A profitable system to buy?

[turtle trader]

lifestatic,
I don't believe your logic is at fault at all, but, as neil so delicately says, you need to look at your approach. There are trading systems that work (by which I mean they are both tradeable & profitable), I know this because it's how I trade & because it's working (by which I mean I can pay all the bills!). The difference in our approach is that i've spent several years studying the markets & learning about myself, and have channeled everything i've learnt into writing my own systems, that I completely understand and can put my faith in, for that is what is needed to be able to trade this way.

There seem to be members on this site who sneer at system trading for some reason, although they've clearly not studied it sufficiently. There are many valid & profitable ways to trade the market & mechanical system trading is one of them, however, just like all the other methods, it requires an enormous amount of hard work and should not be seen as an easy route. If it's this type of trading that genuinely interests you then forget about buying a system & start looking into how you can learn how to do it for your self.

Good luck
Simon

 

[lifestatic]

Dear Neil and Turtle Trader,

I am getting to understand the difference between these two points of view.
1. The "lazy bum", who wants to buy a simple, easily tradeable and profitable system and
2. Those who are in the know.

Here is my approach to this.
I used to supervise courses for adults. It was a highly technical job. We bought a franchise how exactly this should be done and during the six years of doing it I can say I got very professional in the TECHNOLOGY of it. But soon, within the first two years of it I had to realize that beyond technical perfection there was a lot of the "art of doing it." I knew supervisors who were technically excellent or perfect and students still didn't like them or the way they taught.
I can say I was popular among the groups and many came in only at the hours when I was in the courseroom. And it was not because of a difference in technical level.
It was much more a higher understanding of what was going on.

I assume, then, you are saying that one should know their technical part cold (indicators, market behaviour, factors influencing price changes, etc.) and once this is done and one has a good understanding of the whole scene, we get into the "professional" part of it, into the "fine art" part of it.

Now I know how to put my question:

Instead of asking for a strategy I would like to know HOW you trade?

What makes a professional in this business?

Not phylosophically!
Technically!
What is it that makes a professional?

No vague ideas of "one has to understand the market and bla..bla..bla" This we all know.
What is the "extra" that a pro has and a semi-novice - who is already technically sound -does not have?

 

[Mohican]

To buy or not to buy

I think in order to perform above average one must go thru the mill,, Do top traders like ed seykota
used bought systems?

And even if he bought to review them, it just doesn't feel right to use them as personality and experience would have interfered with the program...so discretion added is neccesary to find the best system suited with each traders,,as ed said , we all get what we want out of market!!

 

[turtle trader]

Morning Lifestatic
I will try to answer technically as you request, but as you point out, once you've got a good understanding of the technicals, you've got to get into the 'fine art' as you put it, and i'm not sure it's possible to give thorough technical answers about fine art?! - you can be told which brush to use & which is the best colour, but after that it's down to you

This is the hard part. Learning about indicators, price action etc. is relatively easy - there's plenty of good books to read & you can then study as many charts as you need to see how these technicalities behave in real life (and you do need to do a great deal of this type of study). The hard, and very time consuming, part is that you then have to put your new found knowledge into practice & see how you personally feel about & react to what you're seeing/experiencing. You have to learn all about yourself. I will tell you a few things i've learned as examples:

I like the concept of scalping because you get your answers very quickly - there's no sitting around waiting to see how a trade turns out, you're either right or you're wrong and you act accordingly. It turns out, however, that i'm rubbish at it - i'm naturally more analytical and found that I wanted to understand each trade before I placed it, which just doesn't work with scalping!

I also like the idea of pattern recognition - looking for 123 formations & double tops etc, it seems to me to be as close as a trader can get to being artistic, which is something I would really like to be. Unfortunately I was no good at art when I was at school, and i'm still no good now. I can see the formations in old charts, and can even see them as they're forming sometimes, but then find myself thinking if the price moves one way it's one formation & if it moves the other way it's something else, and by the time i'm happy which one it is, it's all too late.

What didn't really attract me, for quite a long time, was system trading - it seemed boring & like it wasn't being a 'real' trader, I wanted to make decisions in real time, be able to 'feel' the movements of the market & then react in an instant (& if I could get my hands on one of those brightly coloured jackets then that would just top it all off nicely). Since i'd found that I wasn't very good at trading like that, but still really, really wanted to trade, I thought I better try to analyze what I could prove worked & then all I would have to do would be to follow it.

Although I can sometimes find all this analysis a bit tedious (the code writing part) I do find it to be a fascinating challenge. It doesn't offer the 'art' or excitement that I thought I wanted, but then i'm not in it for fun, it's a business & this is the best way that I am personally able to do well in it.

This is just the tip of the iceberg - you've got to learn much, much more about yourself & how you deal with all the emotions and experiences that trading will present you with. These examples of my own experiences are fairly 'high level' & don't come close to explaining the highs & (more often) lows that you must go through (like can you stick to your plan & take the next trade whilst feeling physically sick because you've had such a bad run that you're seriously considering the possibility of packing it all in, but can't really accept that that's an option because you want it so much).

So for me, going from a reasonably good knowledge of TA to becoming consistently profitable, was all about the time spent trying to put knowledge into practice &, more importantly, learning how I was best able to deal with & learn from the situations that found myself in .... but then it might well be different for you!

Simon

 

[lifestatic]

Dear Turtle Trader!

This is just the best description of a pro trader, of the personal side of trading I have ever read.
The aims you set here are what we're all working towards I believe.

I just cognited something here.

My mechanical-strategy-mania comes from an early period of trading (last March - June) when I could get into the emotional part of trading (quote: "This is just the tip of the iceberg - you've got to learn much, much more about yourself & how you deal with all the emotions and experiences that trading will present you with.") and I used to half-die when my unrealised P/L went into the reds and then made stupid decisions beacuse of my human emotional reactions.

At those time a good, firm, solid meachanical strategy made me feel like my life was saved.
Ergo: I didn't have to think any more so it was no matter how emotional I got.

This is a dead end street, don't you think?

Just a phylosophical side here: How many things in our lives do we put onto automaticities, mechanical "do it for me" systems insted of really doing them?

I used to take driving lessons from a rally-car pro. He had a very poor opinion of ABS, ASR, all those automaticities they put into cars nowadays. According to him, these were substitutes for a true ability to drive well.

Thank you Turtle Trader!

Balazs

 

[turtle trader]

Gosh! I don't think i've ever written the best description anyone's ever read before, thanks for the feedback.

As for your phylosophical aside - I agree completely with your rally driver - we rely far too much on machines etc. doing things for us. Life would be much more rewarding if we were allowed to 'live' it for ourselves a bit more. When it comes to trading though, normal rules don't apply. Just find what really works & go with that, even if it's not the way our souls would prefer to do it!

Simon