Here's the situation as I see it for most users on the forum. You've have been spinning your wheels while thinking that you are getting somewhere. You are trying to learn how to trade in the wrong way.

I see that most aspiring traders focus all their attention on "set-ups" and on finding out which combinations of indicators work. But these people are never going to become profitable. Why? They are following the advice of trading books that say trading is simple and psychology is everything. So they search for set-ups that 'work', and they hope that these setups can take the guess work out of trading. They want to be "disciplined" and have simple rules that guide all their actions in all contexts. But I have got news for you: you CANNOT take the guesswork out of trading!!!

I offer this opinion as someone who started last year with $30,000 and ended with $150,000 without a single losing month. I think I was successful because of the way I went about learning and what I focused on. My learning process was very different from the ones suggested on this stock board. I learned that while psychology is huge it is not everything. And while trading is all about simple principles, actually having an edge is NOT simple. It's a myth that you can have a couple simple price or indicator set-ups and make money consistently if only you are disciplined. That's a load of crap. It keeps the dream alive for wannabe traders who never realize what trading is truly about.

Trading is about being okay with ambiguity. It's about tolerating confusion. It's about sitting with discomfort and being at peace with it. It's about not having an exact script of when to trade or not to trade, or what's really a high odds trade, and being okay with that. It's about exceptions to the rules. It's about contradiction. It's about uncertainty.

And yet traders left and right want to make it simple and certain. They want to reduce it to a few simple set-ups to trade with discipline. But the market is not simple. The market is all about uncertainty, and complexity, and ambiguity. Simple set-ups could never capture that, and they can never give you a true lasting edge.

So what's the solution? Is the problem in the simple set-ups themselves? No, it's how they're being used.

The bottom line is that every trader needs to learn to READ the market, identify the direction of the trend which concerns you. This means that simple rules will not do. There has to be a synthesis of different elements (whether they be price action, indicators, inter-market themes or whatever), and real-time interpretation must take place. It has to be all about CONTEXT.

Once you can read markets in an unbiased way you can then choose to employ "simple" set-ups to enter and exit. But the real work will be in learning to READ THE MARKET to see when you should use which kind of set-up. Seeing a hammer or whatever near a support means nothing unless you've identified the broader picture and gotten a sense of the kind of tactics you should be using, and what the odds are for different scenarios unfolding.

Now I know most traders try do this to some extent, but their main focus is on the set-ups. It's not on reading the market from minute to minute, hour to hour, figuring out the odds of it doing this or doing that, adapting dynamically, and thinking of trade ideas from all your observation as the day unfolds. Rather, it's waiting for some simple set-up to pop up and then taking it.

Is it easier emotionally to have clear set-ups to wait for and trade in this simple manner? Absolutely. But who said 'easy' would make you money? If I've learned anything, it's that the market rewards what is hard to do.

It's hard to have ambiguity surrounding your market reads. It's hard being uncertain. It's hard dealing with competing and sometimes conflicting signs. But this is an inevitable part of the trading process. You must stop trying to avoid it by demanding that things to be clear cut.

Yes, I know, it is hard to be disciplined when there's so much ambiguity, so much uncertainty about just what trade to make.

But as a trader it is impossible to eliminate uncertainty. Don't try to avoid it by looking for simple set-ups or some straight-forward, simple, always- right method. Instead, train your mind to deal with the uncertainty.

How can you learn to do this? You must be constantly engaged with the market, always trying (and often failing) to figure out what the market is trying to do (go up or down). You must learn from experience.

In my own case each and every day I would take notes in a journal. I would try to interpret the market's action and try to figure out trades that would take advantage of my analysis. I took note of the ideas that seemed to work and those that did not. I wasn't focused on paper trading, or on recording my emotions, or anything of that sort. Instead I paid strict attention to the market's action and to the information I thought it was giving me about its condition and trend.

Everything in my journal was about my own perception and interpretation of the market's action and what it was telling me about its trend direction.

Day after day, week after week, I kept on making mistakes, wrong calls, being clueless about what was going on, not knowing how I should trade, and not knowing if my views made sense or not. Yet I refused to be discouraged and I continued taking notes and learning.

I would view charts and combinations of historical intraday charts, and I'd note certain behavior. For example, I'd study trend day after trend day and try to notice what they had in common and how I could have picked up on it in real time. Then I'd study range days. Then I'd study a price chart of the ES versus the Advance decline line and see what the relationship was across many different days. Then I'd do the same with the ES and TICK chart. And on and on. Over time, this gave me a feel for the markets, and a certain understanding of how certain days differ and many subtle signs and tells for each type of environment and context.

As for set-ups, I didn't use any predefined ones. I just formed trading ideas and then tried to get in at good trade locations. Even this, which is the art of execution, can be quite complicated. I started realizing that in some environments it's best to wait for pullbacks, in others I need to get in at market or I'll be left in the dust. In some contexts I can buy low and sell high. In others I have to buy high and sell higher.. And so on.

I became consistently profitable in a timeframe of a few months by doing this. But of course before that I had read 30 or 40 books and so I had a lot of background in technical analysis. I had also worked a lot on my psychology and personal issues. But all of this was in conjunction with a method of learning and trading the markets that was contrary to what the general wisdom says about simple set-ups and exact rules.

In the end you have come to a personal realization. Take a look at your trading career thus far. Do you truly believe that if you just learn to focus and take all of your set-ups then your equity curve will reverse and you'll be a consistently profitable trader? Do you think a few simple set-ups could make you rich?

I don't mean to imply that you need complex mathematical models. Far from it. What I do mean is that you must develop a mental map of market contexts and the experience and skill to tell where the market currently is on that map. This will take time, effort, and lot's of frustration to develop. And you won't be able to do this if you spend the whole trading day simply waiting for set-ups to materialize. That just won't cut it.

Right now your learning curve is stagnant because you're not truly involved with the markets and their behavior. You are acting like a statistician who is separate from the market. Your day is wasted in waiting mode. You are not in the observing and absorbing mode. Because you fear loss you aren't willing to experiment. This means that you aren't making mistakes and failing regularly, which is what you need to do to learn quickly.

So I think you need to make a mental shift. If the path you have followed hasn't brought you to your goal, try my path instead! Prepare to face uncertainty and ambiguity, the essence of financial markets. But don't be afraid. The market isn't out to hurt you. Success in trading requires the ability to be at home with ambiguity and uncertainty, to be able to take a market stance while accepting the fact that you cannot predict the future with any degree of certainty. This is what trading is about. This is why it is an ART. Once you change your focus and your learning process everything, including success, becomes possible. Until then it'll be a distant dream that keeps appearing to be so close and yet stays so far away.

So you need to re-align your thinking and get involved with the markets. Get a trading simulator and trade. Take losses. Make mistakes. Be clueless. Don't be afraid of it. It's okay, that's the only way you'll progress. And trust me, you will progress.

Face these challenges. The stuff you have heard about learning setups and applying discipline comes from gurus who cannot trade, who give advice based on their failed ventures.

These challenges most people find difficult to face. This is why most are not successful. If you can't do this profitable trading will remain a forlorn hope of yours.

I wish you all good luck and I hope some of you find this helpful. This is what I am giving back to the trading community, I hope someone of you have an epiphany over what I have said.

When I was in the 'holy-grail' search mentality, a friend explained all this to me. I took what he said to heart, and I believe this is why I am consistently profitable today. This the only real secret I can pass along to you as traders.
Good luck! "