This time it's different..

NoDoji: you are just brilliant.

Trading off of pure price action and shelving your unvalidated opinion is not only superior strategy, it is actually very liberating and over the course of events it will save your emotional resources. Why? Unvalidated opinions require alot of emotional capital, and defending or validating your opinion requires a tremendous amount of psychological steering between ego and doubt issues.

Trading is just so much easier if you can re-direct those mental resources towards finding places to trade in concert with price action.

Timing a market with an opinion which is NOT validated by technical price action is just reckless and in the end, futile and expensive. A waste.
 
Quote from bone:

NoDoji: you are just brilliant.

Trading off of pure price action and shelving your unvalidated opinion is not only superior strategy, it is actually very liberating and over the course of events it will save your emotional resources. Why? Unvalidated opinions require alot of emotional capital, and defending or validating your opinion requires a tremendous amount of psychological steering between ego and doubt issues.
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Well, let's indulge in mutual admiration, because anyone who has lost/is losing money trading knows in their heart that what you say here is spot on.

Trading is so relaxing and rewarding now that all the emotional and psychological baggage is out of my hands! I'm frequently surprised when a trade I take based on price fulfills my minimum profit target (or better) despite my opinion being the absolute opposite.

Someone on ET once made a comment about following a trend despite having a rational fundamental opinion to the contrary: "Just hold your nose and buy." :D
 
Quote from Nine_Ender:

I traded in the 1990s and today's market is more like mid-1990s then any other time period the last 30 years. You need to learn the basics of most bull markets I've been saying they last a minimum of 3-4 years over and over again.

Valuations based on current earnings are quite modest still. The only reason people haven't driven equity prices much higher is the economic worries like foreclosures ( this is all priced in though ). This is the give and take on the way up but a P/E of 14 for the S&P is not even close to expensive. And earnings are growing every quarter.

You don't seem to understand how important earnings are to markets. All the "POMO" chatter on this site is way overdone, as Maverick says look at market performance elsewhere in the world. In Canada, we don't have POMO, any government bailout programs have been fairly minimal since 2009 ended ( eg we helped bail out GM/Chrysler ). Our markets outperformed US markets every year for 7 years.

I don't know why you are obsessed with collapses they happen far less often then you seem to think. Someone taking your viewpoint in the mid-1990s had 4-5 more years of wondering why markets keep rising. Eventually, things got out of hand in technology. Lot of money to be made before the bubble formed.
It was very obvious when it existed though, with firms with no revenues and profits going up in price every week. We are nowhere near such a situation. IPOs were crazy.

Nothing about today's market is like 2007. Not even investor psychology, too many people got out at the bottom and are pissed off at so called "experts" who told them to sell. You can keep saying "sell, sell, sell" but nobody cares. You make that your motto and if it works out for you well congrats you guessed a retracement. Its a free world take your shot sometimes guesses hit.

Eventually, some of you have to realize when a market rises 20% or more from the point you called a correction, even if there is a 10% correction you're still in a hole. You lost money chasing a home run. So much easier buying into the rally. If only you could have turned your thinking around 6 months ago you'd be doing very well right now.
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Right on... in the latter '90's the S&P 500 PE was on the order of 23 or so... earnings are rising too so if earnings rise and people buy stocks on the way up until they are overvalued it's a double whammy to the upside...

I recall the commentators from the mid '90's onward to the latter part of the decade saying that the market couldn't sustain such "nosebleed" levels.. I saw that word "nosebleed" so many times I stopped reading commentaries...
 
"Trade what you see, not what you think", if you can do it consistently, will make you a lot of money I am sure. However, I think some trades, specifically longer trades (several months or years), will require some degree of "commitment" to the trade idea for you to not be shaken out. And this commitment or bias cannot come from charts alone but will require, in addition, an analysis of news flow, sentiment, opinions, etc.
 
Quote from SymTrader:

"Trade what you see, not what you think", if you can do it consistently, will make you a lot of money I am sure. However, I think some trades, specifically longer trades (several months or years), will require some degree of "commitment" to the trade idea for you to not be shaken out. And this commitment or bias cannot come from charts alone but will require, in addition, an analysis of news flow, sentiment, opinions, etc.
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I can't agree more. Trading the bigger picture is indeed more a question of commitment and also a willingness to let go. Sadly we are greedy and hopeful at the wrong times. For example, when you enter a trade, you obviously hope that it will be profitable. Do a mental switch. You have to fear that the market will go against you instead. This will make you respect risk and set a protective stop at all times.

On the other hand, when you are in a good trade and observe a pullback and consider to close it, you have to be greedy and hope for it to turn around. This will prevent emotions from taking over your investment decisions.
 
Quote from NoDoji:

And here's yet another secret: If you let price instead of bias take you into your trades, your probability of profiting increases dramatically.
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Words of wisdom. Cardinal rule.
 
Quote from SymTrader:

"Trade what you see, not what you think", if you can do it consistently, will make you a lot of money I am sure. However, I think some trades, specifically longer trades (several months or years), will require some degree of "commitment" to the trade idea for you to not be shaken out. And this commitment or bias cannot come from charts alone but will require, in addition, an analysis of news flow, sentiment, opinions, etc.
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I think that's a copout for saying I refuse to admit that I'm wrong. I see no reason why any man of average intelligence or higher would sit in a losing position for months or years because he is "committed"?

Let me ask you something, would you stay in a bad marriage for years and years and years because you were committed? I'm sorry, I just don't think anyone is stupid enough to risk blowing out their account for something so stupid.

I'll give you some good advice and I'm not trying to be a jackass here. I have talked to a lot of guys about this and I've always suggested to them that if you can't trade, you should give your money to a manager that believes in the same idea or theme that you do and let him do it. This way you will never get stopped out, you never have to watch your position and at the end of the day, he will probably trade it better then you anyway and won't be held to the same emotions you might be. This could be a mutual fund, RIA, hedge fund, CTA, whatever. You will have far better success then you having to look at your account every day while your position is going against you and probably will end up with a margin call at the inflection point.
 
You are implying that SymTrader meant commitment to a losing position, Maverick74 (hoping for a turnaround). That would be indeed reckless. I was assuming he meant commitment to a winning position. So what was meant?
 
Quote from Palatine:

You are implying that SymTrader meant commitment to a losing position, Maverick74 (hoping for a turnaround). That would be indeed reckless. I was assuming he meant commitment to a winning position. So what was meant?
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Here is what he said: "However, I think some trades, specifically longer trades (several months or years), will require some degree of "commitment" to the trade idea for you to not be shaken out."

I think we all know what that means.
 
Quote from Maverick74:

I think we all know what that means.
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Nope, we do not. You are riding an uptrend garnering tremendous profits and suddenly you witness a vicious sell-off. Do you close out and get "shaken out" in fear, or do you stay committed to the position and hope for it to recover for even higher highs?

Long story short, you can interpret it both ways depending on your bias.
 
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