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Another example of bad trader traits
"We are now close to the 50% fib mark which is good enough for me to add more positions here and again at 1020, the 61.8% fib mark once we get there. And courtesy of market maker volatility monkey business the premiums on my existing March puts have been degraded to the point where I am actually in the negative on the ones I bought around 1040. Fine by me - just another opportunity to add long term positions.
Let’s see who’s going to have the last laugh a few months down the line."
As opposed to riding the trend and counting coins, this fellow let the bullet train ride over him. Dump all gurus preaching crash. Why
look beyond too far out of anybody's ability, Trade the present and count the coins.
2bit
Premium sucking Thursday Rub down from evil rat
"I know I should listen to my own advice (see prior post) and not even look at those damn March puts, but someone needs to explain to me how exactly they lost 50% of their gains since SPX 1040 when we only rallied 8.5 handles since 995. Can’t be the VIX - we’re only down 1.8 points - and the bid/ask spread is wider but not that wide!
Anyway, enough of my bitching - but it comes to show that being a bear is one of the toughest hats to wear even in a secular bear market - or perhaps especially in a secular bear market as downside speculation is merely condoned but not encouraged (and eventually discouraged) by most market participants. You’ve got to have a thick coat to make it through an entire Primary wave - takes guts, discipline, smarts, and a lot of fortitude. That said - I am not selling - on the contrary - let them push down those premiums and run the tape higher - I’ll just keep buying. Which is why I kept another 20% of cash on the sidelines - just for that event."
I say being stubborn is stupid. The Put buyers were dumping them at the close. It is all about anticipation for options playing man. He'll be cleaned out soon and be banging his poor wife again. LOL
2bit
Hiker,
I am not sure what you are trying to tell me? Can you say a few words for the simple minded?
2bit
OEX 460 held
The whole day there was lack of profit taking sellers but the put sellers were not giving up until the very end, they sold their puts. Near term target OEX 475, that is EM no. willing..
good luck
2bit
This is what I have found from another Blogger..
A ring of truth to it
2bit
"This Man Is an Island
A few weeks ago, Carl Futia posted a very insightful passage about the success and failure of speculators. The theme was the coveted Edge, a quality that most, if not all, traders believe in an hope to have, or know to have.
I worked in an Equity Research department for a year, knowing from the first day that in time I would leave it to day trade. I had many successful swing trades, 90% on the short side.
Three weeks after quitting, I jumped right into trading the e-minis. In a month, trading infrequently, I took a time-out as my account had almost gone straight down. Since then, I've kept above water and have been refining my skills and discovering whether I have an edge.
The point of this post is the lesson I learned from Carl. It was to completely stop reading his blog. Today, I have decided to take a step further and will stop reading any blog that has anything to do with ES day trading. That leaves two.
I read these for entertainment, to see what others are thinking, and at times for some hand-holding when I enter a position myself. These have kept me from refining my edge. At this point in my trading, I am influenced by other opinions. Not too much, but enough for it to be worth stopping. Instead of reading others' read of the tape, I'll stick to reading the tape myself. This will accelerate my realization of whether I have an edge. "
Just my 2bits
oil, gold, finance up
Nasdaq 3 horsemen up
dollar down, euro up
vix down
buy buy buy....
2bit
Just my 2bits
It is like July 28 all over again. VIX coming from lower band to upper band but all the short sellers can do is bring down the market a bit and for a few days and then the market flies off. VIX will slowly subside again the market will make a new high by September.
2bit
Hi You,
"Well, there is another longer term pattern that is playing out, and that would be a 20 year "M-A" pattern with SPX. Double top 1999 and 2007. We are now making the top of the "A", and the drop takes us to new lows... likely all the way back to 1990 levels. let's see which one plays out..."
Cannot visualise your other pattern without a chart, so I cannot comment on it.
"What will negate your interpretation of the market as you see it now? What level needs to be taken out? And are you not taking into account the broadening megaphone pattern on the various indicies? "
There are many indicators that involve statistical analyses of price and A/D issues. They are all moving constantly and it is not one level or price that determines change of trend. Chart pattern is just a snap shot of the market at certain point for the convenience of some traders. You have to know the statistical success rates of the different patterns. All patterns will fail at some point and their significance are different at different stages of the market.
