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):

  3. Redneck



    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