NEW skool trading or OLD skool trading
Dec 06, 2009 at 00:41
Hi everyone,
I'm a new here but if you google on my name you will see that I am around for quite some time.
First difference betweeen old and new skool is that new skool traders don't take the effort to read postings that are longer then 4 lines of text... ;-)
The reason why I open this topic is that over the last 6 months I see more and more systems around who in my opinion have nothing to do with trading anymore.
For that reason I have the tendency to split up trading systems in new skool and old skool trading.
1) new skool: martingale, grid and systems with small T/P's but huge S/L's or even no S/L at all (relying on price so called 'always' comming back).
Those are used by young people or people who have very small accounts to trade from.
They generate enormous profits over a very short period of time but are proven to be sooner or later defenatly going to blow up your account. The kind of people who trade those systems trade from a sort DO or DIE philosophy and know if the account would blow up they have enough time to pick up a 'normal' job and earn the money back that they lost.
Very tipical of those systems is that people who trade those systems here on myfxbook make balance, trade history, lot size and or open history invisible or privat. The reason for this is that it would show that they take absolut redicilous risks or that occasionaly they are confronted with enormous floating losses.
If those kind of people would have a 100K$ account they would never trade such a system.
2) Old skool: 'normal' systems with a lower hitrate then the new skool systems. A longer recovery period and taking longer time to make some profits. They are traded by people who have a more profesional aproach to trading. They have a vision over a longer time. Are more conservative and don't see trading as some vitrual game of casino.
Those systems will not use any martingale techniques or S/L that are way to big in relation with the T/P that the system is aming for ( the average losiing trade should not be more then 2.5 x times bigger then the avg. winning trade (based on 1 fixed lot trading). Those systems clearly show a acceptable Max. drawdown in relation with the total profit and have NORMAL stoplosses so that the open floating losses would not damage the balance to much ( a trade that goes more then 100 pips in loss to initialy take 10 pips profit has nothing to do with trading --predicting in some sort of way the direction of price--but is pure gambling).
People who trade these kind of system on myfxbook will show all details and have nothing to hide and don't have the spirit to double up their account every month.
One can easely trade a 50-100K$ account from these kind of systems with the knowledge that at the end of the year one will have a nice and realistic profit where one can nicely live from.
Recap: There is no wrong or right but only a new skool and old skool of traders. But if I may give my opinion: I would not mind that from tomorrow on brokers need to ask at least a min. starting balance of 5-10K$. It would bring immedialty an end to all the 'virtual financial gamers' so that the market would be left with peole who concentrate on professional trading.
Friendly regards...FXiGoR
PS. Be awere for systems here on myfxbook that don't show you full details on lotsize account balance and open trades and history.
Don't think that they hide their details because they are afraid that they would reveal something or give away some hidden trading secrets.
On the contrary, they are afraid that if you would see how they trade that it would reveal to many redicilous risks that would make you run away from such a system or not take it serious anymore.
I'm a new here but if you google on my name you will see that I am around for quite some time.
First difference betweeen old and new skool is that new skool traders don't take the effort to read postings that are longer then 4 lines of text... ;-)
The reason why I open this topic is that over the last 6 months I see more and more systems around who in my opinion have nothing to do with trading anymore.
For that reason I have the tendency to split up trading systems in new skool and old skool trading.
1) new skool: martingale, grid and systems with small T/P's but huge S/L's or even no S/L at all (relying on price so called 'always' comming back).
Those are used by young people or people who have very small accounts to trade from.
They generate enormous profits over a very short period of time but are proven to be sooner or later defenatly going to blow up your account. The kind of people who trade those systems trade from a sort DO or DIE philosophy and know if the account would blow up they have enough time to pick up a 'normal' job and earn the money back that they lost.
Very tipical of those systems is that people who trade those systems here on myfxbook make balance, trade history, lot size and or open history invisible or privat. The reason for this is that it would show that they take absolut redicilous risks or that occasionaly they are confronted with enormous floating losses.
