My way of seeing the market

Hey Veni, I hope you are reading this. Just to answer your message :

I did the exercise. I kind of know on an intellectual level that it's what's holding me back. Some days I am in that state. I just follow price flow and I exit when I'm wrong (basically "I bet this level will hold" and exit if it doesn't v.s. "this shit's going up" and not knowing when "this shit's no more going up"), then one of those trades runs and everything just seems so easy. Other days it is more of a hassle and that's when I do self-sabotage crap that dig a hole in my account. Basically not being able to handle the fact some days are just crap and/or always wanting more.

You previously told me you had (similar?) self-sabotaging issues before. I believe it to be the case for me right now. Mainly self-sabotaging stuff that adds up quickly. Always wondered how you proceeded to eliminate those self-sabotaging issues? (Could never answer back to the message you sent me last winter, although I thought it was very kind of you to send it and I still to this day resonate with what you said and my life is in a way very similar to yours, except the succeeding at building a trading business for myself).

Focussing on currencies is nice, it is "slower" in a advantageous way (not saying it is easy, not even easier, just different and maybe a better fit for me). Sometimes I believe the time I spent on nq is kind of wasted. It does not move like the pairs until later in the day. So I spent hours upon hours watching high volatility-low probability-shit odds trying to make sense of whatever the hell was going on. Punching crap around my office and chasing the market; Seeing levels get over-powered one after the other with almost no reliability to know when to exit or hold. Joke's on me though. I know it is only me who can make the career work. Anyway... rambling again lol.

In short, I find there is more peace in my trading with the currencies now.

just don't overthink it, you're already a good trader.

This one will likely keep running... small profits add up though, so no need to fret over it.

Are you just using S&D zones, and trading pivot confirmations off S&D zones?

And using nothing else?

And to be honest, trade location is the absolute #1 thing important thing in any trade. Git gud at choosing the spot where the market is going to pivot, and all the other b.s. I guess just becomes....irrelevant....almost.

Should maybe have held a bit longer... the level in the mid got me cautious.

Almost exact same thing... lol

I wish a Merry Christmas to everyone.

I hope everyone had a nice holiday season. I wish a happy New Year to everyone. For all those struggling, by our actions let's make this year the inflection year. The year where the trading business really takes off.

"I know trading is something that can build 1001 illusions in one trading day. But the core will never change!"

-Michael

"after the news is out and the suits and talking heads have postured .......
we now get down to the business of simple support and resistance"

Straightforward...

Black background, same thing.

In everyday life, a situation that has a better-than-expected outcome sets the table for change in the connectivity of neuronal circuits. In other words, our brain will change upon finding more resources than was expected and this is a survivability adaptation in animals to remember:

-what it was doing when the event occurred
-where it was
-what was the circumstances
-etc.

(In order to take advantage of a similar pattern next time and it is mostly on an unconscious level.)

This mechanism is useful in most endeavor in life but can be extremely dangerous in trading (and many other activities/business), if left to its own device. For example, let’s say in the very beginning of someone’s trading journey they placed a trade like a total newb without even caring for the result, it was simply “a learning experience” they thought, and they were not really knowing what they were doing anyway. They were probably not expecting much, but price suddenly went their way, and they made a big winner out of a completely “random” situation. Fast-forward to today, they most likely don’t remember this situation on a conscious level, but they certainly remember it on a much deeper level, and it will hinder their ability to perceive a chart for what it really is, because the person will emotionally not want to remove himself from the possibility of recreating this better-than-expected result. It is simply a survivability mechanism that is hard-wired; emotions are kind of firing upon some algorithmically built situational patterns picked up by our brains throughout our lives.

