brownsfan019

Larger swings up and down. Some days you can't believe how much you made and other days you aren't quite sure what happened. In other words, is it easier to make a solid profit per day and be happy or go for larger dollars, up or down?

Hopefully you guys can tell that I am really into the psychology of trading. I think it's much more important than any system you could possibly design. And I think the many threads here really highlight this if you look at what is really being asked... With that being said, I have a question for everyone. I think there is a poll listed at the top of the thread. The question is: What is easier to do - create consistent profits on a regular basis or create 'roller coaster' rides on your P&L?

Thank you very much sir. Exactly what I was trying to explain here.

I thought of another example of when 'not' to trade that you may hear - don't trade before/during/after econ news. Again, know your markets, but on the US indexes at least, I've found there's no reason to not trade around these times. Sometimes they provide much need volatility and other times the market just ignores them. Again, there's no perfect rhyme or reason here, so you either have to trade all of them or trade none of them. I call it my 'Blackjack Strategy'. On another message board I am on, they recently added an arcade section. It's a more casual board than here. Well, I decided to try my hand at blackjack as I've always enjoyed playing. And my conclusion was simple - you have to play the same hands the exact same way each time if you want a chance at winning. You cannot sometimes hit on 15 or 16, you cannot sometimes hit when the dealer is showing a 10 or face card, you cannot sometimes take blackjack insurance, etc. etc. Trading is no different in my opinion - you must either decide that you will trade Mon, Fri, holidays, econ news, etc. or not. You cannot one day trade these times and the next week not. More often than not, you will be wrong twice. You will be wrong on the times that you do trade them and 'wrong' on the times that you do not. As I found in blackjack, the absolutely critical hands are the tough ones - when you have 12-16 and the dealer is showing a card less than 7. Since the dealer must hit on 16 or lower, how you play your hand is critical. What you do in this scenario must be the same each and every time. Same can be said of trading. Great thread bf!!

Excellent points notouch! I forgot about Fri and it being profit taking day!

James, I agree. As you can see by reading the posts, I was not the attacker here. As Kiwi knows, any good trader has an ego and when attacked, most people will fight back. That's a simple human response. I have to assume that Kiwi thought by using a fancy word like 'obtuse' that his comment would be taken lightly. As far as I am concerned, it's the same thing as saying you are stupid. I may not have my thesaurus handy like Kiwi, but the meaning of the word is the same.

Good question BF. In my years of trading, here's what I've decided - Mon and Fri are no different than the rest of the week. You have no idea going into the week what days will be active and when it won't be. Just when you think you got it pegged, you will be wrong. Few examples... You'll read that before/during/after holidays is a bad time to trade. You'll hear that summer is a bad time to trade. You'll hear that Spring is a bad time to trade b/c Summer is around the corner. You'll hear that trading during lunchtime hours is a bad idea. etc. etc. etc. And what I have personally found out is that as soon as you make any type of assumption of what the market may do that day, week, or month, it will surprise you. Then your mind plays games with you. I remember when I used to assume that trading before a holiday was bad, so I would avoid it or trade less. Sometimes it was slower, sometimes it wasn't. Now, if I assumed that it was a bad idea to trade, but turned out to be good, then your assumption for what the week after is all messed up now. Let me lay it out like this: You say to yourself no trading before a holiday. You watch the market provide incredible trading opportunities, but you must watch b/c you said no trading. Initially you assumed that the week after would be best. Now, you aren't so sure b/c the week before was best. So, what do you do now? Trade or not? Either way, you will be wrong. So, after years of playing these games, I said screw it and just trade each day like it was a 'normal' day. You just simply do not know which days will be best for your trading until the day is over. You have to be in the game in order to win. That's what I found out at least. You may find that your trading setups simply are not reliable during certain timeframes and you are the only one that can figure that out. The guys that say don't trade Mondays, Fridays, lunchtime, etc. either know that it does not work for them (so it must not work for anyone) or they've been told not to trade during these times, so they don't. Here's an example from Fri - Fri afternoons are often referred to as a time to avoid. And back in the day, I avoided them b/c everyone said to. Well, on Friday I got a nice +2pt move on the ES that took very little time to occur. Getting +2 on the ES with ease was a great way to end the day. Note - sometimes you'll find that the 'bad' times are some of the easiest times to make quick money. I'll let you figure out why that is...

James - that is very easy to accomplish as long as people are willing to explain their opinions vs. resorting to name calling. Kiwi obviously did not have anything meaningful to share, so he did what my 3 yr old nephew does.

Kiwi - you want to call me obtuse and then act like you did nothing wrong? Give me a break. For the record, no name calling was done on my part. That was initiated and started by you. In an attempt to understand what the point of your post was, you could not explain like an adult, you resorted to name calling. So, when you refer to someone as obtuse and then wonder why they are defensive, either 1) you have no idea what that word means or 2) got called out and ran with your head between your legs. Enjoy your time ET, I'm sure I'll see you over there. :p

What a draft!!!! The Browns actually look like they know what they are doing and get the best OL and one of the best QB's in round one?!?!?!? Unreal. This will prove to be an incredibly intelligent move by management or the most costly in franchise history. Time will tell. GO BROWNS!

