Mental Ceilings and self fulfilling prophesies
- Thread starter Girlpower
- Start date
I would agree completely, and yet continually here on ET, the question is asked about avarage returns etc. and the answer given is always the same or similar. It is almost as if a culture has grown up around a certain level of success being achievable and anything beyond that is not achievable.
Seeing it being the core of yet another thread has prompted me to challenge these notions.
best
Natalie
You are looking at this type market as a zero sum game.
Wins equal losses over the long run. In rising or falling markets, therearesome other considerations to be sure and they are based on market size changes.
For just considering the unbalance of winners and losers by their numbers and by their actual gains and losses averages aren't too good.
Methods, skills and markets are the salient variables. Refinement is the name of the game. For each there is a heirarchy of facets for making change. There are interdependences as well.
All the assessments of performance come down to marginal analysis instead of absolutes. The issue is attaining performance in the context of what the market has to offer. You have to deal with both elements concurrently.
Bradonf and Chan show some of these refinements as actually contrarian because of when the interdepence (in the example, market and method) is based upon fear.
It is good to make very comprehensive lists in each category and reach an optimization over time by doing the iterative refinement.
The super question of how to change (performance financially and with skill and method changes) is one that applied throughout everyone's trading life.
Some things (blunt basic considerations) I list are:
Methods:
Sideling is most important when you do not know what is going on thoroughly.
Go by risk level from snap to comprehensive.
Have a goal for seamless and continuous.
Always recognize which modus the market is in and trade accordingly.
Always do the 10 elements of the preflight check before market opens.
skills:
KISS
always debrief.
Always log activity on trading log.
always log all potential stop values (Have next value on hand at all times)
Always C&R according to market pace ( set timing ahead of time).
Always trade in the correct market strategy modus.
share all responsibilities with the market
Never usurp market perogatives.
Market.
always know where the market efficiency cut off fractal is.
always know what fractal the each given market pace is traded on.
always know the cyclical status of all fractals from IT term on down to fastest.
always know the harmonic dominance (odd or even) in the fractals esp trading.
Here is an example to throw out.
Over the last 9 trading days, the total range of all 30 mins bars added together is 519 points. That's an avarage of 57.5 (ish) per day
Assuming that only half of them were tradeable due to spread and considerations of liquidity due to size, then the total tradable points then 29 points (roughly) were tradable.
Assuming that there was a 66% hit rate, the profit would be 1/3rd of that or 9.5 points per day.
Even halving that still leaves nearly 5 points avarage per day.
So how can the myth of 1 point per day avarage stand up to any reasonable scrutiny?
Best
Natalie
Over the last 9 trading days, the total range of all 30 mins bars added together is 519 points. That's an avarage of 57.5 (ish) per day
Assuming that only half of them were tradeable due to spread and considerations of liquidity due to size, then the total tradable points then 29 points (roughly) were tradable.
Assuming that there was a 66% hit rate, the profit would be 1/3rd of that or 9.5 points per day.
Even halving that still leaves nearly 5 points avarage per day.
So how can the myth of 1 point per day avarage stand up to any reasonable scrutiny?
Best
Natalie
I have to agree with Natalie, we human beings are conditioned from an early age to experience life on the low end of our true potential.
Think about how may times we have been told "no you can't do that" "thats not available" "we don't have the money for that" etc... we have created a "lack mentality" which is reinforced thru society.
It is more comfortable to have lowered expectations, we have to completely think in a new way, we need new tools to work with.
It would be like asking a carpenter to build a computer, well the only tools he has are a hammer and nails, it won't work, not from a lack of desire but the wrong tools.
If I truly believed I was only going to make average 1 point on a contract I don't think I would pursue trading.
As always Natalie, your posts are provocative and challenging, don't stop.
regards,
Bruce Hawkins
The ET theme that is so prevelant is, as you say, a myth perpetuated by those who have not attained a status of having an approach of any value.
