Trading INVERSLY

Quote from Scientist:



I think that a good trader would kick the sh*t out of a bad trader in a losing contest. The better trader would still win, even with reversed goals.

A good trader should not only know how to win, but particularly how to lose. If he doesn't, he's only half-accomplished. In that way, doing occassional losing contests could be extremely beneficial to improving trading performance!

Turning monitors, deliberately taking opposite trades - It's all BS!
Trading doesn't work that way.

Making a nice entry in the first place is a little bonus, but:
In the end, it's the proper stops and the exits that count. Nothing else.


Sincerely,
~Scientist


you are correct, scientist. however, there is such a thing as losing streaks that we all experience, regardless of ability--think of niederhoffer or tudor jones, when these streaks occur fading ones self can be a viable option. in addition, gallacher is not speaking of good traders, he speaks of the typical losing futures trader.

checked out the magazine in your signature line---- interesting--thanks !

best,

surfer
 
Most traders lose to the vig, the spread commisions, and slippage. What's left over is not enough to fade in most cases.

If you are THAT BAD, sure, you can fade yourself and make money. But it aint gonna happen so forget it.

Maybe brokers monitor the really bad traders and fade them , but like pulling yourself up by your own bootstraps, it's almost impossible to do on your own.
 
Quote from ptt:



the old proverb is, cut your losses and let winners run

this goes against human nature, which is to take quick winners, and to not take losses.

this is why discipline is so important, and why you must look at the risk:reward of the trade/method/system

This is the essence - it is 90% psychological, why would you trade against a system, method or idea that you thought was a winner to start with? The mind will play tricks.

To again prove the above quote - shorted the bonds at 118 02 - immediatly went up - did I take the loss - no, I sat through a 35 (almost $1100) tick drawdown, eventually came down and thankfully took one tick ($31.25). Then the market continued down and I left 47 ticks (over $1400) behind to paranoid to get back in for the rest of the day.

That is what the mind will do if allowed, and I did.

Make 'em pretty, Chris
 
Quote from DblArrow:



This is the essence - it is 90% psychological, why would you trade against a system, method or idea that you thought was a winner to start with? The mind will play tricks.

To again prove the above quote - shorted the bonds at 118 02 - immediatly went up - did I take the loss - no, I sat through a 35 (almost $1100) tick drawdown, eventually came down and thankfully took one tick ($31.25). Then the market continued down and I left 47 ticks (over $1400) behind to paranoid to get back in for the rest of the day.

That is what the mind will do if allowed, and I did.

Make 'em pretty, Chris

You should have traded INVERSLY my friend. You could have been rich by now. :D
 
Quote from bubba7:



As you hold throughout the trade all you have to do is follow the trend given to you by the market. Be on the correct market pace and the market tells you enough for you to know what the market is doing (trendwise). Just keep accomodating the situation.

Hi Jack,

That is so true, but why do we always fight to complicate that process?

gotta_trade
 
Quote from gotta_trade:



Hi Jack,

That is so true, but why do we always fight to complicate that process?

gotta_trade


I believe it is beause of how we relate to money. I do work very hard to communicate about "process", but I notice there is the continuing influence of fear in the moment.

To realize your potential, you have to climb higher. The notion of supression and all the other pictures you saw in this thread are not antidotes. They are just holding patterns for failure.

Lately, we have emerged into a new place where people do not connect money and their fears to the intellectual process of climbing higher.

It is the elegance of realizing that the only thing that stops the continuation of profits are "blockers" or as I call them "flaws" relative to continuation. As in the natural laws of physics, things continue until affected by something.

Once a person has a good set of signals for these flaws, they go to a kiss operation. It is a monitoring setting where so many things can be going on and they are continually digested as "okay". This is the opposite of Scientist's stuff. The only focus is on "flaws" as an advent. Once you turn over the flaw card, you act accordingly. For experts, the action is two fold usually: the relaxing overature of taking profits and the secondary action of beginning the creation of another stream of profits.

It is like two worlds. going with the flow continually (shering jobs with the market) or setting up continual fights with the market to beat it being controlling and supressing your feelings to engender personal discipline.

