this is the kind of post that sends new traders down the wrong path....fear / psychology has nothing to do with whether your method has an edge or not...although psychology / fear is a somewhat important component it's not the reason behind why traders lose..."lack of an edge" is the reason my trading didn't really change for the better until I developed better "SETUPS" and focused like a laser on managing my risk and keeping the size of my winners much larger than my losers...so yeah...finding setups that make money consistently is what will turn your trading around...not psychology..think about it...either a trade will win or it won't..what does your superman psychology have to do with the outcome of a trade ...on the contrary..the setup itself and how you manage the trade by keeping your winners larger than your losers with a decent win rate is what will set you apart from other traders...and yes...even gurus... look ma....it didn't take a dissertation for me to convey my point across
I believe the question that this post answered was a little more nuanced than that suggested by your review of the answer. That there should be an edge is a given - and this entire thread has been full of posts encouraging new traders to develop their own. I am one of them. I suppose this exchange is a good example of context. Patterns of right and wrong answers cannot be applied indiscriminately to all questions.
B. The problem with making the transition from behavior to pattern is that the pattern becomes disconnected from the behavior, and it's then a short trip to butterflies and foghorns and other such. There is no advantage to developing a catalog of patterns. In fact, there's nothing in Wyckoff, for example, that might even be considered a pattern with the sole exception of the hinge, but even there the "pattern" itself is not particularly important, which is why so many people find hinges where none exist.
Lack of an edge is not the problem, rather it is the lack of a thoroughly-tested and consistently profitable trading plan. Such a plan provides the edge, not better "setups". Fear prevents the trader from following it, particularly if it is a plan that he bought somewhere or copied from somebody rather than one he created and developed himself. And for others who'd rather not read the thread, I'll repeat the definition of "edge" here. It's not difficult to remember: Your edge begins with the knowledge you gain through your research and testing that a particular price pattern or market behavior offers a level of predictability and a risk to reward ratio that provides a consistently profitable outcome over time. Without it, one is just "playing" the market in order to have something to talk about on message boards. To get it, you have to know exactly what you're looking for and what to do with it once you've found it. This process is what a journal is all about. And, again, for those who don't know what a journal is or how to begin and maintain one, click here: http://www.traderslaboratory.com/forums/wyckoff-forum/15535-developing-plan-trading-journal.html
Damok and Jalad. At Tanagra. Picard and Dathaon at El-Adrel. dbPhoenix and.... (Hootie, for one) at EliteTrader. Sometimes you just hear it one more time in one more way and there is almost an audible 'click' as everything connects differently.
I'm one of those fearful traders who wasn't comfortable until I defined setups in specific contexts as well as exact rules for managing trades. This was the result of having a plan, enjoying the profits, then abandoning it for intuition, losing badly, wash rinse and repeat. Finally, I realized that I needed absolute structure, and it saved my ass. Only now, years later, can I simply look at S/R levels, calculate the R:R of a potential trade and consider a trade that's not purely "by the book". Yet even with this hint of a transition to a more intuitive and less fear-based approach, I still tend to let the fixed plan dictate my trading far more often than not.
Is the opposite of fear.... intuition? Or 'intuitive - ish'? Have to think about that one. I do know that I have a different 'story' running thru my head as I trade. One more aware of behaviors than my prior stories focused on setups and rules. edit: Less fear for sure frees you up. That goes toward confidence and even intuition.
When traders who are in trouble (which sometimes seems to be nearly everybody) post to forums like this one seeking help, the most common though not the only reply, depending on how many vendors are lurking, is that the supplicant must learn to "control his emotions". Very rarely, VERY rarely does anyone bother to ask whether or not the seeker has a trading plan, much less what it is (and, no, "buy if it looks like it's going to go up" is not a trading plan). Trading psychologists *gag* love this stuff because they can counsel clients into the next millenium without ever attacking the real issue, which is that the trader-in-trouble has no idea what he's looking at, much less what to do with it. Therefore, any discussion of fear has to begin with whether or not the fearful trader has a trading plan and, if so, what it is. If he does, and it's something he created and developed himself (as opposed to buying a software package from 4X R Us or copying something from somebody who claimed that his method/approach/system was the key to unimaginable wealth), and if he's tested it thoroughly enough to have confidence in it, fear becomes a non-issue. This is why newcomers find trading so much easier than those who have been failing for two or three or five or fifteen years: they have not yet learned to be afraid. And if they're lucky enough to find somebody who will show them how to create a trading plan instead of sell them something, it's entirely possible that they will never know fear. Otherwise they will assume these learned fear behaviors in a matter of months, perhaps weeks. And from there it's generally downhill. So the opposite of fear is I suppose a state of calm assuredness. If one has created and developed his own trading plan and knows that it is consistently profitable, what is there to be afraid of? He develops the sort of disinterestedness that enables him to observe and evaluate what's happening in front of him without getting all twisted in knots about what to do about it, much like the sports fan who's watching a contest between two teams whom he knows nothing about and who couldn't care less who wins. It's difficult for me to drum up much sympathy for the failed trader since he always brings it on himself. Rarely does the failed trader care anything about how markets work or even about trading. He's interested in making money, so, ironically, he does exactly those things that will prevent him from doing so. He drifts from vendor to vendor, room to room, guru to guru, then whines because nobody will show him what to do (we won't mention any names here). The idea of sitting down in front of a screen with a box of pencils and a stack of legal pads and doing his own research and testing is so alien to him that it may as well be expressed in Swahili (unless he knows Swahili, but you get the point). It's so much easier to buy from somebody or copy from somebody, then blame them for unsatisfactory results. *sigh* I seem to be rant-prone today.
Even traders who seem not to need a great deal of structure often find that when they venture too far outside the lines and their results begin to suffer they must re-center themselves in order to achieve the results they know they're capable of. Sometimes their egos intrude and they resort to revenge-trading and so forth, but one hopes that eventually their "adult" regains control and their path to profitability is restored.
SLV has breached the supply line and has had a steady retracement. Retracement isn't a hard and fast always guaranteed to be exactly leading to a test at previous low thing. It's here we need a bit of screen time to at least have some idea where a reasonable entry may exist. I am of the opinion it's not a bad place to try a long and of course keep your stops close and exit if things don't pan out. Here's the chart for SLV Daily: Gringo