The Framework

Discussion in 'Trading' started by Bombardier, Feb 24, 2012.

  1. We always get to hear about "finding our own way" in trading and doing what "fits our personality". I believe that these words go much deeper than learning by doing. I observe a tendency among successful traders toward having a general theory of why the market does what it does. I recognize a necessity for a framework that defines every detail about your understanding of market movements. Before you even think of developing a strategy and its processes, you should first have such a theory. The essence is to build an individually crafted foundation (or one passed to you by a mentor).

    Newbies are often being advised about specific actions or changes to undertake in their trading, but I have yet to see discussions here of how traders look at the financial market that can inspire a newbie to critical thinking. The market has a language and a trader has to understand this language. To everyone else, the day-to-day price action is randomness and noise. What ubiquitous theory is based on your daily interpretation and trading execution?

    Have you explored a few representations of the market in terms of a concept? Did you leverage other traders' perspectives to manifest your own framework?
     
  2. One very inspiring framework I came across is how the market is seen in terms of energy. I'd certainly love to learn more about this, but there is only a short snippet of thought (with hopefully more elaborate thoughts to come): http://thisisbigger.com/2011/12/09/the-market-is-energy/

     
  3. Redneck

    Redneck

    Bombardier

    You, understandably, are attempting to understand (justify) uncertainty

    After all can I really go long – just because I see price moving up/ not going down – btw the answer is = yes I can

    Don’t I need to understand, at least in some esoteric theory, why price is going up – before I act – the answer is = no I don't



    Understanding, and accepting uncertainty is a bitch, but once you do, the need for “why” vanishes

    Some never get it


    Work to understand the players, and how they typically behave… screw the why

    Just something to ponder
    RN