Friday, August 13, 2010

16 Observations on Learning Powerful Money Making Strategies for Beating the Financial Futures Market.

1.    The average trader cannot succeed unless he or she is 100 percent mechanical. Most of us can't "hear what the markets are telling us" because for all practical purposes, the markets ain't saying sqaut.
2.    Human psychology tends to be drastically out of synch with what is needed to trade successfully.
3.    Market activity consists overwhelmingly of noise with a very small trend component. The latter is what makes mechanical trading possible, but it can't be perceived over one trial. It takes many trades — a numbers game universe — for an edge to manifest itself.
4.    Spontaneous traders therefore have nothing to tune into other than noise. That is why it is so hard for such a trader to move forward or get better over time. There is no tangible reinforcement.
5.    There is the occasional trader who proves the exception to the rule. He or she is born with the talent, and tends to discover it almost immediately after embarking on a trading career. If you've been losing money for several months, you are almost certainly not one of those people.
6.    When one combines mechanical with discretionary trading, one tends to get the worst of both worlds.
7.    Simple is best.
8.    Basic elements can be combined to create greater wholes.
9.    Day trading can work, but there are inherent problems compared to other types of trading. The main obstacle lies in the relatively small trading arcs compared to trading costs.
10.    Ideas generally have to test well over a fairly wide array of markets and trading environments in order to be considered trustworthy.
11.    If you're getting a buzz from your trading, you're not doing it right. Good trading should be boring.
12.    Never act on anything you don't thoroughly understand. Understand every step and every aspect of your research.
13.    Nobody has a magic informational pipeline. The most successful traders of all time are still going to be wrong roughly half the time. Never coat-tail anybody. Never trade on touts.
14.    If you're praying, you're wrong. In fact, God loves to punish system violators.
15.    If you're emotionally engaged at all, you're wrong.
16.    If you think there's any wisdom in "yes I know what the system says, but this time, it has to be wrong," you're wrong. Wrong wrong wrong?(should I stress it one more time?)?wrong.

And finally, you might want to frame this one :
If you are not following your systems 100 percent exactly as mandated, then by definition you are not trading mechanically.



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