steve46

I don't want to cause any unecessary distress for anyone, but here is today's chart showing the Globex open....and just by coincidence I am sure...price moves up to test a supply/demand node created at the end of the regular trade session, where oops it gets hammered by shorts.... Again I am sure it is simply coincidence that this short trade occurred at the begining of the Globex session. In fact I suggest people simply ignore it....

That being the case I suggest you ignore my comments......that should help to relieve the emotional distress you seem to be feeling....I will do the same... Best of luck to you..

So really you cannot control yourself....thats too bad, because this business requires emotional control....and when I see people who simply cannot control their impulses, I KNOW that they aren't making money.... So heres a comment directed toward those who actually want to learn something Its not about being "good" or "great" and its not about hitting a trade "to the tick"....you can't count on that because the markets are a dynamic and noisy process...and humans are not perfect (obviously none of us are)...so what is the take away from this gentleman's comment? Well if you look at those two charts, you can see that actually, price came up and into the setup area twice...once right after the Globex open, and then several hours later. One of the primary differences between amateurs and pros is the ability to tolerate the tension of holding a position knowing that it might stop you out on the other side of that setup area (I call it a supply demand "node")...Most amateurs can't take the physical tension that causes and they wimp out taking a loss prematurely, only to see price reverse (as it did in the first example) and turn into a nice profitable trade....even when a trade goes immediately in their favor, amateurs often succumb to the temptation of taking profits too soon (after a tick or two) and then they have to watch as that trade moves another 5 to 10 points without them. Learning to manage your emotions, your impulses, your fears and your personal demons is THE main thing that amateurs lack....and that a good mentor can teach... Best of luck

There are two very basic issues that professionals must learn, either the "hard way" or the "easy way".... One is that there is a unmistakable relationship between the effort a person puts out and the rewards they reap in the market. Two is that there is an unbreakable relationship between risk and reward, and in order to survive in the markets one must learn how to characterize risk accurately and how to manage it effectively. For those few of you who really want to transform your lives, I suggest you take a moment and look around your neighborhoods...go to the nicest most expensive neighborhoods near you and look carefully at how those people live....look at the cars they drive at the clothes they wear, drive by the shopping malls they frequent and the restuarants they eat at...and ask yourself, "is this the kind of life I want"? "Do I want to be free of the concern for money..." The fact is there are few people willing to put in effort necessary to really be successful at this or any profession for that matter. They say they want it, but when push comes to shove, are unwilling to do what it takes to get there. Read Jack Schwager's books and notice that there are only a few who really "make it" and even those few have volatile careers. Often that is because early in their lives, before they learned these few "truths", they took unecessary risks, or were beneficiaries of simple random good luck...then at some point, things reversed and they "blew out" their accounts....(there are quite a few stories of folks who lost fortunes several times over before learning the most important lessons...just think back to Jesse Livermore). Personally I would prefer not to leave my career to chance....I think a person can learn these few important lessons by researching and learning about careers of these unusual folks.... Finally I am sure (because it happened to me) that one can find a good mentor and good education, and with a little perserverance and hard work, get to their financial goals. Best of luck in the markets Steve

Sir or Madam I think the answer to your question is that it depends on the individual (as I stated in my original comment). Personally I don't know what else I could add that would help you....I believe that a professional orientation is helpful because I see it every day....of course there are bound to be exceptions..another way of putting it is, that I tend to be agressive in terms of ability to tolerate risk, to put on size in the market and in terms of looking for opportunity....I was trained to be agressive with respect to those elements of trading....otherwise I tend to be more thoughtful and subdued in my approach....I notice that some very successful individuals have a similar orientation to the market.... I leave it to others to decide which approach works best.. Good luck

OK so I am a patient person within limits of course. Here is a reply to Mighty Mouse; The first chart I posted showed an area where I was inclined to enter short postions. That chart was posted and notated a little after 2am PST....then about an hour LATER the market retraced up to the lower boundary of that notation (to the tick) where it reversed.... Sorry to have to point out that your comment was ass backward wrong...in public...but then you really should think before you post...then you won't have this problem... Finally in an effort to bring this back to the topic...this is in part why skilled people are hesitant to teach....Certainly there are people who are willing to work, to do research and to think about the subject....and then there are those who really never should be involved, or who have emotional issues that prevent them from learning anything of value. Frankly the skilled participant ends up asking him/herself, "why do this when I can just trade and not have to put up with this crap...." Good luck to those who are out there seriously looking for help

