Sharing Trading Systems

The Challenge with most Trading Systems introduced in Forums/Chat Rooms . . .

Often generous traders like to share their trading systems in forums and chat rooms. In spite of their charitable efforts, this can be a laborious and frustrating endeavor – not only for the presenter, but the participants as well.

Most of the confusion is from inexperienced traders and our human tendency to make simple things complicated. Spend some time in the chat rooms and the trading system threads and you will notice the myriad of questions on basic elements of each system that have already been clearly defined and are generally uncomplicated. Even the simplest of instructions are met with the need for clarification to the extreme. What’s typically missing (in addition to knowledge and skill of thread participants) is the comprehensive understanding and explanation of Trade Plan Development.

Trade Plan Development is more than just a trading “system.” It encompasses a solid understanding of market structure, how to build and thoroughly back test a trading system, and training your trading mindset through trading psychology tools to control emotion and maintain discipline. The critical pieces missing in the chat rooms and forums are the models and methodologies to actually achieve each of these elements. Although most traders are aware of their existence, they do not have the knowledge, experience and/or skill to translate and/or teach these to other traders. If you don’t have the tools and training, you can change your mind 43 times within a 5M bar.

The system presented always works for the author because he developed and revised it to fit his personality. Trading systems rarely translate unilaterally to other traders. The ongoing evidence is in the litany of questions and misinterpretations regarding the execution of the simplest of systems and their rules. The fact is the system presenter can never provide all of the information or training required for any other trader to use any system successfully. The user must have the knowledge and experience to adapt the system to his individual proclivities.

The combination of inexperienced, as well as experienced traders attempting to clarify system rules can be exasperating for other forum and thread participants. The repetition of questions contributing to the unnecessary length of the threads is also vexing. Eventually, the experienced traders will lose interest and exit the thread; leaving the system author to spend his posts re-explaining the basics to the inexperienced or lazy traders that will not do the work or “pay their dues” to get up to speed (read the entire thread.) This is the endless cycle of forum threads; the enthusiasm and relevant content at the outset ends in boredom and redundancy as new traders enter near the middle and the end of the thread without having read the entire body of information. The presenter’s reward for sharing becomes diminished as the time commitment to maintain the thread increases. The author loses his zeal and slowly curtails his thread attentiveness. In spite of the initial interest and momentum, the sharing archetype eventually implodes from impatience and weariness.

This cycle is what professionals rely on. They know that that most of the traders in these forums and chat rooms are impatient – jumping from system to system (look at the thousands out there) and rarely, if ever, do the work or invest in a real trading education.

The fact is the trading system is irrelevant. The trader must know the totality of Trade Plan Development and create his/her own trading system. They may adapt an existing system to their individual personality, but still only after acquiring the knowledge and skill provided through a comprehensive trading education that incorporates the elements of complete Trade Plan Development. A proper Trade Plan Development education will teach the trader how to create and test their own system theories, build the belief in a profitable system, and consistently execute valid signals in a live market – all without requiring endorsement, judgment or confirmation from other traders or pundits.

There is no lack of generosity and good intent in the forums and chat rooms, but these are not the hotbeds for producing trading professionals. Although the presenter’s altruism is obvious, there still exists the fundamental deficiencies noted above; lack of a total Trade Plan Development approach along with traders seeking short cuts – a capricious mix at best.

There will be a small number of self-motivated exceptions that will succeed, but for the most part, 90-95% won’t get it and never will. The churn of wide-eyed newbies and struggling, losing traders will keep this cycle alive.

As much as I deride this milieu (the model, not the people,) I realize that this paradigm contributes to my earnings in a very direct way. It perpetuates the delusion that trading is an easy and fast way to make money and those that believe it are investing in the collective market pot from which I draw my income. For that I say thank you. You will keep funding the lifestyle of traders like me that follow rules and a solid trading plan.

I know this first hand because not long ago, I was in the thick of it doing exactly the same thing – looking for quick answers from any and every source. I was just like you – and probably even worse. I know everyone has to start somewhere, but along the way you will come to the realization that you can’t fake it any more. I finally made the decision to make real money trading and with that I had to make a real commitment.

If I can do it, so can you. You simply must decide to do it and then make it happen.

Rick

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