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A jump to the beginning - chaos and market forces

  • #161
  • Sep 30, 2015 12:59pm Sep 30, 2015 12:59pm
Quoting mvp77
{quote} I love your posts. Seems you write the whole day to be the smart guy.
CP is one of the well respected guys in this forum. There are many people like me who learn from his posts. Please Respect and learn from the posts else just ignore and leave. I'm not trying to judge you but please don't distract him. Thanks
  • #162
  • Sep 30, 2015 1:05pm Sep 30, 2015 1:05pm
Quoting tradeforlife
{quote} CP is one of the well respected guys in this forum. There are many people like me who learn from his posts. Please Respect and learn from the posts else just ignore and leave. I'm not trying to judge you but please don't distract him. Thanks
I respect who I want!

And show me, what you have learned from CP.
  • #163
  • Sep 30, 2015 1:11pm Sep 30, 2015 1:11pm
Quoting tradeforlife
{quote} CP is one of the well respected guys in this forum. There are many people like me who learn from his posts. Please Respect and learn from the posts else just ignore and leave. I'm not trying to judge you but please don't distract him. Thanks
Don't bother defending me because all the other trolls will come.
Just ignore him.
He's got some serious problems.

  • #164
  • Sep 30, 2015 1:17pm Sep 30, 2015 1:17pm
Yes.
My problem is i am not a sheep !
  • #165
  • Sep 30, 2015 1:20pm Sep 30, 2015 1:20pm
Heres a 'random' thought...

Im walking down a street when all of a sudden a bird shits on my tshirt.
I get angry, then laugh, then look for something to wipe it off with.

Depending on how 'settled' i am with my mind...this will either piss me off or i'll just shrug it off and carry on.

So, is my psychology/behavior on that given day INFLUENCED by my actions or by the birds actions.

Does psychology/behavior drive the market? Or is it the opposite? The market drives the psychology/behavior?


Just something im thinking about.
  • #166
  • Sep 30, 2015 1:26pm Sep 30, 2015 1:26pm
Everyone here must be as respectful as possible with all posters and with the content posted.
I absolutely don't want useless posts.
Everyone has two possibilities, over the second I'll ban instantly. This time mvp77 said goodbye.
  • #167
  • Sep 30, 2015 1:43pm Sep 30, 2015 1:43pm
Quoting Pipalicious
Heres a 'random' thought... Im walking down a street when all of a sudden a bird shits on my tshirt. I get angry, then laugh, then look for something to wipe it off with. Depending on how 'settled' i am with my mind...this will either piss me off or i'll just shrug it off and carry on. So, is my psychology/behavior on that given day INFLUENCED by my actions or by the birds actions. Does psychology/behavior drive the market? Or is it the opposite? The market drives the psychology/behavior? Just something im thinking about.
You are right
  • #168
  • Sep 30, 2015 1:52pm Sep 30, 2015 1:52pm
Here is an article by Van Tharp, the author of "Trading beyond the matrix".


Principles of the Conscious Mind

by Van K. Tharp


Through my workshops, courses, and programs, traders learn that whatever you have in life right now is exactly what you want. It might not be what you think you want, but it is what you want. If what you have doesn't correspond with your conscious goals, it is because you have a lot of conflict and sabotage programmed into your unconscious mind. I have devoted a good deal of my work to self-sabotage and how to overcome it.

The Conscious Mind

I define the conscious mind to be everything you are aware of and the unconscious mind to be everything else. However, this definition can be expanded by comparing the qualities of awareness with the qualities of those parts of your mind of which you are unaware. For example, your conscious mind has four primary qualities that are useful to explore.

FIRST: It has a limited capacity for processing information.

SECOND: It is the seat of your intellectual capacities. It is responsible for such skills as planning, logical reasoning, higher order thinking, etc.

THIRD: It provides you with your sense of self. That is, your conscious mind helps you distinguish what is you and what is not you.

FOURTH: Lastly, your conscious mind tends to focus on those things that you do poorly. More on Limited Capacity:

Here’s a little more on the conscious mind’s quality of limited capacity:

You might think of your conscious mind as that part of you which is constantly thinking and chattering in your head. You think diverse thoughts such as what you are going to have for dinner; how you should have gotten out of that last trade much earlier; why your spouse left the house without saying anything to you last night; one of your upper molars is starting to bother you; and you need to lose weight. Bits and pieces of different thoughts such as these, plus thousands more, are constantly going through your head.

