Forex Trading Philosophy

I posted this elsewhere on FF. Thought it was appropriate here.



It's Saturday morning and I felt like writing something here.

Supply/demand trading is a concept that has been around for centuries if not millenniums. So with that in mind do you think the fabricators of these zones (Big Money) is aware of what they are doing and the tracks they leave on the chart? Why will price blow through a very strong zone like shit through a goose only to be stopped by something that looks insignificant? Or are they going to leave billions of dollars, pounds, yens and euros dormant for weeks just because it is a zone? Every day I am thinking about trading and how my life interacts with theses questions and many more.

The point of this is to realize that trading is much more then marking a zone and placing orders, a monkey can do that, and the monkey pays the price. Would Wallmart sell bathing suits in North America in December? But they will sell them in Australia. Is the Forex market any different?

I have spent a lot of time in the woods doing various activities. The tracks left behind by various critters tell a story if you are willing to take the time to read it. Where they go for water, food, safety or bed down can all be seen once you learn what you see. The same holds true for the tracks left in the market. To me reading price is much more then what price is doing now or what it did to the left. What is the "intent" of the price now? What was it yesterday? Why does a deer pause at the edge of the woods before stepping out into a meadow to graze? All issues of supply and demand.

So some things to think about.

1. What is the intent of the money behind the move.
a. Right now
b. This week
c. last month

2. What time of day is the best time for those in charge to accomplish their intents.

If a bank wants to fill billions of dollars in orders and a 4h zone is hit with the opening of the Aussie session is it going to happen? Usually it is like selling surfboards to cowboys. Sure some will buy but usually not a very good marketing strategy. Is a cougar going to hunt for deer in the middle of the afternoon? It is all supply and demand.

The animal kingdom is made up of two types of critters, predators and prey. Predators have their eyes on the front of their head. This enables them to focus all their intention to the prey that is hunted, the deer who does not pause at the edge of the meadow. Prey's eyes are on the side of their head. They have a much wider field of vision and can easily see movement and run to safety. Retail traders in the Forex market are prey. Yet our eyes are on the front of our heads...predators. Could this be why we don't understand price action at times? Maybe we are seeing it from the wrong perspective. There is a Grizzly Bear in the woods tracking your every move waiting for one mistake. (I have been trailed by a Grizzly). When you as a predator are being trailed by a Grizzly you then become prey. At this point are you thinking like a predator?

So the point of all this.

To think outside the box that was made for you as a trader 1000's of years ago. The Grizzly is a master hunter and understands supply and demand. The banks are master hunters and understand supply and demand. Now where do you fit into this picture? Now how do you profit from it?

Have a good weekend with food for thought.

Rufus

Mostly Filled With Space :nerd:


Between a Proton and Neutron are filled with space.
Between a Nucleus of an atom and Electron are filled with space.
Between Atoms are filled with space.
Between Atom and Membranes are filled with space.
Between a Membrane and Cells are filled with space
Between Cells and Organs are filled with space.
Between Organs and Body are filled with space.
Between Bodies are filled with space.
Between Body and Earth are filled with space.
Between Earth and Planets are filled with space.
Between Planets and Galaxies are filled with space.
These are tangible things filled with space.



Between Rhythms in Musics are filled with space.
Between Brainwaves of a thought are filled with space.
Between Breath are filled with space.
Between Letters and Numbers are filled with space.
Between Cycles are filled with space.
Between Words and Sentences are filled with space.
Between the Unconscious and Conscious thoughts are filled with space.
Between Emotion of Love and Hate are filled with space.
Between the Tangible physical objects and Intangible non-physical ideas are filled with space.
These are the Intangible Consciousness filled with space.



Most trader fails at trading because they have not come to the awareness that trading is mostly filled with space.

within a given time frame, scroll left, if new highs were made, only look for buy opportunities; if new lows were made, only look for sell opportunities, good entries are at where most people think it's a trend change.

it seems gems like

http://www.forexfactory.com/showthread.php?p=3465822

and

http://www.forexfactory.com/showthread.php?t=245149

are meant to be buried deep.

yes, even on earth, treasures are buried deep and beneath.

Just read the posts by cp and pipeasy, it's not hard to understand them, both seem living in Australia, I used to have a colleague telling me Aussies are rather street smart, it's sure a trader quality.

CP is obvious a smart guy, even a year younger than me, but his post defintely required a lot of effort that I could not put into place. I admire him to be honest.

I used to think I am quite smart back in my early 20s, after I did an IQ test and scored way above average, until I got totally destroyed by a younger man who is always 2nd place at Cambridge of his batch, the 1st was always a Korean. Lol.

I spend well over a hour to finish the test, but he could finish it in 50minutes and scored higher than me. The beauty of IQ test is, if the brain is not hardwared to have the complexity and capacity, it does not matter how long it takes, I can't figure it out means I can't figure it out, period.

