For 3 years I lived and worked in Las Vegas as a professional gambler. I played Poker, Blackjack and baccarat. During that whole time, when I relied entirely on my Casino earnings to survive (Regardless of the strategy employed for the game) the most important thing that I did was follow the basic rule. Increase unit size while winning and decrease unit size while losing. This would be applied to the hour, the day, the week or even the month. Just a thought.
If you set up and used a dichotomous key for analyzing the possibilites, it only takes two questions to attain a focus. Q1 Is it the market or me? Q2. Has there been a change? The four paths lead to a general solution first stated above by PTJ. If a person then wishes, while trading with smaller volume, then he deals with those things, if any, under his control. Only one of the four are under the person's immediate control. That is, when he has changed what and how he is performing. This alternative is a thing that actually needs continual attention. Mostly because anything a person is doing affects his future. The primary effect is that of closing doors during periods of poor performance. In it's finest (most detailed) essence, it is a matter of how the physiological systems close doors biochemically. By not inflicting repeated more severe emotional conditions, the bod has a lesser chance of being biochemically affected by such insults. If a person, on the other hand is very persistent, he will achieve closing doors on future learning opportunities. Learning requires memory. When the memory paths are closed because of repeated defining failure (Receptors are what is blocked), then no learning (that is consideration of the topic to further understanding) can be initiated. It turns out that all sensory perceptions (watching the market, hearing the pit) are in parallel with an associated emotion. This always occuring twin package of sense and emotion either makes it or not to thinking centers. Potential learning opportunities initiated by sensing can be relegated to the human enterprise of "fight or flee" once former paths are closed. In ET there are recommendation and advice classes. One of them, mostly based upon experience, is to "take a break" or "stop for a while". What have these advisors or recommendors been through? Repeated failure and the inability to recover. They know that it takes time for the biochemical attack they created needs time to remediate. After some point there is only a slim chance of remediation. What does PTJ suggest. He suggests getting down below the triggering of emotional reactions to sensory situations (trading set ups and edges that do not work) that have been imposed in the form of amount of volume. Shut down the biochemical attack by operating below the threshold. What does the other side of the coin look like. Prevention is fun but making money is really where the action is. We got to see AMT go through the paces on several concurrent sensory/emotional shots. Still, he demonstrated previously what great skills are available to really pull the money down. Electric Savant, before "work" every day does several time based edge senarios. Watch scientist, zoom into a new market. Watch scientistchange fractas for efficient extraction of money. All wizards are accomplished because they persistantly take the twin sets of sensory/ emotional stuff and it gets through their systems to a point where memory allows them to successively repeat making money very efficiently for the time spent. Can you relax your system so it can work? Work once again. Personal analysis of your condition is required. you need to detect and dicover what is in balance for you now and also work on the emotions that are not in balance. these inflamed emotions can control your learning (both the IQ stuff and the EQ stuff). The art of communication is verbal and non verbal. Not here of course (LOL). The majority of real live communication that we do is nonverbal. If communication is snesory and if all sensed infomation has an emotion associated with it (it and they do), then any part of your EQ that is not in balance is inflamed and not helping you. Better log your emotions and check all of them out and get them in order. Start by getting to "empty" (Google the threads) After that is achieved go through your inventory. Start real real simple. Communicate with your bod. See if you can sense (hear) our breathing. Then get empty enough to examine (hear) your heart beat. slow breathing and then slow your heart beat. get to a place where you cannot feel your extremities. Try harder. Then selectively energize just your arms, add your head, add your legs and feet. This is a good repeatable warm up to check in on your emotions. It is not dealing with emotions but if you then look at your log of emotions that are coming up youcan sort it into two groups: the ones you want and summon and he ones that appear whenever they want to unasked. Try to keep the balanced ones working for you and make a deal withthe other ones as to how they can get healthy again. If they stay on the shelf when they are not needed then they are healthy. Discipline is a fun thing. You can forget about it until you hve your emotions just where they belong all the time. keeping them on the shelf is not hard when they are not inflamed. if they are, they get in the way when you want to summon up thecorrect ones for the job. Success in this world is decided by emotions and not intelligence. Non verbal communications is what rules. Just ask Dean these days. Non verbal communications are driven by unbalanced (inflamed emotions) in a lot of people's cases. Your choice. Don't let things persist that aren't working for you. If you meditate, do it effectively with yourself. deal while you are "empty". There's a lot to get done. Learning to trade is not a one pager, not a succinct IQ stetement. It is an EQ learning process that is totally unblocked by crap that has accumulated in your past.
