johnw

Thanks Rande, There is a great deal of truth in the expression "all we have to work with is ourselves" The part that is missing is "but first we must learn how we work" 2014 is going to be a most interesting year as we continue to borrow our way out of debt and throw rhetoric at the reasons why it is not working. We are in BA for a few months and last Thursday the City temperature hit a humid 47.8C (118F) on the very day that the Central Bank gave up their futile efforts to defend the Peso. The whole place is a shambles needless to say .... but as some Wit remarked "we know how to create a crisis and then how to survive it" How is that for 'perpetual mediocrity' ... Regards

I thought this was another of your very incisive pieces Rande. Thank you. You have added more bite to to this one which may well account for the deafening silence from the assembled crowd. perpetual mediocrity This is a very catchy little truism. Years ago (in another life) I had built up a staff of around 50-60 people and since I owned the Company, I took a particular interest in their well being and their incomes. Occasionally, when someone was under performing I would have a quiet chat with them (not necessarily only about their job performance) and it always wound up with " you have perpetual potential, just make certain that you don't take it with you to the grave" That little phrase could bat above it's weight and change attitudes overnight. Regards

IMO, trading is all about winning Statistical edge .. mental edge are components and very important components indeed, but without a Winners attitude they are incomplete. Winning is a habit,it is attitude, it is a belief... You win because you are a Winner. A Winner has the mental edge and that in turn develops the statistical edge.

Hi RH, Another very interesting piece from you I particularly appreciated .. To be released from the comfort zone that the brain has created, but that now has become a prison to your growth as a trader (and as a human being), you courageously embrace your history (simply accepting it as one possible organization of the self) and begin taking responsibility for the organization of the self that you can be. IMO it ranks right up there with an earlier piece from you .. If you have any weaknesses (realised or unrealised), Trading will reveal them. (the quote may not be exactly word for word) many thanks

The most important aspect of learning to trade is not to get ahead of Price. Just relax and watch, relax and watch and you will be to understand how Price moves in waves. Each wave can be separated by a battleground where longs and shorts fight for supremacy. Sometimes the waves just reverse as though every Trader agrees on a change of direction. But then again, every Trader cannot agree otherwise Price would stall because for every Bought Contract there must be a Sold Contract. These simple little things are the guts of trading. Try to place Indicators to one side until you establish a sense of confidence that you can follow Price ... at this point many things will become evident to you. Much of what is written about Indicators here on TL is written by People who have not reached this point of understanding ... in fact many have not even tried to understand Price and so they are doomed before they even start.

Hi livernik, I would suggest that you only watch the price bars and concentrate on what bars you think best represent price (time, range, tic, vol) and what size bars you want. If for example you chose 3 minute bars, at least you will understand what is unfolding before your eyes because you have weighed up the options and then made a choice. This is quite different from using 3 minute bars because someone else mentioned them. Supply/ demand will open up to you from watching price.

Welcome to South America .. the continent of perpetual potential. On a brighter note, I am sure that the Latino attitude will give way to a more Nordic approach to business and SA will have it's day in the sun. Just make certain that you stay alive long enough to join in the celebrations.

Hi livernik, The markets have changed a great deal in the last few years as Quants have replaced Traders and now rule the markets. If you watch the Price very carefully and monitor the ask-bid volume you will come to understand The Quants perspective. From this knowledge you can devise a strategy to put you into the market and then pull you out again. IMO this is time better spent than following TA history. good luck

Nice piece of work Zupcon ..very nice indeed. If People come into trading with no prior experience of what it takes to struggle and persevere in an individual effort such as Arts, Sport, Disability/Injury then they will naturally take the course of trying to match their academic firepower against the Market. I don't think that it is arrogance that causes this, but rather it is the result of a complete and utter lack of understanding of how we function as Humans and what our potential really is. I thought your posts were very clear and refreshing .... "most people fail"

gm OILFXPRO, You have just written the ROAD TO FAILURE .. Now how about balancing this well written piece by writing THE ROAD TO SUCCESS.

