The following text is my reply to a thread called "what do you think about yourself". But it turns out the topic of that thread is overtrading. I feel my reply is a good start to initiate another thread related to psychology. So I repost it here. Please reply here rather than in the other thread. Thanks. ---------- I always think that I am the opponent of the market. That is problematic. I imagine the market as a group of people (fund managers, market makers, specialists, analysts, brokers, regulators, and even news media) that runs a casino game together. They can monitor everything that we (the customers) do and rip money from most of us. I do not know how true this is in reality. What do you think? I really hope I can be part of the market instead an opponent of it. ---------- By the way, what I really mean is that I hope that my thought was not true. Hope that in a certain degree that the market is not controlled by A group, meaning most people feel like what I feel but do not know what is really going on? But perhaps my hope is not realistic.
So what ? It will depend on your attitude. As for myself I have this vision and I am very pleased to take their money off the table . If not so I don't think I would agree to speculate. Although at the beginning I didn't think that, now I do think it because of facts and also and above all my model .
To me it seems more like a computer game. It's like trying to move SuperMario around these obstacles that are moving more or less in a random and unpredictable manner. If your timing is just right, you can jump on the shifting platforms and grab the coins. It should be so easy, if you can get it going right, but it can be so frustratingly hard. So easy to fall off the cliff and Game Over. The odds seem stacked against me because it's me against the game's complex programming. Like trying to play chess or pool against a computer, it is programmed to know all possible moves beforehand, putting me as an individual human competitor at a disadvantage. In a real sense I think the market these days has in fact become a giant video game tournament. What real difference is there between people who spend day after day firing their computer laser blasts at alien spaceships to rack up points, and people spending day after day firing trading account balances at ES and NQ and QQQ targets? Less and less difference every day. The kids who have grown up on video games are starting to take over the daytrading game. The same sort of skills and mentality has become necessary to excel at this game. The fund managers, and analysts, and the rest, are like the people who programmed the game. They've programmed the game, but it runs on its own. I'm not competing against them, I'm competing against the game they have created. Which is almost the same thing, but not quite. I have to play against the game itself, not the programmers.
It would seem obvious to me that it makes no difference why markets move. What matters is that they DO move and we find a way to take advantage of this fact. From what I've been reading on a lot of these boards - men take this too seriously - one of you commented that you "treat it like a video game", now that's the spirit. If you're going to do it - ENJOY IT!!!! Good thing I have no male ego and hormones to stand in my way of peace of mind and financial success. Men need to learn to: Relax, go with the flow, and most of all - Enjoy the journey Happy Hoildays Marielle
The kingdom of heaven is within you. That means that you are responsible for all creation. So, my job is to create a profitable market.
Your line of thinking about being an opponent of the market is dead wrong. The key is to align yourself with what the market is telling you, because it is telling you what to do all the time, the real key is listening and observing. Learn to know the key groups that lead the market, BKX XBD, SOX, MSH, if these groups are outperforming the broader market (SPX) and the A/D line, is +1000, the market is strong, be long. Don't fight it, go with the flow. Look for trades in the strongest sectors on the long side. Pulbacks are likely to be very shallow, so shorting will be and exercise in frustration. Conversly, on days like Friday, most of those key groups were underperforming, and groups like HCX, DRG, CMR were outperforming, the A/D line was horrid, the market's telling you it's gonna be a pretty shitty day to be long. When those sectors are leading the market is playing defense...listen! Rally attempts will be weak. Watch. On days when there's no key leadership, and the A/D line is even..this might be a good day just to watch, sit out. Find some something repeatable, especially with regards to economic numbers.. Retail sales coming out that day?, why not focus there and have a retail stock ready to play, on Thursday, on the higher than expected #s, RLX is strong, and KSS went from 62 to 63.30 in about 4 minutes..that's what you should look for; ISM Survey due out?, have a MMM, or DD ready to go...day before Thanksgiving, MMM went from 127 to almost 130, over the course of the day! Stack the deck in your favor, and listen to what the market is saying. Don't overcomplicate things, don't rely so heavily on indicators, sure they can guide you along, but on strong days I have seen stochastics at 95 for hours on end, are you shorting? Just try and keep it simple, and overtme the odds will work in your favor. Hope this helps you.
Thank you for your insight, TheCaracal. You gave very good suggestion on trading with the market/trend. I just want to point out that when I said I though I was opponent of the market, it didn't mean trading against the trend. I mean I compete with the market on the other side psychologically(not counter-trend). Anyway, very good and helpful suggestion to ease my anxiety.