Shortcuts vs knowledge

[new_trader]

PKKFW,

I don't agree with any of your points because they are all superficial. That is why I have to resort to retarded analogies 😆 (NB: I'm not implying that you are a retard)

The common theme of ALL of your posts is "IF".

How can anyone make a valid case when all of their arguments consist of "IF"?

If someone makes money by making trades based on a coin flip, then they are a professional.

If someone makes money by making wild guesses, then they are a professional.

etc

Almost all of your posts, especially the ones that get many reps, follow this theme. IF someone makes money trading a mechanical system....IF someone makes money using a magic MA crossover....IF.....IF...

That to me is like saying IF you don't die walking across a tightrope suspended above a gorge then it must be safe. But I know this analogy won't land because you are trapped in a hypothetical world of hope.

You have ignored and even criticised the sage advice of professionals who have been trading for DECADES in favour of your belief, misguided as it is. You have done such a wonderful job of convincing yourself you are right that you don't seem to stop and consider what is being said.

I have been trying to instil the idea of acquiring knowledge and skill which is a permanent asset, and applying this knowledge and skill in the market to make money. It is not about entry points, and exit points and money management etc, these evolve with study and trading practice.

To use your carpenter analogy: The carpenter must at least have an understanding of what a bookshelf is before s/he has any hope of building one using a brick or hammer. Do you see? You keep saying "IF the end result is a bookshelf". My question is, how do they gain that understanding? Surely to be a professional carpenter they must understand whether they need to use a mortice and tenon joint instead of a butt joint, or perhaps a dovetail joint instead of a tongue and groove joint. Do you see? Nothing artsy fartsy or sciency...just an understanding of the profession.

I'm sure, that any carpenter with a bit of brains would realise after their first few failed attempts at building a bookshelf, when they are knee deep in wood splinters and sawdust and they have 3 broken fingers, that a brick simply isn't the right tool for the job. That's my opinion anyway. But IF that doesn't happen, who knows, you might start seeing bricks hanging in the tool section of hardware stores around the world.

 

[Lee Shepherd]

New Trader,

Great post.

Rep will follow shortly, have to spread some around.

 

[PKFFW]

new_trader,

I totally agree with one of your points. That is "the idea of acquiring knowledge and skill which is a permanent asset, and applying this knowledge and skill in the market to make money."

IF someone has the knowledge and skill to develop a mechanical trading system based on MACD, IB's, Pin bars or any other set up, and they apply that knowledge and skill in the market to make money, then in my opinion they have the right to call themselves a professional trader.

Obviously in your opininon they do not. Obviously in your opinion only the skills and knowledge that you yourself have acquired are relevant to trading. All other skills and knowledge are unprofessional and somehow "not permanent". As if the skill and knowledge of creating a system will somehow vanish from the mind the moment a system is created and the creator will never again be able to develop another profitable system.

Quite obviously for someone to create such a system they would have to have some idea of "trading" and system development. Just as the carpenter would need to know what a bookshelf is before s/he could make one. Obviously they would have to have some idea of all the tools available for the creation of such a system. Just like the carpenter would need to know what tools are needed and available for the building of the bookshelf.

Just because they decide to use one set of tools that is different to the set you choose to use simply does not mean they have no idea what they are doing and no concept of trading.

Unfortunately the rest of your point is based entirely around the concept of IF.

Basically put your point is this.....

"IF you don't trade the way I do then you are not a professional. IF you don't use the same tools I do you are not a professional. IF you have skills and knowledge that are different to the skills and knowledge I have you are not a professional."

Ever heard the saying "there is more than one way to skin a cat"? Have a think about it and you might be able to see my point.

Cheers,
PKFFW

 

[wasp]

Great post new_trader.

I left for 24 hours to see what may happen but I opened a thread for discussing and looking to learn.

This thread has had 61 replies and 1300 views, the one discussing markets has had 7 replies and 174 views.

No one here wants to really understand what they are watching, better to wait for the bar to retrace over a fib or one coloured line to cross another.

