SIUYA

unless of course his point is right - that the 1 in 100 year events are actually more frequent that we think. eg; 1987 share crash, 1991 - gulf war, 1992 bull market, 1997 Asian crisis, 1998 LTCM, 2000 internet bubble, recent events etc; etc;... There are plenty of opportunities for dislocations, and they certainly occur more than "risk" models suggest (VAR - what a joke)...anyways that is a different discussion. I read a book a few years back - the luck factor by Richard Wiseman - I thought that was a pretty good read and summary.

it would be unlucky not to think that luck plays a big part.....however luck will not make you a good trader, it may give you a few good wins, that when the smarts ones realise they were just lucky.

You misunderstood me. A RR ratio is merely a historical measure of what you might expect. To me its often talked about as a pre-trade tool, whereby a trader just sets and forgets - and this is where I think for many new traders they just do this with out thinking about what it is they are doing. I have often talked about marginal trades....and these are ones that basically risk little to make a lot. They are not trades whereby you buy as something that is in a downtrend and is approaching resistance as its retracing a little - purely because you think you are only risking 10 and resistance is 30 ticks away. --- that to me is a marginal and poor value trade. (much as other posters mention - every trade is different - thats why for me context is king ) Unless you have done statistical analysis to say that this is >60% chance of occurring then maybe its a different thing......but a better trade for me (in this instance) is to wait, sell at the resistance and try and capture a lot more. History will likely show then your RR will AVERAGE better than 1:3 I think we are talking similar things here - my bug bear is that RR is seen as the holy grail as something that is set in stone and must be adhered to. A lot of new traders dont get explained to them the importance of using this as an idea of expectation only. (much the same as you describe), that it only comes from testing or trading experience (ie; do you move your stops efficiently, do you enter too early, exit too late, f..k up the trade management) in comparison to what the "ideal" might have been Whenever you invest in a fund you are constantly told "past performance is no guarantee of future performance" - its exactly the same here. To many people think that every trade is the same so long as you have the RR set up.....to me this is like driving a car a fog. Which leads to this thread getting off topic from "tips to better trading", better start another RR one (to add to the many already about) thanks wrb for re- tracking it So with that in mind - for better trading a tip, understand the tools people promote, why they are used, how best they use them, and understand their correct use.....as they apply to you If you only rattle off a pre-defined answer as to what something is - then you have problems

we are talking the same thing...... Too many people throw out RR and numbers from thin air. It is only a useful measure if you already have an idea what the expected loss and potential related profit shows up as a historical measure that you might be able to use going forward. ie; you have tested it, or have done the same setup and trigger enough times in the past to know what to expect....and hence its worth repeating. Thinking "I will risk 10 and will not take a profit until 30 ticks" without the historical idea and testing showing this is a good measure is insanity:crap:.....but I am pretty sure thats what many traders do. Personally I think capping the return part does not make sense for me...but every on is different, and i prefer to look for momentum trades that ideally have very small risk. 1:3 --- na ....go for 1 to 20.

problem with all the R and R talk is that you cant set them randomly or with hope that its a 3:1 a 5:1 or a 500: 1......it should be based on the probabilities that have been shown to occur for that particular setup from a historical basis...otherwise its all just guesswork....and guess what - you probably have to keep changing it based on the current market as well. IMHO as its too often misunderstood, glossed over or just thrown out there - all the constant talk about RR is probably the greatest load of bollocks ever dumped on the trading community.

A little bit of semantics maybe.... additionally getting the wrong habits early on, from a poor educator, or a teacher who may be good at teaching but in fact teaches habits that dont suit all people is also a big issue. As luck plays a big part in many vocations.....often stumbling not only on the right teacher, but the right teacher for that student, and prior to getting any ingrained habits is vital. Poor habits can be overridden, but its makes it that much harder and even just practice might actually be considered harmful as well. Perennial bulls and bears are often forged in particular markets under particular teachers and never really change or adapt. Scalpers find it hard to trade longer term, fundamental analysts often dont want to believe the market, maths whizzs might want too much certainty....etc;

and the ironic thing becomes that a lot of the free marketers who push the government to get off our backs usually cry the most when they are scammed. How often are the extremists of freedom and free markets the first to want help and self policing and regulations, ask for bailouts, and other subsidies that more often hinder competition and distort markets...... They often don't accept the logical consequences of the system that is promoted Happens a lot - if you know the history of art (The great cycle of life).....the revolutionary becomes the establishment......world trade....the biggest promoters of free world trade are often the biggest subsidizers....:crap: :crap:...sorry off topic....stick to moral hazard.