Jack, Thank you.....I am searching for empty. Then I can find balance in my life and trading by re-learning a few things and take down the walls. I am returning to stock trading to understand how to balance baskets to be less volatile and learn how to guage market direction better. To do this in Futures requires more capital then I wish to speculate with. To disconnect from the large amounts of money required to diversify with futures to get to the "not care stage" is challenging to me. So rather than achieve non-learning levels it is best to start over. The key is to grow and learn how to be a Chameleon sensing the change of character that markets bring and change color.... Please PM with any opportunity that I can get from participating in your private circle of traders. I am starting over and am ripe to learn your techniques. Michael B.
YW, my priviledge. I like the chameleon imagery. It specifically implies a lot of emotions on the shelf in working order that can be summoned to be in harmony with the scenery of the given market. I particularly like how you use the portions that you do in those edge areas and markets. Equities markets are so suitable for the large blocks. And what you say above is right on the mark. I am on a schedule here to regain my health situation. So far it has gone the wrong way and become more invasive. I have lots of coaching now, however, so things will work their courses. I have settled in to get most of the stuff I have in the works polished but I am being selfish with what time I have. A lot of stuff will hit the deck in the next few months and I hope to have an active colleague from the non TA side of things (the performance side) nailing down the rest.
From what I read so far in the thread, it seems that you must reduce your trade size if you are making "bad trades" not "losing trades" [NihabaAshi]. In order to do this you must be first able to recognize whether you are trading "correctly" and the market is changing thus causing an inevitable drawdown inherent to your system [lindq], or it is you that makes the bad calls due to disturbed emotional balance [Grob109]. This clears the picture a little bit! Thanks to everyone for their answers
I disagree. The trade size should be only determined by your money management system. It has nothing to do with the fact that you lost or won the last trade.
And by what is your money management system determined BTW I never said "last trade". I wrote "bad trades".
If you are having a losing streak, it is more than randomly likely that the current market state is not favourable to your style of trading. Equally, when you are on a winning streak, it is likely that the market state is well suited to your style of trading. Given that you should cut back size when opportunities are not there, and increase it when they are abundant, then the rationale for this rule becomes clear - it uses recent P&L results as a simple method of judging whether the market state is favourable or unfavourable to your trading approach. Personally I think it has some usefulness, but its main weakness is that it is backward looking. I think it is better to look at the market objectively and make an assessment as to whether its current state is favourable or unfavourable, based on *present* conditions, not recent conditions. For example, it may have been unfavourable, handing you a losing streak, but suddenly some major development occurs and instantly the market action becomes very favourable to you. In this case, it is better to move to large size immediately, rather than wait for several days of winning trades before doing so. It is like racing a car - if it starts raining, it is better to anticipate the effects and slow down immediately, rather than wait until you start skidding towards the crash barriers before adjusting. This is very common with "trader lore" - it is better to understand the reasoning behind the "saying", because then you can realise what the *real* problem is that the saying is addressing. You can then deal with it directly, rather than indirectly through the opaque veil of some trader cliche.
========================================= To paraphrase Jack Schwager i like miss Faith * Trend; but Professor Coin had a good point a bout a wall street firm nicknamed Churnem & Burnem. In other words noticed Bright Bros [ a non wall street firm] doing well; but my point is they dont do much wall street business like Churnem & Burnem. Taxes are less in Nevada, TN...
Neutrino: Another poster may have already indicated this but volume size in relation to trading poorly or well may need clarification perhaps it is why it is not registering... Maybe PTJ meant during a particular trade. If you're averaging / scaling in or out perhaps adjusting size based on whether the trade is going for you or against you is a better interpretation. ol