ramblin' on (and on...)

Discussion in 'Trading' started by darkhorse, Jul 17, 2002.

  1. Back up the truck, here comes some serious rambling stream of consciousness type babble.
    Too much babble for one post. For TWO posts even. Three posts of crap! Yowza!
    Just so no one complains or dies of boredom, can't say I didn't warn you.

    Was looking at some market commentary in my boredom, peppered with 'the bulls this' and 'the bears that' and 'the bulls pressed here' but 'the bears drew the line there' etc. Anybody besides me think the bulls and bears language is way too black and white? Obviously the terms are metaphorical shortcuts to describe a more complex process, but I think it's too easy to take them literally in a mental sense. The bears did this, the bulls did that, which is which? We hear so much about these animals that we tend to assume them as actual static groups even if our conscious mind doesn't say it out loud. The gray reality is much more tenuous. What about bears that cover and bulls that sell out? What about guys who switch sides every few days? What about the guys on the sidelines? What about market neutral players? What about auto executions based on index tracking and mutual fund flows?

    I don't really have a specific point here except maybe that a lot of the terminology traders use implies more concreteness than is actually there. The closest we can come is statistical grouping of probability clusters, i.e. bad things have been unfolding lately so it's likely that more bad things will unfold before good things dominate again, same in reverse on upside. The news media is on a witch hunt for earnings misstatements now, so their increased vigor in looking increases the odds they'll find more, mutual funds in the hole will be selling out good positions to make up for hits on bad ones which will depress the market further, etc. etc. That kind of chain reaction thing, that probability clustering, is why trends exist and technicals work, the hidden substance behind the charts. Technicals are basically a loosely knit price-based assessment of the fundamentals, a broad picture of willed ignorance that is superior to false confidence because it filters out extraneous information. If you take a step back, technicals and fundamentals are the same thing on different levels, they just have different labels, and if you look at them hard enough they blur together. (Except for elliott wave and fibonacci, which don't fit into this equation because they are bunkum- in my humble opinion. All the other stuff can be traced back to jenyoowine informashun.) Indicators aren't the source, charts aren't the source, hallowed price itself isn't even the source- they're just as close as we can get to the reality machine in all its complex glory. Different filters and approaches mean different folks pay attention to different strokes, but in the end we all play the same game, just mixed up variations on a theme of gaming what is likely to happen next at a given point in time. Not recommending becoming a fundamental analyst or anything, just trying to inject a little bit of the 'who knows' back into the TA equation but also to temper it with 'a lot of the time you CAN know something,' the answer is in between. A good market thesis will always fit loosely because you just don't have the right to get tight without super strong information and mr. market rarely coughs up all the puzzle pieces. Having an idea of what goes on adds to that elusive feel we seek if you are smart enough not to overplay your hand.

    Simple, logical movements in response to a complex system = good.

    Assuming a complex system is itself simple = naïve/bad.

    Knowing what you don't know and staying humble = good.

    Embracing ignorance as a virtue beyond the negation of false confidence = bad.

    It's better to be more informed than less IF you can utilize the extra information. If there's no value in the surplus info then chop it down, cut it out, turn it off. But it IS possible to see the big picture sometimes if you think hard and squint real hard. So why do many technical analysts embrace their lack of certainty as if it were a good luck charm? Saying 'I don't know' is indeed honesty, and honesty is pretty much always the best policy, but there's no need to embrace a state of blindness if it's possible to figure things out to the benefit of the bottom line. Saying 'I don't know and I can't know and neither can you' is a no-no, uncertainty run wild, humbleness gone bad. Some stuff we CAN know, and sometimes a bell really does ring (in our minds anyway). On the other hand, false confidence is indeed much worse than humble deference so the pendulum swings back again. How much to try and find out? How hard to work the puzzle so you know enough but don't strain to know too much? It's like asking how hard to press or how much to risk- 'enough' is the best blanket answer because situations are so unique and different. How much is enough? No pat answer for that one anywhere, and especially not for $99.95.
  2. Look hard and find stuff out but don't ever get full of yourself, don't be afraid to stick your neck out but don't do it like a jerk, have solid reasoning for doing so. Be intelligent. Be wise. But you have to have wisdom and intelligence to know how to display them…the catch 22 again. So we start out stupid and make our way forward. Listen to other guys who seem to know what they're talking about. Make mistakes. So how do you know if some guy has good stuff to say or if he is just full of it? You have to analyze his logic and his thought process. The farther from the norm the thesis goes, the more convincing you need that it has merit. The conscious mind is like a bouncer: some ideas are ushered in to the club, others come in after a bit of inspection, others are never let in. If only it were all black and white, or all grey. Nope, its both. Some stuff is black and white, some grey, and some stuff we have no idea. That's why this game is such a trip, why life is a trip. Everyone is hacking through the jungle side by side, some with machetes and others with pocketknives. Where your buddy is at comes in relation to where YOU are at. All the cliches are useless because they are like points on a map without the map. You have to measure concept A in relation to concept B. Like the theory of relativity, a lot of stuff only has value in terms of its measured relation to other stuff. Are there absolutes? Absolutely. But where do you stand in relation to them? There is no opposite of being lost, lost is lost like zero is zero (coincidentally, that's why the idea of newbies fading themselves doesn't work- the only successful self fader was George Costanza).

