Successful traders keep silent because trading is so simple...

Discussion in 'Trading' started by ion, Jul 3, 2007.

  1. Here's my 5 seconds of wisdom as there are many different ways to make money in the market, but this applies to all avenues for success:

    "Learn from your mistakes."


    #21     Jul 3, 2007
  2. maxpi


    I don't think it is just traders. When I worked as an Electronics tech I noticed the same thing. Techs would master a job and then their value was higher and they shared nothing with anybody of any value. Being trained by another tech was usually just torture, they would have the task of talking to you without imparting anything of value, and some were really adept at it. Many of them were not people persons at all, they were more like the loners with the high iq's and no clue about most things in life, those ones could really master the "torture-training" speech thing. I hated that aspect of work life but that was the way it was.
    #22     Jul 3, 2007
  3. I know what you're saying.
    #23     Jul 3, 2007
  4. Trading is indeed simple. It's knowing when not to take the trade that's difficult. More difficult yet is knowing a trade is outside ones "system" parameters and taking the trade anyway. Master that, and you're on your way to profitability. It ain't the system, it's the person trading it that distinguishes between the winners and the losers.
    #24     Jul 3, 2007
  5. MrPaul


    Well, you are assuming these people are successful. Most that say they are just aren't.

    I have to disagree that other successful individuals go out exposing trade secrets/methods/models. They may give some great advice but no secrets...none of any real value.

    Those traders who are successful couldn't teach you to be successful with their method in 30 seconds because successful trading lies not in method but in rote learning and EXPERIENCE ( screen time, journaling, reflection etc etc.)

    That is exactly why you may have 100 traders with 100 different methods that can all trade the same market and each be wildly successful.

    I know that is probably not what you want to hear, but after much pain and suffering, rial and error I can verify that is the complete and utter truth in trading.
    #25     Jul 3, 2007
    Akox likes this.
  6. jem


    nice post
    #26     Jul 3, 2007
  7. No, but a very worthwile read all the same. Thank you.
    I also don't think it proof of the 30sec simple method paradign the OP had in mind :)

    #27     Jul 3, 2007
  8. le140


    After 20+ yrs of trading and blowing up many accounts, it's very easy now :)

    Would I do it all over again knowing what I know now? YEEEEES
    #28     Jul 3, 2007
  9. I almost forgot perhaps the most important trade... the scary hidden buyer or seller.

    Often I can tell you how low a stock will trade on a given day by looking at the open book. How? Huge bids at various levels, all around the same size, perhaps 10 cents from each other... once the first one gets taken out, 95% of the time they ALL get taken out. The fewer offers you see, the better. The stock may shake you out, it may take out one offer, bring you beyond your risk tolerance, and then come back, but bids/offers sitting in the book usually always get done. The reason you see all those bids is because the buyers are aware that there's a seller and that they can get their buy orders filled since there will be sufficient supply. On that day a few weeks ago when BBW gave bad guidance and gapped down ~5 points and traded down another 3, this was the case... it was so incredibly obvious that the stock would go lower, because there were so many bids in the book.

    This is why I like refreshers, they're not showing you their hand - if someone is showing you his hand, it's because he's the weak hand, not the strong hand. When you see a stock with strong bullish momentum, and you see some huge offer 30 cents away, realize it's almost a guarantee that stock WILL test that offer. If there's another similar offer even higher, then if the stock gets through the first offer, it will get to the second (unless it gets through the first offer HORRIBLY... with terrible speed, incredibly small prints, etc.). Buy up in front of that offer and be ready to buy more once the offer gets taken out, depending on how it goes. If you don't like the way the offer goes, then you can just get out right in front of it.

    That's another thing that gives huge information - how an offer or bid is taken out. If there's a huge offer that's acting as resistance, and there's not a REAL buyer behind it, then watch how that offer gets taken out... if it goes really slowly, horribly, and with small prints, then there will be very little demand to continue to drive the stock up. See the pop... also see if it's different from earlier in the day. For example, if a stock has run up 4 points... $63, $64, $65, and now it's at the $66 level, and at $63,$64, and $65, when it took the figure out it spread up immediately 15 cents, and the figure was taken out each time very quickly... and now you see that the figure is being taken out slowly, and it only spreads up 6 cents, you probably are near a top.

    If a stock breaks through a key level, but the reaction really sucks... I.E. there should be panic selling and lots of downticks, but there aren't, be ready to fade it and go the other way. Again, unless you have trading experience and know "how" offers should go or how a stock should react when something is taken out or a level is broken, you can't really be taught that so much.