As you observe all of this, notice that you only have one thought at a time. Why? Because your conscious mind has a limited capacity for processing information. Psychologists estimate that its capacity is seven chunks of information, plus or minus two. For example, if I were to ask you to repeat a long list of numbers, you probably could recall about seven of them.

Interestingly enough, because of the way we evolved, your capacity for processing information under stress is even less. For example, imagine primitive man fleeing from a predator. One of our primary advantages in the evolutionary scheme of things is our large brain. It allows us to be creative, to plan, to develop tools, etc. Normally our brains get a large percentage of the blood supply flowing from the heart in order to sustain these functions. But under stress, that blood is redirected toward the major muscles, such as the legs and the back, and away from the brain so you can run faster or you have more strength to fight. At the same time, conscious processing capacity is reduced dramatically. In a typical stressful but non-life threatening situation, you just keep doing what you are already doing only with a lot more energy. This automatic response to stress is not particularly effective for traders. Thus, one of the secrets of trading success is to use more unconscious processing capacity.
  • #169
  • Sep 30, 2015 4:03pm Sep 30, 2015 4:03pm
ok in one hour candle there are four 15 minutes candles. Always.
Now, lets say in a non time based chart, like PNF
How many 15 pips boxes are there in a 60 pips box ?
( i ll post a pic of PNF just below )
  • #170
  • Sep 30, 2015 4:13pm Sep 30, 2015 4:13pm
Small profit/Breakeven/Small loss VS Medium/Big-Loss

First of all a premise: stop loss is not the only way to get out in loss.
Stop loss is only a caution because everything can happen to you or around world from hurricane, war, aliens and price can move in the opposite direction very fast or simply you can't manage the trade (unexpected issue).
In order to prevent a huge drawdown use stop loss.

Its important to realize two things: one is that price can move against you, second is that market is a sea of opportunities.

Your primary target should be protect your capital >> thus you can trade when opportunities will appear.

Everything can change right that moment you are in a trade >> thus you can't think to open a trade, set target/stop and watch youtube.
The idea is to catch big moves >> thus you need money to do that >> preserve capital.

People tend to close trades too late or too early, depending on the situation.
Too late when they are in loss and too early when they are in profit >> this way of trading blows accounts.
Is trade going wrong? You don't know what will happen, you can't think its a retrace and continue to lose more and more >> close it.
Is trade going right? You don't know what will happen, you can't think it will reverse or you cant think it will be a big move >> manage your trade and take as much as possible.

Small profit/Breakeven/Small loss VS Medium/Big-Loss? >> protect your capital.
One way to overcome this psychological problem is to understand that market is a sea of opportunities. Sit and watch your system giving signals, don't trade just watch.
The idea is to shape your mind since you will feel comfortable with Small profit/Breakeven/Small loss.

Attached Image
  • #171
  • Sep 30, 2015 4:15pm Sep 30, 2015 4:15pm
Quoting metta87
ok in one hour candle there are four 15 minutes candles. Always. Now, lets say in a non time based chart, like PNF How many 15 pips boxes are there in a 60 pips box ? ( i ll post a pic of PNF just below )
ok here are some pics.
Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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  • #172
  • Edited 8:24pm Sep 30, 2015 7:09pm | Edited 8:24pm
Quoting strongtrader
Here is an article by Van Tharp, the author of "Trading beyond the matrix".
Isn't it interesting how someone such as Van Tharp, who is recognised by many mechanical traders as possessing a philosophy that is exceedingly rules based and objective...... retains such an open mind regarding 'the conscious mind'.

In my earlier days I used to adopt the position that when you saw these 'masters' stray into esoteric grounds, that they were losing the plot .....but then I realised.....hey, perhaps that is my bias talking and not their problem. It is only when you become aware that you have the blinkers on that the lightbulb of awareness flashes.

True knowledge is inevitably accompanied with a 'halleluyah moment' and this does not mean that this knowledge is that which is unique to the world, but rather that knowledge that comes from 'self awareness'.

