No text book is going to be able to read the emotions of the sea of suckers whom, unbeknownst to them, always get shaken out for the same basic reason. You would think they would learn not to chase the waves right onto the rocks!
Why Is The Obvious Not So Obvious?
- Thread starter nysestocks
- Start date
Hi all, I don't know if "the obvious" the OP is talking about is "the obvious" for every successful trader. Maybe many traders know it but they are not aware the OP calls it "the obvious". "My obvious" is that the price chart shows you the direction of price objectively. It is obvious to me that the only way to make money is to follow price.
I don't know how much more obvious or more objective it can get besides following the market. Even in ranges if you sell the top of the range or buy bottom of the range, you are still following price although it may look like you are not. When price is ranging you follow price within the range. When it is trending, you follow price by following the trend. Nonetheless, you are always following.
Following the market might be obvious but it is not easy. You still need to identify your entry which is usually some balance point.
I don't know how much more obvious or more objective it can get besides following the market. Even in ranges if you sell the top of the range or buy bottom of the range, you are still following price although it may look like you are not. When price is ranging you follow price within the range. When it is trending, you follow price by following the trend. Nonetheless, you are always following.
Following the market might be obvious but it is not easy. You still need to identify your entry which is usually some balance point.
Given the OHLC information displayed on a bar chart...
Not to debate the merits of a trend, or its overall utility, but I have a thought.
If you take that OHLC data, and come up with a point on the chart(No indicators, just excel computations on OHLC data, nothing special). That point has associated with it a direction and a price level. This point is known at the OPEN of a bar, and runs until enough of a wiggle occurs to end that trend.
I took measurements of the price traveled ABOVE this point, and price traveled BELOW this point. Visually, you can imagine a candlestick that has an open/reference point. The amount of tics ABOVE the open are High-Open, and tics BELOW the open are Open-Low.
Graphically, I can show views of how that looks OVER TIME.
To explain, note this FIRST image, where I have highlighted a positive "1". BLue line represents the CUMMULATIVE amount of tics price moved up from this reference point, the RED line represents how many tics price moved DOWN from the reference point.
You can see from the image, that once you have a point, price spends MORE time moving UP than down given that reference point(both shown as positive for perspective). This is only a few dozen samples for visualization purposes, but I have looked across many pairs, bar intervals, time periods, and the overall shape of this graph stays the same.
The case of "-1" is exactly inverted, and the case of 0 is what you'd expect, where the cumulative effect is essentially zeroing them out.
THis is all related to the "WHY" of what I was thinking when I made THIS post.
Not to debate the merits of a trend, or its overall utility, but I have a thought.
If you take that OHLC data, and come up with a point on the chart(No indicators, just excel computations on OHLC data, nothing special). That point has associated with it a direction and a price level. This point is known at the OPEN of a bar, and runs until enough of a wiggle occurs to end that trend.
I took measurements of the price traveled ABOVE this point, and price traveled BELOW this point. Visually, you can imagine a candlestick that has an open/reference point. The amount of tics ABOVE the open are High-Open, and tics BELOW the open are Open-Low.
Graphically, I can show views of how that looks OVER TIME.
To explain, note this FIRST image, where I have highlighted a positive "1". BLue line represents the CUMMULATIVE amount of tics price moved up from this reference point, the RED line represents how many tics price moved DOWN from the reference point.
You can see from the image, that once you have a point, price spends MORE time moving UP than down given that reference point(both shown as positive for perspective). This is only a few dozen samples for visualization purposes, but I have looked across many pairs, bar intervals, time periods, and the overall shape of this graph stays the same.
The case of "-1" is exactly inverted, and the case of 0 is what you'd expect, where the cumulative effect is essentially zeroing them out.
THis is all related to the "WHY" of what I was thinking when I made THIS post.
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A very good description of how it looks when one is doing it successfully, but unless "the obvious" is known, those buy and sell points will become a superior trader's fat pitch.
One famous investor knows The Obvious, based on one of his quotes, and another quote he said was "I wait for the fat pitch"
I have a bit of a problem with this statement. It suggests that we are fighting other traders when we trade. This is technically true, but practically wrong. The only person you are fighting is yourself. You cant possibly be fighting whales because you are just a tiny fish in the market. You get tossed around every day because whales can move price, you cant. Whales fight whales, small fish get tossed around and need to learn how to swim with the whales so they dont get tossed around.
