A question for the experienced few "truly" successful traders out there...

[SoundFX]

Dear "Truly" Successful Traders

I've been trading for a number of years now MANY of the first quite unsuccessful. The last 2 years I've been clawing my way towards consistency profitability as of the last 6 months I feel I can finally see the light at the end of the tunnel though its taken tremendous determination. I've noticed a very interesting phenomenon with my own trading that likely all persistent traders who become successful realize. this may be why folks like Livermore those before our advanced computer technology were as successful as they were. Of course Livermore was ultimately a victim of his own emotions but I'm using him as an example for the way he was able to make such huge gains based on little more than the ticker. BTW everyone needs to read "Reminiscences of a Stock Operator"...at least twice.

Anyway let me backtrack first. When I first started years ago I was overwhelmed with the information out there. I was introduced to trading via the Ken Roberts pattern recognition books which require HUGE capital an iron constitution. I traded futures which were insanely difficult for a undercapitalized beginning trader though it was totally cool to tell my friends I had sold pork bellies earlier in the day . Then I thought mathematical indicators seemed to be the key. If only I could FIGURE OUT the trick (Holy Grail) to these complex indicators I would find a way to be consistently profitable. I literally studied for thouss of hours to try to FIGURE OUT the Holy Grail that indicators would lead me to. My charts looked like a Koala Bear crapped a rainbow on to them. They were ridiculously complex with multi-colored squiggly lines all over them. Very impressive. yet still with the "help" of these fantastical indicators I was a loser. This continued for several years while my wife's confidence in my sanity waned . Then I began focusing on fewer fewer indicators thinking that mastering one or two indicators would yield the elusive success I had sought for so long. It certainly helped but I was still a net loser.

I kept researching delving further in to money management the relevance of only trading certain times of day etc. focusing on shorter time frames. This helped greatly. I toyed with trading specific time frames with trading breakouts of specific time frames utilizing divergence(which is still a great help) Martingale efforts etc. etc. It was like a puzzle I couldn't find the solution to. I wanted a perfect solution i.e. Holy Grail. But of course there is no Gordian knot to be untied no simple "sword the stone" vindication. There IS no perfect solution.

Now my thoughts lean more towards using nothing at all besides bare-ass price charts. I'm getting the distinct feeling that trading well is akin to how Michelangelo performed sculpture you have to strip away strip away the charts (a block of marble) until a simple method becomes apparent. I have little doubt now that I can trade perfectly well with nothing but price charts alone. It is just that simple.

Just wondering if anyone else who is a consistently "successful" trader has had this experience as well. I'm totally leaning toward basing all my trade decisions on nothing more than bare OHLC price charts. The geometry seems so simple now after having cluttered my charts my brain with extraneous graphical indicators. That said there will still be losing trades mis-"calculations". I'm not saying I've found the PERFECT method just the simplest for me most apparent. Utilizing price structure coupled with years of cultured discretion prudent MM seems the "Holy Grail" I've sought for so long. it is simplicity itself. Anybody else had this revelation? Curious.

-SFX

[coolhandluke]

Hello SoundFX
First let me say I am not sure how "successful" I am as a trader. That is relative I suppose. I have been trading for 4 years. Year 1--lost 80% of my account; Year 2---made a little money; Year 3---equaled the yearly salary of my regular job; Year 4---almost doubled my yearly salary! I still have my full time job (it is a pretty good one) will leave it to trade full time only when my trading account is equal to 5X my yearly salary. I hope that will happen in the next couple of years.
I agree that there is no holy grail of indicators out there. I looked hard for that grail just like you did. I use pivot points occasionally a MA cross (as price approaches a pivot) to guide me on my journey. However use of these tools have not really made the difference for me. My turn towards profitability only happened when I stopped trying to be "smater than the market".
I have 2 master's degrees (math mba). I do not say this in any boastful way---I am not better than anybody!!! I say it only to reveal that my technical mind could not get around the fact that with all the sophisticated indicators available I could not consitently pick winners. I had to come around to this fact in all its simplicity: "If the trend in down NEVER be long---If the trend is up NEVER be short." I never fight the trend! I look for short term (daily) movements (price actions) that go against the trend enter there waiting for the trend to resume. I also keep my profit targets modest stops reasonably spaced (to avoid disaster).
In the end I agree with your premise---Simplicity Is Best. I hope your Forex trading can help make your dreams become a reality!!

[pistolfx]

I have a BS degree in engineering started as future trader.

Still have full time job as engineer.

I first started trading FX in 2001 the method I used for future worked pretty well with small adjutment.

Due to my experience future I didn't waste much time for spot FX but I did waste about 2 years with future for finding holy grail (couldn't find it).

I am not gonna share how I became profitable trader or what indicator I am using so on... because it wouldn't help anybody.

The only thing I can say for sure is that every element for profitable trading has to come yourself.

If you are profitable what you are doing is yourself you have a holy grail.

[SoundFX]

Thanks for the response guys. Very impressive stories. Uncomplicating trading seems to a common thread.

-S

[tommyh]

This week was particularly a tough one for me. My system seemed to not be working. In actuality all systems work; it is the subjectiveness of the trader that comes into question. I'm not into indicators at all since in the earlier days of my trading everytime I entered on an indicator I got stopped out. I use a few MA's that is it.

However in the middle of the week I removed all of the indicators my charts except one long term MA. I have always been focused on price however this really brought things into a refined perspective. I began to feel the psychology of the market that the bars were defining.

Thursday Friday were a total of 70+ pips not one expense trade (I do not use the terms winners losers. We are not gambling.) One trade was 0 pips as it did not move like I was expecting so I got out.

As I move forward I will report back on this concept. There is a wave aspect to this that has to be included. Wave counting can also be very subjective. The psychology that the wave represents is more important than just the count.

In closing I would like to add that trading is a very individual activity. You will never trade someone's system as well as they do. Trading is not mathematical it is creative; it cannot be automated by software because the software can never read the psychology of the "mind of the market" as fast as a human mind can. You must love the activity like a musician loves to play or an artist loves to paint. Once you "arrive" at this realization the money will be automatic. The money is the reward for the price you pay to develop the skill that price must be paid in advance.

tommyh

[SoundFX]

Totally agreed Tommy. Nicely said. I love the term "expense" trade BTW.

[jeffizcool]

I think I am also in agreement within the lines of tommyh. This is a good thread.
Price is king that is what everyone is really looking at in the end anyway.

I use a good bit of indicators though but i don't use them in a way of "buy signal sell signal". I use indicators to help me better interpret price action. Like for instance how far the price has relatively moved in a certain span of time(I am mostly a contrarian ). I believe that trading is very subjective. It is an "art" actually takes a skill in order to make money.
So far it has mostly worked for me as I have been consistantly profitable for the past 1.5 years. I do also believe that automation can be achieved successfully but it must be done with different limits approaches than what is generally done by traders.
We will see what the future hold for me as well what my thinking will be later on as it is constantly fine tuning evolving(hopefully for the better).
Have a good one.
lata.

[Nonpiker]

I primarily trade using moving averages chart patterns. However I am fortunate enough to have access to a ton of market information off of sell side traders. This info can be invaluable don't think for a second a ton of CTA's hedge fund traders don't make a fortune off such info. It is a big help when you think USD/whatever is a buy on the dip into support at some level you confirm with a few of the top banks that they have buyers at those levels. It is really lack of information on so many levels that makes it so hard for the average joe.