain.
For example, i could tell you a setup, extremely easy to follow, what i couldn't explain is how i interpret the time and sales window through hours and hours of watching and taking notes and comparing it to order flow and market action... Hours and hours of notes. Without trading, with discpline, with facing the fact that their are no certaincys and therefore the only thing I can have as an EDGE over traders is not a high probability setup, its my own experienced interpertation of the current market context.
The interesting thing about most setups, is that usually people could say if an EMA crossover was a good, one or a bad one. But they say,'oh it doesn't work' and moan about it, they haven't started the hard work. Watching it market after market, taking notes, making a mental map of understanding of its relationship to price and then trading it with a discretionary element and hard learned psychology discpline that needs to be developed to trade properly.
I have seen on these forums, hundreds of people talking about how to be a profitable trader, most of them not profitable themeselves to a happy degree... I can tell you, as someone who makes ALOT of money from the markets and who knows many who make a lot that it was never the special system or the price action setup that finally made me consistant. It was a true study of the markets and embracing the fact that it is ambiguous, through creating my own interpretation of everything, developing it on 'read' knowledge, i am now able to trade without a system, without a detailed plan that all the guru's tell you YOU NEED, without a specific entry and exit plan, with money management. Believe me, that the reason MOST traders lose is because they fail to embrace uncertaintly, they spend hours, claiming to 'work-hard' trying to find a definate way to take money in the markets, rather than spending time cultivating their own understanding and skills... They don't learn the $tick relationship to price themeselves, they looks online and see what others have found and see if that is a clear-cut money making phenemonina, all the time not developing themeselves.
It took me 4 months to become profitable from the first day i looked at stocks - Which i genuinely at the time believed they WENT UP because of sales and down because sales decreased. Many of you won't believe this and the reason i was able to do it so fast was because i cut out all the crap. You guys may believe you are working hard, you may have been up for 8 hours last night testing if your new books strategy is a good one. You haven't done anything yet. You will remain unprofitable. You won't find a high-probability setup you are able to follow, and when you do, it will be because you have studied the market and understood it and studied it and understood it and now with logic can apply something with high probability odds, having in depth studied the setup so that you are the master. I do have 'setups' that argueably are high probability, they alone as unimportant, they miss something...
Let me give you a small example to maybe open your eyes. Imagine a game, a shooting game like Call of Duty 4 or Halo 3. The players who are very good at the game, haven't got a system, they don't spend up at night thinking about the best place to camp with a shotgun. They practice with the right tools... They master it... The difference between a winner and loser isn't that the winner knows a secret, or payed someone to teach them the secrets, or have a system of using power-ups to beat people. They are more skillful, they learnt how to play, they mastered it, they have better aim. They have better aim, this isn't through a combination of indicators like 'Press UP + B' its through skill. Skill, skill, skill.
Try hard to think about the example i just made and what it means, it was hard to explain but i feel it demonstrates the point quite clearly. The good players are genuinely good, being genuinely good in trading isn't have a system of a high-probability setup, its about being skilled and therefore being able to adapt and use your skills in any context, in any environment, rather than fitting a setup to an environment and then pretending every market environment is the same.
CONTEXT! Its all about context, stop trying to make stuff that covers all context, that pretends its all the same. Embrace the uncertainty!
Here's the situation as I see it for most users on the forum; You've just been spinning your wheels while thinking that you are getting somewhere. The reason for this is that you are going about learning how to trade in the wrong way, in my opinion. I say this because I've been trading much less than you, i shouldn't say because of disbelief but alot less than you all, and yet because of the way I went about learning and what I focused on, last year I started with £5,000 and ended with £300,000, without a single losing month, and while only risking a very small portion of my account on any single trade (1%). Now there could be many reasons for the difference in performance, but I think one of the main reasons has to do with what you as individuals are focusing on and how you are going about the learning process.
