Gladiators, Swords, Rolls, and You

[Mad_Alfred]

Re: the premise argument made by "riskfreetrader," I think you have to water down the analogy a bit.

Simply put - you can always quit trading. The individual soldier, however, can very rarely "quit" being at war. Not without serious consequences. If you are a soldier fighting in another nation and you "quit" before your contracted time is up - you have serious problems. If you are an individual defending your turf from an invader, "quitting" basically means leaving your country and trying to survive elsewhere. A very big ordeal.

Many of the acts of heroism/desparation that you see in war are often the result of an individual feeling they had no choice. In trading, you almost always have a choice.

To quit trading, you use the phone or email to say "close out my account" and you provide the routing # and etc. for your bank account. Easy. You get a job and find another way to make money. Life goes on.

To split the difference, I would say trading is similar to combat sports - particularly the martial arts. But even in UFC mix martial arts fighting - some of the toughest guys you will ever meet get to make the choice to "tap out" when they have had enough.

If a UFC fighter wants to retire and he has contractual obligations, he may have the option to "buy out" the commitment.

Sgt. Soldier does not have that option.

 

[riskfreetrading]

Quote from NY0BScalper:

Ok sir well you seem to be the knowledgable guy here. So let me get to the bottom of it. How many thousands of dollars must I shell out for your special insights into the best kind of edges? $5999 for a seminar?

I have never given a trading seminar (The seminars I gave are scientific seminars only). I have nothing for sale at the present time. Sorry I cannot sell you anything (except maybe some options if you want to take the other side : ).

In more seriousness now Sir, I appreciated reading your response. I had a similar thinking to yours some years ago, but then when I looked at stocks that once were the rage of the market and then just years later were OTC or worth nothing, I had to think otherwise.

They say the market is bullish over the long run, but that is for the indices which are dynamically managed--The new best of breed are added, and the less good are removed. DOW, SP500, ND100, are in effect doing portfolio optimization. It is just not done explictly as in a mutual fund.

If you are making money then it is really what matters, and I congratulate you for it. I am sorry if I wrote something that made you think I want to sell you something, but it is not intentional. However it is true to I have taught friends and family what I think I know about the market (in addition to other people when time permits, and I love doing it). If I were to do it at a larger scale, I would just pay google to do the job for me and I will pay them from the business profits.

 

[Trayo]

Quote from Mad_Alfred:

I would say trading is similar to combat sports - particularly the martial arts.

>>>>Exactly. War and contact sports are vastly different enterprises.

In war (if you are the commander) you are trying to damage the enemy to the degree that they will surrender themselves (if you are the aggressor), or surrender thier attack against you (if they are the aggressor).

This is not at all what is going on with contact sports.

In contact sports, your "opponent" is not an enemy. He is a means by which you hone skills and awareness. As such, he is your friend not your enemy. The "enemy" is ones own laziness and dullness, which the sport helps one to overcome. If I am boxing and my awareness lapses or I take anything for granted, I'll get hit. Ok. Ouch. I'll pay better attention now.

I try to approach trading the same way...

 

[MandelbrotSet]

Quote from Trayo:

In contact sports, your "opponent" is not an enemy. He is a means by which you hone skills and awareness. As such, he is your friend not your enemy. The "enemy" is ones own laziness and dullness, which the sport helps one to overcome. If I am boxing and my awareness lapses or I take anything for granted, I'll get hit. Ok. Ouch. I'll pay better attention now.

I try to approach trading the same way...

Great post.

That's why these threads are always so interesting. Other traders, who face the same system, technical and psychological problems can discuss them and present their perspectives.

 

[riskfreetrading]

Quote from MandelbrotSet:

Other traders, who face the same system, technical and psychological problems can discuss them and present their perspectives.

I agree with you.

Go PATS!

 

[jaronimo]

Quote from Spydertrader:

The war analogies, continually perpetuated by the Financial Industry equivalent of those selling 'picks and shovels' to chasers of dreams, serves no purpose for the individual trader. Even in a zero-sum marketplace, the war analogies fail to accurately capture the relationship between market and trader. War, and its ‘battle’ analogy equivalents, engenders the involvement of emotions into the mindset of a trader. One need look no further than the rise in Program Trading to see how many traders have attempted to remove emotion from their trading. No, markets, and the traders who use them, represent a symbiotic relationship, and not, an antagonistic one. Without a marketplace, traders have no job, and without traders, markets cannot exist.
- Spydertrader

I agree with your post. The war and battle analogies are there to make rookies think trading is a fight they must overcome and to make traders think that trading is much harder than it really is.

I was told to think of trading as an auction. The price goes up until nobody will buy anymore. the price goes down until nobody will sell anymore. It stays that way until something changes. Its really that simple.

Sometimes it changes fast because new players come into the auction, or because existing players get impatient, or existing players see a sector move and re-evaluate their prices.

But it is really only an auction and when I think of it that way it keeps me from buying at the tops and selling at the bottoms.

Just my opinion.

 

[riskfreetrading]

Quote from jaronimo:


The price goes up until nobody will buy anymore. the price goes down until nobody will sell anymore. It stays that way until something changes. Its really that simple.
.

But there are always buyers at the top, and sellers at the bottom. So, what you wrote is not the fact. Check any chart, and you will see a significant number of buyers at the top, and ...

 

[Spydertrader]

Quote from riskfreetrading:

But there are always buyers at the top, and sellers at the bottom. So, what you wrote is not the fact. Check any chart, and you will see a significant number of buyers at the top, and ...

"There are always Buyers at the top and Sellers at the bottom" does not invalidate jaronimo's statement. Surely, someone with your insight into market dynamics can see that.

- Spydertrader

 

[Trayo]

Quote from riskfreetrading:

But there are always buyers at the top, and sellers at the bottom. So, what you wrote is not the fact. Check any chart, and you will see a significant number of buyers at the top, and ...

>>>>There are buyer at the top, but there aren't any at 1 tick past the top. At least for now...

 

[riskfreetrading]

Quote from Spydertrader:

"There are always Buyers at the top and Sellers at the bottom" does not invalidate jaronimo's statement. Surely, someone with your insight into market dynamics can see that.

- Spydertrader

Sorry but I just copied and pasted what that person wrote, and I did not mean it and do not meant in a negative way.

I agree that it is an auction. I think the stocks auction will lead to the exact opposite of what was written. I think that at the top there should be a maximum number of buyers, and at the bottom there should be a maximum number of sellers. As for each buyer, there is a seller, at the top and at the bottom, we should experience a maximum volume!

Essentially when a maximum number of people join what I called the battle, that signals the end of the current battle, and a new battle begins (up or down). I then just join the opposite of the trend that took place before I notice a maximum volume.

Did I miss something?

I would also add that if I see a maximum volume, and after it volume drops and prices continues up, I will go short when the volume almost dries up (which I think is what the other writer had in mind).

Stocks auction are I think different from familiar auctions,because you put for auction something that was just auctioned a tick ago.
Therefore, the most common price is the price that involves the highest numbers of buyers and sellers. The top and bottom should be in the area where the volume is at extremes.