illiquid's trade poetry
But what struck me one day was not the knee-jerk clockwork of my emotional buttons, nor the likely impossibility of ever eradicating them. It was instead the recognition that this fearless alter ego, which inevitably spelled utter disaster when allowed to take the reins in desperate circumstances, was exactly the kind of trader I've always aspired to be when all the odds were in my favor. This was the guy I needed to take the helm when the best opportunities arose, when the edge would cut sharpest and where bold and brash worked towards maximizing my advantage.My goal became (and remains today) to transplant this other persona out from a mere instinctual gut-reaction to hostile circumstances, and into an environment polar-opposite to its native one: positive, confident, and proactive. But no matter how clear this was to me in theory, there was no other way to break the habit but continual effort and repetition; reversing years of automatic response and re-directing my aggression to its proper place was not going to be easy.
But what struck me one day was not the knee-jerk clockwork of my emotional buttons, nor the likely impossibility of ever eradicating them. It was instead the recognition that this fearless alter ego, which inevitably spelled utter disaster when allowed to take the reins in desperate circumstances, was exactly the kind of trader I've always aspired to be when all the odds were in my favor. This was the guy I needed to take the helm when the best opportunities arose, when the edge would cut sharpest and where bold and brash worked towards maximizing my advantage.My goal became (and remains today) to transplant this other persona out from a mere instinctual gut-reaction to hostile circumstances, and into an environment polar-opposite to its native one: positive, confident, and proactive. But no matter how clear this was to me in theory, there was no other way to break the habit but continual effort and repetition; reversing years of automatic response and re-directing my aggression to its proper place was not going to be easy.
SOCRATES
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Good. Read what I have to say in the thread Journey from the Basement. It is rather long and a great deal of it has to be presented in the form of allegories, because if you are able to achieve this, you will understand why it is that the attention span of most people is not that great. Therefore all the examples had to be presented as allegories. The dunces thought it was a series of fairy stories, but the really clever ones picked it all up and used it correctly. Enjoy.
Secret opening
Tought I would never again postunder this name on t2w. But cant resist sharing this:
"Prince Wen Hui's cook was cutting up an ox. . . . The ox fell apart with a whisper. The bright cleaver murmured like a gentle wind. Rhythm! Timing! Like a sacred dance. . . . Prince Wen Hui: Good work! Your method is faultless! The cook: Method? What I follow is Tao beyond all methods! When I first began to cut up oxen I would see before me the whole ox all in one mass. After three years I no longer saw this mass. I saw the distinctions. But now I see nothing with the eye. My whole being apprehends. My senses are idle. The spirit free to work without plan follows its own instinct guided by natural line, by the secret opening, the hidden space, my cleaver finds its own way... Then I withdraw the blade, I stand still and let the joy of the work sink in. I clean the blade and put it away. Prince Wan Hui: This is it! My cook has shown me how I ought to live my own life!"
~ Chuang Tzu (c.360 BC-c. 275 BC)
Tought I would never again postunder this name on t2w. But cant resist sharing this:
"Prince Wen Hui's cook was cutting up an ox. . . . The ox fell apart with a whisper. The bright cleaver murmured like a gentle wind. Rhythm! Timing! Like a sacred dance. . . . Prince Wen Hui: Good work! Your method is faultless! The cook: Method? What I follow is Tao beyond all methods! When I first began to cut up oxen I would see before me the whole ox all in one mass. After three years I no longer saw this mass. I saw the distinctions. But now I see nothing with the eye. My whole being apprehends. My senses are idle. The spirit free to work without plan follows its own instinct guided by natural line, by the secret opening, the hidden space, my cleaver finds its own way... Then I withdraw the blade, I stand still and let the joy of the work sink in. I clean the blade and put it away. Prince Wan Hui: This is it! My cook has shown me how I ought to live my own life!"
~ Chuang Tzu (c.360 BC-c. 275 BC)
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Contemplation
"To arrive at the simplest truth, as Newton knew and practiced, requires years of contemplation. Not activity. Not reasoning. Not calculating. Not busy behaviour of any kind. Not reading. Not talking. Not making an effort. Not thinking. Simply bearing in mind what it is one needs to know. And yet those with the courage to tread this path to real discovery are not only offered practically no guidance on how to do so, they are actively discouraged and have to set abut it in secret, pretending meanwhile to be diligently engaged in the frantic diversions and to conform with the deadening personal opinions which are continually being thrust upon them."
