Back to the Future – My Freewheeling Journal

Double premise: Objectivity/Subjectivity. Bias vs Adaptation.

"Want what the Market wants."
- Bill Williams

"A good trader must "get rid of ego."
The quality of a good trader is located not in personal characteristics but in the talent to transcend individuality."
- Caitlin Zaloom

"With the wand of science,
We explain, decide, and discuss.
But only in the silence
Will the market speak to us."
- Bill Williams


Want you know where is the trouble? The hurdle? (of course to me, my personal view.)
To understand the above quotes, one must be “free”.
Free and with a lot of experience in the markets.
Or at least “in disposition” to listen... willing to listen and to accept... RECEPTIVE!
I could write “Want what market wants!” until cows come back home...
If one's mind refuses, denies and opposes itself... you can't see anything of wisdom.
So it's a cycle. A wheel... and a wheel inside the wheel... and wheel's inside wheels (plural),
The Retailer's doom.
It needs a cut! Radical cut.
As quit smoking or drinking... LOL

Stop fighting the market.

I'm doing a lot of "Dirty Work" for you, but you have to study.
If you are not yet profitable... close your charts and open some (good) books.


Being able to identify the trend is the key if you are a discretionary trader
looking to increase your chances for success by trading on “the right side of the market.”
We could, under certain conditions, hazard to say that:
Trend Systems work because "Long-Term Trends capture large price moves caused by fundamental factors."

But what really matters is that:
"Prices are not normally distributed but have a fat tail."
The fat tail means that (look to an H1 chart to get what I mean)
there is an unusually large number of directional price moves that are longer than would be expected if prices were randomly distributed.
The fat tail will generate exceptional trend profits, which are essential to a trend system’s long-term success."
(...prices move in one direction much longer than can be explained by a random distribution.)

"Money moves the markets."
Most trends are supported by the flow of investor funds. (That is a Bull or Bear Campaign!)
While this causes short-term noise, (the Oscillations)
it also delivers the long-term trends.
As trends become clearer to the general public, additional money flows in to continue the trend.

A trend is a relative concept.
It is relative to the trader’s time horizon, and
it is relative to the amount of noise and price swings that are acceptable within the trending period.
Ultimately, a trend exists if you can profit from the price moves using a trending strategy.


Things to give up... if you want to trade better.
The need to always be right.
The need for control everything..
Criticism and blaming others.
Your self-defeating self-talk.
Limiting beliefs.
Complaining.
The need to impress others.
The resistance to change.
Your fears.
Your excuses.
The past.
Attachment and clinging.

Linda, Linda, Linda, Linda, Linda, Linda, Linda, Linda, Linda, Linda, Linda... I'm so boring! I know, I know.

MTA - Market Technicians Association.

Seven years of my life in 14 pages?
Have I written down all my experiences? Bulb-lumps? A-ah moments? Enlightenments?
All my understandings?

How could I?
And of course I don't want to. (Remain quiet and serene CindyXXXX: maybe I know what I'm doing. Maybe...)

I'm pointing you toward a road of study.

Market is fractal.
The Laws are the same: one candle, two candles... one wave, two waves... one cycle.
Each Effect has its Cause.
Nothing is Random.
Markets are the sum of the zillions of Strategies all the Traders of the world are using in each tick.
To face each tick.
So at each tick (at each ema, just to give you one example) you have to expect a reaction or rejection
simply because someone is coming in or out from the market.
Question is: YOUR POINT OF REFERENCE.
Sun Tzu would say: YOUR MORAL LAW.

Understand Dow and its powerful, imaginific lesson.
Understand the differences in technique between Livermore and Gann.
Understand what Wyckoff tried to do and those bases.
And you will get a vision strong, robust and timeproof.

M. Covel– Trend Following
"The experienced trader took the newbie out to the beach.
They stood there watching the waves break against the shoreline.
The neophyte asked, "What's your point?"
The old trader said, "Go down to the shoreline where the waves break.
Now begin to time them.
Run out with the waves as they recede.
Run in as the waves come in.
Can you see how you could get into rhythm with the waves?
You follow the waves out and you follow them in.
You just follow their lead."

I have tons of Moleskine full of quotes... copied and handwritten (pen and pencil!) so to sip each word and its deep meaning.

This is Ed Seykota
“If you want to know everything about the market, go to the beach.
Push and pull your hands with the waves.
Some are bigger waves, some are smaller.
But if you try to push the wave out when it's coming in, it'll never happen.
The market is always right.”

(I'll tell you: “You must never be caught against a term trend. NEVER.” Yes?)

