The Evolution of an E-mini Trader

Originally posted by Huios
Trading is not a favorable game. It is a minus sum game. Say we have a bet for a buck. If I lose, I don't just lose a dollar. I lose more due to commissions. You don't win a dollar, you actually win less, due to commissions. In a minus sum game, normal thinking does not work. Me thinking I am right is normal thinking.
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Right. That's why I say only enter the trade if you have an edge -- if not, you're just gambling.
 
Originally posted by Wonderduck
trade when you have an edge...reduce risk whenever possible
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I think they say the same thing, I just use more words. Something I've always been guilty of.:)
 
I have been reading these journals for past few days...I keep reading about taking losses quickly, etc...It sounds great in the mini's and all, but from my experience, if you cannot absorb some of the noise on these short time frames or scale in, scale out, pair in, pair out of positions, it is next to impossible to come out ahead...The mini's are moving alot these days purely on program trading...Alot of these sell-offs begin, retrace about 2 handles then continue lower...Alot of times we get a large sell program, teh program absorbs, the market gets an automatic bounce of about 1.5-2.0 handles and then resumes lower...To try and stop yourself out within 2 ticks each time is an invitation to disaster...There is alot of "whip" on this time frame and you are up against these mechanical buy/sell programs that basically run the markets thru bids/offers quicker than you can think...You are not necessarily wrong if the market moves 3-4 ticks against you, you are just temporarily behind...If the price level you are keying off of for the sell or the buy is still maintained, you even have a chance for price improvement...To try and say that each time you buy/sell is your criteria for wrong/right and any adverse movement of 3-4 ticks makes you wrong...Well, it sounds ok, but you are going to inflict alot of self pain, and much of it is unnecessary...
 
Originally posted by Huios


It is a simple concept, but very difficult to grasp, and even harder to incorporate into your being.

Trading is not a favorable game. It is a minus sum game. Say we have a bet for a buck. If I lose, I don't just lose a dollar. I lose more due to commissions. You don't win a dollar, you actually win less, due to commissions. In a minus sum game, normal thinking does not work. Me thinking I am right is normal thinking.

Therefore, I assume I am wrong, and let the market prove me right, instead of assume I am right, and let the market prove me wrong.

Ahhhh...but we human beings, love to be right. So therefore, we have to be proven wrong, ie stopped out.

Why not start out as the ultimate contrarian, and assume I am wrong, until proven right!!!

The question then becomes... what is/are the criteria for the market proving me right? The trade immediately moving in my direction? If so, by how much, and in what time frame?

That is another post, another day.
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Finally I figured out who the Phantom is :)

I do agree with you though, minus sum game imo is the product of the human condition... I always fet like a trader is completely f*cked from the get go...

PEACE and good trading,
Commisso
 
Originally posted by nkhoi


this could have taken directly from George Soros book, have you read him http://www.amazon.com/exec/obidos/t...776/reader/26/103-0670382-8817460#reader-link
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IMO, the fallibility of a human is somewhat different than Phantoms reverse psycology of assuming your position is wrong from the outset...

For Soros I think it is more a matter of staying fluid enough to see both sides of the position... For Phantom, he is using it more to implement his Rule # 1 of cutting losses with the quickness...

At any rate Soros on Soros is an excellent read!

"I am not a professional security analyst. I would rather call myself an insecurity analyst..." ~Soros~





PEACE and good trading,
Commisso
 
In my last post I said that "stopping" oneself out after a small "blip" caused by nothing more than the ebb and flow of the market could lead to alot of self torture, I also wanted to add one caveat to this statement...One thing that I think is important in determining how to "trade out" of losing positions is how you are entering the market...If you are trading thru ranges or trading short term breakouts, majority of the time you are going to have to absorb the local fading, the programs kicking in, the opposite side of the trade covering into where you are entering, etc...In this case, you are going to basically be wrong from the get go...However, if you apply a noise filter to that breakout, you can basically look at the ensuing movement without the paniced finger on the mouse looking to cover...In that situation, if you basically assumed you were wrong, you would always be wrong temporarily...

On the other hand, if you are trading re-tests, then you would probably want to "trade out" of the position much more quickly because you are looking for an immediate confirmation of the move...You also have a wall of S/R that you are trading into...The criteria are different and so should be the reaction...

I always think trading is about alot of different elements, it is always somewhere "in between"...Alot of threads on this board try to apply maxims of certainty or "absolute" truths to how to trade, but they cannot possibly encompass all of the scenarios that face us during any series of trades...In fact, alot of unconventional wisdom and many threads which attract as much attention as a Salem witchhunt as far as unpopularity do quite well in the mini's...Truly a perverse market it is!!!
 
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