Here is the first part of edited version, great reading. I believe I will beat these results this year.
The Truth about Trading - Edited Version.
March 15, 2014 at 7:42am

" I am someone who trades for a living. I have less than 20 years experience but I feel that the mental energy, time, and effort I have put into trading is enormous. I think I have had success because I did the REAL HARD WORK, work that most people want to avoid.

Hard work isn't reading a trading book, applying to a broker, opening a chart and spending hours back testing an EMA crossover. It isn't sitting for 12 hours per day testing the crossover on different markets and then sitting 4 hours waiting for the signal to emerge because in the back test your found it to be 'high probability'. If you are doing this you're wasting your time, spinning your wheels without moving. You are avoiding the truth of trading.

Here is the truth of trading. A trader must learn to identify the direction of the market's trend in the various time frames which are relevant to his trading goals. But the trend direction is often ambiguous. So a trader must learn to face trend ambiguity and thrive in it. Trading is not about clarity. It is not about setups and signals - not about EMA crossovers, three-higher closes for entries, waiting for pin-bars at support.

These sorts of setups and signals may work for a small number of successful traders, but for most aspiring traders they are useless. Why? Because they are NOT the essential part of the trading process. Traders who use setups and signals successfully have already built a mental map of market behavior. Such a map identifies the market's condition and trend in the various time frames which concern him. The current position of the market on this map determines the value of a setup and signal in particular contexts. The way such mental maps are developed is difficult to explain.

Here is what I mean. I could explain a specific setup of mine to you, one that is extremely easy to follow. But I couldn't explain how I interpret the time and sales window and compare it to order flow and market action. And it is this latter interpretation that determines whether or not the trend direction is favorable to the setup. This skill at interpreting time and sales in the context of market action is one I have developed by watching the market carefully and by taking hours and hours of notes on its behavior.

It is this experienced recognition of the direction of the current market trend that gives me an EDGE over other traders. Only after I have made this judgment do I start paying attention to setups and signals.

Knowing the direction of the market's various trends tells me whether my setups are likely to be good ones or bad ones. Most aspiring traders can't make these distinctions. To them all setups and signals look the same. When they take a loss after following one all they simply say "oh it didn't work" and moan about it.

These people have not started the really hard work - the work they need to do to be successful traders. They will have to spend weeks or months watching markets trade. They will have to take notes on what they observe and start building a mental map of market behavior. They will have to learn to exercise judgment is assessing the market's condition and trend - and to have confidence in their judgments and the courage to act upon them.

On these forums and boards hundreds of people talk about how to be a profitable trader. But most of them not profitable themselves, at least not to any significant degree.

Speaking as someone who makes A LOT of money from the markets I say that it was never a specific system or price action setup that finally made me consistently profitable. Rather it was my extensive study of market behavior, of the "tells" it gives that help me identify the market's trend. I had to learn to embrace the inherent ambiguity of all market behavior - to learn that there are no certainties, only probabilities. I had to create my own interpretation of everything, even though I used the knowledge I found in books about the market and trading as a starting point.

I am now able to trade without a system, without a detailed plan but with money management. All the guru's say YOU NEED a specific entry and exit plan but I don't use one.

Believe me, the reason MOST traders lose is because they fail to embrace uncertainty. They try to convert the inherent uncertainty of market behavior into something that is a sure thing in the sense that every trade they make will be dictated by a fixed set of rules. They spend fruitless hours trying to find a system of setups and signals that will make money in the markets. They don't learn the $tick relationship to price themselves but instead look online and see what others have found. They are unwilling to do their own thinking . They don't spend the time needed to develop their own skills of market observation and interpretation.

It took me 4 months to become profitable. Many of you won't believe this. But the reason I was able to do it so fast was because I cut out all the crap. You may believe you are working hard - you may have been up for 8 hours last night testing if the strategy you just read about in a trading book is a good one.

But I say you haven't really started doing the hard work yet. Until you do you will remain unprofitable. You won't find the high-probability, profitable setups you seek. To do this you must first study the market's behavior and understand it - learn how to identify the market's condition and trend. Only after you have mastered this aspect of market interpretation that you can you work with setups and signals.

It will be your understanding of the market's trend that turns your setups and signals into high probability, profitable ones. Setups and signals by themselves cannot do the trick - they cannot turn you into a successful trader. They do not incorporate and understanding of the market's trend and condition. They miss something that only your personal judgment can provide.

Let me give you an example that might open your eyes. Have you ever played a shooting game like Call of Duty 4 or Halo 3? The players who are very good at these games haven't got a system, they don't spend up at night thinking about the best place to camp with a shotgun. They practice playing the game. They master it.

The difference between a winner and loser isn't that the winner knows a secret, or paid someone to teach them the secrets, or have a system of using power-ups to beat people. The winners win because they are more skillful, they have learned how to play, they have mastered the game. How did they do this? By playing the game, by being continuously involved in real time competition.

The same is true of good athletes in any competitive sport. They don't plan their moves against their opponents in advance. Instead they play by following general principles they know work most of the time, and they rely on their game experience to make the right play in response to their opponent's action in the context of the specific game situation. Yet despite their skill and experience every great athlete will tell you that he/she fails frequently.

Try hard to think about what this means. I think it demonstrates my point quite clearly. The good players are genuinely skilled. They do not follow mechanical rules in their play, rules that anyone could learn by reading a book. Whoever heard of a football player becoming great by reading a book on football?!! But aspiring traders seem to believe they can become good traders, make good profits, by reading books on trading and checking out the statistics of every setup and signal under the sun! What's wrong with this picture?

A genuinely skillful trader is someone who can apply his knowledge of market behavior in any context, in any environment. In some situations he knows that certain setups and signals are genuinely useful, but in other situation he avoids those same setups and signals like the plague.

CONTEXT! It's all about context. Stop trying to trade on signals and setups that pretend that the market context is always the same. You must instead focus your efforts on identifying the direction of trends. This is inherently an ambiguous and uncertain process. So you must embrace uncertainty! Embrace ambiguity! Accept the fact that you won't get things right every time. But at the same time learn to trust your judgements without the support of a rigid framework of mechanical rules.