miketoll

Theory sounds so uberlogic, yet it's unprovable. No matter if you watch them live trading once or for a year. Doesn't tell you anything about the real results if you know abou. Especially in a case like a Wyckoff approach, that's so diffuse that you can't even name fixed rules (even discretion can be framed, if you have the ability to structure and abstract.

I tell you: I'm so much master, that I call candlestick bullshit, that I threw away elliot waves and that I'm not thinking you can make money in a zero-sum market. Not because some critics proved their failure. Not because I found something that makes more sense and has been lived by "the greatest traders" (livermore, wyckoff, ...). I know very well about variance. I just use the answers to judge, how serious a subject is. It's not difficult to differntiate between deep-thinking people and kids playing around, like they are so often here on forums (like you think, I'm, irght? ) I don't even touch approaches which concepts are too too big. That say at point a someone is accumulating and point b someone is distributing,due to this and that. Big speculation, isn't it? Know one knows if this is true and know one will ever even slightly prove it (you can't right? even your 5 year trading results can't prove it and you know that9. It's a theory which sounds comfortable and logical. Where traders see a light at the end of the tunnel, because they now have their framework they have searched for. You just need to bring enough effort to get this down, right? Pff.... Of course it may work, but maybe it's due to a combination of a hundred others factors and variance. You can't even dream of what variance is like. Wyckoff, Livermore, Wiliams are more likely to be variance, than they are not, especially at the times where they invested. But I won't try to convince anyone about the importance of variance. Don't take it personally, but I think most people here get too much caught up in their "trading world" that they even forget the most essential question: Where is my edge? I'm not talking about you edge is the theory you have. Where's your real edge? If there would be such a loophole, it would be closed...fast. Yet, I'm open to new things. Thanks for your input anyway!

Thanks Gringo! I do have specifically two questions about Wickoff: 1. At some points DB points out following thread: http://www.traderslaboratory.com/forums/wyckoff-forum/13644-trading-90-minutes-archive-8.html#post159560 I don't even have a clue, how this has to do with Wyckoff? I think it's very valuable information, but at the same time tells me, forget about all theories (including Wyckoff): observe the markets BY YOURSELF and build your own strategy. So why even bother about Wyckoff? 2. I don't totally grasp the concept of price continuity. Does it just mean, to forget technicals that are based on history (basically price, volume) and just look at the order flow as a prediction for likely moves? Help is very much appreciated!

Hello, I did go through the threads the entire day. The more I read the more I get the feeling that Wyckoff's way of trading is just another theory. Of course it's a theory, but in a way like Elliot Waves or Candlesticks (which is BS as we all know). I don't want to offend anyone, especially DB or any other great contributers. I'm just curious, what Wyckoff's way of trading makes it superior to other theories? I think anyone in this subforum perceives Wyckoff superior, otherwise he wouldn't practice it. So... What are your experiences with Wyckoff in LIVE trading? How much success do you have and where do you see the advantages?

1. Of course, selling can drive prices lower. However, it's not about if prices can be pressed lower, but if there's a situation where everyone could POTENTIALLY win (which is in stocks, but not in derivates). As I said it's about a conflict of interests which makes trading difficult. 2. True! But my point was about stocks being more predictable compared to other markets. Looking back in history times of crises are so short compared to the times where the market is stable (2 times in last 20 years). And as you said, company information IS relevant when the market is stable making stocks predictable. Although crises may be more intense in terms of price fluctuations, this is not too difficult to manage with good risk-control. What I want to say is, that stocks are much easier to predict in times of macro stability. Forex, however, or every other zero-sum game is very hard to predict (for the reasons stated in my first post), if not unpredictable.

