Prop funding insanity – part II

I’ve read all the responses to the first part of this post here:

https://www.reddit.com/r/Forex/comments/yhm44n/prop_funding_insanity/

And I am now sure, that trading community in general is an asylum for mentally ill people.

One of them says: “I am the Napoleon!”. Another one screams “I am the Cleopatra!”. Someone listens, and he believes it, with hope, that he will become Cleopatra one day too, if he works hard enough.

Prop firms and trading educators are the evil doctors here, making sure, that you will never get better. Because they get paid for it. Are they really “evil”? Well, they just do their business.

I am, on the other hand, a nurse, who sees through this shit and wants to find out what is really going on here. And most of these ill guys bite her, spit on her, and scream:

“Argghh! Work hard, bitch, you will become Cleopatra too! I know Napoleon and Mussolini! It’s possible! Get away from me, you failed-Cleopatra!”

Originally, my point was:

I’ve seen guys who trade for years, and more – they teach people how to analyze macroeconomic context, ro how to trade, through articles. They teach you how to use Supply&Demand, RSI’s and all of this crap. Wyckoff, Elliott Waves – you name it. Before that – they study hard to gain this knowledge, and then – they are passing it through. Majority of them have formal economic education as well.

And they fail.

They know fundamentals well.

And they fail.

They know how to manage risk.

And they fail.

They know everything about trading psychology – because they fuckin’ teach it.

And they fail.

Let’s stop talking about journalism – what about trading educators and Forex gurus?

They fail, yet they hide this fact, fabricating the results.

Then, retail trader is learning from courses, books and articles based on those books and magically… he succeeds. Laughing. My. Ass. Off.

Is there any proof of his profitability? Not at all. Just talking shit for hours and hours. No numbers. I’ve NEVER seen a guy that proved that he is profitable after day trading for 300 days. And this is only the stage I, because later, we should examine it further to check, how he manages his positions to make sure, that he wasn’t lucky.

Take a look at this guy:

FTMO Trader who made $40,000 trading shares his Supply and Demand strategy | FTMO

Made 40 000 dollars trading supply and demand!

Meanwhile in the court, Sam Seiden – the author of Supply&Demand strategy, and his Online Trading Academy get sued and lose. This is what Federal Trade Commision has to say:

“In a lawsuit filed earlier this year, the FTC alleged that Online Trading Academy made unsubstantiated mega-bucks promises about their purported investment training programs. According to the complaint – and the defendants’ own data – for most OTA customers, the only time they saw big money was as it flew out of their hands and into the defendants’ pockets. Under the terms of a settlement, OTA founder Eyal Shachar and others will pay millions toward refunds for consumers. In addition, OTA will have to forgive the debt of thousands of customers who took out financing to take their courses.”

Seiden’s company get sued and people complain, that they sold them a losing strategy. Somehow, the guy from FTMO’s video is having great success with it! Praise the Lord! Trading works! Or maybe…

It was plain fucking luck. No skill, no nothing. Just luck – because S&D works – sometimes, yet it will lose in the long run. Therefore, the only “skill” this guy had was being dumb enough to believe that it is possible. And it was.

Because of the randomness in the universe, he won.

Want more? Take a look at this chart:

https://ibb.co/gVKqB1M

It was obvious that retails took a short from the supply zone. Who created it? Bank of Japan, with its currency intervention. What happened? Nothing. Supply gets broken and the exchange rate rallies higher. Why? Because the selloff already happened and you don’t have an info that the participant that is the author of this, so called “supply zone”, has more to sell and will defend it. You don’t know this. You GAMBLE on the random outcome of events.

That’s why the guy from FTMO’s video passed it. Because he was lucky enough to blindly take setups, that randomly worked for some time.

Then, take a look at this. EUR/CHF pair. Retailer sees the support level at 1.20.

https://ibb.co/mRfd4z2

He doesn’t know why it is a support and what are the chances that it will hold. And it was not that obvious. I’ve read an interview with some economist that got fucked up by this crash.

I am here to help and learn, not to be negative, but to be realistic. And as they say, ignorance is bliss, because I’ve had many potentially profitable systems at hand, that I never used, because even if the expectancy was positive, I did not know WHY it worked, and therefore, it did not make any sense to act like a stupid monkey, doing things because “they work”. And that’s what retailers do. They are monkeys in majority, and small percentage of them win, just like in the lottery. Someone always wins.