To try to put it as succinctly as possible, in my view traders that are focusing all their attention on "set-ups" and finding out which combinations of indicators work are never going to become profitable. They are trying to follow the advice of trading books that say trading is simple and psychology is everything. So they search for set-ups that 'work', and that can take the guess work out of trading. They want to be "disciplined" and have simple rules that guide all their actions. But there's a few problems with this. Namely, while psychology is HUGE, it's not everything. And while trading is all about simple principles, actually having an edge is NOT simple. It's a myth that you can have a couple simple price or indicator set-ups and make money consistently if only you are disciplined. That's a load of crap. It keeps the dream alive for wannabe traders who never realize what it's truly about. Well let me tell you what it's truly about...
Trading is about being okay with ambiguity. It's about tolerating confusion. It's about sitting with discomfort and being at peace with it. It's about not having an exact script of when to trade or not to trade, or what's really a high odds trade, and being okay with that. It's about exceptions to the rules. It's about contradiction. It's about uncertainty.
And yet traders left and right want to make it simple. They want to reduce it to a few simple set-ups to trade with discipline. And yet the market is not simple. The market is all about uncertainty, and complexity, and ambiguity. Simple set-ups could never capture that, and they can never give you a true lasting edge.
So what's the solution? Is the problem in the simple set-ups themselves? No, it's in how they're being used. The bottom line is, every trader needs to learn to READ the markets. This means that simple rules will not do. There has to be a synthesis of different elements (whether they be price action, indicators, inter-market themes or whatever), and real-time interpretation must take place. It has to be all about CONTEXT. Once you can read the markets, and don't fool yourself it is a very complex process, then you can choose to employ "simple" set-ups to enter and exit. But the real work will be in interpreting the market to see when you should use which kind of set-up. Seeing a hammer or whatever near a support means nothing unless you've identified the broader picture and gotten a sense of the kind of tactics you should be using, and what the odds are for different scenarios unfolding.
Now I know many of you, and most traders do this to a certain extent, but your main focus is on the set-ups. It's not on reading the market from minute to minute, hour to hour, figuring out the odds of it doing this or doing that, adapting dynamically, and thinking of trade ideas from all your observation as the day unfolds. Rather, it's waiting for some simple set-up to pop up and then taking it.
Now is it easier emotionally to have clear set-ups to wait for and trade in this simple manner? Absolutely. But who said 'easy' would make you money. If I've learned anything, it's that the market rewards what is hard to do. It's hard to have ambiguity surrounding your market reads. It's hard being uncertain. It's hard dealing with competing and sometimes conflicting signs. And yet, this is what it's all about. You have to stop trying to avoid this by needing things to be clear cut. And is it hard to be disciplined when there's so much uncertainty about what is the right trade to make? Of course. But instead of trying to avoid the uncertainty by looking for simple set-ups, or some straight-forward method, train your mind to be able to deal with the uncertainty.
As for the learning process of how you go about doing this, it's all about being constantly engaged with the markets, trying to figure things out and learn from experience. For me, for instance, what I did was each and every day take notes in a journal all about market action and what I think it means, and how I should trade, and what is working and what's not. I didn't write a journal describing the trades I took, or what my emotions were during the day. It was all about market action. And it was all my perception and interpretation. Day after day, week after week, making mistakes, wrong calls, being clueless as to what was going on, not knowing how I should trade, not knowing if my views made sense or not, and yet I continued taking notes and learning. Then I would view charts and combinations of historical intraday charts, and I'd note certain behavior. For example, I'd study trend day after trend day and try to notice what they had in common and how I could have picked up on it in real time. Then I'd study range days. Then I'd study a price chart of the ES versus the Advance decline line and see what the relationship was across many different days. Then I'd do the same with the ES and TICK chart. And on and on. Over time, this gave me a feel for the markets, and a certain understanding of how certain days differ and many subtle signs and tells for each type of environment and context.
