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Mental break-down from TA
- Thread starter cashmoney69
- Start date
Quote from cashmoney69:
Here is my plan.
My favorite thing to do is short stocks that have had big run ups, or made new highs. This leads me to explain how I scan for stocks.
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MA crossovers are a reliable signal and when a stock falls below one MA, then the other, that gives a clue. Now the hard part is finding out when to enter, because this always screws me over at some point. In a perfect world, a great chart would show a stock opening lower and closing lower, making lower highs, and lower lows. Because this doesn't always happen, I get confused on entry. Example look at RIMM. On daily it opened and closed higher on the gap, but on 15 min chart I'm lost. Stops depend on position size. Smaller size ( under 100) I dont mind risking about 2 points.
So you like to short stocks that are making new highs?
How does this relate to a price 'falling below one MA then another' and making 'lower highs and lower lows'?
My last post here, cash, and I'll be honest. That summary you gave in bold a few posts above, under the header 'Here is my plan', is very confused and doesn't make much sense to me at all - it is internally inconsistent. You seem to be talking about a bunch of different things with no unifying idea. You go from talking about your fav strategy being shorting very strong stocks to talking about how you look for downside MA crosses and lower highs and lows. You have mentioned that you want to trade with the trend, but you are shorting stocks making new highs.... unless you aren't, I'm not sure.
To be honest with you, if you have been posting several threads like this and if you have received the quality of replies that you have here, it may be time to actually pay someone to help you devise a trading plan. I have never, in 4 years here, suggested this to anyone, but after reading your posts, I am not sure that you are in the right frame of mind to be trying to figure these things out on your own.
Believe it or not, this is friendly advice intended to prevent you from losing a bunch more money which, if you try to act on the thoughts you presented in bold above, you surely will.
Nik
14:27 Kiwi: I dont disagree with that view ... but
14:27 Kiwi: thats why people like dbphoenix have emphasised the stepped approach
14:28 Kiwi: have strategy
14:28 Kiwi: have it written down in detail
14:28 Kiwi: test the fuck out of it
14:28 Kiwi: forward test it (paper trade)
14:28 Kiwi: then
14:28 Kiwi: (because u now have confidence at one level)
14:29 Kiwi: trade it as small as you can
14:29 Kiwi: (to build next level and rewire brain)
14:34 Kiwi: the only reason mark suggested someone else system was to remove the personal ownership and maybe make getting a winning strategy easier --- which will no doubt only work for some people
The advice in the last few pages on plan is very good. In its operational side (the setups and what you do exactly to execute them) it needs to be very detailed.
You have to be able to say yes or no to the "did i follow my plan" question and have absolutely no doubt about the answer. I rate every entry, placement of stops and targets, and exit on a scale of 1-3 with 3= I followed my plan 100%, 2= I followed it but it was suspect (because there is a context element outside of my entries and exits), 1 = I fucked up and should pay a price.
When you are starting you should follow Douglas's mechanical phase until you are rock solid. Only after that do you start to introduce intuition - there is plenty of time to get to that.
14:27 Kiwi: thats why people like dbphoenix have emphasised the stepped approach
14:28 Kiwi: have strategy
14:28 Kiwi: have it written down in detail
14:28 Kiwi: test the fuck out of it
14:28 Kiwi: forward test it (paper trade)
14:28 Kiwi: then
14:28 Kiwi: (because u now have confidence at one level)
14:29 Kiwi: trade it as small as you can
14:29 Kiwi: (to build next level and rewire brain)
14:34 Kiwi: the only reason mark suggested someone else system was to remove the personal ownership and maybe make getting a winning strategy easier --- which will no doubt only work for some people
The advice in the last few pages on plan is very good. In its operational side (the setups and what you do exactly to execute them) it needs to be very detailed.
You have to be able to say yes or no to the "did i follow my plan" question and have absolutely no doubt about the answer. I rate every entry, placement of stops and targets, and exit on a scale of 1-3 with 3= I followed my plan 100%, 2= I followed it but it was suspect (because there is a context element outside of my entries and exits), 1 = I fucked up and should pay a price.
When you are starting you should follow Douglas's mechanical phase until you are rock solid. Only after that do you start to introduce intuition - there is plenty of time to get to that.
Quote from traderNik:
I am not sure that you are in the right frame of mind to be trying to figure these things out on your own.
Just say what's really on your mind... What you mean to say is that I dont have the intelligence required to trade, and in your four years on this forum, you've never seen anyone as bad at trading as me.
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mods, please close this thread. Thank you.
Quote from cashmoney69:
Just say what's really on your mind... What you mean to say is that I dont have the intelligence required to trade, and in your four years on this forum, you've never seen anyone as bad at trading as me.
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mods, please close this thread. Thank you.
Sorry you took my post in that way. I posted earlier in the thread in as helpful a manner as I could, as did many others here. I then read what you posted as your game plan and thought I'd point out some inconsistencies that I saw, in order to help you focus your thinking. I also suggested consulting with a pro if possible on your game plan.
I still wish you all the best.
Just one more thing. I am almost certain that there is no positive correlation between intelligence and success in the markets. I never for one second thought or said that you were lacking the intelligence to trade.
I agree with Nik 100%... intelligence and trading acumen are often at opposite ends of success.
