my last thread

Status
Not open for further replies.

oilman5

Well-Known Member
note: on a trade basically u r trading an openion [bullish or bearish] with money......always ready to be wrong[being humbled by market]and occasionally u shall be correct...but when right bet big,..BIG ENOUGH to run your family expediture on a single trade. price confirmation is the only condition for holding a trade.

TRUE STENGTH...SEE THE BIGGER WAVE ..BEFORE ITS FORMING...
THE PROBABLE PT WHERE IT CAN FORM...
READY WITH MONEY TO TAKE POSITION..
ALTERNATE SCENARIO...KEEP EYE OPEN ,JOIN WHERE AND WHEN BIG WAVE IS FORMING...OTHERWISE SIT IDLE.
 

oilman5

Well-Known Member
u must have some method to understand price increament shall continue
and then another when price dilution coming.
high probable trade
............................
its the directional bias...where most waiting watchers r ready to join..
market buying r coming...big volume r increasing

concept is use momentum ...act now.

another concept a trend started yesterday 3pm..hence further steam left.
scan at night for candidate.

without any news. on real time..sudden volume surge..price is also moving up.
ACT NOW ..NO TIME TO THINK make money
shortterm trade/ swing trade
............................................
here u must reqd eod . a software ..preferably some risk reward analysis
some low risk entry tactics and stop-umbrella to save from rain.

u have to define entry characteristic .
1. entry after break out over longterm resistance zone
2. after twice bounce in support ..price just starts moving up.
3. sector starts moving up..stock has good rel strength comparison within sector.

stop
......below 5% of last week low
if not 4% up move occurs within 5 trade days..use time stop

profit target 8-10% from entry..however after 5-6% price is NOT HOLDING
....get out with small profit...than turn profit into loss

for momentum base swing trade..refer david landry and crabel works
for system study see beyond ta..by tusher chande
for me some% up with volume increase...in metastock RSC EXPLORER candidate must be in upperside.
yes i use eye ball technique and pattern failure[ in h&s when instead of fall price starts move up and w.pattern price slowly starts moving..acceptance of price]

however .if u see eod chart + 7 month weekly chart u can see
reason behind . call and exit..by the way my system has subjective criteria. and i actually trade in position size higher on winner

position trade contd
...............................
most imp part of position trade is stock list...here u know from back ground move shall continue..further..as u try for bigger profit ,failure rate is high.
hence u must have inbuild mmsystem to get out with small loss and addon winner....mark boucher course is very helpful.

say being in known field i must track some news on company..
also result out of infy ..how + affect midcap computer company..

as position trade is a judgement game..hit of the moment decision should NEVER be taken..infact temporary fall is a great buy oppurtunity

strength indicator on 2week chart basis [ ie converting data on 10day high-low-close basis available in metastock] is good way to see.
in rangebound market...willium%r at oversold zone good indicator
in trend market , i use aroon .
after long fall, weekly chart engulfing bull i use for entry+ bill williums chaos entry signal
.......for stop simple sar as available in metastock...apart form subjective pattern stop and time stop.
profit booking ...50% quick booking
if however quickly price moving up .instead of sell i buy double as its low risk trade[ in the language of traderji confirmation by price]
--------------------------------------------------------------------------------

-momentum short plan
.............................
this condition to be created by media..rumor of market shall goup ..vs pro have already sold..now some -divergence can be seen ...price slowly starts falling..now tv must speak again and again ..threat percept...more sell order coming in nifty future...NOW ONLY THE TIME for short...hence its a short term quick execution ..a bull market top trade ..with propaganda from media
otherwise harsh bad news....when most participant prefer to sit on cash[bulls r running away]

with hold ing stock its a conflicting trade..better sell holding first.
system implementation
..............................
1. assumption .....condition of trade....if it does not exist no trade
2. entry..particular signal
3. holding profit one...give time.
4. exit..with profit target
with loss.
5. contingency plan..to save skin.
6. write after complete..of trade what i learn ..implementation vs. reaction of me based on fact.

