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My take: Trade stuff that can't be codified. Pattern and volume will tell you real time what indicators MIGHT tell you with a lag. When appropriate do what the majority who lose are not doing or the opposite of what they are doing (exceptions include going short in a strong uptrend etc). Trade people, whether it's people panicking intraday at the bottom or Walt and Irma finally putting money into a sector or country that marks the top. There are no price charts only people charts, their hope and despair and their greed and fear. Stocks don't go up they are put up. Losers react, winners anticipate and wait for early confirmation, but the people who make the big money create situations based on what they know about the way the herd behave.
trendie
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A slight spin on the "do the opposite of what the majority are doing".
I personally am doing reasonably well following the herd, being a trend-follower !
I think the key word here is "anticipate".
If you can anticipate what the herd are going to do, they provide the momentum to get on the trend before it starts.
Of course, you need to jump off before the tredn falters.
So, I disagree that you do the opposite of what other do, but merely profit by anticipating what the majority are going to do.
PS: really good phrase, "people charts" !!
I personally am doing reasonably well following the herd, being a trend-follower !
I think the key word here is "anticipate".
If you can anticipate what the herd are going to do, they provide the momentum to get on the trend before it starts.
Of course, you need to jump off before the tredn falters.
So, I disagree that you do the opposite of what other do, but merely profit by anticipating what the majority are going to do.
PS: really good phrase, "people charts" !!
Trendie, basically what I was saying was don't do what the majority do as the majority donate to the market. Agree with your point about trends, what I meant by "exceptions include going short in a strong uptrend etc" was exactly that, don't go against the majority when they are right i.e. don't go against a trend, but do buy/fade the volume climax at the end. One indicator I do use is web boards - while the market is rising healthily there is still doubt on web boards i.e. it is climbing a wall of worry, then there really is universal acceptance of a never ending bull market, the high volume climax as all funds are put to work, and then, sadly there is the denial phase, "its a healthy correction". Sadly the majority freeze like rabbits in the headlights and now the loss is too big to take. Some maybe even double up. They then miss the exit provided by the second, lower peak and then ride it all the way down.
trendie
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mokwit - I have been there frozen in the headlights many times !!
Yes, the majority start to panic when there are corrections, because they dont have a plan, that says, "I can accomodate a retracement of X%" etc.
They are caught out by events they havent planned for.
Its a pity we cant measure our success in rabbit-pelts !!
Yes, the majority start to panic when there are corrections, because they dont have a plan, that says, "I can accomodate a retracement of X%" etc.
They are caught out by events they havent planned for.
Its a pity we cant measure our success in rabbit-pelts !!
....................an example of doing what most don't do is buying patterns as they form rather then when they are complete - a text book no no but if you buy when volatility has compressed right down you can set the stop down to the point where it is not a big deal if someone tries to create a move in the opposite direction to what you were anticipating (you can play even safer and wait for them to do this and enter after a failure has confirmed direction). By doing this you catch the move without the slippage in thin futures where a STOP market gets filled at support and avoid missing it all together when some anticipatory big player sweeps the book. Also you have a buffer for if it fails or gets very volatile at the breakout point. The majorityy seem to chase it and thats what you want to be on the right side of. That's the sort of thing I meant 
You are talking to BIg Bunny on this one, but I cut often enough to stay solvent. We all do it, even though we know we should not. Try trading a market where you can't enter stop orders, you can watch yourself doing something you know not to do on a regular basis.
Windlesham1
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Thought I'd share this
I've been a happy options trader,and make a good living-i have been doing so,full time since Jan '03. Last november my broker enticed me into trading ftse futures-I have always felt that I was rubbish at charting and picking market direction,which is why I rarely trade shares or share options.By Monday June 14th I had executed 64 futures trades and made a profit of £9,655. I had,until then had 3 losing trades-the biggest being £1300. Do I have your attention now? I had a 96% success rate,based on a very simple charting method,andupday/down day counting. Now I am sitting on two 4505 long futures,and in my little IB account I have turned a 25% profit into a 28% loss,but am out of the market on that account. I now have a serious problem'pulling the trigger' and today missed 4 trades which would have made,in total, 39 ticks.I traded at the end of a trend,and lost 1.5 ticks this afternoon-my hesitation forced me into trading too late,but my money management is now in place! Losing is annoying.Losing big time is 1.stupid 2.expensive 3.It stops you trading properly.