Hello MK, There are many instances of these mental experiments and they do make us think ... as indeed they should.... in many human endeavours, especially those that require one Learned Soul passing un(semi) quantifiable to a hungry Student, it works. However Trading is as quantifiable as it gets ... just look at your daily Brokerage Statement. It is even more exact than being the World's fastest man... even if you run the 100M in the fastest recorded time, there is always the suspicion of drugs hanging over the Runners head. Trading is brutally honest. And so when People tell us things like 'S&R doesn't really work" they are demonstrating the limits of their range of their thoughts or assumptions on the subject. When I say to Handle 'the supply/demand zones exist intraday CL' ... I say this because I can see them. I do not say to Handle that if he doesn't use them then he must be nuts, because that would be a presumption on my part... Handle is a Trader and answers only to himself. S&D zones are the result of Longs and Shorts doing battle and the Winner controls the next Price Wave ... to me this is the very essence of market structure and it is the guts of trading. The Zones will be as long as your bars are small ... it is your choice entirely how you choose to exhibit your price information. Once we accept these concepts, then we can decide how we are going to build a mathematical edge that is applied consistently. Without this edge we are dog tucker. Without this edge, Retail Traders who are well funded will take longer to go broke than Traders with smaller balances. However the Trader who grasps the structure of the market and who builds a mathematical edge will grow their account. In short ... It doesn't matter what you do, so long as you grow your account. This means that any/all experiences, opinions, thoughts and assumptions should be embraced openly and put to the test mathematically before any decision is taken. This is a brutally honest game ... and I mean that we have to be brutally honest with ourselves in every respect.

Hi Handle Try looking inside your 5 minute charts, rather just focusing on the daily lines They are there

Hello Rick, Your analysis was good, the pullback to 83.50 was in an uptrend that showed no signs of weakness and so the pullback was a BUY. However, you were hoping/assuming that the price would fall to your level of 83.00, but it didn't... this is not a clever thing to do, since you are giving away control of the trigger. Remember that price controls direction, but you control the trigger ...this is important. What you are lacking is a Traders Mind ...ie what am I going to do when price reaches a supply/demand zone I say 'zone' rather than 'level' because when price reaches a supply/demand area things can get messy as it shakes out the weak Players and tries to trap other Players on the wrong side. This is the essence of Trading. What you need to contemplate, is entering after a return to upward momentum (in this example) or a retest of the low of the zone.( offering a better entry and a tighter stop) Your stop size is critical. Also, if you have any thoughts of win/loss ratios, I would place them gently to one side and retrain yourself to think in terms of hold/scratch ... in other words, once you are in the market your options then become ... will I continue (hold this trade) or will I scratch this entry and look for better one. The next entry might be in a minute into the same price wave, in which case it may well yield an extra tic or three to cover your scratch trade, or you may miss this price wave and wait for the next one. Add up your scratch trades each day and when the total is close to zero, or better still, it is positive, it means that your trading style of entry is exactly on the money. Focusing on staying in a winning trade without being prematurely 'shaken out' is another subject.

Good for you handle for applying Joe's methods on the odd occasion when you get a signal. There is nothing wrong watching the price all day as you learn. If you are not doing so already, pay careful attention to the LH and HL ... how they are formed and where they are formed and where the next bar starts in relation to the previous HL and LH. After awhile you will begin to see where the market is being pushed.

If you are determined to intraday trade the ES, you will find over time that most (if not all) of your thoughts towards trading will melt away as they are replaced by thoughts that are particular towards your new found interest Words like 'noise' will cease to exist ... win/loss ratio will fade away as you focus on entry continuance or scratch. You lose interest in R/R but you might be heavily attracted to moving averages of High/Low and whether they are traveling in near straight lines from time to time and whether your bar entry lies inside/outside the last bar mov av. of High/Low. RTH Open will be a fat line across your chart together with Yesterday's Close ...2,3 day high/low plus other lines dragged forward from significant recent and not so recent turning points. Trend and momentum merge (who cares what to call the next few minutes) ..either you have bought in or sold in to the developing price wave... you are either long or short on an OCO trade and your management requires you to drag the stops around the DOM, or hit the Flatten button when you want out. Trailing Stops are for other People. This style of trading is not everyone's cup of tea quite frankly .... it is best treated as a game IMO and as such we train for it ... and train hard. We all need a realistic understanding of our appetite to stress and our ability to react immediately. The rewards are good, because you are doing the same thing several times each day, (although your no. of lots keeps increasing) ... and over time you will come to understand that the price is repeating patterns but not always in the same order. That is why People hold the believe that the market is random. Remember that 'No. of Lots"' does the heavy lifting ... you just need to provide stability. Lastly, it is a simple game and you must keep it that way ... there is no time for complexity

