fast

Wouldn't dream of it.

I agree, but my point is that even if avoiding taxes is unfair (and I'm not saying it is), then that has no bearing on whether to do so is wrong.

To say of something that it is unfair is not to say of something that it is wrong.

Example 1) I didn't feel good about this trade at all, and the only reason I took the trade is because it just so happened to meet all my trading rules. I'm now glad I took the trade because it turned out to be my best trade of the week. Example 2) I found this one stock that was performing very well, but it just didn't quite meet all of my trading rules, but I felt that if I jumped on, I could make a quick buck. I can't believe that stock fizzled out right after I entered. Example 3) My stock gapped up putting me into the green. I decided to stay in only for a short while longer because I felt that I was nearing the end of a trend, so even though my trading rules said to not exit, I got nervous and bailed. Man, I wish I would have stayed in because that stock just kept climbing all day long. Example 4) I can't quite put my finger on it, but I really expected this stock to do very well. It did alright, but no where to the extent I thought it would. The examples are only a snip-it of what might serve as a complete entry. Basically, you want to keep a diary that answers why you got in the trade (the technical set-up and any other such mentionables), your thoughts and feelings (the psychological component and any expectations or anticipations), and in what ways you deviated from your plan (your mistakes). Keeping a comprehensive trading log (or your trading diary) won't help you much until you've done it for a little while.. When you start going back and reading your diary and checking it on a frequent basis, that's when it'll start to spit out gold bars. See, you'll realize things about your behavior that you did not know. Man, I knew I made that mistake a couple times, but I had no idea that I did it that much. Gee, if I wasn't doing that, I would have made a lot more money. Gosh, I'm glad I started writing this stuff down because I'm starting to see patterns about what I do that I did not know. The point of all this is so you are more in tune with your tendencies that may either go unnoticed or minimized. What most traders will find is that they can’t trust their own feelings most of the time. After you have a good solid plan that's been sufficiently tested, your odds are better when you trust your own ability to follow your plan than to rely on that sense you get when you think everything looks a certain way.

In regards to that, another couple areas for improvement sometimes include identifying filters and developing triggers. We hear about set-ups all the time, but less often do I hear people discussing filters. A filter is something that tells us when to not trade a particular set-up. I am of the opinion that successful trading is not always about finding the best set-ups. Knowing when to stay out of the market (or to not enter a particular trade) can prove remarkably beneficial to a trader. Let me give an example. If a swing trader is trading trend retracements, then there will be times when the market will behave erratically—whilst trending. For instance, if you're following a stock that goes into a retracement but does so with gusto (sometimes referred to as a vertical retracement), then having vertical retracements as a filter can improve trading results because more often than not, a vertical retracement leads to a complex retracement (an a, b, c pattern, if you will—where an even shorter trend will be in opposition to the dominant trend that you’re trading). In this instance, it would be best to wait until the complex retracement ends. Again, to have a filter is to have a reason to stay out of a trade that would otherwise still meet your set-up. A second area for improvement is to work on our triggers. Having a set-up (with or without filters) is generally insufficient in a good solid plan. We should also have triggers that are separate and apart from our set-ups. Not all set-ups will trigger, so some will and some won't, yet in reading people discuss trading set-ups, they seldom mention the configuration of their triggers. To continue the example of trading a trend retracement, a trigger could be the placement of a buy order after seeing a repeating pattern that shows up on one's cycle indicator. In any given instance, we may have several securities that meet our set-up but only a couple that satisfy our trigger requirements.

. Tactics are narrower in scope than strategy, tend to be me more detail oriented, and bring an added layer of precision. For example (and this is only an example), if you use a full stochastic indicator, then (and in conjunction with other tools) you might look for buying opportunities when %K enters into the oversold area. Then, you might wait for %K to change directions before being triggered into a trade. Next, you might place a buy stop one cent above the candle that caused %K to change directions. This could be a tactical advantage that you have compared to others who follow the very same strategy you have--which might be to swing trade only on the first three pull backs of a upward angling 30day sma trend. Within the same strategy, you might have other tactics you use as far as money management goes. Joe Blow sells after he has a 30 tick increase; you, on the other hand might use a scale out approach (1/2 after 25 ticks) and (1/2 with a two bar trailing stop). If someone is telling you to be more tactic oriented, I'd take that as you should be more concerned with the specifics--the nuts and bolts of how you're gonna execute your trades.