As for set-ups, I didn't use any predefined ones. I just formed trading ideas and then tried to get in at good trade locations. Even this, which is the art of execution, is quite complicated and not straight forward. I started realizing that in some environments it's best to wait for pullbacks, in others I need to get in at market or I'll be left in the dust. In some markets I can buy low and sell high, in other markets the opposite is in order. And so on.
I became consistently profitable in a timeframe of a few months by doing this. But of course before that I had read 30 or 40 books and so I had all the technical background. I had also worked a lot on my psychology and personal issues. But all of this was in conjunction with a method of learning and trading the markets that was mostly in opposition to what the general wisdom says about simple set-ups and exact rules.
Now of course you might say that everyone has their own style, some discretionary and some not. Absolutely. But even the purely mechanical traders are very adept at reading markets, and are aware of all of the complexity and ambiguity inherent in it. Their system might end up being simple, but it will come about through a very deep and complex understanding of markets. And usually this system will take the market environment (i.e. context) into account. It wont just be simple mindless set-ups.
In the end, all of what I am saying is meaningless unless you come to a personal realization. Take a look at your trading career thus far. Do you truly believe that if you just learn to focus and take all of your set-ups then your equity curve will reverse and you'll be a consistently profitable trader? Why would the world's top institutions spend millions and billions on R&D when a few simple set-ups could make them all of the money. This doesn't mean that to make money you need extremely complex mathematical models. Far from it. What it does mean is that you need extremely complex mental maps that take time and experience to develop, and that will never develop if you spend the whole trading day simply waiting for set-ups to materialize. That just won't cut it.
Right now your learning curve is stagnant because you're not truly studying the markets. Your day is wasted in waiting mode. It's not in observing and absorbing mode. Also, because you fear loss, you aren't willing to experiment. This means that you aren't making mistakes and failing regularly, which is what you need to do to learn quickly.
So to conclude, based on all of the above, my advice to you would be to stop trading and make a mental shift. Realize what you need to do to become successful, and it's definitely not staying on this endlessly unfruitful path being supported by the hope of future profits. You're just running in your place unless you change your focus and your learning method. And if you thought the journey was tough so far, you haven't seen anything yet. Get ready for uncertainty and ambiguity like you've never seen it before. But this shouldn't be scary. It should be exciting, because this is what trading is all about. This is why it's called an ART. And it truly becomes one when you change your focus and your learning process. Then everything, including success, becomes possible. And until then, it'll be a distant dream that keeps appearing to be so close and yet stays so far away.
So you need to re-align with a new thought system and then get on the simulator and trade. Take losses. Make mistakes. Be clueless. Don't be afraid of it. It's okay, that's the only way you'll progress. And trust me, progress you will.
Many of you who look at what i have just said and find it totally off-putting have a long way to go, what i have described is what you must do. Those that haven't done such a thing and are still profitable, either don't realise the depths of studying they must have done or more likely are profitable but not to the degree that a proffesional trader should be...
Face these challenges and do it. If you read this and feel that since you WERE JUST backtesting a stochastic system you should finish that first... Please understand that one day you will have to come to the realization that this is what you must do. Anything else you have heard, about learning setups and applying discpline are from gurus, who cannot trade, who give advice from their failed adventure.
This challenge is why trading is considered so hard, its not easy. If you feel you aren't able to do this, your right you will fail until you are ready.
I wish you all good luck and i hope some of you find this helpful. This is what i am giving back to the trading community, i hope someone of you have an epithany over what i have said.
When i was in the 'holy-grail' search mentality, a friend told me similar words. I believe them words are the reason i am consistantly profitable and therefore they are the only real secret i can pass along to you as traders.
I could spend hours discussing my pivot system but i know, that without understanding of what i have just said, it will be useless.
Good luck! x
That you must face ambiguity and thrive in it. Its not about an EMA crossover, three-higher closes for entries, waiting for pin-bars @ support.