Charles Faulkner tells a story about Seykota's finely honed intuition when it comes to trading:
“I am reminded of an experience that Ed Seykota shared with a group.
He said that when he looks at a market, that everyone else thinks has exhausted its up trend,
that is often when he likes to get in.
When I asked him how he made this determination, he said...
he just puts the chart on the other side of the room and if it looked like it was going up, then he would buy it...
Of course this trade was seen through the eyes of someone with deep insight into the market behaviour. “

Do you belong to the “this is what the market should do” group of traders?
I'll state it clear: “No one can predict a market’s top or bottom.”
Tops and bottoms are defined by the market itself.
They are the result of all the forces operating at the equilibrium points.
Buy pressure and sell pressure are equal at the top or bottom points.
Then the forces shift and the trend takes a new direction.

A human being’s opinions or assumptions mean nothing to the market.

How to kill opinions, opinionists and commentators?
(Again: only with fraternal intentions and my passionate Italian language.)

What is the "Line of Least Resistance?" to which Jesse (yes, is a friend of mine) refers?

"There is nothing wrong and nothing right."
"There is no wrong and no right."
Personally, with all the due respect, and -please, I beg you - get my point in the proper way and meaning...
I hate these two sentences with all my forces and my soul.
They are "Killers of Traders' Mindset."

The truth exists.

Good Friday 13th morning,

Stagiaire Exnav est en bord for another live lesson.

Yesterday after walking the dog, switched to Loonie and Cable for a while. USD/CAD touched her H4 downtrend upper line and let me make some pips downward where I was dancing along with. The same time I engaged Long on GBP/USD sharp PB (bears were pushing temporary but significant decline?) at 1.3145 (she dropped farther down to 1.3121) and there I committed a fault - probably being tired I focused on PA and accidentally put overleveraged (1:2 for my dance) positions long. So I was feeling uncomfortable and squared at BE+ just one hour before that one can see now the Dongsky's stance - Bulls smashed the bears and did effectively a new high. Mistake = overleveraged position size.

As far as DAX is, yesterday I finished with two shorts from 13001 and 12985, squaring them both at the latter BE price.

No clue how DAX is going to behave on Friday 13th. Ready for a new descovery dance.

Wishing everyone a successful trading day,

Best regards, Exnav

The Truth Is Out There.
A better comprehension of Market's Dynamics is possible.
I'm proposing the Power of Knowledge and Study.

My humble and personal view and contribution...
I am not, and I have no need to seem, an arrogant primadonna, I already told ya. OK?

X-Files Season 2 Episode 1 – dialogue...

Richard Matheson: “Do you like Bach, Mulder?”
Special Agent Fox Mulder: “I live for Bach.”

I know Mulder is speaking in secretive language (like me, in these pages... LOL)
but as a person who also lives for Bach I can’t tell you how bad I want him to be serious.

When he was young Gould recorded the faster version ever played on the earth.
At late age he recorded his slowest. Sipping each note. Without rushing to show his ability, but just tasting the music waves.

Come on, Jupiter. First, this is your Book and your Home. Although, I supposed this thread is for those who want to learn, discuss through failures and successes. For me, the fight is with "difficult to train old dogs" and somehow related fatigue that may lead to unawareness. Focusing, watching size and ability to adapt swiftly. Actually, focusing not only on terrain and PA but on sizes as well (my yesterday flaw having simultaneously apparently big positions on cable and loonie causing uncomfortable mindset which did not let me hold/ ride in strategically trending direction).

My today's task is to try adding positions on flowing with DAX if Market allows and I'm on good terms with her.

Of course all that is my Universe.
But I'm not teaching and not "revealing".
I suggest an humble path of "individual intellectual efforts".

Only in this way you can discover the huge lesson that is inside this cartoon.
That is the conclusion of all my demonstration on retailers behaviours through the SSI on The Traders Academy. LOL
But you have to study the true Livermore and the true fti to get the whole picture.

Poor Ducks. I told you all with that wonderful cartoon above.
And was not a prediction.
Faith. Blind Faith in well tested and robust Rules.

Squared... no positions in the market!

