SIUYA

Engimatics - if the normal days are a range and you trade mean reversion....then how would you define an extreme day or how do you then determine when to apply the reversion to the mean on extreme days. do you do the same process?

Enigmatics - fair enough....but what you are discussing in terms of range days is certainly not a point of extremes as per the OP conversation. Hunt: "I'm saying you should always be searching for situations where a market is in a drastically different state than normal" hence if the normal type of day is a range bound one, then Hunt is likely looking for extremes of a non range trading day, or a series of non range trading (or normal) days. It sounds like you must have determined that either the day is likely to be range bound and is not a range day, OR is at least not likely to accelerate too far from your entry.....those rare parabolic days. The question for me would become - if the points of entry on a range trading day become some clear, then are they just as clear on a trending day when the mean, vwap, poc etc; is moving and you can go with that trend...... As for the guess work, if you have clearly defined rules etc then its not guess work, but I would be skeptical if any one told me they had a sure fire way of picking tops and bottoms of extreme movements - (and yes they can coincide with a massive support or resistance etc....but this is a deviation between intraday and day trading as well.) I know I know - hence the never ending circular discussions and this is not to show right/wrong/truth in anything.....but simply to me - anyone who can pick good turning points is still better off trading with a trend than against it whilst too many think that mean reversion is simply a matter of trading against a trend. (if that makes sense)

it all makes sense - its just that actually defining what the mean is, how extreme is extreme and then how you either work out you are wrong, or work out how to re-enter again becomes much the same issue as any strategy. Plus too many mean reversion players still have to cut things and not fall into the trap of blowing up when the mean moves towards and surpasses their entry! Anyone who went through the internet bubble might be less inclined to talk about mean reversion.....even when combining the fundamentals and technicals. Like everything it has its place and Enigmatics sums up the issue regardless of style....its hard to wait, while Suntrader is also right....guessing the timing is the other hard part..... another circular never ending discussion on its way

I think creativity might not help in the actual trading part....but it can certainly help in the thinking outside the box when developing a strategy/idea/system and how to test it. More importantly I think that it shows how little we know about how the brain works and how susceptible it is, and how easy it is to modify behavior even if we dont know it is happening..... Creativity is such an illusive beast (or has been) and yet maybe its not, maybe its simply a matter of connecting the various elements of the brain....the more connections the more creative, it can be improved and trained.

at an answer - often without any substantial change in news overnight moves might be caused by the thin volumes and a vacuum (so to speak) of orders trying to push an instrument. Often if this push is against the trend in which case a good opportunity for the main trend to reassert itself when it reopens, hence providing good opportunities. (Often individual stocks that are traded overseas in different markets as ADRs exhibit this - maybe its because some funds only trade in local instruments or their time zone, or because the main flows pushing the trend are suddenly absent - hence the vacuum)

Zdo - in one of those 3 am insights (usually forgotten within 30secs of waking), i woke up and thought a different take on your rant.....is your argument/rant maybe based on.... .... not that the trader mindset is born with the trader, but the tools and the idea of changing by supressing/blocking/controling the brain is the wrong way to go.....instead we should be trying to use tools that unlock and release the power of the brain.....ties in with how can we get increased flow, to be in the zone........so instead of the current paradigm of ‘giving 'cerebral cortex’ more control - we reverse this and relinquish control....?????? (I have ideas on this take of it - but prefer your clarification on the dumbed down intent of the rant) If you dont have a point to the rant then thats cool too....often rants are just that - pointless, thought provoking, thought ordering opinions with no real point....much like life.

well duhhhh - of course! this should get rant of the year. .............. I might be wayyyyy off the mark here - what i get from your rant as a summary (this is how my brain works) .....you think you are either born with a traders mind OR you need to erase what is there already (some life changing event or epiphany maybe), simply following tricks/tips/techniques will not fundamentally alter the brain enough to become a successful traders brain.... ................is this correct - if not could you summarise in three sentences or less for the audience???? (This feels like a talk show whereby we are chatting about things and the others are watching - which is cool. Audience participation is overrated anyways :missy:) FWIW the BBC link actually shows how easy it is to distract and change/improve the mind.......if it is permanent who knows. Lets the games begin! ..... and I really hope we can all learn something from this - even if its that there is no answer.

A: you tube videos as i had never heard of him. problem is after watching a couple of videos...... "That’s the difference between me and the rest of the world! Happiness isn’t good enough for me! I demand euphoria!" ............... Seriously though it reminded me a lot about the ideas of art and getting into the flow of the action - the doing of art....... I have had similar examples while snow boarding or riding a motor bike - every turn is perfect, the feeling is fantastic, you are at one with the board or bike etc......everyone has had similar feeling at some stage. I dont however think this has a lot to do with a lot of trading. One involves doing, while the other often involves often doing nothing (maybe this is part of the flow?). (maybe it is not so applicable to some strategies?? Maybe its more applicable to the testing, and the trade off between boredom and anxiety....do you reduce the challenge? (smaller expectations, smaller trade sizes) The only thing i can relate it to trading is to do with those times whereby with enough experience you can look at a chart and just know whats happening, what will happen next etc.. problem is this is fleeting and will in fact lull you into a false sense of ability. How does the idea of flow, happiness etc and developing a traders mind relate if its a matter of being totally absorbed in the doing of something? So the mind is focused, not wandering and enjoying itself? or is this just one of those completely broad subjects it can be applied in many different ways and interpreted in multiple manners?

The simplest and biggest difference that will make or break your strategy is time decay on the options....depending on if you are long or short. Simply put for most people the futures have more liquidity, and smaller spreads than the options and a lot has to do with your strategy and the time frame in which you trade and how long you may hold positions etc, to make up for the spread, liquidity and time decay issues (or benefits) There is no single general thing you can say to favour one over the other except to say - most people go toward futures for a reason......that says a lot. (apart from the fact that options are harder to understand, follow and learn about) Maybe you need to have more an idea of how you want to apply your strategy and what it is. For options, and futures and stocks etc....I would recommend Interactive brokers - I use them and have not problems with them at all. However they are not as friendly for those with smaller accounts, and have data providing issues (not a problem for me) and might be more than you require. Others might also recommend binary option providers - I dont know any i would recommend

FWIW - (hearsay, one persons opinion, an anonymous website ) We had dinner in London with a Chinese friend who lives in Beijing last night.......his wife is in property development and they also buy places around the world - so i dont take his advice lightly and would prefer it to an economists. For the first time he said the rise in property prices per sq foot was so quick in Beijing that he is starting to worry about a bubble. He also understands that we might only be at the first stages of any blowoff and he thinks the government is powerless to stop it and its likely that as per most governments do - they will stop it when its too late, and their reaction will be to cause a sudden collapse and losses for those late to the party. (typical bubble) In the meantime - expect headlines screaming about how expensive it is - lets wait for the one that says - the rally will never end (that will probably be the day to buy puts) As per any price action trading when the bidders stop hitting the offers and the sellers need to actually do more than simply put a for sale sign up - then there will likely be a short window of opportunity....until then.

for those interested in views on China.... Will the Chinese Be Supreme? by Ian Johnson | The New York Review of Books

Terrance and Phillip.............

more like the cleaner...... http://en.wikipedia.org/wiki/Cleaner_(crime)

Greeks in drag - now you are worrying me Mit - even if we saw you we might not want to recognize you if you get all dolled up in that sort of outfit.....whoops, too many thoughts - you aint seen me right? I am just going to disappear like a Cyprus bank account - look into my eyes, look into my eyes not around the eyes look into my eyes - nothing to see here - no Greeks no option strategy, no more explanations.

I use IB with Sierra charts and have not had a problem with them. IB is NOT a data provider and dont make claims to be and there are some minor issues regards this - but a lot depends on how accurate and timely your requirements are. Everything can be worked around. Sierra initially looks clunky as its not the polished looking sportscar but it works well and is reliable and seems to be growing in popularity all the time which is a good sign. The programmers there are able to update, upgrade and fix issues, requests and bugs very quickly - its refreshing to see. Regards IB, you can also use IB as the broker and a separate data source as the data if required, but that is probably unnecessary and overkill - plus it creates its own problems. I have never had the connections between IB and SC be an issue - it sends various orders in and is reliable as any system i have ever used. I used multicharts and have used ninja, but switched to SC and cant see any reason to change.....every one has their own preferences. The great thing about SC is the flexibility and the fact the guys respond quickly to ideas, and there are a myriad of ways to do things on SC.....plus is great value.

suggestion: Sierra Chart I dont code in C, C++ but i think their language used is the same or similar, but i recommend the software for flexibility, versatility, reliability and price.

You are right to be anxious about it as it is a very real possibility - a risk of using leverage....however I think you just need to be aware of it and be aware of how it affects any portfolio you might have, and have plans in places for what to do when (not if) it occurs. You will either need to deposit more money quickly, OR reduce exisiting positions...or they will do the later for you. All brokers can do this, at any time if they are lending you money, and banks can and do as well -( but is unlikely to due to the illiquidity of the housing market in such short time frames....ever re financed a mortgage? Just because rates are at 2% now does not mean they might not jump to 10%. Unless you have a fixed 30 year mortgage, your rate is likely floating or needs renegotiation - this might not come out in your favour.) If a broker increases the margin they are using doing it for protective reasons like excessive volatility, or a skewed book.. ..... (they also might be doing it to bring extra money in the door as they are in trouble - but that does not happen right! ) The other thing you should remember is that a margin call does not wipe you out....bad trading, sitting on losses and being forced out of those will wipe you out. If you have a margin call on a profitable position you just need to reduce the position....and need to be given enough time to do this. One reason why many fail in this business is because they are undercapitalised right from the start, and then they use too much leverage --- this is not the brokers fault....and if the broker is constantly increasing margins to crush its customers then its probably because its customers are all sailing too close to the edge with too much leverage, otherwise it might be considered rather short sighted for a large broker to burn all its customers. (Stories of individual accts getting margined out by the likes of goldmans do abound! It can and does happen) ............. As for history (after my rather long disclaimer above )- sorry i have no idea have you even asked Interactive brokers for that? (sometimes they increase margins because an exchange requires them, or on certain low market capitalised stocks, this has happened to me and i had a few days to adjust my position with no problem) You have probably allready found it but some web sites are http://www.interactivebrokers.com/en/index.php?f=marginnew&p=overview2 http://www.interactivebrokers.co.uk/en/index.php?f=4745 they also have numerous types of accounts with varying margin requirements....they offer lots of information but practically no help - that is left up to you. One thing people dont like about IB is that they are quick to change margins - this is a downside to using them i guess - a lot depends on how you trade. A quick google found this for some reading as well - i have not read much but it looked ok at a glance http://www.themargininvestor.com/blog.html

just to give you hope... Homeless beggar's honesty rings up a $100,000 reward

yes - its a crime (and we know people argue everything the govt does is a crime), but how was the problem not solved before - that is where the crime took place. The fact that all the other laws designed to be upheld get ignored. The fact that if these banks are insolvent and still being allowed to trade. In any other business directors would be struck off, the companies closed. Now its a matter of trying to save whats left...... The intent of the solution might not be to stop the rounds of crappy investments - it might be to try and pretend to punish those hiding their criminally attained and retained assets in the Cypriot banks but maybe they might have some good results, if people pull their money, get scared and it f...ks the economy but fixes the problems.....yes unlikely as the other issues remain, but unintended consequences might occur. (my optimistic mind) (A similar idea of the state killing a man for murder to stop other murders????) A joke I found supposedly doing the rounds.... “The Russian government is worried about the behavior of Cyprus, where members of the Russian government have been hiding money from the Russian government.”

Probably... Given they are finding that the brain can re-learn/change/adapt really quickly with very small events and actions that can alter how we perceive things, so I think if you then want to address the issues of trading psychology after these basics have been attempted then fair enough.....You will then be more likely to discover or diagnose what the real issue might be and then offer a solution to fix it.....(be it mother issues, fear of destitution, fear of failure in front of others, inability to run a profit.) Plus in doing the exercises I would think that they would help train the brain with some positive trader awareness so that certain issues might be lessened, or strengths and weakness truely revealed. So yes, while many things/posts might inhibit awareness, its also the lack of doing the basics that really inhibit the awareness for many.....after that then yes, whole other levels might be investigated. ''''''''''''''''' To take things to another level, wouldnt you then need a specific issue a trader might have, otherwise its hard to talk about it except in general terms. I think most Trader psychology is normal human behaviour - in general terms it can be reasonably summed up as - a general inability to accept uncertainty accompanied by a desire to think that you have more control over things than you really do. After that well I guess it then becomes more specific to the individual.....but how then do you diagnose that? what specific behaviour modification or training do you think can be used, or should be discussed. '''''''''' as fro maxims --- “Why should I have to WORK for everything?! It’s like saying I don’t deserve it!”

Dont worry Zdo, no one thinks you are sour and negative .....its just some of us have seen continual bears over the years always saying the same thing even when the market booms. ....eventually they are right. Some of us have been skeptical of the whole system but figure you just have to play the game as its played. What I do thank you for is some of the good links, you provide. ........... Re: the Cyprus banks - its an interesting one that everyone claims the government is now stealing the money......technically these banks were probably insolvent many months/years ago, and they should have wound most of them up, burnt the bond holders and share holders and returned as much of the deposits as possible.....reduced the debt yadda yadda. If anything the politicians are to blame for being hoodwinked by the bankers, but the politicians are not the ones walking away with the money. The fear of letting the system collapse means the collapse is likely to be worse and smellier after the carcass has been hanging around in the the sun....and the risk of contagion certainly grows. By feeding the superbugs who have evolved, the situation has probably gotten worse. (linking ) I think the banks that have survived have shown their books are as big as ever, they have learnt nothing.....nor have many people....same conclusion the Hinde report has reached..... The bugs are the bankers, the doctors are the politicians..... now that is sour and negative! I guess we get the politicians we deserve. As the philoshowpher child Calivn says; “Do you believe in the devil? You know, a supreme evil being dedicated to the temptation, corruption, and destruction of man?” “I’m not sure that man needs the help.”

i guess pure rationality does not mix with the ideas of justice and fairness.....simply a fear of death v money. No wonder we have financial crisisisiesiesiiisssss also makes you wonder if the early innovators of inheritance - give it all to the first born male (usually the most aggressive sex) made a lot of sense.

so they may go broke like they should have been allowed to years ago --- it could be a good solution to stop the repetitive circular flow of money from one bad investment to the next. next stop devastation. I’m learning real skills that I can apply throughout the rest of my life … Procrastinating and rationalizing.

Now you are word twisting Zdo..... take out those completely mentally ill or incapacitated. Everyone be able to at least complete the necessary building blocks and think about some simple elements with regards to how they think they are going to make money in the markets. How the markets might work and how they will profit from it. How they might test this and then how they might review the real and tested results. Its not that difficult - there are not necessarily a lot of difficult concepts to grasp, not a lot of mathematical formulas beyond the simple. This alone will not make them a success, but I am sure it will help develop their traders mind to a far greater extent than the current - push the button and hope attitude of some. Unfortunately not everyone is going to be a success the numbers dont allow for this. It requires more than thinking - however it seems most people dont want to do either, the work to see if their thinking has any validity OR the even the thinking is too much of an effort.

I think everyone should be able to do all three. If you cant develop some plan, test it and then review it then you really probably need help and certainly should not be trading. No body says it needs to be done to really high degree, but my guess is the real percentages of people who do it is low, or the effort is really low, and without some real thought or effort. Every profession probably has some base foundations - if you view these as such for successful trading then some competence would clearly be required, but for the sake of the thread - actually doing the process of really attempting these would likely be a good way to train the mind for a trader. We all know slowing down and thinking helps, practice helps, testing helps. Obviously some people will do better attempts than others, and get more value out of various aspects, and maybe the downside is that people get too perfectionist about it....but i would still imagine that the issue is in doing nothing as opposed to spending time and effort attempting it. (In a similar vein of thought - art - what is art, etc.....i spent a few years collecting, learning, attempting a bit and really thinking about the Q: What is art. - for me it is a simple explanation that can be expanded upon, but the first thing that is required is the doing of it. Only then can the creative mind come out in an artist.... How many times have people looked at something and said - i (or my child) could have done that! - when in reality, they have not taken any classes in technique etc, really have no idea of the development (of the artist) and context (socially) to get to this final stage, and if they tried would likely find they cant do it expect by copying it in hindsight. How often does and artists work seem out of place with our view of what society was like at the time - often these guys are far ahead because they are not overnight sucesses - and maybe the % of sucess and failure is similar to trading)