Trading INVERSLY

Discussion in 'Trading' started by estrader, Jul 28, 2003.


  1. you are correct, scientist. however, there is such a thing as losing streaks that we all experience, regardless of ability--think of niederhoffer or tudor jones, when these streaks occur fading ones self can be a viable option. in addition, gallacher is not speaking of good traders, he speaks of the typical losing futures trader.

    checked out the magazine in your signature line---- interesting--thanks !

    best,

    surfer
     
    #41     Jul 29, 2003
  2. Most traders lose to the vig, the spread commisions, and slippage. What's left over is not enough to fade in most cases.

    If you are THAT BAD, sure, you can fade yourself and make money. But it aint gonna happen so forget it.

    Maybe brokers monitor the really bad traders and fade them , but like pulling yourself up by your own bootstraps, it's almost impossible to do on your own.
     
    #42     Jul 29, 2003
  3. DblArrow

    DblArrow

    This is the essence - it is 90% psychological, why would you trade against a system, method or idea that you thought was a winner to start with? The mind will play tricks.

    To again prove the above quote - shorted the bonds at 118 02 - immediatly went up - did I take the loss - no, I sat through a 35 (almost $1100) tick drawdown, eventually came down and thankfully took one tick ($31.25). Then the market continued down and I left 47 ticks (over $1400) behind to paranoid to get back in for the rest of the day.

    That is what the mind will do if allowed, and I did.

    Make 'em pretty, Chris
     
    #43     Jul 29, 2003
  4. You should have traded INVERSLY my friend. You could have been rich by now. :D
     
    #44     Jul 29, 2003
  5. Hi Jack,

    That is so true, but why do we always fight to complicate that process?

    gotta_trade
     
    #45     Jul 29, 2003
  6. bubba7

    bubba7


    I believe it is beause of how we relate to money. I do work very hard to communicate about "process", but I notice there is the continuing influence of fear in the moment.

    To realize your potential, you have to climb higher. The notion of supression and all the other pictures you saw in this thread are not antidotes. They are just holding patterns for failure.

    Lately, we have emerged into a new place where people do not connect money and their fears to the intellectual process of climbing higher.

    It is the elegance of realizing that the only thing that stops the continuation of profits are "blockers" or as I call them "flaws" relative to continuation. As in the natural laws of physics, things continue until affected by something.

    Once a person has a good set of signals for these flaws, they go to a kiss operation. It is a monitoring setting where so many things can be going on and they are continually digested as "okay". This is the opposite of Scientist's stuff. The only focus is on "flaws" as an advent. Once you turn over the flaw card, you act accordingly. For experts, the action is two fold usually: the relaxing overature of taking profits and the secondary action of beginning the creation of another stream of profits.

    It is like two worlds. going with the flow continually (shering jobs with the market) or setting up continual fights with the market to beat it being controlling and supressing your feelings to engender personal discipline.

    It is hard to imagine any strategy like set ups or edges or aquiring and using a vast set of elements designed to handle a collection of individual situations. I can see why this leads to "fighting". Each time a person thus usurps a job the market must do, then there is a fight. All fights end in people going out on stops. We know the market doesn't lose.

    It is so repugnant to consider not using the market's roles and help. Lack of intellect and reason gets a person to a control orientation to "win and beat".

    Half the posts here were "control" posts that ,as you say "started the fight". Fading your control is not a money making strategy.

    The market's modus is "continuation" or "change". In the first, the market takes you in and out. In the second, the market periodically gives you profits and sets your path for the next set of profits.


    In the ESmini the flow was serene and seamless lately: Monday contained seven trades and 26 points (four 5's and three 2's.); Tuesday was similar with alternating short, reversal to long and reversal to short (10, 10, and 8 for 28 points.)

    What was being suppressed anyway; where was there a fight needed? Patience often is called for. We need patience because making money is slow each day; 26 to 28 points on only 5 contracts is only a 1,000 bucks an hour. 13,000 for two days.

    The fighters and suppressors tell us they have drawdowns in the hundreds on a given day. They go out on stops as I understand it. Be a peacenik instead of a suppressor.
     
    #46     Jul 29, 2003
  7. If the statistics say that somewhere around 80-90% of traders lose money, then one must do the opposite of what these losing traders are doing. My guess is that if you analyzed trading records of these losing traders it would probably show that they held the losers too long versus how long they held the winners-I know I was guilty of this during my first year of trading and it was the main reason for having losing days/weeks/months during that first year.
     
    #47     Jul 29, 2003
  8. This was true if day traders were losing to other day traders, but actually they don't. They lose to spillage, commissions and fakes of floor traders and big players. They lose to the market, not to other traders who fade them (or as people suggested here, fade themselves).

    Here is a very basic example: Let’s say two traders (A and B) get opposite signals at the same time. Trader A buys at 1000 and trader B sells at 1000, both using the same firm 1/2 risk reward. The price goes down to 999, hit traders B stop-loss and then reverses and goes to 1001 to hit trader A stop-loss (assuming he did use a firm stop loss and did not move it to b/e). In any case both of them lost, the whole position or just the commissions and spillage.

    Theses scenarios happen all the time especially in critical time of day. And this is how most unsuccessful traders lose constantly.

    TM Trader
     
    #48     Jul 30, 2003
  9. An amusing thought, but the easiest way to lose money is to be an anticipatory reversal trader. You will always be on the wrong side of a market. Never do a reversal trade. Leave those trades for the trading Mozarts who can take money out of boths sides in a trend and not get lost.

    A second good way to lose is to be a momentum trader who waits for confirmation. Just as when volume is at the maximum and you think the market is really going to breakout for a multiple point move, you are probably at a near term top.

    Pattern traders also get squeezed alot. That's the third best way to lose. Rising markets are FULL of short entry points for people who are attracted to rounded tops or swing highs or double tops.
     
    #49     Jul 30, 2003
  10. ptt

    ptt


    OK, we now know your opinion about the best ways to lose, what do you think are the best ways to win?
     
    #50     Jul 30, 2003