The game is much different when you can move the market than when you cannot move it. I've moved the market before and i can tell you it is not a pleasant experience. You need to be very careful with your positions because ideally you dont want to move the market at all. Once you have the power to move the market, mistakes are punished much more severely. Small TFs become impossible to trade because by the time you enter your position you may have moved price to your target already and that would be a breakeven trade at best. Now you need to seek liquidity and things become much more complex.
For every person who cannot move the market, there are exactly two players in this game, yourself and the market as a whole. The market is gonna do whatever its gonna do and there is nothing you can do about it. It becomes a fight with your own emotions and psychology to navigate through these stormy waters. If you think you are fighting whales, you have already lost the fight. It's not a fight when one party completely overpowers the other. It's like trying to fight a tank with a knife.
So it looks like i don't know "the obvious" or at least i am not aware that you call it "the obvious". I have a few questions. Can "the obvious" be described in a single word? Does "the obvious" answer the question: why does price move the way it does?
I really, really like your post! I think it clearly states an Obvious truth that is so, so obvious but that also take so, so long to internalize. I remember RN saying something like: "it does not matter what you think, only how" in this sentence there is so much value that it takes years to really understand it
Thank you very much for sharing your experiences.
I tried to leave the "obvious" contradiction in plain sight for you to discover......
And the "Obvious" myself, OP and redneck were talking about is not related to price itself, or its movement. But if I had to sum it up in one word: "muppets", which you apparently are, if you are letting the pool of piranhas eat you up, over and over again.....
I imagine I'm not the only one who's a bit sceptical. There have been quite a few visitors to this thread, over the years, claiming to know the "obvious" and posting cryptic little hints and riddles. Personally, I've never really been convinced. No-one has ever said the OP revealed it to them, so who knows if their "obvious" was truly what the OP was referring to.
So, how did you find out what the "obvious" is?
I would also like to know how did you figure it out? I know how the OP figured it out, he didn't. Someone else told him that because it was obviously not obvious to him, otherwise he would have figured it out on his own. Maybe the better question to ask is, what do you need to do to be worthy of someone else telling you that? Looks like most people who know it have been told, extremely few actually discovered it on their own. Also if you figure it out on your own, how can you be certain that what you have figured out is indeed that, if nobody is willing to confirm it for you?
I was also told a few truths about the market, they are not obvious at all but are extremely simple. For example the way the market behaves, is the way every single thing in the universe behaves. The way the market unfolds, is the same way a tree grows. These truths won't make you profitable, you still need to learn how to apply them practically. I would imagine knowing "the obvious" also won't make you profitable unless you know how to apply it.
I have my own logical explanation of the market and have figured out how to apply it practically and profit from it. The only way i was able to confirm what i have discovered is because someone else confirmed it for me. I can't search google to confirm my answer, or ask a professor, or find it in a textbook. That person never told me how to apply it, that was for me to figure out. I am not the best trader, but i have figured out how to make a profit in the market. I know there are still things i don't know.
That quote you posted i googled comes from Warren Buffet, he also said "buy when others are fearful, sell when others are greedy". Is this the quote you are talking about? It aligns with the BLSH and SHBL that the OP started this thread with. Also, is the "obvious" present only in the market or in the entire universe as well?
I was also told a few truths about the market, they are not obvious at all but are extremely simple. For example the way the market behaves, is the way every single thing in the universe behaves. The way the market unfolds, is the same way a tree grows. These truths won't make you profitable, you still need to learn how to apply them practically. I would imagine knowing "the obvious" also won't make you profitable unless you know how to apply it.
I have my own logical explanation of the market and have figured out how to apply it practically and profit from it. The only way i was able to confirm what i have discovered is because someone else confirmed it for me. I can't search google to confirm my answer, or ask a professor, or find it in a textbook. That person never told me how to apply it, that was for me to figure out. I am not the best trader, but i have figured out how to make a profit in the market. I know there are still things i don't know.
That quote you posted i googled comes from Warren Buffet, he also said "buy when others are fearful, sell when others are greedy". Is this the quote you are talking about? It aligns with the BLSH and SHBL that the OP started this thread with. Also, is the "obvious" present only in the market or in the entire universe as well?