Grinding it out, day after day

riffrafffpatrol · Jan 11, 2013

Quote from lescor:

And why I recommend Mark Douglas's book.
More...

Amen.

ltn2012 · Jan 12, 2013

I made a great progress when i understood that trading is professional gambling...and bought books like "gambling wizards", IMO you will learn muuuchhh more when you reach a point that you know what youÂ´re doing....bets!

fjpenney · Jan 12, 2013

Quote from NoDoji:

Notes I took from a Mark Douglas interview: âThereâs no way to know the sequence of wins and losses. If we want to be able to trade our methodology in an effective fashion, to be able to utilize this methodology in a way where we can extract the maximum amount of profit that it makes available to us based on the pattern that it identifies, we have to do it in certain ways. Our mind has to be free to be able to execute these trades without making trading errors and the trading errors come from believing that because the pattern is present, that itâs going to give me a winning trade on THIS one; THIS trade is going to be a winner. You canât think that way. Thatâs the way the typical trader thinks. The typical trader thinks âIâm not gonna put on this trade on unless I think itâs gonna be a winner or why would I do it?ââ

âTrading a technical methodology or a technical pattern does not have anything to do with being right or wrong. Itâs just an odds game. Youâve got to be able to take every single trade because you donât know the sequence of wins and losses. Youâve got to be able to identify what your risk is and thatâs simply âHow much am I willing to spend to find out if other traders are going to come into this market and bid it higher than my price or offer lower than my price if I sold?ââ

The solution is to change your mind, to change the way you think. â[Youâve] got to eliminate the potential to think that the marketâs going to disappoint you. And the way [you] eliminate the potential is by understanding that trading is not about being right or wrong. Itâs a probability game.â

There are stages of development such as learning how to think in probabilities so the market doesnât have the potential to cause us to feel emotional pain.

âWhen you put on a trade and it doesnât work, all it really means is that some of the traders didnât come into the market that had the same belief that you had, or the same conviction about this market doing whatever it is you thought it was going to do. You have to learn to walk away.â

We canât predict collective human behavior. âThe methodologies that we have access to, these mathematical formulas, do that for us. But you have to understand that thereâs no possible way that these mathematical formulas can predict the outcome of these patterns on a trade by trade basis, only on a series of trades. So when I get a signal from my methodology, at the most fundamental level what this is telling me is that the odds are in my favor that somebody is going to come into the market (this is what the pattern means) and bid it higher than here if I bought or offer it lower than here if I sold. Thatâs all that itâs saying. Now theyâre either gonna come or theyâre not, and so as a result I donât look at this as being a ârightâ or a âwrongâ; I look at this as How much distance am I going to give the market to move away from my entry point to tell me that theyâre either going to come or theyâre not, and any further is not worth the cost of finding out.â

I can't speak for Lescor, but my guess is that he learned to attain this mindset before he became a master trader.
More...

That was the best post I have read on ET over the past number of months.

Fred

cygnetnoir · Jan 12, 2013

Quote from ltn2012:

I made a great progress when i understood that trading is professional gambling...and bought books like "gambling wizards", IMO you will learn muuuchhh more when you reach a point that you know what youÂ´re doing....bets!
More...

+1

I would only change it to say that "trading is gambling, but just as most gamblers do not rise to the level of professional gambler, so too do most traders fail to rise to the level of professional trader."

Trading is a subset of gambling, and professional traders are profesional gamblers whose game is played in the markets rather than the tracks, casinos, and betting parlors.

boba15 · Jan 12, 2013

Quote from NoDoji:

Notes I took from a Mark Douglas interview:
âTrading a technical methodology or a technical pattern does not have anything to do with being right or wrong. Itâs just an odds game. Youâve got to be able to take every single trade because you donât know the sequence of wins and losses.
More...

There can be a market regime change and your statistically proven "winning" pattern will cease working in one day. And you'll be losing gradually because of slippage and commissions (the pattern will lose its statistical significance).

fjpenney · Jan 12, 2013

Quote from boba15:

There can be a market regime change and your statistically proven "winning" pattern will cease working in one day. And you'll be losing gradually because of slippage and commissions (the pattern will lose its statistical significance).
More...

That's why you have to monitor the system health of each of your trading systems. There are statistical processes for this and these processes can inform you when you should stop trading a given system. Likewise you can also determine when to start trading a system that you had previously taken offline.

Fred

Daring · Jan 13, 2013

Anyone knows what time frames Lescor uses in his trading?

Not sure if he has mention before.

Thx

boba15 · Jan 14, 2013

Lescor, do you have own ideas or explanations of the underlying mechanics: why the price eventually went this or that way (e.g. what was the moving force, why participants behaved like this, what was their goal, etc.)? Or you don't bother with this and just trade what you see?

Mephistophilis · Mar 20, 2013

Hi Lescor and friends..

Thanks for this wonderful journal!! completed reading. would have been great had you continued with it... but whatever you gave is just great..

Had a question. Is it good to keep a daily stop limit?.. like stop trading for the day after hitting a particular limit. What i notice is that when my daily stop limit is hit and i stop taking further trades, next few trades on same day covers loss and also takes account to green for the day.....

thanks

Mephistophilis

lescor · Mar 20, 2013

I'm generally not a fan of doing that. If it's a valid trade setup, you should take it. Unless your losses from earlier in the day have mentally tweaked you to the point that you can't make good decisions anymore, then you should take the rest of the day off.

If you are hitting a daily loss amount that's making you uncomfortable, and it's happening regularly, you are trading too much size.