The funny thing is, its the same people who say making money is the bottom line are the ones who also say those driven by money will not succeed.

Oh, and if you read back on any posts by trader_dante, newtron bomb, darktone... they all have been there and done it and learnt the markets first before getting to where they are now. PKFFW, looking through yours, I see you also have been through the battles of study and desire for knowledge to get you where you are. Why you are now dismissing that I do not understand. Did it not make you a better trader.

For those of you willing to learn and realising understanding a market will help further your quest, I wish you all the best.

 

[PKFFW]

The funny thing is, its the same people who say making money is the bottom line are the ones who also say those driven by money will not succeed.

Obviously I'm one of the ones saying making money is the bottom line, however I have never said those driven by money will not succeed.

Oh, and if you read back on any posts by trader_dante, newtron bomb, darktone... they all have been there and done it and learnt the markets first before getting to where they are now. PKFFW, looking through yours, I see you also have been through the battles of study and desire for knowledge to get you where you are. Why you are now dismissing that I do not understand. Did it not make you a better trader.

I am not dismissing the desire for knowledge and the necessity for study. I am dismissing the idea that one must trade using price and volume only or get inside the minds of the "big guys" or have a thorough knowledge of supply and demand forces or have some deep and meaningful understanding of the market to make money. I am dismissing the idea that there is only one right way to trade. I am dismissing the idea that if someone trades using different tools to those used by new_trader then that someone has no idea what they are doing and is not really trading and is doomed to failure at some point no matter what.

For those of you willing to learn and realising understanding a market will help further your quest, I wish you all the best.

As I stated in my first post in this thread, I believe understanding a market better and learning all you can should be the goal of anyone who takes trading seriously.

Cheers,
PKFFW

 

[BSD]

No disrespect to Newtron Bomb and Trader Dante, their efforts and work is commendable but, for anyone new to this business will do better reading threads from 2004 and before, looking out for posts by many members no longer posting like early socrates

I really couldn't care less what people drive or what they wear, an absolutely loaded buddy of mine who makes millions a year doing nothing more complex than buying bull flags and shorting bear flags is into cars but apart from that literally owns only one pair of sneakers and a few Tshirts and doesn't even know what a watch is, but thats totally fine with me, thats his style, and thats cool the way it is.

But as for Socrates my ass !

This board has had its share of fools and losers, but the person effortlessly winning rank number one in that hierarchy is absolutely Socrates, a guy who when he wasn't busy posting endless and completely irrelevant drivel about trading, was busy losing money as he proved in the single challenge that he entered.

Anybody who believes even for a second that that guy was ever net profitable in his career that was nothing but a pathetic attempt at posturing to impress gullibe simple souls on anonymous message boards absolutely deserves to end up as just a big a loser as he was.

As I say, losers who are clueless and who do not trade for a living post endless, obscure and esoteric nonsense about nonexistent holy grails.

Winners who trade for a living like Trade Dante just go find themselves some simple method like Pin Bars, while people like the joker who started this thread and I will bet you anything you like does NOT trade for a living had nothing better to do than what is typical loser behaviour, hitting on real winners without offering anything tangible and superior as an alternative instead.

Negative, destructive BS in other words.

Losers pointlessly whinge and criticise others without ever having anything better on offer.

Winners concentrate on succes and being constructibve, they just get on and love it, change it or leave it, but don't go posting pointless drivel.

 

[rags2riches]

Hello twistedhedgehog,

I am a newbie. I'm not sure I agree with what you are saying.
[PS: what is your trading background?]

Why do all the forums concentrate on shortcuts like breakouts or pin bars or inside bars?

Beginners need somewhere to start. These provide a template and a foundation on which to build a trading plan. What is wrong with structured learning?

Its as bad as all the 'get rich schemes'.
None of the "shortcut" schemes I respect have ever promised easy money. The emphasis is always on demoing the system until you are proficient. This takes time and effort and work.