If those kind of people would have a 100K$ account they would never trade such a system.
2) Old skool: 'normal' systems with a lower hitrate then the new skool systems. A longer recovery period and taking longer time to make some profits. They are traded by people who have a more profesional aproach to trading. They have a vision over a longer time. Are more conservative and don't see trading as some vitrual game of casino.
Those systems will not use any martingale techniques or S/L that are way to big in relation with the T/P that the system is aming for ( the average losiing trade should not be more then 2.5 x times bigger then the avg. winning trade (based on 1 fixed lot trading). Those systems clearly show a acceptable Max. drawdown in relation with the total profit and have NORMAL stoplosses so that the open floating losses would not damage the balance to much ( a trade that goes more then 100 pips in loss to initialy take 10 pips profit has nothing to do with trading --predicting in some sort of way the direction of price--but is pure gambling).
People who trade these kind of system on myfxbook will show all details and have nothing to hide and don't have the spirit to double up their account every month.
One can easely trade a 50-100K$ account from these kind of systems with the knowledge that at the end of the year one will have a nice and realistic profit where one can nicely live from.
Recap: There is no wrong or right but only a new skool and old skool of traders. But if I may give my opinion: I would not mind that from tomorrow on brokers need to ask at least a min. starting balance of 5-10K$. It would bring immedialty an end to all the 'virtual financial gamers' so that the market would be left with peole who concentrate on professional trading.
Friendly regards...FXiGoR
PS. Be awere for systems here on myfxbook that don't show you full details on lotsize account balance and open trades and history.
Don't think that they hide their details because they are afraid that they would reveal something or give away some hidden trading secrets.
On the contrary, they are afraid that if you would see how they trade that it would reveal to many redicilous risks that would make you run away from such a system or not take it serious anymore.
Dec 06, 2009 at 09:10
FXiGoR, you have spoken well, and I totally agree with you 100%, but you know what's funny? I've looked at all the live, manual, trading systems on this website and I was astonished that some of the people that had the biggest returns had the biggest drawdowns, and when you view thier history it's amazing to see the mindset of the traders.....The negatives aren't the problem, I was wondering why no one was using stoplosses? I posted and asked everyone, did they have a trading business plan together? And guess what? No one responded to that post, but you see post all day about how people are making new systems and getting 100pips and robot trading systems.....I'm not going to lie and say I'm this big time trader and I have all the answers, and don't make silly trades, but I do feel like my 2 years of trading has grown fast, and me having a plan makes me stick out in MY mind, and the thing is not even having a plan, the XAU/USD is in sticking to that plan....I bought Sun Tsu's book and he was real big on having plans and in those plans should be back up plans, so when you see traders here with big drawdowns, no s/l you know thier movie has no script.......I had an instance with traders following me on twitter and they would be talking about all these big profits and their insignt on the market, but I never saw them post any losses. that is what attracted me to this site, I am in the process of building my resume, and getting a new broker, so I will be happy to show my clients my history, once everything is in place........ do you know of MT4 platforms having slippage? I was in a trade last week and I actually had to many lots because I was thinking 10lots was 100,000$ and not 1mil so now I'm on a timeout as stated in my business plan when you make real silly mistake to stop and analyze, anyways if you check the chart in the time frame of the trade my stop was never hit but the broker activated my s/l , but the market went my way so I was really hot (California word for mad) so I'm out the game until tuesday but do you know anything about MT4? oh and check out the video I posted for those twitter jerks I'm sick in the video so please excuse!! you'll laugh out loud!!!!
Early Birds get the worms!!!
