Quote from neutrino:
"Decrease your trading volume when you are trading poorly; increase your volume when you are trading well."
- Paul Tudor Jones
I am sure that this rule is required to achieve a long term success in trading. However I am having a little difficulty in following it strictly because I don't understand very clearly what is the reason behind it... Why would I make more money (or lose less) if I follow it?
Such rule can be justified only if we accept the existence of trends in a trader's equity curve. If you believe that such trends do exist (WHY?!?), then do you "trade" your equity curve?
If you set up and used a dichotomous key for analyzing the possibilites, it only takes two questions to attain a focus.
Q1 Is it the market or me?
Q2. Has there been a change?
The four paths lead to a general solution first stated above by PTJ.
If a person then wishes, while trading with smaller volume, then he deals with those things, if any, under his control.
Only one of the four are under the person's immediate control. That is, when he has changed what and how he is performing.
This alternative is a thing that actually needs continual attention. Mostly because anything a person is doing affects his future. The primary effect is that of closing doors during periods of poor performance. In it's finest (most detailed) essence, it is a matter of how the physiological systems close doors biochemically. By not inflicting repeated more severe emotional conditions, the bod has a lesser chance of being biochemically affected by such insults. If a person, on the other hand is very persistent, he will achieve closing doors on future learning opportunities.
Learning requires memory. When the memory paths are closed because of repeated defining failure (Receptors are what is blocked), then no learning (that is consideration of the topic to further understanding) can be initiated. It turns out that all sensory perceptions (watching the market, hearing the pit) are in parallel with an associated emotion. This always occuring twin package of sense and emotion either makes it or not to thinking centers. Potential learning opportunities initiated by sensing can be relegated to the human enterprise of "fight or flee" once former paths are closed.
In ET there are recommendation and advice classes. One of them, mostly based upon experience, is to "take a break" or "stop for a while". What have these advisors or recommendors been through? Repeated failure and the inability to recover. They know that it takes time for the biochemical attack they created needs time to remediate. After some point there is only a slim chance of remediation.
What does PTJ suggest. He suggests getting down below the triggering of emotional reactions to sensory situations (trading set ups and edges that do not work) that have been imposed in the form of amount of volume. Shut down the biochemical attack by operating below the threshold.
What does the other side of the coin look like. Prevention is fun but making money is really where the action is.
We got to see AMT go through the paces on several concurrent sensory/emotional shots. Still, he demonstrated previously what great skills are available to really pull the money down. Electric Savant, before "work" every day does several time based edge senarios. Watch scientist, zoom into a new market. Watch scientistchange fractas for efficient extraction of money.
All wizards are accomplished because they persistantly take the twin sets of sensory/ emotional stuff and it gets through their systems to a point where memory allows them to successively repeat making money very efficiently for the time spent.
Can you relax your system so it can work? Work once again.
Personal analysis of your condition is required. you need to detect and dicover what is in balance for you now and also work on the emotions that are not in balance. these inflamed emotions can control your learning (both the IQ stuff and the EQ stuff). The art of communication is verbal and non verbal. Not here of course (LOL). The majority of real live communication that we do is nonverbal. If communication is snesory and if all sensed infomation has an emotion associated with it (it and they do), then any part of your EQ that is not in balance is inflamed and not helping you. Better log your emotions and check all of them out and get them in order.
Start by getting to "empty" (Google the threads) After that is achieved go through your inventory. Start real real simple. Communicate with your bod. See if you can sense (hear) our breathing. Then get empty enough to examine (hear) your heart beat. slow breathing and then slow your heart beat. get to a place where you cannot feel your extremities. Try harder. Then selectively energize just your arms, add your head, add your legs and feet. This is a good repeatable warm up to check in on your emotions. It is not dealing with emotions but if you then look at your log of emotions that are coming up youcan sort it into two groups: the ones you want and summon and he ones that appear whenever they want to unasked. Try to keep the balanced ones working for you and make a deal withthe other ones as to how they can get healthy again. If they stay on the shelf when they are not needed then they are healthy.
Discipline is a fun thing. You can forget about it until you hve your emotions just where they belong all the time. keeping them on the shelf is not hard when they are not inflamed. if they are, they get in the way when you want to summon up thecorrect ones for the job.
Success in this world is decided by emotions and not intelligence. Non verbal communications is what rules. Just ask Dean these days. Non verbal communications are driven by unbalanced (inflamed emotions) in a lot of people's cases. Your choice. Don't let things persist that aren't working for you.
If you meditate, do it effectively with yourself. deal while you are "empty". There's a lot to get done.
Learning to trade is not a one pager, not a succinct IQ stetement. It is an EQ learning process that is totally unblocked by crap that has accumulated in your past.
