answer this if you make money
- Thread starter Gordon Gekko
- Start date
I have learned, or come to realize the truth behind AAA's refernce to the FX trader who just used S/R levels and developed a feel for the flow. Well, I have yet to develop a feel, in my opinion... but an understanding of the importance of S/R has made a great impact on my trading, and the way I view trading.
To me, it is all about S/R. However even if you have S/R nailed, the most important fact is...
To me, it is all about S/R. However even if you have S/R nailed, the most important fact is...
Trading is not rocket science. A lot of people use different systems but the fundamentals will always apply no matter what the market:
1) Patience - This means waiting for the right moment to capitalize on the market (i.e. let the market come to you on your terms). A lot of people feed the need to constantly trade all day long and I think that is the reason for the downfall of so many traders.
2) Discipline - Discipline means adhering to a system consistently and never "guessing" what you think is going to happen (i.e. "Oh, I anticipate a late day-rally at 2:30, I am going long).
3) Emotional Control - A loss is not a loss if you cut it and learn from it. Losses are your long term greatest friends. With every loss, you should examine the trade and ask yourself if there is some way that you could refine your system or avoid such a scenerio in the future.
4) Money Management - If you have a string of great trades, don't think you are suddenly impervious to a loss and risk a large percentage of your account. Remain consistent and disciplined. A lot of little jabs will eventually knock out your opponent, but if you go in swinging wildly, you will get tired fast and lose the match.
5) Observe yourself at all times - Like anything else in life, sometimes we get "in the groove" and are more able to flow with the ebb (women, money, job, interviews, etc). If you're not feeling up to par or you feel like your cycle is off, then you don't have to trade. Just like if you're not drunk enough at the bar to attempt to approach the hot chick that has been eyeing your best friend up (when you really thought it was you!)
6) Keep it simple - Trade into the trend, observe price action, don't predict anything. The less you think, the more you will be successful.
aphie
1) Patience - This means waiting for the right moment to capitalize on the market (i.e. let the market come to you on your terms). A lot of people feed the need to constantly trade all day long and I think that is the reason for the downfall of so many traders.
2) Discipline - Discipline means adhering to a system consistently and never "guessing" what you think is going to happen (i.e. "Oh, I anticipate a late day-rally at 2:30, I am going long).
3) Emotional Control - A loss is not a loss if you cut it and learn from it. Losses are your long term greatest friends. With every loss, you should examine the trade and ask yourself if there is some way that you could refine your system or avoid such a scenerio in the future.
4) Money Management - If you have a string of great trades, don't think you are suddenly impervious to a loss and risk a large percentage of your account. Remain consistent and disciplined. A lot of little jabs will eventually knock out your opponent, but if you go in swinging wildly, you will get tired fast and lose the match.
5) Observe yourself at all times - Like anything else in life, sometimes we get "in the groove" and are more able to flow with the ebb (women, money, job, interviews, etc). If you're not feeling up to par or you feel like your cycle is off, then you don't have to trade. Just like if you're not drunk enough at the bar to attempt to approach the hot chick that has been eyeing your best friend up (when you really thought it was you!)
6) Keep it simple - Trade into the trend, observe price action, don't predict anything. The less you think, the more you will be successful.
aphie
hey I think Jimi was secretly a financial mastermind...he was singing this song to traders everywhere....
If you can just get your mind together
uh-then come on across to me
We'll hold hands and then we'll watch the sunrise
From the bottom of the sea
But first, are you experienced?
Uh-have you ever been experienced-uh?
Well, I have
(Well) I know, I know, you'll probably scream and cry
that your little world won't let you go
But who in your measly little world, (-uh)
are you tryin' to prove to that you're
made out of gold and-uh, can't be sold
So-uh, are you experienced?
Have you ever been experienced? (-uh)
Well, I have
Uh, let me prove it to you, yeah
Trumpets and violins I can-uh, hear in the distance
I think they're callin' our name
Maybe now you can't hear them,
but you will, ha-ha, if you just
take hold of my hand
Ohhh, but are you experienced?
Have you ever been experienced?
Not necessarily stoned, but profitable....
If you can just get your mind together
uh-then come on across to me
We'll hold hands and then we'll watch the sunrise
From the bottom of the sea
But first, are you experienced?
Uh-have you ever been experienced-uh?
Well, I have
(Well) I know, I know, you'll probably scream and cry
that your little world won't let you go
But who in your measly little world, (-uh)
are you tryin' to prove to that you're
made out of gold and-uh, can't be sold
So-uh, are you experienced?
Have you ever been experienced? (-uh)
Well, I have
Uh, let me prove it to you, yeah
Trumpets and violins I can-uh, hear in the distance
I think they're callin' our name
Maybe now you can't hear them,
but you will, ha-ha, if you just
take hold of my hand
Ohhh, but are you experienced?
Have you ever been experienced?
Not necessarily stoned, but profitable....
I do something similar to this at times.
Sometimes an easy way for me to help judge whether or not price has extended too far from the XXma is to envelope it with percentage bands. Sometimes I put a couple of different percentage values around it for a range or zone.
"Too far" will vary with different markets. I've found thinner stocks, in general, to be harder to trade with this method due to the volatility extremes that come and go in them, depending upon the agendas of all the different players for the day. It seems to work better on markets like the futures or qqq or spy and maybe the thicker issues like csco etc. but I haven't tried it with them.
One thing to keep in mind with this is that your reference point (eg:20ma) is always moving. What seems to be an extreme in one bar isn't necessarily so in the next bar therefore it's often best to let price really nail the extreme before entering the trade...that way it can give you a little working room...maybe.
Exiting is tricky (isn't it always?). Some traders will use a percentage band piercing to show them the strength of a trend so if you're fading that signal you may be fading a strong trend but that doesn't mean there isn't a scalp to be had...or perhaps you've combined this with an S/R area and have nailed a turning point...or maybe it's a good entry point for the trend on the next higher time frame.
Anyway, hope this helps and/or is grist for the mill.
Simple, ain't it?
ps. I would have said all of that in a riddle but I figured the post was confusing enough as it is.
don,Originally posted by Don Bright
Wow...talk about "over complicating" the whole idea of trading...geez, guys....trading is simple (not necessarily "easy" of course), but it is simple. Get on the same side as the Specialist...read the tape (follow short sellers down, then reverse - trades go to size, "no buyers at the bottom, no sellers at the top).....strong groups, strong market, Premium on Spoos, .....
For gosh sakes....."keep it simple".....
Don
what would you say to someone who does not want to trade intraday? do you have traders that trade from days to a few weeks? what methods work good for that time frame?
thanks