    There are a lot of stupid questions (Whoever said 'there are no stupid questions' was just trying to be nice). But a lot of the questions that SEEM stupid are actually very insightful. Simple questions are often the best ones. The stupid questions are the ones that seek a ridiculously big answer in a few sentences, seeking a handout or a shortcut, like 'tell me how to make money' or 'which indicators are profitable'. The simple questions that are actually good tend to reexamine the obvious and draw out hidden conclusions that are not so obvious. And the good questions tend to come AFTER a lot of ground has already been covered, not before. Gotta pay the bill to get the juice, got to have the juice for the light to come on. The great ideas are often the ones that seem so obvious at first we tend to go 'but that's too obvious, isn't it harder than that?' Nope, a lot of the time it's not harder than that because the work is already done. The hard work was getting there in the first place, figuring out the right questions to ask. Once you're there- hey, there it is. How hard is it to stick a flag in a patch of dirt? Not hard at all- unless that patch of dirt is atop Mt. Everest.

    Winning trading methodologies are simple but they are still hard to find. You can put together a killer method with half a dozen simple rules. But here's the kicker: there are probably half a million rules out there to choose from, and an infinite number of combinations of those rules, and only a handful of them will work for YOU and in the timeframe that YOU are implementing them. So trading is simple, yes, but simple like a combination lock. And since you only have one way to measure whether you've really made it- consistent profitability- you never get true affirmation until you've made it all the way. You could be 99% there and not even know it because that last tumbler could have you still locked out. You could have it all put together except the money management and still bang your head against the wall and quit, not knowing you were so close. You could have a great method that would have made you rich if you had only worked it on certain days instead of every day, but you worked it every day and it choked to death on commissions and you threw it out. Or you tried it in a weird crappy market and just picked a freak test period. Or your dog got sick. Whatever. All kinds of monkey wrenches, countless ones, a hail storm of monkey wrenches. You just don't know and no one is going to tell you, you have to go find it, because when people figure it all the way out themselves their instinct is not "great let me go share this," it tends to be "man, I spent so much time and blood figuring out something so freakin' simple, no way am I going to let the other guys in on this golden goose for free." Or even if they do want to share, they find themselves unable to because so much of direct experience can't be translated.
  3. All those guys who write books, they aren't telling you the real stuff- they couldn't if they wanted to anyway. Ideas in books and methods and gurus are just tons and tons of information whizzing around out there, some good, some bad, most of it repetitive. Building your own structure is tough because there are a million ways to go wrong and its easy to get frustrated and quit before you make it to the promised land. This is why all you can do is to try and learn as much as you can and recognize that you can never learn enough. You have to have the smarts to understand a complex game and understand how to play that complex game in a simple way. No website or message board can ever give you the valuable lessons that come from bleeding and trying and failing and experimenting.

