The Mark of a Good Trader

[fxPipTitan]

The Mark of a Good Trader and or Signaling Company:

Nearly two years I have researched and watched traders of the forex market with the specific reason as to ascertain the difference between a good trader and one who is still lacking in comprehendsion of what it takes to make that next step up.

This thread will be on going in the coming weeks and months.

1.) Season traders don't allow themselves to get caught up in the marketing hype of the industry and especially forums and chat-rooms. For example, most newbies believe and/or are told that there is a difference between trading a demo-acct and a real-acct. The common reason as stated by those who spread hype from some industry guru is due to the supposed emotions that alter between how you feel with a demo or by having real money on the line.

Truth: The Season trader of 3, 5, 7 yrs or more can tell you that he/she can trade a demo as eaisly as a real-acct and that there is no change in their profit or loss average. And that if you can't make money in a demo, you for darn sure can't make money in a real-acct. How can this be, you might ask? The season trader is just that! Season. He/she has learned control of one's emotions but more to the point they have adapted to the experiences that money can have on a person from winning or losing. Where the secret to such is in one's trading methodology. *You will get pissed-off constantly and depressed from not having a method which is consistently producing profit.

Truth: Most newbies focus on how many pips they can generate per day, week or month, not knowing that one's passion should be totally on the trading method. Forget about the pips and the money, they are nothing more than the by-products of your hard work on devising a successful trading method.

Truth: Want to know if a trader, signaling company or money manager is a season trader regardless of their years of experience? Look at their performance record and ask yourself if their trades are even/level (also every season trader has a re-occurring pattern in their trades which repeats often, its a dead give away as to their skill and how well the trading method is). And does their largest loss exceed their largest gain, constantly. Is this a trader, signaling company or money manager who will let a loss climb to the moon (going to the moon is anything over the largest gain by twice the amount, this is a major red-flag that this person or service is not a season trader).

More to come, but I just had to mention this and it is my own view point. If you feel differently then please by all means post your comments.

[fxPipTitan]

Why did I post the above thread? Because I am so tired (and at time I get a little upset) at seeing so many signaling services not being honest about their results. Not to mention keeping a straight face with posting up losses of 300, 500, 700 or even 1000 pips in a single month as if this is supposed to be normal and okay.

The new guy/gal must be made aware to some degree on some level that such performance is not acceptable. A 300 pip loss is 3k in one month and a 1000 pip loss is 10k in one month. That's crazy! No real investor will put up with non-sense of that nature, but a newbie might.

Becareful out there...

[fxPipTitan]

Here's a good example as to what I speak: goto fxstreet then click on Signal Tracker on the left hand side of the page. Then click on AceTrader's PDF file for their trades.

Notice how even/level their trades are from June 1st all the way to June 14th. THEN, bam June 15th and the method changes from a range of roughly 35/20 pips to 5/10 pips gains (there are still some 30/25 pip gains but for the most part a marked difference did occcur on June 15th).

This type of trading where a level of change occurred to such a degree is not due to the trading method employed but by the trader/company making a conscious decision to reduce profit levels and keep such within a set guide line. The trades are way too even/level for an inexperience trader to pull this off.

And, yes, I am saying that based on my experience this particular company wants to keep profit levels within a certain range for their customers. It takes serious skill and know how to pull that off and not make a mistake.

The in-experience trader has profits and loss all over the place and nothing is even/level for any length of time.

There are other things I will share but later, I will share them later.

[chriss]

One of the problems with assessing any trading results is they all can look very promising but what if you missed three critical trades out of the 20 or so you that a system may have produced over a set period of time, how then does that affect the overall net score.fficeffice" />>>
If you are looking at other peoples results and also want to asses the reality of your own results from any trading system or strategy then you will find this free utility can keep you in touch with reality. >>
http://www.softpedia.com/get/Others/Finances-Business/Trading-Strategy-Reality-Check-Utility.shtml
>>
http://www.softpedia.com/progClean/Trading-Strategy-Reality-Check-Utility-Clean-43419.html>>

[fxPipTitan]

Hi Chriss

Yes, i have come across that piece of software on the net but you do understand that it's really not going to give you a realistic reality-check as to what your out-come is really going to be based on demo-trading.

Here's one reason, the Season trader can perform in the same fashsion on demo-acct as his real-acct. He/she does not see a difference or responds differently because of experience and the trading method. Most newbies and/or the inexperience trader seems to some how not realize just how important a vaible trading method is and just how much of a change it will have on confidents and performance.

Example using real-life: A newbie driver or the inexperience driver will be seriously effected 'emotionally' by a strong rain storm or fog on a four lane open highway, but the experience driver (as well as the smart driver) knows how to handle themself. For instance, the inexperience or stupid driver for what ever reason may stop in the middle of the road to get their bearing... While the experience driver will pull off to the side of the road.

The software you speak of should not be called a Reality-Check system but a Randomizer of Predictions which have no basis what so ever as to what will really happen. That software is a form of rolling dice on what may be or what may not be. The newbie or inexperience trader may think it's a help but I assure you, it won't.

[initialsBB]

There is nothing really wrong with system whose worst DD was 800 pips as long as its monthly performance ranges between 1500 and 2400 pips. That would be the same if you make -80 and your monthly average is 150 or 240 pips. Ofcourse with that in mind you would scale your positions down.

Regarding signaling services you don't have to be any whiz-kid to distinguish good from bad ones. I find it brutal that some people can't understand or still haven't realized that number of pips per month is so unimportant. And sadly that is the way most signal providers give their performance. They say they made 1000 pips last month, but don't say their previous drawdown was 800 pips. There is this funny case with (I think) forexone.info whose peerformance is displayed with excel-style columns. This says just about nothing for their trading.

So if you see table on their site with "performance" month by month with number of pips then that provider would be a big no-no. Another case is when provider uses multiple targets (mostly 3) to make its poor performance look good (fx universal) or when the provider shows excessive and unrealistic gains (zifx.com).

I know this is the way 95% of providers do it, but that only means there are few good ones (if any). Even Rob Booker erased the table with trades from his web-site!

[fxPipTitan]

Hi InitialsBB

I agree completely that a signaling company who only displays month to month results is a red-flag. There must be a break down of each individual trade if such is going to be posted, so that the potential client can see clearly what is taking place.

I find it funny you mention zifx because I have a relative who uses them and if one checks out their posted results they have like one lost in 5yrs or something like that...LOL Yeah right.

And again your right in regards to companies who post 3 levels or more for price targets.

Allow me to add something to what you mention: If a signaling company or trade advisor needs to place more than 2 lots per trade then you are 'without question' dealing with a person who does not have the client's best interest at heart. I don't know maybe its their ego or attempting to keep up some appearance before the eyes of others, the need to feel like they're big man on campus. A signaling company or trade advisor does not need to trade multiple lots inexcess of 2, if they are in fact giving recommendations in one fashsion or another.

And since we are on the topic you should always know what the trading rules are before hiring a signaling company or trade advisor. Why? Well lets say you only have 1.5k to invest but the trading method being employed can have a DD (drawdown) of 500 or 800, then what...?

Out of all the signaling companies I have seen to date, not one has laid out the rules and requirements for trading their particular system. In most cases they just say, sign-up and pay.

[initialsBB]

Not only breakdown, what i'd like to see is more of a TradeStation-style report. Other important issue is that you need at least 100 trades to assess performance-in most cases they don't last that long.
Zifx.com were charged for fraud by the US Federal Court. It's really amazing to hear that someone actually uses them