The Psychopathology of Everyday Trading

Dear Mr John M

All you need is to follow the advice of your best trading personalitiy, I think it was Roake or something like that, he had it spot on in his post on one of the old Jack threads. (In quotes below)

I can't believe that the man behind this post has any difficulty trading and making money.

Your biggest fan ........ Bonkey


"Then pick yourself up and go back to basics. Forget all the sweep bullshit, and the five minute chart, and the INDU/YM jerk off (there ain't nothin there). Chart nice and crisp in one minute in an all day scale, and don't draw your first trend line until about 30 minutes has passed. Don't chart volume (price moves profitably all the time on miniscule volume). Get in on that point three (price rarely retrace to it) and ride the fucker past the first trend deceleration (if there is one) or until the first trend deceleration after the first trend acceleration. By all means draw and redraw channels, but be very careful about trading FTT's. Retests of the trend line provide better entries.

Take a nap at midday and come back at 2PM for the pro cleanup. They establish their positions in the AM, work them midday, and take their profits in the PM.

Or jump on a short consolidation after a quick opening run and ride it for two legs (or one if you're nervous).

Chart the VWAP. It tells you where the MMs have their positions. Think: if I had my position there, where would I take price? After the morning, follow them there. Watch for that first golden test of the VWAP.

Put up a fairly fast sma, somewhere around 20 periods. Watch it for indications of trending or of fibrillations.

Above all, if there ain't no lower lows, DON'T SHORT. And vice versa. If you can't make yourself hold through retraces, force yourself to scale in as an antidote. And pick a tight entry stop. If price goes two ticks beyond your entry, most likely it was a shitty entry, and a better one, or the opposite trade, awaits a few minutes later.

Jack says KISS, but he does anything but. The way to learn to trade is to start with a simple rule and build on it, simple to complex. You didn't fail, you just got suckered. There is NO proof anywhere that Jack is anything but a garrulous homebound old fart who likes to fuck with peoples' heads.

P.S. Inventing is GOOD. But you don't trade it! You write it down in a journal, and every once in a while look at all that trash to see if ideas repeat."
 
Quote from Bonkey_Dollocks:

Get in on that point three (price rarely retrace to it) and ride the fucker past the first trend deceleration (if there is one) or until the first trend deceleration after the first trend acceleration. By all means draw and redraw channels, but be very careful about trading FTT's
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Can you explain what this paragraph means in plain English, please? Point three? FTT?
Trying to decipher it, thanks in advance.
 
Quote from Sashe:

Can you explain what this paragraph means in plain English, please? Point three? FTT?
Trying to decipher it, thanks in advance.
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I'll leave this for John to comment on, they are his words, I just borrowed them.

Best Regards Bonkey
 
Gentlemen, there is an utterly fascinating thread about Jack Hershey's intraday method running over in Strategy Trading. Please take it there. The only interest this thread starter has in that topic is that it provides ample daily documentation of variations on the theme of forgetting.
 
Quote from Duref Mudgins:

Thunderdog, I fear that ET is not your issue. Low market volatility is. ET is merely the place to which you go to seek credible approaches to squeeze more blood out the turnip. In my professional opinion those approaches only appear credible to the credulous. In my own trading I typically only find ONE setup a day, so I feel your pain. But take heart. Foolishness feeds volatility. And foolishness is on the rise. Tune to ET during those times setups are unlikely to occur, and observe the myriad ways the foolish are following as they ready themselves toplunge into the markets.
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Actually, I don't come to ET for trading ideas. I am fairly content with my own evolving ones. Besides, there are so many conflicting views out there (few of which I agree with, anyway), that if I were to take them seriously, then I would never get past square one. As I see it, my issue lies with the relatively few setups that ES presently gives me on an intraday basis, and the fact that I am not always at my most attentive when they do occur. The distraction does not occur often at critical times, but it does not need to happen often in order to have an impact since, as stated, there are very few daily setups for me. To be fair, if it were not ET, then the distraction would likely be something else. It is challenging to be fully focused for the entirety of RTH when you typically can only hope for a couple of good setups per day. I suppose I should not really complain since it is the path I chose. I just wish there was a way to harness and focus my attention better so that I am at my best at these few key moments. A number of different occupations have been characterized as "hours of boredom punctuated by moments of terror." While "terror" is not the right word in this case, there is something to this assessment. Periodically, I "rediscover" proper breathing and simple meditation to slow down the mind and keep it on track. It seems to work for a time until I go off track again. (Yeah, that's the ticket.)

