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Know Your Enemy & Know Yourself

"If you know your enemy and you know yourself,
then you need not fear the result of a hundred battles."
~ Sun Tzu

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Explanation:
Can you write 10,000 words essay on the following single topic?:

 

1. 10,000 words essay on 'Entry'
2. 10,000 words essay on 'Exit'
3. 10,000 words essay on 'Money Management'
4. 10,000 words essay on 'Human psychology/Behavior/Discipline'
5. 10,000 words essay on 'Moving averages/MACD/Indicator'
6. 10,000 words essay on 'Risk & Trade Management'
7. 10,000 words essay on 'Technical Analysis' that hasn't been published
8. 10,000 words essay on your 'Trading Plan'

It is simply because, if you know how moving averages work, then writing 10,000 words on the subject would be very easy. If you don't know, well you can only write as much.

Most people don't yet understand that trading is a competition. It is a competition between you and the other traders. And in any form of competition, winning requires a greater advantage, a greater edge over the opposition... A greater advantage in size, strength, technology, discipline, intellectual, etc... Whatever form of advantage/edge you can get will aid your victory over your opponents.

If you can't write all of the above points, then you don't know the enemy and you don't know yourself. You don't have to physically write it, but do you possess a vast knowledge of information about each topic? You may think you know, but I am just quantifying what you know. And if you can't write 10,000 words on the subject, then you simply don't know much.

Success is Something You Attract

"Success is something you attract,
it is not something you pursue."
~ Jim Rohn

"Thank you" is not enough to express my gratitude for the incredible and positive impact you have made in my life.
It's an honor and a privilege to have known you Sir.
Thank you kindly.
R.I.P. Mr.Rohn

Inside the pot

I wonder if there is a way of telling how many people are selling and buying at a particular amount of time. I think there might be an edge if someone knows of very large pending orders (buy or sell) that will pressure and move the price.

I mean.... why would I sell if market movers are buying and putting pressure and pushing the price in a particular direction?



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Explanation:
You can see the bulls vs the bears in a particular amount of time. It is like looking inside the pot of whether the bulls or the bears are dominating. Kind of like looking in the books which is top secret classified.

Draw a mid-point of the high and low of a bar. If the close is below, there are more bears, sellers or amount of sell orders. If the close is above, there are more bulls, buyers or amount of buy orders. That's what is inside the pot.

Through my research, even knowing what is inside the pot doesn't guarantee success. At any point in time, any market movers can drop large amounts that will put pressure on the price. Order flow is not the answer to success. It can help decision making, but it is not a guarantee nor an absolute... Unless you can see the top secret live order executions of the market makers... insider trading... you go to jail for that

Stop Focusing on Lost Opportunities
(Training exercise)

I need to de-clutter my mind so that I can focus clearly at the task at hand. It's been a month and it is time for self evaluation. There is one area I can improve in.

Make note: Stop focusing on lost opportunities. It doesn't serve me any good.



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Explanation:
It is the most common plague in Amateur traders: "Focusing on the wrong things". Amateurs are too busy focusing on things that are not beneficial to their trading.

Sink this in your trading philosophy and trading psychology; If it doesn't help your trading in anyway, get rid of it. Do not waste the time and energy focusing on it.

Amateurs would open a chart and look at the areas where "they could have made profits" IF they just didn't "have an interruption", "had to go and do something", "had to go sleep", etc... for whatever reasons and excuses of missing out on the trade.

Professional traders don't open a chart and look at the missed opportunities that just happened. If I wasn't in a trade for a certain amount of time and then opened my chart and saw a big move, I don't even waste my time telling myself IF ONLY.

It may seem nothing or not of a big issue... but it is a big issue to your trading psychology, trading philosophy and trading journey to Professionalism.



Training Exercise:
From now on, you will never open a chart and look at the missed opportunities that just happened and play the "IF ONLY" excuse. You will never waste you time and energy on useless things, especially the "IF ONLY" excuse. You will stop focusing on lost opportunities.


Stop focusing on lost opportunities. When you focus on lost opportunities you make "IF ONLY" excuses and mental reasoning. That type of mentally is playing the victim card. That you are a victim and undeserving of success. It is a mental reasoning that you are a failure. Amateurs are full of excuses. Are you an Amateur or a Professional? Do you want to become a Professional?... Then start acting like one!!!