Let's see where it is implied that ex-sales persons make bad traders: > he points out an area where ex-sales types may be at a disadvantage > Outcome bias: The tendency to judge a decision by its outcome rather than by the quality of the decision at the time it was made. > Sales types are very focussed on the numbers. No matter how much process is discussed you end up a hero or dead on your numbers. > So it may be harder to detach from outcome and focus on process than for some other former careers. Now, since I am 'obtuse' please elaborate on how those comments do not imply or flat out say that ex-sales persons may be a bad trader. And if this is not your point, what was the point of the initial post to begin with? Tin and I shared REAL LIFE examples of how coming from a sales background was to our advantage and you chime in with some quote from some guy's book who's never been in sales... What exactly were you trying to share with the group? PS If you want to start the name calling, feel free to spend your time over at elitetrader. To say that I am "Lacking quickness of perception or intellect" is what I expect over at that place. Take your name calling elsewhere unless of course the plan is turn TL into another version of ET. Completely immature Kiwi and it simply shows how childish some people are, regardless of what forum they may post on.

Here's a WRB chart from today with some nice exits. This is an ES chart with a 15,000 VBC setting. As I said in the previous post, WRB's are more obvious on a larger VBC setting. So, my suggestion at this point for anyone interested in WRB's and using a VBC chart is to consider a 'higher' VBC setting. At least what I would consider a higher setting. I've been looking at different settings for the VBC and there's a fine line between helping to keep the noise down and to having too little going on in my opinion.

Faith is Galt's Chief Investment Officer. He is an original Turtle, an elite member of Richard Dennis' trader training program. Called the most successful of the Turtles by the Wall Street Journal, Faith has been developing computerized quantitative investment strategies for more than 20 years. Faith is also a seasoned technologist and entrepreneur. He has founded and/or worked on the startup team for several enterprise software and technology companies including Borealis, Sierra Software, Efficient Field Service, OneCard, and ScoutFire. Galt Capital: The Most Profitable Community Of Investors In The World - Ok, there is his bio. Not sure what I am supposed to see here b/c I see no reference of being in an actual sales position. OK, missing the point again... I don't see how this translates to the argument that previous sales people make bad traders. The fact that a lot of people fail has no correlation to a previous career as a sales person.

Kiwi - I'm sure we could make arguments about the best types of careers to come from for trading. I personally have come from sales and see the many correlations, so I think it's an advantage. And until someone has actually gone thru what myself and tin have, I take no stock in their comments. I'm sure the author of the book is a smart guy, but until he's been in a sales environment for years and successful at it, just another opinion. Just like any other book on trading, it's all just someone's opinion and that's fine. But I am of the belief that until you actually do what you are commenting on, it's just a speculative opinion. For example, I would think that being a social worker can be a rewarding job even though it pays very little. Now, someone that was actually a social worker may disagree completely and say that with all the red tape, the job is terrible. Obviously my opinion was not worth much b/c it was based on my opinion only.

Michael - in a trend - up or down - indicators are going to be useless in my opinion. Just look how long AMZN has been 'overbought'. One thing I learned about indicators - they can stay overbought much longer than your account can stomach trying to short them. I don't use these types of indicators anymore for this very example. As soon as you get caught into a strong trend and your indicator keeps saying it's time to short, you will get hammered. Once the market takes a breather and/or enters more 'choppy' times, the indicator will look like gold assuming you and your account are still trading.

Pivot - little update here - I did notice that when I increase the volume threshold on a constant VBC chart that WRB's not only appear, they can be fairly strong areas to exit. So, something for me to consider and look at closer since I enjoyed using the WRB's on the 'subjective' TS VBC chart. To put this in perspective, I looked at an ES chart today of 15k, 25k, and 30k for the volume threshold. I've been using 3500. So, not only are the WRB's appearing on the larger settings, they are more reliable (so far) than something found on the 3500 setting. I'll try to remember to post some updates and charts here to keep the discussion going and provide good analysis over multiple chart settings.

Soul - FYI - the spammers are now hitting the PM's of message boards.