Good morning from St. Martin (French Side) As always a very interesting thread. If you wiki "List of cognitive biases" you may be as suprised as I am to see a seemingly never ending list ..how on earth is an Individual expected to work through this list I wonder. My favourite cb is The Dunning-Kruger Effect ....we are surrounded by it and it is in play at a very serious level right now. I wouldn't be at all suprised to wake up tomorrow morning (Sunday) to the news that the World has yet again lurched into another blunder.... blunder upon blunder I do agree with you Rande that trading is very effective at bringing People to the point where they accept that they must re-organise themselves or retreat back into their world of make believe. Short of putting your own life on the line, trading provides a brutal mirror into which we can gaze... what happens next is up to us. And so this thread has brought together two keystones of trading. Steve46 writes about having a proven mathematical edge ... this is essential and it must be complete and seamless (no gaps) ... and it must be doable in Real Time .... the mathematical edge will most probably be layered.... to take account of context, triggers and exits.... in other words it is probability upon probability upon probability etc Each of these situations have a probability and when they are layered one on top of the other you have a trade. ... anything less than this and you do not have a trade... the market controls the game, but you control the trigger. Rande, your simultaneous firing of left/right brain (what I call 'lining up all the troops') maximises our potential ...and makes Simple Tasks (trading) that are very hard to do, become Simple. As for the seemingly endless list cognitive biases .... the more you combine Rande's seamless combination of left/right brain and apply it to the mathematical edge that Steve46 talks about, then the more you will relax. The more you relax, then the more the cog biases will melt away ... after all, we are trying to reclaim the life that is ours to live, just as other People are trying desperately to wrench away from us. sounds a lot like the Markets doesn't it. Nice to hear Buddha andCarl Jung mentioned together, Rande. Carl and I shared a birthday last month .... with one major difference ...and it was the same day that Mick Jagger turned 70 as it turned out.... he has a three year head start on me. Good luck next week PS. Rhythm... I forgot to mention rhythm. I find it most important to put my self into the same rhythm for each trading day and the day starts on the previous evening. I do not vary my routine of sleeping, waking time, exercise, breakfast etc ... the only thing that I want to see bouncing around is The Price .... this I believe is the third pillar.

I can think of 85B reasons every month why this current bull market will continue. Take any of these away and the world will change. S&P has grown 12% this year and GDP is supposedly up 1.7% At 85B per month, this life support package is just over 1T per year. Place this over a 15T economy and it simply means that life support of 6.7% yields growth of 1.7%

Politicians say it is growing ..however with QE running at 85B per month on a say 15T economy (and who is to say that is not overstated) QE = 6.8% Try pulling (tapering) that out of the economy and see what happens. As always, life is a race and the race in Bernie's case is to retire before the whole ball of wax blows up in his face

http://www.portoflosangeles.org/maritime/stats.asp These are the TEU statistics for The Ports of Los Angeles. All TEU transfers are down, which strikes me as unusual in a growth economy.

You guys are walking yourselves into the classic failure trap. Yes, I read that you are talking about 95% failure rate in the 3rd person, but in reality you are talking in the 1st person. You need to restart this thread and change the focus ...."5% of Retail Traders are successful ..what habits do they develop that makes them consistently successful" If you keep analyzing failing habits ... guess what will happen to you.(if it hasn't already) If you want to join the 5% Winners, you need to create a seamless you Give up all the nitpicking self analysis and build yourself into a seamless person. If you don't know how to do it, then you had better find out quickly or give up trading. You need to understand how the market works and let go any childish notions of whether indicators, fibs etc work or they do not work. There will come a time when you will know how to bait the trap into which price will move ...this knowledge comes from watching price with an open mind. In other words, price is going to teach you how it can be trapped ... so just forget the friggin leopard and it's spots.... it is trying to catch a bunny that does not want to be caught ... price is not a bunny...quite the opposite in fact. Can you not see that all you need to bring to the party is a seamless open mind coupled with a burning desire to win. Price will show you the rest of the game and how to play it. Siuya and Steve46 have good insights into trading IMO. None of us can afford the luxury of delving into the minds of the 95% or more who fail. This is a very dangerous place into which to wander and the sooner we position ourselves with the 5% Winners and their habits, the sooner we are properly functioning people.

