The Ultimate DAX Scalping Discussion Thread!

Quote from franklin:

Traders with marginal trading strategies always conclude that trading is all about psychology, since that is the only way they can get their marginal strategies to be profitable (i.e., they have too little room for error or undisciplined behavior).
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"Always" is a little absolut not?

But maybe you're right in some cases. You can also turn things around. Traders with marginal psychology conclude that trading is all about trading strategies, since that is the only way they can get around their poor psychology.

From my experience I think psychology deserves the most attention. I rather start with perfect psychology and continue with perfect money management and conclude with trading strategies than the other way around. But that may be because I started off with excellent trading strategies in the first place :p
 
Traders with marginal trading strategies always conclude that trading is all about psychology, since that is the only way they can get their marginal strategies to be profitable (i.e., they have too little room for error or undisciplined behavior).

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That may or may not be true. However, psychology is undoubtable a most important component in trading effectively. Most literature supports this, Elder being a good start. Following on from there, Mark Douglas' book Trading in the Zone, which has been mentioned before, is an excellent piece of work.

Having said this Franklin, I feel you are interested in pushing the thread back towards trading - good idea.

From a day trading perspective, I find RSI a very useful tool in conjunction with 5min bar charts (plus 5 period EMAs and longer term "boundary" EMAs). I find RSI "hooks" up or down, along with market action that looks to be heading towards a spike, particularly good indicators.

Any other thoughts on this?
 
Quote from franklin:

Traders with marginal trading strategies always conclude that trading is all about psychology, since that is the only way they can get their marginal strategies to be profitable (i.e., they have too little room for error or undisciplined behavior).
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I'm not quite sure if you know what you're talking about. I tell you why:

I have been developing and programming mechanical trading systems longer than I have been trading - Some of them very complex and very refined in many ways, so I know what I'm talking about. Profitable? Yes, but only with the right kind of person who can execute it flawlessly and without hesitation. Most don't have the "mind" for it. This applies for many, even fully mechanical systems, where one person makes a fortune, the other loses a fortune, on the identical system. Why? I leave the answer to you.

As for discretionary trading (scalping is too complex/refined to be systemized) I have refined most of my trading strategies to the very tick, with arduous per-hand-backtesting, simulation, quantitative analysis and spreadsheets. Every day, even after scalping, I enter all my trades into complicated spreadsheets to analyze all the ratios and tweak them. Ask trade4succes. He's seen one of them.

So, don't assume I'm using psychology as an excuse for insufficiently developed, "marginal" trading strategies. The very opposite is the case. I put boat-loads of work even into my scalping, every day. But the bottom line is psychology.

You probably don't understand this, because you maybe trade some system that trades 3-5 trades per day, on 1-2 contracts, with a R:R ratio of 4:1. Admitted, that doesn't take too much psychological prowess... That isn't professional trading, though.

Now, try trading like a professional. "Professional" in the sense we're discussing here means high-volume, high turnover, high margin, high RT. If you're trading ES, margin your account at $2-5K per contract, so you can trade 10-30 contracts. Adapt your stops, R:R ratio etc. accordingly, I.e. smaller targets, and larger stops (likely larger than the targets). Watch and trade.

Now, do that for a week, then come back here and tell us again the story about "marginal strategies" and psychology. Good Luck.

Scientist.
 
Quote from trade4succes:

"Always" is a little absolut not?

But maybe you're right in some cases. You can also turn things around. Traders with marginal psychology conclude that trading is all about trading strategies, since that is the only way they can get around their poor psychology.
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LOL! Nice pass. :D

From my experience I think psychology deserves the most attention. I rather start with perfect psychology and continue with perfect money management and conclude with trading strategies than the other way around. But that may be because I started off with excellent trading strategies in the first place :p
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Yep. Same here... I'd take the perfect psyche anyday... :)

Smart.
 
Quote from easyrider:

As the goal of psychology is to make you sane Im not sure it will help.
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Hmm... Well, the "goal" of psychology isn't really to "make you sane".
"Psychology", by etymology, comes from Greek "psukho", for life, soul, and "logos" for "science of ..." - AFAIK.

I'm sure you were referring to psychiatry - Which, unlike psychology, is for the actual purpose of diagnosing and/or treating mental disorders, ditto make you sane.

Conclusion: Getting to know yourself, your life, your soul, (Psychology) can indeed improve your trading.

Psychiatry, upon consultation, would probably diagnose a problem gambling disorder and disimprove it.

Take it easy,
Scientist
 
Quote from franklin:

Traders with marginal trading strategies always conclude that trading is all about psychology, since that is the only way they can get their marginal strategies to be profitable (i.e., they have too little room for error or undisciplined behavior).
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Wouldn't you agree that strategy showing very positive results in the testing period can still generate some uncomfortable feeling once traded with real $$?
 
Quote from wercurna:

Wouldn't you agree that strategy showing very positive results in the testing period can still generate some uncomfortable feeling once traded with real $$?
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Sure. I was just making the point that its not "all about" psychology, or that psychology is the #1 thing to worry about. This is similar to those who try to argue that entries don't matter, or that its all about money management.

Note Scientist's reluctance to talk about the details of his trading methodology, but his eagerness to talk about "psychology". Which do you think is really more valuable to him? His apparent studiousness, testing, and attention to detail impress me, but his need for attention, verboseness, and claims of psychological superiority do not.

Scientist: I like reading your stuff, and only about 25% of what you now say is total ****. :) The latest **** being your contention that the only real traders are the ones who trade large size in extremely short time frames. Ha! It would be fun to have you go back and document for us all the stuff that you now think is nonsense that you once spouted with such confidence on ET.
 
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