Why Is The Not So Obvious Obvious?
- Thread starter OddTrader
- Start date
To create your own example:
Watch a chart until you see a perfect setup..................one that you have 100% confidence in & one that you feel completely comfortable taking.
Make sure your stop order is far enough away that it won't get hit by noise.
Make sure technical analysis or price action confirms your position.
Everything has to be completely perfect; otherwise don't take the trade.
About 10 seconds after you are filled your trade will be in the red. A few minutes later you & everyone else who saw such an obvious trade are all stopped out.
I know this works from personal experience.
Quote from macattack:
To create your own example:
Watch a chart until you see a perfect setup..................one that you have 100% confidence in & one that you feel completely comfortable taking.
Make sure your stop order is far enough away that it won't get hit by noise.
Make sure technical analysis or price action confirms your position.
Everything has to be completely perfect; otherwise don't take the trade.
About 10 seconds after you are filled your trade will be in the red. A few minutes later you & everyone else who saw such an obvious trade are all stopped out.
I know this works from personal experience.
Great post. Pretty much sums it up. So, the obvious is to......
The obvious is that whoever started the other thread, "Why is the Obvious Not So Obvious?" was paid to post on this site to generate some activity, because no matter what anyone said there was never a correct answer. (Now if someone wants to prove me wrong & send me the answer to the question I would really appreciate it).
So Why Is "The Not So Obvious" Obvious...................................maybe because it's not so obvious to the amateurs, but it's obvious to the select few that end up with all the money at the end of the game.
So Why Is The "Obvious" Not So Obvious..................................maybe because the situations which look so incredibly obvious to the amateurs become nothing more than traps which take from the poor & give to the rich.
Quote from macattack:
To create your own example:
Watch a chart until you see a perfect setup..................one that you have 100% confidence in & one that you feel completely comfortable taking.
Make sure your stop order is far enough away that it won't get hit by noise.
Make sure technical analysis or price action confirms your position.
Everything has to be completely perfect; otherwise don't take the trade.
About 10 seconds after you are filled your trade will be in the red. A few minutes later you & everyone else who saw such an obvious trade are all stopped out.
I know this works from personal experience.
And, to add insult to injury, the trade you don't take is the one that's positive from the start...
Outstanding post there Red.
Folks, what he's basically saying is that markets are PERVERSE and that perversity will dog ALL traders mot of the time.
Therefore to make money OVERTIME you have to first accept the perversity then USE IT TO YOUR ADVANTAGE.
How do you do that? Simple, just do as Red says, look for areas on the charts where you know people are getting fukked. Then look to go the other way. This won't work if you use a machine gun to trade, ie splattering trades around the market all the time. Instead you need a one (or 2) shot sniper rifle plus a lot of PATIENCE.
Want an example?
Go look at a 5m chart of Cable, last Friday at 4pm London time. See the big low at 13:45, that's a reference point. There's no trade there but it's something 'interesting' to note. See how they move the market higher at 15:10 and stop a lot of shorts out and longs in. Then BAM, they boys smack it down through the stops at 1.5990 - that's PAIN right there + perversity. Perversity because the move was all about setting the market up to rise so it's no surprise we got the rally into the close.
I was watchin this one and I admit it was hard to get onboard I couldn't as price moved too sharp and I couldn't get a good stop in (too big). But it's the 5m chart so others will happen.
Thi sort of strategyworks in all timeframes.
PS. One further clue abouthowto spot these trades - look for the thrust, the sharp movement, when that happens PAY ATTENTION.
PPS> Even if you know this sort of strategy it's a) noteasy, and b) takes time to both learn and put into practice. My motto is this - he who concentrates the most makes the most, concentration is therefore a big edge.
Good luck everyone this week in the markets.
Folks, what he's basically saying is that markets are PERVERSE and that perversity will dog ALL traders mot of the time.
Therefore to make money OVERTIME you have to first accept the perversity then USE IT TO YOUR ADVANTAGE.
How do you do that? Simple, just do as Red says, look for areas on the charts where you know people are getting fukked. Then look to go the other way. This won't work if you use a machine gun to trade, ie splattering trades around the market all the time. Instead you need a one (or 2) shot sniper rifle plus a lot of PATIENCE.
Want an example?
Go look at a 5m chart of Cable, last Friday at 4pm London time. See the big low at 13:45, that's a reference point. There's no trade there but it's something 'interesting' to note. See how they move the market higher at 15:10 and stop a lot of shorts out and longs in. Then BAM, they boys smack it down through the stops at 1.5990 - that's PAIN right there + perversity. Perversity because the move was all about setting the market up to rise so it's no surprise we got the rally into the close.
I was watchin this one and I admit it was hard to get onboard I couldn't as price moved too sharp and I couldn't get a good stop in (too big). But it's the 5m chart so others will happen.
Thi sort of strategyworks in all timeframes.
PS. One further clue abouthowto spot these trades - look for the thrust, the sharp movement, when that happens PAY ATTENTION.
PPS> Even if you know this sort of strategy it's a) noteasy, and b) takes time to both learn and put into practice. My motto is this - he who concentrates the most makes the most, concentration is therefore a big edge.