95% vs the 5%

I've listened and read several opinions from the experienced traders. I realized, sometimes even if they possess years of experience, they still ought to be NOT trusted at certain times. Their intentions are righteous, but at times I realized they are actually holding be back from my true potential. They are actually having a negative effect to my personal growth and trading.

What is important is that I grasp the fundamentals, master the basics, possess and accumulate the knowledge that are present within my reach. Anything beyond that requires my own critical thinking and my own creative thinking.



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Explanation:
I say this with deep respect to every individual who may be reading this. Please do not be offended.

I'm very fortunate to meet thousands of people in different field of endeavors. They have taught be valuable life lessons, for that I am very grateful.

There is one truth I see again and again. In any field of endeavor; Athletes, Scientists, Doctors, Engineers, Accountants, Mechanics, Bakers, Craftsman, Musicians, Philosophers, Teachers, Plumbers, Electricians, Ministers, Welders, Mathematicians, Biologists, Farmers, Lawyers, Entrepreneurs, Traders, etc...

Approximately 95% of people in their field are mediocre. 5% are the best at what they do.

If you grab 100 Doctors, only 5 will be outstanding in performance. The 5 will probably discovery new medicines, develop new techniques or invent a medical machine. The other 95 will have a working knowledge of medicine and that's as far as they will go.

Einstein, Bohr, Currie, Faraday, Planck, Newton... they make up only less than 5% of people in their respected field. It is no different in any other field. Did you know NASA had problems employing welders? because out of thousands of applicants only a few can work at such high standards. NASA required around 50 welders, out of 2000 applicants (with at least 10years of experience) they only found 10 who can perform the job.

Don't make the wrong assumption that someone who has 10 years of experience has a lot to teach you. I've personally seen people with 20 years of experience in their trade and yet have not learned a lot in that 20 years. It is no different in the trading field.

What's important is that you grasp the fundamentals, master the basics, possess and accumulate the knowledge that are present within your reach.Anything beyond that requires your own critical thinking and your own creative thinking. There is nothing wrong listening to an advice, but you have to use your own brain whether to apply or discard that advice.

Simple, But Not Simpler

Don't confuse 'Simple' from 'Simpler'.
Don't simplify your trading for the wrong reasons.
Make your trading simple, not simpler.

Reticular Formation and The Charting Dimension

Is the lady spinning left or right (clockwise or anti-clockwise)? This is not a trick question.

Some of you see will her spinning left, while others will see her spinning right. There are no right and wrong answers. It'll just depend on the reticular formation part of your brain. You can actually make her spin in either direction you want.

Here are some directions:
Close your eyes and vividly imagine her spinning in the other directions and then open your eyes.

or

While looking at her, consciously blink repeatedly every 1 second while focusing on her spinning in the other direction.

or

Look to the top or bottom 3inches away. Keep her in your peripheral vision, but do not focus your vision on her. Imagine her spinning in the other direction and the moment you see her in your peripheral spinning the other way, then return your focus on her.

She actually spins left, right and (if you are advance) you can make her do sidesteps. For this example just achieve to make her spin left or right at your will.



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Explanation:
She is actually spinning left, right and doing sidesteps all at the same time, in different dimensions. That's why people will perceive her to their own conviction.

Some people will be fully convinced that she only spins left or right. This is because they are unable to make her spin (control their way of thinking) in the direction they want. They will believe that this is an illusion and that the .gif will change direction on its own fooling the the viewer. I can guarantee you this is not the case.

It is no different in trading and charting analysis. Your beliefs are subjective and you will see what you want to see. "Beauty lies in the eyes of the beholder"... scientifically speaking; your reticular formation will dictate what is beautiful to you. It is no different with trading; how traders are fully convinced of their own set of beliefs... how convinced they are with their power of predicting the future of price.

Professional traders put emphasis to eliminate subjectivity and discretion within their trading system. The so-called 'successful discretionary traders' are not actually working with discretion, they simply just don't know how to explain what they do. Thus confusing them as being discretionary.

The reticular formation is the subjective part of your brain. It is the part of your brain that filters all external and incoming information. Your conscious mind can influence your subconscious mind. The reticular formation is also part of the subconscious mind. You can dictate your reticular formation what you want to be filtered.

Any successful individuals in any field of endeavor possess a certain mindset. This is because success is a psychological seed, embedded deep within your subconscious mind. What does the reticular formation have to do with trading?.... Everything.