Membro Desde Aug 31, 2009
131 posts
Dec 06, 2009 at 09:17
Touche' - VERY Nice post. The only point I quibble with is the 'hiding' trades comment. Some systems can be reverse engineered by watching the open/pending orders. Myfxbook allows you to compute the drawdown so its really not hidden for system trackers but I agree with the other 99% written. Trying to double your account every month is a recipe for disaster - Forex allows us to make what I consider astronomical returns (10% to 30+%) monthly with relative safety. Playing FX or BUST is for newbies.
It ain't easy being Cheesy!
Dec 06, 2009 at 15:29
(editado Dec 06, 2009 at 15:43)
What you say is true about excessive risk taken by relatively new traders. But you can't generalized new skool and old skool like that. There's also pro trader with fat account that trend trades with small tp and large sl in term of pips, but obviously they control their risks too.
I know you are one of the successful trader, You are one of my 'reading list'. I read all your work back then from sbfx, ff, and fx-tsd (trend retracement, then develop zorro, and now dna right?). Doubled 6 digit euro account around 2005 - 2007 right? and prolly hold 7 digit account right now.
I think its fair enough if I say I know there are other traders that also manage big account that do trend following trading with relatively small TP and large SL with reasonable SL placement, and equally successful as you are.
Other than that, I agree with your post and warning.
PS. hey Fulltime247! I still can't make that averaging up script works :(
I know you are one of the successful trader, You are one of my 'reading list'. I read all your work back then from sbfx, ff, and fx-tsd (trend retracement, then develop zorro, and now dna right?). Doubled 6 digit euro account around 2005 - 2007 right? and prolly hold 7 digit account right now.
I think its fair enough if I say I know there are other traders that also manage big account that do trend following trading with relatively small TP and large SL with reasonable SL placement, and equally successful as you are.
Other than that, I agree with your post and warning.
PS. hey Fulltime247! I still can't make that averaging up script works :(
Dec 06, 2009 at 21:31
Sometimes it is even less then a day. Take a look at Oandas FX News Effects and see how the news effected the currency and the time period.
https://fxtradeinfocenter.oanda.com/market_news/fxnewseffects.shtml
https://fxtradeinfocenter.oanda.com/market_news/fxnewseffects.shtml
Dec 08, 2009 at 01:43
I don't understand...I tryed to make already severall posting and every time I click on the button posting nothing happens.
It looks like if one makes an swer of 10 lines it accepted but if you make a posting that is longer then it does not accepted.
Sorry but I am not the person of 2-3 words.... 😕
It looks like if one makes an swer of 10 lines it accepted but if you make a posting that is longer then it does not accepted.
Sorry but I am not the person of 2-3 words.... 😕
Dec 08, 2009 at 01:44
lets try it in parts then...
Part1
Part1
streepips posted:
...And guess what? No one responded to that post, but you see post all day about how people are making new systems and getting 100pips and robot trading systems.....
.....I'm not going to lie and say I'm this big time trader and I have all the answers, and don't make silly trades, but I do feel like my 2 years of trading has grown fast, and me having a plan makes me stick out in MY mind, and the thing is not even having a plan, the XAU/USD is in sticking to that plan.........
........do you know of MT4 platforms having slippage?
Dec 08, 2009 at 01:45
Part 2
Hi Streepips,
About the results of the manual traders: If you have red some books like A.Elder, John.J.Murphy, Garry Williams, Jack Berntein etc etc...They have all write one thing in common on their introducing page or the back of their book....we are experienced traders for over more then 15-20 years. In those years we had several years where me made a ton of money and we had years where we all gave it back again. Their end conclsuon was that they needed ton trade according a well thought of system or trading plan and really stick to it without any excuse. From that moment on they started to make money and know now that this money is for keeping ( of course one will have entermidiar losses).
Conclusion1: you need to stick to a plan. And that plan is going to change over time but you need to respect the ground principals
Hi Streepips,
About the results of the manual traders: If you have red some books like A.Elder, John.J.Murphy, Garry Williams, Jack Berntein etc etc...They have all write one thing in common on their introducing page or the back of their book....we are experienced traders for over more then 15-20 years. In those years we had several years where me made a ton of money and we had years where we all gave it back again. Their end conclsuon was that they needed ton trade according a well thought of system or trading plan and really stick to it without any excuse. From that moment on they started to make money and know now that this money is for keeping ( of course one will have entermidiar losses).
