Menu
Sister Sites

Options

Bookmark Thread

First Page First Unread Last Page Last Post

Print Thread

Similar Threads

My mentality - my problem 422 replies

Mentality - reasons for trading 8 replies

Do You Have A Winning Mentality? 38 replies

Free lunch mentality 6 replies

The mentality of the successful trader 3 replies

Self-help mentality

Quoting pipmutt
I'm interested to know why a couple of you think a niche would be helpful, retail trading isn't competitive so trying to find something unique which no-one else has thought of isn't really going to help is it, in fact quite probably the opposite!

Niche: a place or position suitable or appropriate for a person or thing: to find one's niche in the business world
Quoting Custos

I thought the foreign exchange market is a zero-sum game? Now if that is not competitive then I don't know what is.
That's a whole other conversation, but whether it is or not is immaterial, in retail forex trading you're not competing with anyone for anything. Sure liquidity might dry up now and then but that's the only 'competition' you're likely to face in this game.

Quoting Custos

Well, and with regards to doing everything the same as everybody else, then why are still not more people profitable in the fx market.
As someone else mentioned, trading systems and strategies are a dime a dozen and in the majority they're all profitable to some degree. It's not the system or strategy which will make money, it's the trader who trades it, and we've seen plenty of evidence to support that fact. Strategy is probably about the least important aspect of trading but it's something the majority devote all their time, energy, and focus on. The majority lose, what does that tell you?

Quoting Custos

But I totally agree that it is much more important to try to understand other market participants (behavioral finance, mass behavior,...), than wasting effort on developing a "trading" psychology.
An impossible task, institutional traders aren't predictable, it's not in their interest to be. If they tell you something there's usually an ulterior motive!
Quoting Hedginghog

Niche: a place or position suitable or appropriate for a person or thing: to find one's niche in the business world
Ok, so forex trading might be the niche itself but what's a niche in forex trading and why would you need one?
Quoting pipmutt
Ok, so forex trading might be the niche itself but what's a niche in forex trading and why would you need one?
With the definition I have given, the "niche" is about finding out what works for you... It need not imply something new or previously unused by retail traders, but rather finding one's own place and method in the broader markets. This would be distinct from hoping to become profitable by copying someone else's system or method, or using a 'spray and pray' approach to trading, or with reference to the purpose of this thread: hoping to turn a fundamentally crap system into profit with good trading psychology.

I don't care if we call it a "niche", "fleeche," or "meeche" for that matter; it's about finding out what works for you and being prepared to put in the hard work to develop your "own place" in the markets. Upon reflection of my own trading journey to date, it makes a lot of sense to me..
Quoting Hedginghog

With the definition I have given, the "niche" is about finding out what works for you... It need not imply something new or previously unused by retail traders, but rather finding one's own place and method in the broader markets.
Ah ok, I was going by the description Custos gave.......

Quoting Custos
And running a successful business has mostly to do with finding a niche, which the majority of already established businesses have overlooked. Or just doing things in a smarter and more appealing way to the customers than the already established ones. You can have the best business owner and manager mentality, but if you don't have a unique niche, business model or product, you will not make it in any business.

Quoting Hedginghog

This would be distinct from hoping to become profitable by copying someone else's system or method......it's about finding out what works for you
Sure we adapt strategies to suit ourselves, and I think it's that process itself which helps us understand what trading is all about, the adapted strategy isn't really instrumental in helping us achieve profitability in my opinion, it's the other things we learn and realize during that process.
  • Post #46
  • Quote
  • Edited 12:03pm Feb 8, 2011 5:41am | Edited 12:03pm
Quoting Custos
But I totally agree that it is much more important to try to understand other market participants (behavioral finance, mass behavior,...), than wasting effort on developing a "trading" psychology.
Here's a case for the opposite:

Understanding my own actions and guiding them to achieve my goals, which is to me 'a "trading" psychology', is much more important than to waste effort trying to understand other market participants.
The latter ends up being an inexact language that covers up for poor study of the exact price and time record right in front of oneself, whereupon one admits about and thus drops the latter due to the difficulty of news interpretation and the unavailability of order flow.
Quoting pipmutt
As someone else mentioned, trading systems and strategies are a dime a dozen and in the majority they're all profitable to some degree. It's not the system or strategy which will make money, it's the trader who trades it, and we've seen plenty of evidence to support that fact. Strategy is probably about the least important aspect of trading but it's something the majority devote all their time, energy, and focus on. The majority lose, what does that tell you?
It just tells me that they are not properly researching strategies. Like the average investor, going to the bank, buying into a fund and not understanding what it is all about. Same goes with people's research of strategies, their attempts are just too amateurish and have nothing to do with proper research.

Well, if it's really the trader who trades it, then I am wondering why more and more investment banks and firms rely on properly researched algorithms instead of individual traders, when it comes to trading. They also wanna cancel out the human component and rely on hard statistics instead.

