Trade what you see, not what you think....

[the hare]

Your comparisons are not like for like ,only some things can be automated and it has it's limits.I have wasted 6,000 hours on it , you do not understand why it will not work consistently.

I don't think spending 6000 hours renaming and selling EA's lifted from forex TSD really counts. I agree its a long time, but not not a very productive use of that time

 

[barjon]

Seems to me than many people think you can "buy-in" the necessary trading skill to short cut the arduous task of developing that skill themselves. Hence the interest in EAs etc and the mechanical methods of trading.

Since "skill" has a wide range of levels that is probably a valid enough thought in providing a low level of basic skill enough to compete in knockabout games of beach football, but woefully short of the level of skill necessary to play professional football.

 

[15 min tlb]

I don't think spending 6000 hours renaming and selling EA's lifted from forex TSD really counts. I agree its a long time, but not not a very productive use of that time

I actually got scammed by programmers on tsd and spent another 5k making new eas and worked on them .The renamed indicators were already renamed from russian sites and renamed standard indicators .I bought enough of those on forums.They made a mug out of me and sold eas that were useless.Many people blew their accounts.

 

[wallstreetwarrior87]

I wonder what techniques 'lurkerlurker' employs.

I'm gonna guess that it's nothing to do with TA/charts OR reading the DOM/Time+sales etc.

I bet it is a type of analysis, but not technical in the conventional sense.

Remember all charts are a representation of data/information. So if you take it to its basic core, T&S/DOM etc are all there on the charts you see in front of you, no matter how you display your data, there are ofcourse limitations to each display type, as a line chart wont show you what a bar chart does. But the data/information does exist, whether you can see it or not.

You can see how hard this business really is, as there is so much terminology used that confuses the individual to really get down to the, dare i say it again; nitty gritty. Maybe better to say its all one big illusion?

Mission; to seek the truth:smart:

Failing that, I have one hell of a MA crossover in my back pocket, just in case!

 

[wallstreetwarrior87]

Since "skill" has a wide range of levels that is probably a valid enough thought in providing a low level of basic skill enough to compete in knockabout games of beach football, but woefully short of the level of skill necessary to play professional football.

Barjon, this is also a reason why it is difficult to discuss topics in a general arena, as everyone is at a different position in their ability/development.

Also the individual needs to believe something can be done/achieved before taking on the task in the first place. If not, a topic can go nowhere as too many people will try to derail the thread, because they cant contribute in a correct manner, as they dont really want to be there. But at the same time, the door is open to everybody, as we have freedom of speech. This has been evident in many other threads.

 

[cablemonster]

The problem is that Cablemonster is actually backing up the techniques all these authors/gurus cum failed traders espouse.

I'm saying it's mostly nonsense & that trading is a skill.

All this 'cause I 'dissed' candlesticks. Perhaps I need to stop using that Steve Nison book as a doorstop.

But is that the problem. Or is the problem that you chest beat against all other methods apart from the one using the product you sell. Funny that. You can fool some of the people all of the time but...........

 

[Shakone]

Barjon, this is also a reason why it is difficult to discuss topics in a general arena, as everyone is at a different position in their ability/development.

Also the individual needs to believe something can be done/achieved before taking on the task in the first place. If not, a topic can go nowhere as too many people will try to derail the thread, because they cant contribute in a correct manner, as they dont really want to be there. But at the same time, the door is open to everybody, as we have freedom of speech. This has been evident in many other threads.

Perhaps. But more commonly, it is that people make claims which they are unwilling to back up (not directed at you).

I don't think it is hard to discuss topics when people are at different levels, since that is always the case, in all discussions, in all walks of life. It is easy. You make your post. It lands or it doesn't. Sometimes you're wrong, and you are corrected and you benefit. You can continue the discussion with those who get what you're saying and filter out the noise. For those on an advanced level, this filtering should be easy. I think (again not directed at you) that some posters like to sound esoteric and mysterious on purpose, and prefer not to provide any substance. Providing the substance is the hard part.

 

[wallstreetwarrior87]

Perhaps. But more commonly, it is that people make claims which they are unwilling to back up (not directed at you).

