Back to the Future – My Freewheeling Journal

Welcome back to my universe.
Part II. The Return.

Please. Read post #1 for a second time...
Fell free to participate.
Feel free to criticize and hypercriticize.
But, please, respect me and my job.

(from Wikipedia)
The Son of Man is a 1964 painting by the Belgian surrealist painter René Magritte. It is perhaps his most well-known artwork.
About the painting, Magritte himself once said:

“At least it hides the face partly well, so you have the apparent face, the apple, hiding the visible but hidden, the face of the person.
It's something that happens constantly.
Everything we see hides another thing, we always want to see what is hidden by what we see.
There is an interest in that which is hidden and which the visible does not show us.
This interest can take the form of a quite intense feeling,
a sort of conflict, one might say, between the visible that is hidden and the visible that is present...”

Secrets? Did I reveal any secret?
Am I doing something wrong? Something dangerous for me or for you?
Are there any secrets about trading? Do secrets exist? Shortcuts, obscure black box formulas or miraculous potion?

Whenever I'm confused about something, I ask Gann to reveal the answers to my questions, and he does.

“To make a success in trading you must get the knowledge first; you must learn BEFORE you lose.
Many traders go into the market without any knowledge
and lose a large part of their capital before they learn that it is necessary to go through a period of preparation BEFORE they start trading.”

“Learn to work hard and study.
The more you study the greater your success will be.
KNOWLEDGE IS THE GREATEST THING YOU CAN HAVE.
It is better than money in the bank.
You can never lose KNOWLEDGE and no one can STEAL it from YOU;
therefore, get all the KNOWLEDGE YOU possibly can.

CONCLUSION
I have written this course of instructions, SPECULATION A PROFITABLE PROFESSION to help others make a success trading in Commodities.
There is no greater pleasure in life than rendering good service to others.
The Bible tells us that a man should not hide his candle under a bushel;
I believe in passing on my secret discoveries to help others and have always found greater happiness and made greater success by helping others. “


P.S. Got the philosophical irony of that “my secret discoveries” in the last line?
Nowadays, everything has already been written down somewhere!
Trader's job is to find all the scattered pieces, pick them up and recompose the puzzle!
Buy Gann's books. And Livermore's and Wyckoff's ones, as well.
Nothing will be a secret anymore to the diligent and humble market's student...

And no one could stop you... if not yourself.

Come on. Let's face the truth.
This was a Text Book Move. DAX yesterday's m5 chart. "How to clean the blackboard!"

Good heaven! Give me something like that everyday!

Same job. Day in and day out.
Attack and scale out.
+38 points. DAX m5. @London Open. Scouts still in @12.440.

you stay here? no more Carpe Diem?

Good question. Thanks.
Today I'm reopening these pages.
In the next days I will surely find my "new" equilibrium and a "new" Point of Balance.

They say that at a certain point of his career, Livermore decided to go to frequent a Psychology Course.
With his money and the Market Structure of his time, Livermore could move Prices at his will.
Yes. He was God. And, possibly, he felt and saw himself like God.
(I don't know what they think of themselves at Goldman Sachs... but I guess, actually, that it is something really similar.)

Jesse was right. And he was a great visionary and precursor of modernity: he saw the Market as a Complex System. (post #3 here)

The study of Complex Systems investigates how relationships between a system's parts give rise to its collective behaviours
and how the system interacts and forms relationships with its environment.
The study of Complex Systems regards collective behaviours as the fundamental object of study...
The study of Complex Systems draws contributions from many different fields, such as the study of:
self-organization from physics,
spontaneous order from the social sciences,
chaos from mathematics,
adaptation from biology,
and many others.

That's absolutely true. Systems exhibit complexity that makes them difficult to model...
This is why Market and Price “LOGIC” are so difficult to understand.
This means their behaviours cannot be understood apart from the very properties that make them difficult to model,
and they are governed entirely, or almost entirely, by the behaviours those properties produce.
(Causes and Effects are internal to the system itself!
Internal Laws are modelled on the model itself!)

Any modelling approach that ignores such difficulties or characterizes them as noise, then, will necessarily produce models that are neither accurate nor useful.

Anyway, possible models exist.

We have chaotic behaviour (behaviour that exhibits extreme sensitivity to initial conditions),
We have emergent properties (properties that are not apparent from their components in isolation but which result from the relationships and dependencies they form when placed together in a system),
We have computationally intractable to model (if they depend on a number of parameters that grows too rapidly with respect to the size of the system).

Market, by its/her nature, is one of the most complex among the complexest!

My invitation, my suggestion to the diligent student is to start his own investigation from this fields:
Market Structure/Price delivery
Volatility/Liquidity
Retailers' Psychology.

DYOR. Try to understand what is hidden by what we see.

Chaos.
Applied to Complex Systems, it refers to the sensitive dependence on initial conditions,
It's the well-known "butterfly effect."
Small changes to initial conditions can lead to dramatically different outcomes.

Chaotic behaviour can therefore be extremely hard to model numerically.
Small errors can cause the model to generate completely inaccurate output.
Moreover, if a complex system returns to a state similar to one it held previously,
it may behave completely differently in response to exactly the same stimuli... (Sounds familiar to anyone?)

So chaos also poses challenges for extrapolating from past experience. (Variations are the norm...!)

Do you want a “poetic” example? Enjoy this one (always from Bill Williams' work!):

"For want of a nail, the shoe was lost;
For want of a shoe, the horse was lost;
For want of a horse, the rider was lost;
For want of a rider, the battle was lost;
For want of a battle, the kingdom was lost!”

Following the same principle, a trader must be closely attuned to any changes in the initial conditions of the market,
or to the initial condition of a single move.

