M6 - Man, Mind, Money, Markets, Method & Madness
- Thread starter DSM
- Start date
Aughbhai, You are right in part. However in my view there is another side to the coin.... Most traders will take any signal, in what is called as trading noise. I have done that a lot, taken entries on the minutes of signal, hit some, missed many more. And now it has taken me quite a bit of reflection, and self analysis after stepping back and being emotionally detached to see what I was actually doing was an self injurious, mentally draining and financially unremenurative process that I called day trading.
So instead of trying to be in the market at all times, and trading all signals, now prefer to trade only when there is a clarity and probability of the trade being successful. There is no emotional or mental baggage of haven taken 2-3 trades that were stopped out, or in marginal profit after 2-3-4 hours of screen watching.
What I am trying to say is that being more selective of taking entries or that which will provide a better RR or higher probability, or when the market shows a clear trend is much more desirable as well as more profitable end of day. I believe that there are a lot of traders who we may never heard of or know about, but would be taking only a few selective trades and be far, far more profitable than say many, many day traders trading all signals.
My post is to highlight an alternative way of thinking, look at things differently, and with a different perspective, all in search of trying to be a better trader each day or trading more profitably. I think the same old mindset will not work. And from that posted earlier (John Paulson, Soros and others in the list - who did get to take few such bets for astounding return) are just some of the few, even if investors, we can learn something and try to emulate winning big RR.... Also, let us not think that such returns are only for a few biggies. Here's a link to a 24 year old trader, just like one of us, who searched the net for ideas, and came across one - of trading penny stocks and transformed 1,500 into over a million dollars in 3 years.
http://money.cnn.com/2013/12/16/investing/penny-stock-trader-millionaire/
So instead of trying to be in the market at all times, and trading all signals, now prefer to trade only when there is a clarity and probability of the trade being successful. There is no emotional or mental baggage of haven taken 2-3 trades that were stopped out, or in marginal profit after 2-3-4 hours of screen watching.
What I am trying to say is that being more selective of taking entries or that which will provide a better RR or higher probability, or when the market shows a clear trend is much more desirable as well as more profitable end of day. I believe that there are a lot of traders who we may never heard of or know about, but would be taking only a few selective trades and be far, far more profitable than say many, many day traders trading all signals.
My post is to highlight an alternative way of thinking, look at things differently, and with a different perspective, all in search of trying to be a better trader each day or trading more profitably. I think the same old mindset will not work. And from that posted earlier (John Paulson, Soros and others in the list - who did get to take few such bets for astounding return) are just some of the few, even if investors, we can learn something and try to emulate winning big RR.... Also, let us not think that such returns are only for a few biggies. Here's a link to a 24 year old trader, just like one of us, who searched the net for ideas, and came across one - of trading penny stocks and transformed 1,500 into over a million dollars in 3 years.
http://money.cnn.com/2013/12/16/investing/penny-stock-trader-millionaire/
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Hello DSM,
Good to know that ur in process of getting large R/R trades, i have also gone through this process....the problem is they are Rare as u metioned.., we cannot make it happen consistently,its not repeatable....as u cannot find the exact copy trade of john paulson after he did it.those type trades get caught by Rare Skilled persons.
In ur post #116.
you have given 10 peoples examples who achieved excellent R/R......see there only 10 (may be some more) out of world population, so what are our odd's in relation to their success and other point is no one copied another's idea/method,so we need to develop our own method/skill/idea(i think i.e what ur doing/looking for).
In ur Post #117.
you have given about 10-11 characteristics of strong Trend, what if there is only one way/thing to define the trend to reduce the load on mind, which keep us in the trend for about 50 -60% of total move.
pls don't consider my words if they doesn't make any sense to u, ignore my words and move on...
Regards,
Good to know that ur in process of getting large R/R trades, i have also gone through this process....the problem is they are Rare as u metioned.., we cannot make it happen consistently,its not repeatable....as u cannot find the exact copy trade of john paulson after he did it.those type trades get caught by Rare Skilled persons.
