Exactly how it works for me too. That tidbit info could be the spark.
Discretionary Trading Rules - The Recording
- Thread starter JigsawTrading
- Start date
Exactly how it works for me too. That tidbit info could be the spark.
So you also did not watch the video, right?
1 - I think people skip over 'market state' - understanding what's driving the markets & what the resulting action may be (then of course, confirming it). On some days, it just makes more sense to jump on board moves than to sit there watching, waiting for them to end, so you can go in the other direction. But yes - I do think that this focuse on levels/support & resistance is generally way overrated.
2 - Well - we do have our own app - so be a bit wierd if I didn't recommend that.... https://www.journalytix.me/
Stops me from arguing with the wife, to be honest.
I do find it amusing. I'm on lockdown. I need an outlet ;-)
Maybe I should go back to knitting as a boredom trade avoidance scheme.
JigsawTrading,
You mention a few times throughout the video via using a phrase of "gut feel" and I believe you even used it on a diagram in the video.
Earlier you had used an example involving multi-tasking while driving (I skipped through a lot of the talk involving multi-tasking) and such.
Here at Elitetrader.com there's a few traders (usernames not mention because I don't want them to misunderstand and think its a put down on their trading skills...just the opposite)...
They are in fact "discretionary traders" that I suspect do a lot of what's commonly known as "intuition trading" which is equivalent to your "gut feel" statements you've used throughout the video.
Here's what I've learned from my Psycho Therapy sessions since Dec 2016 via something the PhD folks and professionals in the field that work with those in the financial markets...its something in our brain / memory (how the neurons/synapses go into action) is essentially divided in two parts called Declarative memory and Procedural memory.
Basically the declarative memory helps us to recall events in our trading that reminds us a past familiar trading situation...the what is what aspect. It's the spark into intuition trading (gut feel) that some of us discretionary traders will categorize as having trading experience in familiar price actions.
Typically intuition trading (what the video refer to as gut feel) is bad in discretionary trading...it invites the risk of ruin scenarios if proper risk management is not being used.
The procedural memory helps us to recall the "how and what" in our trading. It is in fact the unconscious memory when we're doing every day tasks including how our brain cognitively process decision making in our trade decisions...
As an example, the Psycho Therapists equate this to the story about never forgetting how to ride a bike. Their job with me for the next year after coming out of a two month coma was to show me that I've develop trading skills similar to riding a bike.
Essentially I never forgot how to trade, how to multi-task particular things I did in my trading routine even though I couldn't remember the passwords to access my computer network.
There was a guy in the group therapy (ex intuition trader from New York now living in Québec) that happens to also be very good on the violin. Although he had daily problems with simple tasks. For example, like identifying whom had been wearing glasses from a group of 5 different pictures that he had been shown 3 mins earlier and one of the pictures is the only female and she's wearing glasses...
He couldn't remember if it was a male or female that was wearing glasses nor remember how many males were among the 5 individuals in the picture. It's an example of how to test you to determine if there's been any damage to your brain after a traumatic event. It's also a way for them to test your "attention span" and "focus" via simply using similar like memory tasks but show further away as time elapses.
In example of the female with glasses from among the predominantly male pictures...they would one week later show it to you again but his time 15 mins earlier in comparison to the prior time of 3 mins earlier.
Yet, he never forgot that he can play the violin at concert level along with having excellent posture and position while playing the violin.
My point, the declarative memory and the procedural memory are flowing around (e.g. neurons and synapses) in our brain while we're trading. They do in fact have impact on our trading even when trading via a solid trade strategy with a positive expectancy.
They can be a good thing (following the trading plan) or a bad thing (intuition trading).
When its a bad thing...its one of the reasons why some as discretionary traders will repeat the same cognitive decision making errors in their trading that some just simply chalk it up as a trader that lacks discipline when its just the opposite or others say its a trader that's sabotaging their trade performance...
On the contrary, its a trader that's very discipline but the trader doesn't realize the bad trade decisions are being trigger by something very familiar in their unconscious and subconscious.
