Just wondering how many people out there feel that they can see things going on in the market that others can't. I'm not talking about just being a good trader -- I'm talking about having unique set-ups, criteria, etc. as well as instincts that you don't read about in a TA book. Also, for those of you that feel that way, did you struggle for a period with having confidence in yourself given that you were seeing things that others couldn't see?
I know several traders making great money by trading unconventional strategies. Less competition = more opportunity. It's not so much about seeing things others don't, or unique setups, it's more about thinking of ideas from a whole different angle than how most people approach the markets. Things like taking advantage of a small inefficiency in market structure, trying to find holes in the algorithms of automated bots or purely quant-based ideas. Lots of guys are making great money using no indicators, or even charts. Yet to most people, that is the only way they can imagine making money in the markets.
"Also, for those of you that feel that way, did you struggle for a period with having confidence in yourself given that you were seeing things that others couldn't see?" Yea, it's lonely out there. Can't talk fundamentals, can't talk charts, no one believes a word you say because you won't/don't talk the talk. You can see it but can't prove it in a conventional sense. You write in your journal, hmmm. positive effect, negative effect Eh, it all boils down to what works for you, takes a broad base of knowledge and repetition to develope a trust in yourself.
I think the creator of this thread had an excellent idea with this concept. In my opinion this is the correct path to follow if you ever want to acheive greatness in this business of trading. I have long used a reverse logic approach to the markets. When I started using this approach my Win/Loss ratio became much much better. This approach is really nothing new. For a long time traders have known how great in value a failed signal is compared to an ordinary signal. My thinking works kind of like this. Think more like an objective scientist. Rather than prove one side, try to disprove the other side. If you can objectively disprove one side you now know which side to take. For example, rather than saying I want to take a bullish posture. I will try to disprove the bearish side and if that can be done it now becomes clear to take the bull side. Some would say this really doesn't change much of anything. That may be true for them but if you can build an effective method to disprove one side your edge will increase. I hope this thread strikes a cord with other traders. I would really love to hear the conversation about this concept.
"If you can objectively disprove one side you now know which side to take." Let's say I see a news article or something that peeks my interest in a stock. "Hey, I like that concept or whatever" Then I've made a choice to buy (but not yet). Next, I follow through only researching the negatives. The negative news, opinions comments. Then point by point reading, I formulate my opinions not based on (buy) reasons what "other" authors conclude but what I have thought about. You might conclude that reading positive comments would give the same result but for me the opposite works better.
Isn't this just contrarian thinking? Seems to me you are simply taking the other side... http://lauristonletter.blogspot.com/
Its not exactly contrarian thinking. Sometimes yes and sometimes no. A better description is that I'm fully versed in the principles of conventional technical analysis. (Edwards and Maggee) I know what should happen at key points on the chart. When the bear side should be strongly bearish and he doesn't even make an effort or his effort is a joke. I know that I should be on the bull side if I can place a decent stop without taking to much risk. I call it "failure to respond."
On the Edwards & Maggee note, I'm well-versed in conventional TA. One of the issues I have, though, is if anything in life is "conventional" or "accepted" then it is often flawed or wrong. Part of the reason I started this thread is that it's very difficult to talk about how I trade because it doesn't fit with what everyone else has been taught. For example, I think I'm fairly good at picking tops and bottoms although "conventional" analysis says this is stupid and you need to wait for confirmation, etc. Well, what if MY confirmation is a handful of indicators that no one else uses (or uses in the manner that I do).
I agree classical TA is the norm so in the big picture you can't get to far ahead if you use it just like everyone else. You must use it differently. I believe the purpose of the market is to generate as much transactions as possible and then run the stops on those transactions. Hence, so many false classical TA patterns create demand, then they run the stops to create more transactions and more demand at those new levels. If you have a method to align yourself to run the stops you will do well. Here is a good example of what I'm talking about in this chart of todays action in the spy. Conventional TA would say go long at 146 for the trend reversal. 1. Demand was created for the long side from these patterns all in the same setup. IMO its more less a painting of the charts so they can run the stops. In my eyes I try to align my self with the true purpose of the market and trap the longs and when the stops are run exit at a handsome quick profit. A. Double bottom B. 1-2-3 C. Breakout out of nice base