Most Difficult Trade

[SnakeEYE]

NoDoji, do you use any leading indicator to trade CL?And if so,what is it?

 

[afto]

Quote from KDASFTG:

Greetings NoDoji:

I’m no “market psychologist”, but after 20 plus years in trading, I have spent more time examining my own “grey matter” than the average person. And as such, I have worked out for myself, some of the very same problems as outlined on your excellent thread. My intent in writing this slightly long missive, is to describe the thinking that has worked for me, in the hope that maybe it can do the same for someone else on your thread. Or at least, it may perhaps stimulate thoughts, ideas, or solutions. Again, I am no expert. But this state of mind works for me. Sometimes in the course of active day-to-day engagement in the market, our precise logical and reasoning abilities can get in the way of seeing what is obvious to others. And for the sake of this discussion, I believe this is one of those instances.

To me, your thread strikes at the very core of what trading is really about. Pardon me for sounding cliché, but trading really is a game that is played in the mind of each individual trader. When you honestly stop to think about it, what else could it be. Essentially, the market just transmits ticks. The game being played, and the meaning assigned to those ticks, resides in the head of each individual trader. Its not you against the market, its just you reflecting who you are in the market. Conscious or unwittingly, good, bad, or indifferent. You can only trade what you “know”, and what you “believe”. That is the sum total of what is inside of you. So therefore, you don’t honestly see the market as it really is,…but as you really are. Once understood, the implications of this simple truth can be absolutely profound.

For example, lets take a look at a hypothetical trader plagued with the often-recurring problem of inconsistency in executing his/her trading methodology. And lets say that this trader believes that this inconsistency is due to the fact that the dollar risk of their method keeps changing in the market with each signal. And this constantly changing variable causes them to “think” while “executing”. And since this risk frequently moves outside their “comfort zone”, this also causes them to sometimes mentally hesitate or freeze when they see their signal, further eroding their ideal state of mind. These things wreak havoc on their account balance, trading mindset, and consistency. Lets also say, that this trader firmly believes that their mental makeup, or psychology, needs to be somehow “adjusted” in order to “grow” beyond this recurring cycle of frustration.

From my perspective, I do not believe that the trader in this situation has a psychological problem with maintaining consistency. As I see it, they have a consistency problem that is affecting their psychology. I see that they are allowing what is basically a doable technical risk control problem, to stand in the way of their maintaining the consistency necessary for their continued success. I do believe that they have somehow failed to understand the concept that:

“Consistency is a State of Mind”.

Consistency is a way of thinking. You don’t get consistency from the market! You bring your consistency to the market! You do this as a natural expression of who you are. YOU ARE CONSISTENT. In my mind, the above trader only needs to create a consistent means, to build around this “comfort zone” problem, so that they can get back to maintaining consistency in the market. As Douglas says: “The hard reality of trading is that, if you want to create consistency, you have to start from the premise that no matter what the outcome, you are completely responsible for creating it”. You see,……..it has to come from you!

When the trader truly “owns” this concept, the struggle in the market will naturally cease. You will realize that you were the cause of your own market dissatisfaction. And this was engendered by the way you were thinking, and how you were thinking. You created your own unfavorable market experience by your own inconsistent thinking and actions. Trading is a game that each individual trader plays in his/her own head. Understanding this, you will no longer be attending to “symptoms” on the outside, while at the same time, harboring the “cause” on the inside. You will be congruent in intent and in deed.

What can this thinking do for you? Let me provide you with a quick practical example of integrating this concept. Now I am not advocating or promoting this trading style for anyone. You need to create your own. It’s just what I do. I use Constant Range Bars and price action in my trading. And since I chose the fixed range of the bar, I can thereby align the bar so as to fit my personal “comfort zone risk”. In doing so, I have pre-built “comfort zone” into my pattern signal. As a result, I already know how much I’m likely risking on any given signal setup. Consequently, I am comfortable with consistently taking every signal that meets my criteria. More importantly, my emotions stay in check.

I believe that for the most part, all it really takes is to understand that; “Consistency really is a State of Mind” that anyone can create for themselves. Then all you need is a genuine desire to change. Believe me, you have no idea how bad I wanted to change. But that’s another story (smile). I think the results will be the same for anyone else who truly and honestly “desires to change”. And the best part is; this change can literally take place after you finish reading this message. Fully embracing and understand this concept, resolve to be consistent. Find a way to represent your data to align your patterns and signals within your “comfort zone”. This will free your mind to flawlessly execute as the Casino,………..Consistently.

