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  • #1,081
  • Feb 13, 2017 3:23am Feb 13, 2017 3:23am
Quoting cat
Overcoming fear is without a doubt the single biggest psychological challenge we traders face along the journey to success. It is not everything, and it is not the first thing we must learn, but unless we overcome it, nothing else is going to work, no matter how many years we put into it or how good we may be as analysts. First we have to learn how to trade, and once we have done, we then have to put all that knowledge, hard work and experience into practice, and this means moving into a zone in which the fear factor does not exist, or if...
Yes. Consciously everyone knows when fear is the problem, but it is not enough just to know the problem. It often can't be solved on the conscious level. And this one is deep routed in the sub-consciense, where a piece of our mind (or a small part in the brain, called amigdula), "defends" us from things that it perceives as danger, initiating a "Fight or flight" response. There are excersises for this, because motivational speaks does the trick for a short period of time, but the effects are not lasting. For dealing with stress, anxiety, fear, self-sabotage and so on, I find EFT tehniques - tapping, pretty helping.

On this site, you can find a lot of it, videos, explanations, and so on. When I first saw this, I personally was like "Oh, no, another BS... ", then I tryed and it is helping me. What is tapping? There are many videos online, I preffer Nick Ortner explanations, like this one.
Hope is dangerous in this game.
  • #1,082
  • Feb 16, 2017 8:03am Feb 16, 2017 8:03am
Whatever you trade, you need to be watching the Dow because obviously US stocks will have implications right across the board.

In what is a seemingly unstoppable Trump rally, the Dow looks to be headed for the cosmos, but, as any good trader knows, the most dangerous time to be complacent is when the price is seemingly set one way or the other. I am watching for signs however that this rally could be coming to an end. One is on the monthly chart which is showing potentially strong diversion, and the other is on this Daily chart, which you can see. the price can still rise for the Daily diversion with MACD to be intact, but I know from experience, on any time frame with any pair, that this is a potentially classic Diversion pattern, which could set up nicely to send the Dow tumbling.

I'll update on this thread when I see any developments either way.
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  • #1,083
  • Feb 17, 2017 3:46am Feb 17, 2017 3:46am
I've written, as have others, about the importance of physical fitness ( and therefore by implication, mental fitness as well ) on this thread, so at risk of repeating myself, if you are someone who falls out of bed in the morning and slumps groggily in front of your computer screen with a cup pf coffee, then you are doing it all wrong. Even if you are a profitable trader, you'll be dead before you make enough to retire.

If you start work at 6am, then get out of bed at 4.30, go for a run, do some yoga, go for a swim or a fast walk and give yourself enough time to shower, cool down, and be at your computer screen with enough time to pull up the charts and analyze the order of play for the day.

If you do not do this and you are struggling to succeed, then if it was me I know what I'd be doing first thing on Monday morning. If you do not do this and you are a successful, consistently profitable trader, then just remember that this is probably your only form of income, and you want to be around for as long as possible to reap the rewards.

The first rule of successful trading is to be disciplined, it is the number one requirement above all else. If you cannot muster the willpower and determination to get yourself into the best possible shape you can be in, then you are very unlikely to have the willpower and determination to succeed as a trader.

If you like this, and I've made you think a bit, then there's no better time for beginning your new self than tomorrow morning. If you want this badly enough, and I know we all do, then it should be no problem at all getting yourself into the physical and mental shape that successful trading requires. It's up to you.
  • #1,084
  • Feb 23, 2017 10:00am Feb 23, 2017 10:00am
I have the $ index coming down perhaps as much as 1000 pips over the next few weeks. Very bearish set up on weekly.
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  • #1,085
  • Edited Feb 25, 2017 1:24pm Feb 24, 2017 1:59pm | Edited Feb 25, 2017 1:24pm
Quoting cat
I have the $ index coming down perhaps as much as 1000 pips over the next few weeks. Very bearish set up on weekly.
Please understand: I'm not disagreeing with you. But when I saw your chart/comment, it reminded me of what I consider to be a very important point.

We can look at a chart and think it looks bearish, for whatever reason (e.g. overbought, overhead resistance, large upper candle wicks, head and shoulders parttern, divergence, etc etc). But a trend trader might simply see an uptrend (e.g. price is still above a certain MA, or trendline), which he assumes will continue, hence he sees the same chart as being bullish.

