Tradewinds

Those are better words. Actually, I've just started thinking about my commitment to trading, and realized, that I really haven't made a conscious decision to make the commitment. It's fascinating how so many things lurk beneath the surface, . . . they are there, but until I consciously name them, and face it, the real action doesn't happen. I've always wanted to trade. I know I can do it. I spend all my spare time learning about trading. So I have committed time, effort and resources; but even with all of that, I don't think I've ever really asked myself if I'm really committed to it. I can say that I am, and being able to state that gives me a sense of power.

This is a very interesting point. I have struggled with admitting how long this road has been, and that I'm still not trading live. It's not that I tell people I am a successful trader, or that I'm trying to convince people I'm a successful trader. I'm not proactively trying to pawn myself off as something I'm not. And it's not that I don't know anything about trading, because I do. But my pride doesn't want to get it's ego bruised. So here it is for all to see. I am NOT a successful trader. I am afraid of trading live. And it's embarrassing after working at this for over 3 years now!! :embarassed: Ok, now I'm free. :rofl: I don't need to worry about that anymore. I wouldn't be surprised if a lot of traders struggle with this. We all want to be successful and financially secure, and feel that we are a success story. I wonder if those 90% who don't make money, just quietly fade away into the shadows, and the story never gets told. Hopefully I'm too stubborn to have that happen. lol

Have the people whose posts were selected to be part of the book, agree to forgo any personal compensation. If they don't agree, just leave them out. Or give them a coffee mug and a tee-shirt.

If you appealed to people's massive trading ego's :rofl: and their post was nominated for inclusion in the book, they would probably be willing to do a little editing of their post, and categorize it for a topic in the book. If I could get my user name, or real name listed as a credit under the section of text that became part of the book, I'd be willing to do a little work, and a little editing to make it happen. If it became a group effort, it would go faster. Of course, someone would need to be in charge, and manage the work. But there is a way to make that less work also. Take people's ideas and opinions, then go with the majority consensus. If there is a conflict of opinions as to how the book should be laid out, etc. just do a poll, and the majority wins. Period. That way you avoid hostile takeovers. The forum here already has different categories of topics. For the book, all you would need to do is duplicate that. Unless there was a majority consensus that the chapters, and layout of the book should be different. Then take everyone's ideas, and opinions, and filter it down to the final consensus. The site could even have a forum dedicated to work on the book. It would be just like a regular forum, with subcategories. What will make everything acheivable, is a structured decision making process. There are known good strategies for making business decisions that can be employed.

As the song says, "Know when to 'hold 'em, know when to 'fold 'em', know when to walk away, know when to run." Kenny Rogers The Gambler Lyrics

Here are some thoughts about possible scenarios: IF <huge price move> AND <price move up> AND <previous trend down> ENTER LONG ON CLOSE DOWN IF <huge price move> AND <price move up> AND <current trend up> EXIT LONG IF <just entered short> AND <price move up> AND <new higher high> TAKE LOSS ON SHORT AND REVERSE BACK LONG IF <volatile> AND <huge price spikes> AND <just caught a better than usual profit> EXIT AND WAIT FOR NEXT ENTRY SET UP IF <news was very bad> AND <market is going up> BE CAUTIOUS AND LOOK FOR A DOWN TURN. IF <news was very bad> AND <market going down> AND <just got a long set up signal> GO LONG BUT LOOK FOR CONFIRMATION OF STRENGTH UP IF <just entered long> AND <price move up weak> AND <no strength signal up> AND <news was bad> AND <trend down and price dropped hard> EXIT LONG, WAIT TO SEE WHAT MARKET IS DOING I have developed a lot of rules that I either have written down, or I've seen the conditions so often, that there is a 'database' of rules in my head that I can draw from. Now I'm at the stage of trying to get all those rules to be right at the front of my consciousness, and quickly available for decision making. Plus I want to develop a discipline of cycling through all my indicators, and not getting hypnotized by my profit and loss column.

