Hello everybody,
After reading some posts on this and other forums, and also reading Trade Your Way To Financial Freedom (which everyone seems to recommend); it appears to me that most people think that trading is just a mind game, that the most difficult part is discipline rather than finding a system.
Van Tharp says there are hundres of thousands of working systems; someone here (was it fiji?) said that their are more working systems than traders; someone else (I think dial) said once "it's just a matter of finding a system with positive expectancy".
However, some facts seem to contradict that view, starting with the very book by Van Tharp. He almost disregards the system aspect (mentioning, of course, that a system should have positive expectancy) to the point that in one chapter he goes something like "hey, you want a system? here ya go one", and proceeds to explain the "Foolish Four" strategy for stock trading. After reading this I immediately went to www.fool.com in order to read more about the strategy, and guess what... the very developers of the system have found that it doesn't work, because it was based on some bad data.
Another issue to take in account is the Yahoo! forum of Metatrader system development. There are many intelligent people contributing to it. Maybe a hundred mechanical systems are stored there. None of them works. The systems are developed, discussed, patched, discussed again, patched again, patched once again and finally abandoned when a new idea is introduced. There you have, a community of hundreds of people trying to code a profitable system (be it simple or complex) and they haven't succedeed yet. A similar thing happens at Moneytec; and I haven't checked the Coder's forum here.
So my question is, where are the hundreds of thousands of simple working systems? Why have these people failed to find at least one of them? Since 95% of traders lose money, could it be true that 95% of traders are just undisciplined? Or is it rather that the 5% have actually developed a "feel" for the market that can't be accounted for in a system, and that the 95% lack?
Sorry for the long post, and thanks in advance for any comments.
Bonete
After reading some posts on this and other forums, and also reading Trade Your Way To Financial Freedom (which everyone seems to recommend); it appears to me that most people think that trading is just a mind game, that the most difficult part is discipline rather than finding a system.
Van Tharp says there are hundres of thousands of working systems; someone here (was it fiji?) said that their are more working systems than traders; someone else (I think dial) said once "it's just a matter of finding a system with positive expectancy".
However, some facts seem to contradict that view, starting with the very book by Van Tharp. He almost disregards the system aspect (mentioning, of course, that a system should have positive expectancy) to the point that in one chapter he goes something like "hey, you want a system? here ya go one", and proceeds to explain the "Foolish Four" strategy for stock trading. After reading this I immediately went to www.fool.com in order to read more about the strategy, and guess what... the very developers of the system have found that it doesn't work, because it was based on some bad data.
Another issue to take in account is the Yahoo! forum of Metatrader system development. There are many intelligent people contributing to it. Maybe a hundred mechanical systems are stored there. None of them works. The systems are developed, discussed, patched, discussed again, patched again, patched once again and finally abandoned when a new idea is introduced. There you have, a community of hundreds of people trying to code a profitable system (be it simple or complex) and they haven't succedeed yet. A similar thing happens at Moneytec; and I haven't checked the Coder's forum here.
So my question is, where are the hundreds of thousands of simple working systems? Why have these people failed to find at least one of them? Since 95% of traders lose money, could it be true that 95% of traders are just undisciplined? Or is it rather that the 5% have actually developed a "feel" for the market that can't be accounted for in a system, and that the 95% lack?
Sorry for the long post, and thanks in advance for any comments.
Bonete