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rjkauffman

Tipping Point

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The Tipping Point, A Traders Observation

 

There seems to be a point in the trading day, or even more than one where things change rapidly. I call it my tipping point. No that’s not just before you leave the restaurant.

The stress of prolonged high levels of concentration have their effect. I could blame the vulgarities of the market but the real culprit seems to be the ability of prices to suck you into loosing focus of the larger picture. Some times I will have a profit on a trade and hold on for 1 more tick and next thing you know it‘s GONE. What’s Worse , I would have made my daily goal. It seems like when you insist on the market meeting your requirements , you loose.

Thankfully things can go the other way too. You start picking them off like ripe apples and life is good. Stops stay safe and targets are hit. How sweet it is.

Of course that Tipping Point can apply to not just to a days trading but to the week ,the month, even to an entire career. The whole Point here is developing the ability to spot this critical juncture and make the necessary adjustments. Any comments ?????

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The most powerful trait a trader can have is restraint! I agree.

 

Jesse Livermore:

 

Remember this : when you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap the benefits from their mistakes.

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Having been at this game for many years, I can definitely understand your ‘tipping point’ experiences. For years, I would run into that virtual ‘wall’ sometime in the trading day. The easy answer for these junctures is mental tiredness and consequent degradation of focus and perspective. But that answer stopped working for me – for a variety of reasons I won’t go into here.

 

The more comprehensive (and complicated) answer that developed goes something like this – individuals are subject to ultradian rhythms that are cyclic pulsations in mental processing – it is a series of actual trances we pass through during each day. Culture, ego, and clock time train us to suppress our sensitivity, responsiveness, and alignment to these rhythms*. Furthermore, maladaptive habits / patterns can form in reaction to shocks / trauma and / or deprivation that further block our resonance with these natural rhythms**. I am positing that in some of these trances it is literally impossible to ‘step outside’ and be immune to the ‘collective’ and to the operation of ‘normal’ biases (ie what would be normal in most social arenas) - and those are times when a trader is susceptible to 'make' mistakes, bad trades, get out of sync, etc. - ie it's not just fatigue 'tipping'

 

Proficient traders are ‘healthy’ in awareness of and relating to those rhythms and it is a much, much larger factor in trading success than most believe. Instead of focusing on the various grades of 'why the #v(k did I do that??', it is better for me to focus on moving into a positive relationship and re-establishing a synchrony with those rhythms...

 

When I investigated this with other traders, I found a cloud of cultural misdirection– good traders who do it without knowing they do, (and assuming everyone else does it too); the dominating prominence of system and the emphasis on entries in the mentality of most traders; and of course the hoard of traders who say just trade, execute well, use ‘discipline’, and ignore all the ‘psychological’ crap – basically attributing trading success to anything but the ‘trances’.

 

While the tipping point threshold after prolonged high levels of concentration is a most practical explanation, I find that the personal rhythms model is even better and that doing the work of identifying and aligning with those personal rhythms is a more comprehensive and adaptive (albeit more arduous) approach in the long run.

 

“…it’s not the markets, it’s not you and the markets, it’s just you…”

Mark Douglas

 

 

*Exploring the Crack in the Cosmic Egg Joseph Chilton Pierce

**Emotional Anatomy Stanley Keleman

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Markets change back and forth over time congestion comes and goes volatility expands and decreases. Could it be that the market changes and you do not recognise it or recognise it late - hence triggering a tipping point?

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Yes, it's kind of like the frog in the water who's temp keeps rising . He does not jump till it's too late.

Perfect example yest. On the esu08 I did well from 11 am till 3 pm . The market changed course but I just did not get it .Even though the charts were oozing clues:doh: Hence I was late on the last move.

I guess when I have something working well I resist changing directions now and again. Could this be some kind of subconscious JuJu ??

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