From a Western viewpoint, the concept of a 'guru' is hard to fathom as it is inevitably accompanied with biases associated with mistrust. A Zen teacher however has absolutely no desire to control or teach. In fact it is the exact opposite. What they do is simply act as a facilitator that is specifically designed to 'self empower' the individual. They do this by esoteric 'jokes' and riddles' that for some reason, us as Westerners (biased by our historical worldview) feel should have intense deep meaning.

These lessons from the Guru are simply used to 'snap us out of our biased mindset'. What in reality these lessons teach us is that any answers to our problems cannot come from teaching itself, but 'self awareness' of our biases or blockages that blind us.

Zen is all about letting go of the 'thing's that bind us or we 'cling' to. In doing so, the perpetual release of these blockages ultimately brings the mind to a perfectly free state, where the 'flip' occurs and you suddenly become sublimely 'self empowered'. That ability to see things for what they 'are' as opposed to what we 'think' they are (or how we consciously shape them based on our accumulated experiences). This flip is a symptom of a systems evolution where things move between 'polar opposites'.

The questions most of us are seeking in life are just not important as these questions traditionally arise from our own biases and insecurities. So when the riddle from the Zen master comes back at you, take it in the manner is was given to you, namely a joke recognising that the answer cannot come from the master but from yourself. The Zen master is laughing at us (the actor) as it is implicit with this form of response that we should already know. Westerners of course think that has deep hidden meaning as we are progressively becoming detached from being thinking creatures by blindly following the rules imposed on us by those with 'ego'.

What Zen is teaching us is that we already know the answers as the ultimate test of whether we truly understand our reality come from being at harmony. In this mind-state, no external rules foisted on us bind us and we are perfectly free agents. This of course scares the Westerner used to living in a controlled environment as it makes those with that viewpoint 'untrustworthy' where the contrary opinion is the more approriate version.

This is the most democratic basis to treat us as human beings. If you prefer a regulated world, where decisions are made for you, then blindly follow the teacher, but if you prefer self-empowerment, then take a queue from the Van Tharpe's, Einstein's, Bohm's, Watt's of this world and learn to become free thinkers.

I am hoping that the participants of this thread are adopting this same viewpoint as the sharing of ideas is critical to awareness. Those that deride with an ulterior motive need to take a step back and just accept that no one in this thread is being brain washed. We are all voluntary participants here simply enjoying the art of talking and free thought.
  • #173
  • Sep 30, 2015 7:20pm Sep 30, 2015 7:20pm
Quoting Copernicus
{quote} Isn't it interesting how someone such as Van Tharp, who is recognised by many mechanical traders as possessing a philosophy that is exceedingly rules based and objective...... retains such an open mind regarding 'the conscious mind'. In my earlier days I used to adopt the position that when you saw these 'masters' stray into esoteric grounds, that they were losing the plot .....but then I realised.....hey, perhaps that is my bias talking and not their problem. It is only when you become aware that you have the blinkers on that the lighbulb...
salute and yes lets always open mind and self awareness
we don't predict, we only ride
  • #174
  • Sep 30, 2015 7:25pm Sep 30, 2015 7:25pm
Quoting Copernicus
{quote} Isn't it interesting how someone such as Van Tharp, who is recognised by many mechanical traders as possessing a philosophy that is exceedingly rules based and objective...... retains such an open mind regarding 'the conscious mind'. In my earlier days I used to adopt the position that when you saw these 'masters' stray into esoteric grounds, that they were losing the plot .....but then I realised.....hey, perhaps that is my bias talking and not their problem. It is only when you become aware that you have the blinkers on that the lightbulb...

"It is the mark of an educated mind to be able to entertain a thought without accepting it."
~ Aristotle
  • #175
  • Sep 30, 2015 7:26pm Sep 30, 2015 7:26pm
Quoting cakrajaya
{quote} salute and yes lets always open mind and self awareness
Thanks C Let's hope this thread flourishes and does not go the way of the dodo.
  • #176
  • Sep 30, 2015 7:28pm Sep 30, 2015 7:28pm
Quoting JR97
{quote} "It is the mark of an educated mind to be able to entertain a thought without accepting it." ~ Aristotle
Nice :-)
  • #177
  • Edited 10:29pm Sep 30, 2015 10:00pm | Edited 10:29pm
Form, the opposite of Price (that within which price is constrained)

Thinking holistically of a system, it is often worthwhile wondering whether a narrow focus on price alone is the answer to trading. It is very easy to get caught up in the explicit form being the 'reality' such as an abstract definition of trading (a drawing) being a bar or a candle. These explicit interpretations are simply symptomatic expressions or ways we humans like to come to the grips with the heart of the matter, namely exchange interactions of value and risk in this market that occur between buyers and sellers.

