Why Is The Obvious Not So Obvious?

[nysestocks]

Quote from MoneyMagnetDude:

Price of a stock is LOW for one reason: supply is greater than demand.
Now if one buys LOW, one needs to be sure that demand for that stock will be greater than supply at some future time. If this is the "obvious" that you'd been driving at, then how does one know the demand will be greater than supply at some point in the future?

Thanks and regards

MMD, the best thing to remember is that there are "no experts" in the trading game, even though many think they are so!

Buying Low means you buy when the price has fallen to a certain level.

And, you will never really know if the price will fall a small bit lower or a good bit lower!

But, you can put yourself in a position where the chances of the price falling a good bit lower are a good deal less than they might otherwise be!

Opposite for selling.

Supply and demand is very subjective - for how do you know if a big player is about to put in an order to buy $100+ Million in a stock and that player may not have traded that stock for the last 6 months, or even longer!

Volume can be very misleading, and that is why I rarely use it, and when I do, it is only on one specific timeframe!

BTW, what has a big impact on your trading results is your chosen timeframe to trade - but that should be obvious to all that have tried out live trading.

 

[TraderD]

The 2 charts are rotated PNF charts (of price)

the 2nd chart seems to have more noise.

i can see obvious, but not obvious which is not obvious

 

[nysestocks]

Quote from MoneyMagnetDude:

capital managment

It is far more important to get the entry right, than the exit!

Why is that you may ask?

Simple!

If you get the entry right you win - If you get the entry wrong you lose!

You can concentrate on your exits when your ratio of good entries to bad entries is about 7:3.

But wait, many will tell you that you can make money with a good system that has only a 4:6, or even a 3:7 ratio, and that the profit is made by good exits!!

Well, as I might have mentioned before, give me the last 200 trades and I will easily show you how stupid and silly this way of thinking is!

If you CAN make money with a 4:6 ratio, then imagine what you can do with a 7:3 ratio

For Pig Iron, let’s say the market averages me 5 stock trades per day with a $200 max risk per trade.

And let’s say that my average profit target is $0.80.

How much capital do I need to use - easy answer!

What is my weekly drawdown - easy answer!

How much can I make in a week - need to think about this one!

What am I missing

 

[nysestocks]

Quote from MoneyMagnetDude:

You use options to leverage your bet?
Could you recommend the risk/reward ratio to be used?

Thanks and regards

NO - options are a wasting asset, so the odds are stacked against you from the start if you buy options.

Selling options is a very risky business, unless you have buckets of money, AND know how to adjust positions to stay delta neutral.

Last week was a great time to buy S&P Call Options, but it was also a great time to buy S&P Futures contracts!

 

[Johno]

Quote from nysestocks:

MMD, the best thing to remember is that there are "no experts" in the trading game, even though many think they are so!

Buying Low means you buy when the price has fallen to a certain level.

And, you will never really know if the price will fall a small bit lower or a good bit lower!

But, you can put yourself in a position where the chances of the price falling a good bit lower are a good deal less than they might otherwise be!

Opposite for selling.

Supply and demand is very subjective - for how do you know if a big player is about to put in an order to buy $100+ Million in a stock and that player may not have traded that stock for the last 6 months, or even longer!

Volume can be very misleading, and that is why I rarely use it, and when I do, it is only on one specific timeframe!

BTW, what has a big impact on your trading results is your chosen timeframe to trade - but that should be obvious to all that have tried out live trading.

NY it's hard to figure out whether you are playing cat and mouse or whether you do in fact have market truths to share. Many times just as in this post you hint at a basic truth and then veer away!
Markets are overpriced and underpriced in most time frames (think Price Action), the ability to take advantage of these situations by using the best RR timeframe will improve your chances of being successful.
Note- the answer is not found in Charts or Indicators!

Regards

Johno

 

[nysestocks]

Quote from MoneyMagnetDude:

Because emotion gets in the way. So one needs to locate one's comfort zone according to what one finds in practice trading the chosen instrument. And then to come up with the parameters to control risks(loses) that can happen to one's capital.

One take on what Morpheus said is:

Unless I can do what I know, it is of no use to me!

Now you will begin to see why there are so many "experts" in the trading game!

But, the reality is that they are not experts, as the game is such that it is not possible for it to be so!

In order to understand what it is you are trying to do - you must understand what it is you are doing!

The only way to really understand anything, is to do it, so that you become aware of what it is!

When you become aware of what it is, only then can you make changes to change how it is you interact!

This to me is very simple, why it is so hard for so many is just beyond thinking - but as most do not want to think for themselves, then it is easy see why this is so:eek:

 

[nysestocks]

Quote from MoneyMagnetDude:

One cant control the outcome of the stock direction, but one can control how much the bet is.

Thanks and regards

Of course - if you have $5K and bet $2.5K per trade, then if you get the first 2 trades wrong you are out!

If you bet $100 per trade, then you will have to get 50 trades in a row wrong before you are out.

So, it should be obvious that if all I have is $5K, then I am far better off risking the $100 per trade.

Hmm, if I am to risk only $100 per trade, then I better learn how to daytrade with low risk!

The chances of getting 50 trades wrong in a row, even for a blind person that trades, is very slim

 

[nysestocks]

Quote from TraderD:

The 2 charts are rotated PNF charts (of price)

the 2nd chart seems to have more noise.

i can see obvious, but not obvious which is not obvious

Yes.

Yes.



I will be more specific.

What markets are the 2 charts of - they are completely different markets!

 

[nysestocks]

Quote from Johno:

NY it's hard to figure out whether you are playing cat and mouse or whether you do in fact have market truths to share. Many times just as in this post you hint at a basic truth and then veer away!
Markets are overpriced and underpriced in most time frames (think Price Action), the ability to take advantage of these situations by using the best RR timeframe will improve your chances of being successful.
Note- the answer is not found in Charts or Indicators!

Regards

Johno

I have no time for basic truths, as the markets do not have any such people running them!

I know that what they preach and make available is nothing short of lies and deceit.

It is better to leave valuations and predictions to the "experts"

Me, and my like, well, lets just say that we are the magicians of the stock market.

To many, we can make it seem impossible, but to the few that know, it is as easy as pulling a rabbit out of a hat, or making an Island disappear - take your pick, the illusion is yours to chose!

 

[TraderD]

Quote from nysestocks:

Yes.

Yes.



I will be more specific.

What markets are the 2 charts of - they are completely different markets!

how can one guess the market?

these charts could represent even the same market, but with different size of PNF box

the markets may be guessed (by someone good) if you tell more about size of box and how you have chosen the box size for each market