Sir or Madam If you take a moment to look the charts, and then simply ask yourself "what is the market doing" one assumes that you will eventually (depending on your skill level) come to the conclusion that we are in a volatile, news driven, down trending market. Although they don't like to acknowledge it, professional interests will use that basis to mark markets down to a level where they can buy inventory at distressed prices (prices at or below wholesale value). In order to do this they have to drive markets down. That has been done since the outbreak of the Mideast conflict and now in the wake of the Japan distaster it continues albeit at a slower pace, because the United States is considered to be insulated somewhat from the effects of that tragedy. The charts tell the story of what has happened. Professionals will continue to drive it down until they see other institutions move in with size to buy at distressed prices. There are "tells" that can be used including open interest as well as daily and hourly volume. Those of us who do this for a living also have other tools at our disposal... The original comment was simple. We continue to sell at every opportunity until the market proves us wrong and makes us pay up....That is "how" we look to be right until proven wrong...(the two charts above are examples). And finally what "certifies" me is the level of my commentary and my knowledge of specific markets. There is plenty that I do not know, but the S&P is one market that I know very well. I think a person of average intelligence can tell whether an author knows what they are talking about...if you are skeptical, ignoring my commentary is your best course of action. Good Luck

Sorry if this is off topic, but here is an updated chart. The most recent short opportunity is notated...and you can see that the S/D node offered a nice clean entry and at least 7 pts profit.

Depending on your emotional needs and maturity an agressive attitude toward the market may help some participants..... In my office we go about business in a subdued manner. We expect to make money (otherwise you are gone)...At this level the participants view the market as a puzzle to be solved within a limited amount of time....we're expected to get it right in time for the market open....if we do that (and most of the time we do) then there is a congratulatory moment at the end of the day...but thats it, because we know that each day is just a dot in the (yearly) distribution, and you're expected to come back and do it again the next day....if you plan to be in this business over the long run, it may be advisable to maintain a more consistent and low stress emotional mindset during market hours. Good luck

thanks for that resource....any news based resource is worth checking out What traders ought to be doing however is "pre-planning" their approach to the markets, especially in what professionals characterize as an "obvious bias market"... In this market the obvious bias is on the negative side...professsionals look at the how the market is priced (in terms of wholesale/retail value and time-based pivots) and will continue to "mark it down"...meaning we will tend to emphasize the short side (until we are proven wrong). Tonight is a great example. The Globex (ES contract) opened down. Our pre-market plan identified S/D above and we waited for the inevitable spike into that area for a short opportunity. There is a lot more to say about this type of orientation to the market (for instance there are actually two (2) Supply/Demand Nodes in this chart and the upper offers the highest percentage success for a short) but this is not the right venue for seminar lol... Good luck

For the Original Poster "Angela"? Well I took the time to read the comments in this thread and as usual you have a lot of "urban myth" to wade through. The obstacles that amateurs encounter are many. Those of us who can do this are doing it. Typically we do not train others because it would require taking a cut in pay (I can explain further if there is interest). Also some of us work for institutions that restrict employees from having "outside" business interests. On the plus side, there are some very simple skills that can be taught and will allow you to profit in any liquid market, provided you have the pre-requisites (as in any profession, you have to have an appropriate educational basis). and finally it does require work...and I suggest this because for reasons unknown to me, many retail (amateurs) decide to find "trade rooms" where a moderator simply tells people when to buy or sell....They assume that one can "buy their way into the profession" or have it delivered to them like room service in a hotel...I assure you that never works. There is no substitute for developing your own skills. If my impression is correct, you are interested in stocks (equities). That being said, you might want to look briefly at my thread on institutional trading. I am sure most here look at this as an "either/or" proposition, but in truth what I do is add a dimension to the kind of trade that most try to do. I do this by incorporating a concept called "time-based pivots"...Although it is not mentioned in my thread, I also trade based on the release of economic reports (this type of appproach is applicable to earnings reports)...and depending on your time frame, you may want to learn about options and the advantages they can offer. Depending on your background you may benefit from reading Lawrence McMillan's book "Options as a Strategic Investment". RISK Interesting that you NEVER hear amateur traders talk about this...and yet it is the basis of a sound professional approach.. I would go so far as to say that the primary difference between amateurs and professionals is the ability to characterize and manage risk effectively. For me the bottom line is this...I could make money in a number of ways....but risk management has to be a part of program and this is one way to screen educational providers. The incompetent and the pretenders don't deal with it. For skilled professional providers of trading education, this is part of the core curriculum. The idea of references doesn't work for obvious reasons. The idea that one needs "verification" of any sort or guarantees is also a non-starter (for me)...what you need to look for is a person who can make things understandable to YOU in simple terms.....once you find that person or resource you will also find that you are making steady progress toward your goals...providing you do the work, that is what you need. Good luck Steve46

