2009.04.04 WHY 95% OF TRADERS LOSE

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rowdy
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Postby rowdy » Sun Apr 05, 2009 8:50 pm

At the risk of getting flamed, in my view this all comes down to developing an EA or EAs and turning it loose. Not unattended but hands free. An EA doesnt bend rules or make irrational or emotional decisions. If the rules behind the EA are profitable, and you keep your hands off, you will be profitable. Plus there is the advantage of not making typing errors. Ok all you discretionary traders, I know you are going to flame me, but you have to admit that I make some valid points.
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Postby TheRumpledOne » Sun Apr 05, 2009 9:38 pm

Image

Image

Image

Did you do your homework BEFORE you started trading?
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

Please do NOT PM me with trading or coding questions, post them in a thread.

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TheRumpledOne
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Postby TheRumpledOne » Sun Apr 05, 2009 9:46 pm

rowdy wrote:At the risk of getting flamed, in my view this all comes down to developing an EA or EAs and turning it loose. Not unattended but hands free. An EA doesnt bend rules or make irrational or emotional decisions. If the rules behind the EA are profitable, and you keep your hands off, you will be profitable. Plus there is the advantage of not making typing errors. Ok all you discretionary traders, I know you are going to flame me, but you have to admit that I make some valid points.


There is a time and place for an EA.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



Please do NOT PM me with trading or coding questions, post them in a thread.

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Re: 2009.04.04 WHY 95% OF TRADERS LOSE

Postby Buddha123 » Mon Apr 06, 2009 11:15 am

TheRumpledOne wrote:2009.04.04 WHY 95% OF TRADERS LOSE

I think I have found out the reason why 95% of traders lose - FAILURE TO FOLLOW INSTRUCTIONS.

I posted the DRAIN THE BANKS method last week. It has "evolved" since the first post. The latest version of TRO_DYNAMIC_FIBS_SR_TRAIL tells the trader when it is OK TO BUY, OK TO SHORT and BREAK OUTS. The trader is just a "trained chimp" - no thinking required.

Some people started making profit right away. But there were a few who refused to follow instructions, put other indicators on the charts and they lost money. Some tried to trade multiple pairs before they leaned how to trade one.

I explained they are like a new judo student who, on their first day in class, want to tell the master how to execute a move. These people wind up on their backs fast.

I explained that when you learn to juggle, you start by juggling one ball. Then two. And finally three.

There were people in the TWO PERCENT CLUB chat room who made 2% or more on their accounts every day. Some made over 10%. We were all using the same charts. We were waiting for the setups before entering a trade. We were taking our profits according to our own rules. We were DRAINING THE BANKS.


Where can I find rules of DTB and homeworks?

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Postby eudamonia » Mon Apr 06, 2009 3:14 pm

Rowdy,

Not flaming, but here's my counterpoint.

A good buddy of mine is an engineer who is a very savvy programmer. He has spent the last 5 years programming automated trading algorithms (like EAs but on his own custom built software). His systems are robust (it took many thousands of hours to achieve a program that was flexible enough to adapt to the market), and profitable. He tells me, "psychology has nothing to do with trading - it is all about the system".

The only problem is - he can't make money. Why? Because he will interfere with his system while it is trading, turn it off and back on at inconsistent points, retest things, reoptimize things, etc.

Can you tell what TRO and I are driving at?

Ultimately, no matter who enters the trades (you or the program), as long as there is a human being involved somewhere in the decision making process, that human being becomes the system. YOU are your EDGE. No matter what.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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Postby PTG » Mon Apr 06, 2009 4:02 pm

Rowdy

History repeats itself.

Go and have a look at the EA-related discussion earlier on in the Never Lose Again thread on this site. I'm talking around December 7th or so, give or take a couple of days. That should deal with any questions.

I know what not to waste my time on: on EA's. They won't earn me ANY money, period.

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Postby rowdy » Mon Apr 06, 2009 10:35 pm

eudamonia wrote:Rowdy,

Not flaming, but here's my counterpoint.

A good buddy of mine is an engineer who is a very savvy programmer. He has spent the last 5 years programming automated trading algorithms (like EAs but on his own custom built software). His systems are robust (it took many thousands of hours to achieve a program that was flexible enough to adapt to the market), and profitable. He tells me, "psychology has nothing to do with trading - it is all about the system".

The only problem is - he can't make money. Why? Because he will interfere with his system while it is trading, turn it off and back on at inconsistent points, retest things, reoptimize things, etc.

Can you tell what TRO and I are driving at?

Ultimately, no matter who enters the trades (you or the program), as long as there is a human being involved somewhere in the decision making process, that human being becomes the system. YOU are your EDGE. No matter what.

Edward


I agree 100% with what you said here. I am an engineer also and I have a little bit of programming skill. You are correct that EA or not it is YOU.

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Postby rowdy » Mon Apr 06, 2009 11:07 pm

PTG wrote:Rowdy

History repeats itself.

Go and have a look at the EA-related discussion earlier on in the Never Lose Again thread on this site. I'm talking around December 7th or so, give or take a couple of days. That should deal with any questions.

I know what not to waste my time on: on EA's. They won't earn me ANY money, period.


With all due respect PTG, I respectfully disagree and here is why. You trade BZ by trying to type in the orders manually. The price moves before you can get your order in. So you start to use scripts and this solves the problem. Then you trade DTB and when you try to drag and drop when the indicator says OK to Go Long, the price moves before you can drag it in. Now you can always play the breakout, but an EA would be fast enough to get your trade in. My point is that there is absolutely no difference between manually trading and an EA as to the trading methodology. How many times have you entered a short trade by accident when you actually meant to enter a long? An EA eliminates these kinds of errors.

As for the thread you mentioned, I believe that msforex was somewhat misinterpreted. In reading the thread, it didnt appear to me that this person was necessarily trying to disprove the validity of the Buzzard indicator. msforex only displayed backtest results for the way msforex coded the idea. msforex may have coded it incorrectly. It is easy to do unless you CHECK your results thoroughly. msforex may have coded it correctly but doesnt understand how to trade it profitably. I would not dismiss EAs as evil or a "waste of time" just from this one thread.

I have to attend a regular job every day so I can only trade part time. This severly limits my options. I can only trade Forex Monday through Thursday nights. Thats it. For those of you who in the same situation I am sure you can relate. Is there any real substitute for live trading experience? No. I understand the value of real trading experience. However, given my limitations can I afford to trade an indicator for a year only to discover that I will only break even at best? Again, I am not suggesting that the indicator doesnt work, I am saying that I may not know how to trade it profitably. Backtesting will give me a clue as to whether I am moving in the right direction. Good backtesting results are absolutely no guarantee that I will do as well in the future, but at least I have some reason to go live with the demo account. I am not trying to "take a shortcut" but I dont have many good options.

I apologize if I have hijacked this thread. It was not my intention. I merely want the discretionary traders to understand my view as a strategy trader as a matter of concern and respect for all involved.

I am going on vacation Memorial Day week and I hope that I will finally be allowed to join in the Paltalk live trading. This would be a real treat for me.

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Postby johnsund » Mon Apr 06, 2009 11:17 pm

rowdy -

Has anyone indicated you cannot join the 2% club? The only one who can "univite" you is TRO and I see nothing here or elsewhere that he has done that. Maybe a past issue???

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Postby TheRumpledOne » Tue Apr 07, 2009 6:07 am

Rowdy:

Feel free to continue the discussion/debate here.

See you in the TWO PERCENT CLUB.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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