Here is one issue that I have seen with scalping: Price goes to a new level, and if you take profit on the first wave, it's very difficult to get back in at a better price to ride the second wave in the same direction. For example, if you are in a long trade, and your trade went to a profit, and then the price slowed down before another run up. There are times when you could exit, and re-enter at a better price, but there are also times when it would not be possible. So if you scalp your profit early, then you miss out on the next price surge up. If price needs to trade through your limit order, there is often not enough range on the bar to get out, and get back in before price shoots up again. For example, trading the ES. I see this all the time. The price will surge, then pause, and the range on the bar is 3 ticks. Well, if the price needs to trade through your limit order to be guaranteed a fill, then you need 4 ticks to safely get out, and then get back in. If you were long, you would need to take profit at one tick lower than the price went to, and to get back in at a 1 tick better price, the price would need to fall back down to one tick under your entry order. That requires a range from the high to the low of 4 ticks, and you would need to enter and exit the absolute perfectly priced order. I'm not saying it can't be done. All I'm saying is, that it's an issue that needs to be factored in. In my opinion, the best thing to do, is to first ADD to your position at the better price for your exit, then exit. So you are "leap frogging". If you were long, you would add to your position right before the exit target, then wait for the exit target to be hit, and decrease your position back to the original amount. It's counter intuitive, but it's the best way to exit and then reenter at a better price than the exit price. Of course, if you are wrong, and you increase your position right before a reversal, then you've have just increased your loss potential. So that risk needs to be factored into the strategy.

I would like to see a rating system similar to the current rating system, but that rated each post for a nomination good enough to be part of a trading book. Then, over time, take all the posts that are the best of the best, put them in a book, and offer it for sale. The proceeds could help support the site. Make it a read only pdf file, or maybe even something you could down load to a electronic book. Then just sell it for a small fee, or a "donation".

I like the idea of the rating system for threads. But when I see a 5 star thread, I have no way of knowing how many people voted. If all the 5 star threads only had one person who rated them 5 stars, that would be meaningless to me. So I would like to see how many people voted in the rating.

I've been using the "Remember" check box, when I log in, and that seems to solve the problem with getting automatically logged out. The Pop Up log in box, doesn't have a "remember" check box, so I have to close that, before I log in.

You bring up a very interesting and important trader problem that I am starting to consciously deal with, and that is the "hypnotic state". I had never heard of it described that way, but it is the perfect description. I often stop thinking, and stop analyzing the market at some point. I will start watching my profit and loss exclusively, and go "brain dead". :crap: Then I will stop watching my indicators. Then even when I realize what I'm doing, and become mindful that I need to start paying attention to my indicators, I still struggle to interpret and analyze them correctly. I want to get into the habit of cycling through all my indicators, and all the patterns that I have learned, in a calm, and controlled state of mind. I like the term that you used, "hypnotic state". I let myself get "hypnotized", by the price action on the trading ladder, and stop looking at my indicators. If I can become "mindful" of that state of mind that I slip into, then I can recognize it when it happens, and tell myself, "Hey, you are in the hypnotic state, snap out of it."

My trading style is day trading, very short trades. My average trade would last 5 to 7 minutes. I take profit on every price wave. If the price goes against my trade on the very first move, I would look to exit immediately. I do not use stops. My opinion is, that for very short term trading, stops are a serious detriment. I can see if an order is not going my way, and exit with a very small loss. I don't see any logical reason for ever changing my style or strategy. If I had huge amounts of money to play with, and had a back-tested strategy, where I could just enter orders, set my stops, and then go live my life, then maybe I'd take longer trades. I'm trading the e-mini future, ES. The reason I trade that is because it moves with the market. And I find it easier to track the market as a whole, rather than trying to find stocks that are moving and keep track of individual news events for that stock. The ES reacts to news in general, and it's easier to watch a few scheduled news events than trying to read streaming news headlines every second. In my opinion, trading stocks is absolutely pointless, unless you are a long term value investor. My trading style, of very short term trades, that I am watching every second, decreases the chances of large losses. But sitting there watching the trade, can increase my anxiety.

Well, it's encouraging to hear that you got past the fear. I'm working on that now, from a combination of gaining confidence in my ability to read the market, admitting my fears, and looking at different techniques to deal with the problem. I think part of the solution is simply spending some time thinking about the positive outcome, and letting it "sink in".

I think what you are saying, is that fear actually has some good, practical uses. If that's what you are saying, I agree with you. But for me, and at at this point in time, fear is an overwhelmingly bad influence on me, that no longer has any validity in my trading. I have a good system that makes money, but some part of my brain just doesn't believe it. One part of my brain believes it, and another part doesn't. But now the "program" has been written, the neurons have been fused, and they do what they were programed to do. They inject me with fear.

