Forex Trading Philosophy

Thanks for your post, which goes beyond being interesting.

I would have liked to find in it a reference to the nature of the market (fractal), compared to the kind of tools we use to approach it (linear).

Also, reference has been made to a logical approach and an emotional approach, and I missed the intuitive approach (intelligence does not need logical processes, built on thousands of experiences).

Weather forecasting, that we see on television, is the result of a "technical analysis" of historical data, and therefore, their results are probable, not accurate.

Anciently, many rural men also predicted time based on the experience accumulated from childhood, through their parents, their grandparents, their exchanges with other farmers ...

And finally, I would have also liked to read about the art. The art of interpreting the signs, graphics ...
One could also discuss a little about the meaning of the word "existence".

I reiterate my admiration for your great article.

PS: my poor English does not allow me to explain better, but I hope you understand my restlessness basically.

UNFORTUNATE\LY

everybody misses such a crucial point

dice

I think meditation could help a lot while trading. Especially if you are day trader or scalper. Just being present in the moment and feeling the market is very important for me. I don't know how to describe this feeling but sometimes you just feel what is going on with the market. I think this feel is just developing over time but I discovered that if I do meditation for 20 minutes before trading session I get to feel the market and trade much much better.

Another really important concept I think is non resistance. That goes back to losing trades, no matter how well you trade, you will always have losing trades. You need to accept the markets and just accept that, trading is hard and you will have losing trades. Just accept it and next time you loose, you are not going to feel any emotion, because you accepted it, you know that it will happen and that's it. Become non resistant to it!

I think most people are looking for holy grail because they resist losing, they don't want to loose and they can't accept the fact that this is part of the business.
The paradox is trading is really hard and at the same time really easy. The key I think is becoming present to the moment and just loving the game and trading what you see. When you get some losing trade, just don't resist it, accept that is part of the game and move on.

Just watched this clip, and thought I'd share it here.

If anybody here more into topics as such, do yourself a favor, go and watch more Rande Howell's videos

The King's Wisdom

A long ago two women was fighting and claiming that they're the mother of this little beautiful baby. There were no evidence or supporting evidence
to rightfully conclude who was the real biological mother. The issue was brought to the law of courts and to prominent people at the time didn't know what to do. The issue was brought to the King. After explaining the situation, the King replied, "... If this is so, then no one shall have the baby!". The King drew out his sword and raised it above his head, ready to strike the baby. Suddenly, one of the woman cried, screamed, and protected the baby, "Please your Highness don't kill my baby! Give my baby to her instead." The King pointed to the crying woman with the baby at her protection and said, "She is the mother, give the baby to her."

I've never been a gambler. It has never exited me in any way or form. Ironically, I found myself at the casino when I was younger. Not purely because of the money, but because of Science and Probability (OK yes, a little bit of the money). It was around 1999 when I turned 18 and was legally allowed in the casino. Yes, I was aware of the famous people and card counting, but at the same time was fully aware of the probabilities and the casino's edge. Card counting was not applicable anymore as the casino already adapted to card counters and made measures to prevent them.

Well, I still made some money trying to prove my own theory/hypothesis (mathematically), because it turned out mathematically correct. I made some money on Black Jack and Roulette. I didn't play anything else at the time, not even poker. I didn't stay around because it was time consuming. And I figured that my time was better spent in gaining knowledge and wisdom rather than money. Wisdom can create money, but money can't create wisdom. Which would you choose? money or wisdom?

It sounds very unbelievable, heck, you've been to the casino too and you too know the odds, right? (by the way, forget spending money on those books that reveals you how to make money in the casino, you're wasting good money). How did I do it? I made card counting with a different twist, simply improved the old system. (No, by the way this is not a sales-pitch, and will remind you again do not give any money to anyone proclaiming to be CrucialPoint). How I made money in black jack is another story, but you know what's really interesting??? >>> When people play blackjack, they would sit on a table and play every hand... I think that's really stupid.