I don't think it is hard to discuss topics when people are at different levels, since that is always the case, in all discussions, in all walks of life. It is easy. You make your post. It lands or it doesn't. Sometimes you're wrong, and you are corrected and you benefit. You can continue the discussion with those who get what you're saying and filter out the noise. For those on an advanced level, this filtering should be easy. I think (again not directed at you) that some posters like to sound esoteric and mysterious on purpose, and prefer not to provide any substance. Providing the substance is the hard part.

Shakone, I take your point, there is a lot of truth in what you are saying, and yes there needs to be substance in all discussion, and not the mystery and illusion as you quite rightly suggest.

Probing questions are just probing because they give you an opportunity to see if anyone goes with it, or simply see no value in commenting/taking it any further.

Those whom can see value will benefit in the end I guess. Well, as long as they know what is of value to them.

 

[robster970]

Perhaps. But more commonly, it is that people make claims which they are unwilling to back up (not directed at you).

I don't think it is hard to discuss topics when people are at different levels, since that is always the case, in all discussions, in all walks of life. It is easy. You make your post. It lands or it doesn't. Sometimes you're wrong, and you are corrected and you benefit. You can continue the discussion with those who get what you're saying and filter out the noise. For those on an advanced level, this filtering should be easy. I think (again not directed at you) that some posters like to sound esoteric and mysterious on purpose, and prefer not to provide any substance. Providing the substance is the hard part.

This thread took an interesting turn whilst I've been abroad this week. So for the record I subscribe to the views expressed by Lurkerlurker and WSW but I think most people know I chose this style of trading.

I don't think it is about right or wrong, it is about trying to elaborate on an elusive quality which sounds esoteric when written down. Ironically it distills down to a conversation you and I had on a different thread about ascertaining the viability of a trade getting to the target you thought it was going to go to and if not, reading what is happening in the now to get out, therefore not exposing yourself to an unnecessary loss.

In order to trade like this a couple of things had to happen to me and it is still an ongoing process:

1) I had to let go of the doctrine associated with mechanistic trading. In order to do this I had to believe it was a better way of trading with improved results. Letting go of some dogma was the hardest part and I had to look inside myself as to why I wanted to hold onto systemic elements and that took some unwinding.

2) Time or more correctly price and it's relationship with time. I had to re-learn about the ebb and flow of price movement and relating price with time essentially tells you whether a move is going to work or not.

So nothing changed on the chart or T&S/DOM - I changed. I just had to let go of my Linus blanket and trade what I saw, without fear and with confidence in my own abilities. It's not voodoo, merely introspection that leads to using the basic tools of our trade with clarity.

 

[cablemonster]

I have always personally interpreted 'Trade what you see, not what you think' to mean don't get a fixed idea of what you think might happen cloud your judgement. Say for example you become convinced that the market is due to turn around and head south then if you get wedded to this idea your brain will start look for more and more reasons to get short creating a confirmation bias. This human condition is known as Pareidolia. It stems from the nature of our brains looking to make short cuts to avoid overloading itself. I am sure people have their own interpretations of the phrase,trading is all about interpretation, we are all presented with the same information. As other posters have written previously every point in the market is unique and truly anything can happen at any time and I agree with this.

As for arguments about which trading methods 'work' or which are 'better' I just dont find them helpful to me in any way. I am more of the view that liquid validity described and he has nailed it imo. I just dont understand why people who find a method they think works and then berate all other methods, that sort of closed mind thinking leads me to believe that perhaps the method they have found isn't all that is seems.

Let's take the use of indicators for example. Some people will jump up and down, chest beat saying they don't work but in reality what this means is that they couldn't make them work themselves, it's that sort of thinking error (small mindedness) that we see throughout human nature. For example racism is perpetuated by small minded people who are often loaded with biases, in reality of course people are people not matter where the originate.

A simple use of an indicator might be to take a directional based indicator to filter out certain market conditions and then apply another trading strategy to the filtered market condition. To just say they dont work is small minded to the extreme.

 

[DionysusToast]

But is that the problem. Or is the problem that you chest beat against all other methods apart from the one using the product you sell. Funny that. You can fool some of the people all of the time but...........

Let me break it down for you a little - the specifics because you do seem to have missed the point. This is fairly common with this sort of debate as there is a fair amount of nuance.

If people thought it was a skill why would they:

- try to program it before they could do it

This one should be fairly obvious. Software generally needs to be designed. To design a piece of software that will trade for you, you need to know how to trade. So those that try to automate trading when they cannot yet trade are pi$$ing in the wind.