"Vix weekly is at long term support and it looks like we are going to make a double top "M" pattern. It needs to first break out of it's falling wedge pattern. Not too mention the incredible positive div. on that same time frame with the stochastics getting a bullish touch last week. Maybe get the cross over next week..."
Not sure I understand this. If it is at long term support, how can it be an M top? You would expect a W? Especially when you are talking about a bullish falling wedge? Mind you, you could loose a lot of money trading on divergence, if you do not have a better tool, don't trade on divergence.
Further, VIX only accounts for a portion of the price movement, not all of it. It is like taking election poll, the real outcome could be very different.
2bit
Another powerful testimony...
The W formation of FXE:UUP....back to JUly08 high which means OEX 570ish
2bit
Hi you
"I guess the vix will go to 10 by then!"
VIX only has to stay around the twenties and besides it is not useful anymore as contrarian indicator.
"Do you have a time frame on that target."
No. But you can approximate using T Theory.
"And are you sure there is enough evidence to support that kinda rally?"
Only death and tax are sure. You can use cumulative A/D for one.
"Do you really think they can sustain this straight up action?"
Who said anything about straight up! But the target is no big deal considering the drop we had in 2008 and beginning of 2009.
"In my opinion all we need is a couple of well respected people to be calling for the same target on CNBC, and the reversal will be confirmed and down we go..."
I won't listern to CNBC. As a matter of fact starting the day
I shut off my ears to the gurus my trading improved tenfolds.
"Support needs to be tested and these overbought conditions on the McC Osc, and summation index need to be corrected."
Nothing needs to be retested, it is only in your mind. MSC is over sold, not over bought.
" That would be a 90% rise from the lows...i just do not see it coming together like that...but anything is possible...and i appreciate your take on it. "
I just trade what the market tells me not what I think it should happen, right now the new high indicator pops out and I have to go along"
Good luck
2bit
Just my 2bits,
We have the confirmtion for new high and for all you H&S freaks,
OEX 575 SPX 1200ish is the target....
2bit
Oman,
Good show...
2bit
Oman.
yes..it has presented itself as a mini run...I have not seen the signals that foretell the March and July marathon runs yet
but bears will be burnt and hurt for sure...everywhere I look most gurus say short, it is at resistance, therefore it is a short, it is a H&S therefore it is a short, it is a magaphone therefore it is a short...they are so naive....
good luck Oman
2bit
It is beginning to look more and more like the orginal 3 drives pattern...spx 1045 or qqqq 42ish you say?
2bit
Yes You,
The OEX 467 is the original forecasted target area. To answer
your question, yes especially when it is supported by strong A/D issues. Remember this is all probabilities. there is always a 10% chance it falls apart...but this is the art of probability..good luck
2bit
Just my 2bits
Am pleased that everything worked out as planned. Now a mini uptrend has been presented. If OEX clears 467 than another upleg is certain else some up/down movements are expected. I think it will be safe to dip buy for the next two days, shorting is out of the question ..oil, gold and finance are in sync.
2bit
Fox,
Don't know who the big buyers are, but all I see is the two gap downs were not caused by North America, it was from the Far East and people here see them as buying opps...economic activities are improving here...herds are afraid the train may leave without them...I bought the two gap downs and have been very profitable...wait till the MCO turns, it will be another leg up....
2bit
Two days of depricing from the Far East, looks like the dip buyers are coming out in drove, if it ain't bottoming process, I'll be fooled...looks like SPX 980 held...
2bit
Just my 2bits
VXO signals buy
OIH, XLF and HUI signal buy with HUI the least
A/D issues signal buy
target OEX 467
possible bottoming process
2bit
Ya Oman, I was long from yesterday too while everybody was screaming sell.... now the trick is going forward .....1035 or 970...LOL experience you say...
2bit
Possible Long Yen trade and u know what will happen to the dollar and market
2bit
Goldman got upgraded to target over 200 today...da boyz won't let the market down too much...you need to know how to play their games...experience you say Oman..LOL
2bit
Rab,
Ya..a beautiful city and that was it....every time I got out of the country I feel so blessed to come home....
2bit
OMan,
Ya..He also said " don't listen to gurus..."
2bit
read if you have time else junk it
2bit
"Why do most traders fail? Change your ways. Now.
