SIUYA

legal and compliance, Sydney drivers - yes the town that I love has definitely the most aggressive, rude, inconsiderate drivers in the world and to make things worse, they are bad at it.

I dont believe in prediction.....but I do believe in anticipation. However, context is king, and this is key if you want to make a prediction. eg; trade with the trend, look for moves that seem to break the current trend and THEN reverse....these usually go the hardest in my book as they catch people.

I am sorry Ingot....you live in Australia as I do...how quickly you forget the Opes prime, Storm Financial allco, Babcock, Tricom. Sonray. There are two things you cannot regulate for ..... 1) stupidity 2) fraud Legal and compliance is already making things as difficult as possible for people to open accounts after the recent above mentioned debacles. They are now causing more problems than they are solving..... and after twenty years trading, and helping set up trading firms - in Australia and the UK, and having my own licence....so I know compliance.....the worst thing is.... 1) Compliance in most places does not really know what its doing....it is box ticking. 2) compliance is not there to protect the retail guys.....it is there to protect the firms from the retail guys being able to sue them, or the government closing them down. There is already enough information out there - go to any bookstore, read a paper, do a course. Even if like many forums some of it is crap....what makes you think that an academic is going to be able to give you any better insight into the markets. Experts constantly disagree, loose money and go broke.....thats right experienced experts. So why should a retail person feel that armed with a couple of courses they can then be better informed. Remember the debates about efficient market theory and random walks and perfect information? This is the same for EVERY profession from legal, engineering, plumbing and farming.....and yet in the markets people expect more certainty.....come on - the nature of markets is about uncertainty and risk. so in a nutshell......I say No regulation, and the best education is one you will get yourself. ( Read the Zurich Axioms for a simple guidebook to investing) Most people wont even get off their butt to read a book let alone do a course. If you study economic history you will find that most booms, busts and retail fleecing occur either due to fraud - which is impossible to regulate by its very definition, or by excessive leverage. So if you really want authorities to help most retail mums and dads out, it can be solved with one regulation......dont let people have excessive leverage.....and to me, excessive leverage is anything over 4-5 times. you sound like you want big sister government to hold your hand

very true. I liked your analysis as well that the same things that attract some people also scare others. Many people have asked me how I do what I do, then I give them my oft quoted comparison (as I grew up on a farm) ..... a farmer puts $500,000 a year into the ground and crosses his fingers that the weather, the markets, labour costs etc; all the things outside his control line up.....who is the real risk taker? As an addendum....I do know of traders who made money, and would rather do other things. This is not a failure, this is just people who realise that there is more to life than making money trading, if thats is not what you are passionate about.

regardless of what you do...... either take profits, short into rallies, let it ride..... consistency is the key. It is when you start changing and picking and choosing, missing trades that it starts to cost you. Ideally - take your money and split it between two systems - let it ride, and take profits, OR work out a system that lets you take profits on 2/3rds (for example) and let the rest ride..... regardless - consistency is crucial. This also applies in terms of making sure your take profits, entries and take losses actually make sense in a system together as well. (I started another thread asking similar questions earlier.....about the trade off between taking profits and letting it ride.)

in response..... and while this is all how each defines things.... I see life as fun.....its meant to be about enjoyment and its meant to be as easy as possible given any circumstances. I see trading as a business, in that you have to have a focus, a plan, you have to approach it as such. etc; etc. So I guess we do see it similarly.....its just as you point out many businesses require pay slips etc. while day trading requires less of this......and yet I would guess that many many day traders fail because they dont treat it seriously enough. As I do more than just day trading, and run more a portfolio among other things I have other issues....none involving payslips (yet I still have problems with my accountants, brokers, clearers, data providers and such) They should rename legal and compliance departments the business blocker department! Now wheres my mama when I need her?

well its a damm sit better than going to the local accountant who says - oh that advice I gave you a few months back, and charged you for...well the government wants their taxes now, and I want to get paid......- how do you feel? (for all the Australians out there old enough - remember the Tooheys adds - how do you feel?) Plus Rande I do hope you realise my post was tongue in cheek.........

I am many others in our office self medicate with alcohol - our bartender is the local psychiatrist, and she looks good too. Unfortunately she has never asked me -- and how does that make you feel?