    Sometimes, you should also just find a level everyone is playing off of - say a stock has been running up with big aggressive bids - and then bid WAY below it, at an absurd level. In HCR the other day, there was a bid everyone was playing off of at XX.75. When it got taken out in one print, people panicked so much with market orders that it printed as low as xx.15. If you had gotten filled there, you were immediately 30-40 cents in the money. Doing it at more sane levels has more risk, but gives you more trades. Generally, if a stock is breaking through a figure but you think there's still a buyer, bid low-mid .80s. When people don't like the reaction as it breaks and shorts start covering and assholes like me starting trying to squeeze people, your bid will generally be a nice fill.

    One last trade I'll go over, which is totally unique.

    This was about two weeks ago on ENR.

    You need to click the attached image to see the chart so that what I'm saying makes sense... I've labeled four points, A,B,C, and D.

    So I'm typing through stocks, going through the stocks which are up the most on the day, and I come across ENR. As I see it, it's right at point A. The first thing I notice on the chart is that the last two candles showed a decrease in momentum (rate of change... before it was going up 50 cents every 5 minutes, now it's taking 10 to barely go up 25)... and I see that it's at the 102 figure level, where 10,000 shares are offered. I look on the daily, and see that 101.95 is a resistance level from several months prior.

    I notice that that offer is sitting there and no one is buying it... the prints I see are for 100 shares, 300 shares, 200 shares... nothing over a few hundred... to me, that means pikers, there is no real buyer. There are a few bids in the low 90s, but then very little liquidity elsewhere... at this point, because this offer is going so slowly, I am considering going short into the bids at .92/.90 to see if I can scare people out.

    Just before I do that, an offer for 5000 shares drops to 101.95... this shows me that someone else sees what I see and I'm probably right, so I get short all the stock I can in the .90s; I throw some bids down in the low .70s, and get filled on a few hundred shares, leaving me with about 400-500 left. The stock keeps falling, and now we're at the beginning of candle B.

    Then, ANOTHER 10,000 share offer (the 102.00 and 101.95 offers are still there) drops down to 101.60... now I know I'm right... then it comes down to 101.50, people panic out down to 101.25ish, and then the stock heads right back up towards that 101.50 level.

    Once it approaches that offer, there is a print for 4400 shares. This makes me KNOW I'm right. Why?

    Well, who the fuck is buying 4400 shares? Obviously it's not a daytrader, since buying 4400 shares of ENR with no bid in sight after an over extended move is just suicide... but if he's a real player, a real buyer who wants to buy that stock up, he should take out the whole thing. Afterwards, no one else wants the stock, and as you can see, for the next four bars, nearly 25 minutes, no one takes out the offer. After about 15 minutes, another 3000 shares are taken out (really slowly, in 100-300 share prints, by daytrader/pikers), and I get out of the last of my short at 101.50... when I get out, the last 3000 shares sit there for another 6 or 7 minutes before they get taken out, showing me that the demand situation SUCKS. We're now at point C.

    I go on to yahoo finance, to make sure I'm correct on the news for this stock, and I am: there is no positive news, so the only reason this stock can be up 4 points is because of a buyer. I don't see a buyer now.

    The stock, after having taken out the 101.50 offer, trades up towards the 102.00 level (this is the principle I mentioned before, about how stocks gravitate towards huge size), and I tell myself I'll see how it reacts when it gets there. Once it gets there - actually, to 101.95, since the 3000 shares that came in there ahead of the 102.00 offer are still there - no one is buying, there is no demand, and there are very few bids. So I short all I can, a little under 1000 shares, and hold tight... and over the next 20 minutes, when the stock comes near that levle, I short all I can in the high 101.80s/low 101.90s. We're now at point D.

    My risk on this trade is 10 cents at most: there is no way in hell I'm going to miss that 10,000 share offer at the figure... if I don't take any of the 3000 shares at 101.95.

    As you can see, after a little patience, the stock tumbles. Why? The stock was up because of a buyer, not good news... and that buyer was no longer there. He didn't want to buy near the 102 level, and he most likely finished his order at 101.50, with his 4400 share print... that was the buyer getting done, we can assume. As a result, the stock had nowhere to go but down.

    I got shaken out around 2:00PM in the upmove, for a profit of about a point and 30 cents, but had I not been so unnecessarily tight with my stops and placed it behind 100.80, which was the last real resistance level, I woul have made 3 points on the trade... or 4 points, if I choose to hold it overnight as the down move continued.
    #29     Jul 3, 2007
  10. insert


    jesus H christ man

    you are the man, the big bid guy :D
    #30     Jul 3, 2007