Many of the most brilliant people I've worked with struggle mightily with trading: they get totally immersed in the minutae of details, and lose complete focus on the simple tasks that are vital.
Also, highly intelligent people tend to trust their brains - inuition too much before the correct knowledge is learned in this profession. After all, the most valuable asset in life for brilliant people has been their mind... when in doubt, tune others out and trust their own thoughts = hunch.
That type of behavior can work excellent in the corporate or real world, but it's deadly in our game here. No correlation between intelligence and trading success in my opinion.
Many of the average, completely unimpressive personalities I work with become highly accomplished traders in rapid fashion. They do not out-think or out-reason themselves... they follow simple plans like a recipe, and that's pretty much what profitable trading requires.
Hey, wait a minute? What in the world does that say about me? I didn't kill that many brains cells doing the fifteen-year plan at Budweiser U, did I? (huge laugh)
Best Trading Wishes,
Austin
Many of the most brilliant people I've worked with struggle mightily with trading: they get totally immersed in the minutae of details, and lose complete focus on the simple tasks that are vital.
Also, highly intelligent people tend to trust their brains - inuition too much before the correct knowledge is learned in this profession. After all, the most valuable asset in life for brilliant people has been their mind... when in doubt, tune others out and trust their own thoughts = hunch.
That type of behavior can work excellent in the corporate or real world, but it's deadly in our game here. No correlation between intelligence and trading success in my opinion.
Many of the average, completely unimpressive personalities I work with become highly accomplished traders in rapid fashion. They do not out-think or out-reason themselves... they follow simple plans like a recipe, and that's pretty much what profitable trading requires.
Hey, wait a minute? What in the world does that say about me? I didn't kill that many brains cells doing the fifteen-year plan at Budweiser U, did I? (huge laugh)
Best Trading Wishes,
Austin
Given the quality of the advice offered here, those who offered it -- whether the object of it pays any attention or not -- should keep this thread in the backs of their minds somewhere so that they can refer other newcomers to it.
There are many Nathans, most of whom are long gone. Perhaps someone else can benefit from what's here.
LC
There are many Nathans, most of whom are long gone. Perhaps someone else can benefit from what's here.
LC
Quote from cashmoney69:
Yes, but one could argue that "History repeats itself". If this is true in trading, then you should be able to predict price direction to some degree.
But in that case, won't other people be able to predict it just as well as you? And many of them have more capital, cheaper commissions, faster market access, superior informaiton. How are you going to get an edge over them? What is your *specific* edge that is exploitable & profitable?
Quote from austinp:
I agree with Nik 100%... intelligence and trading acumen are often at opposite ends of success.
Many of the most brilliant people I've worked with struggle mightily with trading: they get totally immersed in the minutae of details, and lose complete focus on the simple tasks that are vital.
Also, highly intelligent people tend to trust their brains - inuition too much before the correct knowledge is learned in this profession. After all, the most valuable asset in life for brilliant people has been their mind... when in doubt, tune others out and trust their own thoughts = hunch.
That type of behavior can work excellent in the corporate or real world, but it's deadly in our game here. No correlation between intelligence and trading success in my opinion.
Many of the average, completely unimpressive personalities I work with become highly accomplished traders in rapid fashion. They do not out-think or out-reason themselves... they follow simple plans like a recipe, and that's pretty much what profitable trading requires.
Hey, wait a minute? What in the world does that say about me? I didn't kill that many brains cells doing the fifteen-year plan at Budweiser U, did I? (huge laugh)
Best Trading Wishes,
Austin
That's not my experience. I have never met a successful pure trader who was not very intelligent. I have met some arbitrageurs, floor traders, market-makers etc - i.e. people who are in a position with an inbuilt edge in the market, and who therefore don't have to "figure out" future prices - who were only average or moderately above average intelligence. Generally they had other factors such as "street smarts", high drive & motivation, canniness etc that were way above the norm. But without exception, every good pure trader/speculato I encountered was a very smart person.
If intelligence really didn't matter, then wouldn't all the top hedge fund managers be fairly unremarkable? Look at Market Wizards - the book is full of PhDs, graduates from top schools, people who got jobs at the top trading & banking firms in the country. Generally their skills in logic, analysis, and reasoning are very impressive. Even the guys who made it from "nothing" tend to be pretty sharp. The profiles of the best in the industry just don't fit in with this theory that intelligence is irrelevant.
If you look at sports, many top athletes are not particularly intelligent (some are, of course). So there you have evidence that brains don't really matter. But in trading, that's simply not the case.
Quote from Cutten:
That's not my experience. I have never met a successful pure trader who was not very intelligent. I have met some arbitrageurs, floor traders, market-makers etc - i.e. people who are in a position with an inbuilt edge in the market, and who therefore don't have to "figure out" future prices - who were only average or moderately above average intelligence. Generally they had other factors such as "street smarts", high drive & motivation, canniness etc that were way above the norm. But without exception, every good pure trader/speculato I encountered was a very smart person.
Intelligence is only part of it. Being thick-skulled is also an issue. So many of the "intelligent" think that they're smarter than the market, smarter than the books they've skimmed, smarter than all those losers that everybody is always talking about. Therefore, they don't have to do the work. They don't have to pay their dues. They don't have to slog through the process like everybody else. They are, after all, smart.
Intelligence and humility. Now there's a killer combination for you.