this all elements r clearly written ..what actually works.
OTHER ELEMENT
........................
u factor..how to be neutralised so that i can think right.before taking position i must have an openion but PRICE must confirm my openion otherwise i must use stop and book loss to throw away openion.
.MARKET HAS TRENDINESS AND ALSO UNPREDICTABILITY ELEMENT. NEWS AFFECT MARKET [UNKNOWN EVENT]....MAJORITY TRIES TO GUESS WHAT MAJORITY MAY DO , TAKING RISK OF PREDICTION BY PUTTING MONEY BUT READY TO RETREAT IF WRONG........PUT MORE MONEY WHEN RIGHT.

since u have asked i place my personal openioned model
.................................................. ...........................
u have to work on prediction model in which chance of RIGHT/BEING WRONG has to evaluated.

a. company result..good business../..20% weightage
b. macro economy + moneyflow....40% weightage
c.sector business ..priority 20% weightage
d. other factor..operators game/random factor ..20% weightage

total 100%
ALWAYS TAKE CHANCE OF BEING WRONG 40%...SO THAT IF WRONG ...MUST BE PREPARED

by the chart , i SEE how others r viewing..ready with my move ..tv news guide me how fools shall behave,..many a time i am wrong ..but i stick to it.
as trading is not a game of perfection , 50%accuracy sufficient.

IT IS THE DAYTRADING..UR ULTIMATE SKILL WILL BE TESTED
UNLESS EXECUTION MASTER..AND GREAT SURVIVAL SKILL'DONT COME'...however its a reality checking m/c to know where u stand in trading arena.
so from beginner u r moving on top...here u atleast know how to survive..irrespective of market u can run ur family by winning against other traders.
........................
so u r developing trading philosophy...plan new arsenal...to fight better.
so it is trade universe.3terms i introduce...exhausive, exclusive and intersection ie. interrelation between 2 element.
EXHAUSIVE..U HAVE TO GO INTO DETAIL
EXCLUSIVE..NO RELATION EXISTS..INDEPENDENT ELEMENT
INRERSECTION;INTERRELATION BETWEEN 2 ELEMENT...INTERRELATIONSHIP BETN MARKET...INTERRELATIONSHIP BETN MANY COMPANY IN A PARTICULAR SECTOR.
exhausive gives micro view.

so before reaching to become a master...one goes through various way to question and answer this 3 element...[may be in different name].he knows how far he understands...his limit..so now practice on regular basis[system]

and follow it diligently[discipline]
so i use 3 statistical term....

now u see all good thread ..search mode..nothing but ..can be expansion of 3 idea.

any other idea....yes EXECUTION.I DONT UNDERSTAND AS SLIPPAGE A BAD ELEMENT..BUT CV OPENS MY EYE,...i miss 3trades for slippage in intraday.
also some profit booking idea in real sense...so the difference with beginner and pro clearer to me..its IMPLEMENTATION.

...................................
trading must be treated as business ..not hobby
its the dream .. supplier of new fool..
all mf r waiting../.
you must know how to handle business venture...dream vs. REALITY
MUST KNOW A/C...
PROFIT/LOSS..
WHAT MAKES A BUSINESS CLICK?
BREAK EVEN ANALYSIS
A-B-C ANALYSIS..
SWOT...[FOR YOU]
DETERMINATION & PERSEVERENCE..come back next day attitude
no of stock to watch
.............................
4-5 min each chart...if u have 2 hr..20-25 stock

alternatively scanner helps to find particular conditional filter.
then watch them thoroughly for next day..hence more candidate for prelim.scan list..however nifty must be studied..
compare nifty with that stock..better strength in last 2day must

pl prepare the condition of filter carefully..u shall hit or miss because of this
tradersedgeindia....is good.
rbi policy is imp now..economy/rain prediction shall show its headline..
personally price i like ..its naked truth..but in india so many funda-hype. trader...i must see their view and conviction..its the subjective judgement when to follow trend and when to be contrarian

however live with uncertainity. position management and risk control..can make u a trader.
subjective view
......................
preview...before an insident u r taking a view..what may happen.
review....after an insident u analise.
proview..while insident is happening ..u r taking decision[pick among best alternative]..acting in your best interest.
this PROVIEW is the aim of a successful trader.use preview.do review later...
follow proview to get money...avoid danger
do u find difficulty ? think of childhood..writing essay...introduction...
body[proview]...
conclusion[review]..

leading indicator must be used for preview..idea..fundamental estimate..
a trade plan...but on actual market ..only proview..lagging indicator on intraday chart basis...observe and act....at 17-30hr.review of trade..
if u r like me..review in end of week.
never ever introduction to get highest priority..hence openion always comes last....this order should never be broken[if u want to money out of market]

bullish view.....how far market can go up ..at what time limit..
an analyst writes tcs price target 1650..it means 1sigma.66% chance of reaching tcs 1650 within a yr of time..if present condition [linear interpolation] prevails
if he writes conservative target 1600...itmeans 95%[2sigma]
chance of achieving that target within a yr

now again on new quarterly result out/review of company this may be edited depending on prevailing market condition

however conviction is rare in analyst ..to put big money...WHY?

