Some of our time are also sucked up by articles or teachers that teach rubbish.
Too many parameters to tune
I truly believe what's underlying that makes trading difficult is simply because there are too many parameters to tune. By parameters I am talking about:
- type of instrument - options, stocks (local or overseas) , futures, forex, CFD, warrants etc
- timeframe to trade - 5 min, 15 min, 30 min, hourly, 4 h, daily etc
- lot size - a couple of position sizing techniques are mentioned in Dr Van Tharpe's book
- entry strategy - which timeframe to enter, what and how many indicators to use, which candlestick/chart pattern to look out for?
- exit strategy - we have the same amount of choices as for entry strategy
If you were to mix and match the above, we have unlimited possibilities! Not to mention there are over hundred types of indicators and candlestick/chart patterns! Now, how much time do we really need?
Difficult to discuss
When aspiring traders come together, we usually talk about what work and what don't. However, because of the short acquaintance, traders usually don't spell out the entire context. For instance, a aspiring trader sharing with his friend may say: "The MACD indicator works for forex.". But... in what timeframe, what parameters, which currency pairs etc. I think you know what I mean. And those who are listening to him may take his "recommendation" and go back to do their own testing and wasting time as a result.
When something doesn't work it is normal
In my personal opinion, this is the most challenging issue to tackle. Let me illustrate with the following scenario:
I backtested a system, and it worked for historical data. And when I traded it live, things don't turn out as well. Explanation: Well, past performance don't gaurantee future result, market condition changes, anyway, best traders only have success rate of 60% at best, etc
If I come to think of it, we can't have a clue to what's working what not!?!?
Do you have any personal experience to share?
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