zupcon

The problem is there are NO reliable sources. I could probably teach most people to trade, but I wont because its not in my interests to do so, how much could I charge ? and how many students could I handle simultaneously ? Its just not a scalable business proposition compared to trading, and frankly, most people arent remotely interested in trading, they just want to make money. The other issue is you cant take "knowledge" from multiple sources and combine it. Trading systems are highly synergistic, and in order that they function, each and every element within that system needs to be somewhere near in harmony with every other element. You cant mix and match random approaches and ideas and expect things to work out. There's no shortage of evidence that shows that most people cant even profit from trading positive expectancy simulations that are deliberately set up to return a profit. The learning time has very little to do with learning a system, its required to experience and manage the reality of handling almost random returns, and sadly that takes time however you decide to approach it

produce a VERIFIED trading record and prove us all wrong . We really shouldnt encourage them The last verified statement I saw from a "trading educator" (and I do believe it was genuine despite having absolutely no proof one way or the other) started with an opening balance of 100 dollars and covered a period of approximately 3 weeks ! I'd love to know how many tries it took him to achieve that, judging by the stuff he teaches I suspect quite a few. :crap: :rofl:

seriously, anyone who wishes to livestream an abortion on facebook is welcome to Its Darwinian selection at its finest, and long may it continue

LOL I'd kill for 2 steps forward one step back I'm typically making new equity highs less than 20 percent of the time, 80% of the time I'm either losing money, or making back the gains that I lost earlier I am without the best trader that Ive ever met, with triple digit annual returns with very low drawdowns. the two forward one back thing is a good analogy, but very far wide of the mark

FFS When will this insanity end ? I have a cunning plan :idea: and vendors (and forum owners) are not going to like it

On a day by day basis, around 50% of all traders at a particular broker will be be profitable. The gains of the profitable traders are paid from the losses of the losing traders that day. If you dont believe me spend a week opening and closing trades at random, I guarentee around 50% of them will be profitable. If you extend this to longer time periods of say for example, 3 months, the number of profitable traders declines quite significantly to around 30% If you extend the time period to around a year, the number of profitable trades drops to around 5% This happens for a reason. If you really want to understand why this hjappens do some research into the scaling property of randomness, Talib's book fooled by randomness is a good starting point. The simple answer to your question is that the majority of money is extracted out of the system in the form of transaction fee's. Very few of the market participants has an edge, their true expectancy is zero minus transaction costs. Over the short term due to statistical varience some traders will show a profit, but over longer periods of time their performance will revert to the true expectancy of their systems. Maybe 0.5% of the money goes to profitable traders, but the majority of money paid into retail brokerage accounts ends up with the broker. If you do some reseach you'd be shocked to see just how much money the brokers pay in marketing costs and affiliate fee's to ensure a constant supply of fresh meet. Thats where a large chunk of the money actually goes.

The author of that article has the potential to become a great trader... On the other hand, it doesnt really matter if these techniques work or not, it all boils down to numbers, either the cost of advertising allows you to make a profit, or it doesnt. Its a zero sum game, If the targeting becomes better, and conversion significantly improves, advertisers will ultimately end up paying more for their ads anyway.

Its hardly a new situation that we havent seen before.... however, I do think it is worth calling this stuff out when you see it. Speaking from personal experience, Ive been guilty of similar behaviour in the past in the hope that someone would throw me a bone in exchange for my loyalty and / or silence. It obviously didnt happen, and with the benefit of hindsight I now understand that noone had anything remotely useful to offer anyway ! I've no axe to grind with db, he's one of the few who has made a positive contribution in the trading community over the years. I dont really want to be critical of TL either, what other option do they have ?, TL are definately at the whiter than white end of the spectrum, but even so, if the need for principles, integrity and honesty are high up your list of personal values, running or working for a trading forum is probably not the ideal business to be involved in. I know I have a reputation as an old cynic, but can you really expect "principles" in this type of environment ?

