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A Christmas Message From America's Rich
http://www.rollingstone.com/politics/blogs/taibblog/a-christmas-message-from-americas-rich-20111222
Which Type Trader Are You? (by Market Sniper)
http://slopeofhope.com/2011/11/which-type-trader-are-you-market-sniper.html
This post may offend many and that is not its intention. This is a think piece I have been formulating in my mind for quite some time now. Its purpose is to get you to think about your trading methodology(s) and setups in a critical light.
To my way of thinking, traders who utilize technical analysis all fall into three broad groups (traders who use purely fundamental analysis are excluded from this type of grouping).
The Prognosticator
In this group I include Elliot Wave traders, Gann traders and astrological traders. These traders trade in the future. Based on what they say may happen and some go as far as to say what WILL happen. When a trade is a failure, they use misinterpretation of past price action as the excuse for the failed trade. It seems that Elliot wave traders (mostly sellers of the system) are in a constant civil war as to "correct" interpretation. Gann followers can spend their entire trading life searching for his "missing" piece. A lot of legend has been created around WD Gann, promulgated by promoters of his methodology. WD Gann was prolific in his writings and covered a multitude of areas. Regardless of what happens next, some part of his work can be given credit for "calling" the "move." Too bad we lack foresight to know which one! He is also been credited to have died with a tidy fortune due to his trading. Interviews with his son (who happened to have been in the banking business) revealed that he died in modest means and made the bulk of his money promoting his ideas over his life time. The foremost (and longest being tracked) in the astrological trading group is Arch Crawford. In over 25 years of his trading service, he has had flashes of brilliance. However, according to Hulbert, his record, overall, has well under performed the market during the long period tracked. Prognosticators rely on interpretation of price. So much for the prognosticators.
The Dreamer
In this group I include all those traders who rely on lower studies (MACD, STO, RSI, and hundreds of other lower case studies) and upper case studies (such as Bollinger Bands, Keltner Channels, fibonacci ratios, etc.). these traders trade in the past as ALL those studies are based on market driven price information in the past viewed through different lenses. Add to that, very little, if any, are NOT subject to interpretation and therefore, not objective information. What do I mean by that? They all have variables within them that can be "adjusted" or "tweaked". IF that is the case, then it cannot be objective information you are viewing. Here are some examples:
Number of variables in trend tools: MACD=3 and ADX=3.
Number of variables in retracement tools:
a) Percentage retracements: Fib ratios=4; Harmonic ratios=2; Arithmetic ratios=2
b) Over bought/oversold indicators: RSI=3; Socastic oscillator=4
Each input can be changed. So let us say, you put together a trading methodology based on these. Here are some example combinations and the variables involved (Dreamer traders LOVE to use these in combination!):
System 1: Moving Average=1 and RSI=3 for a total number of variables of 4.
System 2: MACD=3 and Stocastics=4 for a total number of variables of 7
System 3: Moving average=1, ADX=3, Fibs=4 and RSI=3 for a total number of variables of 11.
If you can massage the variables, then what you see is NOT objective information. This is the problem with the search for an indicator system Holy Grail. The case CAN be made for a ONE variable trading system. However, once you introduce more than one or two, the probable variations become too large to test. Too many moving parts that are interconnected. The last system would be near impossible to stress test successfully. There are simply too many moving, interconnected, parts to have any confidence that you have hit upon the "correct" variable values. This type of analysis leads to the worst cases of curve fitting historical market data as well and that can be absolutely devastating to trading capital.
A brief word about fibonacci retracement levels. Numerous studies have shown that they are no better and no worse than any other set of ratios. No magic there, either.
In summary, I would suggest that the trader select measures of trend and retracement that have built-in protection against you fiddling with them. The best measures with this built-in protection are ones without parameters or adjustable variables. The best ones are objective and independent of you. The best ones are fixed and NOT subject to any interpretation. Adjustable parameters are just plain unreliable for making trading decisions. This brings us to the third type of trader.
The Pragmatist
In this group I include Market Profile traders, Pivot traders, single trade setup traders and to a lesser extent, Chart Pattern traders. Chart pattern traders are a different breed and exist in both Dreamer and Pragmatist camps. The visualization of a pattern is subjective and interpretive in nature but can, if correctly used, create a pragmatic conclusion: it either works or it fails on such a manner that is not subject to interpretation in a trade.
The Pragmatic trader trades in the now. Not the future or the past. There is no room for any interpretation. It either works or it fails. Support/resistance holds or it does not, etc. The idea here is to select objective and fixed measures for determining trend direction and retracement levels. There can be NO interpretation in their use. A 12 year old must "interpret" the same way you would or you must discard it! There is no wiggle room and there are no shades of grey here at all. It must be fixed. Simple. It either IS or it is NOT based on price NOW. This can be historically tested without problems. You can determine expectancy for what you are doing and have confidence in that expectancy.
Conclusion And Something Else to Ponder
Before any devotees of any methodology get all up in a dither based on my views and observations in any of the above material, here is something for ALL traders to consider.