HE KNOWS THE RISK/ASSUMPTION..which rarely get published..
the trick of management ...promotion sell

sentiment change..alternate scenario..how far market can fall?
at what duration it shall continue...nobody knows..but fibonacci definitely helps the trader..where is support...commit little money..commit and see
price reversing ..hey u get it right..buy more now!

hence market movement offers enough oppurtunity to active observer
methodical man can make money out of it.
TIME FRAME....
it takes time to understand..realisation of capability ..dream vs. reality

patience to bloom oppurtunity[let profit run]

time to observe[search mode] and right time to implement[execution]

but we forget TIME TO LEARN..

DIFFICULT ONE.. time to check own performance[what i am]
tree must be seen before branch...bigger picture must be taken first.
economy/world view/political position ..ofcourse..fii cash flow at present
...understand my view..its not bullish/bearish ..nor goal..
upbeat on economy..
funding
stability or continuity...this 3 element only....

for fii cash flow...a comparative base 10 days ago[2week]

this is only tool i use for fundamental element
only timeframe that suits u. where u can think/visualise .
visualise what may happen .....that is happening later..

can u execute ?another critical question!
if not, place order on phone..allow others to place order..
let other may see the screne...
but decision making process should not be faught with internal dilemma

its a known fact in chess..half hr chess is better than 5min..1 hr rapid is better .2hr is further better..classic chess brings out of a champ...
definitely time to think improve quality...quality of selection and timing...

and see the ploy/decoy..so called news trap and marketing/gimic...
foolish greedy bull trap...
fortunately u , trader has another weapon..time out....stop loss
.................................
hope all enjoy
 

oilman5

Well-Known Member
...skills of a trader..contd...

...adding more to this topic of Risk per trade...(and I have mentioned also earlier, some to the highly speculative opportunities are the '2 mins trade' (I call it 'Maggi Trades', :) ), enter at 3:29 pm previous day EOD and exit at 9:16 am next day BOD. Such setups basically a subset of well know 'Jackpot Options' trades are focusing primarily only on gap up or gap down opening on the next day.

Here the opporunitiy is it to double or triple or multiply with any higher number (depending on the UL and how deep OTM Options you buy) and how much is the gap up / down in your favour. But at the same time there is very very high risk of the UL not gap opening (so even flat opening will make your position down by 5% to 10% instantly (again depending on the deepness of OTMs). And if the gap opening is 'opposite' to your judgement than you are instantly down anywhere between 25 - 30 - 40 - 50%....

So in such 'Maggi Trades' the risk per trade will be extra ordinarily high. I have two options here, one, not take such trades (and let go an opportunity, even though I am 'almost certain' that gap opening will happen) or two, risk only smaller amount of shorter TF trading portfolio. So, if I have 2L as my shorter TF allocation, I may only put 50k for such 'Maggi Trades'. The risk per trade would be 50% (ie a loss of 25k) so the over all short TF portfoilo it would be 25k / 2 L i.e. 12.5%, which I may be ok with

IMO, after the first skill of basic math, good ability to read and interpret the numbers, the second skill is of Problem Identification.

Pls do not raise eyebrows, I am not going to write on the discipline, risk management etc, what all trading books have. I had mentioned that the things mentioned on this thread may not be written in most of the trading books, since they are the outcome of personal experience.

Why is Problem Identification necessary....

There is no activity in the world do in past, present and would be done in future which will be done right the first time. If you look around everywhere, and when you see successful people, brands, companies, relations, products, cultures or anything, they have constantly refined to this level. No one start it right, though the intentions may always be right. For us to be right, depends on, Internal - our ability to define rightness, capability to stick what we think it right and External - environments willingness to support that it is right.


Ok...cutting this short...

