Quote from Davo:
Nevertheless........we should always show respect to a 28 year veteran trader like NoiseTrader. I've read his Manifesto and like what I see.
NoiseTrader, Thank you! I sit at your feet.
A few points:
1. Wyckoff said, "in order to master the markets, you must be their servant." We all sit at the feet of the markets, and they arbitrate what works and what does not work, what is real and what is not real. Davo. I'm glad your interested in my trading ideas and you're welcome to come along for the ride but I cringe at anything that smacks of guru status. That's goes against eveyrthing I know about the right state of mind. That is about getting the ego fed and that's not what I'm about. In fact, I think that puts one âwith formâ -- meaning that your thinking process start to get sticky -- attached to your own opinions which really undermines the objectivity that youâre trying to constantly sustain in order to read the tape and make decisons with a clear mind.
Along that same line, I'm not about to spend my hours engaged in fruitless rebuttals here. I send my trading ideas out nightly, I post the live action in a Yahoo conference and I update the results periodically. I do this in out-of-sample data and you can hunt with me, or not. These trades will accumulate in out-of-sample data and anyone following what my analysis and trades can simply validate the integrity of the ideas on their own.
2. I do not believe in mechanical trading systems, or at least I am not willing to trade with the drawdown required to execute that kind of approach. I use a raft of proprietary stuff to select a group of ideas then apply subjectivity, my own gestalt about what's going on in the markets. In this thread I'm going to provide detail about the ideas that I think works. I'm not going to divulge specific indicators in detail because thats counter-productive and they provide a hard-won edge. I try to write frankly about what's going on inside my head so I think you might enjoy that and you will learn a lot along the way.
3. I have a EXTREME amount of confidence in what I do. That can come across as arrogance. Arrogance also undermines objectivity, but being confident is a necessary part of trading for me, as I oiften hold core positions thru volatility.
4. I am not exposing my ideas to this hail of bullets for humanitarian reasons, although I enjoy sharing my experiences. A hedge fund manager is a trade who is using OPM (other peoples money) to leverage his abilities. In essence he has a call on other people's money. He takes his knowledge about trading and leverages what he knows by borrowing other people's money in exchange for a % of the upside. It functions like a call because he gets upside exposure with no downside. If he has some great years he pulls his 20% incentive off the top. If he draws down and his investors leave he does not share in the losses -- thats why it's a call. It's a very savvy thing to do, only he has to deal with an organization and clients badgering him about why he's flat when the market just popped 2%
I'm not a hedge fund manager, but I am interested in leveraging what I know and my abilities. I am not interested in operating a hedge fund and paying a lawyer $20K for that privelege then supporting that kind of organization. I offer to exchange where I see trades developing, where to take profits and how to manage risk with anyone who wants to come along for small fee. Anyone who follows my analysis, will see vast improvements in their trading. If this particular form of leverage seems unreasonable, or has less credibility than the hedge fund manager who has a call on OPM, then so be it.