Pivot - I meant to post an update here, sorry about that. Yes, the move to a constant volume chart does impact the appearance of WRB's quite a bit. While they could work with the TS setup, I just cannot subject myself to a 'what if' scenario every day - what if TS does show many today, what if they don't? Just too much open to interpretation by their software. As a result of the more 'smooth' looking charts with constant VBC's, I have not used WRB's as discussed here. I see the value of the WRB's for sure, but implementing them on a more smooth looking chart is difficult to do. Now, I should say that depending on how you define a WRB, WRB's are definitely on the constant VBC. For example, if you say if the body is larger than the previous 3, 5, etc bodies, then yes, there are plenty of WRB's on a constant VBC. As I mentioned before however, I was using them more in a visual inspection vs. a hard defined definition. I realize the devil's advocate here then says to just stick with TS and that I may be on to something there... and possibly there is... Like I said though, I personally cannot go into the trading day wondering how much or little TS will put over my threshold settings. I just do not like being subject to their software's interpretation of volume flow. I have a question for you though - have you inspected how WRB's react on a tick chart? Just curious... One other note - on a daily chart I think WRB's could be extremely useful as well. Just some food for thought...

Mac - I guess it depends on the charting, but MC supports broker data plugins. Just depends who you are using - http://www.tssupport.com/products/multicharts/datamanagement/ And they announced yesterday that they are supporting Open ECry as well now.

Will the ES hit 1500? Sure will. This week? No idea and no point of playing that game in my opinion. Just go with the flow.

I've had a good experience so far with MultiCharts. No idea if it can do what you need, but take a look. http://www.tssupport.com/products/multicharts/

tor - great points. The problem all traders face is that until you know for sure that you can trade profitably, it's hard to reward yourself for losing money. And it becomes even harder when you stray from your rules and make money. You've just taught yourself that you can stray and make money; whereas your actual rules lost you money (at least on this particular day). It boils down to knowing if you can make money following your rules or not. Until you are 100% confident, there will always be a game going on in your head. That is the biggest challenge I have seen coming from an environment where everything was laid out in front of you, all you had to do was what you were told. We do not get that luxury in trading. Sure you can buy books and manuals, but there is no guarantee those even work. After years in the stock business and now years in trading, I can tell you that trading is much more difficult, esp in the beginning. And that is due to simply having to create your plan yourself from scratch and then see what works and what does not work. And hopefully you can stick around long enough to find what does work... It's a challenge to say the least.

Good point. When you come from a background where you learned to accept fluctuations in income, transitioning is a little easier to trading. It also helps to have come from a position where earning 'good' money was expected. What I mean is that if you think that 5 or 7 grand a month is good money, you may be leaving a lot on the table. Don't get me wrong, 5 grand a month is a nice income from trading, but coming from a position where you would be fired for earning that, it can light a fire under your butt.

tin - that's cool that we have similar sales backgrounds before entering trading. Until you've actually been on 100% commissions and trained by a company that knows what they are doing, it's hard for others to understand. When I decided to make the jump to full-time trading I did not expect so many things I learned at the firm to translate over to trading.

Good thread tor! All traders, esp those new to trading, could learn a lot from the info we share here. Here's my basis for doing what I do before I explain the specifics - I found that much of what I learned and was taught while a stockbroker translates very well into full-time trading. As a new stockbroker, you are taught that many, many hours, months and years of hard work are required to get the elite level (just like trading). We were also taught that if you follow your 'plan' you NEED to reward yourself, regardless of the commission screen (or P&L). My goal as a new broker was to contact 25 people per day and offer them some sort of investment service. I was taught that as long as I did this, the commissions would soon follow. And you know what? They were right! My first month I made $60 in gross commissions. I could not believe I was working 10-12 hr days and took home a whole 60 bucks gross (good thing they also paid us a monthly salary for 12 mo's). But you know what? I stuck with the plan and each and every month that number increased till I got the point where it was a matter of much $$$ could I make that month... And towards the end of my tenure as a broker, I just laughed when I thought about the tough times of working all day and all week and making very little. What does this have to do with trading and rewarding yourself? Everything. As long as you follow your plan, you need to reward yourself, no matter how little it may seem now. You have to program your brain to think that if you just follow ABC then you will be rewarded with XYZ. Just like training a dog - as soon as your dog realizes that it gets a treat when it shakes hands, it will shake hands any opportunity it gets. I know, that's a very simplified explanation, but the idea holds true. Here's where I think many traders fall short - as an individual trader, most do not have that structure in place (like a corporation) that tells you over and over again to just follow the plan and you will make money. None of us have that luxury. And had I never been a broker, I probably would not see the difference either. I had so many tough days as a new broker and when I called another broker, went to training, etc. it was drilled into my head to just keep doing the work and the $$ will come. And it did. Traders just do not have that service available at all b/c 1) many doubt their trading systems to begin with and/or 2) if it does work, many aren't sure that it does b/c there is no reinforcement. It's a very tough situation in my opinion. If you do not come from a sales career, bridging to trading is difficult in my opinion simply b/c you do not have the knowledge and experience of what is expected of commissioned sales people. And trading is no different - we are not working for commissions, but we also do not make a penny unless we do our job. And even if you do your job, you still may not make any money. That's a difficult hurdle for many. Sorry that I digressed here, but I think the topic is a great one tor and everyone needs to reward themselves for doing their job b/c no one else will.