james_gsx

Well I have noticed trading brings in many crowds. People who want to make a quick buck to one up their neighbor - they often lose. But they are also the ones who pay for the seminars, take hot stock tips, etc. Then there are those who are naturally attracted to risk, if intelligent, they often succeed. They come to make money, obviously, but the initial attraction is risk. I've also learned that understanding markets really is about understanding what people are doing. I feel technical analysis is really analyzing the psychology of other people. The other portion, is mathematic. While I'm not far enough in my study of math, I do feel one of the biggest components to risk management and trading is the human psychological element - and I'm not sure there is a formula for that yet. Someone with a stronger mathematical background feel free to chime in. I am pursuing a degree in applied mathematics, so perhaps one day I will be able to figure it out - but I'm sure it's much more complex then I think. Moral of the story, stop worrying about yourself. Figure out what other people are doing, make a strategy, stick to it. You find yourself making dumb moves? Ask yourself, do you want to keep losing money? If no, then stop making stupid mistakes repeatedly. Trust me, I speak from experience - as do many. Of course, it's not really that black and white, but we can try can't we? After several years of trading I have learned more about myself then I would have otherwise, but that was all in the first year or so when I thought it mattered. Since then, I've pondered more about the chaos of trading crowds and asked myself why people act in certain ways - this has led to a more clear thinking of markets, for me personally. Also, the more I learn about math and see how I can apply it to trading, the more it all makes sense. Essentially eliminating the "self psychology" piece entirely (I still get emotional obviously, but I don't question why - rather I ask if the crowd is doing the same thing). Apologies in advance if this derails the thread, if so, mods feel free to move this to a new thread.

Disclaimer: This is purely for sake of conversation, one can simply view my posts and see a decent amount of trading psychology posts. But do you think this whole notion of understanding yourself, really applies to trading? Or is it simply coming to terms with why you gamble, taking risk, etc? More importantly, discretionary trading? Let's say you have $10,000 that you worked hard to save up. It isn't natural to take the risk of gambling that away - so you need to come to terms with yourself, aka, get to know yourself. Specifically if you're using a discretionary strategy, you literally have to overcome the obstacle of, "Let me risk this perfectly good money in hopes that I make more." But what if that's really just all in our head? What if we've heard so much of this "traders psychology" jargon and we force ourselves to pay attention to it - thus causing more problems. Could it really be as simple as walking up to it and saying, "I am here to make money, I will find my profitable niche and adapt when necessary." I understand some new research points to taking financial risk may be processed in the amygdala of the brain - in which case, those people simply shouldn't trade. But also, if you really have an issue with psychology and trading, why do you even trade looking at charts? Something that can easily be interpreted in a thousand ways - obviously there's no correct way or we wouldn't be able to fill a library on all the techniques. Would it make more sense for the new trader to simply find an edge from data mining, and write a program to exploit it? Theres really no emotion there. Those are just some brief thoughts, I haven't spent much time dwelling on any of them. Feel free to agree or disagree.

Have you considered taking your strategy and doing the exact opposite? I don't mean that in a rude way, just curious. Most of your entries are in such a place where theoretically they work, you'd get the breakout and limited risk. But in reality, those are usually false breakouts intended to get stops, and traders looking for easy money in a breakout. Hence why you see a few ticks go in your direction, then quickly reverse back into the triangle, or range. I haven't done much day-trading in the last year, so someone please correct me if I'm wrong.

Looks fishy to me, why have a waiting list on a newsletter? It's not like there is a shortage where they can't meet the demand. Unless of course, they call it a wait list to A) get more money, and B) stir up demand, make them look more promising. If you want to trade options, my advice is simple. Don't do it. If you must, make sure you are ready to understand the math behind it, don't be another fool following 100% gains overnight, you need to understand why it happens. Pick up some decent books (not the "get rich with options" garbage), and learn on your own - and find ppl who are successful and ask them questions if they let you. If you have nowhere to start, then try think or swim, they have decent tutorials and a free demo.