LOL - that was probably one of the more way off topics (in all tangents by all persons), however IMHO it was reasonably tame, polite and cordial. Doesn't that tell you that the topic was a non event? If moderation is going to involve trying to take off topic discussions into the area of deleting off topic posts - as clearly the topic held little interest - then I hope that TL still remains a place for free and open discussion.....to me off topic is not necessarily a deviation from the thread title - its more about the nature of the posts being personal.....so for my , (as clearly this is ok as its on topic) you moth...r f...king censors should learn to watch out for all the lies, lies, lies and when i catch you i am going to come around and napalm the compost heap your ideas come from....have a nice day.

This thread I thought might become an interesting collection of resources to show the pros and cons of bailouts, examples of moral hazard and the decisions of humans as a result of it. eg; for those in the markets who cannot help themselves. for those in the market who should know better for why we as humans will never learn debates as to weather or not we should have the government to bail us out. (now I would hope that this does not become a thread full of arguments that we either let everything be unregulated, or about attacks on others ideas.....more about a collection of articles, resources or points of view that can be a collection of examples related to the topic.....and yes its a very varied, wide and multi-faceted one - so if it gets legs it may spawn some interesting articles.) Moral Hazard (wikipedia)- In economic theory, a moral hazard is a situation where there is a tendency to take undue risks because the costs are not borne by the party taking the risk. A moral hazard may occur where the behavior of one party may change to the detriment of another after a transaction has taken place. Random questions....In these days of bailouts by governments are we as humans ever going to learn? Is there a mis-match between what we want to be protected from, how we wish that to occur, where do we draw the line? Why is it as traders we want free markets with transparency and more participants (ideally unsuccessful ones) and yet we rile against people selling claims to these participants. Why do humans despite being told, there is no secret sauce, there is no one right way, no holy grail, but when a claim that there is arises some people attack it, others pursue it? (and while it might not all revolve around moral hazard as its known....i for one definitely think its related) This is very topical and was mainly was spurred on by this article below...as well as the debate on TL that people need to be protected from sales vendors, automated trading models promising riches etc; (I have no particular allegiances, prejudices or examples in this regard) when maybe all the protection in the world is really a waste of time for some. The article....Basically an advertised scam that still sees people invest even though they are told it is a pyramid scheme. http://www.bloomberg.com/news/2012-06-06/is-global-finance-a-ponzi-scheme-ask-a-russian-expert.html Lets see if we can find other examples (and there are plenty there)..... and you know what - if someone posts an opinion and others resort to name calling if they dont agree then maybe that is the best (and sadly most pathetic and piss poor response you can have) argument you have....go and join parliament. [ame=http://www.youtube.com/watch?v=fadIvRtayts]BBC World News: Ukraine parliament fight 0020 25 May 2012 - YouTube[/ame]

Sierra chart is a great value (but not free) system that can be used. I think Open E Cry also has options to look at

You are missing the obvious alternatives that could occur to then best assess why... 1.... The simplest answer is that if you buy the call the instrument goes up - why not just sell out the call you made money on, sell out some of the calls, hedge with a partial short OR let it all ride? 2...The instrument goes down and rather than only loosing the cost of the spread you loose the full cost of the single call As MM suggests another way may be to leg into various months (series). You have assumed the best solution and then depending on where the strikes costs etc are, you need to assess the situation. simplistic example; stock $10, buy the $11 strike call at $1, stock rallies to $12, $11 strike call maybe worth now $2. if you sell it out now you make $1 (net cost now 0) if you sell the $13 call at say $1, you might at expiry either make <=$1 if it stays here or falls. or the max is making another $1 (but thats all) so if the market falls or stays still you are no better off.

i like a democratic self regulating free and open market.....so i vote for no moderation and let the punters decide. On that note - this requires more seasoned/experienced members to be an active part of that self regulation (with rights come responsibilities) and that simply means acting in a civil manner towards others even if you disagree with them, AND trying t keep things slightly on topic even though deviations are good. (I mean it not that hard to open a new thread about a specific topic if that is what people want is it?) Off topic is not an issue for me. The ignore button is great - but like any tool if its not used its useless and if someone is a complete twat ignore them.

