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I've been writing like this ever since I left (or rather, was asked to leave) the yeshiva for reasons shrouded in great secrecy and mystery. I got an adjunct position at a community college to support my six children, various habits, and other predilections. I taught Kaballah and other religious studies, and since my medications no longer worked, the "visions" that I thought I was having turned out to be just the consequence of drug interactions. I've often thought about pursuing a doctorate in literature, but instead I've been deconstructing rap lyrics using a post-modern paradigm, but continue to have trouble understanding some of the deeper symbolism within these texts. Apparently, this is not au contraire to monpere, oui?
The point I’m trying to make is there is not one simple answer to trading success, nor is there one single strategy that will insure consistent success. Given the fact that a methodology or trading system has a profitable expectancy, a trader is adequately capitalized, practices sound money management, and has the emotional fortitude to put in the screen time and trade consistently, the trader who has the better (more complete) and more timely (current) analysis will enjoy the greatest edge and have the greatest success.
Effective strategies, mis-pricings, and exploitable inefficiencies in the markets, are ephemeral. They last only as long as it takes for the low hanging fruit to be picked and traded out of the market. The more an edge is gamed the less effective it becomes. The current changes in relative volatility may be the result of the market closing out previous inefficiencies, and these shifts in the fundamental mechanics of the market may have impacts on strategies and methodologies that are not immediately obvious.
The key to trading then is a strong recency bias - identifying what is driving price at the current time and what techniques or strategies are effective at the current time. This requires a thorough understanding of the markets, macro-economics, politics, trader psychology, money flows, smart and dumb money and technical and quantitative analysis.
it is important to understand the impact of money supply and Fed policy decisions, , HFTs on market structure and liquidity, inter-market relationships, and the interaction among geo-political power centers. Against this background, it is important to assess trader psychology from the perspective of fear, greed and equilibrium, using market profile and classical technical analysis methods. Especially, it is important to watch for patterns in price and volume at predetermined critical inflection points to assess when traders at the margin might be setting off a series of events down the time-price hierarchy that can lead to trends and larger market swings.
I don't think I have the capacity to understand all of those things and update with all that information according to a Bayesian model. I can only understand and process a certain amount of things (sometimes not all that many very well either)....I would never have been successful if I tried to understand all of that stuff. Other than that, good point and I hope people really understand the general point you are trying to make.
I get what you're saying and I agree, a trader needs a well rounded knowledge base in addition to a trading method combined with sound risk and money management and that no one trading method will work 100% of the time.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
I sat down to see a failed break out to the upside which put two of three time frames in sync. My entry bar was pretty large so went in conservative on size. Don't want any outliers to take me out of the game to soon. Anyway, that trade was BE after +34 ticks of profit. For some reason, this did not bother me to much...first time for everything I suppose. 2nd trade was ended +33 with full size and technically done for the day.
Waited around to see what might happen. You never know right...its inventory day and decided to see if I could manage anything from that.
Trade three was one lot BE after 50 ticks of profit on the screen. The risk was large on this one as well so one lot + my multiple of risk for a target meant the target was out there a bit. So a break even was the result. Trade 4 same result. Trade 5 was prior to inventory so went in single lot, low volatility held it for a while and then added to it once I got all three time frames to agree. Profit target was 30 ticks, I stretched it to 50 ticks to see if inventory would spike it up there and it missed me by 2 ticks, I exited at my normal profit target for the risk size.
Sometimes when I read @tigertrader, I feel like I am reading a Greenspan speech. Important stuff is contained within the flowery prose but requires diligence and patience to tease out the tasty bits. As with Greenspan, I sometimes wish @tigertrader would be more direct. But I suspect that if he was, I might like what he has to say somewhat less.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