Moreover, there will be other traders looking at the same instrument, but on different timeframe(s). These charts, displaying very different patterns, might look bullish or bearish to them, depending on their trading rationale.

Still other traders are forming opinions based on different fundamental reasons. For example, employment figures are up (potentially bullish), but inflation data just came out lower than expected (potentially bearish). And if it's FX, it's more complex, because there are two different economies involved, e.g. both Europe and USA for EURUSD.

And with FX, there are more complex interrelationships, like triangular equilibrium. For example, GBPJPY = GBPUSD x USDJPY. A move on one instrument can directly 'cause' a move on other instrument. And correlations across markets, e.g. a falling stock market(s) can cause flows to a safe haven currency.

'Sentiment' is caused by a zillion conflicting reasons. For every buyer, there's a seller who's equally and adamantly confident that his analysis is "right". Ineed, it's willing buyers and willing sellers who make the market that facilitates trading in the first place.

As traders, then, we're effectively betting that our own view (bullish or bearish) matches the prevailing view among the heavyweights who potentially have the biggest impact on price behavior. For me, the key is to try to guess what the most potentially pervasive reasons might be, at any given point. The more reasons I can find, the greater my conviction in taking a trade.

We can look at a feature on a historical chart (for example, a pinbar), and see that it marked the turning point of a subsequently long move. But what the chart didn't show was the Yellen speech that contributed to the sentiment that caused the reversal, and thus helped to create the shape of the pinbar. And the fact that there were a zillion other reasons along the way that helped to fuel the subsequent move. And conversely, that there were no technical patterns or fundamental reasons along the way significant enough to overturn the move. The pinbar might be the most prominent chart feature, but we are fooling ourselves if we believe that it caused the subsequent move.

Likewise, we feel self-satisfaction and elation when price behavior subsequently proves our analysis correct, but the rationale behind our correctness is only ever one contributing reason. And given that there are only two possible ways that price can move, it's easily possible to be right, but for the "wrong" reason(s). And we can only ever guess as to what those reasons might have been.

TA is useful, but it has its limitations. Apart from the reasons above, it can not predict things like the sudden placement of huge orders (more here), unexpected news announcements, earthquakes, terrorist attacks, flash crashes and other 'black swan' events. And it makes the assumption that selected historical chart interpretations will recur frequently enough, and signpost future moves that will last long enough, to provide a genuine edge.

Things are never quite as simple as they might seem.
  • #1,086
  • Edited 10:38am Feb 25, 2017 8:15am | Edited 10:38am
Quoting hanover
{quote} ........... TA is useful, but it has its limitations. Apart from the reasons above, it can not predict things like the sudden placement of huge orders (more here), unexpected news announcements, earthquakes, terrorist attacks, flash crashes and other 'black swan' events. And it makes the assumption that selected historical chart interpretations will recur frequently enough, and signpost future moves that will last long enough, to provide a genuine edge. Things...
No they are not hanover, nothing is simple in the markets. But to me TA IS EVERYTHING, in that it is the only aspect of trading I have full control over apart from my psyche. When I take a trade, there are no thoughts in my head at all beyond clicking the mouse because the thinking has already been done. If enough traders have seen what I have seen, and have recognized it as a trading opportunity, I have a winning trade, if not I have a losing one or at best BE. Whether these other traders are heavyweights or not is of no concern to me, in fact nothing is of concern to me beyond reacting to my own TA.

Of course I can see your point, which is the futility of posting charts as I have done above when my TA will not necessarily agree with one other single trader on ff, for the simple reason that it is only my take on it and mine alone. I have also left off the chart above the two key moving averages that have formed my opinion, so again, I am aware how limited or relevant it is with regard to what other traders are seeing. With this in mind, I will not be posting any charts in the futureand will keep my posts away from technicalities - after all, why should I expect anyone to glean anything from my TA when I am never able to glean anything from theirs?