Well they did get one thing right, it takes a lot of work. You could use that $4,000 to buy decent books, and sit in front of a computer every day and study and probably save money. The second part is pretty true, as a retail trader you won't have the same speed, risk analysis, etc, that the larger financial firms have. That doesn't mean you can't be successful, but it puts the odds against you. Making money in this business is definitely possible, it just takes a lot more work then other jobs. You have to be willing to take risk, and understand risk. You need to know what works for you, and what doesn't. It's not looking at charts and pushing a button then watching your bank account grow.

This is interesting, but how do you manage risk? I'm curious if you've even looked that far into the strategy. I've been playing around with a lot of strategies similar to this in Excel with limited success. I'm not looking for any trading strategies, I just like to see the different results. A lot of contrarian plays seemed to be the most consistently profitable, but I only looked back to 2005.

I'm glad to see more Porsches in here I drove a Cayman (base w/ manual) a few years ago and it was the most enjoyable driving experience I've ever had. The new GT3s are unbelievable. 3.8L 435bhp and 0-60 in 4 seconds. Not bad for N/A

I also want a Porsche Panamera Turbo. Everyone hates them, I love them. It's a balls fast station wagon and you can put in a child seat if needed

I park next to one every day at work. It's white, good looking car. Anyways.. I've posted my cars on here before, but in the spirit of this thread I'll do it again. Old GSX - GT40r turbo, AEM EMS, CP pistons, Manley Rods, HKS 272/272 cams.. you get the idea. It was pretty quick, but I got tired of the reliability issues. I gave the car away to a friend about 2 months ago. I bought the Mercedes almost 3 years ago (with my own money, don't worry). I have H&R springs and a rear sway bar sitting on my floor waiting to be installed. It's RWD so it blows in the snow. The plus side, it handles very well. I got lucky with this car, most Mercedes (and I say this as a Mercedes fanboy) are not meant to be driven hard. This car on the other hand has a stiff ride and solid feedback. I imagine Mercedes was targeting the BMW audience with this car, and it worked for me. This is a drive my friend and I took two summers ago in the mountains. Haven't been up there in a while, I typically drive up Mt. Evans at night when no one else is around.

This is awesome. I have been looking at laptops for a while and had not seen this one even after exploring Lenovo's website. I build a lot of big Excel spreadsheets so this is pretty cool.

You can't be serious? Goldman sends me open interest reports for all commodities/currencies/fixed income/etc weekly for free - and it has a lot more data then smiley faces and weather predictions.

Nate - have you read Aaron Browns book? The Poker Face of Wall Street. He posts over at NP, so I'm curious if you've seen it yet. Amazon just lowered the price to something like $5. He basically said the exact opposite of BrownsFan. If you do the same thing every time, then you will become predictable and be exploited. But he also only plays high stakes game where the players are constant. At low limits, people generally aren't paying attention and new players come and go - which I guess could make a case for having a consistent strategy for your own sake. It's an interesting book by a very good trader/poker player if anyone is interested.

It's actually quite simple, since you're using 2nd SD the idea is most of the data is constructed within that range - so it would make the 2nd SD an extreme. If we assume the data is a regular bell shaped curve we can use the empirical rule, so your 2nd SD covers 95% of that curve. You can Google Empirical Rule if you want to see a picture of it. Your risk lies outside of that range, if price moves beyond that level, albeit rare from a statistical point of view, then the extremes are much more volatile - hence why risk management is important here. For example, Big Important Investment Bank (BIIB) says our Value at Risk is $x, they are saying if we experience a 3rd standard deviation event, we can expect to lose X amount of money. This is fairly accurate, since that takes up 99.7% of your distribution. But again, that .3% is where everything goes to hell, because it can easily flare from 3rd SD to say, 6. If we think about this from a trading perspective, it also makes sense you see a shooting star. As price hits that extreme, people are naturally less apt to participate in the move, so it's easy to fade. Again, it's at that 95% extreme, hence where it mathematically makes sense at a very basic level. Sorry for the long rant, but hopefully now you have a better idea of what you're looking at when you see price touch that level. Overall looks like an interesting and simple strategy. Good job.

