Hello FTI,
Thanks for your wonderful thread, dedication and sharing decades of knowledge on how to trade properly with us. its a piece of art for day traders.
I've been a member of FF for some time now but only recently I have found out about this thread!! I must admit some of what is said here I knew before BUT when reading it, its like making all pieces together. Its like you are in a dark place and there are some lights here and there BUT sudenly someone turn all the lights on. Now you could see the beast; Market and yourself!!!! I believe this could ONLY be achieved from longtime experience. Some thing that you have shared with us.
I would like to once again share one of your posts with everyone:
Regards,
Thanks for your wonderful thread, dedication and sharing decades of knowledge on how to trade properly with us. its a piece of art for day traders.
I've been a member of FF for some time now but only recently I have found out about this thread!! I must admit some of what is said here I knew before BUT when reading it, its like making all pieces together. Its like you are in a dark place and there are some lights here and there BUT sudenly someone turn all the lights on. Now you could see the beast; Market and yourself!!!! I believe this could ONLY be achieved from longtime experience. Some thing that you have shared with us.
I would like to once again share one of your posts with everyone:
Regards,
Quoting ftiDislikedHi alexfot, In trading, it is quite impossible to KNOW if a trader is trading a market that runs. As professionals we have to be trading it all the time when we come on board. For traders too, many must be able to trade the markets whenever they come on board, otherwise the productivity is lost to opportunity cost.
So in essence , whenever a trader comes to battle station, he should trade. But sometimes his form is bad and his timing is bad. It is these times that the trader should be wary that is he should over stay a bad entry. During the initial stages of his entry, he would be able to begin to graps the flow of the market. That is why a quick snap shot of the daily chart is necessary for him to determine the undertone of the market. It is from this analysis that he must determine the relationship of the 3 kingdoms and the general volatility , ie the gradient of the footprints of the market would highlight , what the MM should be required.
If volatility was high then the MM should not be aggressive and the tolerance of reverse swing to his position should be re-active. Under low vol conditions his MM must be strong and non riding. His stay would be protracted. AND it would require him to spend much time to carve out his profits. If time was a factor against him for whatsoever reasons, then the trader should not attempt to begin anything that he may not be able to finish. Generally the text from Sun Zi highlights that protracted battles uses lots of energy, therefore should not be attempted unless the charisma was strong And afforded.
Side note: This is what killed the kerviel and leeson, etc. Overstaying bad positions. This is why I trade the short charts. because a protracted battle in 5 min charts can cause a trader to be involved in active battle for up to 24 hours. Just imagine if such was attempted on hourly or 4 hourly charts . The tenure of protracted battle could last for up to a week+. Any thing that last more than 3 days would have totally drained the alertness and nimbleness of the trader. And this can disturb the careful natured behavior of the best traders. When a trader is not proactive in his managing his positions, chances are that HOPE and numbness have stepped in to his mindset.
Mostly , traders gets killed not because of MO but on MM. Which is clearly the case. When positions get large , its basically cos/ the trader is timed out. If trader was against trend , he can definitely feel that his exposure was already dead in the water. Then the decision of whether to rescue comes into play. If such was attempted , it would be an exercise to book damage control, overstaying the trade would only work to his disadvantage. And if the damage increased, it would be fool hardy to increase stake. If stake was increased and the situation for recovery does not surface then it is clear that he's on the wrong side of the fence. Then if rescue was attempted again, surely over staying that rescue would only show his ego at work. And if a trader continue to attempt rescue after rescue without improving book bottom line. It is clear that the trader is disillusioned.
Rule of thumb: Rescues must be strong and swiftly executed. Only profitable trades should be protracted in tenure of attempt, and even that must be limited in strength, for defensive options to be available. regardsIgnored
Manage probability while following the TREND.