Totally true. Measuring profit or loss is the very last thing potential traders should be worrying about. The reason for such an appallingly high failure rate in this business is that people are measuring the completely wrong things. Lets hope it continues

And ironically, many traders employing this approach end up taking their largest positions (and losses) at times of low volatility, and thats generally the time that the types of systems typically traded by the retail crowd tend not to do particularly well Still trading "educators" will continue to peddle this crap, and people lap it up. You cant blame them really (the vendors that is) :rofl:

I'm totally in agreement about the distinctions that you make between portfolio and system based stats. Its a very good point, and its very good advice. The points that I was trying, and probably failing to make were as follows: Any "statistic" derived from a trading strategy needs to be more along the lines of rough estimates, rather than high precision statistics. I'm sure there are people out there using insanely complcated statistical approaches, but thats probably beyond the realm of most retail traders. I'd also probably argie that the units used to derive any statistics are probably best based on some sort of market based values rather than points, or dollar amounts. The main point that I was trying to make is that if you take a simple analysis tool like Software for Position Sizing Optimization : Forex Trading Systems : Stock Trading Online : Adaptrade Software and you attempt to optimize any MM strategy its simply a matter of fact that different strategies are going to perform differently at different times and in different market conditions. Over a diversified portfolio of systems, and enough time, things tend to average out, so you might as well go for an MM strategy thats easy to understand an impliment, and that you can actually trade (my example of optimal f hopefully illustrates the point that the optimum strategy isnt necessarily the best strategy) The problem of course is that you dont know, what you dont know, and I am prepared to accept that there are systematic traders out their who's level of sophistication in the implimentation of their MM is way beyond mine, and that they are possibly able to dynamically optimise their MM approach based on market conditions, and that such an approach might potentially form a part of their edge. I'm a system trader these days, and I tend to associate with other system trades who share similar views to my own, which is possibly shortsighted, but it cuts out a lot of extraneous noise. However I started out staring at a screen, and there are times when you are definately in tune and on a roll, and you know it. I never reached the point where I had quite enough confidence to push the gas a little harder during these periods, but I suspect that if I'd continued along that route, eventually I almost certainly would have done, and I know guys who regularly do that based on nothing more than intuition However, on the other hand, in my limited experience, organisations who employ multiple traders tend to handle the risk aspects on a far higher level of abstraction than that that of an individual trader or individual strategy, and I suspect that they've almost certainly done a lot more work that I have on this stuff, so if they cant do it, who can. the concepts of minimising the risk of ruin for a single system isnt rocket science, nor is the idea of diversifying risk across a portfolio of systems. What is rocket science, is the implimentation of those methods. I however would argue that the inherent randomness in returns pretty much invalidates all assumptions on which even the most complex of those models are built. Take 1000 guys trading a simple % fixed fraction, and a thousand quants implimenting the most complex of MM strategies, and after 30 years, I suspect the distribution in final PnL from the two populations wont be too disimilar I'm not attempting to sugar coat anything, I'm saying there is no MM silver bullet, you have to take the rough with the smooth. Im not advocating that people shouldnt reseach these issues, I still spend a fair proportion of time looking at MM, despite previous reseach being completely fruitless, and I suspect that I'll continue to do so I even make the point that you'll need a different approaches based on system metrics, but getting bogged down in unnecessary optimisation is in my experience not the best use of time

I dont really like the term "money management", but if you mean adopting some sort of sensible risk management strategy to minimise risk of ruin, and that can be any position sizing method you like really, IMHO money management is pretty much irrelevant I used to buy into the argument that you optimised MM based on your strategy. It makes some sense, a strategy with a 80% strike rate, and a strategy with a 20% strike rate are going to require a different approach to position sizing, but any kind of specific detail below that is completely irrelevant. The didtribution in trading returns is pretty much random for most people, and the optimum MM approach during period X is going to differ from the optimum approach in period Y. This inherant randomness in returns kind of makes any MM optimisation pretty much redundant Its also probably worth pointing out that psychology can often play a part, and you may not actually be able to trade your optimum MM strategy. How many people could trade a sizable account using something like optimal F for example, would you really tolerate a 98% drawdown on an 8 figure account even if its exactly the right thing to do ?