Just my opinion

KDASFTG

BTW NoDoij - I must admit, I enjoy reading just about everything you pen. You truly write with the clarity and precision of an Ayn Rand. And you very much remind me of her fictional character; Dagny Taggert, from her book; Atlas Shrugged. If you haven’t read the book, you really need to go visit with Dagny. I believe you’ll love everything about her…..Excellent Thread!

This is probably the most valuable post that I've read on ET and it is an atomic discovery. The search for the holy grail ends with the realization that trading - and everything else in life for that matter - is a game played out in consciousness (ie there is no "out there" out there)
Imagine what it means if our whole perception of reality is turned on its head. What if the things/people/events/emotions that appear to show up in our life are the RESULT of our state of consciousness rather than the CAUSE.....mind blowing, baby.
JMO

 

[Cheese]

The eighth and last choice in NoDoji's Poll corresponds best to the sequence of opportunities that the market (eg CL) offers, open to close, via its price gyrations represented by its sequential swings up and down.

I agree with the characterisation of consistency as being in your mind. That is a useful reminder of the obvious and also a reminder that rationally you are in command. You have to marshal the live information, prices on your charts, and impose order. Order is required by your mind and you can put the necessary lines on your chart to represent that order.

Assuming daytrading, the mission, in such a field of rationality, is to take net gains from the days swings as they follow each other. Lets cut to the chase to demonstrate this. Your system should provide you with the signals (ie triggers) to buy the upswings and sell the downswings as you go.

Lets go to a version of buying and selling using slow and fast triggers. Using a fast chart, when your slow trigger goes 'on' (eg to buy), you can take each fast trigger (to buy) that follows whether one or more. You can then exit from each fast trigger by the next fast counter-trigger (to sell). Here the less certain player or the less experienced player is breaking up the process into smaller gains. But a very professional player might also prefer to opt for this process as well.

And, yes, of course its all a game. Therein lies its appeal.

 

[Notes123]

Quote from afto:


What if the things/people/events/emotions that appear to show up in our life are the RESULT of our state of consciousness rather than the CAUSE.....mind blowing, baby.
JMO

sure, your grandpa is not dead, if you don't think he is dead.

I guess stupidity is infectious. Maybe you want to be infected, because only idiots on this forum make money.

 

[ammo]

Quote from NoDoji:

Discretionary means I see a setup forming and there is a price at which a position will be triggered. I place an order at that price.

Automated/automatic means the computer receives ongoing data that tell it a setup is forming and there is a price at which a position will be triggered. The computer places an order at that price.

The difference is that the computer never experiences a difficult trade because it simply trades all the setups it's programmed to trade.

The discretionary trader who hasn't attained a trader's mindset makes choices about whether to trade a setup or not.

My automated system put on a trade the other day where the previous price bar was way too large for me to believe that my stop loss would survive. It took the trade and took the loss. I didn't trade the setup and was happy to have saved myself from a quick loss.

Later that day it put on a trade where the previous price bar was also way too large for my comfort level. I didn't trade the setup. The setup resulted in a move of over 100 ticks from the triggered entry price and the ATS captured a large chunk of that move.

Because the automated system trades every setup, it netted 60 ticks between those two trades and I netted nothing.

That's the advantage of trading all setups, of being the casino not the gambler who picks and chooses which hands s/he will play.

Every professional trader knows that this is an important part of maintaining profitability, but some of us still hesitate, or find certain trades very difficult.

This is a psychology thread to invite discussion about the psychological aspects of trading ONCE YOU HAVE AN EDGE.

If you have no edge, there are plenty of threads about strategies where you can discuss strategies.

Mark Douglas doesn't have to be a trader, nor does his Zone book purport to provide trading tactics. He assumes you have an edge and are having difficulty becoming the casino by trading every appearance of your edge, and he provides guidance for attaining that level of mastering your own edge.

.....http://wwwstatic.megavideo.com/mv_p...6b0531b59e7fd43e1347a2b0557e0.jpg&v=J4TCCQO6. go to 50-54 minute area, the brain decides 6 seconds before we physically react, a safety or an impairment when considering automated vs. discretionary

 

[deaddog]

Quote from Notes123:

I guess stupidity is infectious. Maybe you want to be infected, because only idiots on this forum make money.

