Yup, my whole premise summed up nicely. You only need to be right such a small amount of times more than wrong. Consider the numbers. Take it to an extreme and say that you can be right 1/2 of 1% more than wrong (net after costs). If you could do this consistently (an every day basis) you would have a return, if compounded, that would essentially make you so rich it is not even reasonable to contemplate. Besides, I NEED simplicity because it is all I am capable of!!! RS7
I totally agree. I often say that my trading is much like a casino, where I play the role of the house. The odds are in my favor on every trade (just like for the house on every spin of the roulette wheel). There will be losing trades, but over the long run, I am certain to win, just like the casino. As with the casino, the odds are only slightly in my favor. Success lies in taking a huge number of 'bets' and knowing that my slight advantage will alway win out in the longer run. -Eric
My feelings exactly. This goes well with my style because as I have said, I prefer to use a "shotgun" approach. I will hold many smaller positions rather than fewer or even single positions. This is also why I am not trading e-minis. As I readily admit, my timing is not that perfect. If I am long or short a "basket" of stocks, and playing the trend, momentum, whatever you wish to call it, I am really playing the percentages. Admittedly it is a lot harder now, because we have been bouncing along rather than trending one way or the other. Even intraday. So my only solution to this has been to trade less. Now I know that there are traders that love this kind of volatility. There is certainly opportunity for them playing short term intraday swings. And I have nothing argue about with this. It is just not what I mean by "keeping it simple". Because that kind of trading is not simple. It requires even greater discipline and tighter stops. I admire the guys that can do this successfully. This thread, however is really about the "simple" approach. And that is to get with a trend. So if it is not working in a particular market, you need to recognize that. There are other "simple" techniques. Earlier I mentioned yesterdays extreme down move in LLY. I also said that I knew traders that would have jumped on that trade (by buying). Although this is not something I often do, it too can be a successful strategy. And also a "simple" one. Just buy or short extreme moves (going the opposite way in anticipation of a reversal). There are many strategies. The thing is to find something that works more often than not. To me, this is "simple trading". I think any technique can be exploited. Any strategy. I don't think what works for me is necessarily the right way to trade for the next guy. I think everyone has to find their own niche. I said in the beginning of this thread I would explain how and why I trade the way I do. I never said it was THE way to trade. My objective was to try and make clear that trading should be more "simple" than it somehow seems to be perceived. So "simple" to me is to find something that works and stick with it until it becomes a part of you. This is what adds up to be "EXPERIENCE". I think the traders that do not survive are the traders that try and be "jacks of all trades". I do not believe that the traders that employ more than 2 or 3 strategies are focused enough to become proficient in their trading. I have seen traders try something different on virtually every trade they make in a day. And those traders invariably both overtrade, and try and play "catch up". It is so important to know when the market is not being "friendly" to your individual style. This is when it is CRUCIAL to be patient and wait for the market to come to you. Or in some cases, just a single opportunity like the LLY trade yesterday if that is what you do. That takes great patience, but that is what trading is and should be about. Waiting for the opportunities to present themselves. I have said this before....I think I can repeat it without feeling guilty for being redundant: Being patient, knowing when NOT to trade is HARD WORK! If a trader does not understand this, the trader is not disciplined. Trading is work. Work is knowing what to do and doing it. If the thing to do is to do nothing but wait, that IS WORK. It is hard to sit in front of a screen and not trade. But it is something we must be able to do. rs7
Exactly. "It never was my thinking that made the big money for me. It always was my sitting. My sitting tight! Men who can both be right and sit tight are uncommon." -Jesse Livermore
I enjoyed the Predictors (the book about the company). What many people fail to understand (and this is that the prediction company exploited) is that chaos and predictability are related in non-obvious ways. It's for instance possible to have a deterministic system with chaotic behavior. So what they did was to find small pockets of determinism and trade those.
when do we get the BEEF??? give us something specific something wonderful that we can use TOMORROW MORN 9:30am to take Gold off the Street! i know that YOU know some great trade secrets that you're not revealing here. cmon man, give us the good stuff! "Besides, I NEED simplicity because it is all I am capable of!!!" oh come now, you're a helluva smarter than that. we know it, and you know it. prove it to us by saying something brilliant.
Faster, my man. I just wrote a lengthy diatribe and then had a power surge and lost it all. But since you have always been so kind to me in both your words and actions, I will attempt it all again JUST FOR YOU!!! Trading in the morning.... specifically the open (9:30...how can I address your question more specifically than that?) I talked about "fading the open" I think today. Somewhere in this thread anyway. According to my experience, and statistics provided to me, here is my list from best to worst scenarios for an opening "fade". Keep in mind this needs a bit of qualifying for tomorrow because the momentum from the prior day effects this list. But nonetheless: #1: Down open in an up market #2: Up open in a down market #3: Flat open in an up market (buy, but not truly a fade) #4: Flat open in a down market (to short, but again, not a fade) #5: Up open in an up market (dangerous fade) #6: Down open in a down market (see #5) Now defining a "fade" on a flat open is open to interpretation. Make your own. This is just semantics. Fading a trend (#5 and #6), while truly a "fade" by any definition, is just not a good percentage play, so the pros don't do it unless the move is more extreme than they feel can be sustained. This is a judgement call, and I am not going to tell anyone if we are up or down too much. Use common sense and maybe even charts if that is your inclination. Now tomorrow specifically: First of all, it is questionable what kind of market we are in. Looks like a consolidating market, but we have been (or I have) fooled into thinking this too many times over the past two years. So even though we seem to be in a short term up trend, I guess it is safer to say we are still in a down trend. But we have been up the past two days. Conventional wisdom for overnight (momentum) plays is that the 2nd day up (or down) is the best play. So if this is true, then I, as a momentum player, should be long overnight. But I am not. I was last night. It worked marginally. And I could have easily lost. Or made if I held longer (gambled). Tonight I am totally flat....a relatively (for me) rare occurrence. Yesterday we trended up for a long time; right into the close. There was huge momentum. Today, we were all over the map. So to me it was not a compelling play. Overall, I have been overnighting extremely lightly for over a year, and I never feel I am really missing out. I have missed some opportunities for sure, and I have saved myself a number of times as well. So now I will come in tomorrow flat at the open. If we are in a down market, I should be fading an up open. But my thinking as an overnighter says no...the 2nd day up theory. Also, last week (Tuesday?) we had a strong up open out of nowhere after a down close the previous day. Like many of us, I got badly burned as the market rallied from the bell until it collapsed very late in the day. So therefor, I am not anxious to fade an up open. OK...I have said what I won't do. This is not what you asked for. But I felt it worth explaining HOW I get to my plan for tomorrow. Which is somewhat a process of elimination. And I have eliminated my 2 primary strategies. Carrying positions overnight hoping for follow through (momentum) and fading the open. So now I am to my third and final opening strategy. I will come in early and try and see if there is any news or event driven reason to believe a stock or sector should be strong or weak. I will keep my eyes on the stock/sector/market to see if what I anticipated starts to pan out. I will not trade the first 15 minutes or so. The extreme choppiness lately in this time period makes things so difficult. Look at this morning for a great example!! If after 15/20 minutes I feel that it is time to get involved, I will. I will buy if I think the stock/sector/market is strong for whatever reasons I have .... (use your own....charts, news, gut, whatever. This is something I can't tell you how to do). If it works, I will stay with it. If not, I will be quick to get out....Oh, I should have mentioned that if I want to get long and it's a strong open, I will wait for a sufficient dip (20-25% in the S&P futures is a good indicator). Same in shorts, just everything is the converse. But whatever, not before the "noise" of the open is out of the way. Now, if I do anything at all, and I certainly may not, I will make every attempt to be flat by 11 am. This is for 2 reasons. First, I find it extremely difficult to trade between 11 and 1:30. I think the fills are horrible, the market is unpredictable, and secondly, I need to clear my head. I consider the morning and the afternoon to be separate. It is almost like a double header. A morning game and an afternoon game. If I have positions from the morning all day, it seems to mess my head up. Virtually always when I have an all day position, it is not a good one, and I am just struggling to deal with something bad. Fortunately I have (for the most part) outgrown this tedious kind of frustration. If I do have great positions, with absolutely no reason to get out, I will use stops and get away from the screen. This is the ONLY time I personally use stops (other than mental). So there is my plan. I hope it is clear enough. Peace, love, and rock and roll to all! RS7
RS7 I think you got a little past keeping it simple, but what you say makes sense. Good stuff. Thanks. But what happened to the humor? Where's the laughs man? You started on a roll and sort of petered out! MarcD
Humor for MarcD Quote from Darkhorse addressed to Publias, and his response. Maybe you had to be there, but it still makes me laugh! quote: -------------------------------------------------------------------------------- Originally posted by darkhorse there's beautiful girls all over this world if you know where to look- finding an inside to match the outside is what counts... shouldn't be no thang for a trader cut kreator like master publius groovius maximus... -------------------------------------------------------------------------------- (and Publias' response) Bro I don't care if this woman has the DEAD BLACK LAZARUS residing inside!!!!! I AM IN LOVE gimee gimee gimee __________________