There is a major safety in where these people have put themselves. It is a major major survival defence mechanism. People here are very safe because of their expertise in using the safety they find in practising this survival technique. It is not oriented to fear of failure at all. It is an outcome of an integrated set of pictures they have regarding stepping out of a very safe proven survival mode into a place where they are surrounded by fear of success.
Risks in making money in trading are usually not related to anything but the fear of going to a new unsafe place. The survival skills some people deploy here for not achieving their real potential are, as the ads say, "priceless". the skills they use to stay stuck where they are vastly out weigh the skills they need to acquire to be rich.
Some of the lurkers here are rich; once in a while they pop in and say how ridiculous some of the notions that ET'er's cling to really are.
Your key theme is: how to break out of mediocracy. the risk of taking a first step is the primary issue. It means leaving a cocoon. Lowering the risk of making a move is the killer facet. The step up has to be very small and it has to be more than safe. More safe than staying stuck.
If a person here is profering substantive info, invariably there is an ET demo of how engrained this safety in survival and not moving out of the cocoon, limitation is cast in such people. Their demands are corrolatable directly to their wall of fears that their cocoon is made of.
Your topic has garnered a lot of chat about earnings per day, for example. Thank god it did not go to the usual litany of demands that mirror the stuck persons safety survival cocoon.
The bridge building solution that is so desirable can best be looked at from building it back from where we all want to be.
I feel it is the vantage point of a high performance continuous, seamless method, using skills gained from experience. the caveat on gaining experience is togo from plane to plane as you suggest. The ES market is now available. The DJXX, even in preliquidity days as Chan raises, was not as easy as the ES is now.
There are many of these methods. If a person objectively assesses himself in the context of several different ones, he can gain an understanding of his challenge to bridge to his potential. I think most people have been dealt a terrific hand in terms of potential. By looking deeply at several methods, a person finds out a lot about himself and what he carries with him to the party.
Dumping garbage is tough stuff. If a person has built a safety in survival mechanism using all his potential and skills, it is going to be like tearing down a reinforced concrete structure.
The 1 point a day crap is something else and it is cast in concrete all over the place in ET.
I was watching a show awhile back on limitations and they had some examples about this in the animal world.
Wild elephants when first caught are secured to a post with a heavy chain, after a short period of time the elephants realize (believe) they cannot break the chain. When those same elephants are then secured by a piece of rope that they could easily break free from, they don't, they accepted the limitation of their earlier experience.
They then measured the height flea's could jump which averaged
appox. 30" they put them in a glass enclosure for a few hours with a ceiling of 12". After they removed them from the enclosure the flea's would then only average 12" when they jumped.
What does this mean? The only thing I can think of is make sure
your elephants don't have flea's.
regards,
Bruce Hawkins
Wild elephants when first caught are secured to a post with a heavy chain, after a short period of time the elephants realize (believe) they cannot break the chain. When those same elephants are then secured by a piece of rope that they could easily break free from, they don't, they accepted the limitation of their earlier experience.
They then measured the height flea's could jump which averaged
appox. 30" they put them in a glass enclosure for a few hours with a ceiling of 12". After they removed them from the enclosure the flea's would then only average 12" when they jumped.
What does this mean? The only thing I can think of is make sure
your elephants don't have flea's.
regards,
Bruce Hawkins
Have to say I agree with you
What "most" traders do automatically leads to the brick wall of 1 pt a day.
The issue I raised is that people have to dump their current favorite way of trading in order to maximize their profits that you are refering to.
I think the lack of confidence into a new strategy could be key to the reason why most traders dislike venturing into new techniques. Confidence in something requires experience, statistics, sometimes mentors, most important of all, time to build up.
An interesting example is that why we believe the Earth is round now as oppose to its being flat
I don't think many of us have travelled far enough to look at Earth by themselves.Thus, part of the mental block can be "removed" when the trader can collect enough information to "believe" in the new methods.
But how much information is enough?