Markets are not that simple, traders are not that simple.
Undoubtedly true. But if a simple method gives a positive expectancy I am not going to turn it down, even if it does just come down to discipline and money management

A successful trader needs to be adaptable and they can only do that with knowledge, understanding and skill.
And surely this can only come with time and experience. I like to learn by doing. As you gain more experience you can start to understand strengths, weaknesses of a method, factor in market conditions etc.

To be the best you need to truly understand what you are doing and what you are trading and trade via that skill. Finding, or worse still, copying someone else's strat is a road to ruin.
The strategy needs to have a logical basis on which you can make money. Blindly following anything is a bad idea - but if you understand the concept I don't understand how this is a road to ruin.

Oh, why oh why do people not try to learn the markets...? No one is learning a thing here.
I have learnt a lot about myself and am gaining discipline slowly. Is this not beneficial?

Knowledge is king. If all the 'traders' on here spent more time acquiring their skills and edge through understanding the number of losers would greatly decrease.

Teaching a man to fish does not involve just learning how to cast a rod and where to place it, it means understanding the fish, the environment, the conditions and being able to change and adapt each minute through intense understanding, not some set of rules, whether indicator based or price.

Surely having a set of rules for a beginner is useful to teach discipline and prevent them from blowing up. Reviewing trades made by seeing if you followed the rules allows you to rate your own performance?
ONLY when you have gained enough experience through observation and testing can you start replacing/modifying rules to reflect your understanding. It will probably take months and years to obtain that kind of experience.

 

[wasp]

I'm with the hedgehog on this one.

If, after 15 years on and off in this business, I could go back to my first day on the job, I would say this...

DON'T EVEN THINK ABOUT TRADING YET.

STOP, LOOK, LISTEN, WATCH.

UNDERSTAND THE MARKET THROUGH 6 MONTHS OF SCREEN TIME. WATCH & SEE UNTIL THE MARKET YOU ARE WATCHING MAKES SENSE, YOU EYES BLEED* + YOU KNOW IT BETTER THAN YOURSELF.

I wasted years with indicators, trendlines, S/R, candlestick patterns etc.... It wasn't until I thought back to my early days in Hong Kong in the 90's where price was it and charts were nowhere to be seen, did I really change and become proficient.

I took everything of my chart until all there was were the candles. From there I spent months just watching them and the price ticker changing... I studied the behaviour of the players behind my market and after countless weeks, did I get to understand wht a pin bar was and what was really happening; only then could I tell the difference between weak and strong hands, what was stop hunting and what was a tussle between buyers and sellers.

Steve Nison wrote a book and labelled canlesticks that statistically do X, Y or Zee and yes, a pinnochio bar is a strong reason to enter, especially with fibs or S/R. A crossover on the HMA's or MACD will make more than it loses and yes, a coin toss system will make you money eventually. Basic math proves that letting winners run and cutting losers quick will make you money.

All this is well and good. A car driver will succeed if he knows what the pedals do, Dr Nick Riviera will succeed overall although kill plenty along the way, and tiger woods could win if he played with hockey sticks, and, if that's how you want to approach trading, fine...

For me, it was the day I learnt the behaviour of the players that made a pinnochio bar, or the behaviour at S/R that showed a reversal was imminent (not just because its a candlestick pattern in a book) that not only made me more profitable, but it gave me the confidence to know I will trade till I retire because I don't have a statistical edge,I know why and I know the bank traders better than I know myself.

Someone once asked me why I went long at X, and I said a candlestick pattern and they just laughed and said ignorance is bliss, since then, I have constantly asked why? to everything and I believe, hell, I know, I am a better trader for it.

I think there are two camps here, ones who have a passion and those who just want a statistical edge. Yes, I have an edge, I also have favourite setups, but my edge is my skill and knowledge and if I could go back to me when I was 18 and start over, I would swap everything I made for the knowledge I have now through study.

Question everything, understand why it happens and you will be better off for it.

Just my 2c


*thanks to mr.marcus for that quote, it stuck with me!

 

[options]

See you are back in the uk SLBF.

Was it a quick world tour?

