Wednesday, July 21, 2010

Wise Words from Barry Ritholtz

3 comments:

Ashvin said...

hi sir,

one observation and one help required..

observation : almost all the analyst have their proprietary(as u also have) indicators?? i was reading a research on common indicators like MACD, RSI etc... research says almost all freely and easily available indicators and setups do not work in actual trading..

that is why i think every analyst have their proprietary indicators(which are not magic indicators) but modified indicators or setups which are suitable to their trading style.
what's u r view on this thought?

now help part, I have read few books on technical analysis but i am not able to create a trading stratergy for positional trading which works on real market?? i have knowledge of common indicators like macd, rsi, cci etc... and some less common indicators like ehler's mesa, sinewave, etc... also.

i have programmed few setups but their result are not good on back testing as well as on paper trading..
kindly suggest forward path??

Mind Without Fear said...

I think making money in trading depends less on access to proprietary or publicly available indicators than the following two:

1. Money management - in particular managing loss, and

2. consistency in using the set ups using that indicator.

I believe that the success of great traders lies in the above two factors than in having any magic formula. After all any formula discovered by one will be found by another sooner or later ( in todays information spread scenario, sooner and not later ). Furthermore, reat traders are not the geniuses of the world in the mold of Einstein and Newton or Ramanujan, but they can beat any three of the above in trading discipline and money management.

prannyyyyyy said...

sir u r great