Market is a big auction. Moves up and down. Fast and slow. Some days trend. Some days chop. All depends on how aggressive the buyers and the sellers are.
First I would like to thank you for taking the time to post, but I'm afraid that I don't quite see what you're getting at, which you predicted anyway. You saying I'm going about this mostly all wrong, and yet you offer nothing else. What are my beliefs about the market that are wrong? I believe that its simply a matter of buyers and sellers, all with different needs and different time frames. I don't believe that I need to know of be aware of the whole forest, whatever that even means in trading. Just today, Handle123 I think it was made the comment that if all a trader ever did was take one pattern and studying the ins and outs of it then he could do well. Mark Douglas says that an edge in the markets is simply one thing that is more likely to happen over another. Your post is quite eloquent, but I don't see anything of substance that can be used to put on a trade (you of course don't even seem to imply that looking for an entry is all that important though). If putting on a trade isn't important, how does one make money? If the entry doesn't so much matter, then why not put on a trade anywhere? Why not start with explaining how the market therefore moves, and then perhaps just a few sentences on how I can exploit this. You say that I don't have an ability to listen, but I feel as if posts like this which are so lost in the metaphysical realm of the market don't have one ounce of something tangible to them. Shall I go off and meditate about the market till the answer comes to me? Here is an example of what I'm looking for. The way I view the markets now is to look for a place where there was a change in demand. Either buyers stepped in to push price up, or buyers weren't interested so price had to drop. Now look for areas where price once again comes to these levels and see if there is any change in interest. How is this wrong, and how do you therefore view opportunity in the markets? I realize I'm being sarcastic, but I don't in any way mean to be rude. If you can offer something tangible, I am more than open to listening. But don't just tell me I need to go search for something. We aren't talking about god or religion here so your answer cannot come down to faith and I certainly don't want you to give me homework. You have to share something that is a bit more tangible.
And furthermore, all this sentence does is prove your superiority. If you were really interested in helping me not spin my wheels any further, you would actually try and tell me what this magic message is. All you're saying is that I don't understand, which isn't all that useful. What message have people been trying to tell me? I remember your name from the SLA days where DbPhoenix was doing his straight line threads. If I click on your name to see all your posts, and click on page 20 and scan all of your posts, here is what comes up. "Ah, this discussion about orders has cleared up my confusion." "Wow, so I feel like these last few pages of discussion have finally caused a giant light-bulb to go off in my head. I have been feeling confused... "DB and Huyang, Thank you both for taking the time to respond to my inquiries, although I feel undeserving of the effort you've put forth to... I still feel fairly inexperienced in understanding how price usually behaves during and after a hinge. Hmm, you've lost me a little here. It goes on and on. Your confusion and lack of understanding is screaming in these posts. Perhaps you can mention to us what you are doing now that makes you say you have found the light and is responsible for your enlightened path to where you are now.
I'll never understand this mindset, this notion that entrances don't matter or are entirely secondary to other parts of a trading plan. Makes no sense to me. The reason most losing trades are losers is precisely because of lousy entrances. How could it be otherwise? Cutting Losses Short is all well and good but how about minimizing the number of losses in the first place by starting out in the right direction? In other words, how you enter a trade matters a great deal.
I fully agree, but of course we will just be told we don't understand the entire market structure. Here on this chart... doesn't matter what the lines mean, but this first red dot is where I wanted to get in (a pretty damn good trade I didn't actually take... sigh) But what if I got in at the next red dot (just chosen as an entry to make my point)... price is clearly going down, so I'm trading in the right direction. Or what if I wait till it dropped below that second pink line, at the third dot, cause price is really going down now! Both those shorts would go at least 5 points against you before price stops rising and drops a bit more. If anything, I would argue that the entry is more important than anything else. A good entry means you can be wrong about the direction and be out for very little loss or even BE. A terrible entry means you can still have the direction right but be very much in the red before it turns around, just hoping and wishing it turns around of course, which is never a good position to be in. But perhaps once we have an explanation of how the market really works and how you have to look past the trees to see the forest we will understand that the entry doesn't matter and learn how to make money without even being worried about the entry.
