You’re beginning to have thoughts / ideas about trading – that are so far out of the norm of conventional thinking…, that absolutely fly in the face of what is historically taught / ingrained within us – that these new thoughts (concepts) seem utterly impossible
You know RN... I think you might be absolutely right here, like dead on right.
To ultimately win – be a good loser
This one in particular is very important, especially directly within the framework of a trading plan. In my PMs with another member who is truly an inspiration because of all the work he is doing, the idea of stops is pivotal. Using the idea of the danger point from Wyckoff, the stop must absolutely lie outside the danger point. I've always had this same idea, but the trouble was that my trade entries were always so far also into the trend of reversal, that there was no way a stop could be anywhere close to this point. My need for confirmation, dare I say to be right for getting on board this trade because look, it really is moving in the right direction, completely obliterated any notion of a proper stop placement.
My entire thinking going forward is now about stop placement and my entry has to allow for the stop to be beyond the danger point. If I want to short below an overnight high which is at 4500 lets say, an I want to use a tight 2 point stop, I better not short any lower than 4499 to at least allow 1 point of penetration above this level. (in reality, 2 points is almost not enough though, but that's a whole other subject). If I hesitate too long and don't get in, then I either have to accept a bigger stop, or not get in it at all. So when looking at every single trade now, its where the stop would go that is guiding my entry.
Essentially, this means that I'm trying to be a good loser. If my trade will lose and cost me money, I want to make sure it loses in a spectacular way, not just because of a hiccup. Any time I enter a trade I can be either right or wrong, but if the trade is entered to late, and stop gets hit, and its not past the danger point and hence I'm still not wrong, but I still lose money, this is the worst case scenario.
(NoDoji of course in many ways got this ball rolling I think with her one example weeks ago of where a long entry had to go once she said there was a signal to go long if one is to use a 2 point stop)
I think – you are not looking to others for a validation of what we can / cannot do per se
Rather you’re seeking validation (vetting out) that these new thoughts you’re experiencing are actually legit
After all…, how can they possibly be – they are the antithesis of everything we’ve been raised to believe
I'm sitting here trying to respond to this in my head first and I keep going around in circles. On the one hand, I'd like to think I don't need any validation from anyone, but this clearly probably isn't the way it always was when I was looking for answers over these past few months. So I will have to ponder this some more.
But this entire post of your is absolutely interesting. Learning to operate in this new framework is something I never thought would be the cornerstone of a proper trading mindset. Even reading Douglas early on, I still didn't quite grasp any of this. Sure I could understand the math behind having a edge, not knowing what would happen next in order to make money, the need to evaluate after a series of trades, etc. But all this goes out the window when you're losing money.
Maybe its like love. You can read about it till the cows come home, but its not until you feel both the joys and pain of loving someone else that you can truly understand.
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