LOL Thinking is hard, boo hoo. It's pretty clear that ten thousand books and websites and trading magazines and indicators haven't done jack for the typical losing trader. It's also pretty clear that breathing exercises and attitude adjustments haven't done much either. So what's left other than doing a complete rehaul and changing the way they think from the ground up. Of course, that can be tough and a real grind to pull off- giving up is a much easier option.
Excellent observation. Honestly, I think a lot of it comes down to experience. The best trader I know, who traded FX for major banks for years, had no idea what basic indicators were and thought it was hilarious that I would use them. The real pro's use support and resistance levels, they understand flow, they understand where price will want to go and what it does when it gets there will tell them what to do.
Here's a useful exercise for anyone serious about improving: 1) Write out your methodology in full. Leave nothing out. Explain everything in full detail, as if you were writing it for your gramma who knows nothing about markets. 2) Put on your cynical skeptic hat. Write out all the reasons why your methodology might be incomplete or poor or wrong. Be merciless. Highlight where you may have made bad assumptions, where you may have overlooked something or didn't understand something, where you just didn't know what is going on, where your ideas might not match up with the real world. 3) Come up with a list of questions that need to be answered based on your findings from step 2. It doesn't matter how basic or dumb they seem- in fact the broader they are, the better. You can get more specific later when you are tweaking instead of overhauling. 'What is the main reason I am losing?' and 'Does this indicator have any real value?' are two examples of broad but valuable questions. Repeat steps 1-3 on a regular basis throughout your career until you either a) reach a plateau you are happy with or b) retire from trading altogether.
aphie, Probably best, then, instead of prefacing your emini chart with a hint that you're giving away "secrets" to instead preface it by saying, "Oh, by the way, I've never traded the eminis...." I've noticed a few times in your posts that you seem to confuse "good" papertrading with the real thing, implying that it's just a simple hop skip 'n a jump from one to the other. Far from it.
Think about the following: a) How much risk in terms of time/capital is each 'trader' taking? b) What rewards do they expect to gain relative to risk assumed? c) How is each 'trader's' style matched to their risk:reward profile? d) Now which one do you want to be? Just my thoughts. Nothing more.
Magna, If that is the attitude of this board, I will be happy to not share any advice from now on. Thanks aphie
Wow...talk about "over complicating" the whole idea of trading...geez, guys....trading is simple (not necessarily "easy" of course), but it is simple. Get on the same side as the Specialist...read the tape (follow short sellers down, then reverse - trades go to size, "no buyers at the bottom, no sellers at the top).....strong groups, strong market, Premium on Spoos, ..... For gosh sakes....."keep it simple"..... Don
Be cool aphie; if anybody means well it's Magna, he's the nicest guy here. (Not to mention that short term statistical relationships are like smoke rings; a little gust of change and they are gone). Some more questions for those getting a kick out of this thinking exercise: When a cheetah isn't running, what is it doing? If you had to survive out in the African plains, what would you be doing most of the time? Why do cheetahs hate and fear lions? What are the key strategy differentials between cheetahs and lions? What is a venture capitalist constantly looking for? If you had to sum up what a VC wants in a single phrase of six words or less, what would it be? What is the defining characteristic of an LBO (besides the fact that leverage is being used)? What are some of the typical risks in an LBO? Does the reward potential of an LBO have to be defined by the risk taken on, or can the relationship vary dramatically from deal to deal?
This reminds me of the old looney tunes cartoons where bugs bunny is in a phone booth that's been pushed off a cliff, speeding towards the ground at a hundred miles an hour. Just before the phone booth smashes to pieces he steps out and walks away eating his carrot. As a six year old it seemed so 'simple' to me to just step out of the booth like Bugs did, I didn't understand why it couldn't work in real life or why it felt wrong- until my dad explained the 'complicated' concept of inertia, which cleared things up. The cartoon was funny because the suggested action seemed so reasonable, yet you knew something was wrong with it- even if you couldn't explain it with immediate words. The fact that it LOOKS simple, but is actually NOT, is kind of the whole point.
Don's keep it simple spew really makes me feel like I can do it. I feel like I will succeed and all I have to do is go an plunk down 25k at Bright, and I'll be making $$$ out my ass soon enough. Thank Don for being so encouraging. I absolutely know I'm going to become one of the 5 percent that succeed in daytrading. Darkhorse, without reading your name, I eagerly started to read your post. Halfway thru, I thought, shit this must be Darkhorses post, and sure enough, a quick glance confirmed it. You amaze me with the stupidity of the ways in which you choose to stretch the boundaries of your skull.