Quote from Hawker:
Friend Scientist,
Why are you doing this ??
Now the secret is out. The Holy Grail is found.
So, please tell me , How can we still trying to trade without wasting our time and burning our trading capital with all those fancy oscillators and TA indicators ?
Why are you taking away all the mystery, the rocket science, the engineering and the IQ requirements to understand how we can ( NOT) make money with all those sexy indicators and mechanical systems ?
I'm blaming you in the same way I've blamed myself when I realized all the time and money I've spent trying to get positive results in trading, goofing around with TA.
Thx for sharing a great valuable knowledge , that make me feel that I'm not alone in my approach, since I did quit wasting my nights roasting my brain with TA some time ago, to learn that everything is in the tape observation and interpretation.
Best.
Hi Hawker,
You might like to hear that I've been on a very similar kind of quest, in fact most traders did. They try indicators, trading systems, ra ra ra and maybe one day figure out it's all a waste of time, in comparison to what they can do by just observing raw price action, chart patterns, price, volume and order flow.
You wasted whole nights roasting your brain with TA? Don't worry Hawker - I wasted whole years with it!
In fact the "discovery" was very recent and very unexpected. One of my best trading friends, a long-time veteran trader and ex-pit-trader who I respect the highest of all, literally forced me to "Delete all my Spaghetti Bolognaise from my charts" and only use price and volume. I was terrified for a day or two. I felt completely naked. After a few days, I still was a little inconfident. A week later, I got to see all the things that I couldn't see before through all the pasta. I could focus on the patterns (which are much more powerful - fuck TA, try patterns), as well as just price, volume, tape and depth. I was transformed, and absolutely amazed. All my time reading the best of MA's, CCI and DMI/ADX were wasted. I moved on. Now all the time that was wasted with TA everyday could be spent of focusing on depth & tape. Within about a month, my average daily profits almost doubled, no nonsense. It was the most amazing trading breakthrough I ever had I from what I recall - And it came very late.
Pit traders know this from the very beginning, since they're never subjected to all the vendor-hype and snakeoil society. However, few people have to privilege to start off as a pit trader.
Either way, if you read Douglas' "Trading in the Zone", you will see that (particularly in the beginning of the book) he repeatedly stresses that the fancier your approach, the worse, since if you have more variables to process, you have more possible combinations to make up to make excuses for your mistakes!
Douglas mainly speaks about how psychology and "being in the zone" is the most important aspect of all and how the trader with the simplest system and most disciplined and self-critical mindset will consistently outperform the undisciplined trader with the best tools, highest intelligence and lack of discipline and self-criticism.
He examples this with saying how the very beginning, TA-illiterate and unexperienced traders often have considerable winning streaks. As we find out, "beginners luck" has less to do with luck, but more with the yet untouched confidence of virgin traders. Only as the first losers come into the game, the trader's psychology starts to rear its ugly head and have an adverse effect on confidence. The next step in the trader's development is to try to compensate for this by doing more and more analysis and evaluating more and more factors to try to predict the market and basically "be right". One step further in that evolution comes the final step, where the trader realizes that all this is superfluous, that we need to throw the fancy stuff away, stop trying to work on the markets and start working on ourselves.
Look at this quote:
Quote from Mark Douglas:
You have two choices : You can try to eliminate risk by learning about as many market variables as possible. (I call this the black hole of analysis, because it is the path of ultimate frustration.) Or you can learn how to redefine your trading activities in such a way that you truly accept the risk, and you're no longer afraid.
Nothing more truthful could have been ever said. I admire Douglas - Although I have no idea if the guy
really trades, but what he writes about is fundamentally true and insightful nevertheless. I would stress any serious trader, but even non-traders, to study his writings. It is full of insights.
Best in your trading, brother Hawker!
Warmest Regards,
Scientist