Could it be we are ALL placebo traders? My intent here is not to tell any trader how they should trade. Personally, I am a pragmatic trader as it has much fewer "problems" and resonates with ME. If you are a successful trader (defined as a trader who consistently extracts capital from markets and has a positive, upward equity curve) regardless of methodology use, could it be that we are using our chosen methodology as a placebo? Are we using our chosen methodology to give us the courage to actively engage markets? Could it be that the successful trader is just a superior trader in spite of the chosen methodology? Could it be that the successful trader is NOT giving himself the credit deserved for being that superior trader and giving undo credit to his chosen methodology? This then leads into the field of trader psychology and away from methodology. This is an area, I believe, deserves some serious thought and consideration. Peace, my fellow traders and may your equity curves trend ever higher!
Yours in the never end quest of the trading edge. The Market Sniper.
Your Trading Journal (Market Sniper)
http://slopeofhope.com/2011/11/your-trading-journal-market-sniper.html#more
In the past few days there has been a lot of discussion on The Slope about keeping a trading journal. Here is a very brief examination of the subject. I hope it helps!
I cannot over stress how important it is that the trader maintain a constantly up to date trading journal. Yet most traders do not even have one! A trading journal is NOT just a compilation of entry, exit and net profit or loss for each trade. That is what is in your brokerage statements . Of course, you should also include that information. There are many things that can go into your trading journal and each trader will do it differently. Here are just some ideas of what can be included and they are by no means exhaustive, far from it. Nobody but you will ever see your entries in your journal. Be brutally frank. Use your journal as a vehicle for improving your trading. Here are just a few ideas to get you started.
- Did I follow my trading plan for the trade? If not, why not.
- At what point in the trade did I doubt the trade. If so, why
- What did I do right in the trade
- Where did I stumble in the trade?
When you make an error, make a statement of correction. An example: I did not honor my stop in the trade according to my trading plan. I moved it NOT according to plan…therefore, in my next trade, I will adhere to my trading plan as to stops. I will place stops and manage my stops according to my trading plan. This will demonstrate that I am a patient and disciplined professional trader.
We ALL make mistakes and errors. Take total responsibility for your trading decisions and outcomes. When an error is made, do not beat yourself up over it. Make the correction and move on as demonstrated in the above example. Attempt to keep it positive. We should learn from our own errors. This is part of how we can improve our performance as traders.
You can also grade your trade. You can use a simple pass/fail. Do not grade your trade according to the trading outcome! Grade it in light of whether you followed your trading plan or not. Here is a more complex grading system and one I use.
A=I followed my trading plan and made good money.
B=I followed my trading plan and made some money.
C=I followed my trading plan and lost some money.
D=I did NOT follow my trading plan and made good money.
E=I did NOT follow my trading plan and made some money.
F=I did NOT follow my trading plan and lost money.
We all want to be A traders, right? That being said, there is nothing wrong with being a B or C trader. Over time, your grade average will increase!
If you can, also take screen shots of your trade and put them in your journal. A picture is often worth more than one thousand words.
Here is another VERY important reason for keeping a trading journal. It can be the very best source for gauging your own trading metrics! Over time, you can discover which are your best trading days of the week and which is your worst. You can find out what hours are your best/worst if you are a day trader. In other words, you can find another edge for yourself. IF Fridays are your worst days, then decide not to trade on Friday or if you do trade on Friday, you may wish to cut down the size you trade.
In summary, if you are NOT keeping a trading journal, you are setting yourself up for trading failure. IF you are under utilizing this tool, you may just be a lazy trader. It is a very simple process and again, I cannot over stress your need to keep a complete trading journal.
Yours in the ever elusive search for trading edges, the Market Sniper
The Eagles - Hotel California
[Video] Nassim Taleb on Occupy Wall Street and the Banking System
http://www.fundmymutualfund.com/2011/10/video-nassim-taleb-on-occupy-wall.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+FundMyMutualFund+%28Fund+my+Mutual+Fund%29
Satyajit Das, Extreme Money: Masters of the Universe and the Cult of Risk
http://www.amazon.com/Extreme-Money-Masters-Universe-Cult/dp/0132790076/ref=cm_cr_pr_product_top
The Upcoming Crash Of Apple And Amazon
http://market-ticker.org/akcs-www?post=194889
Eurozone Market will Crash Traders like Alessio Rastani dream about the money they will make
SPY future 60 minutes= bear flag, imfo.
http://finviz.com/futures_charts.ashx?t=ES&p=h1
Textbook Bear Flag: S&P 500 Target UNDER 1,000 Explained
http://www.thedisciplinedinvestor.com/blog/2011/09/26/textbook-bear-flag-sp-500-target-under-1000-explained/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+thedisciplinedinvestor%2FEBHR+%28The+Disciplined+Investor%29
Moody's rebaja el rating de ocho bancos griegos por la situación de la economía helena
http://www.lavanguardia.com/economia/20110923/54219670196/moody-s-rebaja-el-rating-de-ocho-bancos-griegos-por-la-situacion-de-la-economia-helena.html
Chavez Decrees Nationalization of Gold Industry Amid Surging Bullion Price
http://www.bloomberg.com/news/2011-09-19/chavez-decrees-nationalization-of-gold-industry-amid-surging-bullion-price.html
VIX daily chart= ?
http://stockcharts.com/h-sc/ui?s=$VIX&p=D&yr=0&mn=9&dy=0&id=p25153589470
ps, miss Brazil.
