General Trading Chat
- Thread starter timepass
- Start date
- Tags idle thoughts trading talk only
Many new traders believe that large successful traders have some secret system or indicator which never fails. This is far from truth. Truth is these traders methods also have losing trades. But because of this false notion a new trader goes on system hopping spree and never understands that good system is just 1 part of trading. Other more important parts are Reward to Risk Ratio, MM, Trade management.
I remember having read an interview of a large US trader Paul Tudor Jones. He it seems had caught the bottom of the market ( some T bonds I think ) and the interviewer was congratulating him for being so accurate. The reply from Paul Tudor Jones was something as under :
It is true that I caught the bottom of the market and the newspaper headlines are shouting that " Paul Tudor Jones caught T bonds market at lowest tick ( at bottom) but the fact is I caught it on my 5th try.....my earlier 4 attempts failed and I had to take my loss. But newspapers and magazines will not talk about earlier 4 failures as it does not make a great eyecatching story for them."
Now think about it. A trader like Paul Tudor Jones does not have a never fail system and we average traders are running after it.
Incidently Paul Tudor Jones is believed to be trading many of De Mark systems and research.
Smart_trade
I remember having read an interview of a large US trader Paul Tudor Jones. He it seems had caught the bottom of the market ( some T bonds I think ) and the interviewer was congratulating him for being so accurate. The reply from Paul Tudor Jones was something as under :
It is true that I caught the bottom of the market and the newspaper headlines are shouting that " Paul Tudor Jones caught T bonds market at lowest tick ( at bottom) but the fact is I caught it on my 5th try.....my earlier 4 attempts failed and I had to take my loss. But newspapers and magazines will not talk about earlier 4 failures as it does not make a great eyecatching story for them."
Now think about it. A trader like Paul Tudor Jones does not have a never fail system and we average traders are running after it.
Incidently Paul Tudor Jones is believed to be trading many of De Mark systems and research.
Smart_trade
what an example sir. Hats off to you for sharing such eye openers. I see many people on facebook, money control that they do not believe their system. Even on the day when they made profit, they will be asking others to see if there was a way to make more money. Unfortunately, how foolish that is to even think. in our job, when we get our salary, we do not ask our managing director how much he got. we want to become like him one day so we learn and improve not just enter his office and snatch his chair. there is hard work for everything and it requires your sweat and blood to make you successful.
stoploss = is a psychological concept ,to believe in throwing the towel. not always a written idea to trigger.
a trade has various aspect while taken at start.
1] an initiation to see what is going on at present on small size. since its we assume to know the market direction ,ie. which side strong money flow shall join= bull or bear, this experimental must be traded big bet when right or book loss earliest.
2] a scalper = stop is must otherwise -momentum can ruin trading business.
3] a swing trader with countertrend buy at support,sell at resistance,here stop should be below a noise zone.
4] a breakout at resistance trader or strong momentum player. here failure rate is high ,so quickly stop at system is better.
5] a std pullback trader with economic or fundamental strong understanding. as potential trade has direction bias not on timing ,stoploss may not be that imp being big pocket. only risk is opportunity cost on other missed trade.
6] strong macro invest cycle trade= stop of certain % is unnecessary as play is for long haul.
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more mechanically u trade better to keep stoploss. activating by system or alert also workable with maturity. but no stop is sabotage .
yes u may put in written ,mechanical way if price not move within a time ,to activate time stop.
someone also may allow price,to do little upsurge so loss amount is less -but never put hope on a losing trade.
a trade has various aspect while taken at start.
1] an initiation to see what is going on at present on small size. since its we assume to know the market direction ,ie. which side strong money flow shall join= bull or bear, this experimental must be traded big bet when right or book loss earliest.
2] a scalper = stop is must otherwise -momentum can ruin trading business.
3] a swing trader with countertrend buy at support,sell at resistance,here stop should be below a noise zone.
4] a breakout at resistance trader or strong momentum player. here failure rate is high ,so quickly stop at system is better.
5] a std pullback trader with economic or fundamental strong understanding. as potential trade has direction bias not on timing ,stoploss may not be that imp being big pocket. only risk is opportunity cost on other missed trade.
6] strong macro invest cycle trade= stop of certain % is unnecessary as play is for long haul.
..............................................
more mechanically u trade better to keep stoploss. activating by system or alert also workable with maturity. but no stop is sabotage .
yes u may put in written ,mechanical way if price not move within a time ,to activate time stop.
someone also may allow price,to do little upsurge so loss amount is less -but never put hope on a losing trade.
