They turn into a persistent bias toward the market, which brings emotion into it. I see numbers, they don't have emotion and neither should traders.
Constantine, i agree with you 100% on the emotional control......that was probably the hardest variable to master when I first started trading a few yrs ago; I mean it was really hard for me......
I'm not sure about websites that give good reviews of the basics of fractal geometry, but this book is still the best introduction I have found. There is some math involved but even if you don't have any calculus (mine sucks) you can get a lot out of it. http://www.amazon.com/Chaos-Fractals-New-Frontiers-Science/dp/0387979034 There does exist a video based on this book which has amazing interviews with Mandelbrot and Lorentz and a good exposition of the basics, but for some reason I can't find it on the 'net. It's published by Springer-Verlag and it would be a hell of a lot quicker than the book, if you can find it. I'm almost sure it goes by the same title as the book above, but it was a long time ago that I viewed it last. I'm still looking, and I'll post the link if I find it. I know they have it at York U. in Toronto, if you feel like flying out here : ) Let me put it this way. If you get into fractals, watch out. It can be addictive.
Stops are predetermined Losses! You must have an exit strategy that would signal the failure of your Entry strategy. A predetermined Loss does NOT serve that purpose!
A discretional stop, unlimited downside if you ask me, we are human after all. Mechanical stops are the only way to go, CONTROL YOUR DOWNSIDE RISK!
yes they do. I dont take trades with stops bigger then 3 points. and if i do get stopped out, i have a small loss.
You must have an strategy to enter a trade right? If you do then that strategy is NOT correct unless you also know it's failure point, that point is you stop. Here's the most basic example which will only help you understand the concept and is NOT a real strategy. Let us assume you are entering a trade based on a 0.3% Zig. therefore you'd reverse or get stopped on an opposing Zag. Hence, while the Stop was totally Mechanical you actually practiced an entry and exit strategy. The ZZ examle above does not work and is ridiculous as an strategy but best describes the concept of having an exit strategy based on the failure of the entry strat. HTH
This strategy maximizes loses, or would only be acceptable is you are 100 percent correct on all trades.