gm Mitzy, If a Trader thinks that they understand this process, then they are doomed. Only when they know that they know how price moves then can they move on to making money consistently. Now here I am thinking just how far you have come since our wee chat on Rande's thread and now you go and spit the dummy on me.... disappointing Mitzy ..very very disappointing indeed.

Trading is one of those things that is simple and yet hard to do ... it is made hard to do because it is simple ... and the more complicated it is made then the more impossible it is to do. IMO the 'simplicity' of trading lies in getting to the bottom of understanding what makes prices move .... everything is based upon the auction process, because without it there would be no market .... it is pure and that is where it's simplicity lies.... when there are no more counter parties at a price level, then price moves to the next level. If a Trader thinks that they understand this process, then they are doomed. Only when they know that they know how price moves then can they move on to making money consistently. Now let us move on to Fibs ... firstly the midpoint (50%) of the last price wave is important. This does not mean that price will always hesitate at this point ... but it often does. ... too often to ignore in fact. We all seem to understand that 50% is not a fibbo, but it seems to crop up in every fibbo thread ... I find this curious and disturbing. We all seem to understand that price waves are not a precise science ... so imagine what happens when price approaches 50% and shudders under the impact of the Asks and the Bids as Traders fight out the next move ..... will price continue .. or will it turn thus ending this price wave. Traders give this battle the title of 'consolidation' and define it by an upper and a lower point (the points turn into lines if the battle continues for a few bars or more.) The upper and lower lines/points will be a few tics either side of the 50% line and can easily be around the 40% and 60% mark of the previous price wave ... in fact you could call them 62 and 38% ... or why not call them 61.8 and 38.2% after all this is not a precise science. If your understanding of price movement is more or less as I have just described then I ask you ... what have fibs got to do with the trading auction process?

Good for you ... seems as though you have this game all sorted ...

Good for you, you have unraveled the puzzle to momo intraday trading the ES. Once you have established consistency then you steadily increase size. I see you refer to time bars 5-30 minutes. Why not try constant volume bars ... they will add a smoother flow to your game. Why not try thinking in terms of win/scratch rather than win/loss... by all means maintain a 4-5 tic stop loss but think about scratching the trade for a tic or two either way rather than allowing your stop to be hit. Keep track of these scratch trades each day and as you improve your skills their running total will steadily approach zero .. just imagine that, all your 'bad' trades incur a zero sum loss. Give some thought to OCO trading and simply drag your two stops across the DOM ... never open up the stop loss. Try a second screen 3x the size of your trading screen to offer direction and profit taking opportunity .... when this becomes second nature, try adding a 3rd screen 3x larger than the 2nd screen. Be aware of the rth open at all times plus the usual range of previous high/lows ... the distance that price is from these horizontal lines is always critical as they have a magnetic effect. The accumulated bid/ask delta is a two edged sword .... if you learn how and when to use it then it is useful ... if you are kidding yourself then it will work against you... my suggestion is to leave the delta alone until you know that you know what it means to you. Once you begin to master this method, no amount of morphing, bots, news etc can ruin your day... some days will be good and some days will be even better, but these are the only two outcomes there can be ...unless of course you lose the plot. good luck

Hi equtrader, Yes, that is the attitude that most people bring into trading, only to experience disappointment, followed by more disappointment as they continue to ram math and stats at the infinite world of trading. Steve46 and some others view the trading world from a realistic point of view. The question then arises as to whether a risk adverse Person can change into a Risk Manager. It all depends on how badly they want it ... assuming they can accept that the problem is them in the first place. Most people never get past this acceptance stage ... and the very few who do, then face the commitment to change. By this stage, the Survivors of this self selection process are reaching a place of acceptance and are finally beginning to see and enjoy the real world of trading.