Useful things I've found on the Net.

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Old Mar 17, 2008, 12:51pm   #76
Joined Jan 2007
impressive nine

latter a week could be 2 should do it :-)
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Old Mar 17, 2008, 4:58pm   #77
Joined Jan 2007
longer look and thought required

had a good look nine, nice thought provoking link and very very relevent info imho agree with your conclusions to regards starting out and ease with which habits good or bad become embedded.

Had my problems with some of those listed and guess BSD would say I still do.

Could be reason that I prefer to trade shorter moves ~

I can control myself for a short time but a whole hour

appreciated time taken

give it some serious thought over next few weeks nine and post back...............

eventually
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Old Mar 20, 2008, 12:29am   #78
 
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nine started this thread And locally, a little bit of genius:

Quote:
Originally Posted by fibonelli View Post
Why do we make trading so difficult?

Why anticipate a trend resuming when you can simply patiently wait for sufficient evidence, from the actions of eg "big money" trend traders, on the price chart to confirm that there is a high probability of the trend resuming from defined support/resistance zones in an uptrend/downtrend.
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Old Mar 20, 2008, 11:33am   #79
Joined Jan 2007
Found this ................and

Found this ....

@

Trading 101: Expectancy Trader Mike

some member posted, sorry can not remember who to credit because often just save links quick when passing

browsed on and .....

Fickle Trader: An argument for trading many small positions

only clipped the 1st bit due to time............

I want to put forth the argument that reducing trade size and increasing trade frequency carries many hidden benefits. I did not realize many of these benefits until I had traded this way for a significant length of time. I thought I would share what I've learned from my experiences and hopefully have a chance to learn from readers who want to take the time to share their outlook on this important topic.

I'm currently reading Mark Douglas's book "Trading in the Zone". This book is centered around a similar argument to the one I'm about to make. The numerous effects that follow a loss of confidence caused by equity drawdowns are the most common cause of trading failure. So in the interest of our long-term success as traders, we should seek to minimize equity drawdowns. It follows that fear-based trades and missed opportunities will also be minimized. We pull out the weeds by the roots.

When I was trading larger positions and carrying far fewer at a time, I was still doing what I do now: making trades based on things that I knew would statistically give me an edge over time, but the outcome of any specific trade was uncertain. On any given day, my odds of having a drawdown day were far higher than they are now because it takes a high quantity of trades for any statistical edge to be properly reflected in account equity. Trading with fewer positions meant that at any given time, my account equity showed a less accurate representation of what I should expect in the long run. This lays all sorts of emotional traps for the unwary trader.

It is worth rephrasing simply: "When your portfolio is composed of a larger quantity of smaller trades, you are leveraging your edge by making your account equity at each moment in time a more accurate reflection of how you will perform in the long run."


imho its good food for thought(for me anyway) given some of the threads/posts on the subject of strike rate and risk and reward of late on the boards, arguments always seem to end up at the same point...................

You except a 30% SR for larger gains / HUGE GAINS = RAINBOWS END and in my mind thats just plain wrong and a poor or suspect business model

Reasearch and developement money runs out eventually even if you have the constitution of a horse to trade such methods.

No outcome on any thread as really been conclusive one way or another imho, I am perhaps the worst person to even post on the subject because......

I trade real and what works for me in the moment and have done so for a period of time and over enough trades to no that its not random re-enforcement at work. I guess I agree with this guys opening paragraph or two and it cuts against the grain a touch perhaps.

I would say I have very limited brain power in some areas and some very simple concepts I can find very very difficult to grasp so feel free to correct me and show me the error in my thinking

Help Pinkpig resolve this in is mind

resolve what ?

I don"t no whatever needs resolving

HARD HATS ON !

Andy
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Old Mar 21, 2008, 1:57am   #80
 
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nine started this thread And more local genius. I'd recommend thinking seriously about Steve's posts although, remember, that there is more than one way to take money from the markets.


Quote:
Originally Posted by stevespray View Post
xxxx - I say that your logic is flawed! It does not matter what you feel the volatility is or was. The market will do what the market will do. This is the reasons why backtesting is pretty much useless. Backtesting assumes that, given the same set of circumstances again, people will re-act in an identical manner...... they dont. Add to that is the fact that your system will now react when, in the back test, your system was not a factor.

