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ianf0ster Sep 28, 2018 10:40am | Post# 721

Boris Sclossberg is talking some sense (unless you are a student of Ray de Medici).
Here is his latest email: ( My comments are in blue)
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The Incredible Power of Having a Losing Mindset



Trading to Win.
The Winner’s Attitude.
Five Ways to a Winning Mindset.

Trading blogs are littered with advice about winning and while their intent is noble, they couldn’t be more wrong and their advice is actual poison to your success.

Take a step back and think about any competitive human activity. It is basically a study in failure and losing. In FIFA 2018 World Cup Croatia took 115 shots on goal -- the most of any team in the tournament. Care to guess how many actual goals they scored? 14. That works out to an 88% fail rate. Croatians, the Cinderella story of the summer only succeeded 12% of the time.

In American football, Alex Smith of the Kansas City Chiefs is considered to be the most accurate passer of 2017 season. His completion rate? Just a bit better than half at 56%.

In poker, Phil Hellmuth is one of the greatest players of the game. He has been playing professional poker for 30 years. Each year there are at least 50 WSOP tournaments which means since he started playing there have been more than 1500 events. He holds the most bracelets of anyone who has ever played the game. How many? 15. How many times has he been at the final table? 58 times. Basically, he fails 97% of the time.

The biggest winners in the world lose. They lose a lot. And if we want to have any chance of being like them, we need to understand that losing is not just part of the game. It IS the game. - Understanding what range of loss rate is reasonable (for your system/method) and accepting that , but making adjustments when losses are much higher than expected - so as to stay 'in the game'. That IS THE GAME!

Yet when it comes to trading we suspend all rational thinking and approach the market with the ridiculous expectation of winning every trade. Or 9 out of 10 times. Or at worst 8 out of 10 times. But even if we had a great trading system that won 80% of the time, the reality of probability means that we could have 100 trades where the win rate was only 50% and another 100 trades where the win rate was 90%. We could go on for months underperforming the win rate percentages by 20, 30 even 40 percent and not be doing anything wrong. Despite that reality, most retail traders will they stop trading the system if they hit 3 losers in a row. If they hit 10 they quit altogether.


Developing a winning mindset does little to fix this problem. In fact, it hurts you immeasurably. A winning mindset creates the false expectation of a win, so just one or two losses completely destabilizes your psyche. You double up on the position. You pull you stop. You punch your screen. In short, you lose control, not because your execution is bad, but because your expectation is completely at odds with market reality.

Now imagine if you approached each day expecting to lose money. Let’s say you are day trading. You set a total risk budget of 50 pips while trading positions with 15 pips stops and every trade you take you FULLY EXPECT TO LOSE.
What happens then? - I'm sure he meant to say something useful here, but personally if I expected to lose every trade every day - LOL! Well I just wouldn't trade that system/method and surely no sane person would -LOL!

Well for starters you let your strategy be. You don’t second guess every pip of adverse movement and close out positions too early. You TRADE TO PLAN because you have given yourself the permission to lose. You are not annoyed, angered or frustrated. Your mind is actually clear and calm which means you can analyze the next setup with a much better attitude. If a winner comes, it’s a pleasant surprise, rather than your God-given right and you can continue to look for the next trade and work on improving your process. - A winning trade shouldn't be a surprise (unless you are trading a low win % High Reward method like that of the 'Turtles'). But certainly you should always aim to trade to your plan. I say 'aim to trade to plan' because my plan is to trade perfectly and I am human, so I very rarely achieve that in a trade and I don't think I have yet had a perfect trading day. But you can only rate your trading against your plan - not against your results! Results are heavily influence by chance events i.e. LUCK, but if you trade (a good system/method) well then good results will inevitably follow!

Think how much better it is to have a LOSING MINDSET. You are unfazed by a losing day, a losing week or even a losing month. It all becomes part of the job and it allows you to stay in the game much longer than the average retail trader, which in the end is how winning is really done.
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ianf0ster Oct 8, 2018 10:39am | Post# 722

More from Boris ( my comments in blue ):
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Dear Ian

How to take the Fear out of Trading


What is the biggest problem in trading?

It’s fear. - I agree here, people talk about Fear and Greed, but for retail it is really all about fear!

