thalestrader

There really has been nothing new of any real importance conceived, discovered, etc. and so on with respect to trading since Dickson Watts published Speculation as a Fine Art sometime in the late 1800's (what is "selling down to the sleeping point" if not a commonsense, real world expression of the risk of ruin?). If you have that book alone, that is enough, provided you have the emotional discipline required to heed its advice. We now live in a world where fame is viewed as the pinnacle of achievement. It is telling that Charles Dow never called his technical approach "Dow Theory," that William O'Neil codified the work of others (Livermore, Baruch, Darvas et.al.) and named the approach with a simple acronym of the approach's component concepts, i.e. CANSLIM. Wells Wilder created an indicator that he called, simply Relative Strength Index. Others subsequently added the prenom "Wilder's" to RSI only to distinguish the indicator from the concept of relative strength. But where have we come in the last 35 years? We have a Joe Ross who wants to name a basic building block of price action after himself, we have a Joe DiNapoli who wants to rename Fibonacci levels after himself, and Tom Demark wants to name every single thing that emanates from his body a "Demark this" and a "Demark that." Each is exceedingly unoriginal, in his own way. But why should I care? As Thomas Jefferson would say, "It neither breaks my bones nor picks my pocket." I am all for credit where credit is due. But let's not become overly concerned with the "from where things came" and lose sight of the main point - "will this be to my advantage or disadvantage to use". You can call it whatever you wish. In the end, this about speculating about the immediate future direction of prices in order to profit while limiting losses. And we should use whatever we may find at our disposal to aid us in those endeavors. Best Wishes, Thales

Hi Folks, Found some Linda Raschke videos on Youtube when doing a google search for her seminar. I haven't watched each of these, so I cannot vouch for their content, but she has never disappointed me. [ame=http://www.youtube.com/watch?v=wsH6fWVP3Z8]YouTube - Linda Raschke: Stick to the Plan and Become a Better Trader[/ame] [ame=http://www.youtube.com/watch?v=5x--xYjuajE&feature=related]YouTube - Linda Raschke and Why She Rarely Uses Trailing Stops[/ame] [ame=http://www.youtube.com/watch?v=9rHLGJq79ZU&feature=related]YouTube - How to Use Stops, Why Trade with Stops, How to Determine Stops[/ame] [ame=http://www.youtube.com/watch?v=AnQZnNmKJng&feature=related]YouTube - OCO As Trade Entry Techniques with Linda Raschke[/ame] [ame=http://www.youtube.com/watch?v=g1hs6-mr6PU&feature=related]YouTube - Plan Your Trades, Learn the Essentials[/ame] Best Wishes, Thales

No problem, TrueBalance. I agree with you - credit where credit is due. I know you were not directing your comments toward me. I've said all along that I am a most unoriginal trader. And I stand by that self-assessment. I have, however, spent my way through all manner of BS, and all I've wanted to do in this thread is direct folks to the people, books, articles, and concepts that I feel have been of value, so as to help others avoid the fools errands I've been on. So, our friend Kiwi notwithstanding, I found Van Tharp incredibly helpful (though I'd probably not recommend his two books so much as the three or four articles I've posted here in the thread. Best Wishes, Thales

Traderscalm looks like it may be a decent resource, Blowfish. Thanks for sharing it with us. Best Wishes, Thales

What is the tick value on the "micros"? The tick value on the 6B is $6.25. I'd not really want it smaller than that ... after all, my costs for trading the 6B are 2x's my costs for 6E, 6J, and ES when trading comparable size. Best Wishes, Thales

You will serve yourself better by exploring adjusting your position size based upon real risk, rather than on perceived "goodness." Best Wishes, Thales

While we are on the topic of Risk of Ruin and such, here is some good info from the blog of Brett Steenbarger: TraderFeed: How to Avoid Risk of Ruin in Trading I'm not sure if this is the entry that MidK referenced recently, if so, no harm done, if not, its only tot he good. Best Wishes, Thales

Now do not leave us hanging for long, Kiwi, ... Best Wishes, Thales

Hi TrueBalance, Good to hear from you again ... you've been too quiet! I kind of thought R-multiples was the basis of Richard Dennis's and William Eckhardt's money management regimen from the 70's (not to be confused with N-multiples, which were trading units based upon volatility, if I understand them correctly, which I am never sure I do). I'm not sure it really matters as risk as a percent of equity has been used by many over the years, including William O'Neil as far back as the 60's. Whether it was call "R" or "Units of Risk" is not so important. "A rose by any other name ..." I personally have conceived of nothing new, I take credit for nothing, and do try to give credit where credit is due. It was Tharp's writings that made this type of money management approach clear to me, and whether it was developed buy Chuck Branscomb, Richard Dennis, or Socrates, Ben Franklin, Van Tharp has to get credit for making the concept and its benefits easily and publicly available. Best Wishes, Thales

