Very simple:
1. Find the ‘best’ system on C2
2. Subscribe
3. Trade OPPOSITE the signal
4. After that system becomes a ‘loser’, move on to the next ‘best’ system on C2
That is how I feel as well.
And because of my bad experience with about 7 other systems (no need to name them), I have been bit by the bug to build a better mouse trap myself.
WOW. Even though I have been trading for four years now, I can’t believe how much things change when that first “sub” signs up and you realize it is for real. Now it is someone else’s money as well.
And I couldn’t understand why someone would let a position go into the red for dozens of points only then to close it out or to let it go hundreds of points or pips in the red only to close it out at break even.
Now I know. The pressure is intense.
I have committed on my own system page to always enter the stop (and not move it). I don’t half the time!
Following this and other rules is hard. EMOTIONS are the traders nemesis. And I still let them get the best of me.
For now.
But I will overcome.
Steve Theobald
AATS-FX.
#1 system accepting subscribers on the grid for FX systems less than 30 days old.[LINKSYSTEM_41000073]
Good post Steve. Words of wisdom for anyone that cares to listen.
To have even reached the stage where you realise the answer to what you seek is within yourself is an immense achievement in trading. Many can learn from your experience, thanks for sharing it with us and best of luck on your journey. Now the fun begins.
"3. Trade OPPOSITE the signal
4. After that system becomes a ‘loser’, move on to the next ‘best’ system on C2 "
This doesn’t work on so many levels, it is not even funny…
Your inability to detect sarcasm is not even funny.
Your inability to grasp how many newer traders take this idea to heart, so much that some may think you were being serious, including the fact that the site owner implemented this functionality…
…is even less not funny.
Since most traders/developers end up losing money, the argument for taking C2’s “trade opposite” option is strong and could be a serious money maker.
Let’s analyze what is going on here-- it’s all about fear and greed–and stupidity.
Fear: The market just made a big move up. It broke a significant Resistance level. I am thinking–“the market is going to go up 50 points without me! I have got to get in now!” And of course, the price reverses within 30 miliseconds of hitting the send order button. And then proceeds to DROP 50 points.
Fear: (same trade, after the 50 point loss) “I just lost most of my account because I over leveraged again. I have got to get out before I lose any more and get a margin call.” And of course, you exit right before the volatility picks up again and the price zooms back to your entry again.
Greed: “I had a good entry on that trade. I am up 20 points! I need just 5 more points to reach my goal for the day. I will hang on.” And then the market drops 50 points.
Stupidity:
1. Fighting the dominant trend
2. Not using stops
3. Not listening to the market in the moment, but deciding what should happen based on the technicals or fundaments and not budging when things go against you.
4. Over leveraging
THEREFORE–
It is hard to overcome the fear and greed and stupidity. ON AVERAGE it would be good to trade against ALL systems. But some clearly have mastered the art of the poor trade. I think adding the “trade opposite” button is a shear stroke of genius, if nothing more than to get traders and developers to think about things concretely. Q.E.D.
p.s. As a review of good trading–
1. Most markets spend more time in ranges than in trends. Sell tops and buy bottoms. Use Bollinger bands or stochastic or RSI to keep an eye on overbought/oversold conditions. Use as tools, not entries.
2. Trendlines and Support/Resistance levels are not arbitrary. They are significant in the minds of most traders. Keep your eye on them!
3. Keep positions small. Build the house one brick at a time. Take small profits often and leave the homeruns to the newbies. If the trade is not good, the loss will be minimal.
4. Always enter your stop immediately after the entry if not simultaneously.
(I violated many of these rules today unintentionally. I left a trade on without a stop and left for several hours because I “knew” what the market was going to do. Fortunately, the position was small.)
[LINKSYSTEM_41000073]
"ON AVERAGE it would be good to trade against ALL systems."
This is true only if you are a broker, and reap all the commissions, win or lose.
- There is no guarantee any system will either continue winning or losing into the future. Doing the “opposite” of a bad system is no better than randomly trading. Every sytem has runs. When the “bad” system has a good run, it will likley blow out some “opposite” traders/
2) Doing the opposite is similar to taking the opposite of a bad gambler’s trades at a casino. On the roulette wheel, take black when he takes red, etc… The house edge will grind you both down over time, similarly to the slippage, commissions, fees, doing an “opposite C2” subscription, broker/trader/communication errors, market disruptions and other problems outlasts almost all traders. The “Risk of Ruin” will apply to the bad trader and his opposite.