Each pair will have characteristics. Some of these change over time whilst others stay very similar. If you get 'close' to a pair and trade it day in day out then you sense these things. Because of this you evolve as the market evolves.

The biggest mistake most people make is believing that they have to make a prediction on which way the market is going move. THIS IS NOT THE CASE. This over complicates trading forex. The key is trade in areas where you can identify low risk entries. This is not predicting market movement but entering a position and preparing for all outcomes. If you make a good entry then you might win or you might lose - it's still a good entry - the key is that, if you are wrong, you find out about it very quickly and close for minimal losses.

I hope that you can understand the poinst which I am making here.

Steve.


Quote:
Originally Posted by stevespray View Post
I do not use any kind of FA in my trading there is no point. My trading revolves around the noise which is created when speculation enters and leaves the market. Im not interested in holding positions for many hours, days or weeks. There is no need. My interest is in playing on the side of the 5% who consistently win. If I took a view, based on FA or TA, then I would not be able to maintain a balanced view about what the market was telling me on a short term basis. Lots of folk lose because the marry themselves to a view and hence a position even when the market is going against them. I try not to do this. Analyse you biggest loss making trades I guarantee that these are trades where you know full well that you should have closed them before you did. For some people this is the only thing which lies between success and failure as a trader.

As I mentioned in an earlier post trading the majors can be a brutal business. The markets movement has a grating effect on oneself. This can happen if you are running a loss or a profit. How many times have you sat there and thought that the market has a webcam hidden over your shoulder watching what you do so it can do the reverse? In my opinion what one needs is a system which negates or considerably lessens this grating effect. This is where the volume studies come in. By monitoring more than price we can examine the market more deeply to justify or nullify our position in the market. This gives us a strength that a simple examination of price cannot. Hopefully it helps us run winners (when the condition prevails) and cut losses quickly when the balance of the market shifts. The point is that you only need a small edge to make fair bit of money providing that you don't get overly attached to your individual trades. Some of my better trades have lasted only a few minutes.

Those two systems that you posted seem, at first glance, to be wholly indicator based. This to my mind is a false prophet. All indicators use prior price to produce a further derived number. From this number other numbers might be deduced and potential trades identified. This makes little sense to me generally since there is no way of the indicator detecting which prices are important and which ones are not.

Have a look at the numbers that I posted earlier this morning. At 9.09am I told you that 2.0178 area was fairly key. Pop that line on a 5 minute chart and check it out. How many trades could you have made this morning using that level as a critical level? Even from the time I mention it you could have made 3 or 4 trades for +16 winners. Sure you might of had a loss in there too but overall youd be well ahead. Let us examine the loss. The loss would have occurred on the 12.30 bar (1 min chart) and immediately it was visible that all was not well with a long at 1.0180 ish. Realistic loss on that trade, even if you froze for a minute or so, would have circa 15 pips. As I said, trading is as easy or as hard as you want to make it.

Steve.



Quote:
Originally Posted by stevespray View Post
Evening Ampro Very good and interesting post.

For what its worth most of what you write is not actually that relevant to my style of trading / learning. I understand what you have written but it is far to global for me. In setting up my charts I rarely look back any further than a few days and, in most cases, I am set up basis yesterday and what I see developing today. What you may have gathered, based on my prior posts, is the fact I try to look at things as simplistically as is possible. If you think about this realistically then you will see that the current price is derived by people trading in the shortest time frames. Its the same in shares and index futures (which is what set me on this road). As more people get involved in a particular market it has a greater ability to deflect from its true or fundamental value. The so called Tech Boom aka The Dot Com Bubble is a clear example of this on a grand scale in the end every man and his dog had a position in the market and the market was deflected massively from its fundamental value.

The same thing can occur in certain Forex pairs but on a much more short term basis. Again this needs careful consideration and in depth thinking. You see, its my belief that short term traders trade entirely on price this is their downfall. Their every action and reaction is based solely on the prices that they see. A stop loss for example is a pure reaction to price. No consideration is given to other factors which, for example, might also have a bearing on the validity of their current trade. This leaves the 95% wide open to consistent loss as their every trading action is dictated by the markets movement. This is why the market has this amazing ability to consistently generate its own trade even when it is reasonably quiet in nature. This generated trade is short term players reacting purely to price either fear or greed.