My 'system' is not infallible and I stayed out of several trades in the last few weeks, that my system told me to get into,and which turned out to be losers. I always listen to other traders,and am completely open about what I do(not my methods though). For me the most valuable asset in trading is not the hardware,the software,my brain or the size of my account,it is simply being able to talk with other traders,some who have become good friends,and some 'net buddies.Just thought i'd share that.Phew!
I've been a happy options trader,and make a good living-i have been doing so,full time since Jan '03. Last november my broker enticed me into trading ftse futures-I have always felt that I was rubbish at charting and picking market direction,which is why I rarely trade shares or share options.By Monday June 14th I had executed 64 futures trades and made a profit of £9,655. I had,until then had 3 losing trades-the biggest being £1300. Do I have your attention now? I had a 96% success rate,based on a very simple charting method,andupday/down day counting. Now I am sitting on two 4505 long futures,and in my little IB account I have turned a 25% profit into a 28% loss,but am out of the market on that account. I now have a serious problem'pulling the trigger' and today missed 4 trades which would have made,in total, 39 ticks.I traded at the end of a trend,and lost 1.5 ticks this afternoon-my hesitation forced me into trading too late,but my money management is now in place! Losing is annoying.Losing big time is 1.stupid 2.expensive 3.It stops you trading properly.
My 'system' is not infallible and I stayed out of several trades in the last few weeks, that my system told me to get into,and which turned out to be losers. I always listen to other traders,and am completely open about what I do(not my methods though). For me the most valuable asset in trading is not the hardware,the software,my brain or the size of my account,it is simply being able to talk with other traders,some who have become good friends,and some 'net buddies.Just thought i'd share that.Phew!
Trader333
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Windlesham,
Hmm, 64 trades that gave you a profit of £9655 which equates to £150 profit per trade and yet you managed to lose more than 8 times that much in one trade (£1300)
In my view it was always only going to take a small change in your win rate to make substantial losses and I think that your risk per trade is just too great if you can lose 8 times the amount you could win.
Paul
Hmm, 64 trades that gave you a profit of £9655 which equates to £150 profit per trade and yet you managed to lose more than 8 times that much in one trade (£1300)
In my view it was always only going to take a small change in your win rate to make substantial losses and I think that your risk per trade is just too great if you can lose 8 times the amount you could win.
Paul
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growltiger
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Infinite stops
What a horrible experience. You are right that your system is not infallible. 96% success rates and infallibility are not the same sort of animal.
The 96% success rate can only come from one of two things; either a run of outrageous luck or a strategy that combines an enormously wide stop loss - or perhaps no stop loss - with a rather unambitious target.
It sounds to me as if your approach is of the second type, particularly as you tell us you have been sitting on a two-contract position with an unrealised loss of around 200 points (4505 less this morning's FTSE low of 4290 = 215pts). What are you doing with that position? Waiting for an early Xmas? Since your average win is 15 points, I guess you must have a target of about 20 (to ensure you capture the win, right?).
In all probability, your system would turn out to have a positive expectancy, despite the horrible draw-down which you have allowed yourself to experience. But one cannot tell for certain without knowing how you pick your entries. One thing is for certain, however; there is never any good reason for expecting a position that has gone quite so wrong to come good again, in any finite period. If you thought this morning that the right price for FTSE in September was above 4505, the correct thing would have been to close the old position, think about it, and - if you still like the trade - put on a new long position with an appropriate stop loss.
What is appropriate? All sorts of ways to analyse that question. Clearly, you must have something to stop you losing your whole account on two contracts. If you really still like the idea of deep stops and modest targets, try setting a stop just outside the normal range of market fluctuation for your holding period. But not a holding period of 5 weeks and not a stop of 200 points, unless you were prepared to commit an account of around £100k per contract to this one strategy.
Good luck, anyway.
Windlesham1 said:
What a horrible experience. You are right that your system is not infallible. 96% success rates and infallibility are not the same sort of animal.