That familiarity is something that's very difficult to break and when a trader learns how to break it...they essentially do not realize that they can then teach how to unlearn to ride a bike, unlearn how to play the violin if such was possible. They say its not possible but dangerous in trying to do such.
Simply, instead of focusing on how to unlearn bad habits...we need to learn how to merge them with good habits in our trading as a way to allow the good habits to control (engulf) the bad habits.
Its a very strange game played out in the brain...a balance act that I personally believe its best to understand and learn how to use it as an advantage while trading instead of trying to learn how to eliminate it because the latter can have very dangerous consequences in cognitive decision making processes while trading.
Moral of the story, the familiar habits we do while trading...its our mind telling us its trying to stay in control even if some of those habits are bad.
Someone here at ET once stated something I've heard from Psycho Therapists...even on the dawn of the arrival of quantum computers...
Some traders will still outperform the computer.
There's something to think about (another outlet) instead of knitting while on lockdown unless the knitting is part of the trading routine.
wrbtrader
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Do you honestly want to know why people skip over market state who day trading and stick to dyanmic support and resistance when trading?
Because worrying about the market state within the first 2 hours of trading is far too much work and confusion. Looking back a hour chart, too much work. looking at DOM, too much work, looking at news, too much work.
And when a new trader have to do all that work and take losses, they leave. Best to keep newbie simple and give some clear cut direction.
If a trader has no clear cut direction and have to look at 20 different things, leads to confusion and frustration. Newbie needs to start simple first and naked chart only
Your video leaves out one thing critical....The market wants to confuse people daily. support and resistance is not confusing.
Market state? Where here is my chart on crude oil, when I wake up, the market state is down, get my black ass short. entry blue dot, exit at support purple.
now the market state is upwards, get my black ass long on a pull back. Use big stop loss
It has to be this simple for me.
Also, one of the big problem on ET, is too much talking and no showing of charts. Everyone being secretive and not sharing simple instructions for people to learn. This is why I favor newbie pay for quality trading coaching on HOW TO TRADE. All that mind stuff is too much work. If newbie know how to make money, they do it. The mind just wants to know how to make money. Once they mind knows this, it does what it needs to do.
Technical skill is required first, allllll that bullshit mental stuff and mind stuff comes last. Show a person How To Make Money Trading and how to study to make money trading. PERIOD.
Everything else is just messing around and talking and TOOOO much information. When I am looking for trading knowledge, i spent time researching who to listen too. I like listening to people who get straight to the action. Trading, no messing around talking and stuff.
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This was a problem for me early in my trading career.
Information Overload or Too Much Analysis during the heat of trading.
It took about 3 years to get through it or manage it.
wrbtrader
wrbtrader,
Me too man. TOOOOOO much messing around. If I can train somebody, I tell them open a 3 minute chart, don't add nothing to it and trade what you see.
Yes, in the heat of the moment, I need to know when to get in and when to get out. AND AND AND, I need to be OK with it. Comfortable with it.
I took all that indicators off my chart, said forget the higher timeframe chart.
I am in this trade right now. Why I am in this trade why now? Because I want to make money, and looks like price is going up, so I better get long, put the stop is logical location, and hope price get to target up there near 26.93.
Note: I've used the word unconscious in error when I've should have used the word subconscious.
Kudos to anyone that caught that error on their own.
Subconscious is a word commonly used in psychology...such is commonly known.
wrbtrader
I think people skip market state because it's too much like hard work. But like anything - it'll feel like juggling first time you do it but not the 1000th. It is a skill and like any skill takes time to aquire.
I rarely watch Gold - couldn't tell you if it was fast or slow. I can watch an open on ES and often tell you what sort of day it will be based on that.
This isn't a mental thing - it's a market thing.
A good example is Air France-KLM, who as at first April had hedged the entire years fuel need at around $77. They are facing a billion dollar loss. If you can understand that sometimes there's a whale like this in the market loading up or unloading, usually because of a news event - you are much better positioned to play the day out.
Whetever you do on a regular day simply won't work on a day where there's panic or FOMO.
Market state is the reason you feel like King of Trading one day and the village idiot the next. It is fundamental in selecting the correct lay-ups for the day.
This isn't too much information - it's essential.