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  • #3,461
  • May 20, 2013 7:14pm May 20, 2013 7:14pm
Quoting mmaker
He gave the solution at the end of the book, you know that.
Do you mean this?

De-activating internal conflicts is not a function of time; it's a function-focused desire (although it can
take a considerable amount of time to get to the point where we really make up our minds). Otherwise,
in the absence of extreme clarity and conviction, the technique of self-discipline, over time, will do the
job quite nicely (if, of course, you're willing to use it).

and his exercise for developing consistency by trading a bit like like a casino game with precise rules which must be adhered to?

So is the solution you mentioned the nurturing of self-discipline via endlessly repeating the simple but strict trading exercises combined with a focused desire to be an excellent trader? ie trading like an emotionless EA facilitated by endless dispassionate repetition? Or is it attaining clarity of thought through self observation and self awareness which he also promotes? ie trading emotionless but not like an automaton but from a state where inner conflict has become naturally subdued?

They two are very different things but both aim for the same outcome (to attain the Zone) and I'd be interested to know which you prefer or if they can be combined. (Obviously both go hand in hand with the building of confidence, self-belief and the acceptance of losses with out self-criticism.)
  • #3,462
  • May 20, 2013 9:42pm May 20, 2013 9:42pm
You guys are reading too much into this.

I had a couple of bad days and drew down less than five percent. I was trading my fundamental view on the Euro and I chose the wrong pair to trade that view. More importantly I was ignoring my method in order to trade that view. I know this is behavior I cannot tolerate or allow to continue so I took a few days off. It really isn't any thing more than that. When I catch myself trading with a bias I have to immediately stop and take a few days off until I can come back fresh and enter trades per my method and ignore the noise in the news and financial reports.

As to shutting down the explorer and stopping plans for a website and live room. I was only looking into things and had not made any commitments. My wife didn't want me to take the time and after doing some cost evaluations and projections on possible income stream I don't think it would have any impact on my lifestyle. If there is no real money to be made, why do something that would take up so much time. Running a live room for three days per week for three different markets would be nearly impossible for me to continue for any length of time.

There is no deep failure on my part. There is no crisis of confidence. There is no belief on my part that I have a method that has failed me in any way. This was simply a lapse in personal discipline and had to be stopped quickly in order to make sure I didn't do any real damage to my account. I have said many times in this thread that the inner game is more important than the method. You have to manage your emotions and your discipline. These are far more important to success than the particular method in play. I use my test account and breaks from trading to deal with lapses in judgment and discipline. This way I do not damage my account when I am not trading at my best.

Nothing more to it than that.
  • #3,463
  • May 21, 2013 3:18am May 21, 2013 3:18am
http://www.youtube.com/watch?v=Zjz16xjeBAA

All the best SP, and again thanks for sharing your ramblings.
  • #3,464
  • May 21, 2013 4:28am May 21, 2013 4:28am
Quoting 60minuteman
{quote} just takes time, little by little you improve, eventually you get to the point where you still have the impulse to trade.."ooh i'll get in before the close.." but you eventually realize that even if THAT trade wins in the long run it's not the way to go about being consistent.... Its a moment when the reality clicks and you're no longer desperate to rush in, you've sat through thousands of pointless drawdowns, you become tired of your own short cutting and finally settle into a systematic disciplined way of trading. Your first hint you're...
First of all, thanks to SP for opening this great thread and sharing his views. Also thanks for all the bright people that have participated!

Actually this last few pages have again been really great. Not just talk about system or entries, but about the whole concept and reasons for trading. Trading psychology can't be underestimated. Of course, you have to have good and solid trading system, but at least for me, sticking to it has been the hardest part.

60minuteman summarizes my feelings and goals greatly. I have had great problems in discipline. Also, when some trade doesn't work out I tend to go the "revengetrade / i have a feeling it might go this way, let's enter the market" -road, possibly with too big positions too. BUT, I have identified this problem and actually had some success passing those feelings and just sticking to the plan. It is not easy though!

I think, that walking away from computer is one very good point. If you have system and it works, what good does it make to constantly watch the trade.

