This is hard to take...
- Thread starter retire45
- Start date
There is little doubt in my mind I will do well over time but I will build up based on the irrelevance of predicting and the folly of price levels.. I suppose if taking trades on the breaks of those TL's expecting a decline is "predicting" then yes I am predicting. But trying longs at 1630, 1625, 1616, 1612.. etc is the type of predicting I see as being VERY popular but to me a head-scratcher.
That's what she said 
It's not that hard to understand. Most traders are the type of people that dislike authority and being told what to do. That's why trading attracts them - they want to make their own rules and stick it to "the man".
Only problem is, the only way to make money in the markets is to follow "the man", not stick it to him. So when new traders show up, they always instinctively try to fight the trend to get a sense of psychological power from making the market turn and go the other way on command. Most of them do this subconsciously, whether they are aware of it or not. It's the rush of power you get when you pick the exact bottom and the market spikes right after you bought. It's the same allure that a gambler feels when placing his bets on the ponies or on sports - you feel a rush of power when you win, kind of like you're the one responsible for making it happen.
Fighting the trend is the #1 way that wealth is transferred from those who don't know how to trade to those who do. When the markets are static not a lot of wealth is being transferred because volume is low and price is not moving anyways. On the other hand when things are running, the newbs try to pick bottoms and tops, and the experienced hands follow the trend and take them to the cleaners.
Basically, that's the markets in a nutshell.
I placed my first trade in 1995, but I didn't really get serious about it until a few years ago... pretty much went through the standard learning curve that everyone goes through. In my opinion it's just a question of staring at the market for months and months on end until the patterns start to become familiar and you get the feel for them. Some people get it, some don't.
The most important quality is being able to analyze yourself. I'll tell you something else that seriously helped me, as an example of self-analysis:
I used to always fight the trend for the reasons that I mentioned in the previous post. But in addition to that psychological reason, I realized that there was another one: the color of the candlesticks I was looking at. I began to realize that part of the reason I was always fighting the trend was because I would see an opposite-colored candlestick show up as part of a retracement, and my mind would instinctively think "Green - must be going up!", or "Red - must be going down!". Of course it never was the end of the trend and I got killed, but when I realized that the color was affecting my judgement, I changed to white and gray candlesticks, and made a colored moving average that tracked price and was overlaid on the bars. That way when a retracement happened in an uptrend, I was looking at the structure of the price movement rather than the color of the bars, and the green MA was reminding me that the trend was still up. It made a big difference.
This type of thing is the main difference between successful and unsuccessful traders - successful traders start out making mistakes but learn to analyze themselves and take steps to correct the root of the problems. Unsuccessful ones just keep doing the same wrong things over and over again without learning.
It's just a matter of semantics. "Predicting" is usually an evil word around here, but that's what we are doing everytime we put on a trade. Afterall, we wouldn't put on a trade, with expectations of a loss. So, predicting, gambling, experience, expecting, whatever one prefers/feels most comfortable with. Good trading, bro.
The last two weeks smell like upcoming distribution and Sept. may not be kind.