TRADEZILLA

I think it can all be summed up in 2 answers, either the trader has not found a reliable edge that is comprehensive or their psychology/discipline does not allow them to give their edge a chance to kick in. I believe the biggest delusion many traders have is that they believe the market allows for a big edge. Any edge that can be found will be slight, but its the trust in this slight edge that will do wonders for your results. However, your edge needs to be comprehensive and not just entries, meaning good probability in both entries and exits, R/R, risk management and etc..

I think we're on the same page on that one for sure.. I don't believe that is possible and the burden of proof falls upon anyone claiming otherwise. I have never heard of it done before and I don't even think a good sensible theory is possible. I would love for someone to prove me otherwise, and if they make such a claim, they need to make a good argument for it and not just say it is so..

You're right that I didn't read the threads in the middle, I only answered the original/1'st post and that was my intention and my post is consistent with both the intent and the subject of the thread so I am familar with the topic of the thread.. IT is you who has changed the subject but that's fine and I don't find it inappropriate. IMHO from your question, I believe you cannot in a meaningful way if you cannot increase your odds without just random luck. The reason I believe that is because have you ever seen a consistently profitable gambler that has no edge? I think the answer to that one is easy..

"The financail markets are no different. An academic will write a paper saying he could not see any pattern in the test he did, so therefore markets are random. Just because a person cannot see the non-randomness does not mean it doesn't exist. It merely comes down to how you analyse price behaviour. " Also, do not overestimate the academics when it comes to trading. Almost always, they know less than you believe they do. Not every thesis is absolute just because they have a PHD. Often for every academic argument that sounds good, there is an opposing argument equally convincing especially when it comes to something as obscure as trading.

I think we have a different premise. You assume the market is 100% random and I assume the market is less than 100% random. If the market is 100% random, it will not be possible for 5% of traders to be consistently profitable because they should not experience a different outcome than others over the long run, and yet, 5% of traders beat the odds repeatedly and I know for certain they exist. If your assumption is correct, how did they get an edge to be consistently profitable? In addition, you can even be profitable with a 50% success rate if your wins are bigger than your losses, but that also requires an edge. There are consistently profitable traders from both scalping and buy and hold methods so an edge does exist in the market in more ways than one.

By getting an edge inside the random movements like a gambler counting cards to change the odds. Though this is difficult to put together when starting out like someone lost in a jungle for the 1'st time trying to figure out how to survive and many just as lost trying to help out, it is possible.. the market has both a random and non-random aspect to it and it is possible to distinguish the 2 with a greater than 50% probability. Even a 3-5% edge can make a big difference in the total results.. For example, casinos have a very small edge, yet they are incredibly profitable with that small edge. Trading is abit more complicated than that but if you can get an equivalent edge of 3-5%, the rest is up to you(psychology/discipline) to give your edge a chance to kick in.

Even if it is random, it doesn't mean you can't capitalize from it. When you play blackjack, your wins and losses are random.. as a matter of fact, a little worse than random, but what happens if you learn how to count cards? You have put the random outcome in your favor. The same concept can be applied to the market. If you can manage to get an edge even a small one and trade in a way that allows your edge to kick in, the randomness of the market will favor your outcome, and though this is very possible, its much easier said than done because many aspects have to come together for this to happen; discipline, risk management and etc... and given that your edge is solid in various market conditions.

I have yet to see an automated/mechanical method based on pattern set ups (including market delta) without a macro thesis, that is effective as more than a scalping technique. The reason holding is so hard for many is because they need to have a reason to hold other than just hoping for the trade to keep rolling to the next level.

DAVT, I have only seen one trader in my lifetime that did not have a losing day in a 2-3 month period, but far from not having a losing trade and def far from to the tick. In my own trading experience, I find S/R to be a zone rather than an exact line. In addition, price responds to S/R differently in different types market conditions. Since your method is so precise, can you give us a general thesis or premise of your method? It does not have to be detailed but I want to know the basic theory behind it. Do you rely on marketdelta for "tick accuracy" what's your risk parameter and how do you determine profit target? Do you enter 1 tick above below your S/R and etc?

My apologies, I got it after reading more.. actually I think that method will probably perform as well as any out there and probably better than many due to the locations chosen to initiate when it comes to forex. I think my edge is bigger on ES but never had a good handle on forex.. wish I did..

All I see is levels. How do you know which side of the level have the better odds? I have not read through every post but from the earlier posts, it appears that the thesis is that there are many simple ways to get your levels to trade off, but which side should I be trading from? Is that discretional?

The RumpledOne, In many ways I agree with your thesis in the way you approach trading as long as you have a definable edge in your directional bias. Do you have one? I'd like to hear it. Thx, TZ

Anyone that has an edge that is real, the more you play the better your odds given that you're trading the way you're supposed to. The best theory that applies to the market is game theory because this is ultimately gambling. A gambler that counts cards at the blackjack table, the more he plays, the more his edge kicks in. If he keeps losing, its because he's not counting the cards right. The same applies to trading. If you're doing everything right and you're not consistently profitable on a weekly/monthly basis, then your edge is not real but imagined, or you're not adhering to the way you're supposed to trade. The macro thesis of your method needs to be sound, then you just need a way to capture the edge that your thesis assumes in the micro details on how you're supposed to trade.