However, what do you think about sudden changes in the market - ie. liquidity dries up like in that fake news of AP on 23rd of April or some more severe cases? Can you trust on stops and your broker on the days like flash crash. Do they liquidate your position? Is it certain or do you end up paying 80% of the position if you are on the wrong side and they don't liquidate your position as they should, when your margin goes to near zero. This question have hindered me to get out of trading station. I asked about my broker (IB) about the matter, but the best they could say was, that they try to liquidate positions in extreme situations, but can't guarantee that and there are possibility that you end up paying huge sums.`Maybe I overanalyze this matter?
  • #3,465
  • May 21, 2013 7:08am May 21, 2013 7:08am
Quoting tdforex
{quote} However, what do you think about sudden changes in the market - ie. liquidity dries up like in that fake news of AP on 23rd of April or some more severe cases? Can you trust on stops and your broker on the days like flash crash. Do they liquidate your position? Is it certain or do you end up paying 80% of the position if you are on the wrong side and they don't liquidate your position as they should, when your margin goes to near zero. This question have hindered me to get out of trading station. I asked about my broker (IB) about the...

I never keep all my capital in my brokers account, I just keep enough to be able to take the positions I need.... you actually don't need that much... I know traders who have been trading for 20 years, earn $250k a year and only keep $10k in their account, withdrawing their profits each month...

The notion you have to keep compounding until you're the new Bill Gates is not the only option, and I think you'll find that most traders reach a threshold where they have enough income and freedoms to spend time on other stuff other than the pursuit of riches...
tradewith60
  • #3,466
  • May 21, 2013 7:48am May 21, 2013 7:48am
Quoting Seneca pilot
You guys are reading too much into this. I had a couple of bad days and drew down less than five percent. I was trading my fundamental view on the Euro and I chose the wrong pair to trade that view. More importantly I was ignoring my method in order to trade that view. I know this is behavior I cannot tolerate or allow to continue so I took a few days off. It really isn't any thing more than that. When I catch myself trading with a bias I have to immediately stop and take a few days off until I can come back fresh and enter trades per my method...
Absolutely but we are not all on the same level. Being a bit of a veteran you can get over lapses in a few days but others may take months or years to get close to being able to do that.

If I asked my other half to drive us over to the next city she would not be able to as she can't drive. In fact the very idea of it would probably make her sick with fright and she would say 'I can't do that I'd kill us both' or the like. Ofcourse I felt the same before having lessons - the idea of just getting in a car and driving on a major road would seem insane and suicidal. Now, six or seven years into my driving, I could do the journey with ease and not only that I could sing along to the radio while tapping out the beat on the wheel, put on a cd, check my hair in the mirror, take lingering glances at the scenery, speed a bit while scanning for unmarked police cars behind or speed cameras ahead, punch out a quick text, mess with a SatNav app on my phone, reach to the back seat to grab a drink, judge other drivers technique and give them a blast of horn if they fall short, have a conversation with a passenger - and all that while operating a car to a standard I thought I'd never achieve after months of lessons and a failed first driving test. So its easy for
me to say 'driving is easy' because it is for me now. But it isn't easy if you can't do it - it can actually seem impossible.
  • #3,467
  • May 21, 2013 8:31am May 21, 2013 8:31am
No matter how popular is the book "Trading in the zone", I don't agree with the notion that as far as you clear up the psychological issues, you will enjoy unlimited opportunities provided by the market...
The technical part of the game is also very tough, and technical part of the game should be handled before the psychological part.
Also, the opportunities provided by the market is like hunting in the jungle, a lion have to make a big effort to capture its prey every time, and the lion won't see his preys easily and frequently. So, it is still hard work even doing it emotionlessly.
Quoting stevexyg
{quote} Do you mean this? De-activating internal conflicts is not a function of time; it's a function-focused desire (although it can take a considerable amount of time to get to the point where we really make up our minds). Otherwise, in the absence of extreme clarity and conviction, the technique of self-discipline, over time, will do the job quite nicely (if, of course, you're willing to use it). and his exercise for developing consistency by trading a bit like like a casino game with precise rules which must be adhered to? So is the solution...
  • #3,468
  • May 21, 2013 8:51am May 21, 2013 8:51am
Quoting stevexyg
{quote} Absolutely but we are not all on the same level. Being a bit of a veteran you can get over lapses in a few days but others may take months or years to get close to being able to do that. If I asked my other half to drive us over to the next city she would not be able to as she can't drive. In fact the very idea of it would probably make her sick with fright and she would say 'I can't do that I'd kill us both' or the like. Ofcourse I felt the same before having lessons - the idea of just getting in a car and driving on a major road would...
Just remember we often build our own barriers.