Your comment brings to mind a second interpretation of the thread title. A transition from trading a good solid plan inconsistently to doing so consistently could very well lead to an improvement in trading results, yet on the other hand, one that already maintains consistency with a good solid plan is unlikely to make significant strides beyond the trading results one currently achieves. If one already has a good solid plan and trades his plan consistently, one can still improve trading results without trading inconsistently. One can simply consistently trade a slightly altered and well tested plan. I will say this though; I am out of my comfort zone on this issue. The plan that I follow has been molded, twisted, and tweaked into my own, but it's still nevertheless true that my success is a function of the fact that I have stood on the shoulders of giants. By that, I mean, I wouldn't be where I'm at today if not for the countless years of experience of others that have come before me. I did not reinvent the wheel, as it were. The reason I'm out of my comfort zone is that I'm not fully adept in the best process to make substantive improvements without also potentially undermining my current results in the interim. That being said, some common sense items like not making changes unless a statistically significant number of test trades have been run over a meaningful time period comes to mind, but beyond some back testing and forward testing, I'm not really sure what I can offer in the way of advice when it comes to trade improvement via testing.

What I was getting at is that we should strive to eliminate mistakes. That (and perhaps above all else) will most assuredly help one to maintain consistency and improve trading results. Maybe that term is a bit too narrow, as what I had in mind even includes intentional deviations from one's plan. Consistency demands rigidity. It can be difficult for some people to watch set-ups that are so close pass us by to later see that they were successful. There will be times when close (but not quite there) set-ups will be what would have been for us a winning streak, and it can be especially difficult to also see our set ups we trade land us in a losing streak, but patience is a virtue in that we can reap the rewards that a solid plan can bring if we stick to what we have know to be a good plan.

I’ve reviewed the lexical definitions of the term, “intuition”, and although I have not attempted to take my efforts further by trying to analyze the term for it’s necessary and sufficient conditions (that would require more effort than I’m willing to expend on this side issue), I am finding similarities (despite the presence of subtle differences) between how the term is commonly used in both the discipline of psychology and philosophy. I do understand how you’re using the term, but I would have to characterize your use as a stipulative use. As such, it’s customary to use single quotes when using a term in an unusual or alternative manner. So, although intuition doesn’t appear to be what you have in mind, ‘intuition’ does, as characterized by you. That’s okay. It was never my intention to correct (or even appear to correct) you—a forum about trading perhaps isn’t the correct venue for such a thing. I just wanted to make sure I understood just what it was you meant by what you said. You do, however, seem to have a genuine desire to understand what intuition is. An easy search of the term reveals this insight: “Intuition is the ability to acquire knowledge without inference or the use of reason.” The source goes on to say that the word has a rough translation meaning “to look inside.” That is a far cry short of a sufficient explanation, but I only bring it up because it reminds me of introspection (which I think is relevant) whereby one looks to oneself rather than externally as a basis of belief. Intuition is a belief (but certainly not merely a belief) that appears to not be a function of the characteristics you ascribe to intuition, and it’s mostly for that reason I have a strong suspicion that what you have in mind is something other than intuition. Of course, what word you use to articulate your views is inconsequential to a fruitful discussion, so long as I understand what you mean by what you say.

I am pleased with your response, as you clearly have an appreciation for distinctions. I also want to thank you for the explanation, as it reinforces what I thought you meant earlier. If you follow a good rule-based methodology and refuse to deviate from it (and let trades go by that are close but don't quite meet your criteria), and if you consistently do it for a long period of time (especially without making mistakes), then the various components that you ordinarily look at that go into your trading decisions will become ingrained in you. What you are supposed to do (in accordance with your plan) will become instinctive, as if (as if, I say) it is intuitive. You can eventually get to a point where your trading becomes second nature to you making the decision making process very simple and almost spontaneous. This is a good place for an experienced trader to be, as it can significantly serve to eliminate analysis time and the dreaded thing that hurts us most of all: mistakes. However, a trader who is trading a plan that is second nature to him isn't necessarily a trader that is in what we sometimes call, “the zone.” Being in the zone has more to do with focus, yet a trader that is focused still isn't necessarily in the zone—hence, another distinction. I'd like to expound on that topic just a bit and maybe you'll see why I don't think the zone is quite as mystic as some might think, but I need to approach the subject with examples outside of trading to bring this all together. People sometimes report of what they’ll characterize as a “slowing down effect” moments before a vehicle crash. They say things like, “Everything seemed to be moving in slow motion.” Time seems to almost stand still. They were in the zone. There's a technical name for this, but I cannot recall what that is. It often occurs during an extreme event, but it is also brought on during times of extreme focus. Serious gamers can “get in the zone.” What happens is a sudden clarity of thought comes over them brought on while maintaining intense focus. Nearly everything else becomes tuned out. Consider someone that is playing a game of Tetris that gradually levels up. There comes a point during the higher levels that he simply can’t keep up, but by repeatedly playing and trying very hard, something may eventually happen whereby he can all of a sudden play higher levels with incredible ease. There is actually a physiological explanation for this experience. It’s ironic that it’s often characterized as a slowing down effect because the effect is a result of something that is actually speeding up. Let me give one more example and provide further explanation before I tie this in with trading. Race car drivers may at times get in the zone, and I bet you too have been in the zone as well. Have you ever been driving and for a few moments felt like you could get out and walk faster than the car beside you? Intellectually, you know you can't, but perceptively, you're so in-tune with your surrounding that things almost appear as though you could. Welcome to the zone! This can occur after you’ve considerably slowed down after a long fast drive. I recall a time when I was speeding down the interstate driving along somewhere in the 80 MPH range. There was very light traffic, and about forty minutes later I came up on a ton of traffic moving at about 45 MPH. I had been processing a lot of information. Now, I'm amidst traffic driving much closer to cars than I would otherwise normally do. I felt like I could roll down my window and inch over and touch the vehicle next to me. The feeling normally fades after a bit, but that feeling that you get where everything is moving slow is a result of being in the zone. In fact, it's caused by your brain speeding up (as if going into overdrive)--probably caused by an increase in adrenaline. If you wake up at near the market open and pull up a 200 tick chart of the NQ in a fast moving market, the bars could go by so fast that one could easily become overwhelmed--no focus. Now, if you've been watching a 25 tick chart for the last 30 minutes intensely trying to follow your different indicators and how they relate to each other, you might find yourself on the verge of entering the zone (a mental state of heightened awareness). At that time, switch to a 400 tick chart, and you just mind find that you are literally capable of multitasking between day trading and just about anything else that may come up. It's not the focus but the mental effect that sometimes occurs because of that focus. That's what I call being in the zone. Traders never need to be in such a zone to be successful, but day traders highly focused on a low number tick chart (for example) might very well occasionally find themselves so in-tuned with the occurrences on their charting platform that they’ll enter this seemingly mystic zone.