PIMCO's Bill Gross Admits He was Wrong on U.S. Treasuries - and by Definition Jeffrey Gundlach was Correct
http://www.fundmymutualfund.com/2011/08/pimcos-bill-gross-admits-he-was-wrong.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+FundMyMutualFund+%28Fund+my+Mutual+Fund%29
[KR174] Keiser Report: Crimogenic UK
http://maxkeiser.com/2011/08/18/kr174-keiser-report-crimogenic-uk/
spy monthly chart,
http://finviz.com/quote.ashx?t=SPY&ty=c&ta=0&p=m
El toro asesino Ratón vuelve a matar en Xàtiva
Keiser Report: Banking Looters
http://maxkeiser.com/2011/08/16/keiser-report-banking-looters/
John Stewart: Why is Media Ignoring Ron Paul ?
http://www.ritholtz.com/blog/2011/08/john-stewart-why-is-media-ignoring-ron-paul/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29
Worst 40-Year Bond Sale Shows Cash King as Investors Flinch: Japan Credit
http://www.bloomberg.com/news/2011-08-09/worst-40-year-bond-sale-shows-cash-king-as-investors-flinch-japan-credit.html
S&P Cuts AAA Ratings on Thousands of Municipal Bonds After U.S. Downgrade
http://www.bloomberg.com/news/2011-08-07/muni-market-prepares-for-loss-of-aaa-ratings-as-s-p-downgrades-u-s-credit.html
South Korea Joins Greece In Banning Short Selling
http://www.zerohedge.com/news/south-korea-joins-greece-banning-short-selling
France, As Most Susceptble To Contagion, Will See Its Banks Suffer
http://boombustblog.com/BoomBustBlog/France-As-Most-Susceptble-To-Contagion-Will-See-Its-Banks-Suffer.html
Japanese government intervenes in market to weaken yen
http://www.bbc.co.uk/news/business-14398392
[KR169] Keiser Report: Peak Everything With James Howard Kunstler
http://maxkeiser.com/2011/08/02/kr169-keiser-report-peak-everything-with-james-howard-kunstler/
[KR167] Keiser Report – Mass Psychosis
http://maxkeiser.com/2011/07/26/kr167-keiser-report-mass-psychosis/
[KR165] Keiser Report – Debt and Ratings Theater
http://maxkeiser.com/2011/07/19/kr165-keiser-report-debt-and-ratings-theater/
fyi, AUD , pps @ key resistance (upper trendline)
http://finviz.com/futures_charts.ashx?t=6A
ps, US peso @ key support area.
imfo.
Keiser Report: Ratings Racket
http://maxkeiser.com/2011/07/12/keiser-report-ratings-racket/
[KR162] Keiser Report – Europe’s Neo-Feudalism
http://maxkeiser.com/2011/07/07/kr162-keiser-report-europes-neo-feudalism/
Starting Salaries for Lawyers Plunge 20%; Temporary Jobs are 27% of Total, 12.4% of Graduates Receive No Offers
http://globaleconomicanalysis.blogspot.com/2011/07/starting-salaries-for-lawyers-plunge-20.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29
China Rebuilds San Francisco-Oakland Bay Bridge, Pledges More Support for European Debt, Fuels Latin-America Debt Rally by Financing Ecuador Budget
http://globaleconomicanalysis.blogspot.com/2011/06/china-rebuilds-san-francisco-oakland.html
[KR158] Keiser Report – The Greek Resistance & An Increase Wages Special
http://maxkeiser.com/2011/06/23/kr158-keiser-report-greek-resistance-increase-wages-special/
New Michael Lewis Book: Boomerang – Travels in the New Third World
http://www.ritholtz.com/blog/2011/06/new-michael-lewis-book-boomerang-travels-in-the-new-third-world/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29
Notice a Pattern Here?
http://slopeofhope.com/2011/06/notice-a-pattern-here.html
[KR157] Keiser Report – Financial No-Go Zone
http://maxkeiser.com/2011/06/21/kr157-keiser-report-financial-no-go-zone/
The Revolution Has Begun In Europe (Must Watch!)
Pay OFF That Mortgage! (by Market Sniper)
http://slopeofhope.com/2011/06/pay-off-that-mortgage-market-sniper.html
per pm=
si
Hasta Mañana.
my friend (mami) said its a sexo (i.e., fuckable) song, flol.
we should find out on Saturday.
ciao.
no pm, free account.
The Eagles - Hotel California -Studio HD
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