Pin-bars @ support may work, especially for Tom, but imagine, he can give you all his system, the reason you are un able to replicate is because the setup isn't even the most important part, Tom has built a mental map of understanding of the markets, built his concept based on this, he takes into consideration a multitude of things in taking setups that would be very difficult to explain.
For example, i could tell you a setup, extremely easy to follow, what i couldn't explain is how i interpret the time and sales window through hours and hours of watching and taking notes and comparing it to order flow and market action... Hours and hours of notes. Without trading, with discpline, with facing the fact that their are no certaincys and therefore the only thing I can have as an EDGE over traders is not a high probability setup, its my own experienced interpertation of the current market context.
The interesting thing about most setups, is that usually people could say if an EMA crossover was a good, one or a bad one. But they say,'oh it doesn't work' and moan about it, they haven't started the hard work. Watching it market after market, taking notes, making a mental map of understanding of its relationship to price and then trading it with a discretionary element and hard learned psychology discpline that needs to be developed to trade properly.
I have seen on these forums, hundreds of people talking about how to be a profitable trader, most of them not profitable themeselves to a happy degree... I can tell you, as someone who makes ALOT of money from the markets and who knows many who make a lot that it was never the special system or the price action setup that finally made me consistant. It was a true study of the markets and embracing the fact that it is ambiguous, through creating my own interpretation of everything, developing it on 'read' knowledge, i am now able to trade without a system, without a detailed plan that all the guru's tell you YOU NEED, without a specific entry and exit plan, with money management. Believe me, that the reason MOST traders lose is because they fail to embrace uncertaintly, they spend hours, claiming to 'work-hard' trying to find a definate way to take money in the markets, rather than spending time cultivating their own understanding and skills... They don't learn the $tick relationship to price themeselves, they looks online and see what others have found and see if that is a clear-cut money making phenemonina, all the time not developing themeselves.
It took me 4 months to become profitable from the first day i looked at stocks - Which i genuinely at the time believed they WENT UP because of sales and down because sales decreased. Many of you won't believe this and the reason i was able to do it so fast was because i cut out all the crap. You guys may believe you are working hard, you may have been up for 8 hours last night testing if your new books strategy is a good one. You haven't done anything yet. You will remain unprofitable. You won't find a high-probability setup you are able to follow, and when you do, it will be because you have studied the market and understood it and studied it and understood it and now with logic can apply something with high probability odds, having in depth studied the setup so that you are the master. I do have 'setups' that argueably are high probability, they alone as unimportant, they miss something...
Let me give you a small example to maybe open your eyes. Imagine a game, a shooting game like Call of Duty 4 or Halo 3. The players who are very good at the game, haven't got a system, they don't spend up at night thinking about the best place to camp with a shotgun. They practice with the right tools... They master it... The difference between a winner and loser isn't that the winner knows a secret, or payed someone to teach them the secrets, or have a system of using power-ups to beat people. They are more skillful, they learnt how to play, they mastered it, they have better aim. They have better aim, this isn't through a combination of indicators like 'Press UP + B' its through skill. Skill, skill, skill.
Try hard to think about the example i just made and what it means, it was hard to explain but i feel it demonstrates the point quite clearly. The good players are genuinely good, being genuinely good in trading isn't have a system of a high-probability setup, its about being skilled and therefore being able to adapt and use your skills in any context, in any environment, rather than fitting a setup to an environment and then pretending every market environment is the same.
CONTEXT! Its all about context, stop trying to make stuff that covers all context, that pretends its all the same. Embrace the uncertainty!
Here's the situation as I see it for most users on the forum; You've just been spinning your wheels while thinking that you are getting somewhere. The reason for this is that you are going about learning how to trade in the wrong way, in my opinion. I say this because I've been trading much less than you, i shouldn't say because of disbelief but alot less than you all, and yet because of the way I went about learning and what I focused on, last year I started with £5,000 and ended with £300,000, without a single losing month, and while only risking a very small portion of my account on any single trade (1%). Now there could be many reasons for the difference in performance, but I think one of the main reasons has to do with what you as individuals are focusing on and how you are going about the learning process.
