You have to QUANTIFY your edge first. That means a whole slew of things including Position sizing, money management, % probability, etc .. Then you must understand and believe the 5 truths of trading. 1. Anything can happen. 2. You dont need to know whats going to happen in the market next in order to make money. 3. There is a random distribution between wins and losses 4. An edge is nothing more of a higher probability of something happening over another. 5. Every moment in the market is unique.
Oh God! How many more people are going to come on here and post complete nonsense. Open a book, read, and post. Ratio trader, YOU, yes YOU, can read the market. You may not be very good at it, but you have got some vague skills. Let me explain. 1. Anything can happen. The thing is, anything can't happen, can it? You tell me and everybody else what couldn't happen today on the DJIA. Will it fall 1000 pts, 500 pts, 250pts. Will it rise 1000 pts, 500 pts, 250 pts. What you mean is that anything can happen within your own personal field of market 'vision', but that's not my 'vision', or anybody elses 'vision'. So please, keep your stupid textbook speel to yourself, for the sake of everyone and yourself. Dackster.
I just finished watching the European Poker Championship finals on TV, many of the attributes that give these players an edge are relevant to trading/speculating. On a different note, not everything needs to be learnt in the school of hard knocks, sometimes books can point someone in the right direction regarding market specifics. Just don't expect to find the complete answer in book/seminars etc. Ultimately, you will find your market truth within! Dackster, where did you find your edge? Regards Johno
I give a summary. We were trading large cap NYSE stocks. Over time we realized that we wanted to be trading the stocks which were part of the buyer or sell programs or part of heavy vwap trading... large vwap orders could be holding the stock down while the futures were moving up or vice versa. Our set up was to buy and sell pullback to to sloping 20 period moving averages in on 1 and 5 minute charts. It worked great for years. We used charts and found large caps stocks which did well recently according to our methods. We were always looking for new ones. It got tougher when the specialist started taking the other sides of trades. Their participation went from 7% to 30 or more. It got tougher because the penny spread let specialist participate more. It got tougher because ecns then allowed arb programs to arb the futures with the stocks. It turns out we were using t/a to do manually what the arb programs eventually did. Its whey I am always telling the anti t/a guys they are fucking idiots. using t/a is what many hedge funds do. They just call it a different name. We were manual arbs and we found and traded our targets using t/a. I am sure it is still being done. you could compare markets and trade the strongest on pullbacks. Now you can use stats and a spreadsheet or you could use charts relative strength lines and t/a. When you look at the stock tables in IBD long enough you start to get a picture of what the stock chart probably looks like. How the hell anyone could say t/a does not work is beyond me. If you are trading directionally you have a choice trade for reversion or trade for the rip. You then have to pick your vehicles. If you are good at t/a and stats guess what - you vehicles frequently come out to be the same.
Johno, Most people on here think that they are trading PA, if that particular phrase suits, but they are wrong. They are not trading PA, they are trading, technicals. Technicals are not PA. The reason why technicals are not PA, is because a person cannot put market sentiment into a box, it can not be harnessed with geometry, this is an exercise in futility. Trading PA is trading 'on the fly', for want of a better expression, it can't be formulated, there is no obvious 'edge'. The only 'edge', is what is going on inside a traders mind. I don't have an edge, i just understand what i should be doing, according to the market and my own personal comfort zone. Dackster.
You can advise all you want but I only use what I can validate through consistency and my own two eyes unlike you and a lot of traders that think coin flips are high tech research models. It's individuals like yourself that make selling options so damn profitable. Keep your head buried in the sand Bud, every day I hear from more and more money managers and traders that what I do works. Someday you might even get over your insane laziness and test it for yourself.
I think your question would be probably a very correct answer, imo. Many of us called traders basically are merely dream-builders! We build dreams, hence we keep on trading! http://www.elitetrader.com/vb/showt...23643&highlight=successful+trader#post1223643 "38-Steps To Be A Successful Trader by Anonymous 1. We accumulate information--buying books, going to seminars and researching. 2. We begin to trade with our 'new' knowledge. 3. We consistently 'donate' and then realize we may need more knowledge or information. 4. We accumulate more information. 5. We switch the commodities we are currently following. 6. We go back into the market and trade with our 'updated' knowledge. 7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in. 8. We start to listen to 'outside news' & other traders. 9. We go back into the market and continue to donate. 10. We switch commodities again. 11. We search for more information. 12. We go back into the market and start to see a little progress. 13. We get 'overconfident' & market humbles us. 14. We start to understand that trading successfully is going to take more time and more knowledge then we anticipated. Most People Will Give up at this Point as They Realize Work Is Involved. 15. We get serious and start concentrating on learning a 'real' methodology. 16. We trade our methodology with some success, but realize that something is missing. 17. We begin to understand the need for having rules to apply our methodology. 18. We take a sabbatical from trading to develop and research our trading rules. 19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. 20. We add, subtract and modify rules as we see a need to be more proficient with our rules. 21. We feel we are very close to crossing that threshold of successful trading. 22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology. 23. We continue to trade and become more proficient with our methodology and our rules. 24. As we trade we still have a tendency to violate our rips and our results are still erratic. 25. We know we are close. 26. We go back and research our rules. 27. We build the confidence in our rules and go back into the market and trade. 28. Our trading results are getting better, but we are still hesitating in executing our rules. 29. We now see the importance of following our rules as we see the results of our trades when we don't follow them. 30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better. 31. We continue to trade and the market teaches us more and more about ourselves. 32. We master our methodology and trading rules. 33. We begin to consistently make money. 34. We get a little overconfident and the market humbles us. 35. We continue to learn our lessons. 36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size. 37. We are making more money then we ever dreamed to be possible. 38. We go on with our lives and accomplish many of the goals we had always dreamed of."
A. They think they are special, with almost mythical capabilities. B. They got suckered in by brokers, who promote active trading, in order to generate increased commissions.