With regard to random events - Black Swans , huge placement orders, terrorist attacks etc, nothing can protect us from these, they are beyond anything we can control. TA however, my TA, has no limitations whatsoever, and I am in a continual process of improving and widening the boundaries of my own abilities in reading price movement. The only limits in the markets are those imposed by us. Can TA to be right 100% of the time? Yes, absolutely it can if we take the random element discussed above out of the equation...where is the law which says it cannot? Indeed, perfection as a trader, whether it can be achieved or not, should be the driving force behind any trader, no matter how long he/she has been trading.
  • #1,087
  • Feb 25, 2017 9:53am Feb 25, 2017 9:53am
Quoting hanover
{quote} Please understand: I'm not disagreeing with you. But when I saw your chart/comment, it reminded me of what I consider to be a very important point. We can look at a chart and think it looks bearish, for whatever reason (e.g. overbought, overhead resistance, large upper candle wicks, head and shoulders parttern, divergence, etc etc). But a trend trader might simply see an uptrend (e.g. price is still above a certain MA, or trendline), which he assumes will continue, hence he sees the same chart as being bullish. Moreover, there will be other...
I LOVE and respect the way you define things and describe them mate
Let me fill my acount wallet then will take Ur advice
  • #1,088
  • Feb 25, 2017 12:25pm Feb 25, 2017 12:25pm
Cat,
I've been a silent lurker oft this thread for the last 2 months and studied it in and out. Although I don't feel ready yet to contribute here, it is definitely a game changer for me. Thank you very much for sharing so generously!
Best
sk
  • #1,089
  • Feb 25, 2017 12:44pm Feb 25, 2017 12:44pm
Quoting sktradingfx
Cat, I've been a silent lurker oft this thread for the last 2 months and studied it in and out. Although I don't feel ready yet to contribute here, it is definitely a game changer for me. Thank you very much for sharing so generously! Best sk
Thank you SK, I'm genuinely happy that this thread has been so useful to you...it's always good to know when your threads are appreciated, because if they weren't I would have wrapped up this thread a long time ago.

I don't post so much on it anymore, as there's only so much one can pass on to others, as 99.9% has to come from ourselves, but perhaps, just perhaps, a guiding hand every now and again from others with a bit more knowledge and experience is a good thing.

Always feel free to ask me anything you may wish me to elaborate on or explain, as I will always do the best I can to answer, and obviously, I for one am never very far from the screens for too long.

All the best
  • #1,090
  • Edited 5:59pm Feb 25, 2017 2:27pm | Edited 5:59pm
Quoting cat
Of course I can see your point, which is the futility of posting charts as I have done above when my TA will not necessarily agree with one other single trader on ff, for the simple reason that it is only my take on it and mine alone ...... With this in mind, I will not be posting any charts in the futureand will keep my posts away from technicalities - after all, why should I expect anyone to glean anything from my TA when I am never able to glean anything from theirs?
I wasn't taking a shot at you or your analysis. I was making a general comment and could have replied to anybody who posted a chart and a view. Yours just happened to be the one that I saw.

I'm not a naysayer attempting to malign TA. Part of my investment portfolio is managed by a forex trader who uses TA (and a little discretion, plus some sensible risk management), and he has had 26 consecutive profitable months since I've been with him (evidence here for anybody who's interested).

Quote
Can TA to be right 100% of the time? Yes, absolutely it can if we take the random element discussed above out of the equation...where is the law which says it cannot? Indeed, perfection as a trader, whether it can be achieved or not, should be the driving force behind any trader, no matter how long he/she has been trading.
I don't believe in 'perfect' analysis, or that it's possible to be 'right' 100% of the time, largely for the reasons that I gave in my previous post. Analysis is merely subjective interpretation into a market that can behave as irrationally (from the trader's viewpoint) as it pleases. And if a 'holy grail' existed, there would be no need to manage risk. But as we both know, it's possible to be profitable with less than a 100% win rate; that is the basis of an 'edge'.

I fully agree that traders can only do their best in analyzing whatever information is available to them. In many ways TA is more transparent, more readily available, and arguably more digestible than FA. If your analysis/methodology brings you a net positive result, there is no reason to change it, but by all means look toward continual improvement in your understanding of PA, and how and why markets work. IMHO nobody can argue against any of that.

