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Warning - lengthy ramblings
I've been reading this list with some fascination lately. A few things
that have been mentioned are incredibly accurate. Others...well...
Timothy Morge wrote about his experience in school and how no prof.
would ever admit that TA was possible. I had the same experience. The
sum total of information about trading that I got from school was about
5 -7 mins of lecture time where the prof said that there were supposedly
some "head and shoulders" formations but it was more like reading tea
leaves. That's it. I think that set me back about a decade.
Since then, I've had everyone I know tell me that TA won't work.
Friends, family, the works. I wasn't completely sure myself, since I've
never known anyone that trades for a living. I've still never met an
actual trader in the flesh. I had hints though. After all, I had an
early DOS version of Metastock - a market had to exist for that
product. I knew there were traders at exchanges. Essentially though, I
had only my belief that people could make a living at this away from the
floor. The trading floor was impossible for me to get to. Until I read
Jack Schwager's "Market Wizards" I could only believe that there were
people doing exactly what I was committed to doing..
I mention this because I never thought that anyone would have to defend
TA on a list that features as it's one commonality, a product that is
designed for TA, a product whose entire function is system design and
testing (and little else). I mean, it's not turning the lights on here
or producing graphic art. Obviously everyone else's experience is
similar to mine - constant defence. At least friends and family aren't
telling me that it can't be done any more. I had someone else tell me
recently that trading can't be done. (after the obligatory - Oh, you're
a stockbroker?) I asked him what he did. He said that he was a
lawyer. I said that's something that can't be done. It made as much
sense.
I just wonder if the 6th step in the maturity of a trader is to outgrow
TS, indicators, system trading etc. Am I the only one that finds
discussions of this nature on this list to be bizzare?
Something Mark Brown said recently seemed to be a confirmation of what I
believe to be true when it comes to trading. He spoke of being able to
trade successfully under a number of conditions or constraints.
Something like "I could trade with a stochastic...(etc)". It has always
been my belief that a skilled trader could make the simplest system work
and that a novice could lose money using the Holy Grail. I don't know
Mark Brown, I have no basis for my opinion other than what I've read
here, but I believe that he could do all the things that he said. I
don't doubt him and don't consider it to be BS. If this is
argumentative to you, then just substitute "someone" for "Mark Brown".
The whole point is that success is profitability. He probably doesn't
use just a stochastic because there are marginal gains to be made from
some other method. However he trades, it is not the indicator that is
important. It is attitude and money management and capitalization and
time frame and above all, comfort with whatever tool(s) you use.
Allan Kaminsky referred to himself as being from geekdom or some such
remark. ( I don't know about the rest of you, but it's 1:30 am and I'm
writing email to people I don't know about TA - who does he think *we*
are?) All that means to me is that he won't be comfortable with a
method (I hate to use the word system, even if it means systematic
approach - as opposed to chaotic approach) that is too simple. Others
don't want complexity. Whatever. The Best System Ever becomes The
Worst System Ever if you aren't comfortable and can't trade it.
As far as indicators go then, if you accept that it is possible to make
money with a stochastic, then everything else is just improving those
returns. Either that, or you're looking for a way to predict an
unpredictable entity. The best you'll ever get is an improvement on the
probabilities. If you are looking to factor in everything that the
market can throw at you, and condense it into two lines crossing that
predict , with certainty, a market movement, then GOOD LUCK. Successful
trading to me simply means mastery of probabilities where mastery =
profitability.
One thing that's been discussed that I am left to wonder about is
discretionary trading. How does one go about developing discretion, or
are you born with it? I can't think of any other way than to start with
the basics - a simle profitable system or method, traded with dicipline
until discretion develops. At that time, discretion should allow for
greater profitability, but I would hesitate to start there. I've poured
heart and soul into this for 11 yrs. and still don't trust my
discretion. I seem to have an uncanny knack for the right discretion at
the wrong time, or is it the other way around? Have I overlooked a
source? Let me know.
This is just my $0.02 (okay, $0.10). Hope you weren't bored.
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