If I look at my personal trading statistics, I find that I'm only making new equity highs around about 18% of the time. So, in reality, 82% of the time I'm technically in drawdown, and I'm losing money, or slowly recovering money that I lost earlier. What I find particularly amusing about those figures is that practically everyone who has ever seen my equity curve has accused me of fabricating the results ! Its a beautiful illustration of just how wildly unrealistic most people's expectations possibly are. I was genuinely surprised by the comment by Anton Kriel suggesting that his students might experience drawdown in approximately 3 months of each year. I dont know Anton personally, but I am aware that he advocates trading a diversified portfolio of instruments and typically over a much longer timeframe than the typical day trader. Even so, those figures seam a little over optimistic to me, if they are true, his students must be absolutely killing it.

avoiding that particular forum would definately give most people an advantage !

and there's deliberate fraud too ! FFS, there's currently a 40 page thread over at the zoo encouraging traders to trade without stops, and the main cheerleader is none other than the sites content manager. Its nothing to do with ignorance, stupidity or being ill informed, its a deliberate attempt to hose their membership (again) its not even being written 4 lulz thankfully the sites as dead as a dodo, and making new lows every day so no real damage done

That is perfectly true, and a very good point although I doubt the good people at trade 2 win would necessarily agree :haha: In answer to where does the lost money go, a fair chunk of it definately ends up in the pockets of those altuistic people who devote their lives to "helping traders" :rofl:

I think a lot of people underestimate the effects of fees, the brokers really do have a MASSIVE edge. Even if you look at those ridiculous quarterly NFA statistics on the percentage of winning traders, despite the various shinnanagins in play you'll see a weak correlation between win rates and the size of spread being charged. As you point out there are a myriad of reasons why people are getting hosed by these costs, personally I think it's a fairly fundemental part of the game figuring this stuff out If you really want to bleed a account dry you could always follow the advice given by trade to wins content manager Mr Tim Wilcox who suggested simultaneously opening long and short trades in the same instrument ! :helloooo: I know they have a living to make, but recommending traders to pay double the spread just to get an IB kickback is beyond criminal. What a bunch of *****

I have to admit that I love a bit of the auld lulz, and thankfully, a certain popular trading forum that shall remain nameless never ever ceases to disapoint. Ive been laughing for days at their latest debacle. This weeks proliferation of lulz is provided by the sites founder and CEO who started a thread titled "Is it better to trade with or against the trend?" :rofl: Is it any wonder that their business is in terminal decline when this nonsense is the best their CEO can come up with to stimulate debate ? Despite the appalingly lame question, you might have hoped that participants on a trading forum could have come up with some sensible insights, but sadly the big gorilla may well have asked What’s north of the North Pole? What happened before time? How many angels can you fit on a head of a pin? "THE TREND" FFS they really have reached a new low, they have the combined trading wisdom of a retarded amoeba, great lulz though. If there's any behavioural psychologist types looking for reseach material as to why people fail, that that thread is simply gold dust. The contributions by the vendors and the sites content editors are feckin priceless.

True, Jack never really got it.

When I was actively day trading trying to earn a living and developing my trading chops thats the approach I used, basically trading a confluence of hidden divergence trend reentry, with regular divergence trigers on faster timeframes. In recent years I've moved away from that prmarily because I'm more concerned about risk, and I find it impractical to diversify using that approach. I must admit that I still find it immensely satisfying to apply TA to a chart, and pinpoint potential entries and exits, and to take those trades, but I also realise this plays right into a major psychological weakness of wanting to be demonstrate that I'm right. I am in no doubt at all that the satisfaction from those kind of trades comes from being proved right and not from any financial incentive, and thats one of the secondary reasons I no longer like this approach Although I could write a very long, and very boring book about why I dislike that particular style, and why I developed my current approach, I suspect that long term, if I could get the automation right, I'd probably drift away from my random thing back towards attempting to capture more "probable" smaller moves I certainly dont waste too much effort these days trying to achieve that, but its not something Ive totally abandoned either. I supose its like being a recovering alcoholic, always just one drink away from a relapse.

