You are our new Guru!!
I'm reading the final chapter of Douglas, but he his view is from the conflict perspective...
Why Is The Obvious Not So Obvious?
- Thread starter nysestocks
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I'm reading the final chapter of Douglas, but he his view is from the conflict perspective...
I was under capitalized and was looking for screaming returns, so turned to penny stocks, and learned a hard lezzon on long term down trends. But I did start using a primitive version of The Obvious at that inflection in my equity curve. The shallower region was my old ABC-12 elliot wave trend pullback setup, and this was on a sub $20k account in about a year, trading very small.
"Everyone gets what they want out of the markets" said a famous trend following guru, who turned out to be a serious weirdo in the end. I would rather be a righteous human being like Gandhi (look at his eyes when he was a young lawyer and look at the beaming joy in him when he lived like a bum with his countrymen, resisting the british) than a rich pig. I think my own mind is out to get me, which is why I've abandoned several usable methods, two of which were automated.
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You are our new Guru!!
I'm reading the final chapter of Douglas, but he his view is from the conflict perspective...
Just about every trader is looking at the market like an arena for doing battle, but it's an instrument of capitalism and banking that is part of what made western countries so wealthy when the world left the dark ages. It all started with futures contracts for farm commodities. Jim Rogers explains it really well in the beginning of his book on commodities.
And like another (spiritual) guru, or the author of the book on the "carnegie secret", I have to cloak The Obvious, like the OP, because if I just left it out in the open it would probably turn everybody off. The foreplay will put your mind in a very focused state of desire, so you will pursue the prize and verify it when you find it. But trust me, when it's the real thing, you'll know it......
Unless I've misunderstood what you mean by trading with a "strong trend", then this would mean accepting that:
(a) you will always miss out on a big part of the move (the formative stage before it developed into a strong trend)
(b) you may be entering just as the trend is about to end, and possibly even reverse
(c) you will only ever be able to capture a portion of the entire move
(d) you will have to sit patiently, doing nothing, maybe for quite a long time, until a strong trend occurs
I doubt this approach would appeal to many (retail) traders.
Point (d) also incurrs an "opportunity cost". All of the time your chosen instrument is not strongly trending, you won't be making any money.
Obviously, you could use leverage to try and increase the overall return, and offset some of the opportunity cost, but there is another way.
There are rare elliott wave tacticians who use it to make trades and examine the progress of trends.
We've all heard of the guy who tried to call a top with a fifth wave count, only to get obliterated by an extension of the wave into the stratosphere, and in the days of central bank buying of securities with unlimited funds it can be a suicide mission to anticipate a turn with just a wave count.
But I'm convinced the elliott practitioners who take profits overall know "the obvious", and I'm sure I had it in the back of my mind during my ABC-12 days. The absolute best (and brief) period of super accurate entries I've ever had was when I was unemployed, rejected again after a job interview, and absolutely had to make money at trading. The elliot waves jumped out at me in a white hot state of burning desire. It all started the morning of the voice mail I received with the latest turn down. I realized there was no going back (even though I was wrong, engineering has been a hot career for decades). My mind just shifted gears that morning and did not shift out until a recruiter called me for my first ever contract job that paid more money than I had ever thought possible.
Then my brain just got sloppy, and forget everything it had been doing the few weeks prior.
The Obvious jumped out at me recently for the same reason, and now that Brandon's mandate has been impaled by the God fearing courts, I'm back at work, sloppily trading as before.
We've all heard of the guy who tried to call a top with a fifth wave count, only to get obliterated by an extension of the wave into the stratosphere, and in the days of central bank buying of securities with unlimited funds it can be a suicide mission to anticipate a turn with just a wave count.
But I'm convinced the elliott practitioners who take profits overall know "the obvious", and I'm sure I had it in the back of my mind during my ABC-12 days. The absolute best (and brief) period of super accurate entries I've ever had was when I was unemployed, rejected again after a job interview, and absolutely had to make money at trading. The elliot waves jumped out at me in a white hot state of burning desire. It all started the morning of the voice mail I received with the latest turn down. I realized there was no going back (even though I was wrong, engineering has been a hot career for decades). My mind just shifted gears that morning and did not shift out until a recruiter called me for my first ever contract job that paid more money than I had ever thought possible.
Then my brain just got sloppy, and forget everything it had been doing the few weeks prior.
The Obvious jumped out at me recently for the same reason, and now that Brandon's mandate has been impaled by the God fearing courts, I'm back at work, sloppily trading as before.
That's it!!
Not only am I going to quit my job, I'm going to give away half of what I own!
In all seriousness... Are you saying your perception changed? What you figured out initially, right before you got a job offer... the knowledge must be there no matter what right(once you figured it out)?
You seem to suggest you recently RE-discovered it?
Not only am I going to quit my job, I'm going to give away half of what I own!
In all seriousness... Are you saying your perception changed? What you figured out initially, right before you got a job offer... the knowledge must be there no matter what right(once you figured it out)?
You seem to suggest you recently RE-discovered it?
Unless I've misunderstood what you mean by trading with a "strong trend", then this would mean accepting that:
(a) you will always miss out on a big part of the move (the formative stage before it developed into a strong trend)
(b) you may be entering just as the trend is about to end, and possibly even reverse
(c) you will only ever be able to capture a portion of the entire move
(d) you will have to sit patiently, doing nothing, maybe for quite a long time, until a strong trend occurs
I doubt this approach would appeal to many (retail) traders.
Point (d) also incurrs an "opportunity cost". All of the time your chosen instrument is not strongly trending, you won't be making any money.
Obviously, you could use leverage to try and increase the overall return, and offset some of the opportunity cost, but there is another way.
To make things clear: I did not say that this would necessarily be a complete system. The specific question was related to entries and my point was that if a strong trend is present you can get away with even a sloppy entry.
(a / b) Well, like I said. If you have a valid way of recognizing a strong trend...
You obviously can't be too late and if it's a strong trend there should be more juice left when you enter.
(c) Does that matter...?
(d) Correct. You can monitor your screens while doing other stuff, though.
Sure. There's opportunity cost, but what if you had a really high win rate and knew you would pretty much win as long as you waited for conditions to be right? And could eliminate all the losses and frustrations you encountered when trading noisy or range bound markets?
If you have a consistently high win rate - that's something which scales.
I firmly believe that the ability to stay out when you don't know what's going on is a crucial skill in trading success, but it requires both patience and discipline. I do my best to not trade if I know I have something to attend to later on or if I'm feeling impatient. In the past, I've made trading mistakes when I start trading and really should be doing something else. I rush things and do stupid mistakes.
It's been said in this thread that The Obvious is something which is hard to do in practice even if you know what it is. So who knows...
1) high-risk/low-risk has nothing to do with RR or maybe I should have typed it the other way around. Same difference anyway.
2) yes and no.