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gosu
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Everything posted by gosu
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Hi karoshiman, My everyday intention is to extract a few bucks before breakfast. The way I do that is to get on the right side for a leg or two and that requires me to know the position of the market on several levels. If you want to call that a plan, I don't object to that at all. However, I think what Tom meant by his trade hypothesis was something more specific, an "if price reaches x, then he will do y" kind of thing. As you say, my "plan" is flexible, and I will just slightly correct your understanding by saying I do not wait for the market to reach anything. Regarding "anything can happen" and p2 being "anywhere": the fact that I don't know whether or not p2 is in place as of Friday's close doesn't equate to "anything can happen." To me it is not a matter of semantics. The market transitions from operating point to operating point and does not arbitrarily jump around. What this means is that for any given operating point, the possibilities to where the market can transition to are limited, even down to just one possibility at times. Moreover, when I say that the current possibilities are that the market either HAS or HAS NOT put in the p2, it does not follow that I have an "expectation that it's a 50/50 game." As an analogy, the fact that I can either WIN or NOT WIN the LOTTO does not make it a 50/50 game. Thank for the comments.
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Hi Tom, Thanks for the thoughtful post. I don't want my post to imply that you are doing it wrong by having a hypothesis or a plan. As always I'm speaking for myself based on my own experience and I'm fond of saying that there is more than one way to skin a cat. Also I never go into a trading day "blind." Every night there is homework and then there is the up-to-the-minute "housekeeping" into the cash open. I describe what I do as "defensive" trading. I think you stated in an earlier post that you are focused on minimizing your risk rather than maximizing your profits, and that is my approach in a nutshell. I use Mike Tyson's quote as mostly humor (a bad attempt, I admit), but if I were to extend the boxing analogy I would say that I'm not looking to throw punches and always protecting myself. Trading is a game of not losing, which is not the same as being afraid to lose as TL's resident therapist keeps asserting in his articles. In line with my focus on defense, I do not make any specific plans of "attack" at any specific prices before the day begins. It is enough for me to have all the annotations done and the market will give me additional data when or if the lines come into play. I am just a little guy in a huge game and my "edge" (I don't like using that word much) is that I can take liquidity at will and it doesn't take much volatility to fill my cup. Most days I'm done trading by 9 a.m. What level of specificity in a premarket plan or hypothesis does that require? For me, none.
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The Illusion of Control: The First Step to Emotional Sobriety in Trading
gosu replied to Rande Howell's topic in Psychology
The real issue is . . . there is no real issue. Issues are needed by people in the business of selling remedies. Issues are also needed by people who rely on them to cope with their making poor choices. It is a match made in heaven and thus the proliferation of both sellers of remedies and people with issues. The more people I come across in this industry the more I think that traders are born and not made. This is not a statement that a person can learn to trade without working hard at it. -
You say days like Friday are why we are in business. No doubt it is sweet getting a big range trend day to close the week. But it does present a kind of test for the uninitiated. As I stated, "free money" also means "sure losses" for those on the wrong side. So I would add that days like Friday are why some go out of business. Regarding not knowing what will happen on Monday: I have no concern about Monday until Monday arrives. I don't know if on Sunday night the market will open with a gap up, gap down, or near Friday's close. What I do KNOW is the position of the market as of NOW (Friday's close), and from the current position I KNOW there are but two possibilities. I do not buy into the favored mantra of this thread that "anything can happen." A person who thinks that anything can happen at any time in the market is a beginner teetering on the fence that separates the "good enough" from the "not good enough." What it means is that the person has not made the differentiation to see days like Friday coming and KNOW them when they're here. They are missing the deja vu feeling that guides the experienced. I have no pre-market trade hypothesis or trading plan for Monday. I come from the Mike Tyson school of trading and rely on my experience to avoid walking into a punch to the face. The current position of the market is that it is on its way to p2 after which there will be a retrace to p3 and a resumption. The two possibilities from the current position is that the market either HAS or HAS NOT reached p2. Enjoy your weekend.