Key Concepts to Correct Trading Behaviour.
THE BANDWAGON THEORY

“Imagine a bandwagon that is rolling forward at a quickened pace. Music that is very pleasing to the ear is being played from speakers on each side of this bandwagon, and a few people currently on the back of the wagon are partying, having the time of their lives. The music, loud and clear, starts to attract many other onlookers that happen to be idly standing on the sidelines. These onlookers, unable to resist the sweet sounds being played, run to join the party that seems to be going on.
Progressively, more and more onlookers jump on the back of this bandwagon, and those few who were initially enjoying the first phase of the party begin to leave. As the crowd of new party animals on this bandwagon grows larger, the bandwagon finds it harder and harder to move forward at the same pace. It slows, enabling more and more late onlookers, witnessing the great fun, the chance to jump on. The crowd grows even larger. Larger and larger this crowd grows, until the bandwagon, heavily laden with the bodies of drunken party animals, can no longer move forward. It finally comes to a complete stop. Now that the bandwagon is at a complete standstill, more people jump on. And why not? At this point, joining the fun is easy. Absolutely no work is required, for individuals wanting to join the crowd no longer have to run to jump on board.
The nature of the bandwagon is to move forward. Its motionless state is unnatural, and therefore cannot last. It tries to move forward again, but can’t. The crowd, piled on back, is much too large. It must free itself of the heavy burden. And it does. It quickly shifts into reverse, and jolts backward, knocking a few of the party animals off the back. The music stops. Puzzled faces from the crowd begin to emerge. Before anyone figures out what’s going on, another backward jerk takes place, only this one is more violent. Another large group of people gets thrown off the back. Now, reality sets in. The fun has turned into a nightmare of epic proportions, and panic begins to run rampant. Some decide to jump to their deaths. Another thrust backwards sends an even larger group of drunken, off balance people, hurling to the muddy ground. It doesn’t stop. The jolts backward continue, each successive one more violent than the last. At this point, only a few die-hard wagon dwellers are holding on, their very lives hanging in the balance by a very thin thread. Failing to be completely free, the bandwagon angrily puts the pedal to the metal, and this final thrust backward is so vicious that its front wheels lift high off the ground, momentarily suspending the wagon in a perpendicular position. The last of the hangers-on crash to the ground, broken and maimed to no end.
At this point, a new group of onlookers emerge from the nearby woods. They are clean and serene. Each movement they make is deliberate and powerfully energetic, for they did not take part in the tragedy that just transpired. Or did they? A few of the dejected souls lying on the ground take a closer look, a look that reveals something very interesting. This seemingly new group is not new at all. It is the same group that was seen quietly exiting the party before it came to its violent end. An even closer examination by a few more beaten-down onlookers reveals something even more stunning. This group not only exited the party early, they were the originators of it! “My God,” someone exclaims.
Paralyzed, and unable to move freely, all these dejected souls can do is watch, as the masters of the game go to work, again. No sooner does the bandwagon’s wheels hit the ground than this professional platoon bolts for the wagon. In a flash they are on board. Easy. The bandwagon, now free of the larger crowd, can move forward freely and gracefully, comfortably carrying the more astute group with it. Its pace quickens, and before long a smooth elegant stride is in place. After a few miles of uninterrupted movement, someone from this masterful group flips on a switch, and suddenly the loud sounds of entertaining music start again. Someone yells, “OK everyone. Here they come. Let’s do it again.” Within moments, those who were the former victims of the backward crash become interested again. The music almost calling them from the grave. And once more, the never-ending cycle repeats.”

Why should "the Reason" matter?

We are in this business to make money!
And not to be right and guess the reason why a market is going down or up.
Regardless, a lot of people cannot subtract themselves from this mental trap
and they will often do what logic suggests rather than doing what price suggests.
But if the trader carefully thinks about it
if price is going up there is only one course of action left,
and that is to be long the market, despite everything. What else matters?

Whenever a trader is looking for the “why” a market is behaving in a certain way
versus “what” the market is doing...
then trouble can be foreseen ahead.

The “why” is always reflected in the price of a market thus it is better to focus on the “what”.
What the market is currently doing, that is far more important!

Determine your rules about "The Change": start, continuation and end of a Trend. And follow them.
Let the Price talks to you.

(Always from my collections of Moleskine... I can go on like that for centuries.)

DAX.
After the New High, Price went down to retest the H1 Uptrend.
Is there enough Support to go up again or not?

After the videos I suggested to you... you must have some new tools to be able to analyse the action.
Don't ask me where and why I squared.
Find "your" explanation in between the candles.

Now, for you, what is happening at the Yesterday close level?
Again: find "your own" explanation in between the candles.

Attached chart DAX m5

The economic data is not good. I wonder how the stock exchanges will react to this.

My suggestion is: just don't do it.
Re-read Wyckoff.
Re-read my lines.

Ask her. Ask the Market. Follow. Don't try to predict reaction to the news. Never.
You waste your time, energy and serenity.
Be "Technical" (quote unquote) : Highs and Lows. And decide.

And now watch out for the possible classic WS deception.
I'm ready.
And I'm already testing the waters.
We'll see.

Use these minutes before the Opening Bell to review your levels... zoom out and observe the battlefield.
Prepare yourself.
If... Then...
If not... This other...

To speak in technical terms: I'm waiting for the support of around 12.980 becomes resistance!

I believe it's breaking atm!