Trading and broad market knowledge

R

rajesheck

Let me get straight. BROAD market knowledge had got NOTHING to do with ROI. What is needed to generate profits is DEEP trading skills.

I am NOT A BIG FAN of BROAD knowledge. I am a trader with only DEEP trading skills which i am proud of.

I see trading forums flooded with knowledgeable people. Its natural for them to be proud of their knowledge.

What these people "Dont Know That They Dont know" is broad market knowledge alone is USELESS in trading, though it is good for academic/analytical purpose ONLY.

More we acquire knowledge, more we get into "analysis paralysis".
More we develop skills, more we know what to do with the knowledge.

Yes...trading skill is all about ABILITY to APPLY the knowledge. Its totally a different ball game from just ACQUIRING knowledge.

Feel free to read my thread on "Trading Knowledge VS Trading Skill"
http://www.elitetrader.com/et/index.php?threads/trading-knowledge-vs-trading-skillset.298662/
 
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Next time when you encounter a knowledgeable person, ask him how he "applies" his knowledge. If he ignores your question then understand that he is a theory person :)
 
IMV... the best trading is done on "narrow market knowledge". That is if you can't explain your trade in 10 words or less, the odds of your being wrong go up.
 
I don't understand why you decided to choose one over the other when you really don't need to. Thus, use both broad market knowledge and deep trading skills to prevent getting tunnel vision when you concentrate too much on deep trading skills.

Having both is very useful especially if when the day arrives you need to adapt and do something else in your trading to prevent drawdown. For example, lets pretend you only trade trends or prefer to trade trends...that's a deep trading skill as you refer to. Unfortunately the markets don't always trend because it spends most of its time range, chop, noise or whatever that's not a trend.

Now pretend you've "broaden" your strategies so that you've become knowledgeable in trading ranges too. Guess what, you can now trade trends, ranges and you've now increased your number of opportunities and lesson the chance of not knowing what to do when the markets you thought was trending then decides to go range bound.

Therefore, deepen your trading skills but also broaden your market knowledge instead of doing one without the other.

P.S. Knowledge comes first...the skills then follows. It's impossible to be the other way around. Simply, you must first learn and understand (knowledge) the rules of the game before you can effectively play the game.

P.S.S. This reminds me when I was a teenager. There was this kid that was the best basketball dunker around. Nobody came close to his fancy types of dunks. It's an extreme skillset to have. Unfortunately, he didn't have a broad knowledge of the game. He often made turnovers when passing the ball, often didn't follow the coaches designed plays and poorly dribble the ball that resulted in more turnovers. That's why he never made it to the next level...college basketball. He only had a specific skillset and nothing else.

Just something to think about.
 
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Scataphagos said:
IMV... the best trading is done on "narrow market knowledge". That is if you can't explain your trade in 10 words or less, the odds of your being wrong go up.
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In other words "odds of being theoretical go up" :)

I can explain my trades as :
1. Trend trading
2. Counter trend trading
 
wrbtrader said:
Now pretend you've "broaden" your strategies so that you've become knowledgeable in trading ranges too. Guess what, you can now trade trends, ranges and you've now increased your number of opportunities and lesson the chance of not knowing what to do when the markets you thought was trending then decides to go range bound.
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We both are sailing on same boat :)

Your above example is skill oriented knowledge. Which comes under Deep/Narrow category !
 
rajesheck said:
We both are sailing on same boat :)

Your above example is skill oriented knowledge. Which comes under Deep/Narrow category !
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Yes, that's why I stated to you in another thread it may be just "semantics". Thus, someone expanding their knowledge in the markets (broad knowledge) can be the same as that person developing skill sets in many different areas instead of specializing in just one thing only.

Thus, we could be on the same page (same boat).
 
wrbtrader said:
Yes, that's why I stated to you in another thread it may be just "semantics". Thus, someone expanding their knowledge in the markets (broad knowledge) can be the same as that person developing skill sets in many different areas instead of specializing in just one thing only.

Thus, we could be on the same page (same boat).
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We may put it this way: Acquiring knowledge for applying or just analytical purpose ?
 
rajesheck said:
We may put it this way: Acquiring knowledge for applying or just analytical purpose ?
More...

This has been discussed for thousands of years. It's simply the old discussion of theory vs practice.

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For trading, you can't accomplish anything consistent without practice, but theory will as always be a useful tool to enhance and revolutionize your practice. So they really go hand-in-hand, since you newer can predict with 100% accuracy what knowledge will be useful or not. Ie. you don't know about what you don't know, and everything might build on that later someday.
 
A monkey can trade better than many than those who work for big funds at the right time, monkey in a bull market like 2009 can throw darts at newspaper to select stocks. He has no knowledge and has no trading ability. It just came to be in right time, and his owner bought the stocks.

Sometimes you don't need neither of knowledge or skills.

Hmmm breakfast time, in mood for banana oatmeal.
 
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