Unwilling, not unable.

I didn't mean to come across as if I had conflated them, but yes, there most certainly is a distinction between the two. However, intuition is not the culmination of knowledge. At least that's my conclusion after reviewing a few relevant articles in the Stanford Encyclopedia of Philosophy. Even experienced traders often deviate from their plan when they start 'feeling' their way through trades. One may exit too early because things don't feel right, or one may enter when they feel good about a trade. Sometimes, it pays off, but if one is trading a solid plan, it's unlikely to pay off more often than not. You talk about maintaining consistency and improving trading results, and though I agree with you in that we shouldn't be trying to undercover the meaning of life when trading, we should pay very close attention to not only what we're doing but why we're doing it. The journal provides an excellent biofeedback mechanism in that it serves as a reflection of our thoughts and feelings. Why are we deviating from our plans which we've spent so much time putting together, and what are the consequences of doing that? Keeping a journal paves the way for traders (new and experienced) to figure that out. Another way to improve consistency is to objectify every aspect of the trading methodology. When we seek to eliminate the subjective elements in our plan, consistency is a byproduct of that effort. We can also improve our trading results by learning when it's appropriate to tweak or otherwise make substantial changes to our plan. The good points you made are certainly nothing to scoff at, especially for day traders. Also, it's a good idea to avoid trading when tired or bored. We shouldn't trade just for fun, nor should we trade when overexcited. There are quite a few situations when it's obvious we should take a break.

I would like to add something that I think is very important, and that is to never underestimate the power that your feelings have over your trading. Specifically, I’m talking about the feeling you get while reviewing a developing chart that seems to show some promise. When you feel good about a trade … that feeling. When you come across a potential trade that you feel especially good about, there is a very real danger that you may trade it regardless of whether or not it fits your trading rules. It’s so easy to sit back without the trading platform up and intellectually appraise the disadvantages of trading by instinct, intuition, or gut feeling, but when we’re looking at the hard right edge of the screen and see the action unfolding before our very eyes, we are susceptible to being lured into trading based on our feelings. The solution doesn’t lie in telling ourselves not to do it. That doesn’t work. The solution is having something click inside us (a mental awakening), and that comes with the realization that we simply haven’t a clue what’s going to happen next. That takes a while, so it won’t happen overnight. Meanwhile, all we can do is trade our carefully crafted rules that were designed to put the odds on our side and manage our money like our life depended on it. So, how do we get this mental awakening? Two things: 1) you must learn something about yourself that even you didn’t know, and that is the actual frequency in which you trade based on feeling. Oh sure, you know you’ve done it, but what’ll surprise you is just how darn often you’ve done it. Once you learn that I’m right, you’ll be like, “I had no idea I did it that much!” That’s right, not only do our feelings guide us more often than we should allow, we have also somehow managed to adopt some selective memory issues. Go us! The second thing is to pull out the calculator and figure out just how much more money we would have had if we simply followed our rules. Once we start making the connection between what we’re doing and the consequences of doing it, most of us will eventually stop. The secret is to keep a trading journal that not only includes the technical’s and financials but also the psychological aspects of the trade.

I count waves, but the waves I count aren’t Elliott Waves.

Now I'm embarrassed. I had clicked on the "latest posts" button and came across your post and found it interesting. I responded, but I inadvertently did so with disregard to the subform I was in. I did not even for a moment consider the context and how it relates to what you wrote in your post. My apologies. I should probably refrain from speaking about that which I have very little background knowledge—I am not as familiar with Wychoff as I perhaps ought to be.