That’s because trading is the only business in the world where every decision you make has a 100% chance of uncertainty. Unless you are cheating, there is literally no way to know how the next moment in the market will unfold. - Why Boris spouts such nonsense is beyond my understanding. yes no trade (at entry) has a certain outcome, but almost everything is uncertain (which is what having a 100% chance of uncertainty actually means). Famously there are only 2 certainties in life : Death and Taxes !


Sure other businesses have variance. If you own a donut store you don’t know if one day you’ll sell 100 or 500 donuts. Weather, seasonality, competition all have their say in almost any business, but I doubt you’ll find a donut shop owner who’ll tell you that today he may sell zero donuts or he may sell 500. Such a wide variance just doesn’t exist in any other sphere of business life yet in trading it is a daily occurrence.

You can go days, weeks, sometimes months selling zero donuts in trading and that sense of extreme uncertainty is responsible for more mistakes than just about any other aspect of the business.

What Boris is confusing here is the difference between uncertainty and probability or expectation.
But again fundamentally there is no huge difference between trading and any other business. For example extreme weather, a natural disaster or large accident etc could (at almost any time) shut down a retail business for weeks or even months. However unless you setup your business on an active volcano, the chances of repeated occurrences are very small!
And you don't have to trade a method/system with such a low %win outcome that makes you doomed to have frequent losing days. Ray's students are achieving 'whole trade' win percentages of 75% to 95%. In fact Ray often says that they are trading badly if they get less than 80% wins over a reasonable number of trades.


Ever taken a trade, got stopped out and then got spooked from taking the next one which in retrospect proved profitable?

Of course, you have. Trading may be the business of uncertainty, but I am 100% positive that everyone who is reading this sentence has had that experience.
Yes even now I don't always perfectly trade my plan, but it is also the case that after getting stopped out I may see that Value has changed and so the odds are no longer favourable for a re-entry trade - even though this might, in hindsight prove to be profitable. That is just the difference between a high probability and a certainty.


So what to do?

How do we conquer that fear?

I don’t think we ever fully overcome the problem, but here are a few ideas that can help you stay calm amidst the perpetual uncertainty.


Trade in sets. This is especially true if you are day trading as 80% of FX retail traders do. Don’t think of a single trade as a distinct individual event. If you are a trading a system, estimate how many times that system should trade during a given week.

Let’s say your system trades 20 times per week and on average generates 16 winners and 4 losers. If you hit a losing trade then just think of it as part of the weekly set.
Understand also that not every week is a winner and you could have a run of bad sets. If the week is a loser examine each trade -- was it done to spec? If so then there is no need to change anything. You simply hit an expected losing cycle.
As I said in the post above, rate your results based upon how well you traded to your plan - never just based on how much profit or loss you made!

You see what I’ve done there? I’ve actually made my field of vision more blurry. I’ve moved away to an eagle’s eye view of trading. I’ve stopped obsessing about every pip on the chart, every tweet, every noise from my squawk box. I look at the system as a broad narrative story rather than the drama of the minute.
Whether the above is good or bad advice depends upon your trading style and size. Both Ray (trading institutional size) and the 'Mr Carlsberg of retail trading' do obsess about every pip, but if you are trading large swings with small size then it matters much less.

The other thing that helps with controlling fear and uncertainty is to understand just how little you need to make in order to double your money. If you are trading a $10,000 account you only need to make $40/day to turn the account to $20,000 by the end of the year that’s actually pretty hard) but if you made just $10/day you would make 20% on your money and become top 1% of all traders in the world.

I don't know what assumptions Boris was making here, but the idea that using retail risk management levels and making only 20% per year puts you in the top 1% of all traders, is laughable!
A trader in the top 5% of those in Ray's room would consider a +20% month to be a very poor month's profit even after extra-ordinary bad luck - LOL !

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ianf0ster Oct 8, 2018 11:23am | Post# 723

My favourites out of Boris 7 favourites of the stories he read this week:

Since my favourite investing book is 'Fooled by Ramdomness', this one ticks all the boxess !

Interview with Legendary Investor Felix Grandluckmeister
Posted on October 6, 2018
Price Action Lab spoke with (FICTIONAL) legendary investor Felix Grandluckmeister on his secrets of success. Felix Grandluckmeister ‘s fund, RNDTrading, has had only 6 down quarters in the last 31 years, which is considered unique performance.