To try to put it as succinctly as possible, in my view traders that are focusing all their attention on "set-ups" and finding out which combinations of indicators work are never going to become profitable. They are trying to follow the advice of trading books that say trading is simple and psychology is everything. So they search for set-ups that 'work', and that can take the guess work out of trading. They want to be "disciplined" and have simple rules that guide all their actions. But there's a few problems with this. Namely, while psychology is HUGE, it's not everything. And while trading is all about simple principles, actually having an edge is NOT simple. It's a myth that you can have a couple simple price or indicator set-ups and make money consistently if only you are disciplined. That's a load of crap. It keeps the dream alive for wannabe traders who never realize what it's truly about. Well let me tell you what it's truly about...
Trading is about being okay with ambiguity. It's about tolerating confusion. It's about sitting with discomfort and being at peace with it. It's about not having an exact script of when to trade or not to trade, or what's really a high odds trade, and being okay with that. It's about exceptions to the rules. It's about contradiction. It's about uncertainty.
And yet traders left and right want to make it simple. They want to reduce it to a few simple set-ups to trade with discipline. And yet the market is not simple. The market is all about uncertainty, and complexity, and ambiguity. Simple set-ups could never capture that, and they can never give you a true lasting edge.
So what's the solution? Is the problem in the simple set-ups themselves? No, it's in how they're being used. The bottom line is, every trader needs to learn to READ the markets. This means that simple rules will not do. There has to be a synthesis of different elements (whether they be price action, indicators, inter-market themes or whatever), and real-time interpretation must take place. It has to be all about CONTEXT. Once you can read the markets, and don't fool yourself it is a very complex process, then you can choose to employ "simple" set-ups to enter and exit. But the real work will be in interpreting the market to see when you should use which kind of set-up. Seeing a hammer or whatever near a support means nothing unless you've identified the broader picture and gotten a sense of the kind of tactics you should be using, and what the odds are for different scenarios unfolding.
Now I know many of you, and most traders do this to a certain extent, but your main focus is on the set-ups. It's not on reading the market from minute to minute, hour to hour, figuring out the odds of it doing this or doing that, adapting dynamically, and thinking of trade ideas from all your observation as the day unfolds. Rather, it's waiting for some simple set-up to pop up and then taking it.
Now is it easier emotionally to have clear set-ups to wait for and trade in this simple manner? Absolutely. But who said 'easy' would make you money. If I've learned anything, it's that the market rewards what is hard to do. It's hard to have ambiguity surrounding your market reads. It's hard being uncertain. It's hard dealing with competing and sometimes conflicting signs. And yet, this is what it's all about. You have to stop trying to avoid this by needing things to be clear cut. And is it hard to be disciplined when there's so much uncertainty about what is the right trade to make? Of course. But instead of trying to avoid the uncertainty by looking for simple set-ups, or some straight-forward method, train your mind to be able to deal with the uncertainty.
As for the learning process of how you go about doing this, it's all about being constantly engaged with the markets, trying to figure things out and learn from experience. For me, for instance, what I did was each and every day take notes in a journal all about market action and what I think it means, and how I should trade, and what is working and what's not. I didn't write a journal describing the trades I took, or what my emotions were during the day. It was all about market action. And it was all my perception and interpretation. Day after day, week after week, making mistakes, wrong calls, being clueless as to what was going on, not knowing how I should trade, not knowing if my views made sense or not, and yet I continued taking notes and learning. Then I would view charts and combinations of historical intraday charts, and I'd note certain behavior. For example, I'd study trend day after trend day and try to notice what they had in common and how I could have picked up on it in real time. Then I'd study range days. Then I'd study a price chart of the ES versus the Advance decline line and see what the relationship was across many different days. Then I'd do the same with the ES and TICK chart. And on and on. Over time, this gave me a feel for the markets, and a certain understanding of how certain days differ and many subtle signs and tells for each type of environment and context.