By GladiatorX
edited by Carl Futia
I am someone who trades for a living. I have less than 10 years experience but I feel that the mental energy, time, and effort I have put into trading is enormous. I think I have had success because I did the REAL HARD WORK, work that most people want to avoid. Hard work isn't reading a trading book, applying to a broker, opening a chart and spending hours back testing an EMA crossover. It isn't sitting for 12 hours per day testing the crossover on different markets and then sitting 4 hours waiting for the signal to emerge because in the back test your found it to be 'high probability'. If you are doing this you're wasting your time, spinning your wheels without moving. You are avoiding the truth of trading;
Here is the truth of trading. A trader must face ambiguity and thrive in it. Trading is not about clarity. It is not about setups and signals - not about EMA crossovers, three-higher closes for entries, waiting for pin-bars at support.
These sorts of setups and signals may work for a small number of people, but for most aspiring traders they are useless. Why? Because they are NOT the essential part of the trading process. Traders who use setups and signals successfully have already built a mental map of market behavior. Such a map takes into consideration a multitude of things that determine the market's condition and trend. The current position of the market on this map determines the value of a setup and signal in particular contexts. The exact nature of such mental maps is difficult to explain.
Here is what I mean. I could explain a specific setup of mine to you, one that is extremely easy to follow. But I couldn't explain how I interpret the time and sales window and compare it to order flow and market action. And it is this latter interpretation that determines whether or not I pay any attention to the setup. This skill at interpreting time and sales in the context of market action is one I have developed by watching the market carefully and by taking hours and hours of notes on its behavior. It is this experienced interpretation of the current market context that gives me an EDGE over other traders. It is my ability to judge just what the market is trying to do - to judge its technical condition and its trend. Only after I have made this judgment do I start paying attention to setups and signals.
It is this skill that lets me see whether my setups are likely to be good ones or bad ones. Most aspiring traders can't make these distinctions. To them all setups and signals look the same. When they take a loss after following one all they simply say "oh it didn't work" and moan about it.
These people have not started the really hard work - the work they need to do to be successful traders. They will have to spend weeks or months watching markets trade. They will have to take notes on what they observe and start building a mental map of market behavior. They will have to learn to exercise judgment is assessing the market's condition and trend - and to have confidence in their judgments and the courage to act upon them.
On these forums hundreds of people talk about how to be a profitable trader. But most of them not profitable themselves, at least not to any significant degree. Speaking as someone who makes ALOT of money from the markets I say that it was never a specific system or price action setup that finally made me consistently profitable. Rather it was my extensive study of market behavior, of the "tells" it gives that help me identify the market's trend. I had to learn to embrace the inherent ambiguity of all market behavior - to learn that there are no certainties, only probabilities. I had to create my own interpretation of everything, even though I used the knowledge I found in books about the market and trading as a starting point.
I am now able to trade without a system, without a detailed plan but with money management. All the guru's say YOU NEED a specific entry and exit plan but I don't use one.
Believe me, the reason MOST traders lose is because they fail to embrace uncertainty. They try to convert the inherent uncertainty of market behavior into something that is a sure thing. They spend fruitless hours trying to find a system of setups and signals that will make money in the markets. They don't learn the $tick relationship to price themselves but instead look online and see what others have found. They are unwilling to do their own thinking . They don't spend the time needed to develop their own skills of market observation and interpretation.
It took me 4 months to become profitable. Many of you won't believe this. But the reason I was able to do it so fast was because I cut out all the crap. You may believe you are working hard - you may have been up for 8 hours last night testing if the strategy you just read about in a trading book is a good one.
But I say you haven't really started doing the hard work yet. Until you do you will remain unprofitable. You won't find the high-probability, profitable setups you seek. To do this you must first study the market's behavior and understand it - learn how to identify the market's condition and trend. Only after you have mastered this aspect of market interpretation that you can you work with setups and signals. It will be your understanding of the market's trend that turns your setups and signals into high probability, profitable ones. Setups and signals by themselves cannot do the trick - they cannot turn you into a successful trader. They do not incorporate and understanding of the market's trend and condition. They miss something that only your personal judgment can provide.
