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Chinook's EUR/USD (E/$)Mumblings
- Thread starter chinook
- Start date
Chinook, while I agree that the FX market has lots of little chops and mini moves throughout the day, how can one actually expect to have any reasonable way of catching or predicting those moves? If it has been successful thus far, I must caution that luck can fool us into thinking that we have an edge where one simply does not exist. Do you believe that you can truly be successful as a switch hitter in the FX markets scalping 10-30 pips here and there over the span of a career or even a year for that matter?
Successful trading is about 'edge' in my opinion. What is the edge that you feel that you are able to exploit here? The dealers have order flow to lean against and if you are a trader holding $1 Billion EUR (also called a yard) for sale @ 12115, I say by all means, you have an edge and should trade short against that order all day long. However, as screen-based traders without flow (which I assume that you are), one makes trades with a negative edge all day long (ie. paying commission, the spread, less information than the counterparty on the other side of you, etc.). There are 2 big edges that people like ourselves can use to our advantage. 1. We do not have to play when we don't want to. This is a big edge that market-makers, locals and flow traders do not have. 2. We can trade with the longer-term trend which by definition provides an edge (an object in motion in a certain direction is more likely to continue in that direction). You seem like a really nice guy and a sincere student of the market. I believe that we all need to make our own mistakes and learn from the markets for ourselves. Nonetheless, I ask that you consider my words over the coming days, weeks and months. Please take my comments with a tone that is meant to be friendly and helpful. For those in our situation, the less we trade, the better off we are. While Krups and I seem to view the current EUR trade completely opposite, I must say that our styles seem to be similar in that we try to trade the longer-term trend utilizing short-term moves for risk management purposes as well as trade location purposes. Wishing you nothing but the best of luck..Neal.
Successful trading is about 'edge' in my opinion. What is the edge that you feel that you are able to exploit here? The dealers have order flow to lean against and if you are a trader holding $1 Billion EUR (also called a yard) for sale @ 12115, I say by all means, you have an edge and should trade short against that order all day long. However, as screen-based traders without flow (which I assume that you are), one makes trades with a negative edge all day long (ie. paying commission, the spread, less information than the counterparty on the other side of you, etc.). There are 2 big edges that people like ourselves can use to our advantage. 1. We do not have to play when we don't want to. This is a big edge that market-makers, locals and flow traders do not have. 2. We can trade with the longer-term trend which by definition provides an edge (an object in motion in a certain direction is more likely to continue in that direction). You seem like a really nice guy and a sincere student of the market. I believe that we all need to make our own mistakes and learn from the markets for ourselves. Nonetheless, I ask that you consider my words over the coming days, weeks and months. Please take my comments with a tone that is meant to be friendly and helpful. For those in our situation, the less we trade, the better off we are. While Krups and I seem to view the current EUR trade completely opposite, I must say that our styles seem to be similar in that we try to trade the longer-term trend utilizing short-term moves for risk management purposes as well as trade location purposes. Wishing you nothing but the best of luck..Neal.
I agree and disagree with you Neal. I think that the edge that the day trader has is that he is first to catch when the long term systems guys are caught in a position...and this is seen as divergences in momentum or lack of follow-thru, false breaks,etc...the daytrader can predict where people will fold their positions and can capitalize on this by not always being in the market and picking and choosing their spots.
I've always felt that one must look at the longer term trend, but not always trade with it. However, when looking for extensions, the odds are stronger looking for one with the trend as opposed to against the trend, as long as there are confirming technical indicators to suit your position.
Trend is THE most important thing to look at, but traders like Paul Tudor Jones, have made a living in putting in tops and bottoms, so its hard to argue with that success...
I've always felt that one must look at the longer term trend, but not always trade with it. However, when looking for extensions, the odds are stronger looking for one with the trend as opposed to against the trend, as long as there are confirming technical indicators to suit your position.
Trend is THE most important thing to look at, but traders like Paul Tudor Jones, have made a living in putting in tops and bottoms, so its hard to argue with that success...
are there any GBP traders out there? I think this thing is going to continue to collapse, we've broken through trendlines, head and shoulders neck lines, previous lows, 200 day MA's...the whole lot...if you like euro lower, gbp may be the better play as eurgbp looks to be trading fairly bid from its lows...
