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Amazing. I’ve tried to give away my methodology...
- Thread starter tortoise
- Start date
Yes but what if “something else” presents its own share of formidable challenges? If that doesn’t work, do you then move on to “something else” yet again?The "six months" thing rang a bell and reminded me of the following, posted several years ago:
My interest in daytrading was sparked by a chance viewing of an early morning infomercial for a day trading school. I actually contacted the school, and my conversation with the admissions counselor left me with two takeaways: first, he was trying hard to sell me, and I do not respond well to the hard sell; second, from his pitch, it became apparent that learning to "read the tape" was, according to his pitch, the critical skill component of learning to trade.
A google search of "tape reading" and "reading the tape," and a little discernment applied to what I was reading as I investigated the results quickly acquainted me with Wyckoff and Neill. One cannot immerse oneself in the study of a field and not quickly come to terms with the vocabulary of its participants. Less than two months ago, I was vaguely aware of "ticker tape," mostly as it related to parades. I have a much more comprehensive view of "the tape" now than I did then. Much of that has to do with the fact that, in addition to Wyckoff and Neill and Raschke, I also read a few basic textbooks on the financial markets. I knew nothing when I started. More importantly, I knew that I knew nothing and that I needed to learn what these financial markets were about before I started to engage them on an active basis.
Rather than "sift through thousands of market strategies," I have really explored only one – the one that was my first introduction to this business: "learning how to read the tape." I have encountered other systems in my reading. I have been fortunate in that I read everything with a eye toward how it related to what I had learned about price movement and volume.
I have indeed been invested in the markets for quite some time. I have Keogh accounts as well as non-retirement savings that have been invested in mutual funds for some years. As a matter of fact, my recently-funded trading account began as a $60,000 investment with a Merrill Lynch broker in a group of diversified mutual funds over 13 years ago. In 13 years, that $60,000 had "grown" to $58,155.29. So I am not new to being a market participant. I am new to be an active and informed participant.
I have also spent a fair amount of time reading trading websites, blogs, and trading forums. I have found very few that added to my understanding in any beneficial way. One thought that struck me early on – and has continued to recur to me over my journey – is that many who speculate in the financial markets seem to be of a mind that it needs to be more complicated than it is. Of course, my having said that can easily, and likely will, and probably should be readily dismissed by those who think it a highly complicated and difficult business, as I am admittedly new to the business. I am enough of a realist to recognize that they may have the last laugh.
For now, I am pleased with my progress. I am confident. Maybe I am just lucky that my personality and my background have caused me to find affinity with certain authors and not others. I read several books that raised more questions in my mind than answers before I stumbled upon Wyckoff. Studies in Tape Reading made perfect sense to me. It is likely my background: I am a self-employed tradesman who understands the difference between retail and wholesale and the need at times to mark down inventory, sometimes below even wholesale cost, selling product at a small loss to avoid complete spoilage and a large loss in order to purge the shelves, so to speak, to make room for more salable goods.
On the other hand, I just finished a fairly recent book on technical analysis by an author who appears to be widely read and highly respected by professional traders (if the book jacket blurbs are to be believed) that was chock full of indicator studies. Far from making sense to me, I am baffled by it. That doesn't mean there are not others who are not only not baffled, but who also use these indicators to engage in profitable trading operations.
My charts are fairly bare-bones affairs. My trades are short-term, most being opened and closed within the same trading session, while others are held for a few days. I do have a line struck at the current session's opening trade price and also at the prior day's closing price. I also write down yesterday's high and low using a lowly pencil and wide-ruled paper in a 17-cent notebook. Other than that, any notes or annotations which I think may be helpful for review are drawn after the trade is closed using a separate screenshot edited in Paint. In other words, the only lines on my chart in my charting software are yesterday's close and today's open. I also use volume, and that is plotted in a subpane of the main price window.
I do not dwell on the fact that I am unable to do what others do with ease. I have always been of the mind that I can do what anyone else can do so long as I am able to find my own way. Fortunately, it seems as though others have found my way long before I ever was; therefore, I simply need to follow those who blazed the trail before me.
Wyckoff makes it clear that if someone were to take the time to understand the how and why of price movement then to speculate according to the way the market in fact works, it should be neither difficult nor take an interminably long time to achieve profitability.
In the first pages of Studies in Tape Reading, Wyckoff mentions a friend of his who had started trading over the same ticker with a trader named Joe Manning. In the beginning, they were both trading in 10-share lots. Years later, Joe Manning was trading hundreds of thousands of dollars, while Wyckoff's friend was still trading in 10-share lots.
In six months, I'll either be on my way to being a Joe Manning, or I'll be like Wyckoff's unnamed friend. If the former, then full steam ahead, and if the latter, I'll move on to something else. It would be irresponsible of me and, in my opinion, plain crazy of me to continue to bang my head obsessively against the wall for six years, insisting that I was going to "make it as a trader" in spite of clear and compelling evidence to the contrary.
–fortydraws
There’s no right or wrong answer here.
Yes but what if “something else” presents its own share of formidable challenges? If that doesn’t work, do you then move on to “something else” yet again?
There’s no right or wrong answer here.
True. There's no reason to believe that the something elses will not also be challenging. But he knew himself well enough to understand that if he didn't get it in six months, he was unlikely to get it at all, in contrast to those traders who go on year after year after year and never get much past break-even, if that.
Those who aren't locked into a particular course by family or other circumstances may return to the buffet several times before finding something that is just right. Life is no longer short, so there's time, as long as one doesn't crap it all away by being stubbornly unrealistic.
Well, most sources of alpha are very straight forward, it's the implementation and combination of them that makes the whole thing complex. What really differentiates RenTech from many other shops is how they combine different alphas.You're going up against the likes of Renaissance Technologies. If it were as accessible as a MACD cross and maybe a stochastic divergence, would Renaissance be hiring all those MIT Ph.Ds?
Indeed.Writing as one who trained to be a violinist, i find many parallels between training for a career in music and training for a trading career.
It's 150 bucks of delta, relatively pedestrian size for any institutional player.Are u Ray Dalio?
...to three acquaintances who have expressed interest in trading. The whole thing. Soup to nuts. For free. And when they see there’s work involved—study, watching price action, understanding market structure—they walk away.
Just unfathomable to me. But I guess i’m a weirdo.
Something like that happened to me with online poker many years ago.
Only one friend listened, shadowed my play and then crushed her games many levels lower for an excellent living.
Everyone else noded, agreed but kept to their old ways, lost their ass-- and then one even tried to borrow money.