PAL: Thank you for the interview Mr. Grandluckmeister. Everyone is talking about your unique performance in the stock market with only 6 down quarters in the last 31 years. Can you give us a few hints about your edge?
Grandluckmeister: Thank you. I will not try to make up any stories about edges or brag about my skills. I was just lucky. My performance is due to pure luck.
http://www.priceactionlab.com/Blog/2...dary-investor/



Now what to me looks like a shameless advert by MEB Faber - but based upon an important fundamental truth which I use when selecting funds for my (risk averse) wife's portfolio. Managers with 'skin in the game' run better than average funds:

Why I’m Investing Most of my Money in Just One Fund by MEB Faber
https://mebfaber.com/2018/10/01/why-...just-one-fund/



Another fundamental truth which I use when selecting funds for my (risk averse) wife's portfolio.

Losing less is much more valuable than winning more by Mark Hulbert
The biggest obstacle to long-term investment success is “the dogma that you must beat the S&P 500 during bull markets.”
So writes Brian Livingston in his new book “Muscular Portfolios: The Investing Revolution for Superior Returns with Lower Risk.” I couldn’t agree more.
Livingston is an investigative journalist who has focused his energies in recent years on the investment industry. He is president of the Seattle chapter of the American Association of Individual Investors, and I think highly of both him and his work. (For the record, I have spoken to that AAII chapter, but I have no financial interest in his book sales.)
https://www.marketwatch.com/story/now-is-not-the-time-for-stock-investors-to-ignore-the-next-bear-market-2018-10-01


In the last century some of the most ruthless, crooked SOBs in business were also some of the biggest philanthropists.
Has that changed?

“The reality is, we’ve had a tremendous amount of innovation over the last 40 years,” Giridharadas said. “Half of Americans, the bottom half of Americans, 117 million Americans, literally got no more money in their paycheck as a result of 40 years of innovation. We don’t have an innovation shortage, we have a progress shortage.”
https://www.recode.net/2018/10/3/17930990/anand-giridharadas-winners-take-all-book-changing-world-kara-swisher-decode-podcast-jeff-bezos

ianf0ster Oct 10, 2018 12:11pm | Post# 724

Here is something from Lance Beggs (of Your Trading Coach), a guy I respect partly because he switched his day around and started trading the (Australian) night shift- so he could trade the markets he likes during the time that they move!

He is taking a break from that because his health isn't so good. In fact he is warning people that it isn't a good idea to trade the night shift for months and years (apart from vacation) on end. he is suggesting taking 1 to 2 week breaks every 2 to 3 months (though I think that it may need to be so frequent as that).
I remember how bad permanent night shift can be from when my dad worked permanent night shift for several years.


Anyway Lance Beggs also says something else, which to me has the WRONG emphasis because it focuses on Profit rather than on trading well, but for those with a proper defined trading style it can be easily adapted to focus on real performance,
Lance has his own trading style and has not had the good fortune to have studied under Ray. He is a Price Action scalper and so his charts are completely different from any I have ever posted in here:

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Chasing Performance

Here's a little post-session exercise which may help stretch your performance to "never-before-reached" profit levels.

Pick a target just above your all-time-high for a trading session. Whatever that is - $100, $500, $1000, $5000 or more.

And ask yourself the following.

Looking at the chart for today's session, with the benefit of hindsight, how could I have achieved an all-time high in profits?

It's not about beating yourself up for having failed to reach new highs. Most days you won't reach them.

But it's about pushing yourself. Never settling for mediocrity. Always stretching to achieve more.

Look at the chart. Look at your trades.

Were there were price sequences which you failed to see? Is there some way you could you have captured them?

Were there price sequences in which you underperformed? Could you have taken more out of the move? Could you have increased size somehow? Could you have re-entered if stopped out? Could you have extended the targets or trailed price differently?

If you somehow did manage to squeeze all the profits out of your strategy that day, then ask if there were other ways could you have viewed price and profited? Operate from an assumption that there WAS some way to have achieved new all-time highs today. NOW FIND IT.

And just maybe... next time... you'll take the lessons learnt and actually push through to achieve these new levels of performance.

http://www.yourtradingcoach.com/imag...formance-2.png

http://www.yourtradingcoach.com/imag...formance-3.png

http://www.yourtradingcoach.com/imag...formance-4.png

http://www.yourtradingcoach.com/imag...formance-5.png

http://www.yourtradingcoach.com/imag...formance-6.png
http://www.yourtradingcoach.com/imag...formance-7.png

http://www.yourtradingcoach.com/imag...formance-8.png

http://www.yourtradingcoach.com/imag...formance-9.png

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Post-session:

Consider your outcome. And compare it with your all-time high.

