Calling all traders who "get it"

This is a discussion on Calling all traders who "get it" within the General Trading Chat forums, part of the Reception category; Originally Posted by tomorton This is such a healthy observation. Trading is so much psychology that attitude is a huge ...

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Old Feb 11, 2018, 9:51pm   #16
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Originally Posted by tomorton View Post
This is such a healthy observation.

Trading is so much psychology that attitude is a huge influence on profitability. I have voiced to many people that if you regard trading as a head to head competition between you and the broker, who actually wants to wipe you out, its going to cause you to deploy lots of wrong behaviour and pervert your decision-making away from profit-making. I'm sure this attitude can even bring about the result these guys most fear.

Good words mate, unfashionable but correct.
Thanks Tom

It can't be healthy to be in a constant battle with your broker. I remember realising years ago (when I was trading more frequently) that for every trade that hit my stop by 1 pip then reversed, there was a trade that hit my limit by 1 pip then reversed!

I wonder how much blaming the broker is a diversion to not have to face the real problem: the trader!

As someone told me once "if you are driving around thinking all the other drivers are idiots, maybe you are the idiot and they are all driving fine!" In other words, if you are blaming everyone/everything else, maybe you are the problem.
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Old Feb 11, 2018, 10:02pm   #17
 
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Originally Posted by jm1054 View Post
Fair point "cut your losses" is a bit vague and over-used!

You know, I don't think it really matters when (as long as there is consistency) just when the trade is not doing what you envisaged it would (& I use "envisaged" on purpose because we often visualise how we would like the trade to pan out, especially someone who is visual).

That's why simple set-ups are great - it either works or it doesn't. Sharp break-outs are a great example, they either go or they don't. If it's not working out it's pretty obvious when to get out.
if you "get in intuitively get out intuitively", keep it consistent that makes sense and you'll find out real quick if you have an intuitive edge OR NOT
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Old Feb 12, 2018, 8:46pm   #18
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if you "get in intuitively get out intuitively", keep it consistent that makes sense and you'll find out real quick if you have an intuitive edge OR NOT
Learning to trust your intuition is the hard part. That and knowing whether what you are hearing at any given time is your intuition or something less helpful.

Here's a thought:

How about getting in intuitively but getting out with a set SL and TP? One less thing to worry about i.e. whether or not you used your intuition on exiting the trade.
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Old Feb 12, 2018, 8:56pm   #19
 
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Originally Posted by jm1054 View Post
Learning to trust your intuition is the hard part. That and knowing whether what you are hearing at any given time is your intuition or something less helpful.

Here's a thought:

How about getting in intuitively but getting out with a set SL and TP? One less thing to worry about i.e. whether or not you used your intuition on exiting the trade.
how does this help. my entry is subjective and my SL arbitrary????

pretty much what i am doing now.
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Last edited by piphoe; Feb 12, 2018 at 9:04pm.
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Old Feb 12, 2018, 9:25pm   #20
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how does this help. my entry is subjective and my SL arbitrary????

pretty much what i am doing now.
Mmmmm, OK, let's say trade entry is your edge, and importantly knowing when not to trade is an important part of your edge.

If your exit is arbitrary (but consistently arbitrary over a series of trades), then that doesn't negate the fact that your edge has been played out on entry.

Once entries on intuition have become second-nature, then things can be improved by using intuition on exit too.

Or not. If you are profitable using intuition on entry alone, maybe you would choose not to complicate things.

Just a thought. Happy for my "logic" to be challenged!
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Old Feb 12, 2018, 9:48pm   #21
 
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Originally Posted by jm1054 View Post
Mmmmm, OK, let's say trade entry is your edge, and importantly knowing when not to trade is an important part of your edge.

If your exit is arbitrary (but consistently arbitrary over a series of trades), then that doesn't negate the fact that your edge has been played out on entry.

Once entries on intuition have become second-nature, then things can be improved by using intuition on exit too.

Or not. If you are profitable using intuition on entry alone, maybe you would choose not to complicate things.

Just a thought. Happy for my "logic" to be challenged!
lol, oh sht..working my way thru the LOGIC..first several times don't get it thanks for reply get back to ya
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Old Feb 13, 2018, 2:10pm   #22
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jm1054 started this thread I suppose what I am trying to ask (not very well) is: Is it not possible to trade profitably using intuition on entry alone, for a less stressful experience?

Let's say we choose a forex pair, doesn't matter which, so let's say USDJPY. Then we choose one set-up, it doesn't matter which for this experiment.

Let's put psychological-sabotage aside for now and and assume we are zen-like in our execution.

Now we enter a series of trades randomly, with each SL set at 50 pips and each TP set at 100 pips. After 100 trades, we would expect to be break-even (minus commission/spread) with a win rate of about 33.3%.