Let me give you an example that might open your eyes. Have you ever played a shooting game like Call of Duty 4 or Halo 3? The players who are very good at these games haven't got a system, they don't spend up at night thinking about the best place to camp with a shotgun. They practice playing the game. They master it. The difference between a winner and loser isn't that the winner knows a secret, or paid someone to teach them the secrets, or have a system of using power-ups to beat people. The winners win because they are more skillful, they have learned how to play, they have mastered the game. They have a better aim than other player, but this isn't through a combination of indicators like 'Press UP + B'. It's through skill,skill, skill, skill.
The same is true of good athletes in any competitive sport. They don't plan their moves against their opponents in advance. Instead they play by following general principles they know work time after time, and they rely on their game experience to make the right play in response to their opponent's action in the context of the specific game situation.
Try hard to think about what this means. I think it demonstrates my point quite clearly. The good players are genuinely skilled. They do not follow mechanical rules in their play, rules that anyone could learn by reading a book. Whoever heard of a football player becoming great by reading a book on football?!! But aspiring traders seem to believe they can become good traders, make good profits, by reading books on trading and checking out the statistics of every setup and signal under the sun! What's wrong with this picture?
A genuinely skillful trader is someone who can apply his knowledge of market behavior in any context, in any environment. In some situations he knows that certain setups and signals are genuinely useful, but in other situation he avoids those same setups and signals like the plague.
CONTEXT! It's all about context. Stop trying to trade on signals and setups that pretend that the market context is always the same. Embrace uncertainty! Embrace ambiguity! Embrace change!
Here's the situation as I see it for most users on the forum. You've have been spinning your wheels while thinking that you are getting somewhere. You are trying to learn how to trade in the wrong way. I see that most aspiring traders focus all their attention on "set-ups" and on finding out which combinations of indicators work. But these people are never going to become profitable. Why? They are following the advice of trading books that say trading is simple and psychology is everything. So they search for set-ups that 'work', and they hope that these setups can take the guess work out of trading. They want to be "disciplined" and have simple rules that guide all their actions in all contexts. But I have got news for you: you CANNOT take the guesswork out of trading!!!
I offer this opinion as someone who started last year with £5,000 and ended with £300,000, without a single losing month, and while only risking a very small portion of my account on any single trade (1%). I think I was successful because of the way I went about learning and what I focused on. My learning process was very different from the ones suggested on this forum. I learned that while psychology is huge it is not everything. And while trading is all about simple principles, actually having an edge is NOT simple. It's a myth that you can have a couple simple price or indicator set-ups and make money consistently if only you are disciplined. That's a load of crap. It keeps the dream alive for wannabe traders who never realize what trading is truly about.
Trading is about being okay with ambiguity. It's about tolerating confusion. It's about sitting with discomfort and being at peace with it. It's about not having an exact script of when to trade or not to trade, or what's really a high odds trade, and being okay with that. It's about exceptions to the rules. It's about contradiction. It's about uncertainty.
And yet traders left and right want to make it simple and certain. They want to reduce it to a few simple set-ups to trade with discipline. But the market is not simple. The market is all about uncertainty, and complexity, and ambiguity. Simple set-ups could never capture that, and they can never give you a true lasting edge.
So what's the solution? Is the problem in the simple set-ups themselves? No, it's how they're being used. The bottom line is that every trader needs to learn to READ the markets. This means that simple rules will not do. There has to be a synthesis of different elements (whether they be price action, indicators, inter-market themes or whatever), and real-time interpretation must take place. It has to be all about CONTEXT. Once you can read the markets in an unbiased way you can then choose to employ "simple" set-ups to enter and exit. But the real work will be in learning to READ THE MARKET to see when you should use which kind of set-up. Seeing a hammer or whatever near a support means nothing unless you've identified the broader picture and gotten a sense of the kind of tactics you should be using, and what the odds are for different scenarios unfolding.
Now I know most traders try do this to some extent, but their main focus is on the set-ups. It's not on reading the market from minute to minute, hour to hour, figuring out the odds of it doing this or doing that, adapting dynamically, and thinking of trade ideas from all your observation as the day unfolds. Rather, it's waiting for some simple set-up to pop up and then taking it.
