Trading Pearls

[Lojanica]

Quote from 1a2b3cppp:

All I'm saying is most of the "gurus" on ET who give the most advice actually have no idea what they are talking about...


I basically do everything the opposite of what you're supposed to do. I buy in down trends, I sell into up trends. I average down. I have long and short positions open at the same time. I hold through way more than 2% equity drawdown. etc.

But that's how I do it. If other people can make trendlines, or MACD, or whatever work for them, then more power to them.

I trade pretty non-directionally because I cannot predict direction. Like I always say, if I could, I'd be throwing dozens of ES contracts on at a time and making 4-5 figures per day. But until I learn how to do that, I'll do it my way.

There is no universal advice in trading, I don't think.

Even though a lot of people say "indicators don't work" (and in my experience, which includes years of backtesting and developing my own, they don't), that doesn't mean there's not necessarily someone out there who can use them profitably.

OK. Thanks for the contribution.

No one is selling anything here. The thread is free for Elite Traders.

I do take issue with saying courses are worthless. I believe they are part of the path. I've learned something from every endeavor paid for or not. I also lost great sums by ignoring "sage advice" that I paid for but perhaps those are lessons that everyone must endure or perhaps my skull is thick.

In any event I like your counter to the crowd style. You have developed a style that works for you and that is the next pearl.


OWN YOUR METHOD.

If you understand every facet then it is easier to follow and understand and not follow when and if the time comes where you're confronted with an abnormality. Not every system works at all times and perhaps that is what you were saying in so many words. If you could decide when to use which method you'd be pulling out 4 and 5 figures per day or for others 3 to 4 figures, and still others 5 to 6 figures per day......

 

[1a2b3cppp]

Quote from Lojanica:


If you understand every facet then it is easier to follow and understand and not follow when and if the time comes where you're confronted with an abnormality. Not every system works at all times and perhaps that is what you were saying in so many words. If you could decide when to use which method you'd be pulling out 4 and 5 figures per day or for others 3 to 4 figures, and still others 5 to 6 figures per day......

Oh of course. If you could predict ahead of time if it was going to be a trendy day you could just trade in the direction of a relatively fast HMA and make money all day.

And fade BBands if it was going to be a choppy day.

 

[LEAPup]

Quote from Zr1Trader:

Watching many markets at one time eg. Oil, 6e, 6b, dx, ES, NQ, YM, GC, SI, ZB, ZN,

Helps to see the overall picture of where the money is moving. Gives one more of the big picture of what is happening at the moment. One can get some nice warnings from other markets. Also , concerning time of day, one can see the effect of one market closing compared to the other markets that are still open.

I can see the logic behind what you monitor. Btw, how many monitors are you using to watch these markets? And from your name, are you a ZR-1 owner? I love that car! 638HP stock, and gets 24mpg! Amazing!

I had a C6 vert mn6 with a Vortech blower, headers, borla exhaust, and larger injectors. Miss that car.

 

[logic_man]

The trick to trading is to develop a strategy which FORCES you in to the market before the bulk of the move you are want to catch is done. Not that you will be profitable on every trade or every trad will be a huge winner when it is profitable, but you will catch all of the market's "fat tails" in your favor.

Once you develop a profitable strategy, you should never stop dissecting your results to find the unprofitable subsets of trades within that strategy, so long as those trades can be identified with objectivity.

Long and short trades have to be managed differently.

The ideal scenario for a retail trader is to be "the smartest dumb money".

The market has its own logic. Substitute your own individual logic for the market's at your peril.

 

[logic_man]

Quote from Lojanica:

This thread is about trading pearls.

Time of Day is important.

Traders focus on price action which is king but in the King's Court lies Time of Day. That is WHAT Price Action is doing at WHAT time of day is more important than either independent factor alone.

News is released at certain times, programs are initiated at certain times, algorithms reassess at certain times, volume can often tell you what times are important. Time of day is so important that companies and Gov't entities analyze at what time to release news and data. Something to ponder.

One of the best tools I've developed for filtering trades is an adjustment factor based on time of day. That thing keeps me out of fake moves all the time and let's me trade 24/7 without worrying about the discrepancy between AH and RTH. Unless you're the kind of trader who's looking to catch a tick or two or three, you absolutely have to be aware of the time of day and how it impacts the size of the market's moves.

 

[Lojanica]

Quote from jhiro:

Scared money don't make money.

True. Like today after the "Mini spike meltdown". Buy it because after a few minutes it was clear support was solid at 1295/1300 and a retrace was inevitable.

 

[nonlinear5]

Quote from logic_man:

Long and short trades have to be managed differently.

This seems straightforward after the fact, but it took me about five years to realize it.

 

[Lojanica]

Quote from nonlinear5:

This seems straightforward after the fact, but it took me about five years to realize it.

OK. Can you fill in with a little more advice. How?

Thanks!!!

 

[nonlinear5]

Quote from Lojanica:
OK. Can you fill in with a little more advice. How?
Thanks!!!

I had been developing automated trading strategies, and my approach was essentially this: if certain thresholds were exceeded, the strategy would take a long position, and if the same threshold were exceeded on the other side of the spectrum, the strategy would take a short position. The same thing with the exits. That is, the underlying assumption was that the market movements (up and down) were symmetrical with respect to my conditions. In the more commonly understood terms, think of a simple MA crossover strategy. When the fast MA is above the slow MA, you buy, and when it's the opposite, you sell short. Same thing here, the assumption is that the market moves symmetrically up and down in response to these crossovers. In reality, it's well understood that the price symmetry is not there. The down moves are generally faster than the up moves. There are numerous implications deriving from this fact, and one of them is that the duration of the short trades (that is, the time while in a given trade) can be much smaller than the duration of the long trades, while you realize comparable reward/risk ratios. Thus, the entries and the exits (and even the indicators) have to be treated differently depending on whether the strategy is trading from the long or short size. Ultimately, I separated my strategies into the "short only" strategies and the "long only" strategies, and everything fell in place. They are running totally independently, using their own indicators, conditions, entries, and exits.

 

[Zr1Trader]

Quote from LEAPup:

I can see the logic behind what you monitor. Btw, how many monitors are you using to watch these markets? And from your name, are you a ZR-1 owner? I love that car! 638HP stock, and gets 24mpg! Amazing!

I had a C6 vert mn6 with a Vortech blower, headers, borla exhaust, and larger injectors. Miss that car.

I use two 23 inch monitors with 6 markets on each screen. Then from there I can tell by blending candlesticks ect if I'm getting a signal on a different timeframe. My signals are pretty rare but effective so that is the reason I monitor so many different markets.

ZR1 does imply the vette, I don't have one yet but will eventually.

Your vette sounds awesome, that is almost exactly what I would do to it.

At the moment I have a 94 z28 camaro ony 50k miles on it yet. Got it for 4k from a police auction, It was an undercover narcotics car (b4c) steal of a deal. I put some things in it. Headers, Custom true dual exhaust, vette wheels and tires 17", shot of NOS in case I feel like racing some big boys. Saving for that vette!