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The Illusion of Control: The First Step to Emotional Sobriety in Trading
gosu replied to Rande Howell's topic in Psychology
RE: Human Beings Inherently Wired to Avoid Uncertainty This is just simply false. The realm of "uncertainty" includes calculated risk-taking as well as flat out gambling. We know humans engage voluntarily in both types of activities in life and in the casinos and indeed some people are "wired" such that they derive pleasure from doing things where the outcome is in doubt and no pleasure (i.e., they are bored) when the outcome is certain. The market provides a venue for both types of activities. -
The Illusion of Control: The First Step to Emotional Sobriety in Trading
gosu replied to Rande Howell's topic in Psychology
RE: Sim Trading In theory I can see how it might be useful. It was recommended to me early on and I did make an attempt but could not stay on it for long and I always "cheated." The problem for me was I could not see the point of it when I had a significant amount ready to trade with and I have never feared putting money on the line for anything I've wanted to do in life. I know there are people who swear by it and on message boards it is often touted. The two persons I've observed up close who swore by their sim trading results were both "cheaters" by my reckoning. That is, they both simmed with amounts they didn't have and traded in ways I knew they wouldn't trade if their own money was on the line. Both had the same lament about how good their system was and how they were "undercapitalized" and so couldn't trade the way they knew they could. I observed them with the possibility of backing their trading and in both cases I declined. I think that sim trading could have some use if done conscientiously, and there may be people who have not transferred "successful" sim trading into trading with cold hard cash. But I suspect that a lot of people who say they're successful in simulation but not live trading are not being honest with themselves about their sim trading. -
I've studied EW for years and have a nice collection of books, software, newsletters, and a thick binder of personal notes. My conclusion up to this point: there is never a need to count past 3.
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[ame=http://www.youtube.com/watch?v=UXoNE14U_zM]Classic Movie Line #15 - YouTube[/ame]
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Yes, glad to see you posting the simplicity of this AM. The difference between today's trend AM and Tuesday's is today's was telegraphed coming into the cash open. We all know the once a month report is a reliable timing event. I don't take any credit for accepting money that is being handed out. I am merely a partner and my job is to get on the right side and I am not in charge of the amount of profits. I call it "free money" but I know it's because to people on the wrong side it's "sure losses."
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I call mornings like today "free money."
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The Illusion of Control: The First Step to Emotional Sobriety in Trading
gosu replied to Rande Howell's topic in Psychology
I do enjoy your articles as much as anything else on this site. They are redundant but still they don't fail to cause me to laugh and shake my head at the same time. As a point of interest, there is a word to describe the person in your scenario. He is what is known as a FISH. It wasn't clear to me if your purpose for using him as an example was to assert that he is the kind of person who can benefit from your services. I take it he is, otherwise what's the point of bringing him up, right? I get what you are saying about his "visualizing," "affirming," "modeling," "attracting success," etc. Doing those things cannot make up for the fact he has no real knowledge, skill and experience in how to play the game. Yet I don't see how doing those things differs all that much from making up characters in his head and assigning them cute names and distinct roles. I may be oversimplifying what you do, but no doubt he will remain a FISH after you get through with him, except that he got attracted to different bait. -
Hi Tom, I am guessing that your "rotation" is what I call a "retrace" and I do see that waiting for a decent retrace to play the continuation after the breakout (BO) would have kept you sidelined yesterday AM. For me, the BO is paired with the FBO, so I do not limit myself to continuation moves and like to play the reversals on the failures. Moreover, there are different kinds of BOs and I knew yesterday's was not going to fail on the fractal that I trade. I've written previously about why I hold through trend AMs rather than trading nondoms (retraces) or trading around them. Waiting for a retrace to play continuation after the FBO is ruled out is equivalent to trading around nondoms. I won't bore you by repeating my reasons. On a sidenote, compared to yesterday I consider today's AM much more challenging to trade on ES. After seeing the cash market open yesterday within the prior day's lateral, I expected the kind of action we had this morning - namely, a BO south after the news report, FBO and back into range into midday. Today's cash open was a duplicate of yesterday's and I carried over the same lateral channel from 2 days ago. It's as if the market was on its way to somewhere yesterday morning when it got hijacked momentarily and this morning it got back on course and completed what it intended. Hopefully this was somewhat intelligible. Cheers.
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Hi Tom, Here's the Cliff's Notes version: Saw the lateral, was surprised by the breakout, entered long late, took the bonus at the end (of AM). If it makes you feel any better, I don't know your acronyms and felt the same about your post. I did see that you thought today was difficult to trade for daytraders, and earlier joshdance posted that today the market was out to screw everyone. Regardless of P&Ls, I had a different assessment.