While it is often said that PTJ is a 'top' and 'bottom' picker, I do not believe that this negates the fact that he has made most of his fortune trading with the trend. I believe that PTJ simply attempts to be earlier than most in recognizing a new trend developing and/or attempting to trade that view. Of course, he uses stops if things do not materialize as he hopes. His money is made by either catching the early stages of new trends and riding them to completion, or by catching the middle stages of trends and also playing them. I do not believe that there is anyone in the market that has made money consistently by trading counter-trend unless they are trading against/with flow, a mathematical arbitrage system, or some other type of edge. Just my 2 pfennings.
Very interesting conversation...
Any comments on Victor Niederhoffer?? He always went against the trend. (At least that's what I thought, he always made fun of technical anaysis.). I was his tennis pro and he started laughing at my Japanese Candlesticks book that I was carrying.
He trades on Mathematical Theories (Time Series Analysis??) Any way, I am not a professional. But if any one can add any insight, that would be great.
See ya
Any comments on Victor Niederhoffer?? He always went against the trend. (At least that's what I thought, he always made fun of technical anaysis.). I was his tennis pro and he started laughing at my Japanese Candlesticks book that I was carrying.
He trades on Mathematical Theories (Time Series Analysis??) Any way, I am not a professional. But if any one can add any insight, that would be great.
See ya
Quote from trade-ya1:
Chinook, while I agree that the FX market has lots of little chops and mini moves throughout the day, how can one actually expect to have any reasonable way of catching or predicting those moves? If it has been successful thus far, I must caution that luck can fool us into thinking that we have an edge where one simply does not exist. Do you believe that you can truly be successful as a switch hitter in the FX markets scalping 10-30 pips here and there over the span of a career or even a year for that matter?
Successful trading is about 'edge' in my opinion. What is the edge that you feel that you are able to exploit here? The dealers have order flow to lean against and if you are a trader holding $1 Billion EUR (also called a yard) for sale @ 12115, I say by all means, you have an edge and should trade short against that order all day long. However, as screen-based traders without flow (which I assume that you are), one makes trades with a negative edge all day long (ie. paying commission, the spread, less information than the counterparty on the other side of you, etc.). There are 2 big edges that people like ourselves can use to our advantage. 1. We do not have to play when we don't want to. This is a big edge that market-makers, locals and flow traders do not have. 2. We can trade with the longer-term trend which by definition provides an edge (an object in motion in a certain direction is more likely to continue in that direction). You seem like a really nice guy and a sincere student of the market. I believe that we all need to make our own mistakes and learn from the markets for ourselves. Nonetheless, I ask that you consider my words over the coming days, weeks and months. Please take my comments with a tone that is meant to be friendly and helpful. For those in our situation, the less we trade, the better off we are. While Krups and I seem to view the current EUR trade completely opposite, I must say that our styles seem to be similar in that we try to trade the longer-term trend utilizing short-term moves for risk management purposes as well as trade location purposes. Wishing you nothing but the best of luck..Neal.
Neal,
Thanks, I respect your opinion. I also want to trade with the trend. However, I don't have enough capital to handle drawdowns for long-term trend following. That's why I switched to "intraday" trend following. Lately, I noticed I can reasonably predict the small swings during the day. Everyday I'm learning new things about the market and myself too. I'm sure my trading will evolve as time goes by. I agree with you that the less one trades the better it is. I'm not sure how long I can sustain this too.
Anyway, my ultimate goal is to bring couple of my scientist friends into this game and be able to automate what I learned from the markets so far.
It looks like the Eur/$ bottom has been found.
Chinook
Seeking Out Psychological Balance
It's difficult to trade day after day for months on end. The most effective way to keep going is to make sure that trading isn't your whole life. It's vital for long-term success that you seek psychological balance: Make sure that your life is multi-faceted. Make sure that you have fun in areas outside of trading. Enjoy spending time in fulfilling relationships, and enjoy life to the fullest. The more you can balance trading with more pleasurable and genuinely meaningful activities, the more you will be able to ensure long-term success.
