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-----Original Message-----
From: Michael <comdytrd@xxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Friday, July 31, 1998 10:56 AM
Subject: Re: FUT:Today's Bond Trade
>Options - By Paul Forchione for July 31, 1998
>FNet Mentor http://www.futures.net/trading/full-bio-paul.html
>
> Do you know the best kept secret in the trading community? It's that
THERE IS NO secret. >Believing there are people who can regularly "outsmart"
the market is a lie that reaches into every >corner. Everyone's entitled to
their guesses and opinions about what the markets are going to do, but
>these prognostications should be accepted for what they are -- guesses and
opinions. Experienced >traders operate under the premise that there is no
substitute for risk control and money management.
> These are big subjects and indispensable elements of a well constructed
trading plan. But that's >like telling someone the key to health and
longevity is eating a balanced diet and exercising. It's not >"sexy" and
it's obvious, so no one wants to hear it. Instead, everyone wants an
esoteric explanation, a >secret that "strikes their fancy" and that's known
only by a select few. There's no changing human >nature, but as traders we
should strive to implement a trading plan with components that serve us well
>as opposed to searching for secrets that don't exist.
Well said Michael,
I think a lot of people, including my self, lack self-confidence
when the first start out. This makes them especially vulnerable to
deceptively worded adds designed to play on our greed, fears, and desire to
succeed. So we bite and plunk down $_____.00 (fill in the blank yourself).
Of course we need a 400 mh. computer with 128k ram and a real time satellite
down link with 100 bazillion data points per second to go with it. We load
everything up and make some trades. Maybe we make some money but more
likely we lose.
Sometimes, if we are lucky, a funny thing happens. While we are
waiting for the next shure-fired, guaranteed-to-make-millions signal we set
up a simple indicator or two (you know, just to test them against the
megabuck system). Maybe just a 9 period EMA on a 5 min. chart and MACD
lines. We aren't really paying much attention because the megabuck system
hasn't fired. Maybe we notice that the EMA has turned down and the MACD
lines just crossed. But, it can't mean much because megabucks is still
neutral, so we check our e-mail (from RT's). Later checking the chart we
notice the EMA line has become very steeply down as have the MACD lines and
they have gotten pretty far apart, Wow the market's really down too. "I
wonder if I could trade this", so we start to watch it. Shure enough the
lines start to flatten and we notice the down trend has slowed. Now we're
hooked. In a few minuets the MACD lines cross the opposite way and the EMA
is sloping up. We might notice that the point where the market turned is
near a previous low, "could this be support?" we ask.
Now we're living on the right edge with just a few simple
indicators for confirmation. "Could this be what the guys on RT's meant by
price being the only real time indicator?" we ask.
Good luck and good trading,
Ray Raffurty
P.S. We forgot all about Mega-bucks, it never worked worth a damn anyway.
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