my journal

This is a discussion on my journal within the Trading Journals forums, part of the Reception category; Ok, closed all ZN positions, and back at 6k. Now i am ready to start trading with probability in mind, ...

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Old Dec 29, 2009, 10:41pm   #1876
 
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back at 6k and flat

Yamato started this thread Ok, closed all ZN positions, and back at 6k. Now i am ready to start trading with probability in mind, without emotions, and considering only win/loss and risk/reward ratios.
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Old Dec 29, 2009, 10:59pm   #1877
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Re: back at 6k and flat

Quote:
Originally Posted by travis View Post
Ok, closed all ZN positions, and back at 6k. Now i am ready to start trading with probability in mind, without emotions, and considering only win/loss and risk/reward ratios.
Way to go! Keep it simple in act and mind!
Wish you the best!

Later!
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Old Dec 29, 2009, 11:22pm   #1878
 
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Re: my journal

Yamato started this thread Thanks.
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Old Dec 29, 2009, 11:32pm   #1879
 
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Re: my journal

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Originally Posted by travis View Post
So, do I have to read it every time I want to get 20 winning days in a row or is it enough to read it once? Anyway, thanks for the advice. That thing you said about 20 winning days in a row is what made me read it.

This book is so much powerful knowing that it made you profitable (or more profitable), and it is powerful to me also because I am expecting the author to be a profitable trader. I believe in this. But even if he were a professor studying and describing profitable traders, it would still be valuable.
I don't know if that winning period was a coincidence or something else, but I liked the book (to my mind one of the best books on trading).
When I complained about my recent losses month ago or so to one professional trader, he asked if I read the book. When I replied that I know about the book (and have read it), he suggested to read it again (obviously I haven't read it properly!?)
Although it is a demanding book, worth reading again.
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Old Dec 29, 2009, 11:33pm   #1880
 
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Re: my journal

Yamato started this thread Watching this now:
http://www.letmewatchthis.com/tv-413...ranos/season-1

Not bad at all.

From:
http://en.wikipedia.org/wiki/The_Sopranos

Quote:
A major commercial and critical success, The Sopranos is the most financially successful cable series in the history of television and is acknowledged as one of the greatest television series of all time and a seminal dramatic production.[1] The series is noted for its high level of quality in every aspect of production and is particularly recognized for its writing and the performances of its lead actors.[2] The show is credited with bringing a greater level of artistry to the television medium and paving the way for many successful drama series that followed.[3][4] It also won numerous awards, including twenty-one Emmys and five Golden Globes.
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Old Dec 29, 2009, 11:37pm   #1881
 
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Re: my journal

Yamato started this thread
Quote:
Originally Posted by bedsit View Post
I don't know if that winning period was a coincidence or something else, but I liked the book (to my mind one of the best books on trading).
When I complained about my recent losses month ago or so to one professional trader, he asked if I read the book. When I replied that I know about the book (and have read it), he suggested to read it again (obviously I haven't read it properly!?)
Although it is a demanding book, worth reading again.
Thanks for the information. It makes sense. So this professional trader thinks that book should solve the final problems on your path to profitability. I agree and I hope it will happen for me. I think the book really gives you an understanding on what you need to do. As I said, after reading a few pages of it, I felt it was the best trading book I ever read (or rather: I ever started to read, because I haven't finished any of them). The most comprehensive one.

I mean: finding a an edge is the easiest part. The hardest part is using the stoploss. This book is all about making you understand why you should use the stoploss. It may sound simplistic and demeaning for the book, but if it achieves to get you to understand risk, accepting risk (which means taking the loss, when it happens), it will have achieved its purpose. So it is basically all about using the stoploss. If he had titled it "why you should use the stoploss" he might have sold fewer copies, but the title would have been more appropriate.

I expect the book to get this through my head: that you have to understand and accept your risk each time you make a trade, or you will not be in control of all possible outcomes once that trade is on: with the potential risk of blowing out your account. Understanding this will also mean that you will always have a maximum predetermined loss, and you will accept it. The whole book could have consisted of one word: stoploss. But one thing is to give you the formula, and another is to make you understand it. The formula is "stoploss". Understanding it requires one book of explanations, and years of losses.

Last edited by Yamato; Dec 30, 2009 at 12:01am.
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Old Dec 29, 2009, 11:59pm   #1882
 
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Re: my journal

I should think I need to change certain beliefs as far as trading is concerned. Definitely need some work on fear, euphoria – recklessness, discipline etc. This time I'll try to apply what I learnt from the book (for a change)
About his approach: Well I try not to be dismissive – heard about him coaching some institutional traders etc. His philosophical approach may be unusual, but if it works why not. Trying to be pragmatic.
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Old Dec 30, 2009, 12:03am   #1883
 
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Re: my journal

Yamato started this thread If he uses whipping in his coaching I am all for it.

I don't read that much but when I read something, if I manage to read it, it means I am getting the message. I hope that within a few months my unprofitability will only be a distant memory. After 12 straight years of losses it would be about time.

I think this book you suggested to me is perfectly addressing my problem. I feel that he wrote every sentence of it just for me.
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Old Dec 30, 2009, 12:10am   #1884
 
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Re: my journal

Hope it works for you well. I wouldn't wait few months, instead would apply it immediately (I mean as soon as this unusual holiday price behaviour finishes)
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Old Dec 30, 2009, 12:18am   #1885
 
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Re: my journal

Yamato started this thread It might take me a few weeks and months to digest the book and its message. That's why I said "months". I don't think that yesterday's was my last relapse ever: I hope it was, but I wouldn't bet on it.

I'll be very happy if, by the end of book, I'll be cured.
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Old Dec 30, 2009, 1:03am   #1886
 
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craving to break rules

Yamato started this thread Chapter 2:

Quote:
...Just at that moment, he hears a scream from across the room, "NO! DON'T TOUCH THAT!"

Startled, the child falls back on his butt, and begins to cry. Obviously, this is a very common occurrence and one that is completely unavoidable. Children have absolutely no concept of how they can injure themselves or how valuable something like a vase can be. In fact, learning what is safe and what isn't and the value of things are important lessons the child must learn. However, there are some extremely important psychological dynamics at work here that have a direct effect on our ability to create the kind of discipline and focus necessary to trade effectively later in life.
and:
Quote:
The problem is that, most of the time, events are not allowed to take their natural course and the denied
impulses are never reconciled (at least, not while we're still children). There are many reasons why adults don't like it when their children (especially boys) cry, and do everything they can to discourage this behavior. There are just as many reasons why adults will not bother to explain to children why they are being forced to do something they don't want to do. Even if adults do try, there are no assurances that they will be effective enough to reconcile the imbalance. What happens if these impulses aren't reconciled?

They accumulate and usually end up manifesting themselves in any number of addictive and compulsive behavior patterns. They accumulate and usually end up manifesting themselves in any number of addictive and
compulsive behavior patterns. A very loose rule of thumb is: Whatever we believe we were deprived of as children can easily become addictions in adulthood. For example, many people are addicted to attention. I am referring to people who will do most anything to draw attention to themselves. The most common reason for this is that they believe they either didn't get enough attention when they were young or didn't get it when it was important to them. In any case, the deprivation becomes unresolved emotional energy that compels them to behave in ways that will satisfy the addiction. What's important for us to understand about these unreconciled, denied impulses (that exist in all of us) is how they affect our ability to stay focused and take a disciplined, consistent approach to our trading.
I can't believe this guy is explaining to me what happened with my father forbidding just about everything to me and enforcing just about any type of discipline and rules that could ever be conceived by a parent. He's better than any shrink I could have ever gone to.

What did my dad deny to me that is causing me to trade unprofitably? I can't jump to conclusions. But basically he gave me too many rules, and so I have an unsatisfied need for freedom: but if I trade with the necessary rules, freedom is reduced to zero. So I basically have to look for freedom in other areas. However what goes on is that - throughout my life - I've been feeling this crave to break rules, and this also happens in my trading.

But let's keep on reading.

I was waiting for him to tell me how to curb my compulsive behaviours. Not yet, but he says something else very interesting:

Quote:
The market is like a stream that is in constant motion. It doesn't start, stop, or wait. Even when the markets are closed, prices are still in motion. There is no rule that the opening price on any day must be the same as the closing price the day before. Nothing we do in society properly prepares us to function effectively in such a "boundary-less" environment. Even gambling games have built-in structures that make them much different from trading, and a lot less dangerous. For example, if we decide to play blackjack, the first thing we have to do is decide how much we are going to wager or risk. This is a choice we are forced to make by the rules of the game. If we don't make the choice, we don't get to play.

In trading, no one (except yourself) is going to force you to decide in advance what your risk is. In fact, what we have is a limitless environment, where virtually anything can happen at any moment and only the consistent winners define their risk in advance of putting on a trade. For everyone else, defining the risk in advance would force you to confront the reality that each trade has a probable outcome, meaning that it could be a loser. Consistent losers do almost anything to avoid accepting the reality that, no matter how good a trade looks, it could lose. Without the presence of an external structure forcing the typical trader to think otherwise, he is susceptible to any number of justifications, rationalizations, and the kind of distorted logic that will allow him to get into a trade believing that it can't lose, which makes determining the risk in advance irrelevant.
Let me quote it once more because this is the point of the whole book, it totally applies to me, and if I can get to understand this, I am done!!!

Quote:
In trading, no one (except yourself) is going to force you to decide in advance what your risk is. In fact, what we have is a limitless environment, where virtually anything can happen at any moment and only the consistent winners define their risk in advance of putting on a trade. For everyone else, defining the risk in advance would force you to confront the reality that each trade has a probable outcome, meaning that it could be a loser. Consistent losers do almost anything to avoid accepting the reality that, no matter how good a trade looks, it could lose. Without the presence of an external structure forcing the typical trader to think otherwise, he is susceptible to any number of justifications, rationalizations, and the kind of distorted logic that will allow him to get into a trade believing that it can't lose, which makes determining the risk in advance irrelevant.
It is totally true: before I make a trade I hate to hypothesize that it could be a loser.

He talks about creating rules, and respecting rules just about after this. I don't know if I'll post the whole book though, because it's getting tiring. Basically everything he says is just perfect for me.

