Zen and The Art of Trading
- Thread starter martys
- Start date
I believe S&P in general is an efficient mean-reverting market with large swings. Taking profits early actually reduces the time spent in the market and the chance of your uncle point being hit. Having said that I don't want to screw people up. The other reason is because I choose to use mental stop (and not very good at it) which means I can get burned sometimes therefore I prefer to get out early if I can. I think I can get away with a tight stop on reversal trades but I don't really do them much. Maybe it is stupid but this is just what I am doing now. I am open to change in the future with better methodology and bigger account size. However I do try to trail a stop in high momentum situation to get a little more and I understand the tremendous benefits of riding trend for the P/L. If you think there is a way to do it with small drawdown, maybe you can give me some suggestions. Thanks.
Actually this belief was passed down for three generations. My mentor friend passed it to me and he got it from his mentor (None of them got paid a dime). I think he is right though if you look at the daily chart, how many large candle bars are there relative to other bars (except for the past few weeks when the funds are off to the races to pump their performance relative to each other. As the winners unload and the losers pump the few key large cap stocks hoping to beat the more diversed S&P.) Maybe the key is to ride those trend days (trade differently), I thought about this sometimes ago but I was too busy doing my balancing act. Maybe I should look into the Taylor stuff or something? Any pointers?
I've learned not to get too far into "suggestions" without knowing the person's plan since most of it ends up being a waste of time, not because the person isn't paying attention and not because the suggestions are worthless, but because it's nearly always apples and oranges. So one gets into "Here's what I'd do" and somebody comes along and says that that's a load of crap and so on.
So staying within the context of the spirit of this thread, I suggest you clear your mind of those beliefs and take another look at the charts. One of the chief advantages -- if not the chief advantage -- of trading the minis is the predictability of the moves.
Therefore, go back over a couple months' charts and find those days that made the ADR. Look at where the moves began and try to find some commonality among those points or levels. If you can find that, then you know where to enter. You then have to decide how to enter and how to manage the trade. However, exiting before you reach your target is not an option (currently 10pts on the ES). You must be "detached" from the trade. If the trade doesn't go, you "fold".
This requires detachment, persistence, a great deal of patience, a willingness to fold, acceptance of whatever the market is willing to give you, a willingness to forgive yourself. As for the specifics of setups, entry, stops, testing, etc., consider opening a journal. Getting into that here would create an entirely different thread.
So staying within the context of the spirit of this thread, I suggest you clear your mind of those beliefs and take another look at the charts. One of the chief advantages -- if not the chief advantage -- of trading the minis is the predictability of the moves.
Therefore, go back over a couple months' charts and find those days that made the ADR. Look at where the moves began and try to find some commonality among those points or levels. If you can find that, then you know where to enter. You then have to decide how to enter and how to manage the trade. However, exiting before you reach your target is not an option (currently 10pts on the ES). You must be "detached" from the trade. If the trade doesn't go, you "fold".
This requires detachment, persistence, a great deal of patience, a willingness to fold, acceptance of whatever the market is willing to give you, a willingness to forgive yourself. As for the specifics of setups, entry, stops, testing, etc., consider opening a journal. Getting into that here would create an entirely different thread.
Thanks for posting this thread. I've ordered the book and am looking forward to what I can learn from it.
Knowing the rules is one thing. Internalize them is a different matter. I try to meditate and reflect a few vital points with detailed examples for a few weeks and then deepen them with self-hypnosis. My old habits still creeps back but I think they are more manageable.
The last rule I posted should be numbered 65. Further evidence of my senility...
"POKER RULE# 66: Learn how to bet extravagantly and wildly at times yet be able to turn it off completely at others... And it is difficult to bet lavishly and freely at the right times, yet retreat into monklike quietude at the other times. This is achieved by self-discipline and being flexible, not locking your game into one or the other extreme."
Got to know when to press the gas, when to hit the brake and when to get off the highway. Otherwise it might as well be blind-man driving...