Conclusion1: you need to stick to a plan. And that plan is going to change over time but you need to respect the ground principals
Dec 08, 2009 at 01:45
Part3
Conclusion2: It is not because you see some manual traders out there that are really doing good that they saw the holy light. Manual trading is an iron bol chained around your leg for the rest of your life or better as long as you are manual trading.
If you want to do it good you never are at ease or in a resting period. You need to always keep contact with the markets. You need to have the markets streaming through your blood. And most important if you drop one moment that most important factor DISCIPLINE it can kill you.
It happend to me. I am not a professional trader for 14 years. The evening of the 23th of Feb. 2001 I lost everything I had in my life. I had made a lot of money through trading because of avereging out all the time. That day price did not come back and continued the wrong way. My broker phoned me and said: Sorry igor but all your accounts are closed and I even did everything possible to keep them open for a bit longer.
Conclusion2: It is not because you see some manual traders out there that are really doing good that they saw the holy light. Manual trading is an iron bol chained around your leg for the rest of your life or better as long as you are manual trading.
If you want to do it good you never are at ease or in a resting period. You need to always keep contact with the markets. You need to have the markets streaming through your blood. And most important if you drop one moment that most important factor DISCIPLINE it can kill you.
It happend to me. I am not a professional trader for 14 years. The evening of the 23th of Feb. 2001 I lost everything I had in my life. I had made a lot of money through trading because of avereging out all the time. That day price did not come back and continued the wrong way. My broker phoned me and said: Sorry igor but all your accounts are closed and I even did everything possible to keep them open for a bit longer.
Dec 08, 2009 at 01:46
Part 4
I looked to my screen for 48H with glazy eyes in a zombie state of mind and was REALLY thinking of commiting suicide because I did not have a pot to piss in anymore (lost it ALL).
Lucky enough that my 2 children walked trough the door after those 48hours staring as a zombie to my trading platform and realised that they needed me.
Moral of the story: You can be very good for 5 years as a manual trader but it only needs 1 day to whipe you out completaly.
Same for the manual traders you see here. I did not check out their results but if you say that they do not use any stoplosses or have strange trading techniques like martingale or averaging out like I did then the question should not be ask how good are they but when are they going to fail completaly.
People talk about the 5% rule on traders being succesful. Believe me, trust me, it is only 1 on 1000traders that is succesfull.
Up till now I never saw a trading track record over more then 3 years manual trading. And that is normally the minimum to calculate a reliable 'sterling ratio' on your track record ( Total profit over 3 years devide by 3 to have the avg result per year devided by the biggest drawdown on your balance --open trades not closed trades-- over that 3 year period).
I looked to my screen for 48H with glazy eyes in a zombie state of mind and was REALLY thinking of commiting suicide because I did not have a pot to piss in anymore (lost it ALL).
Lucky enough that my 2 children walked trough the door after those 48hours staring as a zombie to my trading platform and realised that they needed me.
Moral of the story: You can be very good for 5 years as a manual trader but it only needs 1 day to whipe you out completaly.
Same for the manual traders you see here. I did not check out their results but if you say that they do not use any stoplosses or have strange trading techniques like martingale or averaging out like I did then the question should not be ask how good are they but when are they going to fail completaly.
People talk about the 5% rule on traders being succesful. Believe me, trust me, it is only 1 on 1000traders that is succesfull.
Up till now I never saw a trading track record over more then 3 years manual trading. And that is normally the minimum to calculate a reliable 'sterling ratio' on your track record ( Total profit over 3 years devide by 3 to have the avg result per year devided by the biggest drawdown on your balance --open trades not closed trades-- over that 3 year period).