Review the charts and find ways you could have stretched yourself to never-before achieved levels of performance.

Perhaps next time, this exercise might just help you reach the new target.

Happy trading,

Lance Beggs
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As far as I am concerned, a serious trader should always do a quick review their trades every day - just to see if they fall within the expected performance range. But should take longer over trades which fail to meet expected performance.
Analysing why missed trades were not taken is just a logical progression from this.

juangecko Oct 10, 2018 7:17pm | Post# 725

{quote} I see you in this thread all the time. You also contacted me with questions about Ray's course. You are very sceptical(which is understandable) about it and you always agree with persons who are trying to talk trash about this course. I don't understand. If you are so convinced about that this is/will be a course that is worthless why are you still here and want more videos about Ray's course? For me it looks like in the back of your mind you know you have to take this course because it is the real deal but you don't have the money for it....
Why don't you offer trading third parties accounts? that is the best way to prove how good you are at trading.
Ian and you are not willing to do that.

ianf0ster Oct 11, 2018 9:45am | Post# 726

{quote} Why don't you offer trading third parties accounts? that is the best way to prove how good you are at trading. Ian and you are not willing to do that.
You appear to be assuming that for some reason I am interested in 'proving how good' a trader I am. Since a big ego is one of the very worst psych problems that a trader can suffer, I don't care if everybody else thinks I am a useless trader! I am not selling anything - actually I despise most Salespersons, even the Self Help Group I run is still completely free after over 4yrs although some members would like to change that so we can have better resources.

I have previously responded to similar questions from readers of this thread and the answer doesn't change!

Except for good retail traders who are basically broke (i.e. unable to either make enough to live on, or not enough to compound their account). A good retail trader would have to be insane to trade for other people! The effort involved, the pressure and the risk that it will ruin their trading far outweigh any additional potential for earnings.

I even turned down trading money for my wife! I did that because I know she is amazingly risk averse, so I would have felt impossible pressure to have at least no losing weeks, if not no losing days. I only know of 2 retail traders who have achieved that over at least a 6 month period - I certainly haven't. Neither of them will even consider trading other people's money !

A retail trader has to be not just a trader, but a Strategist, an Analyst and a Risk Manager. Adding a Customer Services and a Marketing role to that huge workload is just asking for trouble.

A good student of Ray, if trading at least the London morning Session or the US morning Session 5 days per week, should be capable of making between 1% and 3% on a poor to average day, perhaps as high as 10% on a good day. I know several students who are better traders than me and my average profitable week has been consistently in the 10% to 20% range over the last 18 months. So they should be doing even better than that.

ianf0ster Oct 11, 2018 10:08am | Post# 727

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An interesting email from Boris Schlossberg about the importance of knowing what range of performance figures your trading method/system 'should' produce:

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Dear Ian
The Trade Before the Trade


Nick Maggiulli who writes a wonderful financial blog called ofdollarsanddata, posted a piece this week that really caught my eye. Titled, Why The Best Predictor of Future Stock Market Returns is Useless, the post deals with a very interesting indicator of stock market returns -- the average investor allocation to equities. Basically when investors exceed the historical average, allocating say 70% or more of their funds to stocks, equities perform poorly over the next 10 year. When the allocation is below the historical average the performance is much better.
Nick sketches out the basic investing model here:


Here is how the AvgEquityShare model works:
Start by investing in stocks (S&P 500).
When demand gets too high (>70% average equity allocation) => sell your stocks and move into bonds (5yr Treasuries).
Stay in bonds until demand gets too low (<50% average equity allocation) => sell your bonds and buy back into stocks.
Repeat steps 2-3.

That’s it. I chose the 70% upper limit and 50% lower limit to have round numbers that also corresponded to different return regimes (aka I data-mined this using backtests). If you run this model you will find that from 1987 to 2018, $1 would have grown into $43 compared to only $24 for “Buy and Hold” (almost 2x better dollar growth), with a far better drawdown profile -- the AvgEquityShare model is half (-23.2%) of what “Buy and Hold” delivered (-50.9%).

Though I could show you many other performance metrics that illustrate how much better the AvgEquityShare is than “Buy and Hold” it wouldn’t matter. Why? Because when we dig into the details we realize that the AvgEquityShare model would’ve been near impossible to hold for any typical investor.”