Quoting pipmutt
An impossible task, institutional traders aren't predictable, it's not in their interest to be. If they tell you something there's usually an ulterior motive!
individual traders aren't predictable, but the mass is to a certain extent. Thus understanding the mass is important
Quoting ha-pattern
Here's a case for the opposite:

Understanding my own actions and guiding them to achieve my goals, which is to me 'a "trading" psychology', is much more important than to waste effort trying to understand other market participants.
The latter ends up being an inexact language that covers up for poor study of the exact price and time record right in front of oneself, whereupon one admits and thus drops the latter due to the difficulty of news interpretation and the unavailability of order flow.
Study of the market patterns and behavioral patterns is definitely important and devising a system to exploit them.
It seems you guys wanna tell me that forex is the only business where it is not important to look at what customers want right now (researching inefficiencies already apparent in the current market), which trends come up (researching upcoming inefficiences), how competitors act (other traders act) and how we can exploit all these facts.
Forex is a remarkable business, if all of these factors are of no concern.
Quoting Custos
Well, if it's really the trader who trades it, then I am wondering why more and more investment banks and firms rely on properly researched algorithms instead of individual traders, when it comes to trading. They also wanna cancel out the human component and rely on hard statistics instead.
Ask Scooby what they do. (he trades for hsbc). They rely on properly researched algorithms to inform exceptionally skilled individual traders. They spent lots of money (millions hiring programmers & PhD's) on fully automated systems, but even at that level many fail including the ones he was knowledgable about.

Apparently there are some that succeed, rumors there's something good Barclays & of course Jim Simons' amazing hedge fund.
Quoting mbkennel
Ask Scooby what they do. (he trades for hsbc). They rely on properly researched algorithms to inform exceptionally skilled individual traders. They spent lots of money (millions hiring programmers & PhD's) on fully automated systems, but even at that level many fail including the ones he was knowledgable about.

Apparently there are some that succeed, rumors there's something good Barclays & of course Jim Simons' amazing hedge fund.
Interesting, thanks for the info, gonna read up on that.
Quoting Custos

Same goes with people's research of strategies, their attempts are just too amateurish and have nothing to do with proper research.
Well there's only so much research one can do on say trendlines and such, over-analysis is just as bad as under-analysis. A simple strategy can be employed extremely effectively, and profitably depending on how it's traded. I suppose my point is it's not necessary to develop some highly convoluted strategy to be profitable, simple does just as well if not better in many cases.

You can probably tell, I'm a big fan of the KISS principle.

Quoting Custos

Well, if it's really the trader who trades it, then I am wondering why more and more investment banks and firms rely on properly researched algorithms instead of individual traders, when it comes to trading. They also wanna cancel out the human component and rely on hard statistics instead.
Different game. HFT was yesterday's institutional trading buzzword, who knows what's next!


Quoting Custos

individual traders aren't predictable, but the mass is to a certain extent. Thus understanding the mass is important
Interesting perhaps, but not absolutely necessary I don't think. The trading masses are a notoriously unreliable fickle bunch, I certainly wouldn't like to rely on my speculation about what they may do to form part of my trading strategy!
Quoting pipmutt
Well there's only so much research one can do on say trendlines and such, over-analysis is just as bad as under-analysis. A simple strategy can be employed extremely effectively, and profitably depending on how it's traded. I suppose my point is it's not necessary to develop some highly convoluted strategy to be profitable, simple does just as well if not better in many cases.

You can probably tell, I'm a big fan of the KISS principle.
Totally agree, simple is mostly the best. But I am of the belief that simple only comes after having researched what works and what doesn't. Again, just my belief.

Quoting pipmutt
Interesting perhaps, but not absolutely necessary I don't think. The trading masses are a notoriously unreliable fickle bunch, I certainly wouldn't like to rely on my speculation about what they may do to form part of my trading strategy!
hm, without the masses, price would move nowhere. Or let's say without the large players. In a sense, for example price action is the attempt to make sense of mass buying and mass selling, even though price action is just the result of trading behavior and not necessarily the cause of it.
It might not be necessary to some, but by understanding behavioral patterns, I believe even changing markets are not of a problem, as long as we still can make sense of underlying mass behavior.
Again, just my belief.
Quoting Custos

Totally agree, simple is mostly the best. But I am of the belief that simple only comes after having researched what works and what doesn't. Again, just my belief.
Perhaps that's the evolution of a retail forex trader, we eventually come full circle but need to go through that process first.


Quoting Custos

hm, without the masses, price would move nowhere. Or let's say without the large players. In a sense, for example price action is the attempt to make sense of mass buying and mass selling, even though price action is just the result of trading behavior and not necessarily the cause of it.
It might not be necessary to some, but by understanding behavioral patterns, I believe even changing markets are not of a problem, as long as we still can make sense of underlying mass behavior.
Again, just my belief.
Personally I think it's a futile exercise, the very nature of the underlying market and it's non-transparency, bluff and double bluff, liquidity hunting, etc etc makes trying to predict participants behavior and their motives for doing what they do and when they'll do it an impossible task, the quote in bold is a great example.

As for what the retail trading masses do or why they do it it's pretty irrelevant, we don't know how much of their trading activity is absorbed in-house by the broker or even if/how brokers hedge the excess and their exposure.

I stick with a chart, it's one heck of a lot simpler!
Quoting pipmutt
Perhaps that's the evolution of a retail forex trader, we eventually come full circle but need to go through that process first.
same I could say about the developing psychology stuff


Quoting pipmutt
Personally I think it's a futile exercise, the very nature of the underlying market and it's non-transparency, bluff and double bluff, liquidity hunting, etc etc makes trying to predict participants behavior and their motives for doing what they do and when they'll do it an impossible task, the quote in bold is a great example.

As for what the retail trading masses do or why they do it it's pretty irrelevant, we don't know how much of their trading activity is absorbed in-house by the broker or even if/how brokers hedge the excess and their exposure.

I...
well, let us agree to disagree. For most here trading psychology is the most important thing. For me it is properly researching an edge. I won't convince you and you won't convince me.
So let's leave it at that.
  • Post #55
  • Quote
  • Last Post: Feb 9, 2011 1:36am Feb 9, 2011 1:36am
Ok, I guess......

0 traders viewing now