You are on the correct track towards longer term trading.......... "There is nothing new on Wall Street or in stock speculation. What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion that always gets in the way of human intelligence. Of this I am sure." --Jesse Livermore "The financial markets are naturally set up to take advantage of and prey upon human nature. As a result, markets initiate major intraday and swing moves with as few traders participating as possible. A trader who does not understand how this works is destined to lose money." --John Carter, Financial Trader "Fear and greed drive markets. That's why to succeed as a trader, you must learn to respect the two principal driving forces of price. To win consistently, you must put the odds in your favor by understanding when sentiment reaches an extreme at either end of the scale and take advantage of the markets at that time." --Boris Schlossberg, author of Millionaire Traders: How Everyday People Beat Wall Street at its Own Game "Be fearful when others are greedy and greedy when others are fearful". --Warren Buffett, Oct 2008 on buying US stocks for his personal portfolio in the Oct. 2008 stock market environment. "Buying at market bottoms when fear is at an extreme is an acquired taste that most people never attain." --RTS Trading RTS
Very well said.. marvelous quotes. Thanks for a great post. I am confident i have finally cracked the trading code. It is a simple plain hard work where brain rewire itself to handle trading ambiguity. By repeated practice, neurons grows dendrites and communicates with other neurons through strengthen connection and synapses giving fluency in the subject matter. Memory and learning occur when the neurons and synapses reorganize and strengthen themselves through repeated usage. Moreover, the brain uses stored memories to create, recreate and recognize patterns Because the human brain has an infinite capacity to change, organize and reorganize itself, progression to trading excellence is possible I cant believe...i have to take a step back and did a solid research on how brain works to understand how can i acquire trading skill. The only thing now left is intense hard work and that is a product of good habits...the day i can give 10 hours every day in studying past patterns for few months, i will be able to rewire my brain. Hard Work is the holy grail in any profession.
You are pointing out several salient points for conducting an efficient and effective path to expertise. It caused me to reflect on my personal career (amateur). After reaching a wealth growing trading regime that precluded working, I turned to education since having children was not in the cards for us. A 100% sample over 10 years showed a 123 point shift in math aptitude (SAT pre/post). I was invited to various places to present my theory of education based upon human behavior and critical thinking. Thus in a matter of years it became clear how the neuro linguisting aspects of human growth was common to any mental growth experience (mental growth. there is a language for markets and they communicate to minds that can understand the language. 3 or four decades later fields had been set up to examine these things. Today there is a conprehensive wealth of informatin on the multidisiplinary aspects of building the mind. I have concentrated on building the mind for building wealth. Currently, there is an intellectual vacuum regarding this. Since Behavior Finance has come into being, they have correctly stated the principles regarding individuals and how individuals are handicapped in managing to learn the multidiciplinanry aspcts of extracting wealth for the markets via the market's offer. (See BF or BS in Behavioral Finance). On any time line, it can be projected when such knowledge will become common knowledge. What I chose to do was work with a self selected group which could enable themselves by critical thinking in parallel with how the brain actually builds itself. All people at ET tell us by their palaver where they are in the infinite scheme of things. There are a spectrum of examples. We all have minds and there is a way to make use of the mind's potential. Most people deny themsleves the opportunity. Some of the knotheads here are the best incentives for others to change their ways and get with the program of critical thinking. At least five books come to mnd regarding getting "oriented for the trip forward". One that I didn't mention in the past is "The Social Animal" by David Brooks. I buy batches of such books a spin them out to those who will love reading them. At some point a learner arrives at the pont where he knows that there is no noise and no anomalies in the market and that the market can be torally automated down to the granularity of the market for any market with sufficient liquidity. Finite math and it's subset binary vector analysis is the path to this achievement. I read ET for the express reason of collecting examples of how people wind up where they are on the "Tree of Trading". Those who are self selecting and who do the work make two specific contributions with their new found abilities: they teach others and they contribute time and money to solving local problems. Times have changed and now global problems are on the list and collective efforts are made. Eliminating the need for money in problem solving is one of the greatest components for doing problem solving work. Now we are planning and designing a conference center for drawing people of like minds to work on important problems. I wish everyone well on his path, please try to stay on the main trunk of the tree to get to the top. For those who reject my input; you are making a serious error. That you will find out in 20 to 30 years.
Some interesting thoughts/ axioms and concepts have been expressed. Thanks to those. My little input hardly adds to anything already stated but it has taken me 5 years to be able to read the market's 'language', as Jack would have it. I'm far from a fluent reader and I am prone to the 'contrarian' weaknesses that cause me to make the common mistakes in discretionary trading. But what if you are aware of your failings you can strive to correct them. A feel for the market is definately what you aquire after years of observation and participation. A sort of unfolding story that plays out on a technical level and fundamental level (understanding macroeconomic data and the effect it could have have given me a better feel for things-it's also interesting and gives the brain a bit more to chew on). For me price seems to be heading somewhere and I try and work out where it could change course. And then the nitty gritty for me is pretty simple in application of all this experience. It's really about taking the swings and holding them (a hard job for me and likely everyone else), not taking a small win. I only use a few tools now and be patient and nimble. Input that has been said elsewhere in various forms but perhaps worth stating again. Good luck.
Great post..Your life experience gives you wisdom of true knowledge and thanks for sharing with us here. I fully agree with you..brain development is the key ti sucessful trading or gaining expertise in any profession. The knowledge and patterns stored in Long Term Working Memory (LTWM) helps to solve the issues. Expertise is nothing but enough knowledge stored in Long Term Memory through practice and revision.
How so? I think there are vendors who border on being con artists who push mass psychology as part of their "products" (any vendor selling 'Elliott Wave' related-materials would likely fall into this category), but I have built my own strategy on the assumption that the market is a manifestation of mass psychology and it works quite nicely. In fact, I would think that anyone who works only with charts or price action rather than fundamental analysis has to make the same assumption, otherwise those tools would not work. Does that mean the market is just mass psychology? No, but it does mean that it is unlikely to be just a "con".
In response, I offer the Trend Followers' versions of these quotes, two concepts that hugely boosted the profitability of my day trading: "Be greedy when others are greedy and fearful when others are fearful". "Buying new highs when it seems price can't possibly go any higher is an acquired taste that most people never attain."
Roger Dodger to all that. There is a really big myth about trend followers and the public. The saying goes something like: The public is always wrong. ........ In truth that can not be correct because trends bring in the public to throw more money on the flre to feed the bull. The public can spot a trend as easy as anyone else. Where the public falls a little short in the "investing" game is being a little late entering and a little late exiting. Warren Buffet is no trader to speak of, never was never will be. He bought some good cash flow companies and with a lot of cash makes cut-throat deals when others are in deep dung. :eek: