Why Simple Trading Strategies Seem Profitable When They Aren't
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- Опубліковано 4 лип 2024
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We explain why some simple trading strategies only work on old charts and not in the live markets.
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TRADING STRATEGIES:
Have you ever seen a simple trading strategy working on old charts, only for it to fail in the live markets? We explain why that happens and two tips for you to avoid falling for that trap.
The setup + the context = the decision. I'm a scalper on the ES with 8 years in. I knew the setups back in the first few years and lost because I didn't have the context and experience to recognize when particular setups were lower probability on some days and higher probability on other days. The context and screen time is what took years to develop.
that's not why you succeed, the reason is you learned to treat trading as a game with rules, define your risk before taking a trade and not let losing trades run out of control
@@guyredares Or like my teacher says: You didnt lose money, you payed a lesson. So many lessons the first 2 years...
@@guyredares that too but without context we are out of the game
This is one of the smartest approach that Ive found on UA-cam regarding trading strategies
I really appreciate how you discuss the psychology of trading. Great video mate👍
Very clever video! Thank you, helps a lot.
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Tyyyyyy
Have you dropped the video you promised
We live in a weird world, Gosh! How can some people dislike this video 🤷🏾♂️
Can't please everyone, unfortunately! Thanks Sandile.
~ Nicholas
@@Duomoinitiative for no apparent reason just discourage you from sharing with us helpful information on our forex journey! Thanks for taking time to share with us your experiences and knowledge in forex.
Khophinde Sandile🤦🏾♀️... That's social media for you.
what dislikes
Nice lesson !
Thank you Nicholas, I have recognized this recently in my trading journey but didnt have a complete understanding. label, or solution to look at and deal with it correctly. I very much appreciate your insight on this and as always thank you for sharing your knowledge.
You're welcome, Brian. Happy to help!
~ Nicholas
This is an amazing and insightful concept!
Thanks!
~ Nicholas
Our friend wants to tell us that we should properly backtest our strategies. When you backtest, do at least 100 trades. Do 20 trades per day and in 5 days you have amazing data on how your strategy performs over time!
Thanks buddy
Great video!
Thank you!
Wonderful advise
Thanks Somto.
~ Nicholas
Good video.
My man been gettin them gains!!! 💪💪
😂
FX Replay is the perfect tool for this kind of backtesting.
That is because past performance is not indicative of future results.
The market is like a river, always flowing towards the path with least resistance.
The moment you step into the river, the water around you has changed already so you're basically into a different river, different environment every second even though you're standing still.
You are always challenging my approach, perspective and critical thinking skills. The last video I watched from you " context based approach' taking quality setups. My biggest take from today's video is that we must challenge any sort of strategy or system presented to us before we can go on to use it ourselves.
Thanks JABS! Yes, or at the very least try to get out of our own way so we can assess the approach as objectively as possible while learning about it.
~ Nicholas
your trading wisdom is on whole other level
Thanks Samuel, I appreciate the kind words!
~ Nicholas
I'd come to the same conclusions. Its very common to see a UA-camr demonstrating a strategy when there are other loosing setups that meet their criteria on the very chart they're demonstrating on. It comes down to "scrollback" back-testing is highly deceptive. You've got to do it on the right hand edge of the chart.
That's it Charles!
~ Nicholas
I have backtested the awesome saucer strategy. Very simple, and it is quite logical too. Good results in the backtest. When I try forward test it, it just hovers around 0 profit. If there are many small candles, long wicks without direction and small ATR/low volatility I don't trade it. Still it does not work as good as it should.
In my backtest I of course have looked for discomfirming evidence. Not a problem I thought as it was still profitable. About pinbars. I see these in my backtests. They are not that hard to spot when they don't result in a reversal, and it happens quite often. I have been told you should just trade them at support and resistance. On the 4H you have to wait months to see that.
It's because you don't know how to apply it live.. if it works backtesting majority of the time, it will work live. Discipline and controlling that emotion is key
@@zenitsut7209 Thanks for answer. There is one thing I know. My entries in the backtests are very presise. The entries in the forward tests are sometimes too late. Going in 7 pips too late does matter when I aim for 30-40 pips. Also there can be differences in how successful each currency pair is. I will continue working on it and other strategies.
One of my psychology lectures opened with this exact task. Love it! Another Great video Nicholas
Cheers Mac!
~ Nicholas
This is a great video. But I was thinking, won't I get the same results when backtesting every entry based on my criterias using like the trading view replays tool ?
Was thinking the same too. When you do back testing with due diligence, candle by candle, you will find disconfirming evidence. With or without a replay tool.
He done did it again...
Thank you so much, will accomodate these in my strategy building from now on!
Good luck!
~ Nicholas
Could you please remake or do a part two of Brazils file economy??
🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥You are on fire
Thank you the video Nicolas.
Am learning alot from you.
Glad to hear it Awah!
~ Nicholas
Looking forward to the next video! I’m at the point where I need to focus on my trading psychology so I can start to form my own process
What areas of your trading psychology have you found need some work?
~ Nicholas
@@Duomoinitiative Learning to control my emotions when the trade goes against me but hasn’t reached my stop. I even sized down recently and I was still struggling with it. I also need to learn that it’s ok to take a loss.
I’m actually in the process in trying to find a trading partner to help me and each other to move forward
when strategy don't work, I just wait for different moon phase. full moon does wonders!
pls what tool did u use here, 8:15
It's a simulator - ua-cam.com/video/rwWFDTCb-WM/v-deo.html
People are not paying enough attention to the clock. Ask yourself do big bank and hedge let their trader trade randomly or are they trading at a very specific time and specific area of the day high and low
I can tell you that overcomplicating trading is just as bad, if not worse. Risk management and trade management is arguably more important than strategy.
Loved the parts about trading psychology!!! Ive learned alot in this video!
Happy to hear that! Thanks for watching.
~ Nicholas
holy shit this was sent from heaven
😂🙏
Do you guys trade for other people
Not anymore.
~ Nicholas
Great video, I've realised that confirmation bias is really hard to overcome. If you recorded a couple of negative trades, the next time you see a setup that would not work, you will start looking for excuses as to why you wouldn't have taken this trade. Also, live trading entails bad fills, slippage, hesitation and trying to watch multiple stocks/forex pairs at once, making things easy to miss
Absolutely right Patryk!
~ Nicholas
only one strategy, omg i find the holy grail every week for the last 3 years :(
😂 oh believe me, I've been there many times too.
~ Nicholas
Pinbars everywhere lol great video.
Thanks!
~ Nicholas
CONNOR HAHAHAHA
به فارسی ترجمه کن
I am surprised that before implementing a training strategy, it is not been tested before.
If it does not work in testing environment how can it work in real trading.
Trading without prior tests, it is a waste of money and makes you part of the 90% of loosing traders.
What a shame!
Yeah but you have your own dumo strategy?