Here is a Van Tharp article that may be a bit less intimidating than the more comprehensive pieces I previously posted in the thread, but nonetheless gives a good presentation money management and how focusing on R as oppossed to nominal dollars will help you overcome the desire to be right. Best Wishes, Thales TTJMay Expectancy - Van K. Tharp.pdf

Dollar, Dow, & Gold - I do not see anything today that adds anything new to current unclarity ... Best Wishes, Thales

Interesting document, Dinero, thanks for sharing. 11k/year? Well its nice to know that the big guys are even dumber than us pikers. Best Wishes, Thales

pre-Weekend Reading I do not want to use this as my weekend reading submission, but I think this is an interesting piece. I do not know who wrote it. My friend, the currency trader sent this to me sometime ago. He found it over at FF, and I have actually run into a few other places myself. It is a quick read, but I think it may be of great value for those who sometimes feel as though they are stuck in second gear - it may be the case that you are actually stuck in stage 2. Best Wishes, Thales 5 Steps to Becoming a Trader.pdf

Just because you trade intraday does not mean you need to trade frequently for bird seed. You could choose to apply yourself to developing an approach that allows you to catch 20-100 tick moves. It can be done. Ninja is free if you use it just for charting, but you will need either a broker whose feed connects to Ninja, or you will need to lease a compatible data feed. I use Ninja for charting, but I trade from my broker's DOM or TWS. Best Wishes, Thales

I believe you are as well ... Good Luck, and keep the log going. Best Wishes, Thales

You need to work on your trader instincts ... Best Wishes, Thales

We're in different scales of price movement as I am trying to catch a large rally, so your short and my long may be able to peaceably coexist under certain circumstances. However, as it is the weekend, I do not wish to endure an open position, so I will be out a tick or two before you are short. And frankly, I do not typically endure 60 tick stop outs, even if the liquidity will be there. Price has rallied and then declined to test my entry. I decline to let it fall below that point a second time with me aboard. Best Wishes, Thales

Well, I'm not holding the 6E through a long weekend, so my stop is BE on this trade (1.3601) at this point. If I'm not stopped out, its MOC. Best Wishes, Thales

Apparently I'm not the only one ... Best Wishes, Thales

I might like the EURUSD/6E above 1.3600 ... Best WIshes, Thales

A couple of long stock plays for the day... MFE has triggered, but it is getting sloppy. QCOM has yet to trigger. Motorola (MOT) also looks good, but it is too cheap for me to play (chart not shown). Best Wishes, Thales

That is an excellent point, Marko. Frustration can lead to shaken confidence, and shaken confidence leads to loss avoidance, i.e. skipping trades (fear of pulling the trigger). Once you start doing that, you are dead. There is no way to recover a draw down other than through trading. There is no better way to preserve and to increase a draw down than through fear managed trade selection. As an example, I mentioned a few days ago how last week at one point I found myself down nearly 4R. I had quite a string of losses and BE trades, with hardly a winner in sight over a couple of days. As I was never down a cumulative 2R in any one session, I never had to stop trading per my 2R and I'm out rule. So I kept taking my swings. There I was, down nearly 4R, and the next opportunity presented itself. I placed my order, it triggered, and less than 20 minutes later I was out with a +5.06R profit that not only erased the draw down but put at a new high for the month. It does not always work itself out so completely and at once, of course. However, if you start skipping trades out of frustration or damaged confidence, you will likely miss that +5R opportunity and you will uncannily select to take every -1R the market offers you. Best Wishes, Thales

While the daily chart of the Dow seems to have somewhat bullish implications, an internal look at this rally on the 60 minute ES shows a lot of chop, overlap, and channeling (though not as pefect and neat as one would like). So the internal strcuture looks corrective, and as though we should expect further decline (at least a retest of the 1040.75 low), the daily Dow would have me very close to allowing me to initiate new long stock positions for swing trades. We'll see if the week ends with any more clarity than the rather foggy view I seem to have at present. Best Wishes, Thales

Hi Folks, Earlier tonight I pulled out my old notebook from Linda Raschke's seminar. As my daughter and I read through the first few pages, she asked me who wrote this and I told her LBR. I asked her why she asked, and she said that much of it sounds as though I could have written it. I have mentioned here recently how much my own development as a trader is owed to the insights and teachings of Raschke. I was trying to find out whether or not she still holds her annual seminar in Chicago, and I was unable to find out anything at all. But I did find an MP3 of a webinar she did on Mental Performance, and I thought I'd share it here. I hope you enjoy it. Best Wishes, Thales Mental_Performance.mp3

Another way to look at it is this: Just because your broker will let you trade it, that doesn't mean you ought to trade it. Best Wishes, Thales