That picture could be used in ohhh so many ways.... maybe it should have also taken into the lead up to this.... "no discipline, no taxes, no cuts" - ---leads to a chart or increasing debt and financial collapse!

Good point..... I read a book over the weekend (the power of habit - Charles Duhigg -- not a bad read, light easy - more about the discoveries of how the brain works - its not a self help book) (plus two thumbs up for kindle - new toy....where have you been previously baby) in it they talk about a section whereby casinos rigg the slots so that the "near" miss has a profound effect on people. Check out The Near-Miss Effect | Wired Science | Wired.com as per usual its each to their own and what every works - probably why its always recommended to keep a journal to work out where your strengths and weaknesses lie. Mental sabotage is a slippery little complex subversive little f....r. Stick to the evidence.

There you go MM its average $350 per day per instrument - definitely doable. Well does that mean you will not take me up for a fair and impartial trial? I think if not then that really does explain the unwelcome wagons...... (plus Mitsubishi I am a he despite my soft feminine touch and delicate disposition)

If you think about it allocate $10,000 per contract - =$20,000 Make $1000 per day give or take holidays a few bad days etc....total profit $200,000 for the year Simplistically calculated Net return 1000% ---- not bad. Possible - not probable.....hence I am willing to see and report in a fair manner as any skeptic would. We cant forget that Mr Felton is offering to sell services, and hence as per any sales person will talk up the good things - completely normal, fair and understandable. Maybe this does cloud peoples judgments but show me any sales pitch that does not. eg; this car/beer/clothes/gym membership will get you the girls, the nice weather, the glamourous lifestyle etc; etc;.... That does not make him a bad teacher, nor a poor value service......

I would start with a discretionary trading platform, mainly because if you dont understand how or why this element of it works, then understanding how or why an automated system works might be a lot more difficult. Then use automation to replicate a successful discretionary strategy.

Post #98 Page 13...http://www.traderslaboratory.com/forums/trading-markets/12555-if-i-hear-price-action-setup-13.html It was an offer by me in the original thread where the original altercation took place. By the way it was not so much asking for help, but it was in response to your post #86 page 11 I could satisfy those 4 criteria - maybe I might spend slightly less time on a daily basis as I have other things happening, I also am not inexperienced, though sometimes I do struggle, I am not aware of any emotional mental issues I may have.....(though this is debatable) """"""""""""" I'm seeking a couple of honest individuals who are struggling to succeed as traders. Assuming they have at least some trading experience, what I wanted to propose was to let me work with them for one week. At the end of that week, I will personally guarantee that they will be able to identify excellent market entries in real time 95% or more of the time they spend in front of their charts. Since I cannot force anyone to actually take any particular trade, I can't guarantee that they will make any money...many traders have serious emotional issues that are beyone my control. But I can guarantee they will see the trades in plenty of time to take them and they will easily be able to recognize their profit potential. They will also know the exact moment to exit each trade. They will also know how to spot the majority of the few trade signals that are likely to fizzle. Pretty bold stuff but I know what I can do and I'm willing to stake my 15 year reputation on it (which is impeccable, by the way. I've never been sued, censored, fined or even investigated by any agency. We enjoy a spotless A rating at the BBB while most other "competitors" wouldn't dare join that group). What are the terms? 1. To keep an open mind and be willing to learn something only a handful of traders know about. 2. To never pay me a dime for anything at any time. 3. To allow me to work with them daily for one week. 4. To go back to their group, forum, etc. and give a full honest report on the experience and how they are doing. What do I get out of this? The best I could hope for is simple professional respect. I know I'll never get that from everyone no matter what I do (especially here) but it would be refreshing to be able to join and log into a trading forum and not be verbally spit upon. Who knows, I might even make some friends along the way."""""""""""""""""""

