Soultrader

hehehe Some good points in your post EZ. Thank you for sharing it with us. Reframing our negative experienes is a concept taught in NLP as well. I find it to be very helpful. Its important in trading to understand how your emotions affect your behavior. Without this self understanding, traders will have a tough time dealing with the emotional up and downswings.

Hi Wallstreet. Welcome to the Lab. We look forward to your participation as well Feel free to contact me anytime if you have any trouble with the website.

Nicely said ez. Trading is possibly the greatest outlet for emotional expression. Everyday I learn a little more about myself by being engaged in the markets. I learned alot about controlling emotions during my years as a poker player. Besides from tilt, I found one of the biggest distraction to be euphoria. A euphoric mind can not think rationally. Always a good sign to ring the register or cut some portions loose. How important do you think Emotional Intelligence comes into play in trading? There was a phase in which I studied NLP and anything related to emotional intelligence intensely. I had a debate once with a fellow trader who claimed emotional intelligence had nothing to do with trading. Any thoughts on this?

With your comments, I may actually invest in the eyeQ program. How long did it take you to see significant results? I found out about eyeQ a few months back from a trading buddy who is a pure tape reader. I agree! Always looking for a unique opportunity

I am not a greedy person in general but when it comes to trading somehow that emotional side of me comes out to the fullest. In Japan, our culture teaches us not to be greedy. Greed = disrespectful in my culture. Perhaps this suppression of emotion explodes in the trading arena.

Yea.. relative strength may be better. Different sectors tend to be laggers or leaders depending on the current economical cycle. Indexes also tends to lead one another. FTT, are you familar with intermarket analysis? If so, would love to hear your opinion on the global markets.

Couple limitations I can think of: 1. Scalpers tend to do 40+ roundtrips day with enormous volume 2. Will not catch the bigger swing. 3. Staring at tape all day But this would not be considered a limiation from a scalper point of view. This is their trading style and they tend to be good at what they do. They are very quick to pull the trigger and very quick to exit at the first warning sign as well.

Interesting but hard topic to answer. Traders by nature are very aggressive and thick-skinned. That does not necessarily mean we suffer from a lack of ethics or values. Yes, I am sure you will find unethical traders such as the Enron traders who found it entertaining to shut off California's electrical power. (so they can profit from rising electricity prices) I also saw an interview of a commodity floor trader in the CBOT who made a fortune on 9/11 trading gold. Is this unethical? On the other hand take a look at Warren Buffett who just donated $30.7 billion to the Bill and Melinda Gates Foundation. (respect to that man!) I think it would be wrong to judge the entire trading population as unethical people. Just like any profession you are going to find ethical and unethical people.

ahh yes.. the height of emotions. If there was a barometer for fear and greed, I am sure both emotions would of went off the scale. I find fear easy to control mainly because I am comfortable with all my setups. The problem I have is greed. There are so many times greed interferes with logic. Even if the markets tell me to exit, greed alters my thinking in suggesting price might go up. I have seen many paper profits disappear because of greed.

Thank you ezduzzit. Never been much of a puzzle person but may need to check it out. I am more of a dice/card game type of person. Have you heard of eyeQ? Welcome to eyeQ - Speed Reading and Brain Enhancement Technology This is a little irrelevant to this topic but thought I bring it up. Its a program to help you read faster. I take the demo every now and then to improve on my tape reading skills.

Do you think the 6 year sentence is too light or too heavy for a case like this? In Japan we recently had a similar case of securities fraud. However, due to the fact securities fraud is such a rare case in Japan our laws are still lenient in terms of penalty. Not enough court cases yet to sample from.

Nicely said Trade Up. I have predefined exit target points and stop loss points on every trade to reduce the emotional aspect of trading. This allows me to control fear and greed.

Try looking at the larger timeframe to see the bigger trend. You might see a downtrend in a 30 minute chart but an uptrend in a daily chart. Always look out for the bigger trend. Since you plan to trader on a longer time frame, the understanding the bigger picture is vital. Woud you be able to post some charts up so I can take a look? Perhaps I can explain this better. Thanks

I agree in trusting your intuition. Aferall, intuition takes years of experience to develop. You feel things sometimes without the abilitiy to explain it. I think intuition in trading takes minimum 5 years to develop to a point where you can trust them 8/10 times. I often hear new traders mentioning, "I'm going short because the market feels weak or overbought." This should not be mistaken as intuition. It's simply emotional trading without a plan.