I am telling this story because, if a new trader wannabe comes, its good to chew something a smart one is willing to spit out. Sometimes, one just need a pointer by someone to move into the right direction. Don't expect spoon feeding, seek the aha moment.

Pipeasy has good opinions in stacking positions so that gains can be exponential. CP basically taught everything a trader needs to know.

I already stumbled upon the third picture ( the chart with water ) on another forum some years ago, and interestingly enough, the person was also alluding to the optical illusions and deception occuring on the charts, as CrucialPoint did. That person did not speak about the importance of space per se, but this is something I came to understand (to a small extent) thanks to him (and some others).

However, the first time I did not notice the tiny black candles inside the big candles. Is it a coincidence that they are here ? What could be their meaning if there is any?
Here is the picture with 4 of them circled in case some of you don't see what I mean.
As you can see, they are created in relation with the previous and next big candle, according to their body/wick and the body of the actual big candle.
Just wondering
(Google Images did not help ^^ )



030985

Paul Tudor Jones
is concerned that a laser focus on profits is, as he puts it, "threatening the very underpinnings of society."

The variables influencing any trade outcome are infinite.The mind of man is finite. We cannot possibly take into consideration, even with the aid of the fastest computers,the affect, cumulatively of all variables. We must,therefore,limit our attention to those few conditions in which variables are reduced to manageable quantities that can be quantified and evaluated in real time. The minimum variable conditions exist and are correlated, in my opinion, with trend changes.Identifying those points in time is the problem, taking advantage of them,is yet another problem requiring a different thread and discussion.

Overcoming Obstacle

just want to rambling

"WHY THE FU**K all good thread die fast ?"

my Philosophy for FF, find all the gold in the trash

because human are lazy and stupid

market is the psychological reactions of both buyers and sellers. If anyone, scientist/economist or not, telling me that market can be mathematically modelled so that y=f(x) holds, where x is the number of factors and y is the price, i will be gladly raising both my middle fingers to him/her and tell him/her to GTFO, period. modelling (predicting) market is as good as to predict what am I going to do in the next few seconds, guess i am going to punch these geeks' noses, i am sure i will do it.

buyers seek to buy low first, then sell higher later, if price continuously makes new highs, buyers would be happy to hold onto their long positions and adding more long positions if possible assuming price could go even higher. this condition changes until price failed to make a new high and stalled. the psychological reaction of buyers will be, naturally taking some profits thus adding the selling pressure but of course, these buyers won't start selling yet. until, their most recent stop is hit or break even (naturally most recent low deemed as a price support). things start changing now as long positions getting closed, instinct is telling buyers, run if you still can and take some trophies. some buyers (scalper and intraday) will close all the long positions, and wait for a good price to start selling, this usually is when price is pushed back to the last buy zone, trapped buyers will close their long positions at small or no loss and every tom dick henry will start selling. this cycle repeats just that at different time of a day, the participants change and the strength of participants change which, no one can predict.

so, as long as new highs are made, seek retrace to buy. a typical way is to use higher time frame to identify the zones potentially price will retrace to, then zoom into smaller time frames to check for higher high to buy.

same thing for sell.

edit: typo, lol

and all the good thread always in cyptic need to decipher it and the hardest part internalize it to ourselves

that's why, stupid and lazy don't fit into this business, in fact, any business.

Not about trading specifically, but as relevant as can be:

Big lol, like roger mayweather says : you dont know shit bout boxing.

Agree that, unless a trader is big enough to move the market, he can only ever react to what the market is doing.

But, in order to "manage the now", a trader must implicitly predict the future. For example, if I'm in a trade, any decision that I make (whether to exit; stay in the trade; add to my position; etc) is based on what I believe that price is more likely to do henceforth. Or, if I'm more of a quant trader, it is based on a predetermined plan that has some kind of proven statistical basis. Either way, trade management rationale involves implicit prediction of what is more likely, than not, to happen next. [Unless, of course, it's the result of an emotional reaction (e.g. fear of losing profit attained thus far) which the market takes no cognizance of, and is therefore effectively no better than a random guess.]

The same applies to entries. Anything employing more intelligence than a coin toss involves an implicit prediction of how price is more likely, than not, to behave henceforth.

Thats a great video Medici, it pretty much nails the difference between winners and losers.. how many people have the x factor to go the extra mile.. most people don't have it..

If there's one thing I believe to be invariant about markets is that such a thing called 'trend' exists.

http://intel.harriman-house.com/trad...andom-entries/
http://www.automated-trading-system....-monkey-style/
http://www.automated-trading-system....on-randomness/

As to how it arises, I don't really care but I am guessing it's a result of human nature and how we react to change.