Now, we use our intuition (which is essentially our sub-conscious which has recorded the nuances of the 1000s of set-ups we have seen/experienced/traded) to PASS on those trades which are less likely to work out and trade the ones which are more likely to work out.

Would it be fair to say that as long as...

1. We have had enough experience of the set-up for our intuition to be trusted in telling us when a trade should be put on, and
2. We can tell the difference between our intuition and one of the other voices ("go on, have a punt") which cannot be trusted

...we could realistically get to a point where over 100 trades we now have a win rate of say 50% with a risk:reward of 1:2?

If so, we are profitable using our well-honed intuition (and bucket-loads of self-awareness due to continued work on mindset) for trade entry but arbitrary (although consistent) exits. Thereby doing away with one of the most stressful parts of trading, knowing when to exit.

That's the thought process and the basis of my current experiment.

I would love to hear the thoughts of you lovely lot. Anyone else doing something similar or am I completely bonkers?
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Old Feb 13, 2018, 5:50pm   #23
 
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I have just realised that since just before the start of the session I've been using a 1 min chart. I always use the 5min and have switched back..we do like our comfort zones don't we?

I guess current market conditions suit a 1min chart (the trades are happening a lot quicker), but I have to say the reason I didn't really notice is because I'm only focused on pure price levels and what type of day it is (ie trending/neutral)

Intuition is a difficult subject. There are so many sdes of grey it can get messy in there..very messy.

I allow myself a certain amount of discretion but we probably can't do the subject much justice in a single post- it really needs a whole thread.

I can't recall anyone ever sharing any kind of stats on that. I haven't ever recorded my own for myself. Has anyone here?

When it works it's not a problem.

When you get it wrong, the only thing that matters is how you handle the situation from that point on.

If that part works out OK you're probably likely to continue occasionally using discretion to some degree.
If not, it will probably scare you off for good.

In fact I do recall traders saying that they wont ever use it. So, no stats and the majority view is against it. Is that about right?


Just for balance..

If you don't stick to your stop. Is that a discretionary decision?

In other words, are you making discretionary decisions about all sorts of things all the time without realising/acknowledging it?

Is it a discretionary decision to be reading this during the trading session?...or not to be?
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Old Feb 13, 2018, 6:00pm   #24
 
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Quote:
Originally Posted by jm1054 View Post
I suppose what I am trying to ask (not very well) is: Is it not possible to trade profitably using intuition on entry alone, for a less stressful experience?

Let's say we choose a forex pair, doesn't matter which, so let's say USDJPY. Then we choose one set-up, it doesn't matter which for this experiment.

Let's put psychological-sabotage aside for now and and assume we are zen-like in our execution.

Now we enter a series of trades randomly, with each SL set at 50 pips and each TP set at 100 pips. After 100 trades, we would expect to be break-even (minus commission/spread) with a win rate of about 33.3%.

Now, we use our intuition (which is essentially our sub-conscious which has recorded the nuances of the 1000s of set-ups we have seen/experienced/traded) to PASS on those trades which are less likely to work out and trade the ones which are more likely to work out.

Would it be fair to say that as long as...

1. We have had enough experience of the set-up for our intuition to be trusted in telling us when a trade should be put on, and
2. We can tell the difference between our intuition and one of the other voices ("go on, have a punt") which cannot be trusted

...we could realistically get to a point where over 100 trades we now have a win rate of say 50% with a risk:reward of 1:2?

If so, we are profitable using our well-honed intuition (and bucket-loads of self-awareness due to continued work on mindset) for trade entry but arbitrary (although consistent) exits. Thereby doing away with one of the most stressful parts of trading, knowing when to exit.

That's the thought process and the basis of my current experiment.

I would love to hear the thoughts of you lovely lot. Anyone else doing something similar or am I completely bonkers?
Is what you're asking this: Is it possible to trade profitably with an intuitive entry but a definite and arbitrary SL & target (50,100)??

I ask this in response: If we trust our entry to intuition, why wouldn't we we trust our exits too??
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Old Feb 14, 2018, 11:51am   #25
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Originally Posted by David Knight View Post

Just for balance..

If you don't stick to your stop. Is that a discretionary decision?

In other words, are you making discretionary decisions about all sorts of things all the time without realising/acknowledging it?

Is it a discretionary decision to be reading this during the trading session?...or not to be?
Hi David

Yes, I think you're right, we all use discretion all the time (even in bending our trading rules sometimes ). I suppose every choice we make all through the day uses some form of discretion.

I remember asking various experienced traders years ago questions like "why didn't you take that set-up, it met all the criteria you look for in a trade?" only to be answered with "mmm, well, it just didn't look/feel right to me".

As a beginner, answers like that can be very frustrating as you grapple with trying to formulate a plan, but later on, as experience increases, it makes more sense. This must be because our intuition improves with experience.