W.D. Gann: "A wise man changes his mind. A fool never.
In Wall Street, the man who does not change his mind will soon have no change to mind!"

Are the previous posts stupid, empty non-sense?
I am very worried about the "avalanche" of losers, aspiring suicides, protesters and true Abolitionists here on FF.

I'm talking of complexity, dedication, years and years of study... I'm talking of PREPARATION... Sun Tzu and the Art of War!
This is not a joke. Markets are actually real battlefields, with tons of killing going on "underground"!
Jesse (yes he is a friend of mine...):
> It took me five years to learn to play the game intelligently enough to make big money when I was right.
There was much more to the game of stock speculation than to play for fluctuations of a few points.

Gann? 5 years ...Wyckoff? 10 years... Linda Raschke? 5/7 years...!!! And don't tell me you didn't know it.

This is Gann again. (Franco, I told you... you are so BORING! No one will read your boring messages!)

"Professional men, such as lawyers, doctors, accountants and engineers spend years in training and a large amount of money
to learn how to succeed in their chosen profession.
You must spend time and money to learn the profession and become a successful speculator or investor."

"The question naturally arises, “Why do not more people make fortunes trading in Commodities?”
The answer is weakness of the human element.
They trade on hope, fear, and think prices are too low to sell or too high to buy and if they do act they do different from what the rules indicate,
but remember that there are always some big traders who do buy and sell no matter how low the price is or how high it is,
and these are the people who make big money.
The late Jesse Livermore traded this way and accumulated as much as $15,000,000, at one time.
Men like Dr. Crawford have the nerve to buy and sell at extreme low levels or extreme high levels where the trend is down and to make millions,
while the man who fears or trades on hope does not have the nerve and he not only misses big profits but he makes losses.
If you expect to succeed you must learn to follow rules
and after you have proved to yourself the rules will work, have the nerve to follow them and profits are assured"

Yes another pile of empty, stupid and trite words.

Are you able to tell me something about Livermore as breakout trader?
And about Wyckoff and the Extreme Hi-Lo?
And about the Turtles and their rules on Break?
And about Linda and the Turtle's Soup? (etcetera, just to talk a little about breaks!)
No?
Then, my advice is: do not trade... read Sun Tzu again. (post #10 here)
See you on the battlefield.

That was tough.
Bought the PB. Conviction, Determination & Discipline.
+226 points banked @392
Scouts always in. DAX m5.

Banking some... reducing the base.

I took them... But it is still going up!

I would be scared for my life and I mean literally if I had gotten in after a huge candle like that.
you've done your 100pips, the impossible for me with DAX happy weekends

Read somewhere here on Forex Factory...
“When you see anyone posting a winning trade you can be sure it's a one off
that was preceded by a series of losing trades and will be followed by a series of losing trades.”

Geee.
Why am I doing that?
Why did I open this thread again?


Please, read and enjoy these hanover's posts:


And this from nealpek (how many times I used the same words and expressions?)

My answer! (Essentially what I tried to demonstrate with my contribution to this forum.)

(For a retailer...) The “apprenticeship” to become a trader is long and tiring and surely dangerous.
A training course, a search for knowledge fraught with obstacles, disappointments and pain - caused by its characteristic, continuous “stop and go”.
It is not enough to read tens or hundreds of books containing presumed winning recipes, but it is inevitable/unavoidable to work for years,
often paying from their own pockets, before glimpsing the "hidden order" that exists in the apparently chaotic price movement.
I'll state it clear: doing this it is almost impossible without the highest degree of passion, determination and intelligence.

1. You must know what to search.
2. Be able to search. (You must know how to study in the proper way!)
3. Be able to discern (and so avoid) any sort of scam and garbage... cause otherwise the effect is “necessary”: garbage in, garbage out.
   

Along this winding path is indispensable, as in all human and intellectual activities,
to draw on the experience of those who have already faced the challenge, lived, and possibly won: the Forefathers of Modern Trading.
And their lessons are univocal and unambiguous.

1) Trends exist... Inefficiencies exist: the natural tendency to equilibrium is not perfect.
Markets, in any case, create opportunities from which a smart trader can take advantage from.
Look at an any H1, whatever! Do you see those long legs? Why do prices oscillate, contract and expand?
What is a Cycle? What's the relation between liquidity and volatility?
2) IG Client Sentiment and FXCM Speculative Sentiment Index (SSI) show to anyone well-disposed that the main problem is that:
“retailers are always and constantly on the wrong side of the move”...
you could use their positions as contrarian indicator and so be right 98% of the times!
I tried to demonstrate sense and meaning of this phenomenon in several of my posts.
No one of the readers (1 or 2 maybe) was interested in the matter and in the conversation!
3) Each and every effect has its own proper cause. Nothing is random in the market.
Some of the “Protesters” stated a perfect list of market significant qualities (in negative sense, of course...).
I say: change your perspective! Why don't you try to take advantage from them? You like to be the prey and not the predator?
4) Why do traders lose their money? Everybody knows “The Why(s)”:
- Overtrading,
- No use of Stop Loss,
- Lack of Knowledge.
And Lack of Knowledge is surely the most important reason of all, obviously.

All that in my (not so) humble opinion. An with my (well-known) passionate, Italian accent. (Always thanks to phil13!)

And again in my (not so) humble opinion... all the rest are fire-side chats!
Not all can be winners in the market. Full stop.
Tradable Markets need losers. It's the Jungle Law.
I'm a trader and not an analyst.
And if you ask me... I want to kill all the analysts! I trade price and price only.
Now be careful: I am coming to take your stop loss away, in good company. I am a flea on a big elephant.

Each one of us has his own possibility to choice: train yourself to be like the best or to be like the rest!


PS. Sorry for my elementary English.
But as they said in WS during the Roaring Years: “Better talk good sense that good English”.