Trading In The Zone

Quote from Lamont_C:



Of course, the beginners cherry-pick quotes to disagree with. They invariably gloss over the underpinnings of Douglas's approach to finding the zone, which is the development of a consistently profitable trading strategy, mostly because developing such a strategy is work.



LC
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It'd be nice if you would agree with me at least once.
 
Quote from Mike805:

For fear of sounding like a mindless "dude" I can relate much of my athletic experience with trading. During high school and college I surfed competitively. Yes, I know it sounds silly to some of you who live removed from the ocean, but, here in coastal CA, surfing is actually quite developed as a profession. There are a handful who make an OK living via surfing.

Well, what does this have to do with being in the "zone"? Two things: an extra level of awareness and a subconscious ability to react given your surroundings. I've been surfing for over 16 years and via surfing I am quite familiar with the zone. From spending so much time in the water, my subconscious abilities became very well developed both in ocean knowledge and surfing form.

My knowledge base grew in reading conditions, swell direction, knowing a particular surf spot as it receives a swell from a certain angle with a certain period ~ all this knowledge (while acquired through years of surfing) doesn't really mean much when actually being in the water and catching a wave. I personally relate this to having all the theory and "knowledge" of market dynamics as opposed to actually having the skill required to trade/surf effectively.

The act of catching a wave, much like executing a good trade has all the same emotion/intuition involved. I am able to read the market clearly and without thought, I anticipate my signal approaching and I execute knowing the result before hand. Patience is the key. I wait patiently for a good wave as I do for a good trade signal. Wave selection in competition accounts for 50% of your score, if you aren't patient and wait for the better wave, your opponent will beat you even though his surfing ability may not be as developed. Simply put, the ocean doesn't always produce good quality, it takes years to identify quality waves and even longer to combine the "identify" aspect with the "execute" ability.

While surfing, I can see a wave approaching, while completely ignoring the crowd and other distractions I paddle into the correct position, position myself correctly in the peak (the point of the wave that is just about to break) and as the swell starts to produce momentum for me, I pop up. I know right away if this is going to be a good wave. The "pop-up" and execution on the wave (i.e. turns and maneuvers) are not preconceived, they are simple reactions to what my environment (i.e. the wave) is producing. There is no thinking, I hear almost nothing, there is no foresight, just pure reaction combined with ingrained muscle memory response. More than 80% of my surf sessions I experience this type of stimulus. The other 20% my mind is distracted, I am worried about family, women, something trivial like a unpaid bill, other times I am hungover and I cannot focus on my surroundings and I have a poor session. The same applies when I trade. The experiences are similar from a mental awareness/clarity requirement. Given challenging conditions the physical aspects of surfing are very demanding and frankly, physical fitness is a higher prerequisite. However, the mental aspects of trading are by far the most challenging I have encountered.

As a side note: for all you attempting to learn to trade; It took me over 6 years to become what I consider a "competent" surfer (i.e. I feel comfortable in most ocean conditions). I believe it takes at least that long, if not longer to become a "competent" trader. Its a simple matter of experience.
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Mike, that was really insightful. Thanks for sharing that.
 
Mike805

Excellent post

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Price movements are parametric waves...


As much as waves have varied parametric inertial movement....so do prices...


Excellent post Mike805...
 
Quote from jaronimo:

Mike, your surfing analogy sounds exactly like trading to me. Wave selection, knowing conditions, etc, that is the best comparison to trading I have heard. Learning ocean conditions at a glance takes years of experience, just like knowing the markets.
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And every once in a while, a shark comes around to take a bite off your board...
 
Quote from eusdaiki:

And every once in a while, a shark comes around to take a bite off your board...
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Thats why I don't surf. "Jaws" messed me up badly. Then while in the Navy I thought what better way to get over my shark phobia than to confront it head on by becoming a Navy diver. Plus it will be cool being underwater in tropical locales seeing cool stuff. Plus you get to wear a really big knife strapped to your leg. Whats the downside?

It sounded good in theory but then I spent a few years breaking the ice to get into the water. Swimming in harbors where the mud was so thick you couldn't see 1 inch. Then there was the pollution, you had to jam your ears full of vaseline in order to dive in naples harbor so the bacteria couldn't get in your ears.

Not like I planned. Plus I still fear sharks. But then again I do have some good stories to tell.
 
Quote from eusdaiki:

And every once in a while, a shark comes around to take a bite off your board...
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Never had a close shark encounter (knock on wood)... but I have surfed in conditions that just beat the shit out of me. During my recent trip to Indonesia I recieved a few permanent tatoos courtesey of the reef. Note these weren't as bad as one I got a few years back ~ that time I almost lost my nipple, along with most of the skin surrounding:). There have been many other eye opening encounters with the reef... good memories though.

If there is one thing the ocean can teach you is to never, ever feel invincible.... Market/Natural forces have about 1000 ways to remind you of how little you really matter - predators aside.

Mike
 
Quote from Mike805:

Never had a close shark encounter (knock on wood)... but I have surfed in conditions that just beat the shit out of me. During my recent trip to Indonesia I recieved a few permanent tatoos courtesey of the reef. Note these weren't as bad as one I got a few years back ~ that time I almost lost my nipple, along with most of the skin surrounding:). There have been many other eye opening encounters with the reef... good memories though.

If there is one thing the ocean can teach you is to never, ever feel invincible.... Market/Natural forces have about 1000 ways to remind you of how little you really matter - predators aside.

Mike
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Ok, I have changed my mind. Trading is not like surfing. You will never lose a nipple trading.
 
Quote from Lamont_C:

I find it interesting how experienced traders and beginners view this book differently. The experienced traders think Well, of course. Whereas the beginners think it's nowhere near that easy, what a crock, etc.

Of course, the beginners cherry-pick quotes to disagree with. They invariably gloss over the underpinnings of Douglas's approach to finding the zone, which is the development of a consistently profitable trading strategy, mostly because developing such a strategy is work.

The experienced traders, on the other hand, have put in the time and the effort and have such a strategy. Thus Douglas makes perfect sense.

LC
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Maybe they glossed over it because Douglas doesn't put that much emphasis on it himself. I haven't read this book but have heard it is like his previous one, 'the disciplined trader'. In which he states something to the effect that someone can buy an off the shelf method as there are many available. Pretty sure he also mentioned that the system doesn't even have to be profitable, as the focus was more on everything BUT the system. I'd have to re-read again to be sure.

I have read you mention how important a consistently proftable trading strategy is, while I agree with you, I don't think his book clearly emphasized that.

Kindest wishes,
MK
 
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