Let's represent the spinning lady as a chart. Left spin = downtrend. Right spin = uptrend. It might be hard for you to digest when I tell you that she is spinning left and right at the same time, in the same space. Well, she cannot do this in a 3dimensional world. Thus, we go back into the 6dimensional charting world I have previously discussed. In a 6D charting world she can and she is spinning left and right at the same time, at the same space.

Now chew on this; The charts are moving up and down, at the same time and at the same space. This is how I can link the causal effect why 95% fails in this business. Again sorry for the limited explanation, but it would take heaps of pages and I don't want anyone publishing my research/discoveries.

That's why it seem like an endless pursuit and a never ending failure with trading. And those who succeeds can never truly explain what they do. I mean, who would have thought of a 6D charting world !? This reminds me of Michael Faraday when he told the science community that "...some unseen force field is surrounding the electrified wire." They thought that he was nuts!... whose ever heard of unseen force fields!?... whose ever heard of a 6d charting world!?

In conclusion; the reticular formation part of the brain can be exercised (there are published information on this topic). I would advice that if you want to become successful, then exercising your reticular formation is a must. From my research and discovery over the years, there is a quick fix in fixating the reticular formation without exercising it (designed only for trading and looking at the charts) and applying it to a trading system. Here is a link to the post: by applying a boundary; The Hemispheres. (www.forexfactory.com/showpost.php?p=3713829&postcount=51)

Reticular Formation & The Charting Dimension (round 2)

One reason of my failure was because I was indecisive. I didn't know whether to buy or sell. I would quickly change my mind in a heart beat. I guess indecisiveness can arise from lack of knowledge and/or not being psychologically grounded.

Then again, even if one lacks the knowledge, when they know what they want, they don't become indecisive. So being indecisive is more of a psychological agenda than lacking knowledge.

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Explanation:
The reticular formation is what filter success or failure in the human mind. "If you think you can, you can. If you think you can't, you can't. Either way you are right." If you can see her spinning left, she is spinning left. If you can see her spinning right, she is spinning right.

You can get 2 Professional traders; one to trade only short and the other to trade longs. Have these 2 Professionals trade this way for a whole year and both will be profitable at the end of the year.

The problem with an Amateur trader is that they don't know what they are looking at. One minute they are seeing her spin left, then all of a sudden see her spinning right. They may see her spinning right, but they doubt what they are seeing. They are not grounded psychologically.

If you grab an Amateur and ask whether if the chart is in an uptrend or a downtrend, they will respond hesitantly. And that's why placing a boundary is very crucial. It is there to ground you psychologically. As simple as it is; "Stick to your trading plan" it is there to help stay grounded.

Success involves decision making skills. And exercising your power to execute decisions are the pathway to success. It is as true in life as with trading. As with life, indecisiveness doesn't get you anywhere. I'm sure everyone had this experience; late one night you were indecisive of what food you wanted to eat. It took you at least 2 hours to decide what to eat. You can't get back the 2 hours you just lost.

In a 6 dimensional trading world, everyone are prone to indecisiveness because what they're looking at are like illusions. The people who succeed in this game are the ones that are grounded psychologically. Being indecisive in this business is going to cost you tremendous amount of pain (NEVER FORGET THAT).

Treat it as a Business

I'm still working on a 9to5 job mentality.
I need to shift my mind into a business mentality.



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Explanation:
Point 1: You have to treat trading as a business (part time or full time)
Point 2: Unless you owned your own commercial business, you don't have a single clue what it means to "treat it as a business".

You may have read: "Treat it like a business. A losing trade is part of the cost of running this business. The spread are the cost for the potential gain." This mentality doesn't even come close to the true essence of a business mentality.

First, let's differentiate Job vs Business.
Job:

1. 8 hour shift and then you go home
2. Limited responsibility
3. Limited income

Business:

1. Long hours
2. Full responsibility
3. Unlimited income

A job mentality says: I'll go to work and then go home. I'll do what the boss tells me to do. If any problem occur, I'll let the boss know. If I can't fix it, I've done my best, it's not my problem anymore. Why should I try to improve the work place, I don't get paid enough and I don't get paid to increase the company's profit. Why should I care for the company, the company doesn't care for me. Hmmm... I think I'll pull a sickie tomorrow.