The 96% success rate can only come from one of two things; either a run of outrageous luck or a strategy that combines an enormously wide stop loss - or perhaps no stop loss - with a rather unambitious target.
It sounds to me as if your approach is of the second type, particularly as you tell us you have been sitting on a two-contract position with an unrealised loss of around 200 points (4505 less this morning's FTSE low of 4290 = 215pts). What are you doing with that position? Waiting for an early Xmas? Since your average win is 15 points, I guess you must have a target of about 20 (to ensure you capture the win, right?).
In all probability, your system would turn out to have a positive expectancy, despite the horrible draw-down which you have allowed yourself to experience. But one cannot tell for certain without knowing how you pick your entries. One thing is for certain, however; there is never any good reason for expecting a position that has gone quite so wrong to come good again, in any finite period. If you thought this morning that the right price for FTSE in September was above 4505, the correct thing would have been to close the old position, think about it, and - if you still like the trade - put on a new long position with an appropriate stop loss.
What is appropriate? All sorts of ways to analyse that question. Clearly, you must have something to stop you losing your whole account on two contracts. If you really still like the idea of deep stops and modest targets, try setting a stop just outside the normal range of market fluctuation for your holding period. But not a holding period of 5 weeks and not a stop of 200 points, unless you were prepared to commit an account of around £100k per contract to this one strategy.
Good luck, anyway.
SOCRATES
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Windlesham, this is horrific, but it is not your fault. On first inspection this appears to be a very curious statement. I will explain it to you stage by stage. What happens is that you using the ordinary persona you use in ordinary life have stumbled upon the very unique situation that your life experiences to date (a ) have not prepared you for and
(b) once you are in it do not allow you to get out of it. It is a horrible dilemma.
It is not as a result of stupidity. Not at all. Because if you were stupid, you would have ventured to develop this outcome wlifully.This is obviously not the case. What has happened is that the outcome has overwhelmed you. This happens to perffectly intelligent and rational and well educated people all the time.
It does not necessarily mean that if you posess the aforementioned attributes you are exonerated from making these blunders. Not at all, because your intentions are positive to start with, and there is nothing wrong with that. What happens is that suddenly you are delivered an information shock for which you are not prepared.
This means
(a) you do not expect it
(b) the outcome you experience is not the one you expect and
(c) when you do find yourself in this ambush you are well and truly ambushed, meaning you know what you OUGHT to do but are unable to carry it out.
This does not mean you are a masochist or self destructive, it is a symptom of your inability to deal with a situation. You cannot deal with this situation because you are PREVENTED from doing so. This is not your fault. You are trying to deal with scenarios through your humanistic persona.
Your humanistic persona is not constructed to deal with information shocks of this type. Your humanistic persona is constructed to deal with problems which are repairable. This problem is not repairable at all. In fact it is a corrosive and deteriorating problem with the potential for it to get much worse.
In fact part of the information shock is that it is not repairable. The realisation through all this is that it is not repairable, but viewed through the perspective of the humanistic persona is a contradiction, and viewed as an affront.
The humanistic persona is not constructed to overcome contradiction, the humanistic persona is constructed to be in harmony with being right, not wrong. The humanistic persona's main role in life is to preserve life, that is life itself. This response in human beings causes us to do everything possible to survive, to stay alive.
Peversely the humanistic persona views all experiences as formative, and accumulates a catalogue of experiences that are recalled which can be identified as being life threatening, and when it encounters as scenario like the one above for which it is not constructed a template it persists in trying to protect you the only way it knows how to, whcih is by insisting you are right, because being right is closely related to being able to survive, even in this case when you are clearly wrong.
Now what happens is that an emotion becomes attached to this thinking. Emotions have the faculty of disabling logical deduction and reasoning, and in doing so THE ABILITY TO ACT, and not just the mere ability to act, BUT TO ACT IN ACCORDANCE WITH THIS REASONING.
In this kind of theatre, you may actually experience the desire to get out but your ability to act in accordance with your reasoning is also disconnected. However when the level of pain is so great that it is as if it were life threatening, then this is the trigger that forces you to act and not logical deduction, desire to do so, or the ability to act on its own. It is a sort of knee jerk reaction rather than a planned response.
