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Trading Tech and Tools
1

This was on another forum. It sounds good.

Quote:
The top tenets of mechanical trading

  1. If you cannot quickly recite the daily, weekly and monthly support & resistance values for any pair you’re planning to trade with an EA, you shouldn’t be trading.

  2. If you can’t manually calculate the currency exchange conversion values for any pair you’re planning to trade with an EA, you shouldn’t be trading.

  3. If you cannot read and understand the code of an EA you’re planning to trade with, you shouldn’t be trading with it.

  4. If you haven’t learned to successfully trade manually for at least a year or two, you shouldn’t be mechanically trading trading with an EA.

  5. 99% of all EA’s are destined to fail. Some sooner, some later.

  6. Technical indicators don’t work. They’re a big fib to appease retail traders.

  7. Knowledge of only price action, a few key patterns, and support/resistance is necessary to trade.

  8. If you cannot quickly name the 10 key news events and their dates/times during the upcoming month, you shouldn’t be trading.

  9. You’re worst enemy in trading is your broker.

  10. Broker Pip spreads are only a portion of your trade cost. You are regularly gouged by slippage costs. If your EA has a default slippage value of 3, guess what your typical slippage will be? If it’s set to 4, guess what your typical slippage will be?

  11. The only EA’s that will be profitable are the ones that are cleverly designed to out-fox the brokers and other insideous market forces by resorting to tricks, gimmicks, and smoke & mirrors tactics.

  12. Any EA’s freely available publicly will lose your trading account.

  13. 95% of “traders” on public forums are as uneducated as you are about trading. Be wary of free advice.

  14. The average trader who is persistent and lucky enough to eventually become a profitable trader regularly will first lose $20K - $30K in the markets and spend another $10K on books, lessons, eBooks, subscriptions and software. The rest will perish somewhere along that path.

  15. The amount of time you are “exposed” in the market through active trading, either manually or mechanically, is inversely proportional to your profitability success rate.

  16. Two high probability trades yielding 15 pips each and using a lot size of 50 is all you need each week.

  17. Praying to God isn’t going to influence your trades one way or another. God isn’t listening and God doesn’t care. Neither does the market.

  18. Most new traders are over-leveraged, under-capitalized, assume far too much risk and have absurd profitability expectations. A lot of new traders are actually desperate to be profitable in lieu of working a regular job or some other personal financial issues, and therefore expose themselves to being wiped out early in their trading.

  19. A 5% monthly return on trading is in fact a very generous and profitable ROI to be proud of.

  20. The data feed of a broker demo account is actually more representative of true market price action than a live account feed because it isn’t manipulated.

  21. Backtesting and forward testing of EA’s is virtually useless for purposes other than debugging code logic. The price action data feed of a live account is manipulated by the broker. Brokers use computer monitored algorithms to randomly squash the amplitude of true price volatility to fake out EA indicators and trade logic.

  22. Your trading activities are absolutely and continuously on the radar of your broker, and traders that are too profitable are unknowingly subject to more stringent price manipulation techniques.

  23. The only EA trading methodologies that have a lick and a promise of succeeding are based on creative straddle, hedging or countertrend order placement techniques. All others will eventually fail.

  24. The most obvious and proven successful mechancal trading methods such as scalping are prohibited by brokers.

  25. In most cases, news induced tower bars are nothing more than volatility responses to trader greed and have nothing to due with any real economic impact of the news on the underlying currencies. The currency price usually settles down and returns to it’s mean value after the news.

  26. The majority of industry gurus that offer trading books, methods and seminars don’t even trade and make their money selling you their wares because the risk/reward ratio is much better than actually trading.

2

Packy, I want to repeat my suggestion that I posted on another thread, I think that used auto sales might be your calling. I have only been back for 3 days and allready you piss me off. I think that it is not only me, but other members too. Why are you so negative? All your suggestions are in the negative. Go puke your poison on “that other forum”.

Why are you here anyway??

3

10 or 25 tenets?

4

Did you read the post?

5

I read it again and again and again and I have no problem with what is written, but the manner in which it is written.

6

I think it’s a cut & paste list written by someone else, difficult to be offended by a list.

[B]13. 95% of “traders” on public forums are as uneducated as you are about trading. Be wary of free advice.[/B]

I don’t know where this figure comes from but I would agree that the percentage is high that’s obvious.

The rest is a strange mish mash of robot stuff that doesn’t seem very interesting but hey as the man says “be wary of free advice”. :wink:

7

Ok, I’ll bite…

  1. If you cannot quickly recite the daily, weekly and monthly support & resistance values for any pair you’re planning to trade with an EA, you shouldn’t be trading.

I can’t even tell you the levels that my trading instruments are trading at, let alone the support and resistance levels. I seem to do ok…

  1. If you can’t manually calculate the currency exchange conversion values for any pair you’re planning to trade with an EA, you shouldn’t be trading.

I don’t even know what a currency exchange conversion value is. I seem to do ok without it though…

  1. If you cannot read and understand the code of an EA you’re planning to trade with, you shouldn’t be trading with it.

I can read and understand the code of an EA, but most of the time I don’t bother as it does not change the performance of the EA.

  1. If you haven’t learned to successfully trade manually for at least a year or two, you shouldn’t be mechanically trading trading with an EA.

I think I traded manually for about 2 weeks before I realised how limited it is compared to automated trading. Still, I seem to be doing ok…

  1. 99% of all EA’s are destined to fail. Some sooner, some later.

Same can be said of manual systems…and the percentage is probably closer to 95%.

  1. Technical indicators don’t work. They’re a big fib to appease retail traders.

Some are more effective than others. There are well over 1000 indicators in the market…have you tested all of them. Most indicators are a mathematical representation of Price Action. Are you saying price action is a lie as well?

  1. Knowledge of only price action, a few key patterns, and support/resistance is necessary to trade.

Aahhh, a naked trader. Different strokes, mate.

  1. If you cannot quickly name the 10 key news events and their dates/times during the upcoming month, you shouldn’t be trading.

Ummm, NFP comes to mind…what else is there? I still seem to do ok though…

  1. You’re worst enemy in trading is your broker.

Actually, I used to be my own worst enemy until I gave up manual trading. Blaming your broker is a victim mentality…but you are in good company. Most losers(95%) think along similar lines. I am probably still my worst enemy, but at least I am getting to know my enemy.

  1. Broker Pip spreads are only a portion of your trade cost. You are regularly gouged by slippage costs. If your EA has a default slippage value of 3, guess what your typical slippage will be? If it’s set to 4, guess what your typical slippage will be?

This is true. You need to be aware of slippage. Know what causes it and how to reduce it, but moaning about it will not make you rich.

  1. The only EA’s that will be profitable are the ones that are cleverly designed to out-fox the brokers and other insideous market forces by resorting to tricks, gimmicks, and smoke & mirrors tactics.

Who cares what the EA has to do to be profitable, as long as it is.

  1. Any EA’s freely available publicly will lose your trading account.

Same can be said of manual systems.

  1. 95% of “traders” on public forums are as uneducated as you are about trading. Be wary of free advice.

After reading this post, I am convinced you are correct.

  1. The average trader who is persistent and lucky enough to eventually become a profitable trader regularly will first lose $20K - $30K in the markets and spend another $10K on books, lessons, eBooks, subscriptions and software. The rest will perish somewhere along that path.

I must be above-average…I only blew about $15k before I started making a profit.

  1. The amount of time you are “exposed” in the market through active trading, either manually or mechanically, is inversely proportional to your profitability success rate.

If you don’t trade at all, you would be in the top 6% of traders.

  1. Two high probability trades yielding 15 pips each and using a lot size of 50 is all you need each week.

No comment

  1. Praying to God isn’t going to influence your trades one way or another. God isn’t listening and God doesn’t care. Neither does the market.

No comment

  1. Most new traders are over-leveraged, under-capitalized, assume far too much risk and have absurd profitability expectations. A lot of new traders are actually desperate to be profitable in lieu of working a regular job or some other personal financial issues, and therefore expose themselves to being wiped out early in their trading.

Probably true…but the market has a beautiful way of setting them straight.

  1. A 5% monthly return on trading is in fact a very generous and profitable ROI to be proud of.

Sure, in fact anything positive in a month is a plus for me.

  1. The data feed of a broker demo account is actually more representative of true market price action than a live account feed because it isn’t manipulated.

Do you know anything about retail FX trading? There is no such thing as true market price action. Go read up on what an OTC market is about. The only true price action you are going to find is the one in front of you.

  1. Backtesting and forward testing of EA’s is virtually useless for purposes other than debugging code logic. The price action data feed of a live account is manipulated by the broker. Brokers use computer monitored algorithms to randomly squash the amplitude of true price volatility to fake out EA indicators and trade logic.

Backtesting has its uses. Unfortunately most people do not understand how to do it properly. This is especially true of people that say backtesting is useless.

As for brokers manipulating prices, once again, you need to get with a decent broker.

  1. Your trading activities are absolutely and continuously on the radar of your broker, and traders that are too profitable are unknowingly subject to more stringent price manipulation techniques.

Already answered, I believe.

  1. The only EA trading methodologies that have a lick and a promise of succeeding are based on creative straddle, hedging or countertrend order placement techniques. All others will eventually fail.

So are you really saying that trend trading will eventually fail? I would rate this as a pretty broad and over-confident statement. Perhaps you should refer to Tenet no 13.

  1. The most obvious and proven successful mechancal trading methods such as scalping are prohibited by brokers.

The only true part of this statment is that scalping is a good method. Most brokers permit it. Once again, refer to Tenet no 13.

  1. In most cases, news induced tower bars are nothing more than volatility responses to trader greed and have nothing to due with any real economic impact of the news on the underlying currencies. The currency price usually settles down and returns to it’s mean value after the news.

Most of the times, those tower bars you see at news time, is not greed, but lack of liquidity. Most players withdraw from the market around news time thereby limiting liquidity. Much of the time, those tower bars represent the spread. I saw it last night with my broker when the US market closed and the spread on the EURCHF hit almost 30 pips for about a minute.

  1. The majority of industry gurus that offer trading books, methods and seminars don’t even trade and make their money selling you their wares because the risk/reward ratio is much better than actually trading.

Its true that the risk/reward relationship is better in educating…so what? I would dispute the fact that most of these guru’s don’t trade. There are many well respected traders that turn to educating in their spare time. But, feel free to ignore their information…but again, have a look at Tenet 13.