In my case, I find it easier to understand the day by day movements in the markets. The longer the timeframe I find it harder to predict. The untrained eye sees price mveoments as chaos. But with the proper training and hours of practice, I think one can start to understand the language of the markets.

Having a trading plan is similar to having a map when traveling to a new location. Modern day vehicles often come with a navigation system making it easier to travel with the fastest route. A trading plan acts as a roadmap for the trading day. Most new traders trade without a plan. This often causes reckless trading, emotional trading, and no predefined entry and exit points. They are simply lost during the trading session. Designing a plan prior to the open is necessary. Most new traders are still unexperienced to devise an effective trading plan that can guide them throughout the day. They are unable to locate key support and resistance levels, do not hold strict money management rules, and lack the discipline needed in trading. So What Is A Trading Plan? Everyday after the close I will spend 1-2 hours studying the market action. I will then go through my daily charts, 233 TICK charts, and Market Profile charts. First thing I do is to look for market acceptance vs rejection. Then I switch to the daily chart to view the bigger trend. I will then plot the pivot points and any significant price level that I will be looking at accordingly. This gives me a roadmap for the markets. The second step is to plot the route I plan to take on the roadmap. I will visualize a number of possible situations for the following trading day. Couple examples include: 1. If the markets open up above the value high pivot, I will look for long setups. 2. If the markets gap down to the daily pivot, I will fade it for a gap fill. 3. I will not trade between certain price levels as it offers no opportunity. Every trader has their own methods and analysis techniques to develop a trading plan. There is no right or wrong way to devise one. The biggest mistake alot of traders make is that even with a plan, they are unable to follow it. Why draw a map and not use it? Develop a trading plan and stick with it. Have the discipline to follow your plans. By having a plan and applying money management, you have a significant edge over a good percentage of traders. Best of trading. James Lee

A strong morning trend is likely to continue in the afternoon. So how you find a setup? One method I use after a strong morning trend is to let it sink a little bit while the profit takers come on. I will then plot a fibonacci retracement line from the swing low to swing high and look for support in the 50% - 61.8% fib retracement zone. Notice in the chart, the 61.8% became the dead support and the markts took off for another 70 points.

For those of you who have been following up with Enron over the past several years, this may be of interest. http://biz.yahoo.com/ap/060926/enron_fastow.html?.v=48

I would NEVER average down. Why buy a falling stock? You are wrong and your ego is not allowing you to take a loss. The only thing I would do in a falling stock is short or liquidate for a loss. Im not trying to be a hero and catch the dead lows. All I want is the meat (the middle of the trend). Have you made money averaging down? This method is a sure way to lose unless you are playing with deep pockets.

There is a Wall Street proverb similar to yours. "Buy the rumor and sell the news."

I use alot of market profile in my market analysis and to understand balance from imbalance. I do not trade stocks but would like to know if the same market profile concept applies to the stock market? I trade the YM primarily and feel like the market is a complete auction. However, when I take a look at the stock market there seems to be alot more external things such as earnings, M&A, rumors, etc... I guess my question is: Can I apply the same market understanding/concept of the futures market into the stock market?

I just don't like the concept of overbought or oversold. I dont believe any market should be considered "overbought/oversold". Its a reallly bad way of putting things. Im still trying to organize my thoughts on this one... been testing out some strategies but none seem to make any sense yet. Will keep you posted.

I agree... I am no intermarket analysis expert but I did study John Murphy's work quite a bit.

There is a reason Japan became a top economical country ever since its destruction in World War 2. The people of Japan are hard workers. Most companies will force you to work overtime without extra pay. Unfortunately the people of my generation are not as hard working as our ancestors. Another deception in Japan is that we are perceived as a wealthy country. Yes, the country is not considered poor. But we do not have the tremendous gap between the rich and the poor like most countries do. Most of the people in Japan are stuck in the middle range. They are able to purchase a home on a 30 year loan but need to work until 62-65 until they can collect benefits. This is the typical life of the Japanese "salary man". The tax and legal laws of Japan are made so that people remain equal. If you are looking for the American Dream in Japan... I suggest one take his chance in the US. The only way to make it big in this country is by running your own show.

I dont believe in quick money. Once you have crafted a skill and become an expert at it... I do believe money does pour. However, one must apply hard work to get to that point. The only quick money is inheritance. Which in my opinion does no help for the person wanting to learn how to make money.