to a sound decision, that is indeed a fine quality for a trader (also applies broader I think personally) - step back on time when things get out of order (or at least you need a breath). "Revenge trading" never works imho. Best of luck & hopefully you can add another detail to your trading plan, cosmic
Did great this morning! Then chopped to death in the afternoon... somehow I made back my morning profit. Is there going to be more choppy consolidation before another leg down? I don't think my heart can take it.
I always find myself asking myself on a day like today and yesterday .. Why was I not short???? in fact I made 2.25 pts today from the long side near the open.. I have to learn to stop second guessing what the market is telling me and go with it.. But my intuition always tells me to look for a buying opportunity on these days and yesterday..
There are some top poker players who claim that your first "read" is generally your best one-- and to go with it. Not sure if this applies to trading, but I thought I'd throw it out as an idea. Larry Phillips
It really depends on how one trades? I trade short-term intraday and I find having a too strong of an opinion or "read" can be an opened door for "ego." But I also need some conviction for staying with a good trade. I do basic homework at night but it's just to get a general sense of the terrain to help leviate the fear of unknown. I think it is definitely easier and less likely to get hurt by trading in the direction of the trend. It should be pretty clear when a trend has been established based on one's own definition. In that case, one does not really need to "figure" it out by being reactive to what the numbers are telling oneself. But personally I found this type of trading does not give me enough opportunities during the day but it provides a good basis. Sometimes a loser can also give extra information about the market and oneself.
"POKER RULE #87: Don't develop a personal vendetta against a certain player." I think Marty Schwartz said something like "don't bet against the fat lady" whom you dislike at the crap table.
"POKER RULE #88: Show your opponents that you can't be baited." It is the sitting (for the right opportunity) that makes the money. Don't be a hero.
I think that it does apply to trading. I know from experience that if the market trades a certain statistic distance from the open price, that the probability of reaching the Average Daily Range or Average True Range level substantially increases. However, I still have a tendency to convince myself that there is no way that the market can reach these levels. However, on average, the first read is the correct one. Fear can be a hard nut to crack, even for an experienced trader. This is my favorite quote from Brett Steenbarger's book "The Psychology of Trading": "Traders fail not because of their emotions, but because their emotions deflect them from their purpose. In developing their rules and systems, the successful traders had found a way to immunize themselves from the emotional effects of market volatility. Indeed, in many respects, the successful traders appeared to be every bit as fearful as the unsuccessful ones. It's just that the fears of the successful traders were not those of drawdowns or missing a market move. Rather, they feared deviating from their plans." Charles
Hi Charles-- Curiously enough, there is a book coming out on this very subject titled "Blink" by Malcolm Gladwell, author of the book, "The Tipping Point". Some excerpts from the article I saw: It Pays to Trust Your Gut By Daniel Terdiman | 02:00 AM Jan. 07, 2005 PT If the premise of "Blink" has any merit, then by the time you're reading this sentence, you've likely already made some snap judgments about this story. Perhaps that's because you read the author's previous book, the best-selling Tipping Point, or enjoyed his many magazine articles or even have feelings about stories written by the writer of this review. In Blink ($26, Little, Brown), author Malcolm Gladwell makes the argument that people frequently make some of their best decisions in mere seconds. We think without thinking, sizing up situations and determining how we feel about someone or something based not on voluminous new information, but rather on our accumulated experiences. And, Gladwell says, that's a good thing. Blink is rife with wonderful anecdotes of what Gladwell, a staff writer at The New Yorker, calls "thin-slicing." That is, people reacting to the barest of new information and arriving at smart decisions others with more information couldn't make. Gladwell's thesis, written in an easy, flowing, confident prose, is that more information is not necessarily better, even though society is primed to believe careful thought is always preferable. "We live in a world that assumes that the quality of a decision is directly related to the time and effort that went into making it," he writes. " Gladwell argues powerfully that, in fact, thin-slicing is precisely the kind of thinking that, evolutionarily speaking, has kept us alive. "When you walk out into the street and suddenly realize that a truck is bearing down on you, do you have time to think through all your options? Of course not," he posits. "The only way that human beings could ever have survived as a species for as long as we have is that we've developed another kind of decision-making apparatus that's capable of making very quick judgments based on very little information." In the end, that's Gladwell's point: People make instant decisions, and it is possible to learn how to make them good ones. He's not saying that snap judgments are always good. Instead, he says, when they are backed by experience and knowledge, they can be good." Best, Larry Phillips