It is as simple as taking a look and saying to ourselves; I am not performing properly and I need to take a break and review my rules. We can then ask the question; Did my rules let me down or did I just let myself down? Once you know the answer to this burning question you can adjust as needed.
  • #3,469
  • May 21, 2013 8:54am May 21, 2013 8:54am
Quoting kk007
No matter how popular is the book "Trading in the zone", I don't agree with the notion that as far as you clear up the psychological issues, you will enjoy unlimited opportunities provided by the market... The technical part of the game is also very tough, and technical part of the game should be handled before the psychological part. Also, the opportunities provided by the market is like hunting in the jungle, a lion have to make a big effort to capture its prey every time, and the lion won't see his preys easily and frequently. So, it is still...
A lion just repeats what he has done before, he knows he will lose many attacks, he also knows that 1 kill more than covers 5 attacks, the skill to kill was probably difficult to learn, but after time it probably seems easy to him.... the reason he survives is because he hasn't given up and the probabilities are on his side...
tradewith60
  • #3,470
  • May 21, 2013 9:04am May 21, 2013 9:04am
Quoting kk007
No matter how popular is the book "Trading in the zone", I don't agree with the notion that as far as you clear up the psychological issues, you will enjoy unlimited opportunities provided by the market... The technical part of the game is also very tough, and technical part of the game should be handled before the psychological part. Also, the opportunities provided by the market is like hunting in the jungle, a lion have to make a big effort to capture its prey every time, and the lion won't see his preys easily and frequently. So, it is still...
I'll respectfully disagree. How do you properly measure the worth of a method if you can't even follow it faithfully due to psychological deficiencies?

I will give an example. Some of you will read this and it will go no further. Some of you will investigate and make some revelations.

Take a look at the opening range of each trading session. The first fifteen minute bar of London, NY, and Tokyo. Breakouts of this range have been traded for decades. They generally work about 35 - 40% of the time and the rest will be false. You make a profit by riding the winners and cutting the losers. It's trading 101.

Now take another look at these opening bars with a new perspective. What happens when these opening bars straddle a key level. What if the bar is the high/low of the day? What if the bar is testing yesterday's high or low? What happens when we combine support and resistance with these breakouts? What happens with the breakouts when the bar is in the middle of "traffic"?

The problem most people have in trading is that they can't wait. Do you have the discipline to take three or four trades a week? Could you wait for the two or three times per week that the opening range actually sets you up for success or are you the type of person who will trade it no matter what? You see discipline is the key to trading. If you haven't developed discipline the quality of your method is useless. You can have a perfect method but if you can't trade it due to psychological problems you will still lose money.
  • #3,471
  • May 21, 2013 9:22am May 21, 2013 9:22am
Quoting Seneca pilot
{quote} I'll respectfully disagree. How do you properly measure the worth of a method if you can't even follow it faithfully due to psychological deficiencies? I will give an example. Some of you will read this and it will go no further. Some of you will investigate and make some revelations. Take a look at the opening range of each trading session. The first fifteen minute bar of London, NY, and Tokyo. Breakouts of this range have been traded for decades. They generally work about 35 - 40% of the time and the rest will be...
Backtesting...
  • #3,472
  • Edited 10:05am May 21, 2013 9:45am | Edited 10:05am
Quoting kk007
The technical part of the game is also very tough, and technical part of the game should be handled before the psychological part.{quote}
I completely agree you need to do more than clear up psychological issues and while this book is focused on them, on getting you into the zone, it doesn't claim that's all you need to do. It only tackles a specific area and is not supposed to be a complete traders bible - its subtitle is master the market with confidence, discipline and a winning attitude. It's all about approach not systems or technical analysis.

Yes learning the technical side of trading is tough but it's a skill like any other that is learned by studying and practice and repetition.
An example (that doesn't involve lions) is you may spend years at home perfecting lets say your carpentry skills until you are able to design and complete high-end interior furniture. You could then within a few days set up a buisness and sell your furniture and make an income. There are no debilitating psychological barriers at play in the exercising of your carpentry skills or operating a home business. However there are barriers in the exercising (live trading) of your technical analysis skills when significant quantities of money/your sole income is on the line. By doing extremely disciplined trade execution practice you can develop both technical and psychological at the same time, there is no need to ignore one while you learn the other. Infact you may well end up fighting against bad habits that you have developed while learning just the technical side, for example low levels of patience or focus.

Not sure about lions but Cheetas I just read have a hit rate of 1 in 10 - and sometimes they get chased away from their kills by hyenas and lions. Their risk/reward ratio must be atleast 11:1.
  • #3,473
  • May 21, 2013 9:52am May 21, 2013 9:52am
Quoting kk007
{quote} Backtesting...
Just so you don't go chasing the wrong rainbow here is a perfect example.

Notice on 30 April the NY opening range is testing the day low area here. The day low was put in by testing the weekly open a couple of hours before the NY open. This price area is the low of the previous several days. To reach the current day high we have eighty pips plus "room" to go up. Our stop price will be the eighteen pips of the bar size plus the spread on purchase. In this trade we are only looking up. There is massive support below the price bar and air above. Note what happened.

