I think its a good idea to try different things in trading, so this past week I set up my screens completely different...NO CHARTS...not a single chart...I had 2 quote windows...2 order entry windows.....and 5 time and sales windows and that was pretty much it. Like I do every night I wrote down the stocks that looked tradable, the levels I wanted to enter/exit, and went from there. Pretty good results...I'm gonna keep it like that until it stops working.
4Alpha, nice post. Excellent summation. Understanding the derivation of an indicator is key to using it, then you will understand what a stochastic is saying when it reaches overbot levels but price continues to rise. One could easily argue that a price chart alone is an indicator. Understanding the O, H, L, C of any one price bar is key. Understanding the relationship of those values to the same values of previous bars is key. You can say "I am broke." You can also say, "Because of personal tendencies to employ credit spending, my present fiscal status reflects a negative balance. You are broke in both cases. One way is much more complicated than the other. But the more complicated statement revealed clues to the reason you are broke. Indicators et al do the same thing. They provide clues to the reason a stock "is going up." These clues then help determine just how far up a stock might be going, if a pause portends a reversal, etc. etc. I guess we could all still grunt and point and scratch to make our points, but I prefer the art of language. Certainly, the argument has already been thoroughly discussed that the advancement of civilization has hinged on our ability to communicate. Likewise, financial success in the markets is increased by an increased understanding of what the market "is saying." ....grunt grunt....market up...buy...ooo ooo ooo...market down..sell Hey maybe that's all you need to know. I do know one thing for sure...
yeah inand, I read through all that just to get here to say the same thing. Nice post trade4. Alpha always has it together. I would like to be a fly on the wall sometime and listen to what goes on when he is not the smartest guy around. inand, can you imagine how dangerous we would be if we had brains like that? This is all just childs play to you isn't it tradin for alpha? I'm just curious, what do you sit around and think about that is challenging to you? And that's just his 2 cents worth!
hey inandlong, You get the feeling that too many people just want to use an indicator so they don't have to make one more decision, and then after they start studying the indicator, they realize it presents even more opportunites for even more decisions they don't want to make, so then they go back to just price hoping that maybe that will make things simple? I know I do. The lure of the Holy Grail is not riches. It's the desire to be free from having to live every moment as if the next moment depends on some choice we must make right now. I just want to set everything in motion so I don't have to think about it anymore so I can get on with living my life which has been temporarily suspended due to some decisions I must first make before my life can go on again.
Right on as always Profit. There is a group of guys whose posts I search for because of their excellence. You are one of them, and so as not to offend anyone...I won't mention any others. I know we posted elsewhere about the simplicity of trading and I fully believe it. I think my method is about as simple as it gets for what I want to accomplish. grunt grunt, ooo ooo ooo works well for me. PS - I do not have good luck... so if I were a fly on the wall, someone would swat me.
I'm kind of being sarcastic. Once I get it through my head that all these decisions are part of life, I quit trying to find something that will just make it go away, I embrace the complexity and I don't know, it just seems to make it a lot simpler for me.
Thanx profitseer and inandlong for your kind comments. I also thank you for your insightful comments such as profitseer's semi-sarcastic one about traders using indicators to avoid making hard decisions and inandlong's point about the importance of understanding the derivation of indicators. What I think about is all this stuff on ET. Every time someone has a question, I try to answer it, at least in my head and sometimes with a posting. Its great mental exercise to be forced to write down semi-coherent explanations of stuff. Sometimes it forces me to reread some long-forgotten material, do a bit of research, or create a quickie simulation. Many times, I think I know the answer, but when I sit down to write a posting, I discover that the answer is different or that the underlying issue is much more subtle that it looks (those are my favorite questions!). Every time someone offers a trading rule, I try to determine if the rule might be true, how I could prove it to be true, and how the markets would behave if more traders followed that rule. I look at whether what the market is saying meshes with what ETers are saying. And if a rule looks valid or looks like it is widely practiced, then I think about how to either trade with or against that rule. My curse is that I am a scientist and engineer by temperament -- it takes rigorous proof, not faith, to get me to believe in the trading methods that I use. I envy all you traders that are comfortable just looking at a chart (w/ or w/o indictors) and punching in an order. Proof of positive expectation (at reasonable risk) in the markets is hard to come by, especially if the trading system is too complicated. I will always stick with a 2 cent profit target and 1 cent stop-loss on my postings because I know that there are so very many ways to trade. Any tidbit of advice/information that I give will only fit with a small percentage of traders. Moreover, there are so many pieces to the trading puzzle that any one idea is but a shard of the holy grail at best (I'd settle for a servicable drinking mug myself) . If some of my fellow traders can let their profits run on what I post, then I am very happy. Wishing profits to all, Traden4Alpha
there is one somewhat distressing thing ( or enlightening , depends on your point of view ) that keeps popping up on this board : Most people don't have a clue about Expectation. They frequently substitute probability or win/loss for expectation. Many, many times I have seen people say "well, OBVIOUSLY if I don't win more than half the time, I can't make money". Over and over again I see that. The fact that it is mathematically, provably, false doesn't seem to phase them. Maybe a lot of them are just high school or college kids that haven't learned statistics yet. Maybe they never learned stats at all, innumeracy is a problem in this country. If you don't understand expectation then you might as well hang it up until you do. The good news is that it isn't really that hard.
Well I guess some things don't change regardless of whether you are a legend in your own mind (without actual trading experience) or you are a supposed seasoned and successful vet with 35 years of trading under their belt..... Commisso