Yes, I am aware that you are averse to homework. You're continually asking and/or challenging other traders on this board for something that you're just not going to get, instead of pursuing what they are going to, and have given you. There's a number of individuals who've spent some time and effort trying to offer some guidance but none seem to have been able to connect with you or provide you with tangible value that you have the ability to receive. That's where you're wrong. Your statement is simply false. I don't have to share anything at all. The fact that you throw around untrue [i.e. at odds with reality] sentences like this demonstrates what I mean by the fact that you have a thinking problem that you can't see. Maybe we'll talk again in six months from now or something. Feel free to make a defensive and/or emotional post quoting me even though I've stated that I'm choosing to move on from our exchange, as seems to be your current nature. --- Regarding this mindset; what makes the entries of secondary importance is the development of a continual understanding of the nature of the trade, in my opinion. It's a similar effect with stops being irrelevant or even a hindrance for many skilled traders. A good discussion about this was recently linked in Rearden's journal. For example, if someone forced me to open a short at a given time when there was a clear long bias, I would be managing my trade, and instantly exit for maybe 2-3 tick loss. If there was a long bias, I would set up some hypothesis about market conditions, actively control my risk and monitor my trade, and likely come out with a profit. Random entries into a trending direction will profit in a short amount of time; if you're able to identify market conditions and manage them properly without choking successful trades out. Hopefully I was able to clarify what I meant better. You seem like an intelligent individual and I think it's commendable that you are open to asking questions and exploring ideas you have an opposing opinion about. Best of luck to you.
Not clear to me what you mean here. For example, I'm a trend trader. So my entry rule is simple: "Trade with the Trend." The development of the trade is secondary to the entrance because there is no trade until there is an entrance. The development of a continual understanding of the nature of the trade sounds like Jack Hershey talk, which was far too often cryptic rather than revealing. Of course. You were forced to trade against the trend and had to execute the primary exit rule (Cut Losses Short) to prevent a small loss from becoming a large loss. How you entered the trade mattered. It determined how you exited the trade. Here you entered the market correctly: in the direction of the trend. No need for some hypothesis, just apply the second exit rule: Let Winners Run. Again, how you entered the trade matters. It determines how you exit the trade. I think the buzzword "trade management" is overrated. Some traders make it sound like driving a car. Nothing like that. There's an entrance and there's an exit. Inbetween there's mostly just waiting. The term 'management' hardly applies. I thought random entries had random direction as well as random times. If you're trading in the trend direction, then the randomization of entry time just determines whether you get a small or a large portion of the potential profit. Thank you. Good trading to you.
And I'm very aware that you have just as much of a closed mind as I do. I asked you several times to describe to me the nature of the market. I even offered my explanation in a few sentences, and instead of taking the opportunity to be helpful, you just take the time to write how little I know, yet again, and how lost I am, and just blame me for it. Before you go, can we get back to the topic of this thread? You seem to appear to know everything now. I have demonstrated through your posting history that when you started posting, you knew nothing and humbly thanked DbPhoenix and others for their help. Now you are a seasoned trader it would appear with a very complex understanding of the market. So would you say that your trading plan follows the SLA approach? Are you taking retracement entries based on a 1 min chart? Are you waiting for lines to break before going in the opposite direction? After you get 2 stopouts in a row, do you stop trading and wait for price to go somewhere else? Actually, as I dig deeper into your posting history, it seems you had a long thread based on Jack Hershey stuff. Jesus... no wonder I can't understand a thing you say! So this gets even more interesting. I know from the DbPhoenix days that he wasn't a fan of the Hershey method. You'll have to excuse my ignorance here as I have no idea what this method is, but since your thread goes on for many many pages, you were deeply into it I assume. Your posting history ends with following some more of Db's students. So you have me all confused. Does reading Db's PDF, combined with whatever Jack was posting, create this amazing understanding of market structure that you still haven't been able to explain to me?