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The View DownRiver

  • #41
  • Feb 20, 2007 6:56pm Feb 20, 2007 6:56pm
Hi DRT,

Very interesting postings here. I trade using Drummond geometry and found that your method has the same key points as his. DG also has the concept of flow and crowd - you call it river - a place where price returns sometimes for the energy. It also has zones of support and resistance. But it's only a pure geometry. Can you please explain more on the role of volatility, and what volatility is in your system?

Wookey.
Wookey
  • #42
  • Feb 20, 2007 7:41pm Feb 20, 2007 7:41pm
And where is part II?
  • #43
  • Feb 21, 2007 6:26am Feb 21, 2007 6:26am
Can you be a little more specific? Part 2 of what??

Thanks

Quoting blackielawless
And where is part II?
  • #44
  • Feb 21, 2007 11:02am Feb 21, 2007 11:02am

YOU ARE WHO YOU THINK YOU ARE


Several people have asked about the Mental aspects of trading. I would like to say that I am no expert on this subject, but I have spent the better part of 20 years practicing and experiencing the power of the mind. Much of what I discuss is plagurism. I did not make this up myself. Far be it, these are principles that are common to mankind since the beginning of time. I will summarize more on this in a Part 2 post. But for now, let's just focus on what I have to say here in the next few sentences


If you haven't gotten to the point of understanding how important the mental side of this business can be, I predict that you will at some point. I became successful when I started to work on "The Self" and not the strategies for trading. If there is any "Secret to Success" this is it.

I want to start by sharing some general thoughts with you.

I believe that "You are who you think you are". If you think you are a MasterTrader, then you will be a MasterTrader. If you think you don't know how to trade, then you don't know how to trade. The message is that you have to get your "thinking" in order. What dominates your own thoughts on a daily basis? Worry? If you worry about losing, then you will lose. It is your thoughts that are causing you to lose, not your trading. Do you imagine correctly?

Do you understand how your subconscious mind works? It can not tell the difference between real and imagined thoughts. It is always working for you to give you what you think about? The good news is that if you program it correctly, it can give you anything you want.

A human being is a goal seeking mechanism. Unlike some animals, we have the ability to think creatively, to imagine. We get off course alot. But our creative mechanism is constantly trying to get us back on course....based on the thoughts that we feed into our subconscious. Your big task is to come with a goal or a purpose that you absolutely want to achieve no matter what. Once you develop this goal or plan, simple turn it over to your subsconscious mind for execution. How?

Your subconscious mind and nervous system does not know the difference between a real and imagined thought. Try this....

Quote
You are standing in your kitchen. In your right hand you hold a beautiful yellow lemon. You are going to slice it in half. Before you begin to slice it, bring the lemon to your nose and smell the zest. Take a deep breath and smell the lemon. You have a knife in your right hand. As you place the lemon back on the counter with your right hand, begin to slice the lemon in half. Some the juice is running on the counter and the air fills with the tart smell of the lemon. Take a lemon half and hold it to your nose again, touch it with your tongue....


chances are the sides of your tongue are beginning to stir and salivate. How could this be when there is no lemon?? Simple, your subconscious mind imagines that it is there and your nervous system is reacting. It can not tell the difference between a real or an imagined thought.

Using the same principles, you must learn to clearly imagine what you want. If you want to be a MasterTrader who makes $1,000,000 per year then begin to imagine that you are that person. Begin to imagine it in detail. What would it be like. What does your brokerage statement look like? What is it like to be around your family? How does it feel to be able to help others who need it? What kind of car will you drive? How does it smell inside? Imagine what it would feel like to be at Thanksgiving dinner with your family discussing your sucess. What smells are in the air? Is there any music playing? If so, what is the song. What colleges will you be sending your children to? What ever is important to you in the life you want you have to create it NOW! With practice and dedication you can do this. It is easier than you think. Much easier than worrying about trading.

Set aside at least 30 minutes a day to do this. I like to do it as often as I can. Take a walk and think about it. Go to the neighborhood you want to live in. Do it in bed before going to sleep. The important thing is to become absolutely convicted to accomplish this.

All the written material in the world on mental programming boils down to what I said above. Other principles are important, but none equally as important in my opinion.

Can you do this? Of course, anyone can do it. Will you do it? Will you believe in its power? Well, one can only imagine.
  • #45
  • Feb 21, 2007 11:09am Feb 21, 2007 11:09am
Hi DRT

This really brought it home with me. I think that once in a trade i sometimes i have mental defense mechanisms which make me watch the trade even though i have a set plan. I am improving slowly trying not to be emotional with the trade especially the worrying!