In ur post #116.
you have given 10 peoples examples who achieved excellent R/R......see there only 10 (may be some more) out of world population, so what are our odd's in relation to their success and other point is no one copied another's idea/method,so we need to develop our own method/skill/idea(i think i.e what ur doing/looking for).
In ur Post #117.
you have given about 10-11 characteristics of strong Trend, what if there is only one way/thing to define the trend to reduce the load on mind, which keep us in the trend for about 50 -60% of total move.
pls don't consider my words if they doesn't make any sense to u, ignore my words and move on...
Regards,
Agree, only options and synthetic give some way to predict R:R, rest are probable, not entirely predictable. I think if we remove from our mind the need to hit jackpot on every trade, we will be sane trader. Even Paul Johnson mentioned in earlier post just about managed meagre returns after that gargantuan bet. He 's just about an average trader now, though he does not have to earn anymore
Excellent discussion, so I am not able to control myself from posting, it may be idiotic but I usually short list my trades which have low risk high potential for reward before entering the trade itself. This I do it by checking the difference between current price and next S/R that comes along the direction of the price.
If suppose a PH is broken with good volume and the short term intermediate trend is up, I will check for next resistance if it is at least not two times away from the entry, I would not take it. This I know many of us do but just putting it here as some trader like would have struggled to get this idea, might find this helpful.
I have a very simple view of the market which can be derived from basic laws of physics in inertia and momentum,
1)Price usually continues in the the direction of the trend but doing so it tries to take as may weak stops on its move.
2)Price cannot be stopped unless there is some external or internal force that stops it from going further. External factors may be news and Internal factors are fundamental/technical barriers.
3)Suppose price meets an external/internal force, it surely applies force from its end in the form of huge volumes to break the barrier, at this point it is like war those who are on the side of price try to break the walls and those who are on external/internal force side try to defend the boundaries.
If suppose a PH is broken with good volume and the short term intermediate trend is up, I will check for next resistance if it is at least not two times away from the entry, I would not take it. This I know many of us do but just putting it here as some trader like would have struggled to get this idea, might find this helpful.
I have a very simple view of the market which can be derived from basic laws of physics in inertia and momentum,
1)Price usually continues in the the direction of the trend but doing so it tries to take as may weak stops on its move.
2)Price cannot be stopped unless there is some external or internal force that stops it from going further. External factors may be news and Internal factors are fundamental/technical barriers.
3)Suppose price meets an external/internal force, it surely applies force from its end in the form of huge volumes to break the barrier, at this point it is like war those who are on the side of price try to break the walls and those who are on external/internal force side try to defend the boundaries.
Thanks Jahan,
Ideas, views, insights, discussions, even if alternate to what we believe in is most welcome. WE LEARN ONLY WHEN WE LOOK AT THINGS FROM A DIFFERENT SET OF EYES - AND SEE THINGS WITH A DIFFERENT PERSPECTIVE. You ofcourse, are a senior trader and what you say surely needs to be heard with an open mind.
While looking for better RR trades, (the larger the better
) I am in no way saying that I would not take 2:1 or 3:1 (though many experienced or forex traders will not consider less than 3:1) but surely, who would not prefer a trade with better RR? The guys got quoted in 'big 10' ofcourse did, because their ideas, strategies and trade worked out. Possibly it could have happened as well that had their timing been a bit off, it wouldn't. Like in the case of sub-prime bet of John Paulson, there were others who bet too, but lost as they were a bit ahead of the market turn. (You can imagine here, a guy who has the same idea as John Paulson's greatest trade ever - and infact has seen it much earlier, but cannot capitalize on it, as his timing was off - which incidentally can be the story of many day trades, right idea, strategy, but off in timing - and hence the stress of finding market turns for high probability and high RR trades)
I must add here, that I trade everyday, but sometimes, if I have had a losing streak, or I don't see an opportunity, have let a day or two go without trade. And regarding taking trades, any profitable trade is welcome, as it adds to the bottom line. But personally, I would not like to be in a trade for 4 hours for 20 points. That is why my focus is on waiting patiently to for signs of market turns or pushing with momentum (This is still a work in progress) Opportunities such as these do occur where one could bet big or all in, and if I could get high probability trade of 8-10 points net/lot on multi lots, In less than about 20-30 minutes, the trade is done.