Plenty of software out there for you to invest in and play with this concept for years.

- use combinations of indicators to tell them when to trade

Similar to the above, you look for a magic set of indicator combinations that will then absolve you of making a decision. Even worse is the use of software to crunch different combinations and give you a final answer. The idea being that this combination will make the decisions for you and work forever based on win rate, risk & return.

Now - this is not to say you cannot use indicators. It just means that you cannot use them in the above fashion to tell you when to mechanically take a trade.

Plenty of software out there for you to invest in and play with this concept for years.

- buy EAs

Again - looking for something else to make the decision for you. This has nothing to do with trading.

Plenty of software out there for you to invest in and play with this concept for years.

- subscribe to alert services

Same thing - now looking for someone out there to make the decision for you. I guess the expectation is that some of it will rub off.

Plenty of services out there for you to spend your $$$ on

- read candlesticks :whistling

Not smiley - tongue in cheek comment. Still - candlesticks do rather focus on minutae as opposed to the bigger issue "where has it been, where is it heading and how good a job is it of getting there?"

- look at fractals

This one is my favorite. Using something you don't understand to do something you don't understand.

- use digital signal processing techniques and write books about applying them to time price series - and get lauded for it

This is a poke at Ehler. Anyone wondering just how far a blind alleyway an individual could go would do well to read his cybernetics book.

It is obvious that all this stuff exists because of the DEMAND for it. There is a huge demand for 'solutions'/quick fixes to trading. Something that gives you an absolute, unequivocal, objective way to enter the market.

There is a very small demand for things that will work if you put a huge amount of effort into. In fact, you can't give that stuff away for free.

 

[DionysusToast]

Here is what I am saying. Some skills can be automated. Therefore, if DT wants to suggest that people backtesting, looking for automation or using indicators do not believe it is a skill because they are doing these things, then DT would need to prove why this particular skill (trading) cannot be automated. This is an interesting debate, but he will be unable to prove it.

Well the interesting thing, there's never been a retail trader on any forum that has proved they have a working automated system.

I have elaborated now but the point is, that your chances of making an automated system work are zero if you don't know how to trade. If you tried to automate driving in traffic without ever having drive, the results would be similar.

In fact, when you drive now - you don't even think about driving, it has become automatic. This is the ultimate end game in skills development.

Most people that go the automation route do so because that is where there skills lie, it's engineers mostly. Their skills are in this area and so they try to leverage these skills to do something they would NEVER think of doing in their field - building something they don't know how to design.

Now - can someone that can trade automate trading? That is a different discussion.

I think if you want to look for a parallel - look to get someone to automate poker, including the bluffing.

Secondly, every skill that I can currently think of, can be improved by ways other than just doing the skill. Practice, analysis, study etc. Doing these, studying charts etc., does not mean you think it is not a skill, quite the opposite.

Practice is 'doing the skill' - repetition. It develops implicit memory. Reading, study does not do that believe it or not...

HowStuffWorks "Memory Retrieval"

Implicit Memory

Things that we don't purposely try to remember are stored in implicit memory. This kind of memory is both unconscious and unintentional. This type of memory is also known as nondeclarative memory, since you are not able to consciously bring it into awareness. Procedural memories, such as how to perform a specific task like swinging a baseball bat or making toast, are one type of implicit memory since you don't have to consciously recall how to perform these tasks. While implicit memories are not consciously recalled, they still have an influence on how you behave as well as your knowledge of different tasks.

Some examples of implicit memory include singing a familiar song, typing on your computer keyboard, daily habits, and driving a car. Riding a bicycle is another great example. Even after going years without riding one, most people are able to hop on a bike and ride it effortlessly.

Here's a quick demonstration that you can try to show how implicit memory works. Type the following sentence without looking down at your hands: "Every red pepper is tantalizing." Now, without looking at your keyboard, try naming the ten letters that appear in the top row of your keyboard.

Since most students are good typists, you probably found it quite easy to type the above sentence without having to consciously think about where each letter appears on the keyboard. That task requires implicit memory. Having to recall which letters appear in the top row of your keyboard, however, is something that would require explicit memory. Since you have probably never sat down and intentionally committed the order of those keys to memory, it is not something that you are able to easily recall.

