An indecent proposal for Peter

[ruthlessimon]

If you can learn from your mistakes, analyse what you've done wrong, try new strategies to see what works and what will improve your profitability.

I can explain the exact process of enriching uranium - & it's pretty simple - but it takes the resources of an entire country to actually do it.

Same with your statement. That process of "analysing mistakes", is not trivial (an utter rabbit hole at times) - & I'd say almost all of us don't know the optimal way to correct our mistakes when developing strategies/models.

[Dave C]

..but at the end of the day, your best tutor is yourself !..

...you'll probably learn from your own experience more than anyone else can teach you...

With all due respect, that is utter rubbish.

[Derek27]

..but at the end of the day, your best tutor is yourself !..

...you'll probably learn from your own experience more than anyone else can teach you...

With all due respect, that is utter rubbish.

Sorry, maybe you can't, but I have.

After spending thousands of hours trading, I can't honestly say that I've learnt more in the few hours I've spent reading or viewing videos about trading.

[Derek27]

If you can learn from your mistakes, analyse what you've done wrong, try new strategies to see what works and what will improve your profitability.

I can explain the exact process of enriching uranium - & it's pretty simple - but it takes the resources of an entire country to actually do it.

Same with your statement. That process of "analysing mistakes", is not trivial (an utter rabbit hole at times) - & I'd say almost all of us don't know the optimal way to correct our mistakes when developing strategies/models.

It's not a question of knowing "the optimal way" to correct mistakes - nobody's perfect and does everything the optimal way. The question is can you learn and improve from them ?

We all learn to drive with an instructor sitting in the car telling us what to do, but trading is too fast moving to be compared to driving and most other crafts. The decision to back or lay, and at what price has to come from the trader's own brain, and the skill required to trade comes largely from experience.

[Wildly]

Are you still teaching trading to your daughter Peter?

[to75ne]

If you can learn from your mistakes, analyse what you've done wrong, try new strategies to see what works and what will improve your profitability.

I can explain the exact process of enriching uranium - & it's pretty simple - but it takes the resources of an entire country to actually do it.

Same with your statement. That process of "analysing mistakes", is not trivial (an utter rabbit hole at times) - & I'd say almost all of us don't know the optimal way to correct our mistakes when developing strategies/models.

It's not a question of knowing "the optimal way" to correct mistakes - nobody's perfect and does everything the optimal way. The question is can you learn and improve from them ?

We all learn to drive with an instructor sitting in the car telling us what to do, but trading is too fast moving to be compared to driving and most other crafts. The decision to back or lay, and at what price has to come from the trader's own brain, and the skill required to trade comes largely from experience.

I think your mainly correct but the most important aspect/ability is emotional control. learning to take ticks and in practice taking ticks is quite straight forward, the price can only go up, down or stay the same, cant do nothing else. having the emotional control/ability to cut out a bad trade, close a trade ( good or bad), and to take a loss (small or large) would seem to be an innate ability, not something that can or can easily be learnt or taught. these forums are littered with threads that support that.

in short the mechanics can be learnt with experience or with instruction or both, but the emotional aspect would seem to be a natural ability.

[ruthlessimon]

It's not a question of knowing "the optimal way" to correct mistakes - nobody's perfect and does everything the optimal way. The question is can you learn and improve from them ? The decision to back or lay, and at what price has to come from the trader's own brain, and the skill required to trade comes largely from experience.

What advice would you give to this trader:

A breakout trader (who trades breakouts for x, y, z reasons) is just profitable 1:1, with a 60% strike-rate. He struggles mentally with this edge, so focuses a lot of his time trying to cut out these losses & improve the strike-rate. He has a brainwave. All these losses were caused because of reversals. Therefore, he now trades just reversals. This trader has solved all his breakout problems. Yet has just created brand new problems. As every reversal that fails would have been the perfect breakout. This plays on his mind, & a vicious loop of losses & frustration ensues. This trader didn't know how to properly solve his problems. & his experience lead to the wrong conclusion.

He's used his experience, but he doesn't know how to correctly improve from his mistakes. I believe someone like Peter, could solve that trader's problem.

Also, maybe the losses weren't mistakes, as he followed his plan. But he wants to improve his edge, as does a trader who constantly makes mistakes.

[Derek27]

It's not a question of knowing "the optimal way" to correct mistakes - nobody's perfect and does everything the optimal way. The question is can you learn and improve from them ? The decision to back or lay, and at what price has to come from the trader's own brain, and the skill required to trade comes largely from experience.

What advice would you give to this trader:

A breakout trader (who trades breakouts for x, y, z reasons) is just profitable 1:1, with a 60% strike-rate. He struggles mentally with this edge, so focuses a lot of his time trying to cut out these losses & improve the strike-rate. He has a brainwave. All these losses were caused because of reversals. Therefore, he now trades just reversals. This trader has solved all his breakout problems. Yet has just created brand new problems. As every reversal that fails would have been the perfect breakout. This plays on his mind, & a vicious loop of losses & frustration ensues. This trader didn't know how to properly solve his problems. & his experience lead to the wrong conclusion.

He's used his experience, but he doesn't know how to correctly improve from his mistakes. I believe someone like Peter, could solve that trader's problem.

