The real truth of Trading- Read it once, you will not be Disappointed.

[the1]

We are basically in agreement, which is why earlier I said I still play with my crayons. MACD's, MA's, patterns....it's all useful and all useless at one time or another. That goes for intuition too but there are times when you just "know" what the market is going to do. You put it all together and trading is based largely on art and talent. I've seen shitty doctors, shitty attorneys, and plenty of shitty traders. Then in all those fields there is the cream of the crop for one reason or another.

And to quickly wrap up...when I first started I looked to the guy standing next to me or down the hall to learn his "secret." I really thought there was some kind of secret to success in this game. I quickly realized that 99% of the crowd was no better than me and I'd be better off doing an independent study and relying on my own system, judgment and feelings for success, or the lack thereof.

Quote from Scataphagos:

Of course. But "one trade does not make a career".

If your play is generally for 3:1 profit potential/risk, then even a bit less than 50% success on individual trades makes you a winner.

I believe ES players should be looking for the setup where they can "risk 4 points for a reasonable opportunity to make 12 or more"... trying to "risk one tick to make two" is folly... too much noise for that.

 

[the1]

That's <b>precisely</b> what I'm talking about. And then you develop an intuitive read off what your senses tell you. There are many meanings for the word intuition. Two important ones are philosophy and knowledge.

Hit this link and tell me you disagree with the second one that reads:

Intuition (knowledge), understanding without apparent effort

http://en.wikipedia.org/wiki/Intuition

Douglas refers to this as the fucking zone but he doesn't use the word fuck

Quote from BSAM:

I study price action in the market.

 

[jajuanm2]

Bingo!

Quote from Scataphagos:

Of course. But "one trade does not make a career".

If your play is generally for 3:1 profit potential/risk, then even a bit less than 50% success on individual trades makes you a winner.

I believe ES players should be looking for the setup where they can "risk 4 points for a reasonable opportunity to make 12 or more"... trying to "risk one tick to make two" is folly... too much noise for that.

 

[jajuanm2]

How about systematic/hybrid traders? Do you need rules to add structure to your trading? Should the goal be consistency or large random profits ?

 

[lindq]

Quote from kingfisher3210:

Found this post on a blog comment and was blown away by what was said. I think there is a LOT of truth in the following paragraphs. Well worth every struggling traders time.

"Too many traders are looking for setups, when in fact they're the ones being set up.

When it comes to intuition vs statistical probabilities, I'll go with the probabiliites any time.

 

[UrBluffingMe]

Newb here. So take this with a grain of salt...

I find it amusing that the OP recommends that traders educate themselves about the game they are playing so they may play it more effectively, and a bunch of haters come in and scream "BS!" I know next to nothing about trading at this point, but I can't imagine it is a wrong strategy to learn more about it.

Also, whomever made the poker analogy is a bit off. The very best players know the game inside, outside, and every which side you can imagine. They spend countless hours analyzing hand histories (online), betting patters, odds, tells, etc... Poker is about capitalizing on other's mistakes. It's about continually taking advantage of very small edges in odds. You learn to recognize these edges by gaining experience and knowledge. It's not like "house games" such as roulette where the house has an ingrained advantage that can't be overcome. The Borgata doesn't need to win on every turn of the roulette wheel. They just need people to play. The math takes care of the rest.

Finally, a few here need to review the definition of intuition. Hint: It does not mean predicting the future by some form of ESP or whatnot.

 

[illiquid]

I really don't see how any trader worth his salt could strongly disagree with the first post -- the ability to read the market on the fly, to be flexible and comfortable with uncertainty, the importance of context -- these are just basic trading abilities that many would overlook in their quest for "setups". I would only go out of my way to trash that post for the sake of misdirection or misinformation, in keeping with the spirit of typical public anonymous forums. But honestly, probably the best distillation of what it takes to make it in this game that I've read on this site in a long, long time.

 

[Now is Now]

Quote from lindq:

When it comes to intuition vs statistical probabilities, I'll go with the probabiliites any time.

Exactly....Given enough time 'intuition' can become a reality, but cannot override probabilities on the bottom line...