He then presents this chart that basically shows you would have to give up the massive run up from 1996-2002 in order to follow the model properly.

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No doubt he has a point. FOMO is a very powerful emotion that can seduce us all into some very bad decisions. Ask anyone who bought Bitcoin at $16.000 or Ripple at 3 bucks. But let’s step back and analyze his point. Can you really argue that buy and hold is better? Will anyone really be able to hold through a 50% decline and continue investing for the long run?
This question is especially relevant on a day like today when the Dow has crashed 1000 points and many investors are starting to ask -- is this the top? (Hint: YES)
To be fair to Nick he fully acknowledged the false dichotomy of the premise and we went back and forth on twitter discussing this.


But Nick’s column really made me think because what it really demonstrates is the need to truly understand your trading premise before you ever push the button. In short, you need to know the trade before the trade.

In Nick’s model, the success of the AvgEquityShare is obvious under even the most cursory examination. It makes nearly twice as much money with 1/2 the risk. It’s clearly superior to the Buy and Hold. But it comes at a cost of staying out of the market for long stretches of time. Yet, if you knew ahead of time that those are the costs, wouldn’t you be much better prepared to sit out the manic runups?
I have a new day trading strategy that trades trend on the 1M chart. But it only works if I follow a very specific set of rules. So, for example, today I missed the 70 pip move in USDJPY and yesterday I missed the 120 pip move in the pound. But that’s ok. The strategy is never meant to capture those type of moves. I make my 20-25 pips when I can. I keep my risk very low and I grind away trying to make 200 pips net each month, comfortable in the knowledge that the strategy is doing EXACTLY what it is supposed to do.

And for me, that is the true lesson of Nick’s column. It’s not the strategy that matters, it’s having the proper expectation for that strategy. In fact, I would argue that 90% of all our failures as traders ( certainly 90% of mine) are due to the fact that we woefully misalign our expectations and our strategies. That’s why fully understanding the “trade before the trade” is perhaps the most important strategy of all.

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I agree 100% with that last paragraph. The problem is that most retail traders haven't got the faintest idea as to what figures to expect. Indeed many don't even keep the records to enable them to find out!

ianf0ster Oct 11, 2018 10:49am | Post# 728

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One of Ray's batch of new students in his recent course has been posting good results most days:

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And a little later today, the early part of the Oil Inventories:
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She is mostly trading the Equity Indices during the US Session.
I have no idea how big a percentage of her account this would be, but earning over $1,000 per day so soon after attending the course would keep most people quite happy.

ianf0ster Oct 11, 2018 1:44pm | Post# 729

5 Attachment(s)
I got a email from Lance Beggs (of Your Trading Coach ) earlier than usual this week.
There are 2 parts of interest:
1. A post caused by a response from a subscriber to his previous email ( the bulk of which I posted yesterday : post number 724):
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This was the trade Steve is referring to:

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Too many traders take the loss personally. As Steve says, they're stuck in the mindset of "Aaargh, I did it again."

Their focus is on themselves and their feeling of intense injustice and frustration.

Their focus is NOT on the price movement.

And so they miss the next opportunity, which spirals them into even greater depths of despair, especially when that opportunity is back in the original direction in which they entered.

LOSSES ARE A PART OF THE GAME.

Take the hit. Refocus yourself. And move on. (Provided session loss limits are not hit, in which case you shut down for the day!)

We've talked quite a bit over the years about the fact that trading is NOT about individual trades. Instead it's a game of profiting over a SERIES of trades.

Individual trade results are irrelevant. Series of trades are what matters.

And here's the thing - every series of trades will likely contain a combination of both winners AND losers.

LOSSES ARE A PART OF THE GAME.

Take the hit. Refocus yourself. And move on.

I shared a simple concept once before, which may help create a shift in mindset for some who read it. Let's repeat the idea today.

What if you stopped trying to find winners?

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Why is that?

Because...

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Trading is a marathon, not a sprint. We need to remember that the objective is to stay the course, trade well and thus be consistently profitable. - NOT to gamble on getting rich in the least possible time!

2. A post that Lance made on social Media. Note that I can't show you the way that Ray does his 'measured move' analysis, but here is a different (well known) way of doing it which Lance uses:

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ianf0ster Oct 12, 2018 12:45pm | Post# 730

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One of ray's students who has been around for a while and rarely says much is Nicholas K.