~ George Spencer Brown (1923-)
"To arrive at the simplest truth, as Newton knew and practiced, requires years of contemplation. Not activity. Not reasoning. Not calculating. Not busy behaviour of any kind. Not reading. Not talking. Not making an effort. Not thinking. Simply bearing in mind what it is one needs to know. And yet those with the courage to tread this path to real discovery are not only offered practically no guidance on how to do so, they are actively discouraged and have to set abut it in secret, pretending meanwhile to be diligently engaged in the frantic diversions and to conform with the deadening personal opinions which are continually being thrust upon them."
~ George Spencer Brown (1923-)
Doing a better Job every (trading) day
long-time executive of General Motors Corporation, had a fivepoint "secret of success."
It was:
1. Get the facts.
2. Recognize the equities of all concerned.
3. Realize the necessity of doing a better job every day.
4. Keep an open mind.
5. Work hard."
~ Alfred Sloan (1875-1960)
long-time executive of General Motors Corporation, had a fivepoint "secret of success."
It was:
1. Get the facts.
2. Recognize the equities of all concerned.
3. Realize the necessity of doing a better job every day.
4. Keep an open mind.
5. Work hard."
~ Alfred Sloan (1875-1960)
The Test
The natural formation of the country is the soldier's best ally; but a power of estimating the adversary, of controlling the forces of victory, and of shrewdly calculating difficulties, dangers and distances, constitutes the test of a great general. Tsun Szu
The natural formation of the country is the soldier's best ally; but a power of estimating the adversary, of controlling the forces of victory, and of shrewdly calculating difficulties, dangers and distances, constitutes the test of a great general. Tsun Szu
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think it thru. It isn't always first flush right. It's rarely first flush right
scalping framework
mental
attitude
awareness
framework
skills
plan :
loss
risk
money
session
trade
order management
price :
observe+analyse context
internalise current behaviour
trade
snap judge lack of or quality of developing intent
snap act
scalping framework
mental
attitude
awareness
framework
skills
plan :
loss
risk
money
session
trade
order management
price :
observe+analyse context
internalise current behaviour
trade
snap judge lack of or quality of developing intent
snap act
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Trade management and behaviour dynamics
Originally Posted by chump
H& S why does this work and why does it not work ?
When it works it is because the H& S pullback from the higher high is in this case a 1:1 retracement of the prior wave..this does two things...firstly it signals that a change of trend is more likely than not (this does not necessarily mean reversal ..it could be sideways and this is important) ,secondly it signals profit taking from the early trend instigators in conjunction with a pullback opportunity for the late arrivals again important.....the right shoulder however may actually form a trend reversal movement or still go into a trading range..this is not known for sure until the move is underway...if you take an entry on a one bar reversal in theory you take minimal risk on your entry...I would say if you take a small delay and take a stop entry on the break of the second bar back forming the right shoulder then you are even less likely to get whipsawed (I have not tested this statistically but have a look for yourselves) ..the caveat on this is the formation of that bar...entry on that bar should still offer 1:1 based on a 1st target at the base of the right shoulder...manage the trade by making sure you are at b/e quickly as the target approaches..two things may happen (but you will already have a good idea of probability by watching the way the bars form on the downleg of the right shoulder) ...one is it arrives at target but resistance forms and repels price back forming a trading range (the H& S failed ..there was still further buying to be done) ..second is it powers past that resistance and sucks in the stops from the former pullback entries of the latecomers..if it does the latter then 2nd target becomes the area for the breakout prior to the H&S and as this approaches either exit on a stop buy , or trail your stop on the high one bar back....there is another option based on a larger move for managing this but it depends on your timeframe..
Another slant on this is to look at the H&S in a larger context..if you think it is forming after one push up it is much more likely to become a trading range that signals the halfway point of the forthcoming move...if it forms as a third push up it is much more likely to be an H&S although end of trend distribution can sometimes come also via a sagging trading range which in itself belongs to a move from a higher timeframe. Again this reinforces the advice of a topdown view.
Good to see people just talking trading ideas without extraneous input.