This is the crux of the skill vs non-skill argument lies - in the way we learn. This is why I selected those specific examples.

 

[DionysusToast]

So nothing changed on the chart or T&S/DOM - I changed. I just had to let go of my Linus blanket and trade what I saw, without fear and with confidence in my own abilities. It's not voodoo, merely introspection that leads to using the basic tools of our trade with clarity.

Spot on - this is not specific to any tool.

It is specific to a certain mindset or approach.

It often comes after a long period of banging your head up a wall and thinking that maybe discretion should be embraced not avoided.

 

[robster970]

I wonder whether we argue difference in methodology as a metaphor for performance? It is the one taboo we all buy into - none of us declare our performance levels publicly for obvious reasons. Hence we're trying to say to each other in a coded way that "In my experience, method X can generate returns Y".....

Just a thought.

 

[cablemonster]

DT. what you have written is a half-hearted attempt to berate all other forms of trading apart from your own, it really is sad to see it and I hope you are doing it for the right reasons.

when will you learn that the method is only a means to an end, this is why listing different types of trading/whatever is meaningless. It's painful going through each point but I will try.

If people thought it was a skill why would they:

- try to program it before they could do it

This one should be fairly obvious. Software generally needs to be designed. To design a piece of software that will trade for you, you need to know how to trade. So those that try to automate trading when they cannot yet trade are pi$$ing in the wind.

Plenty of software out there for you to invest in and play with this concept for years.

this just doesn't make sense.There are a tonne of traders out there who make money predominantly for IB's and props using automated systems that they program, they are skilled programmers. If someone is a gifted programmer and has an good understanding of the market they can be a trader in their own right, just because they trade this way does not make them any less of a trader than a someone doing it manually/discretionary. What you are saying is just delusional.

- use combinations of indicators to tell them when to trade

Similar to the above, you look for a magic set of indicator combinations that will then absolve you of making a decision. Even worse is the use of software to crunch different combinations and give you a final answer. The idea being that this combination will make the decisions for you and work forever based on win rate, risk & return.

Plenty of software out there for you to invest in and play with this concept for years

are you seriously saying that it is not possible to construct a trading system with indicators (an infinitely large set) that has a positive expectancy. it's just not credible.

buy EAs

Again - looking for something else to make the decision for you. This has nothing to do with trading.

Plenty of software out there for you to invest in and play with this concept for years.

whilst I would agree that purchasing an EA is unlikely to be a sound purchase after all this industry is swamped with vendors looking for some of the newbie dollar there is nothing wrong with EA's. If for example I choose to programme an EA that pops up a little alert when there is an hour left of trading on an instrument and it has fallen say >3% then this is helpful to me. To just throw out all EAs with the bath water is small minded and really not helpful.

subscribe to alert services

Same thing - now looking for someone out there to make the decision for you. I guess the expectation is that some of it will rub off.

Plenty of services out there for you to spend your $$$ on

These services have little to do with trading, and are perpetuated by the lower level vendors. We would probably agree on that.

- read candlesticks

Not smiley - tongue in cheek comment. Still - candlesticks do rather focus on minutae as opposed to the bigger issue "where has it been, where is it heading and how good a job is it of getting there?"

the bigger issue of 'where it is heading'. This is lulzy. If anything told you where the market was heading you would be a very rich man. Candles are just a representation of price, nothing tells you where it is heading. How good a job is subjective to the 'job'.

- look at fractals

This one is my favorite. Using something you don't understand to do something you don't understand.

This is a poke at Ehler. Anyone wondering just how far a blind alleyway an individual could go would do well to read his cybernetics book.

It is obvious that all this stuff exists because of the DEMAND for it. There is a huge demand for 'solutions'/quick fixes to trading. Something that gives you an absolute, unequivocal, objective way to enter the market.

There is a very small demand for things that will work if you put a huge amount of effort into. In fact, you can't give that stuff away for free.

that's lulzy DT. tbh all I know a fractal as is a turning point in the market, which doesnt mean anything, just like saying there is a fork in the road.

For sure there is a demand for solutions/quick fixes to trading, something you have chosen to focus on

really this whole hansel and gretel laying of trails is very tiresome and I credit most people here to be able to see through it but then again there are no limits to human stupidty.

 

[DionysusToast]

I'm not sure it's a performance issue or even a method issue.

