What's S&P Gonna Do Tomorrow?

[ddefina]

Looks like the fund managers are going for the sparkling October close with the market. Can they keep it up till the close tomorrow?

 

[dbphoenix]

Originally posted by OPTIONAL777
Spoken like a master trader.

Spoken like someone who's read a book.

--Db

 

[aphexcoil]

Originally posted by jem
aphie

Trade what you see, trade with the trend, cut your loses let your winners run, buy low, sell high. What does this mean.

I have checked out part of your journal and know that you have been properly humbled by the market. Now I ask you what does trade what you see mean to you. I would be impressed if you could answer the question. I was able to answer that question after a few years of trading. But what does it mean to you. This is not to put you down. After you answer I would like to hear other peoples thoughts on this statement.

At first I thought "trade what you see, not what you think" meant to simply trade what is going on -- but after observing, I've learned it really is more psychological than that.

Trade what you "see" and not what you think is all about unlearning previous biases and really learning to adapt to the market.

I have a major problem of going to a chart with a "bias" and then seeing those things that I want to see to confirm my bias. IBM was a good example. My bias was to short that, but in retrospect, the trend was obviously up for my timeframe.

It is really hard to go to a chart with an empty head (free from getting crushed in a long trade or short trade, getting angry at a bull mini-market when you just "know" it should be going down). So you take that predisposition with you and you want to feel like a bear, so suddenly every chart shoots bearish signals at you because you are placing your bias within the chart and not letting the chart tell its own story.

That will always be very difficult to do. Right now I want to say, "God, this market is stupid! Consumer confidence is horrible, people won't be spending as much money this Christmas and there are all these other concerns but its going in the WRONG direction!"

My 5k account pitted against a 50 trillion dollar market will never be right unless the market tells me I am right. There is no right or wrong here but it is very hard to accept that because I want to rationalize an irrational system.

 

[aphexcoil]

It is also EGO. Once you get past the *need* to be right, and once you can accept that you will often be *wrong* but can still be a good trader, then you start to mellow out.

I am going through that "mellowing out" process where I realized coming into this game, my need to be right was overpowering my need to make money. I don't *need* to make money but I *want* to make money -- but I obviously *needed* and *wanted* to be right all the time, so needs will supercede wants, and naturally it turned into a frustrating game of needing to confirm to myself that I am a good trader by always being right, while ignoring the simple fact that what was really taking place was a subconscious desire to reaffirm my "trading prowess."

Pushing that EGO brick out of my head is probably the hardest thing for me to do -- since I am modifying my reward structure. We do things in life based on rewards and punishment, and if *needing* to be right was more important than *needing* to make money, then losing money wasn't offering a strong enough punishment -- whereas being right on each trade was a strong enough reward to continue the destructive process.

That is why I have more winning trades but a lower account balance. I have succeeded in rewarding my *need* to be right by a higher win percentage, while sacrificing my money since it was obviously less important than my ego.

So I did some behaviour modification and now associate monetary loss with something that I do *need* and I am trying to push out my ego's need to be right more than it is wrong.

This, in my opinion, is paramount to successful trading (for me).