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I learn something new every day and I hope it stays that way. It's possible
to know a lot and still not be able to place one rock on top of another and
there have been times when I've felt that way.
I appreciate your considered input.
Utilizing a favorable risk reward ratio is no doubt an excellent way to come
out on top of a number of trades where you have won at least the smaller
percentage of them. However, if you fall prey to the many pitfalls or traps
without understanding what sort of ploy is being used against you, you may
find that, that percentage of wins is intolerably low and the risk reward is
become a non-factor.
You are playing the game with a room full of sharks and they have the home
field advantage. You must find a way to get an advantage otherwise you will
fall for the same ploy time after time.
This is a fine point to be sure but people who say that you should bring
absolutely no bias to your trading can logically never trade, because if you
decide to buy or sell you have finally indicated a bias for whatever reason.
It's just a mater of what time frame you are talking about.
I agree with you about fundamental ver. technical analysis except in a very
broad way. When I was a new trader I was thinking that there was one of
those 1, 2, 3, bottoms in Live Hogs and I called a broker and asked about
the hogs and he said; " there are a lot of hogs out there" and he was right.
Hogs was no where near a bottom. A quick example of better would be to buy a
few inexpensive call options 6 to 12 months out if you think it's a bottom.
If you're right you will make a lot on a little, if you're wrong get out if
you lose 50% of that small amount. Sounds familiar, small risk, big reward
potential. False bottoms/tops is trading 101 though and we aspire to do
better.
Day trading isn't my specialty although I posted a nice little DMA example
for it a few weeks back (DMA that's an indicator Bill:-) I'm not quick
enough all the way around for that intense pursuit. T-Bonds or no. I found
that I was down a lot more then my set risk by the time I got my orders in.
The only help I would want to pay for in day trading would be one on one
instruction. That's not to say that some books, guides etc. wouldn't be of
help to someone that wants to start down that path.
Brent
-----Original Message-----
From: T-Bondtrader <t-bondtrader@xxxxxxx>
To: brente@xxxxxxxxxxxx <brente@xxxxxxxxxxxx>; RealTraders Discussion Group
<realtraders@xxxxxxxxxxxxxx>
Date: Monday, March 29, 1999 12:18 PM
Subject: Re: Gen: Help for advanced traders.
>Brent
>
>While unlikely that I might add to the sum of your knowledge, let me offer
>you a leaf out of a certain book, as it were! (I did this once before and
>a certain mutual accquaintence got very upset that I should discuss in that
>which he had paid for in private!) However...
>
>I believe an answer (note I use the indefinite rather than definite
>article) is in part a mixture of assessment of the price action and the
>risk/reward of the trade. The price action is the surest way you are
>going to know, or at any rate, judge with reasonable accuracy, which way
>the market is going (I hasten to add that I am speaking, of course, only of
>the T-Bonds and the day trading of them) and the risk/reward of the trade
>has to allow you to be wrong more often than you are right.
>
>Thus, organizing these two aspects correctly, will put yourself in the
>situation of facing the right way, with a greater degree of accuracy than
>with any other tool, and more often than not you will be able to take a few
>(and sometimes many!) steps of profit. This way, on the occasions when
>you find yourself wrong, you will be able to cope admirably and, overal,
>walk away with more than you lose.
>
>There are just a few other factors that have to be taken into account as
>well - and as well you know - but going in the right direction with a
>properly thought through strategy for risk versus reward, are without doubt
>the linch pins in a successful trading plan.
>
>Hope this helps.
>
>By the way, an incidental, but fundamental point, is to establish whether
>you are a technical trader or whether you are a fundamental trader. It is
>best to be clear which and stick to it. There are those who think they
>can mix the two, but they usually fail from falling between two schools of
>thought.