Even discretionary traders who hate words like "intuition" and "sub-conscious", must be using using their intuition all the time. So I agree, we are using it without realising it most of the time.

I suppose we do have some control over how much of the trading process we trust to our intuition and how much we stick to hard-and-fast rules, never to be broken, like:
- I never hold a trade over the weekend
- I never trade such-and-such instrument
- I never trade without a stop.

Maybe this whole trading experience is a process of finding a balance between using rules and using intuition, a balance that suits our particular temperament? For some it might be discretion in all decisions, including exit, for others it might be using discretion only for the exit...
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Old Feb 14, 2018, 12:00pm   #26
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Originally Posted by piphoe View Post
Is what you're asking this: Is it possible to trade profitably with an intuitive entry but a definite and arbitrary SL & target (50,100)??

I ask this in response: If we trust our entry to intuition, why wouldn't we we trust our exits too??
I have been thinking about your question since yesterday. Why not indeed?

Mmmm, it got me in a pickle to be honest, but thanks for posting it, this is just the sort of stuff I need to be challenged on to get clearer in my trading (& life!)

Eventually I came up with this answer:

Assuming that trading with rules is less stressful than trading with discretion, but discretionary trading is where my edge (& therefore profit) is. Then, using intuition for the least stressful decision (entry) and rules for the most stressful (exit) creates a balanced trading plan that suits my temperament, that is both profitable and low-stress.

Using intuition for exits too is obviously a lot cooler though and a whole lot less boring!
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Old Feb 14, 2018, 12:52pm   #27
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Originally Posted by jm1054 View Post
.............I suppose we do have some control over how much of the trading process we trust to our intuition and how much we stick to hard-and-fast rules, never to be broken, like:
- I never hold a trade over the weekend
- I never trade such-and-such instrument
- I never trade without a stop............

This is good. I find sometimes a rule makes more sense if the writer's motivation is -

"because other writers write rules and the publisher said I had to as well"
"because other writers have got a rule on this subject and if I don't have one I'll look like a lightweight"
"so that the new rule will differentiate me from other writers' similar rules"
"so as not to look silly with a reckless rule for a high-risk strategy"
"so that I'll be quoted lots"
"because I can say the same thing more snappily"
"so that the new trader reading this will not lose money - not too quickly anyway".

Our profit isn't always their motive.
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Old Feb 14, 2018, 11:36pm   #28
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I will add my 2 cents worth on the subject of "intuition".

Firstly I think it is important to differentiate between the notion of intuition and discretion. In my world view there are two types of traders, viz discretionary and non discretionary. Non discretionary are basically mechanical traders leaving discretionary traders as simply non mechanical in approach. I subscribe to the idea of intuition in trading but its application is generally random and exceptional rather than as a norm. I do not look for it but it presents itself randomly. So what is the difference between discretion and intuition since ultimately it is about choices? The starting premise is that even if we are discretionary in our approach, there is a systematic approach in our trading process. We may make choices in the instruments, the time to trade, the trading time frame and the core elements within our trading plan i.e. stops and targets. Intuition comes into play for me at least as it most often do is that all the elements of a set up to a trade presents itself and on that basis a trade would and should be taken and yet I hesitate. In essence, the overall picture doesn't look right somehow even though the individual component adds up. In other words, intuition stops me from taking what on paper appears to be a good trade. There is a caveat to it pertaining to the emotional context which I will explore in a latter point.

The second point in this conversation about intuition is that those defending the predominant use of intuition needs to articulate what their approach represents and importantly how it presents as an edge to them. In other words it needs to deflect invariably a charge that intuition is simply a convenient excuse that they effectively don't know what they are doing.

Thirdly consistency in trading comes from consistency in approach and process. It has to be dominant feature in our trading because if not then we do not have a basis to evaluate and improve on our ongoing trade performance. Constantly moving targets do not in principle lend it self to proper benchmarking.

Fourth and last is that trading can be emotionally stressful. Studies indicate that only 37 % of traders are self aware of their state of emotion when making trade decisions. Having rules and an established process are meant to keep us discipline especially when under stress and emotions can overcome sound judgment. When intuition comes in for me, it is important as a safety check to ensure that intuition is not simply an emotional bias when making trade decisions.
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Old Feb 15, 2018, 9:23am   #29
 
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My 2˘ on intuition: The intuition of an inexperienced trader is going to be different to that of a trader with years of experience. Intuition by definition is the ability to understand something instinctively, without the need for conscious reasoning. It would be difficult to argue that a trader with years of experience is acting without any reasoning, conscious or subconscious.
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Old Feb 15, 2018, 10:58am   #30
 
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I find my intuition about as reliable as my “mechanical” rules . What I do find more reliable in respect of bottom line is trade management - out sharpish when trade goes against, take planned advantage when it goes well.
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