Strat's Long Term Stress Free Trading

Hi Max,

I will only answer by quoting an article of from Dr. Brett Steenbarger and I'm sure things will clear up for you (original source here):

It's a question that arises for many traders. So many occupations derive their nobility from contributing to the welfare of others in direct ways. Where is the nobility in trading?

In my reply, echoing Ayn Rand, I challenged the notion that nobility is solely or primarily a function of assisting others.

In mastering risk and uncertainty; in learning to pursue opportunity in effortful ways; in making ourselves better as decision makers; in becoming more disciplined actors; we improve ourselves as human beings. That carries over to many areas of life, so that we can become better business partners, spouses, parents, and friends.

Indeed, this might be the most important distinction between trading well and trading poorly: When we trade well, we make ourselves stronger, better; we tap into the best within us. When we trade poorly, we succumb to our lowest common denominators.

The value of trading is the value of any competitive performance activity: in its mastery, we become just a bit closer to our ideals--and that ripples throughout our lives.

P.S. If the entire planet will trade there WILL be a market to trade, it has nothing to do with the market itself. That was a horrible example, I could say that about any "profitable" occupation (top soccer player, rock star - like Strat is etc).

P.P.S. You have wotk on your beliefs, you must have a valid and realistic philosophy of the trading activity, if you believe it is not noble and you don't contribute anything to the society I'm afraid you'll end up sabotaging yourself.

Trading is an activity where you need to continuously learn and to improve yourself to become better and better. By doing this, and by the skills you learn form this activity you become a better individual. Skills learned from trading can be used in everyday life.

The alternative is (as in any very competitive environments) to disappear.

We all have to go through this one. And the answers will be different for all.

It took me six years of constantly loosing at his game to realize that I didn't really care about how "ethically useful" I was: this was VERY DIFFICULT.

So to me just the fact that I succeeded at this devilish game, entitled me to take profit. Most can't.

I don't feel the need to justify myself to anyone, no more.

Trading: is it a good and positive thing?

It is VERY good and VERY positive for me.

Hi dear Strat, I have a philosophical question for you. I have a very good friend, who is often questioning how trading can be a "good " thing.

Tell him to go forth and multiply or if you don’t have the balls to say that, tell him to go sky diving without a parachute.

I have to agree with him (partly), You are a fool then – stand up for what you BELIEVE!

and my only answer, to save my face, is that I always will donate 10 % of my income from the markets to the poor or to foundations I trust.

You may as well burn your money on a fire or, better still, send it to me. Have you ever noticed how “rich and wealthy” the people are that run Foundations and Trusts?

Have you ever noticed that those for whom the money is supposedly intended keep getting worse and worse?

He also says that if the entire planet would trade (this is of course a provocation) there would not be a market, then he assume that trading is against a logical way of life.

You say this guy is a “very good friend”? I’m glad I don’t have “very good friends” like this!

He is not very smart is he? Has he just dropped in from Mars or just a couple of sandwiches short of a picnic?

The whole Planet ALREADY trades!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

When you go to a supermarket you TRADE your money for food, goods etc.

Trading is a FUNDAMENTAL way of life started by Adam who traded Eve an apple to get into her bed!

The US Irish President O’ Bama TRADED his Senate seat for a Presidential seat.

When WE stop trading, the whole world and civilization as we know it will cease to exist!

You SERIOUSLY need to find a new “very good friend”.

Do you have any other positive sociological or philosophical views for being a trader?

NO! I ONLY trade to make money so that my wife and I can afford and live the lifestyle we choose.

The following pairs are in a situation which we discussed before in the thread.

If you don’t know what the situation is or how to understand it, then it’s time to do some work.

AUDCAD AUDJPY AUDNZD AUDUSD

CADJPY CHFJPY EURJPY GBPJPY

NZDJPY NZDUSD USDJPY

Let’s see AUD pairs and JPY pairs…………………..now what is the common factor?