Dec 08, 2009 at 01:47
Part 5
About your slipage: Every broker has slipage. Slipage is a natural thing in trading. Many people don't understand what slipage means. Slipage is the difference in price between the TIME you RECEIVE the signal to take in an entry and the price you received on the TIME you TOOK the entry.
- If you trade a trend following system then more then 50% of the time you are going to have a worse price on your entry then on your signal.
- If you trigger a stoploss (market order) then more then 50% of the time you are going to have a worse price then your initial price you excpected.
- If you trade a contrair system then more then 50% of the time you are going to have an entry that is BETTER then the price on your signal.
About your slipage: Every broker has slipage. Slipage is a natural thing in trading. Many people don't understand what slipage means. Slipage is the difference in price between the TIME you RECEIVE the signal to take in an entry and the price you received on the TIME you TOOK the entry.
- If you trade a trend following system then more then 50% of the time you are going to have a worse price on your entry then on your signal.
- If you trigger a stoploss (market order) then more then 50% of the time you are going to have a worse price then your initial price you excpected.
- If you trade a contrair system then more then 50% of the time you are going to have an entry that is BETTER then the price on your signal.
Dec 08, 2009 at 01:47
Part 6
If you do backtests with Omega Trade station or Metastock professional or Amibroker you even have a box where you fill in your standard slipage per trade. Which is the write thing to do...filling in a standard slipage per trade, that way you are not going to get suprised. If a system apears not to perform so well with slipage then without slipage then that means that the system has not enough reserve or not robust enough.
Many many system look very nice on paper with a very small spread and no slipage. Once you backtest or even better trade them then suddenly it changes a winning system on paper into a losing system system with real money.
Best brokers: Dukascopy, ATCbrokers, BROCO (trader-fixed spread), Oanda.
Friendly regards... FXiGoR
If you do backtests with Omega Trade station or Metastock professional or Amibroker you even have a box where you fill in your standard slipage per trade. Which is the write thing to do...filling in a standard slipage per trade, that way you are not going to get suprised. If a system apears not to perform so well with slipage then without slipage then that means that the system has not enough reserve or not robust enough.
Many many system look very nice on paper with a very small spread and no slipage. Once you backtest or even better trade them then suddenly it changes a winning system on paper into a losing system system with real money.
Best brokers: Dukascopy, ATCbrokers, BROCO (trader-fixed spread), Oanda.
Friendly regards... FXiGoR
Dec 08, 2009 at 02:11
How redicilous is this....even this posting I need to chop up it up in 2 parts....ppffffff.
Hi Fulltime247,
Reverse ingenering is a bit of to big word. I am a system develloper for nearly 14 years now and there is no way to duplicate a system with 100% certainty to know which specifiec indicators and parameters a system is using by looking to the entry time and price and exit time and price.
You probaly mean that if somebody could see you entrys and exits and has enough knowledge of trading and knows his arsenal of indicators that he could know more or less what system that you trade....
Yep, but if it is that obvious to recongize or reveal a system then you need to realize that there are millions of traders out there and that probably a lot of them are already trading more or less the same system you are trading.
Fulltime247 posted:
....Some systems can be reverse engineered by watching the open/pending orders. ......
Hi Fulltime247,
Reverse ingenering is a bit of to big word. I am a system develloper for nearly 14 years now and there is no way to duplicate a system with 100% certainty to know which specifiec indicators and parameters a system is using by looking to the entry time and price and exit time and price.
You probaly mean that if somebody could see you entrys and exits and has enough knowledge of trading and knows his arsenal of indicators that he could know more or less what system that you trade....
Yep, but if it is that obvious to recongize or reveal a system then you need to realize that there are millions of traders out there and that probably a lot of them are already trading more or less the same system you are trading.