you can be as closed minded as you like..... Some people might find something worth while in Rogers teachings. My aim would be to be as open minded and as fair as I could be (apart from a few instances I think I would be seen as a pretty impartial fellow here ) If I had any biases/pre determined areas to judge it would be on a....was Rodger offering anything new/exciting/worthwhile that could not be found elsewhere for free b....is this value for money for both new and experienced traders (I would probably rate this so you can make your own subjective judgments) c....based on there being a legitimate trade off for speed learning or backup via a mentor rather than trawling through the net and working it out yourself. (My predetermined biases that I am happy to be forthcoming about are that - generally there is not a lot of new stuff there, most things are just variations of the same price action - but there still might be value in short cutting the learning curve.) I think that would be a pretty fair and open way to view it. Thoughts? (without rants )

for the record - I said I would actually check it Rogers testing if I had the time and give what I would consider to be a fair appraisal in the last thread....and I dont think I am a mentor hater - skeptic definitely - but I reckon you would be hard pressed to say hater - I mean I even stick up for them sometimes. (Loved the haters ball video, especially the photo walk through)

classic combination of many things. It was over priced - in a bull market, over priced stocks can still rally - this is not a bull market (or at least it is in a very nervous phase of one) It was over hyped - see above, and the sector was a little soft. (timing is everything) Media confused the issue and talked about 100bill float, when that was its value...not the amount raised This is usually the reality of what really happens when people say they will support the stock (or say they will give you money to trade, or deliver something on time). Until they cut the cheque promises mean nothing. Fundamental information not fully disclosed......if you where a believer and then got told - sorry our fundamental information regards revenues is changing at the last minute.....then it might sap your enthusiasm for buying more or believing the brokers next story. It was an insider led sale....ie its still held mainly by the guys selling out....ie; there is not a lot of free market capital out there. (As I understand it Zuckerman only sold out enough to pay taxes - he is still a true believer) iel......control still rests not with the market float shareholders Technical analysis means nothing until the terrain has been mapped out, once the maps is there then probabilities can be assessed to trade off it. Like you I dont like the thing, but my opinion means nothing. good article regards it...http://www.bbc.co.uk/news/business-18105608

I get where you are coming from as per discussion, yep - comparing it to a basket may make sense, the question will then become one of putting on the trade that best represents the idea. eg - you are bullish the USD basket. do you buy the USD against many currencies or the weakest relative to the USD I also think that in this case it is more a point of mindset. If you are a EUR denominated trader and you are bearish EUR to the USD should it make any difference if you are a GBP or AUD denominated trader with the same view? The only basic difference will be in how your PL is reflected.....but it should not change the trade view. I think you are right "that prices of assets behave differently than their relationship to prices of other assets", and thats what you are trading. Another example is that of spreads eg; long duration bonds v short duration and the spreads there (I dont really trade these but it makes sense that they can often be used to trade an idea better than other things) Maybe it really is just as you say - the reason why some people loose is that they dont view it as a realative trade,

Completely understandable that its hard to grasp the concept in FX sometimes. (Just as some people cannot grasp the idea of shorting - how do you sell something you dont own? ) Karoshiman - to help you get over the FX issue as a suggestion - think about it this way. When ever you trade you are always trading the relationship between two assets. When you buy/sell a stock index you are actually saying that you think there is better value in the trade of the index than just sitting in cash. Think about it in those terms - its all a substitution, as no one is making you trade.

" Should a pure scalper care?" about context. Basically I would say yes - and you just gave the context of what you are trying to do in your description of how you do it. Context like everything is relative to what you are trying to capture. When I talk about context its larger time frame, right down to trying to read the intraday stuff, but its context as to how I see it and context as to how I apply it. eg; bear market...., i like to run shorts over a long term, however i may still trade some longs but due to the context of when i try and put them on, i will likely look to take profits quickly. I think in your case, at a guess it just increases the probabilities of getting more trades right than wrong, and the real focus for you is such things as minimizing costs.

so long as the plus is NOT that little bit of extra ladyboy.... my imagination runs wild. Plus Roger, I too would be happy to do a week (a lot would depend on how long this actually takes), and give honest feedback. I think many of my posts actually stick up for vendors (even though I am not a believer) and so would be happy to do it. (personally I would be surprised if its anything new, but happy to be proven wrong)