Looking forward to hearing a lot more regarding your trading techniques

HoZe

Quoting DownRiverTrader
Really Understanding Risk
There isn't anything about trading that is more central to my success and also more misunderstood than the concept of accepting risk. Accepting risk means accepting the consequences of my trades without emotional discomfort or fear. This means I must learn to think about trading and my relationship with the markets in such a way that the possibility of being wrong, losing, missing out, or leaving money on the table doesn't cause my mental defense mechanisms to kick in and take me out of the opportunity flow. When I make myself available to take advantage of an opportunity, I don't impose any limitations or expectations on the markets behavior. I am perfectly satisfied to let the market do whatever it is going to do. If I learn to create a state of mind that is not affected by the markets behavior, the struggle will cease to exist. When the internal struggle ends, everything else becomes easy. At that point, I can take full advantage of all my skills, analytical or otherwise; to eventually realize my potential as a trader. The traders who break through the cycle and ultimately make it are the ones who eventually learn to stop avoiding and start embracing the responsibility and the risk.
  • #46
  • Feb 21, 2007 12:17pm Feb 21, 2007 12:17pm
Some housekeeping items....

I have created a sort of dashboard to make it easier for me to keep up with the posts here at Forex Factory. It is just links into the Forums that I am active in. It also helps me to keep things organzied as I hope to share more information as time goes on. It is also a good place to post books I would recommend.

Please post your questions and comments here at FF in the forums instead of PM'ing me. I do not mind a PM or email, but most of the information you are asking would be helpful for everyone. Share you wisdom with us.

Now with that said....If you would like to change your life and your trading for the better by developing an understanding of the subconscious mind, I would like to recommend a book. The book has absolutely nothing to do with trading, but it is without a doubt the best $8 I have ever spent. Consume it, study it, refer to it always, give it as a gift. I may need a new copy myself, all my pages are yellow, marked up and falling out.

The links are below.

The Dashboard
The Book
  • #47
  • Feb 21, 2007 12:38pm Feb 21, 2007 12:38pm
Here is the book that is about successfull and emotional free trading based on the book that DRT posted. It is not a substitute above but rather that you could read now and reinforce the DRT's message.

This book was downloaded for free from the interent site, therfore there are no copyright issues. I did not post the link since FF filtering.

Hope it helps
Attached File(s)
File Type: pdf Emotional Free Trading.pdf   484 KB | 716 downloads
  • #48
  • Feb 21, 2007 4:47pm Feb 21, 2007 4:47pm
Thank you, DTR and thank you, Lenny for posting the book.

DTR,

I am looking forward to Part 2 of Mental Preparation...

I took clasess on Personal Development such as NLP, Silva method, and read Napoleon Hill book. These information when applied consistently works wanders.

Have enjoyed your posts a lot.
  • #49
  • Feb 22, 2007 8:32am Feb 22, 2007 8:32am
Tradeit asked a question in the EURUSD thread that I thought others might be interested in. It applies to all the currencies I trade. I may get a poll together to see what is best for the majority of people who are interacting with me.

Click here to read his question
  • #50
  • Feb 22, 2007 8:49am Feb 22, 2007 8:49am
It might be possible to take a screenshot of every screen in your TS every hour and then ftp it to a special page on your website.
I would say its' possible in Metatrader, not a piece of cake but maybe possible.
  • #51
  • Feb 22, 2007 9:08am Feb 22, 2007 9:08am
Thanks. I will play with this.

Quoting irusoh
It might be possible to take a screenshot of every screen in your TS every hour and then ftp it to a special page on your website.
I would say its' possible in Metatrader, not a piece of cake but maybe possible.
  • #52
  • Feb 22, 2007 9:17am Feb 22, 2007 9:17am
This is how I keep an eye on the longer term view. This helps me visulize where we are in the cycle and to make sure I am buying or selling in a reasonable value area. If you stare at bars or candlesticks all day, it makes it difficult to see where these levels are. This clears it up for me. The lines are River Theory applied to the monthly levels.

If you notice, many of the pairs are trading around the current River Level zones on their daily charts. What does this tell us? It tells us that we are at critical value areas and we are building for a directional move. It is natural for trade to slow up around these levels. The chart below is why I am bullish EURUSD. You can see how important the 1.3063 level is at determining the next directional move.

Keep studying value as it relates to price distribution.

http://home.comcast.net/~downrivertr..._2-22-2007.PNG
  • #53
  • Feb 22, 2007 9:55am Feb 22, 2007 9:55am
DRT,

I am sorry to ask you so many questions. But I am really trying ti understand it and see whether I can adopt it. It is very appealing that by not having so many confusing techical indicators yuo could follow multiple pairs and stay patient and relaxed.

You explained this chart in one of your first posts that bars represent number of times currency has exchanged hands if I remember it correctly. Is this chart only available with TradeStation> What is it called? Not sure hot this can be viewed on bar charts but can you explain more about what this chart is and what it is showing to you? Your 3063 level appears to me not at the area of the highest bars though. Very interesting indeed.

Will start reading Daulton book this weekend.

Thank you very much for all your help
Quoting DownRiverTrader
This is how I keep an eye on the longer term view. This helps me visulize where we are in the cycle and to make sure I am buying or selling in a reasonable value area. If you stare at bars or candlesticks all day, it makes it difficult to see where these levels are. This clears it up for me. The lines are River Theory applied to the monthly levels.

If you notice, many of the pairs are trading around the current River Level zones on their daily charts. What does this tell us? It tells us that we are at critical value areas and we are building for a directional move. It is natural for trade to slow up around these levels. The chart below is why I am bullish EURUSD. You can see how important the 1.3063 level is at determining the next directional move.

Keep studying value as it relates to price distribution.

http://home.comcast.net/~downrivertr..._2-22-2007.PNG
  • #54
  • Feb 22, 2007 11:51am Feb 22, 2007 11:51am
I am not sure if this is only available with TS. TS is all I use. I would think other platforms also have a similar study. You can also sign up for market profile data and chart it more accurately. Call you platform vendor and ask if they include a "Price Distribution" study. This is simply a bar chart with the study running beside it.

As you learn more about the curve, you will understand the areas away from the higher (volume) or more frequently traded areas are really telling you something. In this case price has not traded long in this area. As it moved down towards 3063 today, we know that (in the short term) this was an unfair price and there were lots of buyers waiting. They ran price back up quickly towards value. We may go down and see if they are still there again. These areas are where "other time frame buyers/sellers" step in and give us clues to value. At least for now, I know that I do not want to sell in this level. Likewise, when price headed up early this week, Sellers emerged. I emphasize that it is just a guide, use it as a filter or confirmation for you other thoughts.

You are learning quickly. There is also a lot of free info out there on the web. I think the CBOT still offers a study guide. Type Market Profile Study Guide into Google and see what you come up with.



Quoting Tradeit
DRT,

I am sorry to ask you so many questions. But I am really trying ti understand it and see whether I can adopt it. It is very appealing that by not having so many confusing techical indicators yuo could follow multiple pairs and stay patient and relaxed.

You explained this chart in one of your first posts that bars represent number of times currency has exchanged hands if I remember it correctly. Is this chart only available with TradeStation> What is it called? Not sure hot this can be viewed on bar charts but can you explain more about what this chart is and what it is showing to you? Your 3063 level appears to me not at the area of the highest bars though. Very interesting indeed.

Will start reading Daulton book this weekend.

Thank you very much for all your help
  • #55
  • Feb 22, 2007 12:07pm Feb 22, 2007 12:07pm
Drt,

Thank you very much for all the detailed explanation to the tradeit’s questions. I probably have as many questions as he does and certainly agree with his pursuit. I want to understand your method, it offers areas of objective market value points and not just calculated support/resistance levels on multi time frame charts.

Having said that, I hope you will have time to provide the information to Part 2 of “Common Principal of Success”


I was also thinking about what you said in one of the currency discussion (quote below)

Quoting DownRiverTrader
My job is to think like everyone else so I can understand what they are thinking and position myself on the other side. Not an easy task by any means.
The market is setup for most to loose money and clearly the odds are not in favor to the retail trader. We have to bottle Market Makers, Brokers, Institutions, Syndicate Traders, Hedge Funds and other to make it thru. These people have much bigger pockets and more timely and accurate information that most of us are not privileged to see. And as we know many of them are not extremely successful with all the tools that they have at their disposals.

The point I am trying to make is that we require to adapt a different thinking and see more than just the bars or candles in the charts, formations, patterns, trend lines but also identify that if we are seeing them it is most obvious that others seeing them as well which of course enables easy “stop haunting”, shakeouts, tests/retests etc.. To adopt that thinking and seeing the game from the other site’s perspective is essential to be able to stay in this game.

I was wandering if you can explain more what you were attempting to tell in the above quote as it relates to your thinking and how that aligns with your mental preparation.

Best Regards
  • #56
  • Feb 22, 2007 12:54pm Feb 22, 2007 12:54pm
What I was trying to say is....if you can figure out what everyone is thinking, then it may likely not happen. Why? Because it should already be priced in and your edge is that you know it. So take the other side. This is a generic statement and you would need to make it work on your own terms.

One example that comes to mind is that I will see posters make a comment about a noticable pattern developing. There is sometimes a thread dedicated to it on here. Maybe its a head and shoulders or a double top. Think about it for a minute! If it is so obvious that there is a thread discussing it, then will it still work? Who knows, but I would say the chances are not good that the expected move will come to pass. It is being seen by everyone. Just like a MACD divergence or a stochastic cross. Logic would say that if everyone already sees it and knows it, then it is already priced in the market.

Just a very generic comment. I try to think like everyone else so I "know" what they are doing and I can plan my attack with this info.


Quoting Lenny
Drt,

Thank you very much for all the detailed explanation to the tradeit’s questions. I probably have as many questions as he does and certainly agree with his pursuit. I want to understand your method, it offers areas of objective market value points and not just calculated support/resistance levels on multi time frame charts.

Having said that, I hope you will have time to provide the information to Part 2 of “Common Principal of Success”


I was also thinking about what you said in one of the currency discussion (quote below)



The market is setup for most to loose money and clearly the odds are not in favor to the retail trader. We have to bottle Market Makers, Brokers, Institutions, Syndicate Traders, Hedge Funds and other to make it thru. These people have much bigger pockets and more timely and accurate information that most of us are not privileged to see. And as we know many of them are not extremely successful with all the tools that they have at their disposals.

The point I am trying to make is that we require to adapt a different thinking and see more than just the bars or candles in the charts, formations, patterns, trend lines but also identify that if we are seeing them it is most obvious that others seeing them as well which of course enables easy “stop haunting”, shakeouts, tests/retests etc.. To adopt that thinking and seeing the game from the other site’s perspective is essential to be able to stay in this game.

I was wandering if you can explain more what you were attempting to tell in the above quote as it relates to your thinking and how that aligns with your mental preparation.

Best Regards
  • #57
  • Feb 22, 2007 4:24pm Feb 22, 2007 4:24pm
Thanks for your response!

Do you also apply the similar logic when it comes to the Market Makers when it comes to the obvios setup for shakeout and stop hunting? In athor words, do you anticipate the movements from those players when they want to shakeout weak players during tests and shakeouts?

Quoting DownRiverTrader
What I was trying to say is....if you can figure out what everyone is thinking, then it may likely not happen. Why? Because it should already be priced in and your edge is that you know it. So take the other side. This is a generic statement and you would need to make it work on your own terms.

One example that comes to mind is that I will see posters make a comment about a noticable pattern developing. There is sometimes a thread dedicated to it on here. Maybe its a head and shoulders or a double top. Think about it for a minute! If it is so obvious that there is a thread discussing it, then will it still work? Who knows, but I would say the chances are not good that the expected move will come to pass. It is being seen by everyone. Just like a MACD divergence or a stochastic cross. Logic would say that if everyone already sees it and knows it, then it is already priced in the market.

Just a very generic comment. I try to think like everyone else so I "know" what they are doing and I can plan my attack with this info.
  • #58
  • Feb 22, 2007 4:33pm Feb 22, 2007 4:33pm
Perhaps I am not following you but didn't you say that you were not utilizing Market Profile and more specifically that your river indicator are not "volume" based (MP is volume based)

I am attaching a chart with the Market Profile in MT4 platform (this is the platform that majority of the forum participants are using). Looks to me it is volume based and therfore not reliable in Forex.

Quoting DownRiverTrader
I am not sure if this is only available with TS. TS is all I use. I would think other platforms also have a similar study. You can also sign up for market profile data and chart it more accurately. Call you platform vendor and ask if they include a "Price Distribution" study. This is simply a bar chart with the study running beside it.

As you learn more about the curve, you will understand the areas away from the higher (volume) or more frequently traded areas are really telling you something. In this case price has not traded long in this area. As it moved down towards 3063 today, we know that (in the short term) this was an unfair price and there were lots of buyers waiting. They ran price back up quickly towards value. We may go down and see if they are still there again. These areas are where "other time frame buyers/sellers" step in and give us clues to value. At least for now, I know that I do not want to sell in this level. Likewise, when price headed up early this week, Sellers emerged. I emphasize that it is just a guide, use it as a filter or confirmation for you other thoughts.

You are learning quickly. There is also a lot of free info out there on the web. I think the CBOT still offers a study guide. Type Market Profile Study Guide into Google and see what you come up with.
Attached Image
  • #59
  • Feb 22, 2007 4:36pm Feb 22, 2007 4:36pm
Yes. I try to but it is not easy. Many times stop hunting will occur in the Asian session for instance, and it is also helpful to understand the role of options in the marketplace. Recent price action is a reflection of option defense and attack at the 1.31, 1.3150 and 1.32 levels. Don't get bogged down with this. Focus on what you can control which is yourself.
  • #60
  • Feb 22, 2007 4:38pm Feb 22, 2007 4:38pm
I have been doing some analysis this afternoon and I am sensing a move in the market is very near. I do not know if it will be tommorrow, but soon. Particularly with the EURUSD. I wish I knew if it was going to be up or down, but I don't. I am just saying to keep on your toes in the coming sessions and be nimble. We are at some VERY crucial levels in my opinion and the time is near.

Good trading
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