I think there is wisdom here. Cognitive therapy, as a means of behavior modification, also focuses on small steps in the right direction until the mind adjusts to change at its own pace. Further, being cautious and incremental until you get your bearings is simple common sense, especially where risk capital is concerned.
Mental break-down from TA
- Thread starter cashmoney69
- Start date
I think there is truth here, too. I have a friend who is, by far, the most intelligent person I know personally. He has a Ph.D. in electrical engineering, has made waves in the international scientific community in the field of electromagnetics, and has won several teaching awards at a prestigious university. (That's a tough combo in itself.) At around the time I began taking an interest in the market (when my banking career was on its last legs), so did he. However, his interest was rather cursory. He did a little bit of research and testing which, in retrospect, was laughable. Shortly after, he took a few flyers and lost more money than he could have imagined in such a short period of time. His wife doesn't let him trade anymore.
Really.If he had given the market the respect it deserves and had approached it with the humility you allude to, rather than with arrogance and impatience, I have no doubt that he would be rich by now. In fact, I think he has the general psychological makeup required of a trader. However, in retrospect, I think he was going through a difficult period in his personal life at the time, which exacerbated the outcome.
This thread has renewed my faith that there are some who are genuinely interested in helping others.
Thanks for the advice, guys & gals.
Thanks for the advice, guys & gals.
It's not so much intelligence as perception. Those who are mathematically inclined and believe that everything can be solved via an equation may have trouble with the markets, much as those who teach economics and business can't understand that their models of supply and demand don't apply to the financial markets.
Personally I don't think a high IQ is essential. Its very useful for picking tradable relationships from the market and noticing their changes over time but you can do that without a stunning intellect if your second component makes up for any limitations in the first.
The EQ component is more important to trading (forgoing immediate gratification for longer term gratification, coping with the inevitable setbacks so you can stick with your plan, awareness of your foibles so that you can avoid them, etc). Good brain wiring in this element plus the respect for the market and its changes will take a simple strategy to the place we all have to go.
Its worth reposting something that LamontC posted elsewhere for those looking to understand where they're at and where they are going. Here's a different version that I sometimes use to rethink where I am currently.
CM might note the squiggle stage in the first version. I thought the phrase "By the end of the day, your brain is jelly" was very close to the title of this thread.
The EQ component is more important to trading (forgoing immediate gratification for longer term gratification, coping with the inevitable setbacks so you can stick with your plan, awareness of your foibles so that you can avoid them, etc). Good brain wiring in this element plus the respect for the market and its changes will take a simple strategy to the place we all have to go.
Its worth reposting something that LamontC posted elsewhere for those looking to understand where they're at and where they are going. Here's a different version that I sometimes use to rethink where I am currently.
CM might note the squiggle stage in the first version. I thought the phrase "By the end of the day, your brain is jelly" was very close to the title of this thread.
Cutten, you're right that many of the top performers are high-end quants. My point was not so much that intelligence is irrelevant. I should have said that very high intelligence is not a prerequisite for trading success. If you took the top 10,000 retail guys who trade privately, I don't think you would find that their average IQ was very high. Sure, maybe a few points higher than 100, but the OP said 'so you don't think I have the intelligence to trade', and my only point was that persons with an IQ of 100 can make a successful career trading if they have the right combination of aptitudes.
Sure, some aptitudes are positively correlated with intelligence. But not all. And some of the aptitudes that are crucial for trading are clearly not positively correlated with intelligence.
This is what happened to me also - as I stripped off indicators and became more focused on what was actually happening in the markets rather than squiggly lines, my trading improved dramatically, from loser to winner.
It happened after I blew out my small account for about the 5th time and I was forced to Sim trade for about 8 months - best thing that ever happened to me in retrospect. I learned about Price, Volume, Time and Pace.
Cashmoney69, you have been given the answer to your dilemma by many traders here - now the question is, are you willing to do what it takes?
Also, the other thing that was critical was adjusting my trading style to my personality and risk tolerance. I liked the concept of swing trading due to the larger potential profits per trade but found out the truth for me - I am not patient enough to allow those types of trades to pan out. So I only focused on intraday futres trading and it works for me.
Perhaps it will be that way with you also - trading should not be a struggle to conform to your own strategy.
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I cant remember, but I think I have said before on this thread that I've taken off most indicators however I kept ADX and CCI.
So far my longest hold was 2 weeks, but I'D LOVE to learn to actually day-trade, because like you, I dont like waiting that long for results. I'd like to open an options account with thinkorswim to help boost gains.
I have not taken the time to bother reading what others have said, so if this is just a repeat please feel free to ignore it. You are not looking at enough timeframes, but you are looking at way too much shit on the timeframes you are looking at. Each one of the indicators you are looking at are nothing more than derivitives of price and volume. Go back to the basics of price and volume patterns. Forget ALL of the indicators except volume and maybe the moving averages.
1. how do I tell if a stock is over priced? Probably through vigorous fundamental analysis, but it can take years for it to pan out. Technically though there is no such things as overbought or oversold, a stock will go up until its done going up. A good rule of thumb though would be to not buy any stock that is too far extended from its last base or pullback point.
2. How can I see crossovers without MA's and macd? You wont be able too, and before long I am sure you will see it as a blessed thing.
3. How can I tell where a price is heavily supported without volume? [/] You cant, IMHO only a fool would trade without looking at volume.
4. How can I tell if the stock is going to reverse or continue its trend without MACD? One of the better ways is to watch other stocks in the sector and see what they are doing. Stocks tend to move like a swarm of fish, chaotically, but in the same general direction as others in the group.
5. How can I tell how strong a trend is without ADX If you train your eye to just visually see it on the chart. In the end you will be much happier.
Anyway I hope this helps. Althought I do not do it anymore I spent the last 10 years mentoring several hundred traders and your problems are far from unique. Keep working at it and take all that crap off your screen. I can not imagine having to make a trade based on all that stuff. I'm getting dizzy right now just thinking about it.
Brandon