Is it easier emotionally to have clear set-ups to wait for and trade in this simple manner? Absolutely. But who said 'easy' would make you money? If I've learned anything, it's that the market rewards what is hard to do. It's hard to have ambiguity surrounding your market reads. It's hard being uncertain. It's hard dealing with competing and sometimes conflicting signs. But this is an inevitable part of the trading process. You must stop trying to avoid it by demanding that things to be clear cut. Yes, I know, it is hard to be disciplined when there's so much ambiguity, so much uncertainty about just what trade to make. But as a trader it is impossible to eliminate uncertainty. Don't try to avoid it by looking for simple set-ups or some straight-forward, simple, always- right method. Instead, train your mind to deal with the uncertainty.
How can you learn to do this? You must be constantly engaged with the market, always trying (and often failing) to figure things out. You must learn from experience.
In my own case each and every day I would take notes in a journal. I would try to interpret the market's action and try to figure out trades that would take advantage of my analysis. I took note of the ideas that seemed to work and those that did not. I wasn't focused on paper trading, or on recording my emotions, or anything of that sort. Instead I paid strict attention to the market's action and to the information I thought it was giving me about its condition and trend. Everything in my journal was about my own perception and interpretation of the market's action.
Day after day, week after week, I kept on making mistakes, wrong calls, being clueless about what was going on, not knowing how I should trade, and not knowing if my views made sense or not. Yet I refused to be discouraged and I continued taking notes and learning. I would view charts and combinations of historical intraday charts, and I'd note certain behavior. For example, I'd study trend day after trend day and try to notice what they had in common and how I could have picked up on it in real time. Then I'd study range days. Then I'd study a price chart of the ES versus the Advance decline line and see what the relationship was across many different days. Then I'd do the same with the ES and TICK chart. And on and on. Over time, this gave me a feel for the markets, and a certain understanding of how certain days differ and many subtle signs and tells for each type of environment and context.
As for set-ups, I didn't use any predefined ones. I just formed trading ideas and then tried to get in at good trade locations. Even this, which is the art of execution, can be quite complicated. I started realizing that in some environments it's best to wait for pullbacks, in others I need to get in at market or I'll be left in the dust. In some contexts I can buy low and sell high. In others I have to buy high and sell higher.. And so on.
I became consistently profitable in a timeframe of a few months by doing this. But of course before that I had read 30 or 40 books and so I had a lot of background in technical analysis. I had also worked a lot on my psychology and personal issues. But all of this was in conjunction with a method of learning and trading the markets that was contrary to what the general wisdom says about simple set-ups and exact rules.
Now of course you might say that everyone has their own style, some discretionary and some not. Absolutely. But even the successful system traders are very adept at reading markets. They are aware of all of the complexity and ambiguity inherent in it. Their systems might look simple, but they incorporate a deep and understanding of market contexts. Their systems are not just simple, mindless set-ups and signals.
In the end you have come to a personal realization. Take a look at your trading career thus far. Do you truly believe that if you just learn to focus and take all of your set-ups then your equity curve will reverse and you'll be a consistently profitable trader? Do you think a few simple set-ups could make you rich? I don't mean to imply that you need complex mathematical models. Far from it. What I do mean is that you must develop a mental map of market contexts and the experience and skill to tell where the market currently is on that map. This will take time, effort, and lot's of frustration to develop. And you won't be able to do this if you spend the whole trading day simply waiting for set-ups to materialize. That just won't cut it.
Right now your learning curve is stagnant because you're not truly involved with the markets and their behavior. You are acting like a statistician who is separate from the market. Your day is wasted in waiting mode. You are not in the observing and absorbing mode. Because you fear loss you aren't willing to experiment. This means that you aren't making mistakes and failing regularly, which is what you need to do to learn quickly.
So I think you need to make a mental shift. If the path you have followed hasn't brought you to your goal, try my path instead! Prepare to face uncertainty and ambiguity, the essence of financial markets. But don't be afraid. The market isn't out to hurt you. Success in trading requires the ability to be at home with ambiguity and uncertainty, to be able to take a market stance while accepting the fact that you cannot predict the future with any degree of certainty. This is what trading is about. This is why it is an ART. Once you change your focus and your learning process everything, including success, becomes possible. Until then it'll be a distant dream that keeps appearing to be so close and yet stays so far away.