Just sharing my views, not saying they are right or wrong, but which work for me. It's less stressful and with less emotional involvement and more objective as well, since the entry, target, SL is known. Its usually about a 20-30 minute make or break trade. (And BTW, if I have caught a good move, I just trail SL and don't need to watch the screen, as the exit will be SL triggered by the market)
Ideas, views, insights, discussions, even if alternate to what we believe in is most welcome. WE LEARN ONLY WHEN WE LOOK AT THINGS FROM A DIFFERENT SET OF EYES - AND SEE THINGS WITH A DIFFERENT PERSPECTIVE. You ofcourse, are a senior trader and what you say surely needs to be heard with an open mind.
While looking for better RR trades, (the larger the better
) I am in no way saying that I would not take 2:1 or 3:1 (though many experienced or forex traders will not consider less than 3:1) but surely, who would not prefer a trade with better RR? The guys got quoted in 'big 10' ofcourse did, because their ideas, strategies and trade worked out. Possibly it could have happened as well that had their timing been a bit off, it wouldn't. Like in the case of sub-prime bet of John Paulson, there were others who bet too, but lost as they were a bit ahead of the market turn. (You can imagine here, a guy who has the same idea as John Paulson's greatest trade ever - and infact has seen it much earlier, but cannot capitalize on it, as his timing was off - which incidentally can be the story of many day trades, right idea, strategy, but off in timing - and hence the stress of finding market turns for high probability and high RR trades) I must add here, that I trade everyday, but sometimes, if I have had a losing streak, or I don't see an opportunity, have let a day or two go without trade. And regarding taking trades, any profitable trade is welcome, as it adds to the bottom line. But personally, I would not like to be in a trade for 4 hours for 20 points. That is why my focus is on waiting patiently to for signs of market turns or pushing with momentum (This is still a work in progress) Opportunities such as these do occur where one could bet big or all in, and if I could get high probability trade of 8-10 points net/lot on multi lots, In less than about 20-30 minutes, the trade is done.
Just sharing my views, not saying they are right or wrong, but which work for me. It's less stressful and with less emotional involvement and more objective as well, since the entry, target, SL is known. Its usually about a 20-30 minute make or break trade. (And BTW, if I have caught a good move, I just trail SL and don't need to watch the screen, as the exit will be SL triggered by the market)
Will take it with a pinch of salt. You talk about taking entry when S/R levels are at a certain distance, when in the current trend nifty crossed 6350-6415, every other past indicator(S/R is nothing but looking at history) screamed about a short, as every other time it has given close to 1:5 rr by playing short except this one time. So basing on past and judging RR is a probability play and not entirely predictable
While the discussion is going on regarding the trades of people like paulson/paul tudor jones/jim rogers.....people must remember that most of their famous bets are based on fundamental and macro data and not on technical analysis. Macro data involves fundamental, economic, geo political analysis etc and i believe very few people in the world can put all this data together and envision the future and then bet heavily on that. In fact jim rogers does not believe technical analysis can make anyone rich.
Option.Trader,
My 2C on what I understood Tlahuicole has posted.
* The trade is in direction of the trend.
* SL would be break of close/near support.
* Breakout would be a blue sky, risk known and limited, reward not quantified, but surely higher than 1:1.
* It sure helps to know the probable RR when entering a trade, and for sure it cannot be considered in any way predictable - because if it were, every trader would be a walking ATM.
My 2C on what I understood Tlahuicole has posted.
* The trade is in direction of the trend.
* SL would be break of close/near support.
* Breakout would be a blue sky, risk known and limited, reward not quantified, but surely higher than 1:1.
* It sure helps to know the probable RR when entering a trade, and for sure it cannot be considered in any way predictable - because if it were, every trader would be a walking ATM.
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