I find the reference to Freud to be interesting. Personally, I am not much of a fan of psychoanalysis. It certainly has its place, but I find the navel gazing to be vaguely self-indulgent. I understand that "a life unexamined is a life unlived," but I think that relatively few can afford the luxury of time and cost associated with full-fledged psychotherapy. Where to draw the line? I think that cognitive therapy is a somewhat more pragmatic if less philosophical means of attending to a chosen neurosis. Any thoughts?
 
Quote from Wiles Welder:

I have been trading it seems for several lifetimes, certainly longer than most posters here have been alive, and I would like to point out that forgetfulness has a hidden self-destructive nature to it. Let me add to your list:

forgetting your trade rules

forgetting not to trade impulsively

forgetting your stop-loss

forgetting your daily-renewed vow not to be distracted by ET during RMH

forgetting which times of day offer the best opportunities for profit

forgetting not to brag to your spouse about what a hot trade you are in.

So I must agree that "forgetting" is a root cause of poor trading. From the perspective of my generation, forgetting one's manners on ET is the most frightful lapse of all.
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..............forgetting
Good Post 'So true'
 
Thunderdog, attentiveness is an intraday trading issue I can relate to. For three reasons:

for me it takes minutes to form a mental model of the logic of the market, that is, get into its head and form a solid opinion of the durability of moves or of changes in direction

many things have to come together, reinforcing each other, for me about ten

the difference between a marginally profitable few tick move that prompts quick profit taking and a sustained run that requires patience happens very fast, on the order of a couple of minutes.

I can't sustain that level of attentiveness for more than the first 90 minutes, and with rest, for the last 60 minutes. I can't imagine how anyone can do that all 390 minutes. So I set auditory alerts for the middle of the day and kick back, which is just as well because that's when I tend to get impatient, see trades that aren't there, and loose money in whipsaws.

I think trading ought to be fun, but even the most fun I ever have doing other things rarely lasts as long as RMH, at least at my age.

If you code, one thing to do is to do your algorithm development at mid-day so that you can watch out of the corner of your eye. Another is to exercise in sight of your screen. I find exercise so dull that the boredom of attentiveness seems appealing. But my favorite solution is my old man mid-day siesta. As NN says, hope that helps.

P.S.: Stay away from ET. It rots your mind. It's worse than pornography, and not nearly as reliably satisfying.
 
I see that poor somnolent Duref failed to answer your question about therapy. I have been doing it all my adult life, and I can assure that it is highly over-rated. I would stop doing it, but I need the money. Your best bet? Get old. When you're old like Duref and me you don't WANT to change. You LIKE your vices and peccadillos. You see your flaws as ADVANTAGES. Sadism, dishonesty, theft, infidelity, these and other traits are highly valued in the workaday world. Eventually you attract to yourself masochists who are happy to fall under your sway and benefit from the spoils of your sins. Such is the natural order of things, or as the psychological duo Tyson and Fricker put it: "The Lord made a loser so a winner could win." In life, as in trading.
 
I would like to add to the understanding of "forgetting" in trading (that perfect mirror of living) that we forget about the the TRUE nature of the market. Freud spoke about forgetting proper names. What is the proper name of the market? (Yes, yes, I know that Joe Doaks thinks that it is "Bitch".) We forget that the market is an inchoate mass of traders who trade to win (speculators), not to lose (hedgers), to lose (ETers), and just for fun (the bottom feeding Hypostomi). We delude ourselves that the market is a physical phenomenon (the favorite delusion of engineers). That it is a Vegas slot with odds in our favor (the fantasy of senile old men such as myself). Or that it is a bountiful purply engorged breast literally dribbling with succulent nourishment waiting excitedly to be sucked (the lustful fantasy of the Jackers). What is the reality? YOU tell me, hahahaha!
 
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