But today he was excited with his results, hence:

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samidy Oct 14, 2018 8:22am | Post# 731

{quote} Why don't you offer trading third parties accounts? that is the best way to prove how good you are at trading. Ian and you are not willing to do that.

Why should I offer that?
I don't need the money and I'm a free man. If I would offer that my freedom is gone. I have never offered my services to anyone. Not even my own family although I have been asked countless times.
And I don't have to prove to anyone Ray's method works. There are many examples that prove that. There are also examples that it didn't work some how but the way of trading has to resonate with you.

Come on Juangecko. Take the plunge. See it as an investment in yourself. As an education.

ianf0ster Oct 16, 2018 11:22am | Post# 732

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Laurie's had another good day today. I had not realised that she is only trading part-time while studying for professional qualifications:

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It is an interesting note that all 3 other students who congratulate Laurie are themselves very successful traders.

ianf0ster Oct 16, 2018 1:21pm | Post# 733

I have been asked for links to Ray's recorded 'open to all' webinars.

Since I dug out the information, I might as well also post it here.

First, those in the CompassFX Blog (rather than the 'Members Area':

https://www.compassproptraders.com/blog/

There are lots of posts of Screenshots and Recordings (mostly short ones) 3 pages of them going back over 2 yrs.

Then there are those in the marketing Webinar room that Compass use.
Back when I last posted about them (just over 1 yr ago) there were 10 video recordings posted on the 'Documents folder' (the white folder symbol on the bottom right of the webinar page.
You can access the Webinar page by entering any (even a false) email address and using the password volume
The web address is http://compassfx.webinato.com/sharpedge

When you double click on one of the recordings it will put up a browser window for you to open the recording in a separate browser window. You can pause, or go back or forward in the recording but the controls are primitive.

Note; If you don't get a screen requesting an email address and password , then try the link using a different Browser ( I find that most, but not all Browsers work fine).

ianf0ster Oct 18, 2018 10:24am | Post# 734

The latest email from Boris Schlossberg is on something about which we can both agree: Technical Analysis
(My comments in Blue)
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Dear Ian
Why Technicals?

Those of you who’ve been reading me a long time, know how skeptical I am of technical analysis. Trading technicals in a void is like making medical decisions solely on the thermometer reading. At their core technicals are simply signals for sentiment or momentum. That’s all.

Given the funda context sometimes technicals can be an excellent forecasting signal and sometimes they can be a horrible one. One thing is for sure. With very few exceptions (such as major price milestones) technicals almost never drive price action - they simply reflect it.

Pure technicians always get angry at me when I say that, but the proof is in their own actions. How many technicians will stand down ahead of a fundamental release of data? If price action was everything then you can you just ignore funda at will. Go ahead take that long ahead of NFPs. We all know how well that works.


You can, of course, trade off long-term charts and ignore the day to day noise but even there you are still subject to funda drivers. Tell me - how did those weekly charts do on the Brexit vote? (Hint - they walked you straight into a trap).

Anyway, my point isn’t to prosecute the case of what drives price action - that argument has been settled a long time ago. Rather, I’d like to ask a simple question - what are technicals good for?

Some die-hard fundamentalists will say - absolutely nothing. Technical indicators, after all, are simply derivatives of price and therefore lagging by definition. But, as they say in the software business that’s a feature, not a bug.


Why would derivatives of price be useful to traders? Precisely because they can provide a visual narrative that can be difficult to see any other way. Indicators smooth out the randomness of prices and allow the trader to separate the signal from the noise. Take something very simple such as short-term moving average crossing a long-term moving average. Every major price regime change in the market starts with that dynamic. Now granted many of the moves fail to produce a sustainable trend, but by quantifying, standardizing and classifying each successful move you can sometimes tease out a meaningful edge and ride the wave to profit.

Technicals can also act as a check on your ego. If you are absolutely convinced that price should move one way, but technicals are actually showing the opposite chances are that you are wrong. One of my favorite setups is to have news print one way, but price action react the opposite. In that situation, technicals are almost always right.
When this happens, it is nothing to do with the Technicals as such, it is because one or more of the big institutions are using the News reaction either for their exit from a prior position, or as a way to load-up on a contra position in the direction of Macro Value. For Example Macro Value is still very much to the short side (and the news result does not have the impact to change that (by itself), but the news comes out +ve for the market. So some Institutions take advantage of the higher price to add more size to their shorts at better (higher) prices.

