Tonkadad

1.Understanding The Exact Process Behind The Movement In Price

I think it is more important the reasons/motivations why a trader does or doesn't do a certain action (proper money management for example) than the action itself. There is a reason why "a trader is not using money management principles, or is trying to squeeze too much out of a small account." I believe we all respond/react to situations in a fairly consistent pattern, that pattern is created by our interpretation of events/experiences in our lives. We run on auto-pilot. I think this is a critical question we need to ask ourselves: "Who do I need to become to ....(fill in the blank) ?" produce effective trading be a better parent be a better husband/wife As a inconsistent trader, the main question I have started to ask myself is "are the actions I am taking in alignment with my goal of becoming a consistently profitable trader?". I don't think trading is different than anything else in life, it takes dedication, commitment, discipline, .etc... It definitely is very direct in it profit or loss column and very direct in the emotions that come up but to me it just learning how to control our minds to function in the trading environment. I reserve the right to change my mind at a later date.

"The problems traders experience in trading are the same problems they have avoided in other domains of their lives." If the above statement is true (which I believe it to be) then (to me) it would seem the below statement is incorrect. Does our fear know we are trading as opposed to starting a new business, bidding on a new project, asking that women at the bar out on a date?

I think bias in and of itself is not a bad thing. A bias (IMO) can be a tendency, expectation, assumption for a particular outcome or event to happen based on a triggering thought, idea or event. I think a bias in regards to the trading can be a problem if it filters out information that would otherwise be available to us to effectively execute our trading plan. A thought just came to me regarding bias, imagine it like this, an oscillating study with a zero line, when our thoughts/expectations (which would be the actual study line) are close to the zero line (neutral), we are in the best state of mind to respond/react/interpret market data as it comes in. When we have strong biases i.e. thoughts/expectations (study line farther away from zero) than we distort/eliminate/ignore data that is conflicting with our bias. The goal is to keep our biases as close to the zero line as possible, which allows us to react in our best interest. The above is my interpretation of some of Mark Douglas's idea's from his book "Trading in the Zone"

For me a bias is a belief or expectation that a certain outcome will happen. For me most of my knee jerk responses are what I will call "my biases", which after a little reflective thought I realign them. Anytime I can't see both sides of the situation I think that is biased, obviously there are degree's of biasness (is that a word?) More to come on the subject.

First, I would think each individual trader would need to ask themselves some questions to try and determine what their actual biases are, I would bet that they are the same biases that are present in our everyday life but we are just not consciously aware of them. Be conscious of your thoughts when trading, keep a notepad handy and try to capture what dialogue you are having inside of your head. Does the thought of trading get you excited or anxious? When watching the market (not trading) and seeing a nice trending move up do you feel frustrated or angry because you weren't in on the move or do you realize that there are always more trading opportunities. Lets say you place your stop at 1120.30 (GC) after a short entry and price moves initially in your favor and then price retraces and takes your stop out to the tick and proceeds to continue down, do you feel the market is out to get you or that is just how price responds sometimes? The above questions might give you some idea's on how to start the process. When you think about it, every time we trade if we were to keep a log of all of our thoughts about what transpires during the day (I am talking about our internal dialogue) we would have all we need to begin the process of exposing our biases. Obviously the more honest and thurough you can be, the better and quicker the results will be.

Here are my thoughts on the bias post. For me thales comments better align with what I am going thru right now. I can see logic in s&b's comment regarding sim trading "in a serious manner until you get it right" but there is more to the equation (at least for me) then serious sim trading. I will say that sim trading does not elicit the same emotions that live trading does, with a live market I can use my simulated account and go long or short 20 contracts of gold (GC) and not get to caught up in the outcome, the same would not be true if it were real money on the line. Having said that I don't mean to minimize the importance of sim trading and practice in general. But I think most of us come into trading with bias's regarding money, what it means to win/lose, fear of being wrong/right, etc... and to deny that is not the path to go down. Obviously in the above paragraphs I have given some of my beliefs (biases) about trading and if anybody has any comments or insights that they would like to share that would be appreciated, who knows it might just give me a different way to look at trading and help me to the next level. The last thing I want to share is something that happened to me about 20 years ago. I was on vacation in NY, Manhattan to be precise, visiting an old girlfriend. Her and I along with 2 of her male friends were walking down the street during the day and a group of about 10 young males were walking along the same side of the street and basically walked right thru our group, we got jostled abit but no worse for wear. My experience (bias) because I was in vacation mode was I actually found it kind of funny and didn't think twice about it, after we got back to the apartment of the 2 males (both gay) they both expressed frustration and anger about what had happened and it was awhile before they talked about anything else. My point is that was the first time I had first hand experience with people basically having the same event happen to them but their experience being so different.

thales, thanks for posting the John Hill pdf.

Bias is a term used to describe a tendency or preference towards a particular perspective, ideology or result, when the tendency interferes with the ability to be impartial, unprejudiced, or objective.[1]. In other words, bias is generally seen as a 'one-sided' perspective. The term biased refers to a person or group who is judged to exhibit bias. It is used to describe an attitude, judgment, or behavior that is influenced by a prejudice. Bias can be unconscious or conscious in awareness. Having a bias is part of a normal development. Labeling someone as biased in some regard implies they need a greater or more flexible perspective in that area, or that they need to consider more deeply the context. This definition is from Wikipedia, I thought I would post this first and then ponder both thalestrader and srag&birdie's comments. Definitely with you on the Blues s&b. If you are putting thalestrader in the "self-appointed 'gurus'" category then I am definitely NOT with you on that one. I have not read all of his posts but from what I have read IMO, he is a straight shooter. If this is not your intent please disregard.

Correction, Minimum Price Increment $0.025 (2.5¢) per barrel ($12.50 per contract).

I am very bullish on BF, what exchange does it trade on? Excellent results.

Thanks for your response. I first started trading back in Dec. 98 a friend had bought Wade Cooks course on options. He kept bugging me to watch the videos. I finally did and opened an account with Web Street trading call options. In the first 3 months made about 25 grand. Needless to say I thought I hit pay dirt. Boy this was going to be easy. Wasn't long until I lost all the profit. Been an on-again/off-again trader ever since. For the last 3 years up until May 2009, I have been running my general contracting business (commercial and residential remodeling). It took me to completely step away from trading for those 3 years, to realize trading has to be run like a business. For me, one of the most interesting aspects of trading is how trading is a mirror of our internal struggles and personal issues. Thank you to all who post, this is the one forum that I make sure I check everyday. sincerely, Bruce

Thanks for your honesty. Was there a turning point in your trading? It might have been even before you were profitable, but where you knew deep inside you would be able to make it in trading. thanks, Bruce

Duh, I remember you posted this just recently, .:crap: thanks again

What month are the oil traders using? Jan? Feb? When do you switch over approx. thanks, Bruce