Last edited by Yamato; Dec 30, 2009 at 2:06am.
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Old Dec 30, 2009, 2:09am   #1887
 
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Re: my journal

Yamato started this thread One more good quote from chapter 2 before giving up because there's too much good stuff to quote:

Quote:
Trading has no formal ending. The market will not take you out of a trade. Unless you have the appropriate mental structure to end a trade in a manner that is always in your best interest, you can become a passive loser. This means that, once you're in a losing trade, you don't have to do anything to keep on losing. You don't even have to watch. You can just ignore the situation, and the market will take everything you own—and more.

One of the many contradictions of trading is that it offers a gift and a curse at the same time. The gift is that, perhaps for the first time in our lives, we're in complete control of everything we do. The curse is that there are no external rules or boundaries to guide or structure our behavior. The unlimited characteristics of the trading environment require that we act with some degree of restraint and selfcontrol, at least if we want to create some measure of consistent success. The structure we need to guide our behavior has to originate in your mind, as a conscious act of free will. This is where the many problems begin.
The next paragraph is titled "PROBLEM: The willingness to Create Rules" and is like the bible of trading to me, and I feel it will certainly give me the awareness to solve my problems.

However, I will stop quoting, because as usual it's slowing down my reading too much.
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Old Dec 30, 2009, 2:28am   #1888
 
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Re: my journal

Yamato started this thread Very interesting reviews on the book on amazon:
http://www.amazon.com/Trading-Zone-C.../dp/0735201447

The first two comments are really good and summarize what I think already. I agree with both:

Quote:
By Peter B. Nelson (Minneapolis, MN USA) - See all my reviews

If you are like most people, after your first few losing trades you set about to learn better market analysis. After your next string of losers you learned about risk management. But there's still one more challenge to conquer; yourself.
That is the major premise of this book. If it sounds like wishy-washy psycho-babble to you, I'll only say that I would have agreed -- four months ago, before I quit my 20-year technology career, obtained a Series/7 license and joined a professional day-trading firm. I now believe most people would lose money if you gave them 50/50 odds on whether or not it was going to rain tomorrow.
In other words, successfully forecasting the market is not enough. Why not? Well, this book explains why not. It has to do with one's sense of self-worth, one's moral judgment of money, one's work-ethic, one's tendency to focus on good news while ignoring bad, and other things.
"Zone" was recommended to a friend of mine by a professional floor trader who told him, "I wish I had read it before starting two years ago. Don't place another trade until you do." Well said. Does this apply to investors as well as traders? Oh, absolutely! If you have ever said to yourself, "I'm not selling that stock while it's down, I'll wait until I have a profit in it," then for the love of money, read this book.
Finally, read "Zone" before Douglas' earlier work. If you still want more then read "Disciplined Trader" for a general review plus a deeper exploration into the author's philosophical and meta-physical theories.
And:
Quote:
By Mr. John M. Macgregor "John Macgregor" (Chiang Mai, Thailand) - See all my reviews

Because the core of the book - the emphasis on 'thinking probabilistically', and on banishing both fear and euphoria: on the system rather than on individual trades - is excellent and worth the cover price alone.

However there is a wearying amount of padding - most of it in the 'obviousness' category. The author spends pages at a time, for example, telling us that:

1. We have beliefs

2. Those beliefs cause us to act certain ways

3. We can change those beliefs

4. Therefore causing us to act in different ways.

(etc etc etc)

We knew all this.

Chief problem is that Douglas isn't a writer: doesn't know how to pare and refine material; reduce to essence; delete the unnecessary. Likes the sound of his own voice.

This also shows in the frequent spelling and grammatical mistakes, and the poor punctuation - which tends to throw one's attention all over the page, trying to discern a meaning. I'd have hoped the publisher - Prentice Hall - could have afforded an editor.

Douglas also affects, at times, knowledge of things he knows nothing about. E.g. equating negative ions with negative emotions - i.e. an electrical charge with a metaphor (!) Even a bit of school science would have prevented this one.

Hard to know whether to recommend this book or not, as reading it will waste much of your time: as you proceed from gem to gem (and there are many) via a wilderness of excess, often meaningless, verbiage.

Advice to wealthy readers: Pay someone to rip out the time-wasting pages, and chapters, and salvage for you the worthwhile bits - most of them in the first half.

Advice to Prentice Hall: Employ editors; you'll find it cost-effective in the long run. For example, people will recommend more of your books to other people.

Advice to Mark Douglas: cut this book in half, or less.


John Macgregor

Last edited by Yamato; Dec 30, 2009 at 3:54am.
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Old Dec 30, 2009, 4:03am   #1889
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Re: my journal

Hey Travis,

Came accross this thread tonight, re FX500club, in case you're interested: http://www.trade2win.com/boards/mech...tml#post586396
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Old Dec 30, 2009, 4:09am   #1890
 
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Re: my journal

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Originally Posted by wprins View Post
Hey Travis,

Came accross this thread tonight, re FX500club, in case you're interested: http://www.trade2win.com/boards/mech...tml#post586396
Thanks, I'll check it out.
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