http://www.traderslaboratory.com/forums/f104/ http://www.traderslaboratory.com/forums/f131/ http://www.traderslaboratory.com/forums/f151/ http://www.traderslaboratory.com/forums/f150/ http://www.traderslaboratory.com/forums/f6/ http://www.traderslaboratory.com/forums/f110/ Don't waste your money with newsletters and other BS on the web. Look through the book reviews and buy a few of those books.

The security in question was BHP. Here is the current chart. Price dribbled off sideways, after very low volume at the trend line.

This is exactly the problem. The publics perception of reality is terrible, because they don't know what's really going on. And this is good, because the public is irrational. This has been known for hundreds of years, and it's why politicians have been powerful for so long. They paint a specific picture of "reality" then turn around and do something completely different. Why do you think Obama's plan for transparency is so popular? It gives the public the feeling that they know what's going on, they feel more in control. It's all just an idea, so the politicians can turn their back and do whatever they want. We could go on for hours, but this really isn't the time or place.

Not really, you just view politics from a completely different perspective than I do (not parties, I'm a Republican). Trust me, I'd love to discuss real politics with you. PM me if you actually want to discuss politics. I'd love to discuss this with you any day. I've wrote to plenty of senators and representatives, the only time I ever got useful feedback and talked to someone was when I wrote state rep Cory Gardner. I was able to discuss with him my states plan of action for 2009, mostly the economic plans. In fact, during the TARP vote I wrote to Mark Udall, which of course was largely ignored and I got canned response. Of course that's to be expected due to the high volume of people writing letters, but even during slow times I only got responses from aides. It's all a chess game. Each politician is required to raise x amount of money for their party, the longer you've been around the more money they expect you to raise. They have to introduce bills and get attention so they can attract potential supporters who will write a check. Everyone knows this won't pass, hence why writing in won't do you any good. This was simply designed to do 2 things. 1 - attract funds from a supporter to donate to the party for the upcoming elections. You do realize a huge chunk of people who attended Obama's inauguration were execs from Wall Street right? It's all a money game. 2 - show his poor voters that have been severely hurt in this recession and want to naturally blame someone, that he is on their side. Anyone can go up there and list off 50 reasons why he's an idiot, but the voters will only remember the emotions, their hatred towards ppl on wall st. They don't know this bill has nothing to do with the recession, but they hear wall st and jump all over it. It's pretty obvious, just look at his website. He has a ticker for the national debt and is gung ho about punishing everyone. It's all a gimmick to raise money and get more votes come next election. He's up for re-election every 2 years, he doesn't have the luxury of a senator who is up for re-election every 6 years. You also have to take into consideration that it's much easier to block a bill in Washington than it is to pass one. I understand where every trader is coming from, if this bill were to pass then it would be devastating to our markets and our businesses. But everyone needs to take a step back and be a little more realistic. The biggest problem isn't even with the politicians. It's about the people who vote them into office. They plant these seeds so morons can vote them into office. We live among the dumbest people EVER. Ask someone randomly how many years a senator serves, and they wouldn't be able to tell you. Ask them who represents them, they couldn't tell you. That's exactly why this stuff gets made up, so the small amount of people who actually knows who this guy is will vote for him and write him a little check. It's all a game to win over the minds of the masses. Read Plato, he writes it out clearly and those same tactics are used today. If you actually want to do something about this situation, simply writing an e-mail to some politicians aide won't do you anything. That's all I'm really saying. You have a much better chance working with a lobbyist who can lean on other politicians to block the legislation. The people who are actually doing something (the exchanges, GS, MS, etc) would all do this if they needed to.