Dec 08, 2009 at 02:11
Part 2
Or your system is a very simple system and then many people are doing the same thing as you do and then their is not point in hidding the entrys or exits (with millions of people who look to their charts also every day).
Or your system is absolutly unique and then you don't need to be afraid that somebody will know what you are doing.
My system is unique and does not use any indicator what so ever.... so I don't worry. And if somebody out there would have found the same logics I use then I know there is plenty of room out their to allow some more traders that had the same idea like me ;-)
Friendly regards... FXiGoR
Or your system is a very simple system and then many people are doing the same thing as you do and then their is not point in hidding the entrys or exits (with millions of people who look to their charts also every day).
Or your system is absolutly unique and then you don't need to be afraid that somebody will know what you are doing.
My system is unique and does not use any indicator what so ever.... so I don't worry. And if somebody out there would have found the same logics I use then I know there is plenty of room out their to allow some more traders that had the same idea like me ;-)
Friendly regards... FXiGoR
Dec 08, 2009 at 02:47
Here we go again...2 parts...how redicilous is this...
Hi Newborn,
What you say is a bit of a contradiction: .......Large SL.....reasonable SL placement.
If it is reasonable then it is not large.
To help you out a bit what the difference is between a S/L that is reasonable or large and succesful :
Many of the new school traders use very big S/L's and they are VERY succesful. Does that mean that they are right ?....
In trading there is a thing like reward versus risk. So can I ask you a question: Trading is trying to predict which direction the price is going to move. You have 2 posibilitys to do that. Or fundamental techniques (like news reports) OR with the help of technical analysis (such as patern recognition like support and resistance or indicators, finbonacci, EW etc).
If you take in a trade based on the conclusion that price is going to go a certain direction do you think that you can allow price going 10 x times more the wrong way then the direction that you predicted it would go ?....
newborn posted:
................I think its fair enough if I say I know there are other traders that also manage big account that do trend following trading with relatively small TP and large SL with reasonable SL placement, and equally successful as you are.
Other than that, I agree with your post and warning.
.................
Hi Newborn,
What you say is a bit of a contradiction: .......Large SL.....reasonable SL placement.
If it is reasonable then it is not large.
To help you out a bit what the difference is between a S/L that is reasonable or large and succesful :
Many of the new school traders use very big S/L's and they are VERY succesful. Does that mean that they are right ?....
In trading there is a thing like reward versus risk. So can I ask you a question: Trading is trying to predict which direction the price is going to move. You have 2 posibilitys to do that. Or fundamental techniques (like news reports) OR with the help of technical analysis (such as patern recognition like support and resistance or indicators, finbonacci, EW etc).
If you take in a trade based on the conclusion that price is going to go a certain direction do you think that you can allow price going 10 x times more the wrong way then the direction that you predicted it would go ?....
Dec 08, 2009 at 02:48
(editado Dec 08, 2009 at 02:48)
Part 2
That is like me saying to you: I have a technique that can tell me what the colour is of your underwear. You say to me OK tell me. I say white. You say nope it is blue. I say yes OK but I am correct that you are wearing underware so that is not that wrong......
What are you going to say immedaitly to me ? : B*llshit... that has nothing to do with predicting what the colour is of my underwear.
Well that is the same way I think about the new school traders and people who use S/L's that have nothing to do with beeing a trader that is trying to predict the direction of price and who look to trading like some sort of a casino....
Friendly regards....FXiGoR
That is like me saying to you: I have a technique that can tell me what the colour is of your underwear. You say to me OK tell me. I say white. You say nope it is blue. I say yes OK but I am correct that you are wearing underware so that is not that wrong......
What are you going to say immedaitly to me ? : B*llshit... that has nothing to do with predicting what the colour is of my underwear.
Well that is the same way I think about the new school traders and people who use S/L's that have nothing to do with beeing a trader that is trying to predict the direction of price and who look to trading like some sort of a casino....
Friendly regards....FXiGoR