Well Sir or Madam I have to wonder if this really represents your best understanding of what Psychiatry is about? The first six words are technically correct, and then the rest of it seems to be your bias and half truths....I don't think Psychiatrists need me to defend them, so I will simply move on as I dont see the value in continuing along these lines. Good luck to everyone in the markets Steve

I am sure its just my clumsy attempt to comment that causes misunderstanding Emotional reaction to risk depends on the skill and experience of the participants If you want to learn to accept risk, simply committ to taking a significant sample of trades (ALL OF THEM within the sample)...in my opinion this can be as few as 20 or 30 trades although realistically more would be better. You then process your result and take a unemotional view of what your result is...This is part of a process that I was taught long ago and that some call "desensitization". It also teaches you to keep good records and if you have a good advisor, how to interpret your result accurately and what to do if you have to "adjust" your program. Very few retail traders do this and that is probably why they have a strong emotional reaction to the result of individual trades... Finally if you ever get a chance to talk to a skilled professional...ask what their attitude was toward their last losing day....Generally speaking they will shrug and say "its not my first loser, and it won't be my last"...and I would hope that if you asked about their last winning day, they would say something along the same lines about winning. For me and I think for most of my colleagues, we are indifferent to any single trade, any single day, or even week for that matter...naturally as you move to longer time frames you are likely to see a little more reaction, but even then we all know that sooner or later we are going to have to deal with loss, and the way you deal with it is by putting it behind you and coming back to work just like the everyone else.

Todds Your assumptions are incorrect on all fronts. First my initial comment was made in response to another post not yours. My stoploss and placement are provisional and depend on the individual market. As an institutional trader I maintained a presence in the Bond and Euro. For my personal account I often trade the S&P and the DAX futures. I chose an example account for discussion purposes only and to try to make the example accessible to retail traders. In reality, institutional traders often mobilize tens of millions of dollars of account value (more in the bond markets). Talking about this in terms that make sense to a retail trader is not productive, so I used a different example. One hopes that the take away for retail traders is that to manage risk effectively you need specific skills (and now that I am thinking about it again) a specific attitude toward risk that retail traders might characterize as too casual. In fact those of us who do this well always prioritize and manage risk AHEAD OF profit... Finally in terms of your point about % of account, the idea that you can scale down and still operate effectively is simply wrong....for futures markets, unless you have a minimum of $20,000 in your account your odds of success are low. Simply put, you have to be able to withstand the inevitable drawdown and for most retail traders that means at minimum of 25% (if you take the trades)....My advise to retail traders is if you don't have an adequately capitalized account, hang back until you do....and use that time to improve your skills. With respect to choosing an alternative to S&P futures, I think you could try SPY instead. Trading small size of SPY might work. Hope that makes things clearer

The way skilled professionals look at the market is much different than retail I guess the best way to begin is to cut to the chase....Price itself is a lagging indicator.....once you understand why this is the case, it is relatively easy to come to the conclusion that "indicators" are even less important (assuming you want to be something more than a "sacrificial lamb" in the markets). Now I am not suggesting that you give up the use of indicators, but, I do think of them in a different context...for my work, indicators (the few that I use) are only for visualization and to provide a comparative view of how the various markets are performing. From my point of view, on an individual basis, they simply don't provide a consistent idea of where money is going, and by the way thats what markets are about (the decisions that people make to put money to work).... Once you understand the real basis of price movement, then you begin to look for other reasons to trade. Personally I use a combination of price and time, and my understanding of how institutions make decisions. To be fair, this is my bias (I was trained this way and it works for me), it is just one of many ways to make money in the markets. I cover some of the details in my previous thread about institutional trading. Best Regards Steve

