How amateurs design a strategy versus how masters do it
The amateur gets this really no brain system where an indicator or chart pattern or robot or telegram sends them a signal then it's just a matter of placing a limit order with target and stop loss. And walk away to avoid messing with it because of "emotions". And it is the same process for every strategy no matter what any instrument etc you name it.
Well to be fair 100% of the amateur strategies are the same: Reversal. Buy if price go down, Sell if price go up. They found the holy grail of my.
They actually even pat themselves on the back for having something this simple.
And it does not even end there. Adding insult to injury, they actually try to simplify it.
Reminds me of these day traders that made sure their emotions would not get in the way and "just left the computer and when I come back it will all be better", and when they came back they had lost everything.
On the opposite the master first of all has a different process for every strategy, he will not trade a pullback the same way he does a breakout.
The setup that he can get anywhere he wants it does not matter, this is just the 1rst step of here I mentionned 14.
I cannot make it simpler than this, al these steps are necessary. Once the setup is here and correlations, quality, and the stop is checked, you need some conditions to enter, you can't just "simplify" and remove this step, nor the stop, nor the quality of the setup one does not simply pick any piece of junk that presents itself.
Not only for each strategy there is a different process. But for each instrument too, now now in Forex majors they all behave in a similar manner so we don't have to completely re-invent the wheel each time. But if one looked at stocks the time frame is different, breakouts do not act the same way, pullbacks are smaller maybe, trends obviously are much stronger and one can keep adding, if you keep adding in FX well good luck! They don't go very far.
Also for 1 instrument and strategy the 14 steps are not the same each time: Depending on step "quality" or "entry conditions" for example, what follows will vary,
if you entered a breakout early on and answered to the question "Where can I hope target is?" with "far" then the trailing will be a different sub-process supported by experience + excel statistics + intuition + current conditions. Usually Forex at around 5R I stop adding and I get a tighter stop, but if the target is far and China said they are selling then I will hold on get a wider not tighter stop and add more and aim for the moon.
It's such a lack of respect that novices expect it to be simple and try even to simplify it, "all you have to do is control your emotions".
Same thing as a clown that learns chess moves by heart then expects he can play against GM.
Same thing as a clown that thinks he does not need a lawyer all he needs is "the book of laws" and defends himself.
Same thing as all the clowns and conspiracy theorists that self diagnose, in 5 minutes and call it a day too. And ignore counterproof.
You can't even write it down, not even code a program, each if leads to 10 new if, one would have to spend a lifetime or writing IFs and GOTOs, and it would still miss intuition and current news/conditions/ the current paradigm.
It is a long road and there is not a big magical wormhole shortcut.
Jesse Livermoore ended up having to sell trading courses, but I don't think he ever said it was simple and you should "not overcomplicate it", did he?
In the case of gold:
Since 80% think in terms of winrate they see that often the robot thing works, or the exiting winner early thing also has a high winrate.
But their brain basically has a bug, a manufacturing error, and this is a bad method, which is why over time they lose money.
I'm not the one saying it, scientists are saying the brain of most people has a built-in error, not adapted to the modern world or to reality.
Not 1 in 5 new traders will bother calculating the stats for the entry. And not 1 in 5 of those will bother calculating the stats for trailing stop and adding.
Either by going with excel enter the numbers to get the stats, or spending enough time to gain experience. They'd love to buy these stats somewhere with a clic I am sure.
1 in 5 times 1 in 5 here you're about at 5% left already.
This is the hardest game in the world, not the easiest. My eyes hurt when I see certain claims I swear...
Well to be fair 100% of the amateur strategies are the same: Reversal. Buy if price go down, Sell if price go up. They found the holy grail of my.
They actually even pat themselves on the back for having something this simple.
And it does not even end there. Adding insult to injury, they actually try to simplify it.
Reminds me of these day traders that made sure their emotions would not get in the way and "just left the computer and when I come back it will all be better", and when they came back they had lost everything.
On the opposite the master first of all has a different process for every strategy, he will not trade a pullback the same way he does a breakout.
The setup that he can get anywhere he wants it does not matter, this is just the 1rst step of here I mentionned 14.
I cannot make it simpler than this, al these steps are necessary. Once the setup is here and correlations, quality, and the stop is checked, you need some conditions to enter, you can't just "simplify" and remove this step, nor the stop, nor the quality of the setup one does not simply pick any piece of junk that presents itself.
Not only for each strategy there is a different process. But for each instrument too, now now in Forex majors they all behave in a similar manner so we don't have to completely re-invent the wheel each time. But if one looked at stocks the time frame is different, breakouts do not act the same way, pullbacks are smaller maybe, trends obviously are much stronger and one can keep adding, if you keep adding in FX well good luck! They don't go very far.
Also for 1 instrument and strategy the 14 steps are not the same each time: Depending on step "quality" or "entry conditions" for example, what follows will vary,
if you entered a breakout early on and answered to the question "Where can I hope target is?" with "far" then the trailing will be a different sub-process supported by experience + excel statistics + intuition + current conditions. Usually Forex at around 5R I stop adding and I get a tighter stop, but if the target is far and China said they are selling then I will hold on get a wider not tighter stop and add more and aim for the moon.
It's such a lack of respect that novices expect it to be simple and try even to simplify it, "all you have to do is control your emotions".
Same thing as a clown that learns chess moves by heart then expects he can play against GM.
Same thing as a clown that thinks he does not need a lawyer all he needs is "the book of laws" and defends himself.
Same thing as all the clowns and conspiracy theorists that self diagnose, in 5 minutes and call it a day too. And ignore counterproof.
You can't even write it down, not even code a program, each if leads to 10 new if, one would have to spend a lifetime or writing IFs and GOTOs, and it would still miss intuition and current news/conditions/ the current paradigm.
It is a long road and there is not a big magical wormhole shortcut.
Jesse Livermoore ended up having to sell trading courses, but I don't think he ever said it was simple and you should "not overcomplicate it", did he?
In the case of gold:
Since 80% think in terms of winrate they see that often the robot thing works, or the exiting winner early thing also has a high winrate.
But their brain basically has a bug, a manufacturing error, and this is a bad method, which is why over time they lose money.
I'm not the one saying it, scientists are saying the brain of most people has a built-in error, not adapted to the modern world or to reality.
Not 1 in 5 new traders will bother calculating the stats for the entry. And not 1 in 5 of those will bother calculating the stats for trailing stop and adding.
Either by going with excel enter the numbers to get the stats, or spending enough time to gain experience. They'd love to buy these stats somewhere with a clic I am sure.
1 in 5 times 1 in 5 here you're about at 5% left already.
This is the hardest game in the world, not the easiest. My eyes hurt when I see certain claims I swear...