Time for another nom de plume?

 

[wasp]

See you are back in the uk SLBF.

Was it a quick world tour?

Time for another nom de plume?

Nice place NZ, I missed England though.

Enough pen names for now thanks!

 

[JTrader]

I'm with the hedgehog on this one.

If, after 15 years on and off in this business, I could go back to my first day on the job, I would say this...

DON'T EVEN THINK ABOUT TRADING YET.

STOP, LOOK, LISTEN, WATCH.

UNDERSTAND THE MARKET THROUGH 6 MONTHS OF SCREEN TIME. WATCH & SEE UNTIL THE MARKET YOU ARE WATCHING MAKES SENSE, YOU EYES BLEED* + YOU KNOW IT BETTER THAN YOURSELF.

I wasted years with indicators, trendlines, S/R, candlestick patterns etc.... It wasn't until I thought back to my early days in Hong Kong in the 90's where price was it and charts were nowhere to be seen, did I really change and become proficient.

I took everything of my chart until all there was were the candles. From there I spent months just watching them and the price ticker changing... I studied the behaviour of the players behind my market and after countless weeks, did I get to understand wht a pin bar was and what was really happening; only then could I tell the difference between weak and strong hands, what was stop hunting and what was a tussle between buyers and sellers.

Steve Nison wrote a book and labelled canlesticks that statistically do X, Y or Zee and yes, a pinnochio bar is a strong reason to enter, especially with fibs or S/R. A crossover on the HMA's or MACD will make more than it loses and yes, a coin toss system will make you money eventually. Basic math proves that letting winners run and cutting losers quick will make you money.

All this is well and good. A car driver will succeed if he knows what the pedals do, Dr Nick Riviera will succeed overall although kill plenty along the way, and tiger woods could win if he played with hockey sticks, and, if that's how you want to approach trading, fine...

For me, it was the day I learnt the behaviour of the players that made a pinnochio bar, or the behaviour at S/R that showed a reversal was imminent (not just because its a candlestick pattern in a book) that not only made me more profitable, but it gave me the confidence to know I will trade till I retire because I don't have a statistical edge,I know why and I know the bank traders better than I know myself.

Someone once asked me why I went long at X, and I said a candlestick pattern and they just laughed and said ignorance is bliss, since then, I have constantly asked why? to everything and I believe, hell, I know, I am a better trader for it.

I think there are two camps here, ones who have a passion and those who just want a statistical edge. Yes, I have an edge, I also have favourite setups, but my edge is my skill and knowledge and if I could go back to me when I was 18 and start over, I would swap everything I made for the knowledge I have now through study.

Question everything, understand why it happens and you will be better off for it.

Just my 2c


*thanks to mr.marcus for that quote, it stuck with me!

I agree with most of what you said, but not necessarily the highlighted bit.
Just keeping losses small and letting winners run, isn't automatically going to ensure that your P/L is positive. You will still easily be in negative territory if you are trading a market that is not trending, and trading a style that relies on the trend arriving to wipe away all of the small losses is a dangerous game IMO.
I know this is not what you do yourself, as you are more advanced than this. I'm just pointing out that keeping losses small, and trying to erase those small losses by letting profits run & capturing the trends, can easily result in overall losses - because -
1) Trends can be small/non existent for extended periods, and so you fail to make enough to erase those small losses, and some.
2) Volatility can see your small stop losses hit, only for the market to continue in its orignal direction, trending, but having already taken you out of the trade.
3) You may be in the trade, and currently capturing a large part of the trend, by letting the profit run. However, price can often retrace a long way in a short space of time, thus seeing you back at break even, unless you have a more efficient way of locking in profits.
But as we all know, locking in profits through trailing SL's etc. is a double edged sword, sometimes it works for you, other times, against you, as you may exit, only to see a big continuation in your original chosen direction.

Overall, i think trading is just a messy business. Charts often look messy, knowing what will happen next is impossible to say, the situation can quickly change, and making any profit whatsoever is a hard task.