So you need to re-align your thinking and get involved with the markets. Get a trading simulator and trade. Take losses. Make mistakes. Be clueless. Don't be afraid of it. It's okay, that's the only way you'll progress. And trust me, you will progress.
Face these challenges. The stuff you have heard about learning setups and applying discipline comes from gurus who cannot trade, who give advice based on their failed ventures.
These challenges most people find difficult to face. This is why most are not successful. If you can't do this profitable trading will remain a forlorn hope of yours.
I wish you all good luck and I hope some of you find this helpful. This is what I am giving back to the trading community, I hope someone of you have an epiphany over what I have said.
When I was in the 'holy-grail' search mentality, a friend explained all this to me. I took what he said to heart, and I believe this is why I am consistently profitable today. This the only real secret I can pass along to you as traders.
Good luck!
GladiatorX
Part 2 to follow
Part II
How Amateurs Approach the Market.
by Gladiator X
edited by Carl Futia
This post is for people who are struggling with their trading, not being profitable and finding themselves working extremely hard to no effect.
I found very interesting a recent post 'Who uses stop losses?' and the various replies about how stops are necessary, professional, business-like, etc. That post and the ensuing comments confirmed what I already knew: the retail trading crowd thinks and acts like a flock of sheep. Books and information about trading all say the same things. They emphasize money management, tell you that it is stupid to average down, tell you to use stop losses, risk 1% of your account, and other common propaganda.
The interesting thing is that people who talk about the value of stops, money management, etc. appear to have gotten their ideas from a book. This include the authors of those same books! It is a never ending process, a constant recycling of bad ideas. I think that those who write trading books that explain how to trade aren't particularly good traders themselves. Why? I think you must embrace uncertainty to succeed as a trader. Those who write books, teach seminars and so forth are just trying to find a way to make money with certainty because they can't trust their own trading to do it or because they cannot live with the ambiguity and uncertainty of constant involvement with the market.
These ideologies that trading books offer are accepted as trading wisdom in the community of amateur traders. I was fed all this when I was learning to trade. But I got lucky. A very successful trader told me early on in my career that 95% of traders fail. Therefore, to succeed he said that you have to do the opposite of what they do, you have to think outside of the box. I've always tried to think in a unique and different way from other traders and I believe this is in large part responsible for my success.
High probability setups + Discipline = Success
Always use stop loss orders. Have a specific risk-reward ratio in mind. Know exactly what you will risk in every trade
It is stupid to have a risk-reward ratio of less than 1:1
It is stupid to aim for very high win percentages
The entry price is the most important detail.
Almost all amateur traders buy into this ideology. Why? These rules produce the illusion of certainty in the market place. You know your risk and that's it. There is no chance of becoming emotional because you failed to use a stop and therefore busted out you brokerage account. You don't have to worry about having to explain to your husband, wife, or friends that you are not as big an idiot as you seem to be, that trading is still something worth doing.
But in the market certainty doesn't exist. Any rule that produces the illusion of certainty just makes it easier to fail as a trader.
Admittedly I went through a phase of having a set risk-reward ratio (1:2) and risking 1% of my account, thus calculating my position size must be (x). My stop loss was frequently hit. I was going nowhere fast.
I printed off all the trades I ever did and analyzed them in detail, trying to find what went wrong.
I came to some conclusions.
1. I'm buying high, I'm buying on a higher close, buying in a late signaled uptrend rather than buying on falling price.
2. Price is volatile. My stop is getting hit. I can't forecast price fluctuations with enough precision to be able to place a 5 pip stop loss.
I concluded that using a stop loss represented my effort to predict the market's short run fluctuations, to treat the market as if its movements were certain. But I couldn't do it.
I tried to move away from this idea and explore how I could trade without a stop loss.
During this learning process the fact 95% lose was a uppermost in my mind. Whatever traders who were losers wrote I would turn on its head and try to do the opposite. This was my way of thinking outside the box. And I believe that you shouldn't follow the flock.
I began to see trading as an art instead of as pure calculation. It is less about certain maths and more about movement. It's about watching the market dance, letting it move up and down without placing too much significance on any particular jiggle. I decide that I just wanted to take a piece of these constant fluctuations and not try to predict them.