This is a perfect example. They only happen two or three times per week. The yen pairs are best for Tokyo while Euro works really well for London or NY. I like EJ for these most because it is a bargain to trade and moves fast and far.
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  • #3,474
  • May 21, 2013 9:59am May 21, 2013 9:59am
Since I am here today I want to leave you guys with a great metaphor that explains trading.

I have a friend who has a chain of beach shops in Myrtle Beach SC. He sells several million dollars worth of t-shirts each month during the summer season. He buys the shirts from a supplier at wholesale prices and sells them to the unsuspecting beach going public at a rather large mark up. He would never look at the trends in t-shirt prices and decide that he should go to a competitor's store and buy his stock at retail prices because the trend in t-shirt prices is up. He would never buy high and try to sell higher. He would buy at wholesale and sell at retail. This is the key to trading, find a price that is a bargain and buy or find a price that is too high and sell.

Bye for now.

Chris.
  • #3,475
  • May 21, 2013 10:04am May 21, 2013 10:04am
Quoting Seneca pilot
{quote} Just remember we often build our own barriers. It is as simple as taking a look and saying to ourselves; I am not performing properly and I need to take a break and review my rules. We can then ask the question; Did my rules let me down or did I just let myself down? Once you know the answer to this burning question you can adjust as needed.
Yes it is simple really, there is no need to over complicate this. The problem is simply that we can be very complex beings at times. But the great thing for us about these types of issues is that the solution to them is not difficult - it is often just to be aware of them. When you impartially observe these things they often go away. That's what you are saying too, you are looking at what you were doing incorrectly last week and saying 'OK I know what I was doing there, I will watch for that in future' and it's the watchfulness that is often the solution.

If you can't sit infront of a monitor and take just 3 or 4 trades a week what is the solution? Is it to bang your head on the table everytime to let your plan down? Knock yourself about inside and tell yourself you are a fool, a wanabee trader who will never make it? Or is the solution to simply watch what you are doing, watch what you are thinking when you reach for the mouse, watch what you are hoping for in making the trade? Ask yourself why you just made that silly trade that is not in the plan. Was it to release yourself from the boredom of the past 3hrs? If you trade for excitement you are doing it wrong.
  • #3,476
  • May 21, 2013 10:08am May 21, 2013 10:08am
Quoting stevexyg
{quote} Yes it is simple really, there is no need to over complicate this. The problem is simply that we can be very complex beings at times. But the great thing for us about these types of issues is that the solution to them is not difficult - it is often just to be aware of them. When you impartially observe these things they often go away. That's what you are saying too, you are looking at what you were doing incorrectly last week and saying 'OK I know what I was doing there, I will watch for that in future' and it's the watchfulness that is...
If trading is what you want to do most then use that desire to craft a punishment when you break the rules.
  • #3,477
  • May 21, 2013 10:22am May 21, 2013 10:22am
lol that sounds painful. A sadomasochistic-trader dream come true.
  • #3,478
  • May 21, 2013 10:25am May 21, 2013 10:25am
Quoting Seneca pilot
{quote} Just so you don't go chasing the wrong rainbow here is a perfect example. Notice on 30 April the NY opening range is testing the day low area here. The day low was put in by testing the weekly open a couple of hours before the NY open. This price area is the low of the previous several days. To reach the current day high we have eighty pips plus "room" to go up. Our stop price will be the eighteen pips of the bar size plus the spread on purchase. In this trade we are only looking up. There is massive support below the price bar and air...
I am confused with this example. Isn't a opening range refers to the three hours leading to NY open. Assuming SP is talking about Apr 30, the two lines can't be the boundaries of the opening range. Not sure if I have asked a naive question..
  • #3,479
  • May 21, 2013 10:46am May 21, 2013 10:46am
Quoting kk007
{quote} I am confused with this example. Isn't a opening range refers to the three hours leading to NY open. Assuming SP is talking about Apr 30, the two lines can't be the boundaries of the opening range. Not sure if I have asked a naive question..
The first fifteen minutes of the NY session. This is the classic definition of an opening range. No waiting for a retest. No waiting for a close just trading the breakout of the first fifteen minutes of a session at a few specific places.
  • #3,480
  • May 21, 2013 10:55am May 21, 2013 10:55am
Quoting Seneca pilot
{quote} The first fifteen minutes of the NY session. This is the classic definition of an opening range. No waiting for a retest. No waiting for a close just trading the breakout of the first fifteen minutes of a session at a few specific places.
Thanks, I was still using the definiton of opening range as specified in post 80
http://www.forexfactory.com/showthre...06#post6361706
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