You and I both trade value and we both use fairly old concepts. Some of the books explaining these concepts are now hard to get.

Now, if I said to you, market is almost all long overnight, we are way above yesterdays value area, so I'll look for a push up and for reactive sellers to come in. You'd probably say that this was a sensible thing to do.

On the other hand, if I said, I'm going to crunch the past 3 years data with 3 parameters
- number of points above yesterdays VAH at open
- number of ticks target
- number of ticks stop

And then ran that through a backtester to optimize & get the 'best fit' - would you expect to get something you could trade every day based on the red/green light it produced?

Would you even trust it to place trades for you considering the good feel you currently have for that scenario?

 

[cablemonster]

Well the interesting thing, there's never been a retail trader on any forum that has proved they have a working automated system.

please this is lulzy. how on earth can you claim such a thing, such a statement is ignorant and small minded. For a start how do you know there has never been, I guess you have checked every post on every forum right? Lets face you will not see many people posting proof of anything on a trading forum let alone a small subset thereof.

for the record I am not an automated trader but to come out with statement like that is laughable.

have you thought about why someone wouldn't post such proof on a public internet forum besides the obvious they would have found an edge in the market structure that when revealed to the public would disappear.

interesting that you use the phrase 'retail trader' carefully ring fencing the institutional/prop automated traders indicating that you know it can be done, kind of contradicts your chest beating earlier huh. maybe there was another motive behind your post

seriously why dont you just stump up for a banner advert I am sure it will get you the results you are after and it will be less tiresome for the rest of us.

 

[random12345]

As for arguments about which trading methods 'work' or which are 'better' I just dont find them helpful to me in any way. I am more of the view that liquid validity described and he has nailed it imo. I just dont understand why people who find a method they think works and then berate all other methods, that sort of closed mind thinking leads me to believe that perhaps the method they have found isn't all that is seems.

Cable represents good common sense as always. The biggest tragedy of the thread is that LV has fewer likes than he deserves whereas if someone talks generally about what people want to hear (indicators don't work, I opened my mind, I learned from the best, the market is essentially an ethereal puzzle - whatever the hell all that means).. he or she gets lauded. This is because this is the future that most people hope for themselves as retail traders - that they're so likely to return each month in the future because they will be on a higher plane. Confirmation bias in terms of wishful thinking.

Also... I'm a bit hesitant to add this as it might stir a bit more controversy and I reckon it will go down poorly, but I was hardly well liked before... anyway, people shouldn't be so kind on themselves in how long it takes them to become profitable. You shouldn't be giving yourself five+ years as a new trader, nor should you give yourself a few months, but the moment you stop being hard on yourself for results is the moment you'll become one of the slow contributors to the market or, at best, one of the small supplementary winners. If you aren't relatively confident with your ability in 24 months, then you haven't tried hard enough. If I may, I remember feedback time at work... some people were amazed when they got a terrible rating, they honestly thought they weren't bad at their job. It always confused me how you can't be self aware at your own shi*eness, sorry. Be bloody hard on yourself, loathe your performances, surrender ALL your free time, ALL your weekends, sod your social commitments, neglect your relationships somewhat. You might have a chance. I became a retail trader at 28 having been in the army for 4, the fx desk for 3 and while holding down a job in professional services and not much else. I could afford to drop a few years... I can't see how it could have been possible otherwise and it was terribly hard work.

 

[cablemonster]

I'm not sure it's a performance issue or even a method issue.

You and I both trade value and we both use fairly old concepts. Some of the books explaining these concepts are now hard to get.

Now, if I said to you, market is almost all long overnight, we are way above yesterdays value area, so I'll look for a push up and for reactive sellers to come in. You'd probably say that this was a sensible thing to do.

On the other hand, if I said, I'm going to crunch the past 3 years data with 3 parameters
- number of points above yesterdays VAH at open
- number of ticks target
- number of ticks stop

And then ran that through a backtester to optimize & get the 'best fit' - would you expect to get something you could trade every day based on the red/green light it produced?

Would you even trust it to place trades for you considering the good feel you currently have for that scenario?

now you are just getting desperate you sound like one of the market sellers at my local market who trys to flog out of date packs of economy biscuits.

just buy a banner ad FFS

 

[DionysusToast]

DT. what you have written is a half-hearted attempt to berate all other forms of trading apart from your own, it really is sad to see it and I hope you are doing it for the right reasons.