I guess I will take a moment to post one additional comment about risk Most people (including the so called experts) don't seem to understand what its all about...they describe the subject in terms of "taking a bet", where you either win or lose and thats it, over and done...the problem is that in real time, the trader experiences risk in a much different way....Its not a matter of placing a bet long or short and winning or losing, boom your done....no way....instead the trader gets filled and waits......and waits.....and waits, while the market ticks up......and ticks down...and ticks up....(are you getting the message)...so the real IMPACT of risk is the tension that exposure to risk creates and how the trader reacts to that exposure while in the trade... In other words, there are several elements to risk that you have to understand in order to control your emotions. One is that when you are "at risk" (your position is "on"), then you have to be able to manage the tension associated with not knowing whether you are going to win or lose The second issue is that you don't know how long it will take to determine whether you are going to win or lose (how long should you wait....should you let it run, or get out....should you let it hit your stop, or get out) this is how the retail trader experiences that tension....in terms of "duration". and finally unlike the "bet scenario" that most of you quote....you never really know what the money outcome is going to be.....clearly you THINK you know, but when you are in the trade....you have no idea of whether that market is going to spike up or down, and how much....ultimately you don't know whether you will win or lose a particular amount of money....and THAT tension is what causes the average trader to cave in and take a tick or two.....(thats why we call retail traders "weak hands")... So in summary, there are several elements to risk....and you have to understand and figure a way to handle the emotional stress associated with each one....or you are always going to getting your ass whipped when you try to trade....I may have more to say about it later, but for now thats my thought on the subject. Good luck

As usual it seems people feel that they can simply ask for a trading plan that gets them to the moon and someone will step in and provide it.....you may want to ask sir or madam just how realistic is that? On a more realistic note, as regards risk...I will post the following for Todds (I think that is who posted the most recent comment on that subject) Generally speaking professionals manage risk by varying position size, timing of entry and exit and size of stop loss. If they are longer term participants they also have to know how to protect positions using options strategies. These are each subjects in themselves but I will give a short example for your consderation If my account permits me to trade a max of 30 contracts, then initially I will go in with 15 (5 at a time) while I monitor the market for "confirmation"......to me "confirmation" means that the data I monitor tells me that I am right and the market is going my way....Initially I postion my stoploss about 2 points away. As soon as I get confirmation one way or the other I take action. If I am right I look to add another 15 ASAP, and then I go into "risk management mode". I do this because I want to be as big as possible when I am right.....In contrast, if I am uncertain or it look as though I am wrong, I will scale out (of my original 15 contracts) or wait for confirmation that I am wrong (that usually means a stop out and a 2 pt loss). * "risk management mode" means that my job is to stay in the market as long I see it is moving my way....alternatively if I see the market stalling or not going my way my job is to take profit and reduce my exposure to "systematic risk" (unanticipated bad news or perhaps a "flash crash" event)... As you can see, professional conduct is much different than retail, where the trader (usually) has a very limited account size, and therefore has fewer options with regard to entry, profit/loss and exit. Finally I want to stress that there is a lot of nuance to this stuff..don't think that you can read about it in a book (or here in a post) and go get a second mortgage on your house to fund an account......hahahaha....(I've actually seen people suggest this in past)....it probably wont work out well in the end. In my opinion the only way to do this is to see it done in front of you and ask questions...and that is probably the biggest roadblock for retail traders trying to transition into professional status. Hope this helps a little bit

I am always amazed at the mind games people play to get enough courage to pull the trigger....look, its a game of odds....and it doesn't have to be complex....assuming you have a decent plan, you have to learn to think in a non-random way.....what does that mean?.....for most retail traders, even when they have a plan that they think is profitable, the first time they encounter a losing streak, its game over....not because the plan is bad....but because they cannot make themselves take all the trades....they start to "cherry pick" taking one trade here and one there because they think they know which setup is going to be successful....THATS what non-random thinking is....its "amateur hour" and thats what kills most retail trading accounts. In order to have a chance at making it in this profession, you have to be able to committ to taking a significant sample of trades, to keeping accurate records and then you have to have the skills necessary to adapt if your plan doesn;'t work out. Thats what adult behavior and discipline is all about in this business.