I think we all agree that trading is not a science but an art, so the process of every good artiste is different from the other. All artistes go through the cycle of working on established forms of his area of art to understand its 'soul'. True, some basic understanding of the techniques is required which is common to all artistes, but the artiste needs to wander around to broaden his mindset and then, maybe, be able to extract experience out of his failures and flukes (yes flukes, not successes because something got by chance before figuring out what to do exactly is not success) to produce the ultimate, a Picasso, a Beethoven or a Michelangelo.
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yes very true. In life normally we feel though
BLOCKADE> CONFUSION> CLARITY > then comes confidence .
With practice we create art ,or become a servant.
Another thought process is LITERATE . IT MEANS anything we can do knowing WHAT -HOW - THEN WHEN.
In trading ,to be a literate is not easy ,as 1st hand knowledge comes with lot of loss, developing flexibility and understanding proper risk management to suit u.
third part timing using TA/price action also has a market dependent factor ,so skill with handling uncertainity is hallmark
yes very true. In life normally we feel though
BLOCKADE> CONFUSION> CLARITY > then comes confidence .
With practice we create art ,or become a servant.
Another thought process is LITERATE . IT MEANS anything we can do knowing WHAT -HOW - THEN WHEN.
In trading ,to be a literate is not easy ,as 1st hand knowledge comes with lot of loss, developing flexibility and understanding proper risk management to suit u.
third part timing using TA/price action also has a market dependent factor ,so skill with handling uncertainity is hallmark
basically what is stock trading?
.........................................
It has to be treated as Business , buy low sell high, - so 2 variation exists , buy high sell higher, sell high then later buy lower .
So buy/ sell zone identification to be done, how the price is expected to behave there as per cumulative buy power/sell power has to be planned before,as well as contingency plan.
Third factor is expectation by actual big fund player.
Avoiding Media hype.
Since stock results comes 4 times a yr, so is variation .
Reading of random factor in price, when to understand -its not random but TREND ,so is higher continuation chance.
For higher time frame ,we deal economic sense.
For lower time frame,order flow as well as price action.
So far one is not objective, always created trouble by catching a snake as rope,and afraid to remove a rope imagining it a deadly snake. So mind preparation to stoic ,and taking suitable risk adjusted opportunity is must ,and then manage it as its unfolding. When chances of being Wrong is higher is higher, be in a survival mode -save the money . When its right ,use hold and later add- so to make more money.
To do it ,many uses fancy things - but simplest shall be prepare ur eye ,train it - quicker u understand breaking of pivot ,join OR holding at early reversal join other side.
Yes many method to keep u cool to act is IMP. Most cant do it (including me for 1st 10yr)- but perseverance must prevail, same way greedy will compulsorily fail.
EOD study helps to develop objectivity in easier way. I am told 60% hit rate is way , as i am then ready for 4 wrong trade easily ,and inflict less loss.
Dilemma .hope is strict NO for trader
.........................................
It has to be treated as Business , buy low sell high, - so 2 variation exists , buy high sell higher, sell high then later buy lower .
So buy/ sell zone identification to be done, how the price is expected to behave there as per cumulative buy power/sell power has to be planned before,as well as contingency plan.
Third factor is expectation by actual big fund player.
Avoiding Media hype.
Since stock results comes 4 times a yr, so is variation .
Reading of random factor in price, when to understand -its not random but TREND ,so is higher continuation chance.
For higher time frame ,we deal economic sense.
For lower time frame,order flow as well as price action.
So far one is not objective, always created trouble by catching a snake as rope,and afraid to remove a rope imagining it a deadly snake. So mind preparation to stoic ,and taking suitable risk adjusted opportunity is must ,and then manage it as its unfolding. When chances of being Wrong is higher is higher, be in a survival mode -save the money . When its right ,use hold and later add- so to make more money.
To do it ,many uses fancy things - but simplest shall be prepare ur eye ,train it - quicker u understand breaking of pivot ,join OR holding at early reversal join other side.
Yes many method to keep u cool to act is IMP. Most cant do it (including me for 1st 10yr)- but perseverance must prevail, same way greedy will compulsorily fail.
EOD study helps to develop objectivity in easier way. I am told 60% hit rate is way , as i am then ready for 4 wrong trade easily ,and inflict less loss.
Dilemma .hope is strict NO for trader
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