I concluded that trading is not about having a certain risk-reward, not about applying the same risk to every opportunity, not about exiting at a pre-determined level. It is about making adjustments as the market produces new information, as it moves move around on your mental map of its behavior.
It's extremely hard to make money from the common wisdom you find in trading books. But if you look past such "wisdom" you can see trading doesn't have to be so complicated and time-consuming. Volatility can produce profits for you without you having to be a prophet! All the prop firm traders I know who are successful understand and base their methods on this insight. All the successes I have had in trading arise from this observation.
Professional traders win by applying their own judgment and experience to judge the market's position on their personal market maps and then letting the market's natural volatility work for them. They don't waste their time back testing strategies.
So how can you change your current quest to trade for a living?
1. Read my previous post about how to learn to trade, I seriously think if traders learn to read the markets, they will be successful. Read the market, take in the new information is gives you each hour and each day.
2. Try to escape from common wisdom and general public beliefs. Start thinking outside the box, Start looking into volatility, high win percents and try get past your human fears and uneasiness with ambiguity. Don't use hard stops.
3. Average down and pyramid with risk management.
4. Enter when price is falling.... In an uptrend.
I strongly believe averaging down, as long as it isn't done due to fear or because you are losing (If done as a planned strategy) is an easy way to profit... That is from personal experience and it is expressed in my account balance.
Thanks for reading.
Glad to help.
Gladiator X"
Rab,
Just got back from Vienna, and today's action presents a wonderful buying opportunity...
2bit
Hi Elizabeth,
As per MSO, it should be a small pull back...knowing or beliving in another bull T coming...I would buy on the pull back..
2bit
BUY
2bit
RCKS,
Good investigative work...thanks
2bit
Two,
My sore eyes say down..it does not matter about the no. if good you can short from higher ground. today is the first violation of trend line...
2bit
Ya RCKS,
Don't you love this guy...the POMO ends today does it not? I guess his massive puts will get some pennies and he does not have to ba.g..his wife now...LOL
2bit
Sell,
T theory predicted a short term top
A/D issues say sell
Other indicators all say sell
1st Target OEX 450....
2bit
From evil...
"As you are probably aware I have long been keen on learning more about the inner workings pertaining to the NY Fed’s repo auctions and I have occasionally reported on the slosh available to preferred primary dealers. After a very pertinent article posted by ZH earlier this week I carefully combed through the recent POMO calendar, which due their traditional rarity I had foolishly ignored for several months now, and to my surprise arrived at highly interesting results:
Coincidence? You be the judge of that - I however took the liberty to highlight and mark each day a POMO operation was held. Quoting the article:
[Permanent Open Market Operations] are conducted from about 10:30am to 11:00am on pre-announced days. In such auctions, the FRNY permanently purchases Treasury securities from selected dealers, with the total purchase amount for a day ranging from about $1.5 B to $7.5B. These days are highly correlated with paint-the-tape closes, with the theory being that the large institutions that receive capital injections are able to leverage this money by 100 to 500 times and then use it to ramp equities.
Here is the current tentative treasury operation schedule (i.e. POMO auctions):
Please note that the next two operations (auctions) are scheduled for tomorrow and Thursday. I am not hundred percent sure that this schedule only refers to POMO auctions - if someone in the know could confirm this I’d appreciate it.
If we get a gap to the downside in the morning I suggest you use it to close your short and grab long positions. I usually get an email after the completion of the auction - if the operation has been postponed I will report it here immediately.
Bears are retreating..VIX finally gave up...the bulls are free to go for this leg up....will see how far they can take us...
2bit
Didn't I tell you to buy oil and gold? and didn't I say this is another leg up?Gold will hit 1000,,,
Whatever you do...Don't short the market
2bit
SPX target 1170
2bit
Weekend thoughts....
The financials have been forging ahead with very little pullback. Gold and oil have done their 3 days pullback and are on their way up. Next week, is time to buy gold and oil. Since gold is up dollar will be down. The surge in volatility index late day represents climatic surge and since it did very little to the price, it will probably quietly come back down next week. I see very small or little pullback until at least by Aug7 even so the anticipation is the market will be higher in the next two months.
2bit
May I ask are you long the market? and if not why not?
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Smartone,
For example... today's A-D is 2:1 ..Do you short the market? It is very extended...
2bit
both
2bit