A simple experiment might help me make my point. Next time anyone gets the urge to take a position in the market just stop for a moment. Bring up a chart or two of the relevant instrument. Now place yourself in two scenarios and answer the following two questions;
1 ) Imagine that you have recently gone long in this instrument where would you place your stop?
And...
2 ) Imagine that you have recently gone short in this instrument where would you place your stop?
Once you have identified the two stop areas you have identified an area where taking a trade is of much lower risk. It is of lower risk because you have found an area where temporary price deflection is likely to occur. In those areas the 95% are flushed out of their positions purely due to price this is where you can step in. Obviously, if you have supporting volume as well then you are more than likely onto a good thing.

Right I need some sleep!

Steve.
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Old Mar 21, 2008, 1:49pm   #81
Joined Jan 2007
FAO SPLIT...... please make Split aware of this post nine

A simple experiment might help me make my point. Next time anyone gets the urge to take a position in the market just stop for a moment. Bring up a chart or two of the relevant instrument. Now place yourself in two scenarios and answer the following two questions;
1 ) Imagine that you have recently gone long in this instrument where would you place your stop?
And...
2 ) Imagine that you have recently gone short in this instrument where would you place your stop?
Once you have identified the two stop areas you have identified an area where taking a trade is of much lower risk. It is of lower risk because you have found an area where temporary price deflection is likely to occur. In those areas the 95% are flushed out of their positions purely due to price this is where you can step in. Obviously, if you have supporting volume as well then you are more than likely onto a good thing.

Right I need some sleep!

Steve.


Hi nine

Hell that was late in the day, I had given up

Make sure Split sees this post please, thanks do not no how I missed it.

Good spot and by far the most useful and correct post / posts I have read in some time for actually making any money imho

Split that is correct imho = as good as your simple trendline post that day to me, that post made an impact on me because you made me re-examine everything again which did me the world of good.

We are quits Split its been a real pleasure posting with you and around you

thanks and adios amego, all the best

Off to the cavern to watch my ladddy boy play his Sax, then off on holidays for the next few weeks

Great posts Steve

Andy
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Old Mar 26, 2008, 3:50pm   #82
Joined May 2001
Thanks for reposting those. When I first posted them I hoped that it would open up a fruitful debate. Let's see if that occurs here. Once a few more comment then I can add more. I find these matters to be very interesting indeed.

Take care,

Steve.
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Old Mar 27, 2008, 3:39pm   #83
 
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Very interesting, indeed.

jj
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Old Apr 3, 2008, 3:19am   #84
 
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nine started this thread A little song to help you on your way:

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Old Apr 4, 2008, 12:39pm   #85
Joined Jan 2007
just seen this

Quote:
Originally Posted by nine View Post
A little song to help you on your way:

top post nine

Last edited by black bear; Apr 4, 2008 at 12:39pm. Reason: thumbs up
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Old Apr 4, 2008, 1:09pm   #86
Joined Feb 2007
[QUOTE=nine;414457]A little song to help you on your way:

lol he might as well be singing about me
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Old Apr 4, 2008, 2:38pm   #87
Joined Jan 2007
sweet music for your ears

[QUOTE=rags2riches;415059]
Quote:
Originally Posted by nine View Post
A little song to help you on your way:

lol he might as well be singing about me

I will 2nd that Lol

lol lol

Could have Serenaded me on April Fools day for sure
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Old Apr 5, 2008, 1:33pm   #88
Joined Jan 2007
Ordered the book, just got to read it after finding this on the net.....

found this when trying to get my hands on this much talked about book

you no ....................THE ZONE one

extract from interview

What about the third stage?
That’s the intuitive stage. My belief
is intuition comes from the creative part
of our brain. Creativity, by definition,
brings forth something that didn’t previously
exist. On the other hand, the
rational part of our brain contains everything
we’ve already learned, which
means, by definition, it already exists.
So the creative part that generates the
intuitive hunch or gut feeling can and
often is in direct conflict with the rational
part of our thinking process, simply
because creativity exists outside the rational
framework. The hunch or gut
feeling was perfectly correct, but because
it can’t be justified rationally, it
isn’t acted on. To trade intuitively on a
consistent basis, you have to learn how
to properly integrate the rational and
creative parts of your brain
.