In short, a situation like this (or the opposite; instead of winning big the person loses big time; yes, negative experiences can also trigger the release of dopamine), will create a massive neuronal restructuration upon the release of dopamine, and to be fair it is an extremely important feature of our brains. Dopamine is like a marker for change to occur, areas of the brain get flagged for restructuration. The problem when it comes to trading and probabilistic activity in general, is that this very mechanism sets us up for failure by hard wiring exactly the opposite of what needs to be done to better our circumstances right now. In trading, to be blindly feeding this algorithm is setting us up for failure because the trading environment is not the wild our species evolved in. The probabilities, and opportunity costs are much differently distributed, and consequences are not the same either. So, we must structure learning in such a way that will help in stimulating good practices but not hinder it.

This is where this mechanism can be helpful and even leading us towards the right direction if the approach is structured in a way that the main source of measuring success is not the price on the screen. A lot of becoming a professional trader has to do with unlearning rather than learning anything it seems. (That’s why beware of anyone asking a monthly sub to teach you whatever… there’s in fact very, very little to actually learn…)

So… the reason I’m writing a wall of text about this is because it applies to my situation. I don’t know whether I made a big winner in the past or not, but the idea of it keeps occupying my mental space at critical times when trading. I pick up good trades but keep them longer than needed and will sometimes refuse to take some off the table just because I want to keep the better-than-expected outcome on the table at all times. It’s kind of sacrificing the whole to preserve a (small) part. This translates in me rarely ever actually taking profits even if I am very often in positive territory. A lot of my trades end up losers this way. And when in actual “outlying” territory and things could become interesting, a new type of idea occupies my mental space. The thought that it will reverse (You guessed it ). It then translates in trailing it too tight or straight up take profit after a couple pips passed initial target… The important thing to remember is the big dopamine release upon unexpected outcomes that restructure neuronal circuitry, and that’s the reason many people keep repeating old sub-optimal patterns in their lives without even realizing where it all comes from.

The good news is that my brain is working as it is supposed to. What appears to not work though is how I structure my learning approach. I must structure my approach in a way that will not create big, unexpected situations when in front of the charts and find a way to trigger dopamine release from following my “system” and making few to no mistakes. I need to focus on securing some pips every step of the way.

Extrapolated from this video (and many others, I really enjoy listening to this guy):

Great post.

But not sure I agree with this....

There is very little to learn, or so it may seem to someone who has already spent thousands of hours staring at screens and has developed an in-built instinct for how the markets are likely to move, that no two-bit algorithmic or indicator heavy signal generating trading system can compensate for, and whose 'setups' are simply rules of engagement which may help, or may even hinder the traders performance.

Exactly!

Hey, thanks for thinking it was a great post. Here's my thought about your second statement:

When you look at a chart, it always does the same few things. It goes up, down and sideways. There’s nothing there that can’t be learnt in a month or two of watching the charts. Until you can see them for what they are without being afraid, angry, excited, hopeful, etc. you will always under perform. Those feelings have absolutely nothing to do with the trading environment, yet they more often than not dictate the next actions you will take. It is a probabilistic environment, and you have zero control over things that will happen there, unlike most other things in life. That’s why the learning-curve is more like an unlearning-curve, because you must reprogram your emotional algo to fit a totally new environment, and that is what really takes the 10 000 hours mark, and it can’t be done unless you… do it. That’s also the reason I said beware of anyone asking money for advice. Those advices are almost guaranteed to come at the wrong time in the “unlearning-curve”, and if the course seller can’t see that, he isn’t really doing his job of mentoring or whatever he calls it.

A beginner will start trading without a clue of what he is doing, and that is often enough to generate an emotional load that will dictate how he will see the charts. It is likely that he’ll feel “inadequate” and that he is missing something, he will feel stupid and unknowing, in the dark; without realizing the endgame is just exactly the same. That’s when he’ll be ready to let go. He’ll stop craving chart righteousness and start loading, and unloading, without a care in the world. That’s when the instinct you talked about will be performing at its finest, and at this point who needs a course?

Creating courses and selling them is a totally different business than trading and both almost never go hand in hand.