NiN

 

[Redneck]

This thread is quite the lightning rod – with a lot of disagreement...
Probably because there are so many ways to trade


Call me crazy but this makes perfect sense to me

RN

Quote from kingfisher3210:

To try to put it as succinctly as possible, in my view traders that are focusing all their attention on "set-ups" and finding out which combinations of indicators work are never going to become profitable. They are trying to follow the advice of trading books that say trading is simple and psychology is everything. So they search for set-ups that 'work', and that can take the guess work out of trading. They want to be "disciplined" and have simple rules that guide all their actions. But there's a few problems with this. Namely, while psychology is HUGE, it's not everything. And while trading is all about simple principles, actually having an edge is NOT simple. It's a myth that you can have a couple simple price or indicator set-ups and make money consistently if only you are disciplined. That's a load of crap. It keeps the dream alive for wannabe traders who never realize what it's truly about. Well let me tell you what it's truly about...

Trading is about being okay with ambiguity. It's about tolerating confusion. It's about sitting with discomfort and being at peace with it. It's about not having an exact script of when to trade or not to trade, or what's really a high odds trade, and being okay with that. It's about exceptions to the rules. It's about contradiction. It's about uncertainty.

And yet traders left and right want to make it simple. They want to reduce it to a few simple set-ups to trade with discipline. And yet the market is not simple. The market is all about uncertainty, and complexity, and ambiguity. Simple set-ups could never capture that, and they can never give you a true lasting edge.

So what's the solution? Is the problem in the simple set-ups themselves? No, it's in how they're being used. The bottom line is, every trader needs to learn to READ the markets. This means that simple rules will not do. There has to be a synthesis of different elements (whether they be price action, indicators, inter-market themes or whatever), and real-time interpretation must take place. It has to be all about CONTEXT. Once you can read the markets, and don't fool yourself it is a very complex process, then you can choose to employ "simple" set-ups to enter and exit. But the real work will be in interpreting the market to see when you should use which kind of set-up. Seeing a hammer or whatever near a support means nothing unless you've identified the broader picture and gotten a sense of the kind of tactics you should be using, and what the odds are for different scenarios unfolding.

Quote from kingfisher3210:

Now is it easier emotionally to have clear set-ups to wait for and trade in this simple manner? Absolutely. But who said 'easy' would make you money. If I've learned anything, it's that the market rewards what is hard to do. It's hard to have ambiguity surrounding your market reads. It's hard being uncertain. It's hard dealing with competing and sometimes conflicting signs. And yet, this is what it's all about. You have to stop trying to avoid this by needing things to be clear cut. And is it hard to be disciplined when there's so much uncertainty about what is the right trade to make? Of course. But instead of trying to avoid the uncertainty by looking for simple set-ups, or some straight-forward method, train your mind to be able to deal with the uncertainty.

 

[jack hershey]

Quote from jajuanm2:

How about systematic/hybrid traders? Do you need rules to add structure to your trading? Should the goal be consistency or large random profits ?

Most traders who are accomplished focus on two things:

1. Being in the market on the correct side of the market, and

2. Compounding capital.

Ziad does neither as his focus.

Market granularity dictates that stepping is involved. Profit segments are in an order one after the other. To continue on the correct side of a market, a person stays to the left of the boundary. A profit segment ends when the overlap of the new boundary to the right begins.

The rate of compounding is simply dictated by the extent to which profits may be applied. It is worth discovering this as an exercise on an Excel sheet.

The substitute for Ziad's contention is called "Trust". Trust is unfamiliar to him so far.

The three precursors to trust, in order, are: 'tells, acceptance and value. They form points on a circle; trust appears inside and grows as laps around the circle occur.

In the trader/market partnership, the roles of each are explicit.

Ziad explains his quandry, but he does not know the basis. As a consequence, he participates minimally in the market.

The market can be a unique and very rewarding partner. 'tells originate with the market. It is a spoken language to the trader and no conversation can occur. The trader "accepts" the 'tells. All 'tells have value at the time they are spoken.

A trader extracts what is offerred as it is offerred. What appears under this arrangement is complete trust in the partnership.

I like the expression "edge". People who are oriented to "getting", focus on what they perceive to be momentary opportunities. Unfortunately, all edges have two sides. If you do not read market 'tells, you cannot get the profit segment which is associated with an entry type edge.

It will be interesting to see just when Ziad changes from entry/exit trading to be able to take the market's offer. Taking the market's offer is done with hold/reversal trading.