Without the ability (and willingness) to Identify the problem, there is all the likelihood that for a trader, even if he has a good strike rate and a good trading system, he may at best be running on tread mill - running on the same place, thinking that he is going distances. If the problems are not identified, then it is difficult to find a remedy or solutions to address them. I may not write more here, but what I can suggest is instead of reading books on trading it would be worthwhile reading some books on basic engineering / manufacturing books on problem idenfication. No need to buy such books but glancing a few chapters or the foreword would kick start thinking activity in you mind. So visit Crossword and pick up any book relating to this subject and refer it for free :).

Willingness to identify problem, is the first step. I can only but assure you that you may not really need any external help (if have just a basic IQ and reasonable intelligence) that you 'YOURSELF' will be able come out with solutions to your problems, once you identify them.

In the intial post of this thread in the 'Topic list' I had mentioned a top called, 'Show me the data', this plainy refers that YOUR histroric data of the trades taken will show what it the problem (also it will show the strengths...we will talk about it later).

Your own data (which is your history) is the most important source of information, it is your DNA. Starting from this point can help change the DNA for betterment in future. If someone asked me how can I help him trade better. I will first look at his data, his histroy. The doctors, lawyers, ask about past information before giving their opinion. The consultants, corporates hire, spend most of their time in data collection.

...I would have loved showing, problem identification and data collection techniques so you all could relate to it much better. I will see how I can do it here on this faceless forum, with my limited ability on tech skills, with variety of trader readers. ...The next step logical step post this is 'data analysing', well Excel, pivot and other functions can do it for, but you need to be handons on these, certanily not possible for me to demostrate those things here...

tnsn2345
 

oilman5

Well-Known Member
Everything is Documented About...

How to be a good trader.
How to Be Consistent
How to be Disciplined
How to manage money
How to trade the trend
How to analyze fundamentals
Thinking Independently & controlling emotions
Avoiding Psychological trap, Bull trap/Bear trap
Do's & Don't of a good trader
Being an Investor to make wealth
How not to trust news/opinions/pundits/gurus/ "Astrology "

Yet ...

How many who enter this field are profitable and how many still struggle?

Despite of all the Resources in the World, the Path shown to Millions by some Master Traders/Investors, Majority of Traders & Investors always struggle. The ratio of Success/Failure remains consistent and will remain this way no matter what new comes out. Is there something wrong with Humans that they cannot follow simple set of instructions in being successful? Or are the methods/rules etc wrong?

The answer to this, is the answer towards how to be successful. All the Master Traders here know that from inside, yet penning it down is just not possible. Coz that's a journey which every individual has to take and path towards that ultimate goal can never be explained/taught as it is different for everyone.

Just a few thoughts on why being successful in markets has very little* to do with Techniques/MM/Risk Management and more to do with Guts, Self belief and other traits.

If a "Newbie" has to begin, he has to begin by asking this. Else, as Smart_Trade mentioned, he'll never come above the "Strategies Trap" in his lifetime.

Tc
 

oilman5

Well-Known Member
Some generic flaws are:

1) Trading without a TP
2) Changing TF of trades
3) Taking a trade in vengeance
4) Not putting SL
5) Changing SL adversely
6) Adding to losing positions
7) Exiting from profits early
.... etc ...etc...the list is endless....
So, is there a way out to profit from such flaws....I always thought...Why change...why change...Can I make use of my core incompetency to trade profitably. Yes....is the answer...just by changing a little....very very very little and this is possible...
Why is Problem Identification necessary....

There is no activity in the world do in past, present and would be done in future which will be done right the first time. If you look around everywhere, and when you see successful people, brands, companies, relations, products, cultures or anything, they have constantly refined to this level. No one start it right, though the intentions may always be right. For us to be right, depends on, Internal - our ability to define rightness, capability to stick what we think it right and External - environments willingness to support that it is right.


Ok...cutting this short...

Without the ability (and willingness) to Identify the problem, there is all the likelihood that for a trader, even if he has a good strike rate and a good trading system, he may at best be running on tread mill - running on the same place, thinking that he is going distances. If the problems are not identified, then it is difficult to find a remedy or solutions to address them. I may not write more here, but what I can suggest is instead of reading books on trading it would be worthwhile reading some books on basic engineering / manufacturing books on problem idenfication. No need to buy such books but glancing a few chapters or the foreword would kick start thinking activity in you mind. So visit Crossword and pick up any book relating to this subject and refer it for free :).

Willingness to identify problem, is the first step. I can only but assure you that you may not really need any external help (if have just a basic IQ and reasonable intelligence) that you 'YOURSELF' will be able come out with solutions to your problems, once you identify them.

In the intial post of this thread in the 'Topic list' I had mentioned a top called, 'Show me the data', this plainy refers that YOUR histroric data of the trades taken will show what it the problem (also it will show the strengths...we will talk about it later).

Your own data (which is your history) is the most important source of information, it is your DNA. Starting from this point can help change the DNA for betterment in future. If someone asked me how can I help him trade better. I will first look at his data, his histroy. The doctors, lawyers, ask about past information before giving their opinion. The consultants, corporates hire, spend most of their time in data collection.

...I would have loved showing, problem identification and data collection techniques so you all could relate to it much better. I will see how I can do it here on this faceless forum, with my limited ability on tech skills, with variety of trader readers. ...The next step logical step post this is 'data analysing', well Excel, pivot and other functions can do it for, but you need to be handons on these, certanily not possible for me to demostrate those things here...

2) Professional traders - Traders, who have derived some techniques, methods have a TP, MM, RM plans. They mostly stick to the set rules, but since they are 'Professional traders', they again have to be in the market most of the times. Hence for different types of market conditions they will have different trading methods, instruments, which they will keep on changing or altering to be in sync with the market dynamics. They primarily focus on their 'CORE COMPETENCY' and occasionally try out different TP depending on the market conditions. They are mostly full time traders. And for such full time traders, since it is their livelihood, they cut down on volumes during downturns (may also lose opprotunities then) and increase the volume during a good performence (may also take higher risk and trade where there actually may not have been good opportunity)
3) Profitable traders - They are not in the market most of the times. They mostly sit out. They laze around like a crocodile sunbathing on the banks, oblivious of any activity happening around them. They wait for things to come to them and pounce upon them and they are out again. They can endlessly wait for a desired opportunity. They will not go deep water or into the sea to catch fish, but wait patiently by hanging a fishing line from the banks for the entire day and wait for fish to come and get hooked. They neither are careful of their core incompetencies or use their core competencies. They thrive on 'CHOR COMPETENCY'. Just like a 'Chor' (thief) they do not go every night to steal, but are constantly tracking and noticing the movement of their 'target' make up the entire plan, Plan A (pros)and Plan B (cons) and wait for the right time to strike.

It is not that who is right among the above, or who is the best, but the skills of an individual trader can be eithir of the above three competencies or blend of those. It is necessary to define what we are focusing.
.............................................Above are some of the very common flaws of failed trader. Sometimes there is an effort to correct these, and sometimes not. Given the human nature it is difficult to change as you grow up and the older you get, more difficult for one to change. The upbringing, culture and our thinking from our childhood makes things difficult for us to change. And even if there is a change, it will be marginal w.r.t to the effort put in. So, is there a way out to profit from such flaws....I always thought...Why change...why change...Can I make use of my core incompetency to trade profitably. Yes....is the answer...just by changing a little....very very very little and this is possible...(will give examples in the next post)

Coming to the Core Competency part, each of us traders here (failed or consistently successful) have some or other core competency, viz...

1) A good trading system (discretinary or mechanical)
2) A good intutive / gut feel
3) Ability to be paitent (to enter late and to exit later when in profits)
4) A good ability to allocate money, RM, MM and TP
5) Ability to stand out from the market when we do not understand what is happening.
6) Having control over self only to enter trades where there could be a handsome profit and not just a small proft.
etc...etc...

There could be a few more core competency areas. And all can lead profitable trades.

The point here is not how many are our core incompetency or core competent areas. But the idea is to IDENTIFY them. The first step begins with identifying...once you identify them, then can you find a solution...as I said the solution is within you...Even if there in just one Core competency, you can sharpen it so much that you can milk the market with that one thing itself for eternity. And similarly if you identify and focus on core incompetencies, howsoever many they are you can still use it in your favour by just a small tweaking....


TNSN2345
 

oilman5

Well-Known Member
Silence is Golden…but not always
In trading, eliminate noise…but not always

These two rules can help us to trade profitably with our ‘core incompetencies’

I have consolidated the incompetencies from the above post as below:

1) Target achieved in a day but still trading i.e. over trading
2) Seeing profit into loss, and still holding the position and not exiting
3) Vengeance / revenge / trading to recover losses
4) Past experience is used to exit the next trade in less profit / not able to hold profitable trades longer / early exit from profitable trades
5) Past experience of loss or fear of losing results in not taking further trades
6) Not following charts / methods and losing focus in between on the methods
7) Silly mistakes in placing orders and then praying if they go in loss
8) Switching methods / hopping from one to another trade

Disclaimer : Since I am addressing how to best use our flaws to profit, I am not mentioning how to correct them. The above are trader specific and hence should not be construed as a trader personality trait which is ‘necessary’ to trade profitably. If you do not have any or all of these flaws, please do try to ‘acquire’ them. You may be better off not having these.

1) Target achieved in a day but still trading i.e. over trading.
- Create noise, virtually. If you can play some music even better. See if you can enter your profit in an excel trade by trade (net profit) and once it crosses your days target, the sound file should run automatically (simple macros can help – google sound playing macros in excel, you will get many). You can play your favourite song too once you reach your target and play it loud, let to whole wide world know about it.

- Just pull the plug of your CPU or press down the Off button of your laptop at that moment itself in a fraction of a second once the day’s target is achieved. Rush for a shower (if at home) or for a leak in the loo (if in office)

- Dial a random number from your phone book of your mobile and start talking all good things and how you remember him or her. (other purpose of PR with friends/ relatives is also addressed by this)

2) Seeing profit into loss, and still holding the position and not exiting
- Silence is Golden…but not always…
Keep a small innocent looking toy on your desk ( a Noody or a Doreamon will do) once you get into this position, do not look at your screen, look at the toy and start speaking to him loudly (do NOT be silent – when you are mum, you will not act). Ask him why is he sad, make him answer and you speak on his behalf loudly to yourself. Ask him what will make him happy and let him ‘shout at you – ‘Get Out’ or rather ‘WTF you are doing here, Get Out’. Turn back to your screen (no looking at chart or the price), just get out at the market price.

3) Vengeance / revenge / trading to recover losses
- At the juncture of taking a vengeance / revenge trade or trading to recover loss the atmosphere in the mind is quite intense. And you need to release the pressure only at the right moment. Remember there a secret alarm bell button at a cashier counter in a bank and incase of any robbery attempt it has to be pressed immediately which sounds off the nearest police station. In the same way, create a one key (hot key) function which when pressed will sound an irritating alarm. You can use a physical bell too.

- The power of zero. If you still want to take a vengeance trade and you had decided to buy 1000 quantity of x instrument. The moment you are going to enter this trade, keep the ‘0’ key pressed for 2 seconds more and then press enter for order placement. What will happen here is your order will be rejected since the order quantity you placed will not be 1000, but will be 10000000 or 10000000000.

- Play Double Cross - (This can be done easily with little practice). When you are at the verge of taking a vengeance trade, just at the last moment – say it aloud, Allah o Akbar, Jo bole sonihal, Har har Mahadev or whatever similar you have faith in and just enter an opposite trade to what you have been thinking of i.e. if you planning to buy then place a sell order and vice versa. In the most of the most cases it will be a profitable trade.

...................peculiar view from a trader
 

oilman5

Well-Known Member
5) Past experience of loss or fear of losing results in not taking further trades

When I was young and in school, we all had some crush on some or the other girl and during those days, talking to girls in the school was not very common (atleast in my school). It used to to take days, weeks or months to talk to some girl, though every day, the feeling was I will do it today, and some of us could never ever talk to the girl. The situation is quite similar here too, there is a fear of unknown, we are carried away by all that could go wrong with us (either in the girls case or the next trade)...ok since I am not going to offer remedy to this and we are discussing how we can reduce the effect of this flaw or benefit from it, let me guide you to the Netural trade post I wrote early in this thread.

The only way out of this situation is to enter a trade (which we are otherwise prohibited - fear of the unknow, by our mind). So enter a Neutral trade. So if you are an Options (directional) trader, by both Call and Put together and if you are a stock trader enter two stocks (if they are negatively correlated, better still - incidently this is the most common hedge funds strategies to enter Netural with two stock negatively correlated). As soon as your direction is decided, you can let go your non profitable position and hold the profitable position.

See what we are trying to do here is 'Entering a trade' and this is all what we want when we are facing this short coming, since we do not enter, we lose opportunity to profit and more the heartburn. Hence even if we are entering Neutral, the fact is we have atleast 'entered' the market and that is what we wanted......Tnsn2345
 

oilman5

Well-Known Member
You question is quite valid, for most of the traders, they try to put system or a logic to every action they take in the market. Systems are built, programming is done, codes are written for almost every action. But IMO one cannot programme everything. And these are softer elements of human psyche.

In the above examples I gave, there is no system, but as Enygma put is most appropriately that we need to take away the blame from self. And that much is good enough to rest our mind. A stable mind will most likely take correct decisions in the future. So what if the results maybe inconsistent, the mental frame is intact and ready to take on the next trade logically.

Just to give you more prespective, in cricket (we all love this game, don't we) when I was young and had a dream to play for India :), I used to practise batting and the first thing which was taught was the foot work..foot work..and foot work..come to the front foot, in the line of the ball...etc, there were storkes which were all patented, and there was no shot out of the book. But look today, how the batting maestros play, Sehwag, VVS, Ganguly, all great batsman, and rarely they move their foot (sic), are they wrong or was I?? Today there are reverse sweep, paddle shot, late cut, (and yes the helicopter, uppar cut, pallu scoop, etc), all these are not the 'cricketing strokes'. But does it matter now, no, as long as it helps you and you benefit from it, it is ok.

In trading there is no one way of profiting and there is now way you can programme, code or create system for different type of market conditions and eliminate human thinking. The has been, is and always be human behaviour - rational and irrational which will run the markets and no automated systems (whosoever has built it in past and will build in future) can net profit in all cycles of markets - and that's my word.
............tnsn2345
....................................pl understand the comments of the great trader..........he really has solved trading puzzle..........way ahead in modern trading
 

oilman5

Well-Known Member
4) Past experience is used to exit the next trade in less profit / not able to hold profitable trades longer / early exit from profitable trades

- Change a bit from discretionary method to mechanical, just a little bit. Why? In such situations of past experience and current experience our mind keeps on processing multiple and opposite thoughts simultaneously and what ever decision we take there after, if it results in a loss or profit we add it to the hard disk of our head. And this information will again be used for multiple and opposite thoughts in future situations. Hence to avoid blaming or praising our mind during such instances, it is better that the decision to hold or exit the position in less profit or to hold it longer should be done bit mechanically.
So, it can be done in a toggle manner i.e. if the earlier experience says exit (should have been written somewhere earlier before taking the current trade) then you will hold the position, and likewise, what ever is written on the basis of earlier experience you will do the opposite. (You may also choose to do the same as what was done earlier).
You can also use a random decision, by tossing a coin at this juncture and deciding on the basis of Heads (hold), Tails (exit). More simply, you can look at your wrist watch and if the seconds hand is between 12 to 6 (hold) and if between 6 to 12 (exit).

What we are actually doing here is freeing our mind from the additional stress (already it is processing so much for us, why bother it more with such issues, especially when we are in PROFIT). I believe that there are so many questions and mysteries in the world and we need not try and solve each, infact life will be better if some mysteries remain mysteries forever. So even if the coin or a wrist watch helps me keep a cool and stable mind, which can help me take a next trade right, I am willing to stick to it........tnsn2345
 

oilman5

Well-Known Member
Trading is about finding the approach/rules/system that suits trader's personality. Something that suits one person, may or maynot suit other person. Due to our learning from regular life, we think that there is some perfect way of trading that suits all trader.. but that is not the case.

All trading approaches/systems give inconsistent results. They all have lossess as well as profits.. Success of systems comes from "rule of expectancy" not from being 100% correct. As long as
Average win size*%of winners - average loss size * % of losing trader > 0.
you have a winning system in hand. Than it is matter of OUR discipline and soft skills to execute it correctly. If we can control the controllable ie. the execution part, than both uncortollable outcome given by market (win or loss) are ok.. cause over a period of time, we know that system has +ive expectancy and we will win over number of trades.. We don't have to win each and every trade.

Ingrained learning in our subconsious mind about being right, perfectionsim, staying away from being wrong etc are major hurdles in our development as trader. Till the time we can't overwrite these and be THICK to any outcome of an individual trade, upward journey is difficult..............aw10
 
Status
Not open for further replies.