The 95% failure rate is just one of those off the top of the head estimates from industry insiders who get exposed to the data that gives an impression thatt most lose. Analysis of account data indicates its much higher. Personally I think that studying losing traders does provide some useful insight, there's certainly common factors that they tend to share, I dont see a problem with people making themselves aware of these factors The NFA statistics are quite revealing to, but they tell us nothing thats not already known I was genuinely surprised to read in an earlier post which I presume was based on data from Taiwan, that gamblers performed worse than traders. My personal experience is that those with a gambling background are far more likely to do well, most of the guys I work with have those kinds of backgrounds, I think it gives them a massive advantage. Im not sure that studying winning traders is any more useful than studying losing traders (there's less of them, and the smaller sample is going to mean that results are going to be less significant, particularly as they're all going to be taking significantly different approaches. I was recently sent a link to a youtube video of an interview with Tony Robbins (the self help / motivational guy) and an internet marketing guy Frank Kern who sells various information products. I wont provide the link for obvious reasons. Long story short, Robbins has just written a new book about trading and investing, and as part of his research process he interviewed 50 or so successful traders some of these guys he talked to really are doing the business, Im talking about the likes of Paul Tudor Jones etc. Robbins concluded that they all shared common traits (I think he identifies 7) its all really basic stuff like dont take big losses, identify favourable risk:reward opportunities, compound for maximum growth, pay particular attention to transaction costs particularly minimising tax liabilities, diversify risk, understand that losing trades are part of the game etc. Ironically he also identifies and discusses the real reason that these guys are successful, but he fails to explicitly point this out presumably because its not really his area of expertese, but it was cool to see that he at least noticed it. Ive not read the book, and Im not reccommending anyone takes trading or investing advice from a guy who sells recyled NLP tools, but it shows that practically anyone can very quickly spot the obvious commonalities shared by successful traders. The guy who wrote the market wizards books does a more comprehensive job, but comes up with similar conclusions, but strangely enough, doesnt actually spot the real reason why some of these guys are successful, but thats possibly down to his choice of the people he interviews. The point I'm making is that studying profitable traders isnt particularly useful either. Jack Schwager presumably still makes his living writing books and speaking at conferences and events, his study of successful traders didnt transform him into a big swinging dick. Last I saw Tony Robbins still makes his living from books, audio tapes, DVD's and speaking tours. Hanging out with, and even offering professional coaching advice to Paul Tudor Jones for 20 years or so didnt transform him into a BSD either. People might actually get a bit more benefit out of studying THEMSELVES and their OWN trades rather than trying to copy others. Thankfully for the 1% its probably not going happen, because that takes a few minutes work each day for a couple of years, and who wants to do that when you can buy a book for $19.99 ?

they provide an objective quantifiable signal, which as already pointed out makes backtesting far easier than would be possible using a more subjective or discretionary signal They are useful for automation Personally I use them to filter out noise, particularly in faster timeframes, If youre using any kind of evidence based approach, indicators are useful simply because they remove subjectivity. I know people who use them to impose disipline (for example, they wont close a trade until they see a close below a particular moving average) It could also be argued that they provide a psychological crutch, leading to a false belief in their ability to predict (which is ridiculous, but still widely believed) Theyre just convinient in identifying potential setups, which leaves the day free to do something more productive (like slagging off trade 2 win)

Quarterly NFA statistics from US brokerages tend to supports the 95% fail theory. Even if there where absolutely NO consistantly profitable traders, the percentage profitable over a 3 month period just by random chance would be greater than the figures quoted by the NFA. Put it another way, if we replaced retail traders by monkeys throwing darts, the NFA figures would probably be at least 15% better.... and no I am not joking The real figure failing will be much higher than 95% without a doubt A couple of people in the industry who have access to data from actual broker accounts report that the 95% losing stat is an under-estimation. Check out this guys article, he analysed a buch of trading accounts as part of his PhD research Starting to detail forex profitability data | The Essentials of Trading PS. I never know if links are permitted, probably not as its not in a forum owners interest for their members to actually learn anything useful, apologies if any rules transgressed (although you know my apology isnt in the least bit sincere :haha:) PPS.... dont by anything from the above site, he's a vendor, not a trader

It all depends what that confidence is based on. A random series of wins over 30 days returning at least 10 times what the worlds best traders might achieve over 300 days on a good year wouldnt inspire me with much confidence, but hey thats just me. My random robots have been hitting those kinds of winning (and losing) streaks since 2002 (the cool thing of course is I understand why it happens :rofl:) This place really has died hasnt it ? Serves them right for banning oily

Just checked 'big mikes' and I'm pleased to say that there's at least one judge in the USA with a functioning brain, and the case has been kicked out of court. No idea what happened regarding costs, but in my opinion AMP FUTURES actions where clearly vexacious. I sincerely hope their crass stupidity comes back and bites them on the arse. Generally speaking, I like brokers, and I despise forum owners, but in this case I'll make an exception. Amp Futures what a bunch of tossers :crap: "Big Mike" balls of brass and a prince amongst forum owners Can you imagine any other forum owner doing similar ? I cant