 

[barjon]

mmm, I think I've got a foot in both camps 🙂

I'm not a professional. I've been trading as a hobby for well over 30 years using the same method (potential trend continuation after retracement) and I've usually been on the right side year by year, although never by enough to consider chucking in my job and doing it as my living. Until I retired around eight years ago I had little time to devote to the markets and my method was mechanical in nature and did not rely on any deep knowledge of the markets and/or similarly deep understanding of price action.

When I retired I decided to try and gain that knowledge and understanding - thanks to the help of many contributors to T2W over the last five or six years (including Socrates 😱) - with the result that my trading became more and more discretionary as my knowledge and understanding grew, although still based on the same "method". Initially, the discretion applied to my stringent mechanical rules had an adverse effect on my bottom line, but I persevered and gradually began to outstrip what had gone before. I still have a lot to learn, but I am now at the point where my trades are born more from my "understanding" (albeit imperfect) of what's going on than the "pattern" of my method. Hope that makes sense.

My conclusion is that, yes, you can gain a measure of success by utilising a mechanical method (a "shortcut" if you will) where deep knowledge and understanding is unnecessary, but you will gain more in the long run from concentrating on growing your knowledge and understanding.

good trading

jon

 

[Bladerunner]

Any basic method

I think this ones pretty ok for a start, check it out all timeframes, make notes when it does not work etc ? whats it telling you ? etc etc etc

T2W Day Trading & Forex Community

"Question everything, understand why it happens and you will be better off for it."

thanks for the link to mr marcus posts ......appreciated



I for one think all posters / methods have enormous value, well almost all 🙂 that is IF ~

you do question everything before proceeding,

much can be learned from the disagreements to


Mr marcus, your pm machine is off as per.............Thanks 🙂

Anyway latter all

have FUN

Andy

 

[PKFFW]

Good post SWLB,

At least you seem to understand that there are at least two different views and do not attempt to catagorise any who disagree with you as being "wrong" and having no idea what they are doing and doomed to failure! lol

I only quoted the following bits because I wanted to respond directly to those.

For me, it was the day I learnt the behaviour of the players that made a pinnochio bar, or the behaviour at S/R that showed a reversal was imminent (not just because its a candlestick pattern in a book) that not only made me more profitable, but it gave me the confidence to know I will trade till I retire because I don't have a statistical edge,I know why and I know the bank traders better than I know myself.

I freely admit I may never have as deep an understanding of the markets as you, n_t, Grey1, mrmarcus and many others. Like you say, there are those that are passionate about the markets themselves and more power to anyone who does have that passion.

However, even though I may never understand what the big boys are doing, who are the weak hands and what each market participant is thinking in any given moment like the rest of you, I have the confidence to know I will trade till I retire simply because I know I will always be able to find a way to make money from the markets. The last 3 years of training and studying have given me this knowledge. If I can do it once, I can do it all over again. The second time(if necessary) will no doubt be easier too as I will be able to apply the knowledge I have gained to developing a new method if need be.

I think there are two camps here, ones who have a passion and those who just want a statistical edge. Yes, I have an edge, I also have favourite setups, but my edge is my skill and knowledge and if I could go back to me when I was 18 and start over, I would swap everything I made for the knowledge I have now through study.

I would disagree that all others that don't have a passion "just want a statistical edge". I would say most if not all would love to have that deep understanding of the market that allows them trade intuitively and know what all the market participants are doing at all times and easily make money whenever they place a trade. However, I think most realise they may never reach that level of achievement and as such are satisfied with attaining the ability to make money from the markets on a consistant basis.(should they even reach that level of ability of course)

Cheers,
PKFFW

 

[steveborner]

As a newbie this thread is a real eye opener! great to see people willing to share such wealth of knowledge, beneficial between the experienced traders and maybe even more so for newbies.

Completely made me rethink my path to becoming a full time trader.

Do any forum members offer sit in days at a desk so I can observe some live trading?