I am just a learner but this is what I see and you know what I am going to do unless it is bond.

Max, I'm not a psychologist or philosopher but I have a few thoughts on that too, from personal experience.

First of all, if you have a conflict in your mind that there is something "wrong" or unethical about trading, speculating, short-selling, etc. then you have a major psychological hurdle to overcome before you can hope to become a consistently profitable trader.

There is no doubt in my mind that everyone will trade their belief system. That is, you have to believe the market is going to move higher before you decide to buy, and you have to believe the market is getting weaker before you choose to sell short. That is apparent to most people. Not so apparent is that you also have to believe that if you do profit from these trades you take that you deserve the benefits you reap from your actions.

With the exception of a small minority of people who are con artists and scammers, I think most everyone has been taught that they must provide some useful product, service, idea, or something of value to someone or some organization in order to justify the rewards. With that belief system thoroughly ingrained into your subconscious mind it will be difficult or impossible to make gains and keep them if you think you are taking part in an activity that simply exists for parting other less sophisticated market participants from their funds. You will have a deep seated conflict in your mind that will probably resolve itself by causing you to make "errors" in your trading at crucial times that will help to align your account balance with your belief in yourself. (Read "blowing your account.")

So what is the solution? For me, I have it clear in my mind that I am providing liquidity for the market, taking the other side of hedgers, and getting paid for taking on the risk that other market participants (banks, corporations, etc.) are trying to avoid. If I can do this properly I will profit overall in the sense that an insurance company will if they do their business effectively.

You may agree or disagree with my reasoning. That is not important. What is important is that you have YOUR reasons and beliefs that you DESERVE the profits you make. If you have to believe you are providing a service or not is not the issue. What is critical is that you eliminate the internal conflict somehow if you want to succeed in this business.

This is just my opinion. Hope it helps.

Dave

I am a novice on the path too, but I want to ask you where are your moving averages?

Are you preparing to trade counter trend?

On my platform both worker and boss are in strong uptrends.

Don't do anything until you KNOW what the TREND is!

While I respect the views from those who have posted replies on this, (Dave, I didn't know you were so "deep" and that for a pistol totin' dude), when all is said and done,

Trading is a dog eat dog world

If you don't have the mental fortitude to eat the dog on your plate, you will NEVER make it in trading

I don't do moving averages as I am ok without them. I still believe the longer term trend is down and 117 was the price I was waiting for becuase of confluence (TL +R) but I will drop the idea to go short on this one and wait for the better one as there is a trend within trend within trend.

I suggest you read my post (12318, page 822) and more importantly Strat's reply (12326, page 822).

Hope this helps

Hi Simpleman,

I am tighten up my last position. Moving averages are very usefull tool, Strat is using them why not use them.

The subject of moving averages has been canvassed recently on the thread.

I thought the following quotation to be apt:

"It is easier to ride a horse in the direction he's going" - Werner Erhard

I thought the following quotation to be apt:

"It is easier to ride a horse in the direction he's going" - Werner Erhard

So what does this dickhead know about trading ? ? ? ? ? ? ? ? ?

No doubt about that.

I am determined to do whatever it takes to become a successful trader and I understand that much of the result you will have depends on what you learn and how you think. At some point along the path of learning, to become more effective you will have to deal with problems stemming from fear, doubt, greed, etc. Upon digging deeper into the cause for these problems I have found personal limiting beliefs to be at the root of many of them. Especially beliefs about money.

Briefly, I came from a background of working class folks who never learned how to make much money and therefore could not accumulate wealth. So I had no examples to follow or people close to me to learn from. Some of you may be able to relate to that situation too. For those more fortunate, you may not understand that someone can be conditioned to doubt that they are capable of becoming successful and wealthy as a result of their own efforts. I was taught early on to be thrifty and not wasteful of my money but when I asked my parents how to make a lot of money they had about as much chance of explaining that as they did the theory of relativity. (That was before the days of "win the lottery" which is what they probably would have said.) In fact, what they did say was go to school, get a good job, retire. That's all they knew. Not bad - but not the way to wealth. So I guess I always believed that's the way it was.

So, my point is that a person has to develop in himself the beliefs that:

1) You have (or can obtain) the knowledge to make money trading,
2) You have the confidence to take decisive action to profit from the market opportunities,
3) You are involved in a worthwhile and ethical endevour,
4) You are deserving and entitled to the profits you have earned through your superior trading efforts.

If you are still doubtful, then maybe this passage from a more credible source be more convincing:

From the book The Virtue of Selfishness, Chapter 1, The Objectivist Ethics, by Ayn Rand;

"The principle of trade is the only rational ethical principle for all human
relationships, personal and social, private and public, spiritual and material.
It is the principle of justice.

A trader is a man who earns what he gets and does not give or take the
undeserved. He does not treat men as masters or slaves, but as independent
equals. He deals with men by means of a free, voluntary, unforced,
uncoerced exchange—an exchange which benefits both parties by their own
independent judgment. A trader does not expect to be paid for his defaults,
only for his achievements. He does not switch to others the burden of his
failures, and he does not mortgage his life into bondage to the failures of
others."

Some things worth considering, don't you think?

Dave

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No idea.

But the quotation seems to me a humorous way of emphasizing the wisdom of trading with the trend.

Actually a lot like Dr Joe's advice on trading, don't you think?

[quote=PistolDave;3753625]

Hi Davehttp://cdn.forexfactory.com/images/icons/icon7.gif

Good insight on how to handle the trading. I agree with Strat that this is "a dog eats dog" situation but I do consider it more a like a professional "sport". I am here to come first and that means to make profit, second place (loss) is not welcome however I know that I will not always come first. I train and condition my skills to win and that is my focus. I know that there are many other participants, "professional" participants and somebody has to come first, I want to be ahead of them more often than not so this whats drives me.
I do not consider the fact that I am taking money away from other traders as a bad thing, they are doing the same off me - no mercy here, we have the same playing field but I want to be better prepared than them.

I believe that to survive the trading you need to develop fighting attitude and do not give up. consider the paraphrasing of the Hamlet quote " to trade or not to trade" - this is the question, answer it right and be prepared to make it work.

Happy tradinghttp://cdn.forexfactory.com/images/icons/icon14.gif
Jideck

Hi Strat and fellow members,

Tonight, I captured the NZDUSD for my chart study lines analysis. Its here for any comments you guys may have for me. I've used the price extremes to project my trendlines but I'm not sure if I did it correctly. Please advise.

The Big Boss
The uptrend lasted for 8 months.
A monthly shooting star formed last October 2009.
A series of LHs and LLs
20MA is below the 50MA
A present BEOB engulfs the last three months
Price bounced from monthly and weekly Support

http://i689.photobucket.com/albums/v...thly_may25.gif

The Boss
20MA is still above 50MA, the slope of 20MA is beginning to point down and closing in with the 50MA
Weekly candles are printing LHs and LLs
Last week's candle bounce from support while this week candle broke below support came back and at monthly support (blue line).

http://i689.photobucket.com/albums/v...ekly_may25.gif

The Worker
The 20MA is below 50MA
A down trendline is obvious. There is trendline (dotted) inside the main trendline prices are respecting this line.
Current price is also at support (blue line).

http://i689.photobucket.com/albums/v...aily_may25.gif

Action:
No trade. Wait for the Boss to align itself with Big Boss and Worker. Continue to watch PASR. I'm not quite there yet on candle recognitions (BEOB, BEEB, etc.) but I'll keep on reading.

Thank you.

elPips

I know it's early but it is starting to look like a bond.
To me this would just have been a ATM trade as since Noverber last year the trend is up.
I like to use this image that strat posted for a reminder before contemplating trades, I cannot remember the post number. this trade would be against the image, hence to me a ATM trade.