As for set-ups, I didn't use any predefined ones. I just formed trading ideas and then tried to get in at good trade locations. Even this, which is the art of execution, is quite complicated and not straight forward. I started realizing that in some environments it's best to wait for pullbacks, in others I need to get in at market or I'll be left in the dust. In some markets I can buy low and sell high, in other markets the opposite is in order. And so on.
I became consistently profitable in a timeframe of a few months by doing this. But of course before that I had read 30 or 40 books and so I had all the technical background. I had also worked a lot on my psychology and personal issues. But all of this was in conjunction with a method of learning and trading the markets that was mostly in opposition to what the general wisdom says about simple set-ups and exact rules.
Now of course you might say that everyone has their own style, some discretionary and some not. Absolutely. But even the purely mechanical traders are very adept at reading markets, and are aware of all of the complexity and ambiguity inherent in it. Their system might end up being simple, but it will come about through a very deep and complex understanding of markets. And usually this system will take the market environment (i.e. context) into account. It wont just be simple mindless set-ups.
In the end, all of what I am saying is meaningless unless you come to a personal realization. Take a look at your trading career thus far. Do you truly believe that if you just learn to focus and take all of your set-ups then your equity curve will reverse and you'll be a consistently profitable trader? Why would the world's top institutions spend millions and billions on R&D when a few simple set-ups could make them all of the money. This doesn't mean that to make money you need extremely complex mathematical models. Far from it. What it does mean is that you need extremely complex mental maps that take time and experience to develop, and that will never develop if you spend the whole trading day simply waiting for set-ups to materialize. That just won't cut it.
Right now your learning curve is stagnant because you're not truly studying the markets. Your day is wasted in waiting mode. It's not in observing and absorbing mode. Also, because you fear loss, you aren't willing to experiment. This means that you aren't making mistakes and failing regularly, which is what you need to do to learn quickly.
So to conclude, based on all of the above, my advice to you would be to stop trading and make a mental shift. Realize what you need to do to become successful, and it's definitely not staying on this endlessly unfruitful path being supported by the hope of future profits. You're just running in your place unless you change your focus and your learning method. And if you thought the journey was tough so far, you haven't seen anything yet. Get ready for uncertainty and ambiguity like you've never seen it before. But this shouldn't be scary. It should be exciting, because this is what trading is all about. This is why it's called an ART. And it truly becomes one when you change your focus and your learning process. Then everything, including success, becomes possible. And until then, it'll be a distant dream that keeps appearing to be so close and yet stays so far away.
So you need to re-align with a new thought system and then get on the simulator and trade. Take losses. Make mistakes. Be clueless. Don't be afraid of it. It's okay, that's the only way you'll progress. And trust me, progress you will.
Many of you who look at what i have just said and find it totally off-putting have a long way to go, what i have described is what you must do. Those that haven't done such a thing and are still profitable, either don't realise the depths of studying they must have done or more likely are profitable but not to the degree that a proffesional trader should be...
Face these challenges and do it. If you read this and feel that since you WERE JUST backtesting a stochastic system you should finish that first... Please understand that one day you will have to come to the realization that this is what you must do. Anything else you have heard, about learning setups and applying discpline are from gurus, who cannot trade, who give advice from their failed adventure.
This challenge is why trading is considered so hard, its not easy. If you feel you aren't able to do this, your right you will fail until you are ready.
I wish you all good luck and i hope some of you find this helpful. This is what i am giving back to the trading community, i hope someone of you have an epithany over what i have said.
When i was in the 'holy-grail' search mentality, a friend told me similar words. I believe them words are the reason i am consistantly profitable and therefore they are the only real secret i can pass along to you as traders.
I could spend hours discussing my pivot system but i know, that without understanding of what i have just said, it will be useless.
Good luck! x
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