Quoting rafat habeb
I LOVE and respect the way you define things and describe them mate
Thanks. I'm not a pro trader; I merely post my opinions, right or wrong.
  • #1,091
  • Feb 26, 2017 8:09am Feb 26, 2017 8:09am
[quote=hanover;9599244]{quote} I wasn't taking a shot at you or your analysis. I was making a general comment and could have replied to anybody who posted a chart and a view. Yours just happened to be the one that I saw. {quote}

I know you weren't hanover, and I didn't see it that way. Your post was a very interesting one which sought to analyze the many complex reasons for price movement. My comment was merely an attempt to wash over for the benefit if the trader, because when one is a purely technical trader as I am, the secret to success, I believe, is to simplify as much as possible something which is as intricately complex as price movement, and I do this by trading in a TA vacuum that filters out everything except what I see visually infront of me. So whether a pin bar causes the price to drop or rise suddenly is of no concern to me in isolation, but whether that pin bar is in the correct place for a trade to be initiated, is.

Yes, it's possible to be very profitable even if your win/loss ratio is 40/60, but I do believe it is possible to get very close to a 100% win rate with technical trading. That is not to say I am there, or that I ever will be, but that is my goal, and I believe it is the right one to have as a trader. Why? Because there are very few losing trades which I can look at with hindsight and say - ' that was the best entry I could have had, and there was nothing else I could have done about it '. Almost all losing trades are due to a mistake on my part, which means there will always be room for improvement, which as I see it, is the never ending pursuit of trading perfection.

Your opinions are extremely valid, so please don't refrain from posting on any of my threads whenever you want to.
  • #1,092
  • Feb 26, 2017 9:11pm Feb 26, 2017 9:11pm
Quoting cat
Quoting hanover
{quote} I wasn't taking a shot at you or your analysis. I was making a general comment and could have replied to anybody who posted a chart and a view. Yours just happened to be the one that I saw. {quote} I know you weren't hanover, and I didn't see it that way. Your post was a very interesting one which sought to analyze the many complex reasons for price movement. My comment was merely an attempt to wash over for the benefit if the trader, because when one is a purely technical
...
The reasons for price movement are simple.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #1,093
  • Feb 27, 2017 12:35am Feb 27, 2017 12:35am
Quoting TooSlow
{quote}{quote} The reasons for price movement are simple.
Simple or not, we don't need to know them as traders. Screen time teaches us everything there is to know about price movement.
  • #1,094
  • Feb 27, 2017 6:49pm Feb 27, 2017 6:49pm
Quoting cat
{quote} Simple or not, we don't need to know them as traders. Screen time teaches us everything there is to know about price movement.
Screen time is necessary but not sufficient.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #1,095
  • Feb 28, 2017 12:12am Feb 28, 2017 12:12am
Quoting TooSlow
{quote} Screen time is necessary but not sufficient.
For you it may not be, for me it is.
  • #1,096
  • Feb 28, 2017 3:01am Feb 28, 2017 3:01am
Some people are fixated on news...they have Bloomberg on all day, squawk boxes going, constantly worry about news releases and in general end up becoming nervous wrecks unable to trade efficiently because they are so worried about external factors influencing the markets. I'm sure most people aren't like that, but I'm sure some are.

Well believe me, you don't need all that shit in your trading day, all you need is your charts, some nice trading friendly music, and an early morning look at the ff calendar to check for any red flags that you need to be aware of. Your charts tell you everything there is to know to make money in this business. You, your screens, your knowledge, your experience, your killer instinct, and the cat for company, are all you need. Everything else is surplus to requirements.
  • #1,097
  • Feb 28, 2017 3:18am Feb 28, 2017 3:18am
Quoting cat
Some people are fixated on news...they have Bloomberg on all day, squawk boxes going, constantly worry about news releases and in general end up becoming nervous wrecks unable to trade efficiently because they are so worried about external factors influencing the markets. I'm sure most people aren't like that, but I'm sure some are. Well believe me, you don't need all that shit in your trading day, all you need is your charts, some nice trading friendly music, and an early morning look at the ff calendar[/highlight]...
I agree with this. I have worked in a company that placed enourmous flat TV with Bloomberg 24/7 in the office, and it is was just distracting. Nothing there for me, just blah, blah, blah, noise, additional stress... no talking head can help you. Trading in its core is very simple, if the instrument is on support, you buy that, if it is on resistance - you sell it... Simple, but for many reasons not easy. As a trader you answer for your actions... all of this other things are used for excuses, like - "the guy on Bloomberg TV just told to buy Gold on 1,650... and look at it now"... well, dude - look on your charts. Bloomberg? Here is one interview from them, about a famous trader - a Japanese trend follower who kick ass, and how he made millions on that Aug 2015 fall. How he trades? Simple. "Buy stocks that are being bought, and sell stocks that are being sold."
Hope is dangerous in this game.
  • #1,098
  • Feb 28, 2017 3:43am Feb 28, 2017 3:43am
[quote=StrayDog;9606896]{quote} Trading in its core is very simple, if the instrument is on support, you buy that, if it is on resistance - you sell it... Simple, but for many reasons not easy.