How I made money in roulette was very interesting >>> You see, even the mathematically gifted people are in debate about probabilities. You see, the biggest flaw (which not a lot of people know) is that the probability regarding cards and a roulette wheel is not the same :nerd: You see, a red/black in roulette is not the same probability as red/black in cards (both including the house edge or not included). You see, there is a finite number of cards in a deck (or in any given number of decks). This will never change and so the probability will be more towards deterministic (meaning if probability is 50%, the outcome will closely resemble 50%). Rather in roulette, the strength of throwing/spinning the ball is infinite, so the probability will be more towards non-deterministic (meaning if probability is 50%, the outcome will fluctuate several deviation/sigmas from 50%). A coin's outcome is determined by several equations (height, strength, resistance angles, etc...) which changes the outcome of the coin. A card's outcome on the other hand are not governed by such elements It doesn't matter how (hard, high, wind, gravity, etc) you throw a card down, 50% of it will always be black or red.

Just like the King's Wisdom; which realizes the nature of the mother (protective and caring) and exploiting it to extract the truth. Trading has its own truth which can be extracted by understanding its nature. You don't make money from trading because you think the probability of an outcome is greater than so and so. You make money from trading and capturing the randomness, the non-deterministic fluctuation moving several deviations/sigmas from a reference point. You don't know when it occurs, but it just happens. Its very interesting that some people still believe that throwing a coin 50,000x will results in 50% heads or tails. There are scientists who published research stating so, but CrucialPoint is boldly, gun-blazing and outright saying that it is WRONG

The history of that king I think it's in the Bible, and was called Salomon (the wise king).
As for the comparison of deterministic randomness to trading, I guess you will refer to random trading, where do not count the cards.
Because a trading where I count the cards, is nothing random, but I put the odds in my favor, and I can prove it every day.

I feel it is best to approach trading in a way that seeks simplicity rather than complexity; we should apply a philosophy of reductionism to the entire network of trading and only trade on well established, axiomatic principles.

I would even go so far as to exclude technical and fundamental analysis from a trading strategy since they rely on certain questionable assumptions.
However, I am curious to know: which of the two (technical & fundamental) do traders find more idealistic (meaning it is based on realistic principles)?

Coffee-Talks with CrucialPoint: Systems and Strategies


“Compound interest is the most powerful force in the universe.
He who understands it, earns it ... he who doesn't ... pays it.”
~ Albert Einstein


When I was 17, I had a part-time job at a cheese factory. Each year the employees would pool their money and have a yearly betting competition (footy tipping). You pick which Football team would win each week and they tally up how many you picked that won. The person with the most correct winning tips at the end of the year wins the pool of money. You pay $10 for the year and with 100 employees the pool adds to up $1000. The pool was divided as follow:

1. 1st prize is $500
2. 2nd prize is $300
3. 3rd prize is $150
4. The last person who gets the lowest correct tips get $50

I'm an Essendon;Bombers fan, yet I would bet against my team. Result is what matters>>> not ego, not emotion and especially not pride. Long story short I won $50. They laughed at me jokingly and said I didn't know shit about football. I laughed at them quietly, thinking they don't know shit on how to make money. An investment of $10 and a 500% return ($50)... those type of investments are very hard to come by, with very little effort like taking candy from a baby.

99 of the employees are trying to win the first place. 1 employee (me) trying to win the last place... you do the maths on that one.

I have a friend who I play table tennis. We both have a very competitive nature and it is always an excitement when we play against one another. It pisses me off because I lose 9 out of 10 times against my friend. And what suck is that I lose by 1-3 points... ALWAYS! It seems like there is a magical-force-field-barrier which I simply can not penetrate. Results is what matters, losing 1-3 point is a LOSE. It's the difference of having a trophy versus having none. The difference between a medal or no medal is 0.1 seconds.

I've had enough and I asked my friend: "How the F*** do you do it!?".
He replied: "You can practice and practice, but I will always win against you 9/10 by a small margin, ALWAYS. This is because you lack awareness of what you are doing and what I am doing."
He then continued: "You see, more than half of the time, I am not even trying. I'm not even trying to win. I am simply returning the ball in your court and waiting for you to make a mistake. At different intervals, I give you an easy backspin. I give you a couple of easy backspin (2-3 times), and then when you become comfortable, I'll give you a harder than the previous backspin. And then you make the mistake, because you've become comfortable. But the biggest problem is that you are not aware of these things. You are to focused on winning, searching for that magical edge to beat me; a stronger top hand, the tightest slices... looking for that perfect shot. Battles are never won in that fashion."



I'm not a gambler, but I did made some money on black jack. Simply by improving card counting into another level. I don't sit at a table and play every hand >>> that's very stupid, even if you know the odds. I stand and watch people play and I enter in and out, here and there (when the time is right) and then move on to another table. Why would I give the dealer my money while waiting for the big fish? Why would you not just wait and hold tight until the time is right? Tell me, is there a rule in the casino that says you have to play every hand???

Yeah there were some good times at the casino. The people sitting down telling me off, "HEY, WHY DON"T YOU SIT DOWN!!!?? IF YOU'RE GONNA PLAY, SIT DOWN AND PLAY, YOU'RE MAKING ME LOSE!!!" Oh I got a great comeback for them and would simply reply, "GO F*** YOURSELF!".... And the dealer would be like>>>> "SECURITY!!!"



I guess it was fate that had brought me to where I am today. Probabilities, critical thinking, money >>> it wasn't a surprised that I also found myself with sports betting. But let me stop for a moment and remind people who don't know me. I AM NOT A GAMBLER. NEVER WAS AND NEVER WILL. I don't get those itchy craving to throw money away. If I can't mathematically see my winnings, I don't play.

How I made money with sports betting is a similar to the other story I illustrated above; People's thinking an approach is going in one direction and my thinking and approach is totally different from theirs. I guess I was born to see what most people don't see. And it's those very mundane things that people don't see that makes the big difference.

Let me ask you... How big is 1% when you compound it repeatedly???
Long story short; Top 3 rank player/team versus the shittiest player/team is going to win 9/10 times. Rank 1 versus Rank 50 is going to win 19 out of 20 times (19/20). It is not sexy to win 1% return. These are just the glimpse and segmented parts of a system and strategy. I haven't fully disclosed on its full approach... So please save your time from posting why the examples above are not viable.

And then of course, it was inevitable that the next stop was FOREX.

===========================================
What is the problem?


Asking all the wrong questions


Breaking Biases



When it comes to trading 9/10 times I take money out of the market. My approach to trading is not sexy. When I talk about certain topics I get crucified. I'm a scalper and trade from sound logical mathematical reasons. Result is what matters and not Subjective Biases Certain concepts take a lot of writing to explain. Hopefully I have illustrated the difference in thinking and approach to systems and strategies versus society's norm.

Peace,
CrucialPoint

Wow. One of my idols right here.

Please check out my journal, CrucialPoint. --> http://www.forexfactory.com/showthre...57#post7959157

I would highly value input from someone I look up to.

Dear fellow traders! I would like to thank you all for being here and for your participation!
Special thanks to CrucialPoint, who has never stopped sharing his pearls of wisdom with us! I am grateful for all your efforts to show us the right path!
Wish you all a very Merry Christmas and a Prosperous New Year!

I posted this on my thread. Looks like a good fit here.

My daughter put me on to this. Great recording from the Moth. A very worthy listen.

Trading psychology and the psychology of professional poker players are so similar. I think you will enjoy this.

http://cdn.themoth.org/wp-content/up...ngsYouDont.mp3

Long Lost Skills That Has Been Forgotten

1. Ancient Archery versus Modern day Archery
2. Basic Trading versus High Tech Trading

What are the long lost trading skills that has been forgotten?

The Most Efficient Trading System



Tell me...
Does a Cheetah have any predictive bias before hunting down a Gazelle?

The answer is NO.

You can also argue that there are no objective proof if whether in fact the Cheetah have any predictive biases before a chase...
Well, this is what it would look like if a Cheetah have a predictive bias before a chase. Or if a Cheetah ever tries to predict where the Gazelle is likely to go.
Does the picture below remind you of any trader/s you know?



