Off-topic Posts

[Off-topic Posts]

So all we're really waiting for is a loss of consumer confidence....but then again, if you view human beings as a natural extension of our environment-our feelings/wants are a reflection of reality in itself, so perhaps psychological demand has a mechanical presupposition within fundamental reality...ie you trust that human beings can rationally discover the "value" of something. Wait....

[Advice for Beginners....don't Try to Make Money.]

:haha: I hear you say. But really. I think that this is perhaps the single biggest factor in the high failure rate of new traders. Perhaps it would be better put that you should not expect to make money.

 

Let me put it in a different way. A beginner will come into trading and have had very little experience of anything similar. The market will however look familiar somehow and tease them into thinking small successes are down to skill. After all, humans like certainty and are quite happy to congratulate themselves when they think they are good at something.

 

Would you expect to pick up a guitar and then a month or two later be playing at a rock concert? Would you expect to pick up a paintbrush and shortly after have an exhibition on display at the Louvre? Probably not. The difference is though that poor trading costs you your money. Coming into trading, you will be pitted against seasoned professionals, massive hedge funds, banks and computer systems to name but a few.

 

Losses early on affect more than just your bank balance. They affect your emotions and your ability to learn and develop confidence in your understanding of markets and methods you use to trade. If you don't understand how to 'take a loss' this can be catastrophic.

 

Do yourself a favour, when you start trading, trade to trade well, not to make money!

 

HUH? >.<' Profitable since day 2. Running scared in front of death bots, institutional traders with tanks and quicksand brokerage dark pools. Having the time of my life. :P

[Consistently Losing]

I always thought it would be cool to have reverse trading system for the rookies that auto reverses every single trade, hence making about 90% of all traders on this system profitable.

 

But seriously - your stop is to close or in an obvious spot, and/or you are a sideways chop - better to get out until chop is resolved. The best freakin trading trick is when you are in a loosing trade if it goes big time against you from the on set than simply reverse your position - layering money in only when the profits are increasing on the existing position(s)

 

Aloha,

 

Dave

Commissions would kill. Novice traders are usually just getting the timing wrong, mismatching volatility with ability/time to break through support/resistance and not reading the bounce, etc. I'm convinced that no automated system(unless highest frequency bot)can adapt to the dynamic nature of the bid/ask system-as it is made up of collective human psychology.

[Off-topic Posts]

Hi,

 

I have a quick observation/question. I realize that at its base supply and demand drive price. OK. Well in our 21st century economy, where in the US we waste 5 times the amount of food we consume(yet still have starvation), where we've had several price bubbles occur-how can you still maintain that this is the case? How is the demand for an APPLE iphone created? It was not there originally...there was just enough money float in order to CREATE demand through savvy marketing and salesmanship. Steve Jobs was great in that he BELIEVED in what he was doing-he first sold himself fully on his product, then he sold Apple and Apple marketing sold the public. It's not like there is a set demand for iphones out there...its just if you can plant the idea in enough people's heads that you can have a chain reaction. Novelty=demand?

 

The object of the demand need not be something essential.

[Unconscious Vs Conscious Competence]

Floor traders (I used to be one) react a lot to the noise, plus the difference of being on a floor was that you got to make the most of any inefficiencies, you generally saw everything and how/who exactly was buying/selling.... among other things, so even though instincts were built from that environment, they could still be explained by certain things.

 

I guess the point is instinct to be trusted has to have a basis for it. AND

Even experience to be considered worthwhile needs to be shown to be worthwhile.

 

(I am always remember that great old thing I am sure we have all had said to us, and maybe some of us are at that stage we say it to others ....it goes along the line of....." I've been driving for 20/30/40 years young man and I know how its done." when in actual fact it might have been better said "I have been driving badly for all those years and never really proved that my driving was any good")

 

The program I mentioned was from the BBC Horizon series - I could not see it on their site though. the basis for this one little section in the program was this.....

 

Military personnel often have to scan satellite pictures of earth looking for building etc; of interest. This is difficult with large areas. So what these scientists did was chop each large image up into smaller sections, and then they showed the subject an image similar to what they were meant to be looking for (the test image). eg; a building in a desert. At the same time they registered the pattern the brain registered when this test image was seen and studied.

