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.
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.
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!!!!
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.
Member Since Oct 23, 2009 7 postsDito(newborn)Dec 06 2009 at 15:29 (edited 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 :(
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?
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
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