But the problem is sustainability. I don’t know about you, but I am here for longevity. I hate gambling. I hate poker and prefer chess and I pity guys that try to master “psychology” and other bogus shit no sane man alive takes seriously. If I hear “psychology”, I run, because no real business is based on this. If someone wants to sell you this crap, he is either a scammer or just not that intelligent, which happens often as well.

I don’t want to be like this. I want to be a trader, because of the riddle. Because I am passionate about the markets and if the riddle is really unsolvable for the guy who is not PhD physicist, then I don’t want to play this game. Fuck this and I am out, pursuing career in journalism and learning programming languages, which is the thing I wanted to do for a long time.

These posts are here to start a debate, and my points are:

1. Online Prop Firms WANT YOU TO FAIL and they engrave NEGATIVE BEHAVIOUR in retail trading space, like risking 10% of your capital (not 1% – I say it once again) per trade. Therefore, this is a war and Prop Firm is your enemy, not a friend. They make sure that you will not make it – that’s why there is this “5% max daily loss” rule. Just another nail in the coffin, to be sure, that you will stay in this coffin, as a dead man. Do you think that this is there for your safety? They encourage you to risk 10% of your drawdown per single entry – they don’t give a fuck about your safety. Meanwhile, real prop firms want you to succeed, yet they demand formal education and rich track records, so 99.99% of you (including me) have no chances of getting there.
2. If a trader or an investor, who often holds the degree in economics, and who is experienced and knowledgeable enough, to become financial journalist is not profitable in the long run, there are zero chances that the average Joe who trades RSI is able to do this. It’s common sense. It is possible only when trading is gambling and the outcome of your trading after 300 days is random. That explains why we see tons of people that say that they can do it, but never prove it. This thesis goes hand in hand with research papers, that say trading for a living is impossible in the long run. Also, it aligns with market structure on lower timeframes, which are more or less, the battlefield for the HFT algorithms. And yeah – it is common misconception that journalism is all about writing skills. It’s not – poetry is. Journalism is about knowledge, experience in the field and logical thinking and your writing has to be “just right”. Above average human being for sure, but at the end of the day, nobody gives a fuck about this.
3. Guys that say shit like: “I don’t need to know anything about the markets! I don’t need fundamentals, because everything is priced in!” are admitting that they are gamblers, playing the game that involves zero skill. “All information are priced in” comes from the Efficient Market Hypothesis and it means, that price behavior is totally random in the short term, because there is no spread between, let’s say, intrinsic value of the instrument, or crowd’s perception of this intrinsic value (according to Soros) and the price. Therefore, an asset’s price is always right. It’s not “too cheap” on the support level or “too expensive” at the resistance. It is just right. Always. Therefore, if you buy it at the support, you are not a trader or some kind of businessman. You are a gambler that is trying to predict the future outcome, which is unknown. Meanwhile, guy selling things on, let’s say, eBay platform, is buying low from his distributors and selling high for retail prices. Technically speaking, he is a real trader here.
   • An average trader is a victim of Dunning-Kruger effect. Let’s be honest here – you can learn basic technical analysis in ONE HOUR, if you really want it. Watch this video: https://www.youtube.com/watch?v=d8vjQzjiKrs . 7 year-old girl is trading with the “Fractal Indicator” and millions of grown-ass men worldwide are doing similar shit, saying, that “this is difficult”. I will be brutally honest with you. If you think that TA is something complicated, or ICT’s concept are really hard to understand, you either: a) don’t know shit about economics and need to pick up the book, b) are an economist and it does not make any sense to you c) are not that bright. These things are ridiculously easy. You can react emotionally and dislike my post, but I am just stating facts.

And as I said in the first part of this post, many of my points are depressing from my perspective only. You can leave if you want it. You will read a book, find out that this is the fool’s game, and be like “fuck it, whatever”. I can’t do this right now, because markets are, more or less, my life. Not my hobby anymore. That’s why, writing here for the first time, I really wanted to be wrong – and I still want it, because I’ve wasted thousands of hours backtesting, reading books etc. and it just did not pay me off in any way. After reading tons of material on this topic, my biggest fear is this:

“I’ve worked hard at this and failed. Then, I’ve tried to find someone that will prove to me his long-term profitability and I’ve failed again – there was no one. I’ve found research papers and most of them explain it, saying that day trading is not a game of skill, but pure gambling. Meanwhile 12 year old kid from YouTube passed prop challenge because of the phenomenon of overfitting. He was just lucky and will lose his account, but before it happens, he might be getting real money in payouts. And me? No luck, no payouts and wasted years of my only life”.

Be aware of the nature of this industry and don’t believe people without a year of verified track record. Take care.