Good luck everyone this week in the markets.
One really obvious â is how hard the obvious is to figure out â NOT
Instead of wasting time worrying the mkt is out to get your assâ¦, why not spend that same time watching price â learning to decipher its intentions (from its actions) â trading it accordingly
inâ¢tiâ¢mate
[in-tuh-meyt] Show IPA
verb (used with object), inâ¢tiâ¢matâ¢ed, inâ¢tiâ¢matâ¢ing.
1.To indicate or make known indirectly; hint; imply; suggest.
2.Archaic. to make known; announce.
This shit really ainât that hardâ¦, which btw is another obvious
RN
Instead of wasting time worrying the mkt is out to get your assâ¦, why not spend that same time watching price â learning to decipher its intentions (from its actions) â trading it accordingly
inâ¢tiâ¢mate
[in-tuh-meyt] Show IPA
verb (used with object), inâ¢tiâ¢matâ¢ed, inâ¢tiâ¢matâ¢ing.
1.To indicate or make known indirectly; hint; imply; suggest.
2.Archaic. to make known; announce.
This shit really ainât that hardâ¦, which btw is another obvious
RN
I'm not so sure about, "This shit really ain't that hard...", but I don't have a final conclusion yet.
The market isn't out to get anybody, but it pays to watch & make a bet when it looks like a bunch of traders are about to experience a nice juicy stop run.
It seems like no matter what specific method you follow when it comes to reading price action about 1/2 of the obvious setups are valid and the other 1/2 are traps.
It pays to know the difference. When all of the traders who find trading difficult are about to get screwed by the market once again you might as well take their money.
Iâll lay ya a dollar to a dozen doughnuts these stop runs youâre referring to;
Occur at times when volume is lacking
Or when price is back and forth volatile
Or when price retraces just before a major move
Iâm not disagreeing they exist⦠but in the first two scenarios â sit on your hands till you get a clear read
For the third â re-enter
As for the traders who buy topsâ¦, sell bottomsâ¦, and fades the current move â they have different issues
====================
Can/ would you please explain what that looks like / how you know (because straight upâ¦, I donât think you do)
And if youâre hesitant thinking it may divulge something â Iâll respect that â but nonetheless â think through it and prove to yourself you really do knowâ¦
Because unless these traders are posting their stops on the exchange â which I doubt they are â youâll never see em
You can certainly make an educated guess where these stops reside â but that is far from "knowing"
And if you in fact do know â why are you not exploiting that knowledge (rhetorical)
Like I said â I have my doubts
(and for the record I don't know - so / and, when a bar fires off - I never "know" if its stops being hit.., or entries - but it doesn't matter...
Because the result is the same - price moves in that direction - and then it becomes a matter of others joining the fracas - or not...)
Fact about Stops btw â they must be placed where that trade fails â otherwise its pissin money away
=====================
Also, would you mind sharing your definition of PA Sir â this may be where some of the disconnect is
Again if you would rather not - I'll respect that
======================
Cut through some of the myths - maybe we can focus on the truths
Just maybe
Thanks
RN
Occur at times when volume is lacking
Or when price is back and forth volatile
Or when price retraces just before a major move
Iâm not disagreeing they exist⦠but in the first two scenarios â sit on your hands till you get a clear read
For the third â re-enter
As for the traders who buy topsâ¦, sell bottomsâ¦, and fades the current move â they have different issues
====================
Can/ would you please explain what that looks like / how you know (because straight upâ¦, I donât think you do)
And if youâre hesitant thinking it may divulge something â Iâll respect that â but nonetheless â think through it and prove to yourself you really do knowâ¦
Because unless these traders are posting their stops on the exchange â which I doubt they are â youâll never see em
You can certainly make an educated guess where these stops reside â but that is far from "knowing"
And if you in fact do know â why are you not exploiting that knowledge (rhetorical)
Like I said â I have my doubts
(and for the record I don't know - so / and, when a bar fires off - I never "know" if its stops being hit.., or entries - but it doesn't matter...
Because the result is the same - price moves in that direction - and then it becomes a matter of others joining the fracas - or not...)
Fact about Stops btw â they must be placed where that trade fails â otherwise its pissin money away
=====================
Also, would you mind sharing your definition of PA Sir â this may be where some of the disconnect is
Again if you would rather not - I'll respect that
======================
Cut through some of the myths - maybe we can focus on the truths
Just maybe
Thanks
RN
The market as such is not out to get anybody but the market participants sure are because a) they want your money, and b) want your actions to i) provide the gas to move their positions into profit, and ii) to create their offsetting orders (bids in which to cover into assuming they're long).
Those stop runs normally do 2 things, first they force many out, ie their positions are 'stolen' into the hands of the strong. Now the weak are out and not onboard the move they originally forecast many of them will have to go long again so creating more buyers than sellers, so moving price higher. That buying also offers bids for the ones who bought around the lows to sell into. Plus, on the move down shorts will have entered and in order to cover they're going to have to buy so adding more buyers to the mix and helping price to rise.
A great trader once told me - never laugh or disrespect the losers, without them it's hard to make good money as it would be shark against shark and you're never going to be as big or as good as the bigger sharks out there.