BTW-I know the exact TF scalping method as it was revealed to me in detail and can readily use it if I choose, but its not how I prefer to trade and does not resonate with me as much as my own method though its a proven method in my eyes. I will not share it out of respect for the trader that shared it with me, but its possible that he can choose to do so down the road..

[ame=http://www.youtube.com/watch?v=xV8UC7HsjnY]LL Cool J - I'm Bad - YouTube[/ame] I'm down with anyone up to the challenge..

David, Although your claim is highly improbable (to the tick), I'm willing to give you the benefit of the doubt. The reason is because I actually know a trader that has a scalping method on the TF that is profitable every single day (no joke) without a losing day and I saw everything firsthand including PNL. I've also heard of a method using footprints that can scalp to a few ticks accurate. In addition, I've seen some incredible methods that allows a trader to hold for longer runs with very good probability. Currently, I trade a method that tells me when to hold for bigger runs and when to aim smaller and thus far, I have not met another trader that can match my performance size for size aside from that scalper, which never has a losing day. I cannot claim the same but my stats are that I will lose 1day/week on average. I know how to scalp and see all the set ups but will pass it up 99% of the time. I imagine that if I took them, my performance will be even better, but its not how I trade currently, its how I traded in the past. I'm also looking for a few profitable traders to trade with and interact with during the market as I've put up a previous post. I do not reveal my method but if you can match my performance in real time, I'm willing to exchange methodology. I'm willing to give away my methodology that is consistently profitable if you can match or beat my performance in real time, not previous PNL. I trade the ES and will call out all my trades in advance both entries and exits. If you're willing to do the same, let's have some healthy competition.. My method has no indicators at all but the method is very clear. Anyone game? PM me if you are. TZ

I don't think its easy by any means because there are many variables that have to come together.. First, you have to have a "real" edge that puts you on the right side of the trade... Then you have to have a good sense of levels to put you into a trade.. Then you have to survive the stop loss fluctuation before your anticipated move materialize, which is the most dangerous part of the trade.. This fluctuation has a 2 pt random aspect to it that will mess with your head.. Then when you miss the trade because you're either too slow or wanted a better entry location, you risk the temptation to counter trade the other direction against your better judgement... Its not easy at all.. In addition, the market will always give you reasons to trade both sides.. Today was a good day for me but it could have easily gone the other way even when you get the bias right...

I think Siuya has it right in that my method is not systematic but more of a "weighing process" though there are some rules around it.. I can explain it simply but the application will require multiple charts and they come in many combinations.. I'll admit the method has its weaknesses by allowing a subjective/psychological component to enter but I believe it will be there regardless.. Its the method I've settled into to chase the odds for better or for worse.. I see the odds as being dynamic and real time and never absolute. That's why I don't believe in a systematic approach. The reason I believe that is because if there is a systematic method that exists that can capture the market inefficiencies consistently, to profit consistently, that's what the big institutions will focus their considerable resources on. Yet, their most profitable automated trading comes from front running big orders to scalp 1-2 ticks by computer speed rather than high science methodology.. This tells me that if they can't do it, I doubt you and I will be the genius to that road... However, I do know there are consistently profitable traders out there.. They can't be more disciplined than a computer.. so although discipline will prevent you from blowing out, its not likely to be the secret of their consistent trading profits.. I think its because they found a way to gain the odds from themselves, which means there has to be some subjective analysis that exists.. Its not the magic methodology, which is only a roadmap, its likely to be their experience that's giving them the edge.. In other words, its how they can put it all together that's giving them the edge.. so that's the path I seek.. I don't use indicators because I believe it will handicap a trader's goal to grow in that experience.. I play the odds by combining data.. Also, I've come to a late realization that a trade is not worth taking unless it has potential range. The reason I believe that is because every time you place a trade, you risk your stop. My stop is 2 pts and that range can often be random unless you timed it perfectly with both location and confirmation.. I believe a 2 pt stop for a 2pt profit potential won't turn you into a consistently profitable trader.. The old adage that you have to cut your losses early and let your profits ride is repeated by all the good traders for a reason and I'm finally a firm believer and looking at my data is the best way I've found to do it for me, which is reading the market.. I'm not saying I'm a master at it but that's the direction I look to grow and my quest for the holy grail.. If there is a magic indicator or a perfect method out there, believe me, it can be automated.. Yet, there are so many traders out there that think "they" are amongst the few elite traders that have a closely guarded methodology that always put the odds in their favor.. I just don't buy that.. The reason I don't believe that is because casinos only have a 2-3% edge, yet they clean up.. Why can't we with our great methodology have more than 2-3% edge.. The reason is because what you think is an edge at all times is only an edge in certain conditions.. I believe the key is to recognize the conditions and it comes from reading price and reading the market.. Its how you put it together.. Now I don't want to come across as a better trader than I am.. I make plenty of mistake and show many of the same weaknesses of not holding and reading it wrong and etc.. but my results improved after I moved away from a systematic method.. BTW-I'm getting a lot of interest in the skype room now and you all sound great.. I'll just need to talk to my friend and we might re-consider the idea..