While I get your point, you may as well stick to SIM Seriously though when people talk of it as a business, it should be thought of as such in that those who trade for a living...not for fun, not for purity, not for a few extra dollars, generally treat it as a business. They understand costs, business plans etc. Trading should fit your definition of a business perfectly - Profits are made largely through the efforts of others in business - as futures markets are a zero sum game;)

remember the guy who traded up from a paper clip to a house.

The entertainment dollar..... there is no co-incidence that its associated with the "chance" to win big. So maybe trading is just an expensive form of entertainment for some

suggestion...to be helpful learn some more about options - there are many sites. Then ask again, as your question is too broad to make sense....just saying - straddles and strangles are not strategies. They are option jargon - like jelly rolls, collars, and ratios. are you looking to go long or short the straddles and strangles? are you buying/selling them because you think there is a big move coming, or no move? there are many variations with regards choices of strikes, months, skews before looking to implement options into a strategy. Of course just blindly buying or selling might work also

ptcman - "I have a complete list of my trades, where I have noted all my errors, my weaknesses, my strengths, but now I stuck. I have no idea how to, and what to to with that data"" when recording this data its important to record information about what you were thinking at the time.....this can help further analyse the data, and make it work for you. dont just run the data through a statistical analyser. Look at it...work out why certain trades work for you, and which did not.....even if they made or lost money when you did not feel comfortable with them. Also - keep this data.....its amazing to use to look back on..... first to remind you of of what - if anything - you learn over time. Plus to remind you of what a PL trail can look like. Often we forget how long losing streaks can last and what a PL equity curve can look like.... mine is big spikes up, and small grinding losses.

Its a good point DavidJohnHall that its best to keep it simple....but I would wager that your girlfriends son is the exception. most 10 year olds would eat the cookie.....and thats the point. There are few Warren Buffets in the world. (you Tennis story has many similar rings to golf - number one, keep your eye on the ball and swing through it.....forget the rest) Most of the recent studies have found that introducing monetary issues into many trading/bargaining/social scenarios screws up peoples decision making, changing what was seemingly rational behavior. I dont think there are many instances that show we are naturally inclined to speculate, most show the opposite. Now that does not mean its hard to learn......but it usually means un-wiring parts of the brain. plus the cookie market is so illiquid and can crumble at any moment, and the pizza market is likely to sag

try searching the net for investopedia

trading pizzas for cookies, is not speculation - and that is what most of us are doing. Humans are poor risk managers. We would rather take short term gains over long terms gains, we have trouble taking losses, we think we can control what happens in the market (when in fact we can only control what we do in response to the market), when you introduce money into the equation - it changes how we think, we underestimate good and bad luck, remember the times we thought we knew what we were doing and forget the times we completely f...d up.....the list is endless. humans might be naturally inclined to trade, but they are definitely not wired for speculation.

Negotiator - after recently moving from London I know you guys are not familiar with these things you dream of as a 'batcave' in Australia they are called a garage. In the land of OZ many claim you should have a garage on the house that has more car spaces than bedrooms in the house. (and then we wonder why we have a housing boom and have issues with public transport when every house lives too far from everything . Sad to say, that places like Australia has become....dare I say it...as expensive as London, so you will need to be rich to move here

good point Kiwi - as I guess this boils down to if you are looking for a helping hand, you ideally want it from a good coach that can help issues of self deception - as this to me is often overlooked as to why people dont follow their plan - this is the mamma not holding the hand, the wising up and taking responsibility, the elephant in the room. failed traders, struggling traders, fat people (its such a great comparison ) all too often lie to themselves about their abilities, their actions and the consequences of those. Often its not a trading coach you need but a coach that has some experience in trading...... Again, maybe not something for beginners but more for those who have hit a road block.

where are you....? look for people in your area first.