>
>As a day trader, I believe the choice is made! I have to take a technical
>approach and I therefore cannot afford any outside influences or
>predicitions over market movement. I do not need or want to know what
>people think about the market, a report that is due, or any other supposed
>indicator - the risk/reward, if you like, of knowing another's opinion is
>not good enough. In fact it is usually lousy! Furthemore, I find it
>quite frightening that some day traders are actually prepared to pay for
>such 'knowledge'. Tragic.
>
>Best of trading
>Bill Eykyn
>www.dbceuro.com/bille.htm
>
>
>
>
>
>
>-----Original Message-----
>From: BrentinUtahsDixie <brente@xxxxxxxxxxxx>
>To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>Date: Monday, March 29, 1999 5:51 pm
>Subject: Re: Gen: Help for advanced traders.
>
>
>>Of course this is NOT the only way that a market move can develop.
>Movement
>>can happen in any of about 50000 ways. However, it happens frequently
>enough
>>that I consider it a major impact on overall market movement. The whole
>idea
>>is to catch many or even most traders unaware, cause short covering and
>>"profit taking" in a big way. As only two or 3 indicated any interest in
>>this subject I will not belabor the point. I was hoping for more ideas to
>be
>>forthcoming. Most of the suggestions centered around consistency, money
>>management, and no second guessing. One suggestion was to trade
>divergences.
>>I thank those that replied. None of the original post reflects how I trade
>>at present, I simply wanted to generate some thought about some
>difficulties
>>that I have faced in the past and why many even advanced traders get into
>>such traps. No one suggested using options, or strategies like straddles,
>or
>>bracketing etc. etc.
>>
>>Many traders have what they are doing at present or their own ideas so
>>strongly in their mind that they listen very little, have a lot to say
>about
>>that which they know little, and ask good questions even less. I'm often
>>guilty myself and there is spring in the air.
>>
>>Money Management has been sighted as the cure for all ills so often I'm
>>tired of hearing it. Yes, be a perfect money manager it's a great idea.
>I'm
>>not directing this critique at anyone in specific just pointing it out in
>>general.
>>
>>I think that very large orders (more then a few 100 contracts) seldom ever
>>reach the floor to be fed off of as was suggested. I sure wouldn't want to
>>do business that way if I were a large trader. Getting hundreds or even
>>thousands of fills at different prices. No thank you.
>>
>>
>>Brent
>>
>>
>>
>>
>>>brent:
>>>one way to interpret your post is that these are your views of the "only
>>way"
>>>a move (or a range swing) develops...... there are many other
>>possibilities.
>>>Take your first scenario..... while one large trader can do an entire lot
>>with
>>>another large trader, your post seems to suggest that this only happens
>>with a
>>>substantial price change. IF both traders are satisfied with the current
>>>bid/ask, it may transpire with minimal price change, though the volume is
>>of
>>>interest. Secondly, what if there is no opposite large trader.... and
>>someone
>>>bids for 5,000 contracts, then the smaller traders and locals may feed
>off
>>of
>>>that and drive the price higher in a nice trending move.
>>>
>>>But your second scenario is more interesting.... honestly I think the
>>answer
>>>lies in your indicators and your money management. Your post seems to
>>reflect
>>>alot of discretion in your trading.... I use some discretion, but never
>to
>>the
>>>point that I'm "fearful I missed a move".... if my indicators lined up
>>>properly for an entry, and there is a move out of congestion, I'm going
>to
>>>take it... usually with a very comfortable close stop, and if the stop
>is
>>>hit, fine.... if the move just makes it to the next support/resistance
>area
>>>and fades, fine I've got a few ticks, if it continues through, fine I've
>>got a
>>>nice move. THE KEY is in your indicators getting you in, and your stop(s)
>>>managing the trade.... not in your discretionary worry about whether it's
>>too
>>>late. In the latter case, if I find that I did not enter a trade early
>>with
>>>my indicators, I usually do not enter late just to get on board.... I
>wait
>>for
>>>the next setup.
>>>
>>
>>
>>
>
>
>
>
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