Strategy of losers

I read a thread by downrivertrader that said the most important thing in gambling was to trust your own instinct. At the time I was trading simple S/Rbadly it was mentioned, so I thought why not? I decided to a 1:1 R/R (in actuality, less than 1R into account for disperse ) and I would exchange whenever my gut instinct told me to. Screw the rules.

I dropped 10 transactions in a row. The odds of that happening are less than 1 in a 1000. I was shocked and annoyed to get a day or 2 (live account) before I realised just how important a lesson which was. We're hardwired to screw trading up. I wished to know why.

Why do losers lose? To discover the answers hasn't been simple, although it is a simple question. Ignore the Mark Douglas bullsh*t, dismiss the threads of why 95 percent of people lose (all guesswork and badly uninformed), and to find the fact you've got to collate and analyse thousands of hours of Oanda open interest information, dozens of academic papers on retail order flow and unite with a dollop of lateral thinking.

The results are a mixture of the sudden and obvious. Some things I won't reveal here, however, the thrust of what is important I will. And why? Simple really. It merely motivates you to get into the next level, therefore it is a largely selfish endeavour, by showing what you know. I recently come to this conclusion; I always swore I'd never share any of this, so consider it while you can. Before I do however...

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Near-Perfect Market Indior Discovered
Years of Research Reveals Consistent Trading Edge at Aurora, IL


Stock market researchers at the University of Chicago yesterday Declared a breakthrough in their efforts to find the perfect market indior. He is Delbert Dunmore, a home-based trader in Aurora, Illinois.

Based on Giovanni Celini, Ph.D. of the University's Institute for Market Research,'' Mr. Dunmore has failed to earn money for 18 consecutive years of trading, with only a single couple of profits during that time.

This is a result...

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Truly brilliant and outstanding article. Had me in stitches.... In all seriousness though, there's a lot to be learnt from the particular thread. Outstanding research data was introduced by Triphop that has caused me to have a second look at my trading. For instance, EURUSD versus AUDUSD. Fantastic stuff!

I discovered a link to Delbert Dunmore method:
http://traderfeed.blogspot.com/2008/...emarkably.html

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Originally Posted by ;

Near-Perfect Market Indior Discovered
Years of Research Shows Consistent Trading Edge in Aurora, IL


Stock market researchers in the University of Chicago yesterday Declared a breakthrough in their efforts to find the perfect market indior. He's Delbert Dunmore, a home based trader in Aurora, Illinois.

According to Giovanni Celini, Ph.D. of the University's Institute for Market Research, Mr. Dunmore has neglected to make money for 18 consecutive years of trading, with just a single month of profits during that moment.

That is an outcome...

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Outrageously funny.

Another and Delbert Dunmore link.
Http://traderfeed.blogspot.com/2006/...et-indior.html
And should you guys click on his name you will see his picture.

. . .will be profiled at a BBC documentary airing tonight (26 October) at 9pm on BBC 2.

At a thread entitled Strategy of Losers, I thought it appropriate to mention a winner (spurious link, I know), anyway, I thought a few of you might like to know, and as we've had Mark Douglas's soundbites trotted outside, some may be interested in Buffett's:

http://news.bbc.co.uk/1/hi/business/8322921.stm

Thanks to the OP for pulling DT from the woodwork. Always worth reading

AstonDan, nothing tenuous relating to this link in any way, will watch - cheers!

Triphop,

I thought you may appreciate this. It had been given to me by somebody who took the time to attempt and teach me the way to trade.

A New Mindset

In order to be able to see these cycles of opinion since they take place it is critical to remain outside them. Traders who are participating in a current fervor generally don't see themselves as engaging in a fervor at all. How can we remain outside the forest? By adopting a mindset which allows us to do that. The following short story written by Kurt Vonnegut's Kilgore Trout character in”Slaughterhouse Five” (you may also have seen the story referenced in”Market Wizards”) provides a fantastic illuion of the mindset we'll take:


”The Big Board
... It had been roughly an Earthling man and girl who were kidnapped by extra-terrestrials. They were placed in a zoo on a world called Zircon-212.
These fictitious individuals within the zoo had a big board allegedly showing stock market quotations and commodity prices along one wall of the habitat, and a news ticker, and a telephone that was allegedly linked to a brokerage on Earth. The creatures on Zircon-212 advised their captives they had invested a million dollars to get them back on Earth, and that it had been around the captives to manage it so that they'd be wealthy when they returned to Earth.
The telephone and the major board along with the ticker were all fakes, of course. They were only stimulants to make the Earthlings perform vividly for the crowds at the zoo--to make them jump up and down and cheer, or gloat, or sulk, or tear their hair, to be scared shitless or to sense as contented as babies in their mothers' arms.
The Earthlings did really well on paper. This was a part of the rigging, of course. And religion got mixed up in it. The news ticker edued them that everyone should pray, and that the President of the United States had announced National Prayer Week. The Earthlings had had a week on the market before that. They had lost a small fortune in olive oil futures. So they gave praying a whirl. It worked. Olive oil went up.” - Kurt Vonnegut