Thanks
Steve

 

[JTrader]

Trading is difficult because in order to make a profit we have to enter a trade.
We enter a trade because we have formed a view upon what we think will happen next, yet we do not know what will happen next.
We enter the trade and hope for a good outcome along the lines of our prediction/reason for entry.
Sometimes we will be right, other times we will be wrong.
Hopefully, the ratio of wins v's losses, or the size of the wins v's the size of the losses, or a bit of both, means that we make a decent overall profit during a given period of time.

 

[mr.marcus]

Good post SWLB,

At least you seem to understand that there are at least two different views and do not attempt to catagorise any who disagree with you as being "wrong" and having no idea what they are doing and doomed to failure! lol

I only quoted the following bits because I wanted to respond directly to those.

I freely admit I may never have as deep an understanding of the markets as you, n_t, Grey1, mrmarcus and many others. Like you say, there are those that are passionate about the markets themselves and more power to anyone who does have that passion.

However, even though I may never understand what the big boys are doing, who are the weak hands and what each market participant is thinking in any given moment like the rest of you, I have the confidence to know I will trade till I retire simply because I know I will always be able to find a way to make money from the markets. The last 3 years of training and studying have given me this knowledge. If I can do it once, I can do it all over again. The second time(if necessary) will no doubt be easier too as I will be able to apply the knowledge I have gained to developing a new method if need be.

I would disagree that all others that don't have a passion "just want a statistical edge". I would say most if not all would love to have that deep understanding of the market that allows them trade intuitively and know what all the market participants are doing at all times and easily make money whenever they place a trade. However, I think most realise they may never reach that level of achievement and as such are satisfied with attaining the ability to make money from the markets on a consistant basis.(should they even reach that level of ability of course)

Cheers,
PKFFW

...there is room for all levels in trading...ultimately you get out what your prepared to put in...what is not acceptable is...

1....arrogance over others.....be it at what level of knowledge you currently are the possibility for improvement always exists..this is until arrogance creeps in....it forms a barrier to learning and equally distorts decision making..before long if arrogance persists it will effect your "bottom line" and you will find yourself back at the very "rung of the ladder" which you so smugly looked down upon.

2....and equally....ignorance....the constant dismissal of those with the passion and drive to take it beyond a money making exercising and instead a pursuit of excellence with money as a consequence is disgusting....i doubt many top sportsman start out soley driven by money but instead the craft....the cyber chavs are allowed to belittle anyone who seeks to better themselves.....ultimately this is down to thier own insecurities...and is typical of society at the moment...never put down those who are prepared to sacfrice and work to improve self and others....these peopl will be the ones who will be paying your dole money one day.

.......seems pretty simple.....dont pretend to be at a level your not to YOURSELF and others....dont brag about the level your at.....and dont dismiss the level others strive to become.

cheers mark j

 

[barjon]

ps: ........................and it was mr.marcus who probably opened my eyes the widest. Good to see you on the boards again mark.

good trading

jon

 

[mr.marcus]

ps: ........................and it was mr.marcus who probably opened my eyes the widest. Good to see you on the boards again mark.

good trading

jon

................thank you jon....a fleeting visit mind....hope your well....take care.

cheers mark j

ps.....next sw london meet ill be goin as will mr charts....maybe see you there?

 

[Vaco]

I've just read the whole thread and i'm a bit lost, what is it that i should be learning? If its the tape, level 2 and volume, how will that help me if i'm an eod trader? if it is something else someone please tell me what?

Lately I have been thinking that becoming a profitable trader is about mastering yourself more then anything else.

Mr marcus is right when he says that sportsman do not start out solely driven by money, in fact i dont think that the money was the motivation at all. the motivation is to be a winner regardless of the sport, the size of the payday reflects their talent. Same with traders, we learn to trade to be winners, in our case that means profitable, the growth of our account will reflect our talent. Talent is a combination of factors, one of which is practice, coaching is also important and that is the hard part in trading, finding a coach that will guide you telling you what you need to practice on and where you are going wrong in order for you to improve your game.

Trading is a hard lonely game to learn.