Hello, I want to discuss why stocks are easier to trade than forex or other derivates. Please spare me with pseudo-forex-advantages like 24h market (no one trades 24 hours; beside that the market is volatile only in certain times), smaller trading universe (actually I prefer a lot of charts...), bigger market (who cares?), smaller fees (every looked at the commissions of IB?) and liquidity (look at apple, google and co. here you have more liquidity you can dream off...). I claim that stock markets are easier to trade for following reasons: 1. The market has a general upwards drift. You could buy-hold and eventually will turn a profit. Not so in forex or other derivates (e.g. see indices worldwide over the past 50 years - that's not a coincidence) - Anyone knows why??? 2. It's not a zero-sum game in the sense that someone has to loose, whenever I turn a profit. Naturally this means that there's less competition. It's a universal truth, that less competition means more profit potential. The consequence: There's a higher possibility for the constitution of a situation where everyone has the same interest, making it easier to trade the market. 3. Being a smaller entity a company is much easier to analyze compared to an entire country. What's even more important is that people find a consensus much easier about the fundamental strength of a company (which affects the stock price). For example, take the EUR/USD. Good news from the EU and good news from the states. It's in the trader's perception which news is better, ultimately influencing the price. However, good news (or outlook, if longterm) for companies can be interpretet only in one way. Right, good for company; ... which equals good for the stock (in the long term). I think what it comes down to, is that in stock markets there's a stronger consensus about what's good for a company and what's bad for a company (a company is easier to analyze in a whole, there're more information and so on...). This makes stocks more predictable in comparison to commodities, forex or futures... (being a non zero-sum game there isn't a conflict in interest as well; thus everyone can profit). This is the reason, why stock markets are easier to trade. If you disagree or feel to comment I encourage you to do so. -mike

Hey, how fast can a price fall in case of bankruptcy, or other extraordinary circumstances? Can the stock price fall to zero over night? Differently asked, how fast can i usually expect to get out when I use a stop loss? Nobody will propably buy these stocks, after such news. Will I be able to sell them at all? Any opinions/experiences? Greetings -mike

That's probably the biggest disadvantage to forex: IN forex you know your risk in advance. No gaps that eat up half your account :/

Hey, how do you protect against sudden stock-drops of 50% or more (like terror, bankruptcy..)? It just needs to happen, one day in your trading career and you're busted? Even if diversified over 5 stocks, you may have a destroying drawdown (e.g. 9-11: 40% in United Airlines; other 4 stocks around 10% drop --> 18% drawdown).. How do you protect against those drops? I don't want to diversify more, in order to be able to outperform the index. -mike

How much do you diversify? I currently hold 5 stocks, each being 20% of my capital. Let's say a terror attack like 9-11 happens again, I will have one stock gaps 50% and the others maybe around 10%. In total this is 18% drawdown. Let's say I already have been in a 5% drawdown around that time, than I'd be down 23%. It's very hard to cover a loss this big. This scenario may be somewhat unlikely, but it just needs to happen one time in your trading career and you're busted. Further, it doesn't need to be terror or any sort of that. It can also be bankruptcy over night, which can make a stop drop easily 50%... How do you protect against those situations?

Hello, first off, I'm from a Forex background. I know the average volatility of the main currencies very well and common spreads. I often wonder how people tell me that they're doing several trades per day. Guys, please tell me how this is possible? The more trades you make per day, the smaller the timeframe you trade is. I think this makes sense. The problem with small timeframes is that the average profit and average loss decrease a lot. Compared to spread you often get a - how I call it - spread ratio worse than 5:1. Example: average pips traded before you get exit the trade on >15min chart = 10 pip (can be either a profit or a loss) spread = 2 10 / 2= 5. So to speak, for 10 pips you make or loose, you always have to pay 2 pips. What does this mean? This means, that you have to win 60% of the time to trade breakeven. With so many people having access to the markets and information, nobody can deny a certain efficiency in the markets. This decreases your edge a lot and everyone who's traded for a longer time knows, that a 60% edge is extremely hard to maintain. BUT, to make a lot of trades (3+) you'll have to trade those small timeframes. So if you ever wondered why you're doing hard in trading, then think about this aspect. Spread is probably the HUGEST factor that separates the winners from the loosers. Open to some input and ideas! Cheers