Well, from my point of view, the first part of your question is personal, and without being impolite I have to remind you that we don't know each other, so I prefer maintain my privacy on that subject. As regards advice, I guess I would point out that one of the roles a mental health professional takes on, is to model or demonstrate "adult" behavior. In my own way, by declining to share something from my personal life, I am demonstrating how an adult maintains their personal boundaries. Its just one of many "lessons" that you learn along the way. I will tell you this...if you read Jack Schwager's books about "Market Wizards", one thing you may notice is that he interviews people who have made fortunes in a variety of ways. Clearly success in the financial markets doesn't require a specific method, indicator, or algorithm. What DOES seem to matter is skill, intelligence, perseverence, focus, and yes...the ability to act like a responsible adult in the face of significant pressure on an almost daily basis. I think the challenge is to find a skilled advisor (mental health, trading, whatever) who will look you in the eye and tell you the unvarnished truth....and then the rest is up to you... Good luck

Hello Folks I posted a comment on a similar subject in the forum thread "What Psychologists"...I mention it because I believe that simple is often better...and that when I see long winded disertations about this subject it is often the case that the author doesn't really understand what they are talking about...having finally found my own way in this profession I suggest to others that they step back and ask themselves "how has my belief system served me so far?"....If you are satisfied with your answer....if for example nothing were to change in your life from this point forward and that is OK with you....then God Bless you...you are a lucky man (or woman)...If not I urge you to go and aggessively look for the tools you need to succeed. As I understand it...time is going by, whether you take action or not....so I urge everyone to "go for it", and may you all find the success you are looking for... Best Regards Steve

Hello I had the opportunity to work with Dr. Ari Kiev early in my career. Now that the gentleman has died (in 2009) I think I can offer a short comment about my experience. I noticed that Dr. Kiev exhibited competence and mature judgement. What I mean by that is...that when asked a question, the answer I recieved was short, direct, and focused on my needs. I always came away from our meetings feeling that my goals were within reach as long as I was willing to do the work. In contrast, it seems to me that if a "professional" has to employ elaborate jargon to explain our emotional lives, he or she probably doesn't really know what they are talking about....and I would suggest looking elsewhere for assistance. Finally I believe that traders need to learn about adult responsibility....specifically about "taking responsibility" for the results you achieve (or fail to achieve) in this life. I noticed that once I learned this lesson my personal and professional life improved significantly... I hope this helps

Hello In answer to the question "what works" I can respond affirmatively....I can explain in simple terms and in a way that is personal to you (Noob) if you can aswer a few simple questions. 1. Do you have any experience, or have you ever had contact with.....a person who is very good at what they do (sports, business, science, any endeavor). I mean "world class good"... among the the very best....? 2. Have you ever set a goal for yourself, and been prepared to give up everything else to get there? 3. What is your most significant achievement to date? Thats it....you see you have asked a very important question, and I am sure you ask it relatively casually, not knowing that it is the basis for your success in life. To get an answer that actually means something to you....can YOU answer these questions in thoughtful and honest way?

Well I guess I pushed my luck a little too much. I received an email from my employer "suggesting" that I make this my last post on the subject of trading....to those who may have additional questions I am sorry, and I wish everyone good luck. In case people failed to read my disclaimer in the first series of posts, please be aware of the significant risks associated with trading. Also know that my comments are meant as education only, and not as a recommendation to trade or to buy or sell any security....

So I am done for the day and managing risk at this point. I have time to post a couple of thoughts on this subject First with regard to value, be aware that professionals take this very seriously. Whether you are in the S&P pit watching locals, or upstairs in any of the many firms trading off the floor, everyone has their own conception of what "value" is, and what constitutes "excess" (pricing that is extreme). In my opinion, one of the reasons the S&P (and other indexes) move in a cyclical fashion is that institutions like to take advantage of the many entry and exit points that it provides On the attached chart I show the local distribution. What is important is not the exact levels I point out....as mentioned professionals have their own view of what value is, instead notice the way that price retests those levels and then reacts (on both the long and short side) This isnt coincidence...What you are seeing is significant money coming in to move markets away from these levels. To me this suggests that I am not the only one thinking this way... I leave it to you to readers to do their own additional research on the subject. Good luck