Making money is what it's all about.

 

[Bakinec]

NoDoji, great posts as always!

Sadly, I do not have any particular set-ups. I'm lazy, so I trade trend-line breaks on tick charts. I guess you could call that a set-up too.

Most difficult trade is the one after two or more losing trades in a row.

 

[Notes123]

Quote from Gubinec:

NoDoji, great posts as always!

Sadly, I do not have any particular set-ups. I'm lazy, so I trade trend-line breaks on tick charts. I guess you could call that a set-up too.

Most difficult trade is the one after two or more losing trades in a row.

didn't you stop for one second, just one second, to think why it is the most difficult trade???

ok, I will think for you: this trade is likely to be a loser, so I am not going to enter.

If you think the same as I think, you will agree with me, not Nodoji's stupid contradiction! http://www.elitetrader.com/vb/showthread.php?threadid=217087&perpage=6&pagenumber=5

this forum is full of idiots who can't even think straight!

Again, don't worry, because idiots make money.

 

[Swan Noir]

If your contention that "idiots make money" is true why are you not shopping for "idiot pills". C'mon man ... read what you are saying and then get a grip. If your contention is that your logic is sound and what proves that is your tenacity in clinging to it despite that it produces consistent losses then -- and I am not saying this to poke fun -- you need to seek professional help.

No one should deride the man (or woman) that suffers from battle fatigue. Come off the front line for a bit, regroup, get some help, some R&R and then, after some practice on the range, rejoin your outfit. No shame in that.

Quote from Notes123:

didn't you stop for one second, just one second, to think why it is the most difficult trade???

ok, I will think for you: this trade is likely to be a loser, so I am not going to enter.

If you think the same as I think, you will agree with me, not Nodoji's stupid contradiction! http://www.elitetrader.com/vb/showthread.php?threadid=217087&perpage=6&pagenumber=5

this forum is full of idiots who can't even think straight!

Again, don't worry, because idiots make money.

 

[NoDoji]

Quote from xerofia11:

Because most of the trades were very "difficult" for me and I don't have an experienced trader's psychology at least for the moment, I choosed to trust Zulutrade' s Signal Providers. They open positions for me.

"The hypothetical performance results displayed on this website are hypothetical results in that they represent trades made in a demonstration (“demo”) account. Trades placed in demo accounts are based on a Signal Provider having access to an unlimited amount of funds. As a result, demo accounts are not subject to margin calls and have the ability to withstand large, sustained drawdowns which a customer account may not be able to afford. Trades placed in demo accounts are not subject to price slippage which may occur when a signal is actually traded in a customer account. All performance results presented only include the results of completed trades and do not reflect the profit or loss on open positions." (Reminds me of our favorite trading Ace, Lenny Dyskstra!)

THIS COMPOSITE PERFORMANCE RECORD IS HYPOTHETICAL AND THESE TRADING ADVISORS HAVE NOT TRADED TOGETHER IN THE MANNER SHOWN IN THE COMPOSITE. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN A HYPOTHETICAL COMPOSITE RECORD AND THE ACTUAL RECORD SUBSEQUENTLY ACHIEVED. ONE OF THE LIMITATIONS OF A HYPOTHETICAL COMPOSITE PERFORMANCE RECORD IS THAT DECISIONS RELATING TO THE SELECTION OF TRADING ADVISORS AND THE ALLOCATION OF ASSETS AMONG THOSE TRADING ADVISORS WERE MADE WITH THE BENEFIT OF HINDSIGHT BASED UPON THE HISTORICAL RATES OF RETURN OF THE SELECTED TRADING ADVISORS. THEREFORE COMPOSITE PERFORMANCE RECORDS INVARIABLY SHOW POSITIVE RATES OF RETURN. ANOTHER INHERENT LIMITATION ON THESE RESULTS IS THAT THE ALLOCATION DECISIONS REFLECTED IN THE PERFORMANCE RECORD WERE NOT MADE UNDER ACTUAL MARKET CONDITIONS AND THEREFORE, CANNOT COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING."

Well, hell's bells! If I had an "unlimited amount of funds" AND the "BENEFIT OF HINDSIGHT", there would be no difficult trades ever!

Quote from xerofia11:

Most of the time I am very happy to see successful trades in my account.

Until that pesky "large, sustained drawdown" gets you.

:eek: