I suppose it comes down to what makes a good trader ? A good trader must be disciplined, stick to the rules …blah blah blah. Funny that. I knew a trader that worked for a merchant bank, left a well paid job and decided to set himself up on his own. Guess what happened - the markets wiped him out. He told me his sorry tale and I looked at him and thought quiet thoughts. I heard of a GP (MD for the Americans) who has not told his wife and kids he s 600k GBP in debt to a spreadbetting firm. He will have to sell his home and in the current market, he wont get much. There was someone in this forum on a $100k salaried job and was looking to leave to trade so he could travel and live the glamorous life . All I have to say to these and those of this ilk, you have no chance. good traders are not people who have managed through public approval have had rewards of high status thrust upon them, or by having ticked all the boxes and surged to head companies, or having been lucky from inherited wealth, or have praise bestowed upon them of how good and great they are - nope, good traders are mostly anonymous and at the very most perhaps dreamt of rewards but beneath that thin facade of want was another compelling rationale, a drive, a resolve to take on the challenge of the markets - so if you’re one of the beautiful people, the all flying all star hero, stick to what your good at as this is no place for the shallow and vain.
Are you saying that educated people have no drive, that they didn’t push to excel in their area of expertise?
No, I don’t think it is drive/desire alone that makes a trader…
I believe that the educated get destroyed by the markets because they act, learn, and conform to the desires of “teachers” who also think, act, and do every thing the same as all the other sheeple.
Not that the educated cannot think out side of the box, it is just harder for them to break away from rote and listen to their own thoughts.
Where as the under educated have nothing else to think about because we (yes I said we) have nothing else to think about save for our own thoughts giving us an advantage in the markets.
Having said that I leave all those who are willing to delete all the indicators from their charts that are tuning their perception to the mass psychology of the sheeple (that would be all the indicators) from their charts with this piece of wisdom:
That which is moving up is going up and that which is coming down is going down.
That which moves does not do so in a line but a wiggle so catch the market as it jiggles.
That which is moving up does not greatly retrace; turn your mind around stay away from outer space.
When ever ye are sitting in profit, 5 pips more not stopped out by lock it.
If ye must exit for less than a profit, offer to exit for a smaller loss don’t out and cough it.
Not that the educated cannot think out side of the box, it is just harder for them to break away from rote and listen to their own thoughts -
I agree, and with a couple of degrees under my belt it took a long time for me personally to realise that I had been for a better word duped by my environment and surroundings and this comment leads and opens a whole can of worms in terms of lifetime conditioning, from cradle to grave. In a nutshell, be a good citizen, learn conventional wisdom, pay your taxes, and society will ensure you end impoverished, intellectually and financially.
I would appreciate a clearer explaination on your comment of indicators
Fibonacci Retracements: Of course price is going to retrace between 1 and 100% before going up (if it is going up). The lines them selves are of ZERO, ZIP, NO SIGNIFICANCE. You might as well draw random lines and trade bounces off those.
Oscillators: As soon as the oscillators turn up guess what, you have weak bearish candles and/or bullish candles so what is the point?
Divergence: Again you are wasting your time reading oscillators that are based on price when you should be looking at what price its self is doing.
What about over bought and over sold? There is no such thing! Price can stay over bought or over sold for weeks on end! If price is going up then why are you looking to go short?
How about moving averages? They are just candles with less information!
Want to put a 12 MA on a 5 minute chart? Why, a 60 minute chart (12 * 5) will give you more information!
Shall we continue?
Go ahead and put: trend lines, channels, pitchforks, & fractals on your charts, but be honest with your self.
When you think you see a trade setup then delete the indicator and ask your self if it is price or the indicator doing the indicating.
Either you find that you have been trading with horse blinders on your whole trading life and take them off or you leave them on and try and figure out which indicator setting and combinations will work tomorrow.
What about chart formations / candle patterns? In trading, 1 + x does not always = 2; what a pattern is telling you is based on how the pattern is currently responding on the chart. Small patterns (1 to 3 bars) are best because you can adapt to alternate price reactions from the patterns faster and make adjustments to your strategy.
When some one is trading a pattern with a set strategy you are going to pick up on it and possibly place your entry orders near, on, or around their stops.
Discretionary traders are few and far between and they are the only traders who are not susceptible to counter attack.
I will tell you right now that if you are not a discretionary trader then your best chance is a rock solid money management where you leave your stops alone and take profit incrementally to reduce risk.
You might exit at 5p, 10p, and then hold the 3rd for a ride. If you have a 20p SL and you exit your first trade at 5p then your risk is reduced to 13.3 minus 1.6 or 11.7p. If you then take profit at 10p then your risk falls to 6.6 minus 5 or 1.6 pips. If you make 30 pips on the 3rd then you make 15 pips total compared to a risk between 1.6 and 11.7 pips or ~6.7 pips risk for >2 to 1 reward! Had you made 60 pips on your third then your profit would be 25 pips giving you 3.7 to 1 R/R.
Now tell me how many of you are hitting those ratios…be honest!
If you are a discretionary trader then I would recommend doing the opposite; scale into your trades and exit all at once.
With greater skill comes the ability to maneuver and reduce risk by the skillful application of multiple orders; some thing that would be dangerous
for the every day trader.
I have ever only met one trader that trades on candles alone - but he has an ability I cant match. He has a capacity to look at a series of preceding candles and judge the direction of movement about to happen. Proved it to me 27 times on the 3 minute chart. i was counting and amazed but he did not divulge to me what he was looking at other than a lifetime in the business and made the comment that he could not graft his experiences onto me. But your comment about being a discretionary trader has just added some impetus to my trading technique - best regards