    Figure stuff out for yourself. There is nothing wrong with being certain of something, I am a guy who is dead certain of many things, but make sure that certainty is built on a painstaking foundation of toil and study and not some half examined assumption or half assed hope. And once you do find truth, don't pretend you haven't. Don't look away if it ain't pleasant. Look harder, learn to cope. Be a realist. Question yourself. Don't kid yourself. Realize that you probably suck in a lot of ways, but then reach down deeper and find the strength to overcome that suckiness. Most can't reach down like that, which is why most can't trade- but if you can then you can be da man. If you are willing to do whatever it takes, hey that's all you'll have to do. Listen openly but skeptically. Most of the stuff people say has little value, this is just an application of probability because with all the stuff that is wrong and all the stuff that has been said over and over, that pretty much covers most of what comes from people's mouths. Becoming a successful trader reminds me of the escape scene in Shawshank Redemption, where Tim Robbins crawls through a mile of sewer pipe for his freedom. You have to be something of a badass to make it through that pipe- you have to be strong just to take a crazy shot and get into that pipe in the first place. But man oh man is that freedom worth it. Then the glory fades and trading becomes just a job and your journey is just one of those old experiences like that lousy year in high school. Just a gig, ain't no thang but a chicken wang. Shrug.

    small bombshell (cherry bomb? cap gun? exploding sandwich bag?)

    I need to take a break from this site for a while because I have other projects I need to pursue and it sucks up too much of my time, so I'm splitting for a while. I've tried to limit myself to only a small amount of time each day but this place is like lays potato chips, when it comes to posting I can't do just one. So I decided all I can do is go cold turkey on elite, at least for a while until I get some other irons in the fire nice and red hot. Yes I know, who cares...I'm a self important schmuck for making an announcement even if it's buried in a mega compost heap post.... Yes indeed thank u very much…I figured as a going away present I would shoot off one last big long brain dump of the kind which I have sort of become known for in a good and bad way. A lot of you guys probably think I'm a wacked out kook with too much time on his hands who posts waaay too much, and you know you are right LOL (except for the too much time thing, now that I am recommitting to some old priorities). So I give you the amazin' rant you see, which took me about twenty five minutes (fast typing huh?) and with that I have to say bye bye to elite for a while. I can't stay away forever but I want to hang up my message board persona at least until the Fall. These will be my last words posted for a good length of time, probably until Labor Day.

    There are many cool cats on this site, guys I've learned from and consider friends, too many to mention individually, so I figured it would be easiest and best to say 'surprise dudes I'm bugging out' rather than get in some long winded cheesy post by post exit fest.

    So anyways I'm outie for a bit to take care of some bidness and take the next step in my quest. See you down the road in another season, I'll check back in a few months, hopefully we'll all be richer by then. Fruitloop darkhorse rides off into the sunset for a few months. I'll actually be checking into an insane asylum (hey you never know)

    Best to all (and especially to those of you i consider friends)

    :D:D :D :D :D

    :cool: :cool: :cool: :cool: :cool:
  4. T/A_Bo


    Enjoy the vaca Darkhorse!
    Will miss your voice on the board tho! Always enjoyed your posts...

  5. Peace out, Dark.

    And you refer to my main man Leonardo of Pisa as bunkum? Watch the retracements on the spoos intraday. As far as dead Italian mathematicians go, Filius Bonacci is my favorite.
  6. Magna

    Magna Administrator

    Sorry to see ya go, always enjoyed your rumblin' bumblin' stumblin' ramblin'. :)
  7. Bono


    This reminds me of a heavy smoker trying to quit .. let's see if you got some solid will :)
  8. I remember someone imposing a 20 minute per day self imposed limit for posting to this site. I wander how that came out?

    Oh yes! Now I remember, that was "DARKHORSE".

    You do type ffffaaaaaaaaaaaasssssssssssstttttttttttttt!!!!

    :D :D :D

    Good Luck

    See You in the fall

    PS I just realized you cut it off at 1000 posts.

    Don't let us catch you back here under some wise ass alias!!

    Good Luck again
  9. rs7


    Ditto the above for me, Darkhorse.

    (however, i think you need to stop by and browse if you don't want to contribute. I need your feedback sometimes. Just PM me....don't make me go through cold turkey darkhorse withdrawal.)
    Also, congrats on hitting 1000 posts. Also, I said I was gone, but I couldn't stay away. Some called it addiction. I call it therapy in that you get to verbalize what you think, which somehow makes your random thoughts more cohesive. Always better to write than to just speak impromptu. (Though sometimes less is more).
  10. See you in the fall buddy...we'll all miss your insights.:)
    #10     Jul 17, 2002