Everest - i think doug was pointing out that the market does what it wants to do, not what we think it SHOULD do. if i think it should go up and it goes down, i was wrong and it was right. if i think it should go up and it goes up, i was right and it was right. i'm either with the market or i am against it. but that's just my view - i understand that we each see it in our own way. that's been a nice ah-ha for me. i've stopped trying to explain to the market WHAT it should be doing and WHY it should do it. now i just try to listen to the market when it tells me what it is doing. take care and trade well! omni
I wrote that rule about the market always being right because early in my trading, I would disregard my system's signal to exit because I thought I was right and smarter than the market. Boy was that dumb! It cost me thousands to break that bad habit. Hence my two rules that the market is always right and that you should always have and honor stops and exits. Good luck. DS
...Learning that money management is what makes or breaks you as a trader. ...That with good mm, my system only needs to be right 35% of the time to make a good living. ...Not to be a pig and ring the register a little more often instead of waiting for the "big" move. ...Keeping my profit/loss window closed during trading hours and just trade my system and patterns and not dollar count. ...To not give any advice on stocks, futures or market direction in general to friends or family. ...To continue to read and absorb as much information about trading as possible through books, internet, forums, etc. ...To not follow someone else's calls or think there is one "holy grail" that you can pay $299/month and retire in a year or two. ...That I am not trading companies or futures, but emotions of people. ...That sitting on hands is a position and a profitable one at that. ...That there is always a better trade down the road when I miss a big move. ...and most importantly, getting a good jerk in before the market opens always makes me trade better. island0004 :eek:
A few breakthroughs that I've had: Breaking through the "matrix" that every trader seems to be in and viewing trading from a more objective standpoint. Turning off CNBC, getting away from gossipy message boards. Thinking much more indepedently. Modeling only the top traders in the world, especially Jim Rogers. He's got some great views on how to spot hysteria and panic in markets. I've tweaked his methodology and started to quantify it. Having clarity and focus in my outcome. The goal isn't just, "trade and make money." Anyone can do that for awhile and make money. But then the bear market comes and you get wiped out. The goal instead is to trade based on an underlying methodology that works in any market at any time. All great traders know why their methods work.
Just keep it simple...you learn how to respond to the market, pick a couple of stocks, trade with the Specialist (not against him).. read the tape, make money like they have been doing for 200 years. Not a "break through" - just the way it is...don't over complicate it. All the best... Don
Here's to bringing this one back from the dead. This is one of the gems of ET that I've read of all my time mostly lurking. For me, breakthrough or 'eureeka' moments are when I noticeably feel that I am progressing to a new level and something 'clicks' and I learn something. Usually these have been when I resolve problems or questions I've had. These are the ones I remember most: 1. Learning about technical analysis - I first learned about it on Investopedia.com at a stage when I was trying to understand why prices dropped even though fundamentals of a company seemed good. Murphy's book Technical Analysis of the Financial Markets was a great resource, as well as stockcharts.com. 2. When I learned about the concept of position sizing - it was early in my trading when I was still doing percentage-portfolio type of position sizing.. I had been monitoring my positions for a while in terms of their %tage gains and something didn't seem right... some of the positions were up a large % while others tended not to be. This led me into learning about the various concepts of volatility, Van Tharp's studies, expectancy, and the like. Kind of opened my eyes to the fact that there were much more to the markets than I had seen. 3. Reading Come Into My Trading Room by Alexander Elder. This was for me the first book that talked about a comprehensive view of trading - from money management, risk and reward analysis, in-depth trade analysis and journal keeping, as well as psychology. Even though at the time I was not ready* for all of this, it allowed me to see that there was more to it than I thought. 4. Recognizing the importance of psychology in trading. Elder, Douglas, Steenbarger, Kiev, and Van Tharp are also great resources. Sometimes I wonder though if I had never learned about it if things would be different because now I am constantly self-conscious of my own emotions as I trade. 5. Learning about trading system development and backtesting. This thread was most helpful in this regard: http://elitetrader.com/vb/showthread.php?s=&threadid=33654&highlight=system+development+with+acrary By starting to backtest many ideas, I have gained a deeper understanding of the nature of trading strategies and different market cycles. 6. Defining an edge. I felt like I was missing something very important in my studies, similar to what I felt when I started inquiring about position sizing. You can not find something if you don't know what exactly it is you're looking for. 7. Various small mini-breakthroughs such as learning about the concepts of ATR, velocity, trend persistence and ADX, and pairs trading. *: It's kind of funny how you can read about something or see something the first time but pay no attention to it, but when you're actually looking for it or open to the idea then that is when you actually _learn_. Mark Douglas talked about this in Trading in the Zone; how when we didn't know about TA charts looked alien and almost random, but now we see much more to them. I find myself constantly going back to books and resources that I've gone over because I had previously glossed over the material. It now has more of an impact. Thanks to all who have contributed and those who will contribute down the line.
1) Mechanical "in trade" order/position management 2) Dynamic Hedging 3) Market Delta 4) Learning to do proper backtesting of concepts
"Do not try and bend the spoon, that's impossible. Instead... only try to realize the truth...there is no spoon." RoughTrader