A business mentality says: I have to make sure everything is in perfect working order. How can I improve to make things better. I have to get this done, even if I have to work 20 hours straight. Low standards are not acceptable. High standards must be sustained. I have no time to get sick.


If you approach trading with a job mentality, you will fail. People who have never owned a commercial business will never understand how much hard work goes into making a successful business.

A job mentality performs at low accountability. A business mentality performs at high accountability. You have to treat trading as a business.

Trading requires your full responsibility and accountability. It requires your full responsibility of knowing your sh*t. It requires your full responsibility that you are not lacking in certain skills. It requires your full responsibility in performing at high standards. Any half-ass type of work ethics are not acceptable.

Just Dig a little Deeper

"After giving it your all and you feel you have nothing left;
Mentally, Physically and Spiritually.
Just dig a little deeper...
You will realize that there are more within you
than you can possibly imagine."
~ CrucialPoint


You are born with survival instincts.
And it's this natural instinct which allows you
to survive, adapt, develop and progress in your environment.
All you have to do is trigger it...
All you have to do is just dig a little deeper within.

My Last Post

Unfortunately, this will be my last post.

There are more I would like to share about psychology and especially the technical charts. I was just getting started. I had another 1000 things/posts to say.

I wanted to introduce a newer concept on understanding the price/charts:

1. Trading without the use of any historical data.
2. How to read any chart and know where the opportunity lies.
3. The real working nature of charts.
4. To explain how the highly successful traders were unable to explain.
5. A guaranteed edge (for all eternity) in all market conditions without all the fluffs.

You see, what I have discovered was an elegant equation. The truth about price movement (not based on historical data).

Here's my analogy:

1. If I asked you what is 3x3 ? You would have the answer in seconds. If I asked you what is 3452x2543... There is a high percentage you won't be able to calculate it in your head. But if I tell you to grab a pen and paper and figure it out, then everyone will have the answer. You see, once you know the formula... it doesn't matter how simple or complicated the problem, the elegant equation will solve it.

1. We have all this different Religions (trading system/methods). Literally, they are very different in their beliefs and teachings. But when you get down to the source and eliminate all the fluffs. It is all the same: Love one another and God. When you strip away all the fluffs, you get to the truth and the core information. That is what I have discovered about price movement. Someone trading Multiplication, another trading Division, another trading Addition and another trading Subtraction. What I discovered is the unification and the perfect relationship of the different mathematics.
   

I thought I was the first to discover it. Well, I've been informed and proven that I was not. There are a group who have discovered it long before I stumbled upon it.

Unfortunately, I've been told to shut my mouth and...

... well, let's leave it to that.

This is my last post. I won't be participating anymore. I will open the thread so that anyone can post on this thread. Degrade it, debate it, congratulate it, take what you can from it,... it doesn't concern me at all.


Best of luck on your trading journey.
CrucialPoint signing out

Good bye Crucial Point, your posts will be missed

Just when I found the thread I really enjoyed reading it's over. Anyway thanks for your contribution which really got me thinking at some points and all the best

thank you very very much for everything

and congratulation with the best written and the most intelligent thread on forexfactory.

I know what you have discovered or the "equation"

you will be missed

Thanks a lot for your posts CrucialPoint.

Good stuff Crucial, your posts have really inspired me.

I really believe this thread is one of the beeeeeeeeeeeeeeeeeeeest threads EVER on FF and I can't understand why you leaving?!?!?!?
You helped so much and who told you to shut your mouth and WHY would you even consider to listen???
Does anybody know where you from or who you are???
I don't think so!!
Don't listen to stupid people. Just stay with your plan as you did all the years before. Don't care what others say or believe. I wouldn't!!

I seriously can't understand anybody leaving because of some punks!??!

Hi CrucialPoint,

I am sad to hear that you are leaving.

Your thread really changed my mind and way of thinking and looking at trading. WELL written.
I do believe its one of the better (if not the BEST) thread here at FF, no doubt in my mind.

I´ve been reading your post for a while, and was always looking for the next post.

Would love to see you return in the future.

Wish you all the best

-PipFellas-

<<I thought I was the first to discover it. Well, I've been informed and proven that I was not. There are a group who have discovered it long before I stumbled upon it.

Unfortunately, I've been told to shut my mouth and...

... well, let's leave it to that. >>>

To that group, you're sick in the mind !!!

People there is only win or lose, and nothing more,deal with it.