When you say, 'price action is everything' and in the same breathe you simply refer to the lines on a chart, then what you must recognise is that these diagrammatic expressions are just interpretations or 'indicators' of underlying price behaviour. A bar or a candle represents how different viewpoints are manifested on an abstract chart. The price itself represent the different viewpoints of the participants and represent the uncertainty in current value or market consensus (collective perceptions).

Unfortunately without perfect knowledge of participant intent, then we only ever have these 'proxy' abstract tools to guide us, but what is essential is to look wider than the visual representations themselves and focus on the form that these patterns take. This is where a bit of 'yin and yang' comes in as the important features of form represent the form constraints as opposed to the content (or composition) of the form itself. For example the frame of the picture is as important as it's contents or where space plots in a picture is actually part of the form as opposed as the coloured dyes that are placed around these spaces.

In a system form is manisfested by the way system constraints dictate the 'moving' boundaries within which the participants can interact. The boundaries of form actually gives powerful clues as to the way future price action may unfold. For example in a typical price chart we have an abstract definition of how participants behave by the ways the bars/candles in a composite form manifest within boundary constraints and this is represented by the boundaries of volatility.

Price movement compression in a trading range represent a symptom of 'same old same old' with regard to participant expectations. There is no propensity of behavioural view towards future price direction and expectation of price level is orderly and trades with associated low volatility in a narrow trading range. The form this takes is that of a defined narrow boundary within which price oscillates and gyrates. With differing views of future directions, uncertainty in overall boundary constraints leads to increased volatility of price action within these 'less certain' contraints applied to market consensus.

A trend exists when market consensus agrees that the current boundaries are no longer valid or representative of market consensus and hence the form shifts to one of an inclined nature to move collective value within boundary constraints to where future consensus agrees.

So from a very 'real' perspective you can get too caught up in attempting to trade the 'uncertainty' itself (the noise witin the constraints) which is where many traders come undone as opposed to listening to the market and taking heed of the constraints that are defining market form.
  • #178
  • Sep 30, 2015 10:14pm Sep 30, 2015 10:14pm
Quoting Copernicus
Form, the opposite of Price Thinking holistically it is often worthwhile wondering whether a narrow focus on price alone is the answer to trading. It is very easy to get caught up in the explicit form being the 'reality' such as an abstract definition of trading (a drawing) being a bar or a candle. These explicit interpretations are simply symptomatic expressions or ways we humans like to come to the grips with the heart of the matter, namely exchange interactions of value and risk in this market that occur between buyers and sellers. When you say,...
I love read this thread, and made me more confident that finally all its about art.
we don't predict, we only ride
  • #179
  • Sep 30, 2015 10:28pm Sep 30, 2015 10:28pm
Quoting cakrajaya
{quote} I love read this thread, and made me more confident that finally all its about art.
There is beauty in science.....I always sway between the two schools of thought...so perhaps like wave particle duality...it is both....or just one from two different perspectives. Where is my LSD?
  • #180
  • Sep 30, 2015 10:53pm Sep 30, 2015 10:53pm
Quoting katrooo
{quote} This is a wrong assumption. For the sake of simplicity, imagine the market is created by 10 market makers and another 10 risk takers. There are many events happening during the day and these market makers will be quoting different bid/offer on their machines based on the newest available data / events. These 10 market makers and 10 other risk takers might take 0 trades during the day and yet price might move, because market makers constantly keep adjusting bid/offer based on latest available information. You just take this logic and translate...
Good points katrooo. I was going to post something on this but decided not to bother, then I saw your post. HFT is more and more moving bid ask prices on micro timeframes without any order flow. This can be seen by studying the book on a futures contract such as the grains or gasoline on the overnight session. The flash crash in stocks happened with very few orders getting filled. HFT firms continued to cancel orders all the way down ahead of customer orders. The news example in FX is probably the best recurring example of how low order flow with high price volatility can happen. Sometimes very large price gaps occur in FX, and when this happen the gap occurs with no orders being filled. The orders are matched after the instrument reopens but the price moved to this new level without any orders getting filled.
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