Thats interesting. I take it you have reached a certain level of ease with the market and within yourself? Care to expand on the journey you took to reach this?
The reason I dont use any indicators
- Thread starter Grantx
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I use some indicators; but that is good- that some don't use them.
To answer your last question, but its NOT a prediction; i know how market makers make money but i don't trade that way.
Adding to the complexity, General Kevin Haggerty/Fidelity Capital Markets noted , in writing ,many institutions will not admit[ in public] to using a 200 day moving average
Yes. No.
...maybe,...
Boolean Algebra rules the markets.
isTrue or isFalse.
...depends
The journey began when I decided I wanted a more productive relationship with the markets then the one that I had.
I did all the suggested things in all the popular books.
My research started to expand beyond methodology, strategies and tactics promoted in popular financial literature and into a more non-conventional space. Since my goal was to achieve peak performance, logic would have it that the source material and mentors I was looking for would be more non-traditional. This research lead into the concept of logic, paradigms, fractals, and whole systems thinking.
This is similar to learning a truly foreign language that has no shared root with your native tongue. Therefore as a language, it has a vocabulary, grammar, syntax, etc., as well as culture. It requires passion to learn. Also as a language, it's main function is to facilitate communication.
One way to understand something is to break it down into irreducible elements - like a periodic chart, a set of principals, etc. I came across the concept of doing drills to expand market perception as a powerful practice. I'd only been in the market 3yrs at this point, experienced mostly losses but had a good option trade that demonstrated the power of the velocity of money and gave me a year to be frugal and engage in purposeful learning.
By doing drills, this led to understanding the market's granularity - it's elemental state. This granularity from a technical pov is composed of ten price cases and eleven volume elements. There are 56 unique combinations of PV that contain and define all market behavior. Shifting attention from a time-based orientation to an event-based one, revealed much more context. The market is composed of interlocking and intranested fractals of these events. There is a sequence that is the ever repeating order of events (OOE). The OOE is coupled to a pattern - the fundamental pattern of all price action.
The feeling of fear, anxiety and anger in relation to the markets, generally come from 'not knowing'. The current paradigm is one of game theory and using probabilities to place 'bets', targets and stop-losses. The current paradigm advocates detaching from one's emotions - that emotions are a liability not an asset.
The concept of volume being a leading indicator of price does not have a hospitable place within that paradigm.
Another state exists and it's accessible to any who undertake the work. It starts by knowing one thing to be true and then builds upon the what 'is true' under what conditions.
Building on 'knowing that you know' is the pre-req for experiencing the feelings of confidence, comfort and support while being in partnership with the Market. A market that has no flaws, anomalies nor noise. This is all observable but only from a certain vantage point. The vantage point requires a complete system that defines all observable PA phenomenon in relation to the markets.
A recent illustration of such is the productive thread Simples started here. Reading won't change one's perception of the markets as much as doing MADA and drills will.
https://www.elitetrader.com/et/threads/on-10-case-geometry-and-beyond.310880/
May the words I offer be more clarifying than confusing. If they are confusing, it further differentiates my vantage point. As humans we have a mix of desires challenged by our beliefs as well as beliefs challenged by our desires. For me, ease and grace appear more frequently the more my beliefs and desires are in alignment with a higher purpose for Being.
Technology has progressed very rapidly. Thirty years ago you could plot a price chart on a computer screen, and then plot a moving average and RSI study on top of it. That was considered cutting edge.
In this day and age, with more processing power, you can employ synthetic charting where an application can extract different components and characteristics of price variation, and use a multi-dimensional matrix to process a chart price in 10 or even 20 dimensions. This cannot be visualized in the 2D space that most average retail Joe's use, but the application that created it can trade it. As humans, we are limited to observing two dimensions on a computer screen, even if you plot 30 indicators at once.
The difficulty lies in implenting this on a non-stationary time series like our financial markets. Building a model without domain knowledge isn't good enough. I suspect funds like Ren-Tec were doing this years ago.