I do that about once a year, maybe a bit more but usually manage to seperate the two brains and carry on as per usual

April Fools day = I did not and damaged a number of claws on the paw of one of my hands

Have put up the cash and bought the book, and I do not or have not bought many, always prefered to re-invent things for myself after loads of thought and a couple of mi-grains usually

To trade intuitively on a
consistent basis, you have to learn how
to properly integrate the rational and
creative parts of your brain


Above is the offending brain fart area that needs sorting imho being a discretionary trader 100% of the time.

Work in method/system like way but with discretion

see how it goes and report back later
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Last edited by black bear; Apr 5, 2008 at 1:36pm. Reason: typo
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Old Apr 6, 2008, 2:24pm   #89
Joined Mar 2007
Quote:
Originally Posted by black bear View Post
found this when trying to get my hands on this much talked about book

you no ....................THE ZONE one

extract from interview

What about the third stage?
Thats the intuitive stage. My belief
is intuition comes from the creative part
of our brain. Creativity, by definition,
brings forth something that didnt previously
exist. On the other hand, the
rational part of our brain contains everything
weve already learned, which
means, by definition, it already exists.
So the creative part that generates the
intuitive hunch or gut feeling can and
often is in direct conflict with the rational
part of our thinking process, simply
because creativity exists outside the rational
framework. The hunch or gut
feeling was perfectly correct, but because
it cant be justified rationally, it
isnt acted on. To trade intuitively on a
consistent basis, you have to learn how
to properly integrate the rational and
creative parts of your brain
.

I do that about once a year, maybe a bit more but usually manage to seperate the two brains and carry on as per usual

April Fools day = I did not and damaged a number of claws on the paw of one of my hands

Have put up the cash and bought the book, and I do not or have not bought many, always prefered to re-invent things for myself after loads of thought and a couple of mi-grains usually

To trade intuitively on a
consistent basis, you have to learn how
to properly integrate the rational and
creative parts of your brain


Above is the offending brain fart area that needs sorting imho being a discretionary trader 100% of the time.

Work in method/system like way but with discretion

see how it goes and report back later
thanks for that Andy,

not sure why people are having trouble getting hold of the book got mine from amazon a very good price and here 3 days later

also your above quote illustrates why it is so important that our trading system / methods fit with our beliefs about how markets work.

cheers bd.
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Old Apr 13, 2008, 5:10pm   #90
Joined Jan 2007
Wow it really is like playing Snooker

Quote:
Originally Posted by black bear View Post
found this when trying to get my hands on this much talked about book

you no ....................THE ZONE one

extract from interview

What about the third stage?
Thats the intuitive stage. My belief
is intuition comes from the creative part
of our brain. Creativity, by definition,
brings forth something that didnt previously
exist. On the other hand, the
rational part of our brain contains everything
weve already learned, which
means, by definition, it already exists.
So the creative part that generates the
intuitive hunch or gut feeling can and
often is in direct conflict with the rational
part of our thinking process, simply
because creativity exists outside the rational
framework. The hunch or gut
feeling was perfectly correct, but because
it cant be justified rationally, it
isnt acted on. To trade intuitively on a
consistent basis, you have to learn how
to properly integrate the rational and
creative parts of your brain
.

I do that about once a year, maybe a bit more but usually manage to seperate the two brains and carry on as per usual

April Fools day = I did not and damaged a number of claws on the paw of one of my hands

Have put up the cash and bought the book, and I do not or have not bought many, always prefered to re-invent things for myself after loads of thought and a couple of mi-grains usually

To trade intuitively on a
consistent basis, you have to learn how
to properly integrate the rational and
creative parts of your brain


Above is the offending brain fart area that needs sorting imho being a discretionary trader 100% of the time.

Work in method/system like way but with discretion

see how it goes and report back later
Hi all

Read the Book

Why did no one post me and tell me to get this book to busy watching me re-invent It I guess using scrap loads of information

It is very good imho that good I am Scared, read it twice in the last 3 days because I could not believe I read it right the 1st time wrote and marked it all over and it looks like I have owned it years.

Trading is the same as playing snooker, the exact same problems and reading it explains..............................

To much

The guy is a the genuine article imho, a really great book in fact the best book I have ever read by a mile

Jimmy White would have been World Champion with no problem at all if he had met this guy in is mid twenties,

What a bl....dy shame

Latter all
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