Many novice traders falsely believe that they must devote all available time and energy to trading. Although trading is a challenge and demands hard work and a heroic effort, it is also a profession that is stressful and demands creative problem solving. A trader must reconcile these two seemingly opposing forces. If trading weren't so demanding, it may be possible to focus on it exclusively. But trading has a significant psychological component, and if this psychological component isn't addressed, performance will be compromised. So it is necessary to address both the challenges of trading and a need to relax and rejuvenate.
How can one put in the necessary time and effort to trade consistently, but also find time to relax and re-energize? Although it is a challenge to find balance, it is necessary. When you are stressed out, you can't think clearly and execute trades in a peak performance mindset. So you must find the time to rest, take your mind off trading for a while, and build up energy to retackle the markets. Don't get in a psychological rut by refusing to rest and take a break. There's a paradox you should consider. If you work constantly without taking frequent breaks, you'll actually waste much more time than had you worked for shorter periods with frequent breaks. Trading isn't a factory job where you have to work to keep the assembly line moving. You can take breaks from your work schedule with no adverse consequences.
Don't forget to appreciate the advantages of working as a trader. Trading offers freedom, freedom to spend time with your family, friends, and loved ones. Trading provides the means to enjoy life. So regardless of whether you've been trading profitably in recent weeks, reward yourself by taking a nice, well-deserved break. One of the reasons you're trading is to enrich your life. It's important to remember that. It's important to celebrate what life has to offer. If you are not enjoying your life to the fullest, it will gnaw at you. In the back of your mind you'll think, "Why am I spending my life trading?" Use this time to remember why you trade. Remind yourself about what really matters to you. Make sure that you have balance between working as a trader and the things that give your life a deeper meaning. If you ensure that you lead a balanced life, you'll be able to cultivate the peak performance mindset that is a key element to consistently profitable trading.
Copyright © 2000-2003 Innerworth.com. All rights reserved
It's difficult to trade day after day for months on end. The most effective way to keep going is to make sure that trading isn't your whole life. It's vital for long-term success that you seek psychological balance: Make sure that your life is multi-faceted. Make sure that you have fun in areas outside of trading. Enjoy spending time in fulfilling relationships, and enjoy life to the fullest. The more you can balance trading with more pleasurable and genuinely meaningful activities, the more you will be able to ensure long-term success.
Many novice traders falsely believe that they must devote all available time and energy to trading. Although trading is a challenge and demands hard work and a heroic effort, it is also a profession that is stressful and demands creative problem solving. A trader must reconcile these two seemingly opposing forces. If trading weren't so demanding, it may be possible to focus on it exclusively. But trading has a significant psychological component, and if this psychological component isn't addressed, performance will be compromised. So it is necessary to address both the challenges of trading and a need to relax and rejuvenate.
How can one put in the necessary time and effort to trade consistently, but also find time to relax and re-energize? Although it is a challenge to find balance, it is necessary. When you are stressed out, you can't think clearly and execute trades in a peak performance mindset. So you must find the time to rest, take your mind off trading for a while, and build up energy to retackle the markets. Don't get in a psychological rut by refusing to rest and take a break. There's a paradox you should consider. If you work constantly without taking frequent breaks, you'll actually waste much more time than had you worked for shorter periods with frequent breaks. Trading isn't a factory job where you have to work to keep the assembly line moving. You can take breaks from your work schedule with no adverse consequences.
Don't forget to appreciate the advantages of working as a trader. Trading offers freedom, freedom to spend time with your family, friends, and loved ones. Trading provides the means to enjoy life. So regardless of whether you've been trading profitably in recent weeks, reward yourself by taking a nice, well-deserved break. One of the reasons you're trading is to enrich your life. It's important to remember that. It's important to celebrate what life has to offer. If you are not enjoying your life to the fullest, it will gnaw at you. In the back of your mind you'll think, "Why am I spending my life trading?" Use this time to remember why you trade. Remind yourself about what really matters to you. Make sure that you have balance between working as a trader and the things that give your life a deeper meaning. If you ensure that you lead a balanced life, you'll be able to cultivate the peak performance mindset that is a key element to consistently profitable trading.
Copyright © 2000-2003 Innerworth.com. All rights reserved