In this day and age, with more processing power, you can employ synthetic charting where an application can extract different components and characteristics of price variation, and use a multi-dimensional matrix to process a chart price in 10 or even 20 dimensions. This cannot be visualized in the 2D space that most average retail Joe's use, but the application that created it can trade it. As humans, we are limited to observing two dimensions on a computer screen, even if you plot 30 indicators at once.
The difficulty lies in implenting this on a non-stationary time series like our financial markets. Building a model without domain knowledge isn't good enough. I suspect funds like Ren-Tec were doing this years ago.
I know for myself it is not true, I sell strength and buy weakness in long term Commodities, it wasn't by chance or illusion or desire to be first at party and getting near the extremes of major reversals, long term it tested well- you have to get use to losing often and have to hedge, does it feel good that any market is screaming on up and at some point am selling it, not particularly in beginning, and now I am just numb to whole process of the markets. Entire game is an illusion to me, it is basically something to do as I have very little much else to do with my life as I have spent so much time gaining knowledge of how to trade. At some point the market will do a major crap and reverse and so long as I keep hedging, won't run out of funds. It like betting against the Cleveland Indians losing, you at some point start betting against them and then that day they lose, you win and unless you keep betting more to cover all the losses, you might still be in the hole, unlike trading you can bet same amount but wait years to gain whole enchilada.
People who profit consistently lose value of money and seldom get excited of doing it, it becomes a grind. You find areas you love and do them, let the automation do the boring parts.
By time you done 50,000 trades, you are numb to doing your job, once you doing automation, more relaxing to do what you want when you want.
"There is no secret sauce."-------When you do find them, you will never share them either. 99% of trading is rehash of what been done before, but that 1% never gets told if they want to stay in that 1%, and people who say you will own the world-think about this, if you allow the world to see you trading very heavy, people will notice and start watching, best to do enough and not become pigs. Coke don't share their formula, don't count on them sharing it.
If I had a coin that came up heads 60 percent of the time, how much should I bet?No more than 2% of Total Liquid Net Worth (TLNW)
This is not a good answer. If I had a coin that gave me heads 60% of the time, I would be betting huge, 20% each time, to maximise my returns. Such a trade is gold.
Traders who bet only 2% know that their 'coin' is marginal, only giving them heads 50.5% or 51% of the time. And rightly so. Traders who bet bigger are often drastically over-estimating their probability of success. But when you have such a unique trade you must recognise it and make the necessary bet size, if you want to maximise your returns.
This is not a good answer. If I had a coin that gave me heads 60% of the time, I would be betting huge, 20% each time, to maximise my returns. Such a trade is gold.
Traders who bet only 2% know that their 'coin' is marginal, only giving them heads 50.5% or 51% of the time. And rightly so. Traders who bet bigger are often drastically over-estimating their probability of success. But when you have such a unique trade you must recognise it and make the necessary bet size, if you want to maximise your returns.
You would eventually lose everything. You will get a string of losses its inevitable.
Ouch!!
In round numbers: with a 60% win-rate, over the course of 600 flips/trades, there's still a more than 75% chance of having a losing run of 6, and a more than 50% chance of having a losing run of 7, and a more than 25% chance of having a losing run of 8 or more.
Not to mention that longer "losing patches" (without all the losers being consecutive but producing the same overall financial outcome) are considerably more common than any of the equivalent figures given above.
So you might perhaps want to re-think that ...
the funny thing is that knowing this will not necessarily prevent the person from overbetting for psychological reasons as shown in Ed Thorpe's experiment.Ouch!!
In round numbers: with a 60% win-rate, over the course of 600 flips/trades, there's still a more than 75% chance of having a losing run of 6, and a more than 50% chance of having a losing run of 7, and a more than 25% chance of having a losing run of 8 or more.
Not to mention that longer "losing patches" (without all the losers being consecutive but producing the same overall financial outcome) are considerably more common than any of the equivalent figures given above.
So you might perhaps want to re-think that ...