Cause & Effect Trading! Cause & Effect Methods of Analysis!

[smallfil]

A stock trend is pretty obvious. You can see thru a stockchart whether a stock is going up, going down or going sideways. Definition of an uptrend, higher highs and higher lows. A downtrend is the opposite. Lower highs and lower lows. Trade with the trend. If the trend is up, go long, if it is down, short it. Warning: If you trade stocks, do not short stocks. Your risk to the upside if it runs up or gaps up is unlimited! Use put options if you want to short stocks.

 

[777]

huh? Did you read my post? Random does not mean unpredictable. Randomness follows a distribution. You can predict long run events. For example the stock market is random (it's returns follow a skewed normal distribution) but in the long run it will increase by 9% a year etc... trading is about finding a whole bunch of strategies that are uncorrelated but all have a positive expected value. If I asked you after 100000 coin flips how many times do you think you would get heads. You would be able to tell me with high certainty....did you predict that? yes! Trading is about expected value not predicting the future LOL. Randomness is your friend if you understand it.

I am sure you meant to say someyhing to the effect that the market has produced returns of 9% a year over a very long sample (insert sample) and that you think this randomness with an upward drift will probably continue baring giant dusters like nuclear war, although not necessarily the same rate, for "this and that" reason. *Warren Buffett agrees.

 

[AlexMill]

A stock trend is pretty obvious.

Why stocks? I can trade only Forex...

 

[smallfil]

Trends apply to anything you trade be it futures, forex, indexes, stocks. So, I refer to stocks as I do not trade forex but, it applies to currency pairs as well! Unless, you do not look at charts to make your trading decisions?

 

[AlexMill]

Trends apply to anything you trade be it futures, forex, indexes, stocks. So, I refer to stocks as I do not trade forex but, it applies to currency pairs as well! Unless, you do not look at charts to make your trading decisions?

Forex is a flat market

 

[fordewind]

Just use the price levels where you scew up and THEN, as the price on the way back where you`d just screw up, use those levels for your target!By doing simply this religiously you may have a chance.

 

[maxinger]

My goodness!!! Look at cause and effect diagram.

tons and tons of negative emotions, hestitation, wishy washy thinking, fear, greed, fickle minded, unclear mind, undecisiveness, ZERO trade plan.
100% sure lose money.

So what is the solution ?
Very simple - SIMPLY DON'T TRADE !

______________

 

[fordewind]

My goodness!!! Look at cause and effect diagram.

tons and tons of negative emotions, hestitation, wishy washy thinking, fear, greed, fickle minded, unclear mind, undecisiveness, ZERO trade plan.
100% sure lose money.

So what is the solution ?
Very simple - SIMPLY DON'T TRADE !

______________

Seems like lots of flaws.Correcting them at once never happens!Ever!

 

[maxinger]

I'm tired of losing money on Forex!

There are tons of negative emotions in this diagram.

seriously you need to have prerequisite first. The prerequisite for trading is to be able to neutralise negative emotions effectively.
You cannot be wishy washy, fickle minded, unsure, fearful angry frustrated vengeful while trading.


You need to have well tested trade plan. If not you don't know when to enter, when to get out, where to set stop loss, target profit ...

 

[smallfil]

Forex is a flat market

You mean to tell me the current pairs be it EUR/USD and others do not go up and down? Don't be silly. I tried trading forex. The difference I noted compared with stocks is that the prices moved faster! That is all. There are trends even in forex. Maybe, the reason you are not making any monies is you do not read the charts and is merely guessing which direction it is going?
If you continue to trade against the trend, you will continue to lose monies!