Ingot - please take this in the right way as I feel you have a bee in the bonnet that is buzzing around and you wont let it quit....even thought you say you have finished with the discussion.... and while I agreed with your basic ideas I hope this does not keep tormenting you Points I would make. 1) When you say..... "Why does it have to be "something psychological" getting in the way? Why isn't it the failure of the trader to take responsibility for lack of focus, lack of commitment, lack of consistency, failure to write out the rules, failure to follow the rules."" I would imagine.....these things are psychological. Something blocks people from doing these things when really there is no excuse when then dont people do them.....apart from something mental. 2) the turtle experiment pretty much showed that you can give people rules that have an edge, and not everyone will follow them. These rules are freely available. (they may have not been sucessful recently) but the premise works, with personal variations. So people can be given rules.This style of trading also shows that much of the time.... 3) different personalities are suited to different styles. Some people are great scalpers, others swing traders, others long term holders. Sometimes it takes more time to recognise this.....(Sorry Rande I know you dont like to pigeon hole but we all know it true....just as some people might be better shot putters than sprinters, a good coach wont change this ) (example; I know a trader who is great at taking on risk, but not good at taking it off.....he excels in some markets and NOW knows to avoid certain markets. He did not seek coaching, he just knows what works for him....or more importantly what does not. 4) often many people dont go the extra mile required, not in hours spent looking but in hours thinking. Having a trading plan is useless if you dont have a philosophy/theory on the markets and how they work. You need to have a reason for why your plan will work, and you need to then follow up for why things may or may not be working....and then if required a coach may help. (just as a Doctor will not always cure you a coach may or may not help....but often they might help steer you back on track) 5) Nobody normal is correctly predisposed to trading/investments/rational monetary decsions (this is consistently shown).....just as most of us cannot deal with the handling of money, assets and human desire to maxmise short term gains over long term gains. We always to easily forget the adages of - if it sounds too good to be true, it probably is, compounding is your best tool, you cant predict the future, etc; etc; Often the edge is in the mind....not just in the plan. These are not mutually exclusive.....often the best plans cannot be backtested without years of actual trading, even those computersised backtested systems are not the greatest in reality, and many great traders cannot be backtested by a computer. Sometimes the backtesting can show the premise works, but the edge is understanding how it works, why it works, when it doesnot and when best to break the rules....this can also be a disciplined and recorded process. On this point......it is not the start of trading and taking losses that starts the problems....they already exist! There are plenty of people who make money out of sheer luck, think they are geniuses and the smart ones stop or learn before the market shows they are not.....its not losses that cause the problems, its us. (if trading was a game, and did not involve money, I would wager many people would do much better at it.) Finally I would say.....using a different analogy I touched on before witht he diet and exercise industry....as its far easier to diet and exercise than trade.....yet many of us still dont do it. Often people employ a coach/trainer to help.....if they need them....and it works for them. Others join gyms and never go. The fact that most people a fat lazy slobs does not mean the industry is useless. but i would contend that as a new trader to the industry then yes Ingot is right, its is largely a waste of money, and coaching is at its best value when you know what you are doing, and need a helping hand. The criticsm should be that the industry preys on the new comers with false promises ....as do many industries.

automatic trading is possible -- maybe the question should be - is a l00% mechanical system profitable over the long term - without massive drawdowns (the answer is yes) so is the question is can a retail punter implement it? Also there are plenty of systems that can give signals, but do you want to leave a computer to trade those signals? (flash crash ?)

I am with Cunparis about context..... Which then raises another question, which part is worth automating, and which is the discretionary context element..... the context of the bigger picture.... eg; uptrend, market specs are bullish, new highs OR the context of the actual entry, and exits. for me I can easily automate the entry - its about the discretionary element of the bigger picture context, and I would prefer not to automate the exit. This stems from my market making days whereby you are essentially given a position and you have to work out what to do with it - run it, cut it or hedge it. Others may find it more difficult to manage the trade, and most systems offer to automate this for people with trailing stops and profit targets...... my 2 cents......ultimately either measure still involves the management of the trade once you are in it, and that is the holy grail

Glass onion...the other day i passed an office here in sydney that had that exact same Cartoon painted on the wall of their office in a big mural.....Clarity Capital.....an apt cartoon for the the name

thanks Rande.... I would say that you are correct - buyer beware, I do have a slightly different take with this comment...."" Nothing is going to be free. And if it is free, you probably don't want it."" ... my take on this is (while it maybe more a throw away line by you) is that too many people actually dont apply enough value to those things that are given away free. Instead they often feel that because they pay for something it must have more value.....and this is where Ingot nails it. each trader ultimately takes responsibility for themselves, and the support industry should be that....support not answers and quick fixes. (I agree with the expos....i used to go to them and look for new platforms, new systems to help me...now they all seem to filled with vendors of regurgitated ideas, CFD providers and other people who take without helping....it made me shudder last time I was there....and I used to work with them so I know what they are thinking)

just as an aside question for...... Rande and FXGirl and other supporters/practitioners of the industry for trading education. Do you think there is too much hype and a lot of snake oil salesmen? (This might help answer ingots original thread)