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Who would have thunk that an ISM report would fuel such a move? It was just time for the BO and the most difficult part of the entire morning was to accept it and do my job as a good partner. It could have been more challenging had I been on the wrong side and not sidelined. I saw the continuation of yesterday's lateral at the cash open and began picturing breakfast at Hof's Hut. I see the ISM at 7 approaching and ES at lower range of the lateral; and I'm thinking BO south, FBO back into range, range bound into midday, so a nice breakfast ahead. The consequence was that I was caught flat footed on the BO north and entered the party late. But the last spurt going into midday on the 8:50 bar was unexpected and a joy to see. The retrace at the end of the bar was no concern at all, and I offered out at 11.25 as the bar completed. I could have made it a reversal order but I'm not as hardcore as I used to be. Was this an especially difficult AM to trade? I don't think so, but it would have been fun to reverse out of the lateral had I been short going into the report. The 5m volumes ruled that out for me.
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Have you ever played Whac-A-Mole?
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I don't see it as either/or. Does high volume tell you more than low volume? What about "middling" volume? I don't see any mention of "middling" volume.
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You trade 50 clips ES with IB? Why? You are getting jacked.
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What do you mean they "transferred" it to you? You say you assume it's a gift? You mean you don't know? Did you pay any money for it? (A sale) Did you do any services for it? (Remuneration) Did you give up other property for it? (An exchange). If it was a bona fide gift, there's no tax consequence to you at the time of the transfer, but there may be tax consequences to them if the gift exceeded the annual exclusion for tax-free gifts to you. If it was a gift, your basis is the LOWER OF their basis OR the FMV of the stock at the time of the gift. If it's a publicly traded stock, the FMV would be simple to determine. Your basis is used to calculate your gain or loss when you sell the stock. What this means is, if your parents had a realized (but unrecognized) loss in the stock at the time of the gift, that loss went unused.
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Everybody has a plan until they get punched in the face. - Mike Tyson
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It only took 488 pages for this to be pointed out.
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Fear Yourself Young Apprentice and the Chaos Within
gosu replied to TheNegotiator's topic in Trading Psychology
To me, hope is not an emotion but a condition of the mind rooted in not knowing. A person can be hopeful and feel fear/anxiety/anger. A person can be hopeful and also feel no fear, euphoria and joy. My viewpoint, by now probably known to you and others, is that trading decisions ought to be based on knowledge. I know you advocate a "not-knowing" approach so I generally do not comment on your posts as there is little common ground in our views of trading. -
The worst thing that can happen to the second mouse who is late is it misses out on a meal. The first mouse missed out on the meal also but paid a price as well. The analogy is fun but simplistic. So I'll try it without the analogy. Being early and being late are both errors in timing, and they presuppose that there is a moment - neither early nor late - that is ideal. Call that moment, "perfect timing." Perfect timing does occur but imperfect timing is more common. For me, it is better to risk being late than risk being early. This is from my experience, and again, this has little meaning without describing what "perfect timing" means. In general terms, I would describe it as being the moment when the herd changes direction from a prior direction or takes off from a standstill.
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Fear Yourself Young Apprentice and the Chaos Within
gosu replied to TheNegotiator's topic in Trading Psychology
There is no place for hope in trading. None. Zilch. Finis. Fear on the other hand is useful, and I put it in the group of emotions fear/anxiety/anger. All it means is you have not figured out how to handle yourself in the particular market situation that causes the emotional reaction of fear/anxiety/anger. In the big picture, there is nothing to fear in the markets. There is money changing hands back and forth. That's it. Anyone who has survived losing all the money and material possessions they have in the world either through war, natural disaster, social upheaval, etc., knows the truth. The people who are ready to jump out the window because their account blew up and they can't make the payment on the mortgage or have to pull junior out of private school have yet to learn it. -
In trading: Does the early bird get the worm? Or does the second mouse get the cheese? Or are they both bound for extinction? Might make a fun poll question.
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Sure, I was busting your balls there. You were sounding a bit like a college professor unlike your normal self....you know what I mean? Cheers. :beer: