SIUYA

Dedication and Focus http://www.traderslaboratory.com/forums/attachment.php?attachmentid=35423&stc=1&d=1363612385 (It was reported later that his wife did get out safely and that he parred the hole.)

another nail in the coffin trust of government insurance schemes underwriting your deposits. I wonder if it might be argued this is good for the EUR as it signifies that bankrupt banks are not going to be simply bailed out by the rest of Europe. Problem is that it reverses where the risks and rewards are - instead of creditors and bonds holders and shareholders who are meant to take risks for the rewards, the depositors who get little upside get the risks.... some days even your lucky rocketship underpants don’t help.

I like maxims that don't encourage behavior modification

As MMS said - its designed to protect the other accounts from excess leverage as all accounts are effectively mingled if you are using leverage and dont have a cash account whereby the stocks are in your own name. 1...yes good luck - very few measures of risk are adequate and IB have moved the margin required for certain stocks on occasion based on market capitalisaton as well...not just volatility. Remembering that they may be adjusting the margins required based on what they see as excess volatility, or because they have a lot of clients taking risk in certain sectors - these are all designed to ideally protect the overall pool of client money that is leveraged. 2...They reduce your leverage by increasing you margin - as I understand it this may be done either on an account by account basis, OR a individual stock name basis. From what I have seen in the notifications is that they usually give you a few days notice. Its not a lot, and that is why you need to monitor it, and also have a little bit of excess margin just in case. Yes - they can sell you out, and the process they use may not sell out the instruments you would choose. They may sell out those instruments that are more liquid because they can.....all again designed to protect the pool of clients. 3....not 100% sure what you mean here.... Assuming you are short equities and you have a cash deposit against these shorts (they then apply the cash as the margin), and if your shorts are closed because the margin was not large enough, then as the position is closed any cash not used for margin goes back into the account. If there is not a loss then they should simply buy enough of the short back to ensure the balance is covered. Any extra cash remains in the account assuming its not simply eaten up by a loss. BASICS - (this is simplistic) eg; deposit $100 to short $500 of stock ABC. (margin 20% = leverage 5:1) Cash bal 0, short stock bal $500, PL =0 Assume stock does not move BUT they increase margin (new margin 50% = leverage 2:1)..... Cash Bal 0, short stock bal $250, PL=0 --- you need to purchase some of the short back Note: nothing else really changes......! If there is a loss on the stock then they will need to reduce your short stock balance by more to offset the loss. I have seen more detailed responses on IB on other forums - just google it, and it varies regards longs offsetting shorts etc. As I understand it IB built a lot of their systems in conjunction with their associated market making firm Timberhill and so the accounts and leveraging requirements are pretty good.

apart from killing each other to keep it all.... As the older brother only needs to keep 2 other brothers on side to keep > 50% of the vote. He can split the inheritance 3 ways to maximise his amount. 3 brothers are happy with $33 mil each , the other 2 have to accept the democratic process. Basically on this rationale if it was to be split evenly at 20mil each....all you need to do is offer at least two of the brothers a little bit more than that share to get them onside...so it could be as little as 21each to 2 other brothers, screw 2 brothers who have to accept it and keep the remaining 100-(2x21)=$58mil for himself. Too bad ideas of justice and greed get in the way.

SENIOR LADIES-speeding Sitting on the side of the highway waiting to catch speeding drivers, a police officer see a car puttering along at 22 kph. Says he to himself: "This driver is just as dangerous as a speeder!" So he turns on his lights and pulls the driver over. Approaching the car, he notices that there are five old ladies, two in the front seat and three in the back...wide eyed and white as ghosts. The driver, obviously confused, says to him "Officer, I don't understand, I was doing exactly the speed limit! What seems to be the problem?" "Ma'am," the officer replies, "you weren't speeding, but you should know that driving slower than the speed limit can also be a danger to other drivers." "Slower than the speed limit? No sir, I was doing the speed limit exactly...Twenty-two kilometres an hour!" ...the old woman says a bit proudly. The Police officer, trying to contain a chuckle explains to her that 22 is the highway number, not the speed limit. A bit embarrassed, the woman grins and thanks the officer for pointing out her error. "But before I let you go, Ma'am, I have to ask...Is everyone in this car OK? These women seem awfully shaken, and they haven't made a peep this whole time," the officer asks. "Oh, they'll be all right in a minute officer. We just got off Highway 189."

The room was full of pregnant women with their husbands. The instructor said, "Ladies, remember that exercise is good for you. Walking is especially beneficial. It strengthens the pelvic muscles and will make delivery that much easier. Just pace yourself, make plenty of stops and always stay on a soft surface like grass." "Gentlemen, remember -- you're in this together, it wouldn't hurt you to go walking with her. In fact, that shared experience would be good for you both." The room suddenly became very quiet as the men absorbed this information. After a few moments a man, name unknown, at the back of the room, slowly raised his hand. "Yes?" said the instructor. "I was just wondering if it would be all right if she carries my golf bag while we walk?"

Just taking the article as it states, do many people overcomplicate it when all they really need to do it the 3 cannons of preparation - that in fact do prepare the traders mind. (and more my point that often this is simply just skipped anyway) Eg; Emotional Security in Trading How better to get some emotional security that trading is right for you by sitting and think it through, about why and how you wish to do it, then testing it to give you security that it really then should work based on your ideas. All the early testing should humble the ego - if it does not then denial might be something to look at. If our trading habits are defined by our histories then as we cant change the history we need to change the habits.....often we cant change the habits so we need to change the ques and responses to those habits - best start is testing, logical thinking, test it and review to see where we a re weak and strong. Separating the Objective from the Subjective Test, review and record - become scientific. If according to Welz, most trading activityis sub conscious, then how better to reveal it - how better to see where our mistakes really are. The Tendency to Ignore Psychology By completing the three cannons - it should be apparent if psychology is stuffing you up, where you are stuffing up and maybe, just maybe then you have an insight into what to improve, and how to improve it.....it might reveal more than hypnosis. ....I guess it all boils done to prognosis of the problem first, and if its all just psychology then surely automation is the way to go? Is this the tool required? ................... Ultimately if you think that many normal businesses fail because people either did not do the homework, did not do the market research, did not manage their money enough to survive early stage growth and learning difficulties - why is trading that much different.....just because its easy to press a button as opposed to order inventory that is tangible or charge clients for time worked......how many businesses get by on nothing but a gut feel, how many thrive on more than this.... Are we complicating the matter and then using a poor mindset to excuse our other failing of not doing the basics? .......... FWIW - fascinating program on BBC Horizon - the creative brain how insight works well worth watching for those interested...... separate but related topic about how easy it is to change the way the brain works. It can be as simple as changing our daily routines processes, meditation and exercise to let the brain wander and switch off the controlling logical part of the brain just for a while. BBC iPlayer - Horizon: 2013-2014: The Creative Brain: How Insight Works Probably not available everywhere.

Thoughts off the top of the head......most of mine are opposing as the article is so positive and I am a trouble maker..... .............. A home run in base ball at best will get you a limited number of runs.....a home run in trading has a far better return. Many traders who try for home runs also realise that most trades wont turn into the big winner. You still have to manage the trade. If the market changes, so does the trade, but at least you are giving your self the opportunity to make a lot as opposed to restricting yourself. If you are a trader who makes it over a few days then gives it all back...what makes you think you have the strategy to stick to trying to make 1% a day with consistency. Whats wrong with doing less trades, sitting and waiting for higher probability trades, or sitting on longer term trades.....if you have the same discipline, money mgmt and control The other issues many traders have is they over trade - how do you stop this becoming a problem? "1% is easy to do" ---- is it? If you have such a great system that can pick levels well, then why limit their upside? If you have a system that is soooo good that 1% per day is easy - why stop when you hit your $ profit for the day.....surely with that consistency you keep doing more and more trades if the setups are right? There seems to be an inconsistency here. If the trader is so reliably hitting 1% then he should have no problems with 2-3% a day. If they cant do this, then how scalable is the system? Make sure you have low commissions Do you require a system that costs $1000 per month to trade like this --- if so, you will need far more than $1000 in the account! The article states "The problem is that the trader wants the $159,843 RIGHT NOW! Not in 2 years.....hence why 90% of traders lose over time" Well, we all know its not the only reason traders are not profitable, and yet at the same time as telling us we should walk before we run....it then promotes the idea of a trading style that seems to idolise instant gratification from short term trading as opposed to a slow and steady sitting on a position....contradictory maybe? There is no mention of the leverage involved......to get 1% a day - its probably pretty large. Drawdowns in such a system are probably harder to recover from, and a few big losses will take out many many days profits. So in other words - you always need to be on your game, as a slip up is likely to be very costly. ....................... Same old story - there are different ways to do things. No one way is right or wrong....there is no single truth out there, each trader is different......yadda yadda....if short term trading a hitting singles mentality works for you dont let anyone tell you different, and if such articles give you the right mindset to help go for it.....just get a good reliable cheap broker.

probably first thing that comes to mind - and its seems to be something that many dont bother to attend, and yet it really is simple, and soooo often repeated..... Trading philosophy - a simple one explaining how you think you can make money, why the markets do what they do etc; Trading plan - obviously this would make sense if it related to the above....then test it. Trading journal - for recording if you are sticking to the above two, OR how you can improve it. ......... Simply put - it does not get much simpler than this to develop a trading mind but i think many dont even properly attempt this - instead they go for a half assed attempt, or skip sections or dont bother to look at the contradictions between all three. eg; you want to trade long term, but you system is designed for scalping. I would imagine these three things might help develop a trading mind more than anything. ................. As for the situation whereby the trader has done all these three things diligently, BUT seems to always self sabotage, OR meddle OR simply cant stick to plan, then first place to look would be the miss match between plan and philosophy --- or motivations maybe. (These also change over time) After that - extra tools might be seeking professional help....but first you would hope they try and pin point what it is that is causing the problem. A bit like going to the doctor and saying "I hurt" as opposed to saying "my knee hurts when i bend down and it occured when this occured" --- they might say you are simply old get used to it. Maybe these things should be called building blocks/foundations.....and then only after these are any tools likely to help????

The whole finance industry is generally based on people giving advice - and those people giving the advice dont trade or invest. Often because they are restricted due to Chinese walls, or time restrictions on how long they can buy and hold....or because they are bad at it So yes - i think you can trust the advice of those who dont trade. when it comes to FX, this is often a different matter as restrictions may be less onerous..... But how do you know an author or mentor is not an active trader? If they are does that mean their advice is valueless? I would imagine you just need to be aware that the author is or is not actively trading and take that into consideration. Personally - I might trust their advice, but i also might place little value on it.

interesting thoughts. I would imagine if every person fits a different personality profile, or responds to different actions. eg; some people need to blow up numerous times to want to change, others innately have some switch, some people never will or will revert back.... .....then every one might respond to a different tool. We can write something, and we mean one thing to us, and 4 different people can read it and get 4 different reactions. If after a psyco session do people then go out and reinterpret and place their own stamp on it.... in which case - true change will only come from within, OR maybe the tools required (the tasks, processes, lessons) really need to be so simple everyone can use them.....in which case change still needs to come from within, regardless of the word. I guess for each of us, whatever we are saying (when being serious) we think are right anyways....(or in my case i usually try and be completely open to being wrong - except when it comes to the wife - can't give ground there or all will be lost ) It would be hard to talk/communicate to someone who always believes they are wrong.. (Off for dinner, so chat later)

I think they are the same, Zdo. Most humans think they need to be right all the time. We are taught that is the case all the way through school and life as well. Hence to accept the randomness, to accept the probabilities that go with trading, to accept that often you will be wrong is hard to change. To me, a lot has to do with control - and the hammer and nail problem is the same. ie; I have a problem, i have a hammer, i can control this problem. Yet in the markets, where they go is largely out of our control.....regardless of what great tool we have. Dealing with this uncertainty is what stuffs most traders up. ........... Re your question: When the only tool you have is word, every problem begins to resemble----------------- How does that relate to changes and trading?

answer: .....a frustration to prove to people on the internet that your thoughts are right? (not directing this to anyone in particular but it seems that all we have here is words, and these discussions often seem to indicate this. A more optimistic answer might substitute 'challenge' for 'frustration')

You could be in China..... Billionaires galore in People's Congress I also stumbled on this - a book review about similarly related topics of capitalism etc; If anyone is interested they might want to read the book. http://www.newstatesman.com/books/2013/02/reviewed-locust-and-bee-predators-and-creators-capitalisms-future-geoff-mulgan

As a side thought Ingot, I would not get too hung up on self sustainability - with the worlds population at present we need some industrial processes. Random thoughts..... I wonder how many of those taxpayer leagues are sponsored by companies who feel they can do a better job than government - until their own agenda becomes paramount...... or are they already largely the same group. Anyone find it strange that often the same people who run or work in industries that are subsidized by the governments they complain about? Much like the middle class welfare recipients. Accountants and lawyers come to mind here....my pet hate Maybe we should look for more efficient government (which will likely be smaller), and more competition between businesses, and more community rather than simple individual responsibility and control?? Too many groups are NIMBY or pushing their own agenda which has its own issues. IMHO The worst thing is when people simply pass the buck, govt, or corporation. .....or maybe it is a simple aspect of human nature and the idea of a middle class and a redistribution of wealth was just a passing fad for a few centuries..... (After living in Oz and the UK - give me Oz any day for getting a job done. It might be a bit rough, but at least things get done. I hear the US is even better again)

Our point exactly. I would like to set and forget supa dupa computa to do my trading. My miserable attempts at this failed - I am sure others can do it better than I. I asked if it could be back tested - because if it cant then its much the same as many methods.Instead, we learn to read, and interpret, context and patience, then order management - and no one method of reading the same information is better/worse than the other IMHO.... Otherwise if it had the repeatable, clear edge then let the computer read it - it will be likely faster and better than any of us. A lot certainly has to do with time frame and style - in this case day trading as a scalper. For some with a longer term time frame I am sure in the right context, near support/resistance, at what might be deemed a cyclic turning point and with an unrelated stop loss, a MA cross over might be a great way to simply enter without worrying about much else.

Gekko - can you back test any of this data ie; is it repeatable, quantatative and able to be proven as such, or do you still need to be able to read and interpret what is happening as it happens?

I knew my investment in rubber latex masks, red noses and Groucho Marx glasses would pay off one day! (Ingot - On the creek bank it will be the drones you need to be careful of )

How to kill a company with an automated process.....I guess if the finance experts can do it the rest of us might give it a try. Offensive Keep Calm T-Shirts Sold Solid Gold Bomb | Amazon, Photos

The other great miss use of leverage is in quoting returns as well - today i made 500% - tomorrow I lost the lot! Its boring and skipped over because often its a tough one to explain to people as everyone has their idea about what is safe, whats not, what is leverage, what not.....try telling people how to use lots of leverage using options with little exposure these days - they think you are selling sub prime, even if you are not. The only book I know of that will help you do exactly what you are describing is this one http://www.amazon.co.uk/Practical-Guide-ETF-Trading-Systems/dp/1906659273 (There may be others) I have not read this but have seen enough reviews from people who I know trade like this that it has some relevant information to be worthwhile.

You mean to say sometimes its ok to have an answer that is 'I dont know, but here are some possibilities' LOL......thats unpossible on a forum..... You are so doubly deceptively confusing Zdo I never know what to make of your excessive pessimism or optimism but i enjoy it none the less. If the most likely explanation is the simplest explanation then I think your answer might be in the uncertainty of a 'sure profit' maybe. After MFG imagine loosing your physical gold with the 'promise' to get it back. Would most gold bugs be likely to be untrusting souls anyways? As I said I dont know - but at a guess I hope I know more than Kuokams mate Keith Fitz-Gerald,Chief Investment Strategist - who FWIW and IMHO wasted 5 mins of my life with his crap (no offence intended to you Kuokam)

not really - but thoughts might be.... no one wants to own gold in the future... no one trusts their counter parties to deliver, so paper trades below physical.... evil manipulators.... sellers finding liquidity where they can.... Whats the long term spread between spot and future? I dont know, but i am sure Zdo you will have some doom and gloom idea that will be good food for thought to look forward to.....

maybe i am confused. For the ES - if no leverage is requiring $76,000 in an account BUT you only have to have (I dont trade the ES so i am guessing at $5000).... $5000 per contract so you can have a wide range of leverage options if you have the full $76,000 (between 1 to 76/5=15 contracts) So you can have anywhere between 1-15 times in this example here. If you want 6 times, then deposit only $35000 to trade 6 contracts, and leave the rest in a separate bank account maybe? For your example of getting 6:1 from a 3:1 instrument - well either a broker allows you to buy on margin, OR you borrow twice as much externally and deposit twice the amount more money. No different - look at total exposure. If you are then talking about holding 10 similar instruments well then you will effectively be holding 10 times 1 instrument. Thats a lot of leverage - some brokers offer portfolio margin accounts that use offsets, but even then they still usually dont offer too much leverage - they have limits. A 30% drawdown if you are leveraged three times will see your account pretty much gone! I reckon you are correct that one way of viewing it is how much can you borrow separate to the broker - this is not the easiest way, but a way of looking at it. Whats to stop you borrowing 100k against a house that worth 500k with house equity of 400k then leveraging that up 10 times and trading like you have 1 mil....do you have 10 times leverage, or not??? or do you only have 400k leveraged to 1mil. With 100k in an account you can probably manage to control that pretty easily. Make 10% a year on a mil, but its 100k on the account - sell that to someone! (I am conservative and look at over all exposure - not just how many contracts can I trade, but everyone is different)

Just because the leverage is there does not mean you have to use it, hence anything with 50 to 1 means that its just the maximum. It is up to you to have determine what leverage you want 'in between' and while providers may offer instruments, I dont know if there is much of a market for them to be offering too many varying structures/products just because..... Plus dont forget the various futures leverage does change depending on volatility and exchange margins. Brokers also may offer various leverage in different accounts - sometimes they offer portfolio accounts with more leverage based on offsetting positions (one long one short) or simply cash accounts that need to be fully funded. Basically - there are already enough options available.