Also, maybe the losses weren't mistakes, as he followed his plan. But he wants to improve his edge, as does a trader who constantly makes mistakes.

I once spent three hours trying to adjust the brakes and gears on my bicycle, getting nowhere and getting more and more frustrated. I eventually decided to take it to a bicycle mechanic who knows what he's doing, and let him to it.

If I had somebody to show me how to do it, maybe I could have been a bicycle mechanic, or maybe I just wouldn't have the knack ?

I'm sure Peter's courses will enlighten and equip a trader to improve his trading, but unless Peter's going to be standing over his shoulder every time he trades, he has to be able to figure things out for himself if he is to succeed. The situation you described is a simple problem - even a newbie might realise that simply switching to reversal trading is not the answer.

You also need to bear in mind that if you attend Peter's course and do a bad trade, he's not going to impose a £100 fine on top of the fee (at least I hope not!). Trading is like being in the army where you get punished, severely sometimes, for the slightest mistakes. If you can't learn from your own experience not to repeat these mistakes and predominantly rely on other people to tell you what you're doing wrong, you've got an uphill task.

[ruthlessimon]

The situation you described is a simple problem

Therefore a mentor would benefit greatly wouldn't you agree. That small bit of advice may have saved that trader a couple of weeks of development & many losses. A 30sec conversation is all that's needed.

If you can't learn not to repeat these mistakes and predominantly rely on other people to tell you what you're doing wrong, you've got an uphill task.

Trading is the definition of a "wicked problem" - solving a wicked problem is probably one of the hardest endeavours any of us will ever attempt in our working lives. I have so much respect for those who can solve it alone.

[Derek27]

The situation you described is a simple problem

Therefore a mentor would benefit greatly wouldn't you agree. That small bit of advice may have saved that trader a couple of weeks of development & many losses. A 30sec conversation is all that's needed.

I don't think so. I've sometimes made the same mistake twenty times before I learnt not to repeat it, so simply being told not to do it by a mentor wouldn't have helped. It's only when you get your arse kicked (i.e. lose money) that you start to learn. Theory is useless without experience. Besides, if you need simple advice, there's probably a 1000 other things you need advice about so it wouldn't save the trader any losses. This is why most of us lose or break even when we first start trading.

Trying to make money trading is a 'wicked problem', but anyone who consistently profits from trading (I assume you included) has solved the problem, even though there are always other wicked problems to solve in order to progress your trading.

[ruthlessimon]

anyone who consistently profits from trading (I assume you included) has solved the problem, even though there are always other wicked problems to solve in order to progress your trading.

I'm sure I've seen Peter write the following somewhere (along similar lines, although I might have made it up ):

"People have found a pattern that yields consistent returns, but they cannot do the background work to prove it."

I'd put myself in that category. My experience means mostly I've "stumbled" on certain opportunities, but it's pretty much all "instinct" (whereby my journal is based on videos, not data). This is acceptable to a point (i.e. fillrates), but it lacks finesse & ultimately "true" scalability (i.e. does my pattern work equally well on this race? on this runner? etc etc). Maybe I'm a rare breed who wants to prove their edges in cold hard data. But I think all top top traders, have a fundamental base in statistics & data handling - therefore can prove why what they do works - which can be taught.

[Derek27]

If you've made a profit every month for 12 consecutive months, that in my opinion is conclusive proof that your methods are profitable.

I analyse my journal on a meeting-by-meeting basis and find that I'm highly successful at some, and dreadfully bad at others. The reasons why are still a work in progress and perhaps I can do better by changing my approach to the losing meetings. But your overall profit and consistency is most important.

[newaustralian]

Great string of comments. I cannot prove with data that I win however if you have achievable targets they can be achieved with good, repeat good money management. I win using arbitrage between betfair and the online bookmakers and laying. My target is to make 1.17% on my capital each day, addint the profits to the capital and thus winning more each day. Having started with $1000 on August 1 ( birthday of Australian race horses) . I now have $2714 - slightly less than my target as back in September I made a mistake with my arbitrage and lost both sides. By adding the winning to my balance and still aim for at a win target of 1.17% I consider I will have a balance of over $20000 by July 1. Last year while developing my ability I turned $1000 into $12000 in a year. As I write this I have just bet on the US races - woodbine $300 @ $2.00 - Potential win $300 and layed $335 @ $1.89 - Potentail loss $298. The horse won so I made $2.00 BUT if the horse had not won I would have made $35 less commisssion of $17 = $18.00 or a return of about 6% on the bet. Another example - On Saturday an online firm offered a bonus bet equal to your original bet ( up to $100). My arbitrage of the original bet lost $12.00 BUT the bonus bet was placed such that I would make $76.00 on the race . Over all a win of $64 was certain. .. No ability or knowledge is required just the ability see the arbitrage and be willing to take small profits.

[Euler]

Are you still teaching trading to your daughter Peter?

And the other two now.

[Derek27]

I cannot prove with data that I win...

It's easy to prove with data that you win, you just subtract your total losses from your total profits.

As I write this I have just bet on the US races - woodbine $300 @ $2.00

Lucky you. I arb on US racing. With UK bookies you'd be lucky to get more than £100 on an evens favourite and they stop accepting your bets after you've won as little as a few hundred. I take it you don't have that problem in Australia ?