What you are stating is true, . . . but if there is a way, I'd like to step out of the cycle of fear and greed. Both motivations seem flawed, and ultimately destructive. Again, what you are saying is true, and greed does work. But how long does greed work, and what is the final outcome on me as a person. I'd like to try to avoid that road.

I've thought about this myself, and I think it's a good point. My question is: Can you increase the desire without addressing the fear? Or does a person need to do both at the same time? Or do they need to address the fear first? Or something else.

Well, I guess that the Advancers and Decliners are determined by comparing the current price to yesterday's closing price. The point I would like to make, is that Advancers and Decliners don't necessarily mean that anyone is buying or selling at those prices. So a stock may have Advanced in price, but just because it has advanced in price, doesn't mean that people are buying at that price. I guess what I'm saying is, that whoever or whatever controls the price, could be moving the price without people actually buying or selling at that price. I'm trying to figure out the influences and behavior of these market internals. For example, if the Advancers are going up, but actual transactions at the advancing prices are not going up, that is information that I would like to know. To some degree, I think that the Advancers and Decliners represent the price the market is "Asking" for a stock, but it doesn't necessarily mean that anyone is paying that price. It could mean that, it might not mean that. Does anyone know how the exchanges set what the ask and bid is for a stock? I'm assuming that offers get made to buy and sell, all the time, then get canceled. But the market doesn't know those orders are going to get canceled. I've read posts that talk about major institutions entering orders, and then withdrawing them, implying that price could get manipulated by entering orders that they never intend to fill.

I think that extremely successful strategies are possible. I also think that there are incredibly few people who come up with them. Out of all the competitors, somebody will win the gold medal.

To open an account, you will need to do some paperwork, make financial transactions, send money somehow, sign agreements, and have a bank account. You will probably learn some new terminology, like what a "margin" account is. You don't need to know anything about accounting or bookkeeping. You don't need to know anything about finance or valuations. In fact, finance and accounting have almost nothing to do with trading. Trading is a "game" of luck, a game of how to manage probabilities, and a game of market behavior. Trading can be slightly less like gambling because you can actually learn about things that affect price. So you can play with "loaded dice", but you are still rolling the dice. News affects the price, speculation affects the price, what the majority of investors are doing affects the price and trading ranges and other technical aspects have an effect on trends. You can pay attention to the news, get to know price patterns and behavior of the market, and learn technical aspects of low or high probability "set ups". I'm not sure what you mean exactly by financial accounts, but hopefully my answer addresses your question.

Liquidity: How it is created Liquidity is created by Many Buyers : Many Sellers This is a basic economic principle. There is also the issue of how often something is being bought and sold. The average person with a retirement account does very little buying and selling of investment products. Traders may be trading on a daily basis. The trader is willing to take a short term risk to buy and sell. The market exchanges benefit from a lot of buyers and sellers because it increases liquidity. Traders need an incentive in order to execute a lot of short term trades. No one would be attracted to trading without some kind of incentive. So the market provides an incentive, which is profit. Traders want to make a profit, so they trade. The more traders that trade, the greater the liquidity. Liquidity is created buy many buyers and many sellers, who are attracted to buy and sell for profit. Traders add even more liquidity to the market. The entities who own the securities exchanges benefit from the liquidity, because it decreases the entry and exit barriers. If there is no real barrier to enter and exit investment transactions, people freely engage in the market. Traders must be offered potential income as an incentive for them to buy and sell investment securities in the short term.

Liquidity: The importance to the market No one would knowingly buy an investment that they knew they could never resell. It would be pointless. This is the very basis of liquidity. Liquidity is a very basic goal. It is a major goal for the exchanges that create and control the markets. Without liquidity, investors may be reluctant to buy an investment. With no buyers, there is no market.

This thread is dedicated to the topic of Liquidity: How it is created Importance to the market Importance to the trader Implications of it Benefits and dangers of liquidity What you need to know about it How it can be determined

Okay, I'm glad you pointed that out.

The definition I looked at on that site seemed to state something else.

Ok, thanks for responding. I guess it's one of those things that I just have to live with. If the web site developers could just kind of keep this issue in mind, so that it's open to a possible solution at some point, I think it would improve the user experience. Ultimately, Traders Laboratory wants satisfied customers, or they just won't participate as much. It won't stop me, but it might stop other people.