DOD, I believe a good trader will have to have a combination method, both anticipatory and reactionary to be flexible because there is no absolute in the market. For example, if we expect a level to hold and it doesn't, good traders are often open to the idea to reverse directions.. When the market reaches a level I deem significant, I will read price, and not have a order sitting there assuming the level will hold.. It has to show me.. I see the market as in a constant state of decision and indecision and I don't pretend to know I'm certain about the final decision though I do have my bias, but in short, I try to trade in the direction of the final decision, whichever side it comes out of.. This is both anticipatory and reactionary.. TZ

WRB, Although I don't mind sharing at all, it was never meant to be a class.... I think trading with others does give energy and focus to the market which is good.. but I don't want to type and I don't want to read when I trade.. The value is not in the opinion of other traders though I do believe trading with other good traders will sharpen your own skills by default... I believe good traders will not let others sway them from what they see... I trade with another trader that is very good.. we always trade what we see, not what the other person see unless we see what the other sees and agree..

WRB, I hear you, but this is not meant to be a major production.. I think my method is simple, but others may disagree.. It doesn't come from a chart alone, it comes from the relationship of the data and price action, and then there is also a time element and this can come in many dif combinations.. There is no exact formula.. Its a "weighing" of the "micro" set up in combination with the macro theme.. I form my own R/R probability by looking at a combination of data,.. Its not going to be perfect though.. For example: today, I got mixed data so I couldn't hold my trades.. believe it or not, I shorted the opening, bot near the bottom at 28, and shorted 38 from the same data and yet couldn't hold from the same data.. All I look to do is to do is put myself in a position to get lucky...

I disagree.. even with an edge, trading is ultimately still gambling.. The dif is, you can put the odds in your favor, that's all.. The edge is ocfourse never absolute.. what gives an edge in one setting will not give an edge in another setting.. identifying the setting is also part of the edge, but there are many dif ways to do it.. A good method needs to be versatile enough to survive dif market conditions.. Took a few trades in the morning and not trading till after the FOMC now...

The book is worth the read.. I think the concepts are excellent, though ES is probably not the easist place to apply the method...

WRB, That's the intent but our conclusion is that this is easier said than done thru this channel.. Its only working now because the other trader and I understand each other.. The screening process may become exhausting and potentially costly.. and I include the time trading together as part of the screening process... For example, one of the participants trades VP, as do and yet we trade very differntly, which is fine...and I don't doubt he is a proficient trader, YET, he asked me an endless amount of questions the entire trading day from the very opening to the last 20 minutes of the trading day on my market read.. Reading the market cannot be explained in a "bottom line" answer because its dynamic.. Reading price is not just reading the price chart, its the integration of all data you deem relevant, meaning its how you put it together in real time that helps you form your probabilities of each set up the market presents, and this is not easily explained not that I didn't try so the conversation just went on and on.. he said he didn't ask me to give him detailed answers and yet, the follow up questions never stopped and this became very exhausting... I'll do my best to tell you how I trade. I basically - form a bias - look for levels to lean on - read price I believe those are the only HIGH RELEVANCE factors that will put the odds on my side and allow me to manage risk. After all, trading is nothing more than GAMBLING but we all do our best to put the odds in our favor.. I like VP/ACD but I'm not a purist.. along with other data such as the dollar index/tick/add/vold/volume and etc.. and additional data if the settings warrants... The way I trade is not top secret.. I don't believe a holy grail methodolgy exists and that's why I don't believe in automated trading or a "scientific method" in trading, which the other trader believed in... I think he's a great guy, we just disagree.. I believe the closest thing to the holy grail you'll ever get is how you put the data together and that is not easily explained in a KISS way.. We all want KISS and my method is the closest thing I've been able to accomplish it.. However, if a holy grail does exist, it can only come with reading price in context with reading the market with your methodology ONLY AS A ROAD MAP, and its not going to be perfect, just probabilities.... Its like playing any sport where your decisions are dynamic in real time, the manual does not exist except at the very basic level... In summary, that was my conversation today and it was long and exhausting.. Agree to disagree........

Just an update, we decided not to continue with the audio skype room with other traders since we all trade different methodologies and there will inevitably be many methodology questions that can become very distracting. This experience turned out to be very exhausting for me.. I basically spent the entire day in dialogue answering a bombardment of questions about my methodology and how I formed my market bias, which I understand.. However, although my methodology is very simple, how I integrate the data is not easily explained in simple one sentence answers.. This experience confirms what I have heard before that audio rooms can become more of a distraction and generally only add value when you trade with other traders that share a similar approach, otherwise it only has a social value and may be a hinderance to better trading..