I understand your points...and agree that it is much easier to concentrate on trading correctly when you don't have to worry about paying your bills and mortgage. I discourage anyone from trading with "scared money" - not so much from the "money angle" but more from the hesitation that arises from fear of loss. Just a side note...Some of you know our history (Bright brothers), and know that we pretty much risked it all (a couple of times) to get to a point of some comfort. I just like to encourage people that show promise, because I had that same luxury a long time ago, and I like to pass it along. Good Trading....
Jem, "The point is not to make an effort to silence the feelings and cultivate bland indefference. It is to see through the illusion that what is pleasent or good may be wrested from what is painful or evil." --- Alan Watts When everybody recognizes beauty as beautfiul there is already ugliness When everyone recognizes goodness as good, there is already evil "To be" and "not to be" arise mutually; Difficult and easy are mutualy realized; high and low are mutualy posited; long and short are mutualy contrasted; before and after are in mutual sequence ---- Lao Tzu Its not so much an elimination of all emotions as it is an acceptance and detachment from them. Your actions in the market are no longer dictated by fear or euphoria, because you quite simply realize the absurdity of "choosing"... PEACE and good trading, Commisso PEACE and good trading everbody, Commisso
Don, When you have the time, give us a story or two about those exciting times you risked it all and scored big. I'd love to hear it. Live long $ Prosper ProTrader1
Good question Pro... Don's response in this regard would be interesting. I would also like Don to add some insights on the psycholgical aspects to having it "all on the line".
Magna, "Not sure what "sensible" means here, because I can assure you that the large number of losing trading styles I adopted early on seemed clearly and unequivocally sensible to me. I would agree if you said "as long as the trading style has a clear edge, a positive expectancy." Agree. "Psychological development is key, I am convinced. I agree with you 100%, with the caveat that your trading strategy(s) have a clear edge, a positive expectancy (I know, it's sounding like a broken record...) But once the latter is in place, then I agree that the former is of paramount importance. " Oh no, you do not sound like a broken record. The notion Positive Expentancy is so powerful, that _EVERYTHING_, IMHO, takes a back seat to it. I do not know if Positive expentancy has to be in place BEFORE psychological development, but Positive Expentancy better not come afterwards, for sure. "Regarding your Three Commandments I'm not convinced of two of them: 1) trade with trend (or other antitrend entry criteria) The generally accepted platitude is "trade with the trend" or "the trend is your friend"; however, since you've added the second portion regarding antitrend I can't really disagree. But imagine a newbie's quizzical look as he ponders, "hmmm, he says trade with the trend or trade with the antitrend, which one is it, and how do I go about doing that??? And did he mean the 1 minute trend, the 5 minute trend, the hourly trend, the 120 minute trend, the daily trend, the weekly trend, the monthly trend, etc." Oh, my, I hear my own experience resonating here _EXACTLY_ "2) cut losses Absolutely. Positively. No ifs, ands, or buts. " Uhm, any questions? "3) run profits Welllllllllll, I know quite a few scalpers that make very nice livings and they never let their profits run. In fact, they consider it sacrilegious to not take just about any profit the market is offering. One scalper friend has this reminder taped to his monitor: "It is never wrong to take a profit". Yes, YES, _YES_. I may change my mind on this one, but the _GENRALIZATION_ of let your profits run has _DEFINTELY_ turned out to be wrong when scalping. "It is never wrong to take a profit". should read, IMHO IT IS NEVER WRONG TO TAKE A PROFIT WHEN SCALPING. Regards, nitro
"Any given trading style must always be traded in the context of its time framework. Otherwise, contextual misinterpretations (with resulting poor performance) will result. " I have to reply to this the same way that Magna did, that is: "I have to agree, although what Candle says is obviously true, it's quite frankly of little to no _PRACTICAL_VALUE_ [my emphasis.] Why? If you're a beginner or not too far along, you've already heard and absorbed those comments from endless discussions, endless chat sites, and endless books -- but how to incorporate them in any meaningful way into a positive expectancy trading strategy is a whole 'nother matter. And if you're reasonably well along, consistent and successful, then you already know those "truths" like the air you breathe (even though you may use discretion and violate them when appropriate). So in either case they provide nothing of concrete value although we all nod our heads and say, "Yeah, right..." Candle, I appreciate that you made $300K in 2001 as you've let us know many times, that's a stellar year, but I can assure you that it was a bit more involved than merely trading with the trend (except, of course, for the countertrend setups...), cutting losers short, etc. " I coudn't have said it better. As to the second response... [ With regards to your point on trading the trend or trading the countertrend, this is a set-up / belief set issue (Van Tharp's work goes into considerable detail on Belief Dynamics... Mark Douglas does similar analysis from a slightly different perspective)... the belief will be validated / negated by the necessity (or otherwise) to implement 2) ] What happens if you trade Pairs, where clearly you are trading "against the trend" in one stock, and "with the trend in the other?" These generalizations are so misleading to the beginner, that I think the best thing to do is to watch a pro make a living, then watch another pro make a living _VIOLATING_ those very rules that the first PRO holds sacresant, _THEN_, the "real lesson" becomes apparent... For newbies, please _STOP_ reading books and get training, either at Bright, Echo, etc. Then, if your are very lucky, sit behind as many pros that will have you. Then, if you are scientifically oriented and believe in the scientific method, try, just try, to extract that which makes them great. Finally, please don't get me wrong, I read these books to, e.g., the Douglas books, etc., but nothing, and I mean nothing, has made a difference to my trading as much as getting training from pros has. Regards, nitro
Nitro - I think you said what I was thinking. Now on another post one of the traders posted a beautiful example of good s/r trading. Now, since I am fascinated by the strength of Candle's beliefs about the trend, I would really enjoy an example of how he/she? sets up a trade before it begins. Since the trend is your friend until it ends. The burning trend question is the following. Whats the trend? Are we starting to look for shorts at the top of the range on the daily index charts. Are we looking to buy pullbacks in the current rally on the hourlies. Are we looking tomorrow morning to sell weak stocks if the spoos trade through the first hour lows. I suspect these are the questions all the trend traders should be thinking. This is not meant to be antagonistic I am in the process of adding swing trading to my arsenal and I would love some views into the minds of people using other profitable styles. (particularly candles)
For an uptrend, its higher highs and higher lows in whatever time framework you are trading. Don't make things harder than they actually are. Just trade the trend with discipline, and let probability sort out your P&L over the long run.