But you have to know where S&R are, not some guess as to where they are likely to be, but where they are likely to be based on empirical observation over many thousands of hours/days.
  • #1,099
  • Feb 28, 2017 4:25am Feb 28, 2017 4:25am
[quote=cat;9607012]
Quoting StrayDog
{quote} Trading in its core is very simple, if the instrument is on support, you buy that, if it is on resistance - you sell it... Simple, but for many reasons not easy. But you have to know where S&R are, not some guess as to where they are likely to be, but where they are likely to be based on empirical observation over many thousands of hours/days.
Offcourse you have to know that, no need for discusion there . IMO, the best S&R levels are clearly visible on any chart. Like, for example right now DAX is bouncing from Yesterday Low. Do not expect to hit the level to the tick. It happens, but most of the time it will overshoot or undershoot for a few points. It is a reactionary trade for 15-20 points. First step is to train your eye to spot these places. Make a IF - THEN plan, and trade it, if price come to you. And yes, be disciplined to sit on your hands while market chop around for hours, and so on... One of the reasons why this game is not easy. Screen time and knowing what some market can do, and what is unlikely to do. It takes time, but when you finally train yourself to identify areas / zones / levels where you can enter a trade with assymetrical risk/reward and with confidence, that is your edge. Markets evolve. This is low vol market for quite some time, and I get way better results with fading zones, than with continuation type of trades - i.e. good move and you wait for pullback to fib retracement or former broken level. When you look at indices, which I trade, there are maybe 2 days per month with good moves, everything else is either ranging, or grinding higher. So, I fade zones most of the time, trying to get good R/R on every trade, but the targets are way smaller than in high vol environments. Look at DAX again. What did it do for now - drop from resistance zone to support zone, slow moving = fade the edges.
Hope is dangerous in this game.
  • #1,100
  • Edited 6:37am Feb 28, 2017 5:56am | Edited 6:37am
[quote=StrayDog;9607185]
Quoting cat
{quote} Offcourse you have to know that, no need for discusion there . IMO, the best S&R levels are clearly visible on any chart. Like, for example right now DAX is bouncing from Yesterday Low. Do not expect to hit the level to the tick......
But what caused it to stop where it did yesterday, and why should it do the same today when the whole chart configuration is completely different. I have today's support lower down...I had two major MAs giving support yesterday, one of the being the H2 200ema which is holding it right now, but that should break today, so now I've got two likely support levels, the first being the 61.8% at at 11,777, and the second being S2 which is right on top of the 200sma. Those are my support levels for today, and they've got nothing to do with yesterday, apart from the fact that the H2 200ema is still there. Should S2 break, then I move to the H4 chart, and the H4 200ema which is just a few pips below today's S3, and that level gave the support on Friday's big fall. As for resistance, I have a moving average on the 2 and 4 hour time frames, that has been the clear level so far this week, from which the price has today fallen away. expectedly. The previous day's high/low is never R&S for me unless my charts say so.

The fact is, too many relatively inexperienced traders have no idea how to plot daily S&R, and even if they have, they are not able to time their entries without using an overly wide SL, which leads to losses, or an ovely tight one which, with a poor entry, stands a high chance of being knocked out, the results being account drawdown, loss of confidence, increased fear of putting on a trade, and ultimately the death ( metaphorically of course ) of the trader. In short, trader's lose because they do not know what they are doing. Plotting the correct S&R is an absolutely fundamental prerequisite to trading success, though the majority cannot do it. If they could, there would be many more successful traders. Sorry if I sound too negative, but it's difficult not to be when 90% or whatever it is of traders are out of the game within two years of having started.
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