Where I got my slip in the
technicals was actually after starting my role as trader from risk
management. Obviously as risk manager I got a good idea of what not to
do in terms of money management. I developed this nice good system
properly tested it very simple idea and started trading it. Sitting and
watching for the signal and then having the discipline to stay with a
fairly rigid set of rules was not that easy. The funny thing was that I
would make no money but if I used the data after about 3 months and ran
it through my system it showed me trades I never even picked up during
watching the market live. The actual trades look different when looking
back and actually experiencing the trade happening. Also in testing you
would see a level you entered while when you are live the spread might
be larger or the market could have moved so fast that you only got an
entry 10-15 pips away from your signal and then its hard to still take
the trade because LOOK at the slippage. Rather wait for the next one.
The next one is a loss but thats OK I'll take the next one but the next
one the entry has moved away already but last time it moved it was good
for another 50 pips so take it even if it is 15 pips further than the
ideal entry, then it becomes a loss and you start wondering why this
nicely tested system is failing live...
At the time I started trading live I had a lazy friend who also thought this is the way to make a living - the market is always there so sleep when you want trade when you want etc etc etc. So he resigned as IT programmer and started with his own account. He had this idea that the correlations should hold between eur and jpy so he got some DDE feeds to excel that showed the rate where the cross should be and also the rate where the cross is quoted by the broker. If the broker is off by more than 10 pips he would take the trade in that direction - he worked on hourly closes and initially he doubled his account using huge margin within 3 months. What he didn't realise was that the broker only lagged a little bit and the trend was up so he was actually buying into the uptrend and therefore being successful - NOT because he was exploiting an edge. When the trend changed to down he was blissfully still buying up and started to lose. He lost almost everything. Then the fun and games started testing this that and the other because there MUST be some hidden formula or something that just needs discovering.
I am not ashamed to mention that I was part of this all the way. It was a great learning experience and we developed some amazing theories that proved itself for a period of time and then failed. I decided to rather go the long term route and he continued on his route. He eventually had to first borrow money to fund his "research" then when the borrowers wanted their money back he had to start working again. To this day he is still working on getting the "hidden formula". I have had a look at some of his theories and if he used his research at a University he would probably be given a PhD! He doesn't want to do that because then someone else will use his "secret". I am trying to explain to him that for it to be a "secret" he must make money from it. The reply? If maybe I could stake him some so he can test it...There buddy go and test on the DEMO account..."NO! the demo does not use the same rates as live trading I need real cash to trade"...and so on and so forth. It is an addiction not the trading itself but the unstopping search for the hidden layer in the market.
I guess it all boils down to what you believe about the market...is it purely random or is there some hidden structure? If you believe there is some hidden structure you will probably spend the rest of your life trying to find it. With success? You decide. It seems according to SeekingLight your chance of finding it using technicals trendlines etc....is about the same as winning the lottery consistently.
At the time I started trading live I had a lazy friend who also thought this is the way to make a living - the market is always there so sleep when you want trade when you want etc etc etc. So he resigned as IT programmer and started with his own account. He had this idea that the correlations should hold between eur and jpy so he got some DDE feeds to excel that showed the rate where the cross should be and also the rate where the cross is quoted by the broker. If the broker is off by more than 10 pips he would take the trade in that direction - he worked on hourly closes and initially he doubled his account using huge margin within 3 months. What he didn't realise was that the broker only lagged a little bit and the trend was up so he was actually buying into the uptrend and therefore being successful - NOT because he was exploiting an edge. When the trend changed to down he was blissfully still buying up and started to lose. He lost almost everything. Then the fun and games started testing this that and the other because there MUST be some hidden formula or something that just needs discovering.
I am not ashamed to mention that I was part of this all the way. It was a great learning experience and we developed some amazing theories that proved itself for a period of time and then failed. I decided to rather go the long term route and he continued on his route. He eventually had to first borrow money to fund his "research" then when the borrowers wanted their money back he had to start working again. To this day he is still working on getting the "hidden formula". I have had a look at some of his theories and if he used his research at a University he would probably be given a PhD! He doesn't want to do that because then someone else will use his "secret". I am trying to explain to him that for it to be a "secret" he must make money from it. The reply? If maybe I could stake him some so he can test it...There buddy go and test on the DEMO account..."NO! the demo does not use the same rates as live trading I need real cash to trade"...and so on and so forth. It is an addiction not the trading itself but the unstopping search for the hidden layer in the market.
I guess it all boils down to what you believe about the market...is it purely random or is there some hidden structure? If you believe there is some hidden structure you will probably spend the rest of your life trying to find it. With success? You decide. It seems according to SeekingLight your chance of finding it using technicals trendlines etc....is about the same as winning the lottery consistently.
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