Trading In The Zone and The Holy Grail

[flyswatter77]

Originally posted by RealFX


That's what I gotta figure out... how to put those in my favor and not live within the 50/50 realm..

Handle- I like your definition of an "edge".

Maybe that would make a good thread. "The elements of putting the probabilities in your favor"

Thanks again for sharing from Trading in the Zone.

Michael

[autofx]

Originally posted by flyswatter77


Maybe that would make a good thread. "The elements of putting the probabilities in your favor"

I've tried. See this and this.

[autofx]

greggerh,

Good job selecting material for your post. You get it, obviously.

[autofx]

Originally posted by flyswatter77


Excellent thread guys. Getting this right will go a long way towards making for a successful trading business. If these priciples were kept in mind when the trader was developing his/her own trading style it would be much easier to recognize what the elements of a successful trading plan might be. I am convinced that adopting the mind-set shared on this thread and exercising sound money management is the single most important lesson that I can learn.
Thanks again for sharing some "real" trading wisdom.
Michael

Give credit to Mark Douglas's writing -- it's terrific. I especially like
his parallels between casino gaming and trading. I think for most
traders, his ideas are easy to grasp, though applying them is not
that easy. Even if you get the emotion out of your trading and
can think objectively in terms of odds, you still have to screen-
watch and stay up odd hours (if you trade currency in my time
zone, anyway). This is why automatic trading makes sense for
me. Semi-automated trading, where alarms sound when there
are actions to be taken, can also work very nicely.

[KPcurrency]

Autofx not sure where the quote comes from.

This quote, comes from another one of the must reads:

"After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and lots of early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level that would show the greatest profit. And their experience invariable matched mine- that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade(sit) than hundreds did in the days of his ignorance." ~Edwin Lefevre Reminiscences of a Stock Operator

When you trade for expectancy, you are trading to make money by making more when you're right than you lose when you're wrong. This is done by sitting tight. (let your profits run).

I believe in surrendering to the market. And if you are trying to mirror the market, to follow it, then it becomes obvious when to get out. We just keep moving our stop until the market turns against us and takes us out.

[autofx]

KPcurrency,

That's solid thinking.

Surrendering to the market doesn't come easily to certain types
of people. A good example would be ex-CEOs who think they're
going to enter the trading arena and, due to their wonderfulness,
or force of will, have a financial market move as they will it to or
desire it to whenever they place a trade. These are people who
are used to not being told they're wrong.

Bad mindset for a trader!

Others think trading is some cutthroat, high-adrenalin contest of
nerves. Out of the gate, these types charge themselves up
emotionally, sabotaging their ability to calmly react to whatever
the market does next. A few of those have been running around
the MoneyTec forums! Don't heed any "advice" they might have.
I doubt if any of the level-headed people posting on this thread
need this warning.

[MickMason]

Originally posted by RealFX



I was recently looking at an open source JAVA neural net program, but dont plan to pursue it. My style appears to be more discretionary fundamental/psychology than raw numbers or some machine humming in the background running eqations and trying to learn that which is random.

There's not an automated system that's proved profitable long-term, all the ones live tested here have lost money, although Gary did come very close until the market started ranging.

As for the topic, from a psychological perspective it can help to view trades as part of a series instead of individually. Look at results on a monthly basis and avoid daily targets, they only lead to unnecesary pressure and often disappointment. Review an individual trade (both winners and losers), see if anything could have been done better or differently, and move on.

It seems some people have finally got the message about the importance of risk control and money management!

Mick

[autofx]

Still working on "faking" trading records as well as I do?