I see where you're coming from, but I wasn't looking at it from a one candle perspective. Rather, I was hoping someone could help me interpret the volume along with the candles in the triangle to see the flow of money. If that makes any sense.

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Why don't you write your own Rep who's a cosponsor this bill? http://sutton.house.gov/main/ As ridiculous as this bill is, it's just a play to raise support in the future. And I will be utterly shocked if anyones letters get read by an actual member of Congress. Good luck. But you're exactly right, all the money would just move to another exchange. Too many brokerages would be against this, too much money in lobbying to block it. I'm surprised I haven't seen this on T.V yet, since it's simply an attempt for some attention. I would be willing to bet he doesn't represent a very affluent area, so this would be seen as him taking on the "bad guy". Typically those voters are uneducated on the issues at hand, and will vote with what they hear on T.V. etc. So something like their Rep taking on Wall Street and going after the bad guy sounds appealing to them. It's sad, but it works.

I have a question Ascending triangles are typically considered bullish. I was looking at this chart and noticed a few key candle signals. The first is a doji above the resistance line, followed by another gap into the triangle. The inverted hammer before the doji has pretty strong volume, which would tell me plenty of sellers came to the market to push price back into the triangle. The second doji has a similar setup, except volume increased from the support line to the doji itself. Should that lead me to believe buyers are coming in anticipation of a breakout? I also noticed the previous trend was down - followed by sideways action before this triangle. Would that negate the bullishness of this triangle? I'm not going to trade this, but I was just curious. Thanks.

INTP I'm not really surprised.

There are several great options blogs available, but will not really teach you in depth about options. First a disclaimer: I trade options, and I will say that it truly is a fools game. But that doesn't stop me anyways. With options, don't let the idea that "unlimited profit and limited risk" fool you. In fact, those trades often make you the fool. To start out, I would definitely learn about the more complex strategies. The reason is simple, you can use guys like the Option Addict and buy calls/puts on directional movements. But the problem arises when you get the move, and then price reverses against you. This will happen 90% of the time. For example, you see a triangle and anticipate a break to the downside so you buy a put. Price breaks the triangle and shoots south, your put more than doubles in value. A week later, price re-tests that breakout level - now that option is at a loss. This is very important to understand, and it took me a long time to figure out. Those easy trades where you load up on calls and puts, everyone else is doing that as well. You end up paying a premium, and IV starts to move higher - and moves higher again as price breaks out. When price goes back to retest, that IV gets crushed and so do your options. To make sense of that rambling, the "complex" strategies like spreads make more sense. While the risk may seem outrageous compared to the profit, you must look at the probability of getting that profit. You have to be okay with smaller incremental profits - compared to a huge profit and 4 losers. Just like in futures, each trade will be different and will call for different setups. But after a while you'll get the hang of it. If you want to get into options I suggest learning a few things: Spreads (think or swims website is a GREAT educational resource for this) Greeks - again, you can search just about anything to learn about them. Screen time - you'll need to watch the options markets to get an idea how they work. Also, elitetrader has some great threads on options if you do some decent searches. I can't really tell you what to search, but you will figure that out as you move along the learning curve. In reality, options IMO will take much longer to fully understand than futures. But in the mean time, if you are competent with your understanding of price analysis then you can set up some strategies that work will with your risk to trade while you can't trade full time. But it will still take some time to learn.

Considering the amount of newbies that flock to IB, is that really surprising? IB was probably the first futures broker I ever heard of, and it's all over ET. It would be interesting to see how many accounts blow up at IB or TS compared to say Infinity or OEC. On the other hand, I do like the fact you can trade futures, equities, options all under one roof and use Ninja Trader through IB. That part to me is appealing.

They have Sierra charts, and I believe you can get a demo of that as well. But, I was never a fan of the charts. But each trader has their own preferences, and I am picky with my charts.