[zdo]

Kudos for Rethinking EVERY Concept. Experience reminds me to let you know about one of its pitfalls. Each style (scalp, swing, trend, etc ) has tenets that do not cross over at all to the other styles. Our minds, in attempts to 'fill the gaps', tend to imagine hybrids that have no chance of realtime success.

The link below is pushing this topic dangerously sychological... but it goes somewhat to the conflicts about styles already mentioned (scalp, swing, trend, etc and stay vs. no-stay in positions / keeping or exiting winners, etc.)
TED Blog | The surprising science of motivation: Dan Pink on TED.com

All the best,

zdo

[cornhusker]

I highly encourage what you are trying to do here, but you need to wipe the slate further. Stop thinking in terms of time-frames, and every other common TA garble. Many folks watch price bounce around their charts day after day, even year after year and they take things like TA too seriously. It's all a trap really.

Do yourself a favor and put yourself in the shoes of a bank trader ( I see you trade FX). What kinds of things is a bank trader going to be concerned about? Is he going to buy because price has fallen 61%? Is he going to sell because price is just about to 'hit' the 100SMA? Are his eyes glued to a price chart all day long? What in the world is he up to? What kinds of risks/opportunities does he face? A little different angle: how were all the futures pit traders ever profitable down in the pits without precious price charts? How were they making trade decisions? Try to break on through to the other side, and when you do you'll be so far ahead of the curve you won't know what to do with yourself; break off the chains of retail trader thinking.

Keep up the good work and go big red,

Cornhusker

[daedalus]

If you're ever in Omaha i'd love to pick you're brain!

[Kiwi]

Something to think about.

Markets move because of power + motivation. Big speculators have both. Typical bank traders as described by Cornhusker (do you watch the Big Bang Theory?) often don't.

I've known a couple of guys who manage trading in banks well enough to hear the truth. One was currently employed at one Australian bank but it was his second bank trading role. The other was in London but before that he'd been a Tokyo bank. Here's the thing: most banks make all of their "trading" money by taking it from the customers as generous spreads. Their actual trading is a loser but they consider it necessary to maintain contacts and knowledge required to optimally sex their customers.

You need to understand the banks that are active profitable speculators or the true commercial speculators not the typical fx involved banks. And if you talk to your average bank trader don't be surprised if he paints that picture (even when its bs) because he wants to appear to be a big swinging dick - its like asking a salesman how its going - even in a recession it will be going great.

[macdfx]

Originally Posted by zdo »

Kudos for Rethinking EVERY Concept. Experience reminds me to let you know about one of its pitfalls. Each style (scalp, swing, trend, etc ) has tenets that do not cross over at all to the other styles. Our minds, in attempts to 'fill the gaps', tend to imagine hybrids that have no chance of realtime success.

The link below is pushing this topic dangerously sychological... but it goes somewhat to the conflicts about styles already mentioned (scalp, swing, trend, etc and stay vs. no-stay in positions / keeping or exiting winners, etc.)
TED Blog | The surprising science of motivation: Dan Pink on TED.com

All the best,

zdo

Interesting video..here's the YouTube version for your immediate gratification:

YouTube - Daniel Pink on the surprising science of motivation

YouTube - Daniel Pink on the surprising science of motivation

[cornhusker]

Originally Posted by Kiwi »

Something to think about.

Markets move because of power + motivation. Big speculators have both. Typical bank traders as described by Cornhusker (do you watch the Big Bang Theory?) often don't.

I've known a couple of guys who manage trading in banks well enough to hear the truth. One was currently employed at one Australian bank but it was his second bank trading role. The other was in London but before that he'd been a Tokyo bank. Here's the thing: most banks make all of their "trading" money by taking it from the customers as generous spreads. Their actual trading is a loser but they consider it necessary to maintain contacts and knowledge required to optimally sex their customers.

You need to understand the banks that are active profitable speculators or the true commercial speculators not the typical fx involved banks. And if you talk to your average bank trader don't be surprised if he paints that picture (even when its bs) because he wants to appear to be a big swinging dick - its like asking a salesman how its going - even in a recession it will be going great.

Alright, Kiwi, replace bank trader with "big speculators." My point is simply that trading is not the flashy video game or weekend word puzzle it's made out to be. Everyone gets caught up in all the old price data, abstract statistics, joe blow TA, ect, but none of those things move the market. I don't want to sound as if I'm ruling all of that stuff out, some of it can be useful, but it's peripheral to whats really going on.

To illustrate this, lets look at EU and yesterdays strong bearish move. What caused EU to drop like it did? Leave fundamentals out of the answer and explain it in the context of orders, asymmetric information, adverse selection, fear, and greed. I leave logical things like FA out because I consider it pre-trade stimuli; fundamental info is aggregated into price later down the chain of events via orders and quote adjustments.

I invite anyone to take a crack at the question.

Regards,

Cornhusker

[Moyyim]

Originally Posted by Kiwi »

Something to think about.

Markets move because of power + motivation. Big speculators have both. Typical bank traders as described by Cornhusker (do you watch the Big Bang Theory?) often don't.

I've known a couple of guys who manage trading in banks well enough to hear the truth. One was currently employed at one Australian bank but it was his second bank trading role. The other was in London but before that he'd been a Tokyo bank. Here's the thing: most banks make all of their "trading" money by taking it from the customers as generous spreads. Their actual trading is a loser but they consider it necessary to maintain contacts and knowledge required to optimally sex their customers.

You need to understand the banks that are active profitable speculators or the true commercial speculators not the typical fx involved banks. And if you talk to your average bank trader don't be surprised if he paints that picture (even when its bs) because he wants to appear to be a big swinging dick - its like asking a salesman how its going - even in a recession it will be going great.

Yep... I was a "Senior Dealer" (FX) for a very small Bank in London and previously worked for the large German.... The "easy money" is in the spreads and its often said most Banks lose at purely speculative trading - FX is often just provided as a "loss leader" for other business

Cheers

[cornhusker]

Originally Posted by Moyyim »

Yep... I was a "Senior Dealer" (FX) for a very small Bank in London and previously worked for the large German.... The "easy money" is in the spreads and its often said most Banks lose at purely speculative trading - FX is often just provided as a "loss leader" for other business

Cheers

Thanks for chiming in. To be more clear about the FX market, the banks do indeed make most of their money by their dealing operations. It is the large speculative funds that help determine the direction of price changes, but the banks are a crucial part of the equation. When mr bank dealer learns he has traded with mr. hedgefund, he immediately adjusts his quotes (shifts liquidity) while others in the market see this and seriously consider adjusting theirs. Some do, some don't. Those who don't will also trade with mr hedgefund, or one of his followers and regret it because they have nobody to trade with to offset their bad inventory. In the midst of this, fear moves all the liquidity to a place where the orderflows are more two-sided again, because as we've said, banks like their spread income. The first bank dealer could have speculated on what he learned from trading with mr hedgefund, many dealers do.

This is the essence of trading, it will never change. Even in our age of robot traders, and computers gone wild, it's the same game. Trading is really about reading the other players and working to understand who's informed, who's not, and who's bluffing. It's an art really.