3) Almost all “small” traders lose, even though they use many different methods and strategies. Taking opposite positions is a guess that is much less proven than strategies that are generally used. This hwole hypothesis is a guess, and is not founded on real-market studies and research. Brokers LOVE to see people who “have a strategy.” Gee Mr. Broker, I will do the opposite of bad trader/system! Well, at least the broker will make a profit
4) There is psychology involved. An opposite trader is no more likely to do the opposite of every trade and every money management decision that a bad trader/system does.
5) Many years ago, there was a famous experiment with some Ph.D.s (I think econ majors, but do not remember). They were given a trading/gamlbing strategy that had an edge - like it won perhaps 55% of the time. The result? More than 90% wound up losing all their money. Pretty much as expected, money management and the Risk of Ruin caught up to them. The same will happen to someone blindly doing the opposite of other systems.
5) Leveraging and other factors - unless you have an unlimited accont, the same disruptive forces and bad decisions that blow out a “bad” system will work in your direction. Being undercapitalized is as major a problem for traders as having no edge and not having very superb money management skills.
6) Doing the opposite is an idea that many newbie traders seem to come to, thinking it is eureka moment. Here on C2, elitetrader, T2W and other forums, there are constantly newbies floating the idea. The reaction of experienced traders is very predictable - “it does not work that way.”
Well said Index. That study sounds very convincing, but more importantly your statement about the bad traders not even being able to follow the opposite trade is probably right on. Thanks for the dialogue on the topic.
How to make a million on C2?
Have an edge, then be prudent. Have good entries, good exits, and then use good money management. Trade outside of C2 or find a system that takes draw downs very seriously and seems to be able to control them by "getting out" quickly when the market turns against them.
Have an edge
this is almost all of the problem. Lots of people head to the casinos. Given enought time, almost all of them wll leave their money there.
Good money management will not overcome the house advantage, but it gives this illusion to some on a lucky streak. Some of the worst gambling addicts had some kind of early success, and spend time and money trying to recapture it.
It is estimated that approx 95% of people lose their money trading, yet 100% convince themselves they are in the 5%.
"It is estimated that approx 95% of people lose their money trading, yet 100% convince themselves they are in the 5%. "
It is kind of like the seminar of 1000 people where the speaker said "How many of you think you are an above average driver?" and 800 or so raised their hands…
People have an exaggerated opinion of themselves in all things. In trading, this is a KILLER…
Funny you should talk about above average drivers. It was in a driving school class (one that I took so my speeding ticket would not be on my record in California) that the instructor asked “which of you in an excellent driver?” Of course 90% of those in the room raised their hands.
At the end of the day, the instructor conceded that a few of us could be excellent, but then got us all to agree, that statistically, we were all average. However, given the ages of those in our class, he also conceded that we could all be “above average”. He went on further to give us a challenge to do something for the next 30 days. Each time we had to drive somewhere, we were to put hands at 10 and 2 on the steering wheel and say really loudly, "I am an above average driver!"
My kids loved it. My wife thought I was nuts. But I really learned some good things. I realized that I was not the excellent driver I thought I was! I became much more tolerant when people cut me off (or don’t let me in). My stress is lower when I drive. I am not delusional and really have become a safer driver (most of the time).
I loved the concept so much that I named my trading company AATS for Above Average Traders. What is my goal? Not to make a million dollars, but to simply be above average and make more money than I lose for my subscribers. Any good returns are just a bonus. I simply want to stay in the game.
Not sure if I can do it. Not sure if I really am “above average” but I am trying to make it so. I take 1 step forward, and then take 5 steps back.
[LINKSYSTEM_41000073]
Funny you should talk about above average drivers. It was in a driving school class (one that I took so my speeding ticket would not be on my record in California) that the instructor asked “which of you in an excellent driver?” Of course 90% of those in the room raised their hands.
At the end of the day, the instructor conceded that a few of us could be excellent, but then got us all to agree, that statistically, we were all average. However, given the ages of those in our class, he also conceded that we could all be “above average”. He went on further to give us a challenge to do something for the next 30 days. Each time we had to drive somewhere, we were to put hands at 10 and 2 on the steering wheel and say really loudly, "I am an above average driver!"
My kids loved it. My wife thought I was nuts. But I really learned some good things. I realized that I was not the excellent driver I thought I was! I became much more tolerant when people cut me off (or don’t let me in). My stress is lower when I drive. I am not delusional and really have become a safer driver (most of the time).
I loved the concept so much that I named my trading company AATS for Above Average Traders. What is my goal? Not to make a million dollars, but to simply be above average and make more money than I lose for my subscribers. Any good returns are just a bonus. I simply want to stay in the game.
Not sure if I can do it. Not sure if I really am “above average” but I am trying to make it so. I take 1 step forward, and then take 5 steps back.
[LINKSYSTEM_41000073]
