Socrates Examines Technical Strategy

S

Socrates

There is a great spirit of charity and sharing abroad in the land of ET perhaps best exemplified by this thread:

http://www.elitetrader.com/vb/showthread.php?threadid=141661

Its value is self-evident from the clear fact that its protagonists are protegees of ET, in the classical and French meaning of "protected". Protected largely from the apparently subversive dangers of criticism and outside commentary.

But that is not my point. ET indeed provides a boon to the trading community by protecting the valuable method espoused therein. My point is to see if the excluded community of critics can learn something from that method absent willingness to engage in open dialogue.

And dialogue, you may recall, is my forte. I practically invented it. You may also recall that in my day I taught that all knowledge is already known, but it is not remembered. I devised my Socratic method to dislodge knowledge from forgetfulness. It must have been powerful, because I was condemned to death for the unsalutary effects it had on the youth of Athens.

So what we shall do here is apply the Socratic method of simple questioning to help us understand the referenced thread better by remembering what we already know.

I shall commence after letting the objective soak in. I implore the usual suspects to refrain from flaming the participants in the referenced thread. Hemlock with be my suggested remedy.
 
Plato had a good trading lesson in his Republic, Book #1 when he said,

"I replied: There is nothing which for my part I like bet-
ter, Cephalus, than conversing with aged men; for I regard
them as travellers who have gone a journey which I too may
have to go, and of whom I ought to inquire whether the way
is smooth and easy or rugged and difficult. And this is a
question which I should like to ask of you, who have arrived
at that time which the poets call the "threshold of old age":
Is life harder toward the end, or what report do you give of it?

I will tell you, Socrates, he said, what my own feeling is.
Men of my age flock together; we are birds of a feather, as
the old proverb says; and at our meetings the tale of my
acquaintance commonly is: I cannot eat, I cannot drink; the
pleasures of youth and love are fled away; there was a good
time once, but now that is gone, and life is no longer life.
Some complain of the slights which are put upon them by
relations, and they will tell you sadly of how many evils their
old age is the cause. But to me, Socrates, these complainers
seem to blame that which is not really in fault. For if old
age were the cause, I too, being old, and every other old man
would have felt as they do. But this is not my own experi-
ence, nor that of others whom I have known."

Many a good trading lesson in the Classics.
 
Thank you, Jeff, for that apropos quote. I can only add that old traders can find no excuse for failure in age. In the interest of full disclosure, I am nearly 64 (in this life), manage not inconsequential family funds, and daytrade around those positions to avoid the temptation to overtrade. I am an avid student of the method in the referenced thread, in the same way that I was once a fan of the sophists.
 
Thank you, Dackster, for the encouragement. To quote Jack Benny from an old radio skit: "I'm thinking! I'm thinking!" And to my rabid friends in Australia and British Columbia, thank you for your forbearance.
 
Where to begin? As a philosopher, I will begin with philosophy. To me, trading is not technical, it is philosophical. Once you understand the philosophy of trading, the technicals follow perforce. More specifically, trading is epistemological. Once we know what we know, and believe in what we know, process follows. And to a great extent I believe that trading is ontological, specifically existential. As the great ET trading psychologist Dr. Arthur Deco once paraphrased Carl Jung: "All trading is autobiographical."

So let me pose these questions both epistemological and ontological in the context of index futures trading: Why does this market exist? Is it an eleemosynary society designed to benefit market order speculators? Is unlimited wealth allocated therein to provide us income? For that seems to be the existential position reflected in the referenced thread.
 
Quote from Socrates:

Where to begin? As a philosopher, I will begin with philosophy. To me, trading is not technical, it is philosophical. Once you understand the philosophy of trading, the technicals follow perforce. More specifically, trading is epistemological. Once we know what we know, and believe in what we know, process follows. And to a great extent I believe that trading is ontological, specifically existential. As the great ET trading psychologist Dr. Arthur Deco once paraphrased Carl Jung: "All trading is autobiographical."

So let me pose these questions both epistemological and ontological in the context of index futures trading: Why does this market exist? Is it an eleemosynary society designed to benefit market order speculators? Is unlimited wealth allocated therein to provide us income? For that seems to be the existential position reflected in the referenced thread.
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Why were E minis created? I can't think of any line of business that creates a charitable form, 'just for the sake of it'.

Exploitation?
 
You are a fine straight-man, Dackster. I shall turn to you when I go on the road with Comedy Trading School.

The CME an eleemosynary society? Belief in that is as adult as believing in Father Christmas. But that is the ultimate absurdity of those who believe in "pool extraction", that virtually unlimited profits are there for the taking by market order speculators.

Index futures were created to provide stock and stock options market makers the same benefits commodity futures provide: hedging of positions taken in making markets and holding long term positions. They also offered institutions with necessarily illiquid broad market positions the opportunity to hedge.

You and I as market order speculators are tolerated only because we provide liquidity for hedging by market makers and institutions. And because we pay at least the spread and fees for the privilege. So what about those curves you see touted where followers of the referenced method can pile on profits and ultimately trade tens of thousands of contracts, depending on their level of expertise? And eventually amassing wealth so fabulous they no longer deign to post on ET?

This begs the question, what will the index futures markets bear in terms of profits to speculators? Just how deep is that "pool"?

And quickly you see that you already knew the answers to momentous market questions. You just needed to be asked.
 
Can technical strategists overcome market forces? Can there be technicals without strategists? Or does the broader market provide technicals for the strategist?


This one is for the tech traders of E minis.


Be careful how you reply.
 
Well, Dackster, I can only answer truthfully without consideration of the answer's stupidity. Successful market strategists are mental judo artists. They use against the market what it offers. But mine is the answer of an S/R trader, not that of a momo trader. Are you trying to make a Socratic point here? I will add.ress technicals by-the-by in the context of the referenced method.
 
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