A Cheetah never predict in advance where the Gazelle is going to go nor where the Gazelle is going to be... Yet evolution made it the most efficient and the most effective hunting machine. I don't predict where price will go... I don't know and I don't care.




Peace
CrucialPoint

Coffee-Talks with CrucialPoint: Mental Insanity



What if today was the first day of trading and trading never existed before today? What would your signals rely upon? Hypothetically speaking, what if the president banned all price history and is deleted in an instant? Does that mean you will never have the opportunity to trade because you can't figure out a signal to buy or sell?... because your signal/system to enter the market is reliant on historical data.

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If you get 500,000 people (with zero experience and never traded before). Get 250,000 people trade long and the other 250,000 people to trade short. One group will win. Grab the winning group and get half (125,000 people) of them to trade long and the other half to trade short. One group will win. Grab the winning group and get half (62,500 people) of them to trade long and the other half to trade short. One group will win. Grab the winning group and continue to do the following, again and again.
After 15 trades you will have 1 person who has never lost a trade and made 15,000% on their initial account That's not the interesting part. The interesting part is when you tell that person (with no trading experience) that it is all luck. S/He will tell you (convincingly) that it is all about their skills and talent.

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Guru says to buy Gold to hedge yourself against inflation. Guru shows historical evidence and historical statistic (facts) about Gold. So you bought Gold @ price X. 100 people bought gold, yet there are only 20 physical Gold.
Did you physically buy the Gold? Or did you just bought fairy Gold? If everyone who bought Gold went to the bank and claim their Gold physically, there is not enough Gold for everyone. How is that supposed to hedge Gold buyers against inflation?

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How do you win a game if the probability of you losing is 100%? Any mathematician will tell you that it is not possible. "Math is math and numbers don't lie." they say.

It may sound stupidly philosophical, but the answer is "Don't Play".

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To Win versus To Not Lose are totally different (yet people thinks otherwise). When someone says "Its raining outside". You shouldn't reply with "Yeah, today's weather suck". Nobody said it suck. I wonder why people imply such things. If you cannot differentiate between the two, you will have a hard time trading.

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Everyone Procrastinate, even when they are trading. When are you going to close your trade?... later?... maybe you'll do it tomorrow instead? You'll do it just like any other time you procrastinated >>>> When the pain becomes so unbearable, you take action (when you have a big loss). When your loss is so big, it becomes unbearable, and then you take actions.

When everything is going right and comfortable, you become complacent. Do you even know what 'complacent' means? >>>Dictionary: "often without awareness of some potential danger or defect; self-satisfied".


Peace,
CrucialPoint

Great stuff, always.

wow. great stuff

I have thought about this question for months off and on.

For the longest time, it seems like it would be impossible to find a way to trade w/o some sort of a reference point that would exist from the past, as w/o it seems like you wouldn't know left from right, or up from down.

But... thinking about it further, it seems like there may be several ways of thinking ABOUT the question? Seems the interpretation of the phrasing of the question could lead to several lines of thought.

This could mean that you literally have no access to past information or any reference points including the "NOW" moment when you first see where price is, as it is immediately deleted? So how could one ever fashion a system or structure a way of playing the game based on this scenario? The only thought I could come up with this, as a person would have to figure a way of structuring a series of 'bets,' where you would simply treat every SINGLE trade, as a series of linked trades. And maybe you divide that trade into 3-5-7 individual trades (or some odd number), where the goal is to be IN THE MOVE however it eventually does happen(assuming volatility is present to carry you into some distance).

Recently, I've dissolved to a simpler explanation, where the question is just phrased to mean that whatever solution you come up with, each instrument has a certain 'essence' or formula to it. I.e., one CAN use historical information over the life the contract, to come up with the solution to a given instrument. Then at the time of the trade/NOW... you would put various parameters into that formula about where price is to decide how to take your trades?

I'm sure I'll continue to think about it and possibly come up with other interpretations later in the future.