It is hard to imagine any strategy like set ups or edges or aquiring and using a vast set of elements designed to handle a collection of individual situations. I can see why this leads to "fighting". Each time a person thus usurps a job the market must do, then there is a fight. All fights end in people going out on stops. We know the market doesn't lose.

It is so repugnant to consider not using the market's roles and help. Lack of intellect and reason gets a person to a control orientation to "win and beat".

Half the posts here were "control" posts that ,as you say "started the fight". Fading your control is not a money making strategy.

The market's modus is "continuation" or "change". In the first, the market takes you in and out. In the second, the market periodically gives you profits and sets your path for the next set of profits.


In the ESmini the flow was serene and seamless lately: Monday contained seven trades and 26 points (four 5's and three 2's.); Tuesday was similar with alternating short, reversal to long and reversal to short (10, 10, and 8 for 28 points.)

What was being suppressed anyway; where was there a fight needed? Patience often is called for. We need patience because making money is slow each day; 26 to 28 points on only 5 contracts is only a 1,000 bucks an hour. 13,000 for two days.

The fighters and suppressors tell us they have drawdowns in the hundreds on a given day. They go out on stops as I understand it. Be a peacenik instead of a suppressor.
 
If the statistics say that somewhere around 80-90% of traders lose money, then one must do the opposite of what these losing traders are doing. My guess is that if you analyzed trading records of these losing traders it would probably show that they held the losers too long versus how long they held the winners-I know I was guilty of this during my first year of trading and it was the main reason for having losing days/weeks/months during that first year.
 
Quote from GapTrader:

If the statistics say that somewhere around 80-90% of traders lose money, then one must do the opposite of what these losing traders are doing. My guess is that if you analyzed trading records of these losing traders it would probably show that they held the losers too long versus how long they held the winners-I know I was guilty of this during my first year of trading and it was the main reason for having losing days/weeks/months during that first year.

This was true if day traders were losing to other day traders, but actually they don't. They lose to spillage, commissions and fakes of floor traders and big players. They lose to the market, not to other traders who fade them (or as people suggested here, fade themselves).

Here is a very basic example: Let’s say two traders (A and B) get opposite signals at the same time. Trader A buys at 1000 and trader B sells at 1000, both using the same firm 1/2 risk reward. The price goes down to 999, hit traders B stop-loss and then reverses and goes to 1001 to hit trader A stop-loss (assuming he did use a firm stop loss and did not move it to b/e). In any case both of them lost, the whole position or just the commissions and spillage.

Theses scenarios happen all the time especially in critical time of day. And this is how most unsuccessful traders lose constantly.

TM Trader
 
Quote from marketsurfer:

gallacher in his book "winner take all" suggests holding a "world cup of losers" where you win the prize by losing the most amount of money--his contention is that the losers would become winners in the market when trying to lose.

best,

surfer:)
An amusing thought, but the easiest way to lose money is to be an anticipatory reversal trader. You will always be on the wrong side of a market. Never do a reversal trade. Leave those trades for the trading Mozarts who can take money out of boths sides in a trend and not get lost.

A second good way to lose is to be a momentum trader who waits for confirmation. Just as when volume is at the maximum and you think the market is really going to breakout for a multiple point move, you are probably at a near term top.

Pattern traders also get squeezed alot. That's the third best way to lose. Rising markets are FULL of short entry points for people who are attracted to rounded tops or swing highs or double tops.
 
Quote from PuffyGums:

An amusing thought, but the easiest way to lose money is to be an anticipatory reversal trader. You will always be on the wrong side of a market. Never do a reversal trade. Leave those trades for the trading Mozarts who can take money out of boths sides in a trend and not get lost.

A second good way to lose is to be a momentum trader who waits for confirmation. Just as when volume is at the maximum and you think the market is really going to breakout for a multiple point move, you are probably at a near term top.

Pattern traders also get squeezed alot. That's the third best way to lose. Rising markets are FULL of short entry points for people who are attracted to rounded tops or swing highs or double tops.


OK, we now know your opinion about the best ways to lose, what do you think are the best ways to win?
 
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