Ever since our days on the savannah, we have been pattern seeking animals. It’s what kept us alive to the present day. Technicals are simply a unique manifestation of the same dynamic in a different environment. Instead of lion behavior, we watch price behavior and while that information is as incomplete to us as the herd movements were to hunter-gatherers, it is nevertheless valuable. It helps to inform our experience. It provides distinct knowledge which we can then try to turn into trading wisdom.

So even if you are diehard funda trader, you need to look at the charts. They tell a narrative that could be the key to your next profit in the market.
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ianf0ster Oct 25, 2018 8:09am | Post# 735

In Boris' list of his 7 favourite trading/investing stories this week there is only one that I like much.
It is interesting because some of it appears to go completely against Boris' own trading philosophy (and agrees with my own).
It's a blog post about a book written by a psychology graduate and (very successful) professional poker player.
The post also features some of the Blog author's quotes from Charlie Munger (Warren Buffett's partner).
Because it is such a long piece (but well worth reading in full) with copious notes and references, I am just posting a link to it.

I encourage any serious student of the markets, or even of life, to read it:

https://25iq.com/2018/10/13/lessons-from-annie-duke-author-of-thinking-in-bets-making-smarter-decisions-when-you-dont-have-all-the-facts/

ianf0ster Oct 25, 2018 8:59am | Post# 736

One thing referenced in the blog post ( see link above), is really important (in life as well as in trading) and it rarely gets mentioned.
It is that in order to avoid making poor decisions:
“Instead of seeking opinions that confirm what you already believe, seek out those with which you disagree. Listen with an open mind” teach you.” “What makes a decision great is not that it has a great outcome.” “The person who wins a bet is not the one who affirms their priors.” “The goal is to be accurate rather than be right about your prior views.” “A great decision is the result of a good process, and that process must include an attempt to accurately represent our own state of knowledge. That state of knowledge, in turn, is some variation of ‘I’m not sure.’” “The only real failure is to learn from it.” “The worst player at the table has something to teach you."

ianf0ster Oct 25, 2018 1:55pm | Post# 737

Now something from Boris Schlossberg with which I disagree:
(My comments in BLUE)
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In Trading, Great is NOT Good

https://ecp.yusercontent.com/mail?ur...EhfFCCkHSQ--~C
In our winner take all world, we are often told to try the best, do the best, be the best.

That advice is a road to ruin in most aspects of life and very certainly in trading.

The very latest in research suggests that human accomplishment does not come from trying to push ourselves to the limit, but rather from gradual and consistent repetition and improvement.

As Brad Stulberg writes, “Take the case of Eliud Kipchoge, who just shattered the marathon world record. He’s literally the best in the world at what he does. Yet Kipchoge says that the key to his success is not overextending himself in training. He’s not fanatical about trying to be great all the time. Instead, he has an unwavering dedication to being good enough. He recently told The New York Times that he rarely, if ever, pushes himself past 80 percent—90 percent at most—of his maximum effort during workouts. This allows Kipchoge to string together weeks and weeks of consistent training. ‘I want to run with a relaxed mind,’ he says.”

The paradox of performance is that when you push less you achieve more. Stulberg again, “This mindset improves confidence and releases pressure because you don’t always feel like you’re coming up short. It also lessens the risk of injury — emotional and physical — since there isn’t a perceived need to put forth heroic efforts every day. The result is a more consistent performance that compounds over time. Research shows that sustainable progress, in everything from diet to fitness to creativity, isn’t about being consistently great; it’s about being great at being consistent. It’s about being good enough over and over again.”

I have no disagreement with the above, it is well established that more top class athletes fail because of injuries and stresses caused by over-training than by under-training. But unless Boris is talking about extreme lengths of intense (e.g. scalping) trading, that situation doesn't apply to intellectual/emotional activity such as trading!