You have come to the right thread to discuss this. At this point in this discussion i am going to stop because this is as far as it can be taken now. You have to absorb this and come back to me and we can progress this further. It is solveable I promise, and you must crack it otherwise it will crack you. I am sorry I have been off for a few days with a very nasty virus but I am now much better.
(b) once you are in it do not allow you to get out of it. It is a horrible dilemma.
It is not as a result of stupidity. Not at all. Because if you were stupid, you would have ventured to develop this outcome wlifully.This is obviously not the case. What has happened is that the outcome has overwhelmed you. This happens to perffectly intelligent and rational and well educated people all the time.
It does not necessarily mean that if you posess the aforementioned attributes you are exonerated from making these blunders. Not at all, because your intentions are positive to start with, and there is nothing wrong with that. What happens is that suddenly you are delivered an information shock for which you are not prepared.
This means
(a) you do not expect it
(b) the outcome you experience is not the one you expect and
(c) when you do find yourself in this ambush you are well and truly ambushed, meaning you know what you OUGHT to do but are unable to carry it out.
This does not mean you are a masochist or self destructive, it is a symptom of your inability to deal with a situation. You cannot deal with this situation because you are PREVENTED from doing so. This is not your fault. You are trying to deal with scenarios through your humanistic persona.
Your humanistic persona is not constructed to deal with information shocks of this type. Your humanistic persona is constructed to deal with problems which are repairable. This problem is not repairable at all. In fact it is a corrosive and deteriorating problem with the potential for it to get much worse.
In fact part of the information shock is that it is not repairable. The realisation through all this is that it is not repairable, but viewed through the perspective of the humanistic persona is a contradiction, and viewed as an affront.
The humanistic persona is not constructed to overcome contradiction, the humanistic persona is constructed to be in harmony with being right, not wrong. The humanistic persona's main role in life is to preserve life, that is life itself. This response in human beings causes us to do everything possible to survive, to stay alive.
Peversely the humanistic persona views all experiences as formative, and accumulates a catalogue of experiences that are recalled which can be identified as being life threatening, and when it encounters as scenario like the one above for which it is not constructed a template it persists in trying to protect you the only way it knows how to, whcih is by insisting you are right, because being right is closely related to being able to survive, even in this case when you are clearly wrong.
Now what happens is that an emotion becomes attached to this thinking. Emotions have the faculty of disabling logical deduction and reasoning, and in doing so THE ABILITY TO ACT, and not just the mere ability to act, BUT TO ACT IN ACCORDANCE WITH THIS REASONING.
In this kind of theatre, you may actually experience the desire to get out but your ability to act in accordance with your reasoning is also disconnected. However when the level of pain is so great that it is as if it were life threatening, then this is the trigger that forces you to act and not logical deduction, desire to do so, or the ability to act on its own. It is a sort of knee jerk reaction rather than a planned response.
You have come to the right thread to discuss this. At this point in this discussion i am going to stop because this is as far as it can be taken now. You have to absorb this and come back to me and we can progress this further. It is solveable I promise, and you must crack it otherwise it will crack you. I am sorry I have been off for a few days with a very nasty virus but I am now much better.
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Rognvald
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Socrates
See the following:-
http://www.godulike.co.uk/faiths.php?chapter=36&subject=intro
and as always caveat emptor
See the following:-
http://www.godulike.co.uk/faiths.php?chapter=36&subject=intro
and as always caveat emptor
Mr. Charts
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My brother has a way with people who come to his door trying to "introduce" him to their brand of religion.
He asks," which God are you selling today?" followed by, "do you believe cleanliness is next to Godliness?" The answer is always hesitant agreement to which he responds, " well you will never get close to your God until you discover showers..........."
He never gets repeat visits from the same sect.
He asks," which God are you selling today?" followed by, "do you believe cleanliness is next to Godliness?" The answer is always hesitant agreement to which he responds, " well you will never get close to your God until you discover showers..........."
He never gets repeat visits from the same sect.
MysticalTrader
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*giggle*
Nice one Soccie
MT
Nice one Soccie
MT
SOCRATES said:
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