As traders, we are going to sit like the Zirconians and watch the other traders as if they are some kind of attraction in a human zoo. We will assume that the news is meaningful to the extent it drives individuals to buy or sell and that there is no inherent reality behind it. We'll be asking,”What are these strange beings doing and what beliefs are driving their behavior?” If you think there's a specific quantity of disparagement for the fellow traders' skill inherent in a method which includes pretending they are in a zoo, well, then you're right. If 90% of traders lose then you not only avoid the things that they do, but do the reverse. It's not that there isn't camaraderie among traders, however it's a lot more fun when it's with other winners. So hang together with the Zirconians stay out of the cage, and please do not feed the traders.

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... please do not feed the traders.

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I could tape this to my monitor to remind me of this story...
it makes me laugh and keep a proper detached, trade-neutral, positive mindset.

Dopey, you read me well... this is a fantastic article. It reminds me a little public speaking - the best public speakers are concentrating on the audience not on themselves. Thanks for posting.

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1)Inverse disposition at regular leverage, disposition and increased position size following sequences of two wins/losses
The disposition effect is the trend for punters to continue to losing trades for longer than winning trades -- giving rise to the oft-quoted”cut your losers short, let your winners run”. Simple. So, presumably the losers do exactly the right? Wrong.
The average punter does exactly what they are'supposed' to when trading. They cut losers short, and let winners. However, when they have two wins in...

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Very well written and said.
This is the real reason for all looses, I have been there ( and sometimes still get myself there! ) And I know how true this part is.

Retailers must learn to escape from charts and when watching charts, they need to learn how to handle their positions. It's the hardest skill to be learnt.
Occasionally a bad winning trade starts all of the u put on a large sized trade and bingo u win. Loss and then u becomes painful to eliminate, we're gone and until it gets out of hand!

Thank u for sharing

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A bit regarding discipline, Mark Douglas and intuition
, Porkpie, you picked up in my dislike of TITZ (Trading in the Zone, not tits). It is because of all the advice Ifollowed , or've ever read, this was the most useless.

He's indeed blasé about finding a simple system with an edge, anybody would believe it was a doddle. He even goes as far to state simple systems are profitable if you follow the rules. Maybe I have missed a golden age of trading while using the very first hour of a London session for management could make you big bucks, or...

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I recall when I was about to read his novels, I read from the introduction he is not a trader but coach.
Simply I dumbed the publiion and looked for another!

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You won#8217;t even find this advertised by your broker. What percentage of time do you believe retailers (en masse) are winning more than they#8217;re shedding? Can you expect it to be similar across different pairs? To figure this out, I took 9 months of position data from Oanda, and split it into neutral (winners and losers around in equilibrium ), winning and losing.

For the EURUSD, retailers spent 0.5% of the time in profit, 12 percent running at or close to b/e and 87.5% shedding. Wonderful work ? Ever get the impression that you #8217;re in the company? Seeking...

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I believe that you can include here that retailers like to see 4 pairs or even more in precisely the identical period and worse they attempt to handle all of the positions all in exactly the very same times too.
I believe it is so much better to trade just one pair and to focus in order to understand its rhymes and personality.
Now after fighting occasionally winning a pretty good streak then giving everything.
I learnt that handling my positions and where to exit ( especially when I am in a losing trade) is the very important things.

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I remember when I was going to read his novels, I read in the introduction which he is not a trader but coach.
Simply I dumbed the book and looked for a second!

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.... Composed by a forex billionaire? Or by the one who could coach?
Tigerwood gets training lessons, do you know who's his coach? .... Me also do not know who that person is/

ps. After spending many years learning forex, I was finally guided in the right direction by a mentor,....and that person is no Jesse Livermore but the one effective at identifying my limiting factor and knew precisely how to fix it.

I really don't get a share of royalty out of no book of Mark Douglas but find it useful for retail trading just how I (and many others) take action. Everybody is different and therefore no one book is bad or good for everybody.

Trading is similar to wave, be cool awaiting the wave is come in don't think about profit but believing that the wave will coming....

We beg is coming...

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Trading is like wave, be trendy awaiting the wave is come in don't believe about profit but thinking that the wave will coming....

We pray is coming...

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and what praying must do with your trading?

It's the same prayers that you may do if your loss is getting bigger!

When the boat starts to sink, Don't pray, Just jump!