The next step was to rapidly show the larger image broken into much smaller segments, and to record which smaller images registered in the brain with the same scan as the test image. Far faster than we could recognise them, the brain picked it up and recorded the scan and registered it to the image. They then showed the larger image with the registered hotspots for closer inspection.

The scanning this way improved both the time taken to scan images and the accuracy by (from memory) 300%.

Fascinating stuff.....I was thinking of asking the university professors for some equipment

 

Its what many of us do every day anyway, and computer scans as they stand only provide some of the picture, its this little hidden part that it seems you are trying to capture.

Either way the rationale is there, we just need to be able to quantify it.

 

I just realized something from reading your post. During the times of the pits, when traders were crowded shoulder to shoulder, physiology plays as much a part of market movement as do technicals. Humans being intelligent pack animals, we have the same ability to pick up on moods on those around us as do wolves/other pack/herd animals. A lot of this is based upon facial expression-but one thing we often overlook is SMELL. Many soldiers who have been in combat can tell you that Fear has a smell-and that it is contagious. We also look to certain individuals over others for cues because we(consciously or unconsciously)recognize alpha mentalities. So imagine what happens on the trading floor when just one strong personality has a shot of fear so intense that it literally "infects" those around him(through smell and sight)-I imagine its almost an involuntary herd reflex that causes those market crashes. And I wonder if moving away from trading pits is going to reduce the number of market crashes...

[Yum! The Seasoned Trader Feeds On The New Trader]

I'm not a very good giver...

[Losing Money]

Isn't losing money a choice? As a beginning trader, I only take trades near support/resistance with volatility on a stock I know. It helps that there is a underlying market which is heavily manipulated by its home government. If the stock moves past the predefined support/resistance-I'm out. If I lost more than I could afford for that day-I don't trade anymore. Don't take anything with more than 3:1 ratio, taking half at 50% and letting whatever else run until it reverses by a dynamic margin. Now I'm not making a ton of money doing this-but I am profitable because my big winners heavily outweigh my small losers. I trade with 25% of my account because of its size, and factor in commissions(which by trying to "free trade" accounts I've kept to a minimum . So unless I just lose my head and start trying to scale, or use too big a position, or not exit a trade as soon as it moves against me-how could I lose money?

[Profit Guilt]

Hi all,

 

I am a new trader who has been trading in the green for about a month now. I believe I have a solid understanding of this game's fundamentals, different views that people have on what function the markets provide. We are buying and selling fictional assets that have no inherent value except the psychological value people place in it, based on the corresponding psychological price levels we give importance to depending on the numbers that we interpret from the availability of fundamental resources to drive *hopefully growing demand. On one level, investors provide capital to finance ventures to accrue more resources(oil, gold, commodities in general)-which build infrastructure and allow for more specialization(through diverse specialized companies)towards the optimization of our resource gathering/efficiency. On another level, traders speculate and drive prices within certain "projection zones"-which may or may not have a fundamental basis as it is a PROJECTION on continued growth, or decline. Bubbles could not happen if this was not the case.

 

Now the industry itself: as I understand it, the industry does NOT have my best interests at heart. Brokerages make money off of commission and sell/use retail information they gather. Institutions take advantage of information edge, news driving and large capital to mow down retailers. High frequency traders try to scalp everyone...

 

This led me to adopt a psychology of "being a market sociopath". I had to accept the fact that for me to make money, someone out there was "losing money". I thought that most successful traders were "tricking" their morality in order to make money.

 

But this, as it turns out, is a path to loading yourself down with guilt over taking profit lol. Upon further reflection, I realized that anybody who enters the market is essentially a gambler. Once that money leaves their pocket and is in the market-it's no longer any individual's money. It is the markets money, and being made up of all our psychologies/fears/greeds-it will do what it does. I am merely an account operator who lends money to gamblers to play the game they love. I'm enjoying myself.

 

:P

[Predator Mentality]

I remember someone advising me to trade as a crocodile, meaning a predator will wait for a sure catch and will not try to run everytime a protential prey is around. Spare your strength (account) because it costs everytime you use it.

I can't remember the actual statistic from National Geographic, but they still miss something like 75% of the time.