Nope - that is not what I am doing, that is just what you think I am doing.

when will you learn that the method is only a means to an end, this is why listing different types of trading/whatever is meaningless. It's painful going through each point but I will try.

You need to re-read.

With EAs, it's pretty obvious.

With other stuff, you miss the point by a mile. I am wondering if this is intentional.

this just doesn't make sense.There are a tonne of traders out there who make money predominantly for IB's and props using automated systems that they program, they are skilled programmers. If someone is a gifted programmer and has an good understanding of the market they can be a trader in their own right, just because they trade this way does not make them any less of a trader than a someone doing it manually/discretionary. What you are saying is just delusional.

Traders using automated systems? Nothing wrong with it.

As opposed to programmers that can't trade trying to stumble on a mechanical approach that makes them money. This is 2 very distinct groups of people.

Which group of people do you think most of Tradestations customers belong to? I've been on their forums and I can tell you none of them are traders.

Note that opening an account at Tradestation does NOT make you a trader.

are you seriously saying that it is not possible to construct a trading system with indicators (an infinitely large set) that has a positive expectancy. it's just not credible.

Correct - if the only tool you have is indicators and you approach the project without an understanding the markets, you will not find a combination from the infinitely large set that works.

On the other hand, if you understand the market and trading, there is no reason why an indicator could not be included in the system.

Two very different scenarios.

whilst I would agree that purchasing an EA is unlikely to be a sound purchase after all this industry is swamped with vendors looking for some of the newbie dollar there is nothing wrong with EA's. If for example I choose to programme an EA that pops up a little alert when there is an hour left of trading on an instrument and it has fallen say >3% then this is helpful to me. To just throw out all EAs with the bath water is small minded and really not helpful.

What you describe is not an EA. I have various audio alerts I use through the day. They are not EAs either.

An EA is an "Expert Advisor" - let's go to a trading dictionary for the definition

What is Expert Advisor (EA)? - Definition from ForexDictionary

Definition - What does Expert Advisor (EA) mean?
An expert advisor (EA) is a software program that analyzes data and provides a trader with buy and sell recommendations that fit within the trader’s strategy. Much like a trader, an expert advisor analyzes historical data and forecasts future price movements using this data. Unlike a human trader, expert advisors are able to integrate a huge amount of data and process it very quickly for the purpose of forecasting.


I think you will find that with this in mind, my opinion about them is spot on.

You just didn't quite understand what an EA was.

These services have little to do with trading, and are perpetuated by the lower level vendors. We would probably agree on that.

yup

the bigger issue of 'where it is heading'. This is lulzy. If anything told you where the market was heading you would be a very rich man. Candles are just a representation of price, nothing tells you where it is heading. How good a job is subjective to the 'job'.

Agreed - a candle tells you where price opened closed and where it went on the way.

Yet people approach candlesticks expecting them to tell them when to enter a trade. Not only that, they expect it to be unequivocal

that's lulzy DT. tbh all I know a fractal as is a turning point in the market, which doesnt mean anything, just like saying there is a fork in the road.

Again, this really means you don't know what a fractal is.

Fractal | Define Fractal at Dictionary.com
frac·tal [frak-tl]
noun Mathematics, Physics.
a geometrical or physical structure having an irregular or fragmented shape at all scales of measurement between a greatest and smallest scale such that certain mathematical or physical properties of the structure, as the perimeter of a curve or the flow rate in a porous medium, behave as if the dimensions of the structure (fractal dimensions) are greater than the spatial dimensions.

Fractals are fairly obscure math/physics constructs. If you can understand the above definition, then my hat off to you. If you can understand the math behind them then I bow down to you. If not, then probably best not try to use fractal math to trade - especially if you don't know much about trading either.

Hence my comment - using one thing you don't understand to do something else you don't understand.

For sure there is a demand for solutions/quick fixes to trading, something you have chosen to focus on

This simply highlights the fact you have no idea what I do.

really this whole hansel and gretel laying of trails is very tiresome and I credit most people here to be able to see through it but then again there are no limits to human stupidty.

This is not debate, this is not discussion. This is just mud slinging. I would advise sticking to mud and avoiding stones at all costs.