Nice take on management. Knowing the behavioral dynamics can also be helpful, i.e., buying pressure propels the price into the first high, even more pressure into the second (greed). Then, when the TL is broken (important, otherwise the trader may end up trying to "catch the top" and make a series of counter-trend trades), those few who think this is yet another buying opportunity will push price into the last effort at a new high (hope), which of course fails (fear). Thus the pattern of transactions forms the same pattern as that of price. If one is using "volume bars", they should look the same as the price pattern: a high, a higher high, and a subsequent attempt which is not as high as the first.
All of this helps to ensure that the "pattern" succeeds. Without it, as you point out, one can often move sideways. The particular example provided here is an H&S in form but not in content since the "right shoulder" fails due to an event. End result is the same in this case, but without the event, the probability of moving sideways rather than plummeting is likely different than if the pattern is allowed to ripen naturally.
All of which makes real-time trading so much more challenging (the Fred Astaire approach to trade management )
--Db
Originally Posted by chump
H& S why does this work and why does it not work ?
When it works it is because the H& S pullback from the higher high is in this case a 1:1 retracement of the prior wave..this does two things...firstly it signals that a change of trend is more likely than not (this does not necessarily mean reversal ..it could be sideways and this is important) ,secondly it signals profit taking from the early trend instigators in conjunction with a pullback opportunity for the late arrivals again important.....the right shoulder however may actually form a trend reversal movement or still go into a trading range..this is not known for sure until the move is underway...if you take an entry on a one bar reversal in theory you take minimal risk on your entry...I would say if you take a small delay and take a stop entry on the break of the second bar back forming the right shoulder then you are even less likely to get whipsawed (I have not tested this statistically but have a look for yourselves) ..the caveat on this is the formation of that bar...entry on that bar should still offer 1:1 based on a 1st target at the base of the right shoulder...manage the trade by making sure you are at b/e quickly as the target approaches..two things may happen (but you will already have a good idea of probability by watching the way the bars form on the downleg of the right shoulder) ...one is it arrives at target but resistance forms and repels price back forming a trading range (the H& S failed ..there was still further buying to be done) ..second is it powers past that resistance and sucks in the stops from the former pullback entries of the latecomers..if it does the latter then 2nd target becomes the area for the breakout prior to the H&S and as this approaches either exit on a stop buy , or trail your stop on the high one bar back....there is another option based on a larger move for managing this but it depends on your timeframe..
Another slant on this is to look at the H&S in a larger context..if you think it is forming after one push up it is much more likely to become a trading range that signals the halfway point of the forthcoming move...if it forms as a third push up it is much more likely to be an H&S although end of trend distribution can sometimes come also via a sagging trading range which in itself belongs to a move from a higher timeframe. Again this reinforces the advice of a topdown view.
Good to see people just talking trading ideas without extraneous input.
Nice take on management. Knowing the behavioral dynamics can also be helpful, i.e., buying pressure propels the price into the first high, even more pressure into the second (greed). Then, when the TL is broken (important, otherwise the trader may end up trying to "catch the top" and make a series of counter-trend trades), those few who think this is yet another buying opportunity will push price into the last effort at a new high (hope), which of course fails (fear). Thus the pattern of transactions forms the same pattern as that of price. If one is using "volume bars", they should look the same as the price pattern: a high, a higher high, and a subsequent attempt which is not as high as the first.
All of this helps to ensure that the "pattern" succeeds. Without it, as you point out, one can often move sideways. The particular example provided here is an H&S in form but not in content since the "right shoulder" fails due to an event. End result is the same in this case, but without the event, the probability of moving sideways rather than plummeting is likely different than if the pattern is allowed to ripen naturally.
All of which makes real-time trading so much more challenging (the Fred Astaire approach to trade management )
--Db
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'Defining the correct yardstick'. It's an arguementitive statement. We all have our 'correct' yardsticks, but can any of us define them in type and text. I doubt it. There should be an index of 'yardsticks' for each member of this site, newbies could peruse the 'yardstick' index at fanciful will and choose one which best suits them. If any newbie was unfortunate enough to choose the wrong 'yardstick' and started to find they were having difficulties in using somebody else's 'yardstick', then they have been unfortunate enough to have been 'beaten-up', by somebody with a 'yardstick'.
think it thru. It isn't always first flush right. It's rarely first flush right
Now Im more into picking pertinent building blocks for just one strategy at a time with special attention for their underlying order and consistency.
Agree. Defining the correct yardstick "for me" was the initial idea.RUDEBOY said:
Now Im more into picking pertinent building blocks for just one strategy at a time with special attention for their underlying order and consistency.
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