This is certainly true with trading. We are always pushing for more -- more edge, more leverage, more trades when we should all be pushing for less. It’s perfectly ok to take profits early. What does he mean here? - Take profit at what in-hindsight looks to be too early, but is in accordance with your trading plan? - If so, no problem, but I get the strong impression he is saying it is OK to cut your profits shorter than in your plan because of 'wimping out'!
It’s perfectly ok to miss some setups. Does he mean being physically (or financially) unable to take some setups that are in your trading plan? -If so, no problem again, but I get the impression he means missing a trade because of inattention (day dreaming) or because of emotional stress (lost on the last 2 similar trades).
It’s perfectly ok to trade on very low leverage for as long as you want. - Of course it is, until you reach the level where you are scoring each trade setting up and risking a larger amount on the higher probability and higher expectancy ones!
Every one of those behaviors will push you toward success whereas the exact opposite of those behaviors will guarantee failure. Trading -- like marathon running -like almost everything in life -- is a test of endurance. - Now he seems to be saying just the opposite to his previous mantra of don't push too hard! The goal in trading is to 'stay the course' until it becomes easier/even boring because you are now trading so well. Remember that trading well over a decent period of time inevitably bring consistent profits! So trading in a professional manner isn't like running a single marathon. - It's like doing many much shorter races over a long period of time and staying in good shape to be able to participate in them all as their time comes.

There is an old movie with Paul Newman and Robert Wagner called Winning. It’s about the 24 hour race at LeMans. (It was actually the catalyst for Newman becoming a professional race car driver later in life). In the movie, Wagner plays a hot shot driver who “breaks things” because he always pushes everything -- the car, himself, the people around him too far. Wagner is the quintessential example of what not to do in trading. In his quest for excellence, he winds up only with failure.

It’s easy to see how that can happen in trading. Hell, I’ve been the Robert Wagner character many times in my life. Always looking to “optimize”, always looking to push trades beyond their limit. But recently I created a process to change that behavior. And it all starts with the 0.01 lot.
Basically anytime I have an idea for a setup or strategy I start trading it with 0.01 lot. My iron clad rule is to trade at least 10 times at that tiny size, but the more I do it, the more I realize that at least 30-50 times is best (this assumes you are day trading, which is all that I do). The money is real, the quotes are real but the size is so tiny that it does not dissuade you from pursuing the setup even after multiple stops out. More importantly, it is truly amazing how many things you notice the more you trade. Every setup and I mean EVERY setup will change its rules as it develops under real market conditions. That’s because even if you have years of market experience your original notion of how the trade should proceed will come with preconceptions that actual market price action will very quickly destroy. But here is the thing. The more you trade your set up. The more you adjust it to actual market conditions. The more accurate it becomes. The more confident you will be. -Here he is talking about developing/learning a new market/strategy/style/set-up. The marathon runner mentioned at the start was not learning to compete at a new distance, just improving/maintaining what he was already doing, so this is irrelevant!

That confidence will allow increasing the size to the next level which in my case is 0.1 lot -- and inevitably when the losing streak appears you will not abandon ship. You will have that reservoir of confidence from the 0.01 lot days to ride out the drawdowns. This is where the power of gradual improvement really pays off. This is where you realize that good is not the enemy of the great, but rather its basic building block and at that point, you can finally step up to your regular trading size knowing that you have created a truly durable setup to trade.

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Never trade when it means pushing your physical, emotional or financial limits! Don't trade when ill, tired, angry, fearful, or in another highly emotional state! But always aim for trading as close to perfectly according to your plan as it's possible for you to do!

ianf0ster Nov 11, 2018 7:51am | Post# 738

Choosing a trading timeframe is something that many/most retail traders pay little attention to, but it can be really important especially for those who are not able to be 'full-time' traders. It is also important for full-time traders to use a timeframe (or a non-timeframe) which is suitable for their trading style e.g. 'Scalping'.

Here is a video link in which Eusebio (from 'The MAX') discusses this subject. He ignores Scalping because 'The MAX' is a 'trend-following' trading system.
However he does talk about how to produce a 'non-standard' timeframe chart using MT4.

Inserted Video

ianf0ster Nov 11, 2018 8:52am | Post# 739

Here are 2 trading tips from Eusebio (of 'The MAX'). The link is a link to download a short video containing a tip about Divergence and a tip about 'Long Bars', or as Ray calls then 'Gift Candles.

https://spaces.hightail.com/space/EOZYs2XZci

ianf0ster Nov 11, 2018 9:32am | Post# 740

A Bigger View:

Apparently a UK Supermarket publicising an environmental problem and very briefly at the end saying what they will do to help minimise it, is considered to be 'Political Advertising' and is effectively banned. I appreciate that such subjects are multi-faceted and that human livelihoods depend upon growing such products. Just as many families depend upon illegal child labour in order to survive. But that is no excuse for indirectly encouraging it by our purchasing patterns.

Here is a link to the online article:
https://www.msn.com/en-gb/foodanddri...cid=spartanntp


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