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A Village to Raise A Trader
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A Village to Raise A Trader

  #11 (permalink)
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Rock Solid Plan faces the Hard Right Edge of Market

Here I will develop my plan step-by-step.

If I get ahead of myself I will come back and refine terms, setups and failures of the setups.

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  #12 (permalink)
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Discipline

Decide when to trade: (= less is more)

I will trade the time when the London and New York market sessions overlap.

I will not trade more than three hours of a day.

Part of my discipline is making myself available at those times and not letting any distractions in.

Part of my discipline is STOPPING after those hours are up and not being tempted into the markets any further.

As @PandaWarrior says, know your limits.

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  #13 (permalink)
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"Know Yourself"


There are two sides to the coin:

Knowing the market state.

and


Knowing your place in the market.


and both are important.


Intuitive function affords you a glimpse into the market state as your hard work peels off layer after layer of deceit and finally you stare wonder-eyed at singular the universal truth that was earlier so warped and distorted by your ego and internal conflicts.


Acting on this marvellous sight is what "knowing your place in the market" is all about.

I do not act at all times.

I act at a specific volatility, within the confines of a specific pre-defined time, the feel I have of if everything is aligning (or taking the opposite side of a setup, because the market is throwing such a perfect setup that it feels too good to be true and probably is).

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  #14 (permalink)
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Acting in the Click Moment requires COURAGE

Trading is no armchair video game.

And scalping is where only the fleet footed buck gets the mate of choice, if I may use such an analogy.

Hence, hesitation is an enemy when the plan shouts 'ENTER' or 'EXIT'.

The advantage of 'taking refuge' in the plan saves precious moments that otherwise make decision making a long drawn out process, and by the time the decision is made the moment has moved on.

Edit: To be complete, the analogy must also include that sometimes the fleet footed get slain instantly than the hesitant interlopers who tread with caution. The value here is that one must be consistent in ones approach.

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  #15 (permalink)
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iqgod View Post
A Plan:

For example my plan for the $30,000 10-day-min combine, where I will be trading the 6E (evaluation steps will be specified in this very journal), states simply and irrevocably the following:


- Rule 1: At no point during any trade can my loss be greater than 15 pips. If I go long the 6E at 1.3035 and it goes down to 1.3020, since the loss is -15 pips I have to close. That is a max loss of $150 on a one lot trade. A stoploss once set (15 pips away) cannot be moved till the trade goes +50 pips. This is rule number 1 and means two things: I have to wait for proper entries and cannot win if I enter in a hurry.

- Rule 2: Maximum three trades in a day.If I am wrong 3 times in row, I have not got the flow that day, and unlikely that I will. Also losing $450 in a single day is a bad idea for a combine.

Hi iqgood all the best for your combine.

BTW 1 tick in 6E is $12.50.... 15 tick loss is $187.5 loss plus $5(round trip) fees & commission per lot. 3 losses in a row will be ($562.50+15) $577.5 you will cross you daily loss limit for $30k account which is set at $500.

Regards

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Recognition of 'Fear'(s)

My intuitive function recognizes three types pf fear:


1. A 'Numbing' kind of fear

These are all the losers in me trying to even their score and increase their tribe. This happens at moments when the intuition realizes that price is going to take off and not look back, but the losers are trying to look and sound casual and trying to pretend that they are smart-alecs and if the intuition is diverted to their siren calls, the trade is MISSED (...and, usually, its "what a trade it was!"). But these smarty pants are usually the losers of life, voices propelled by peer pressure, conformist attitudes to be a 'part of society' etc. and it takes a twisted effort to KILL these voices and take the trade. If you hear laughter, ridiculing voices - make no mistake, ITS FEAR in disguise. Kill it and take that trade if the intuition is trustworthy. This fear is mainly visible as 'being wrong'.

2. The 'Nothing really works' fear

This might just be a technical trader's worst of fears. Pinbars work, when they fail then take the trade in the opposite direction. Hey wait that trade now seems to be dying out and its a signal again. Wait - that ain't no stinkin signal that's a trap! That trap - oooh, THAT was the signal I've been waiting for... enter! hey what the... my stop has been taken out before I blinked. And so forth.

This fear can ONLY be killed by one single word:

T R U S T.

Trust yourself to such an extent that everything becomes powerless.


3. The 'Real' Fear

This isn't a foe, its a friend! Its the warning part of my intuition that tells me in capital letters - DON'T TAKE THIS TRADE. Even if every star and planet align, even if the melody is harmonious, something amiss has been detected. This might be classified as voodoo and clairvoyance, but it works! Now again this is different from the 'Setup is valid but I am afraid to trade' variety. Its subtlety different! Vipassana meditation has been helping me go deeper and observe the exact sensations - these I can't put on paper but still is a universal primitive communication signal my body can let me know.


There is a fourth fear unique to me and I am glad that I could identify it because now I am going to be able to do something about it.

The fourth fear is a 'Depressionist' inside part or a proverbial 'Plato's Ghost'. This is a forever haunting part of me saying 'now I made money, so what.....? My life has not become better... What is the use of the materialistic world anyway? Why are you working so hard? Relax! Life will do no one any good! Why not just eat junk and become a TV slob?"

There have been times when I fell into this trap and made myself so miserable, unhelping, cowardly, deceitful and a umpteen things I would not like to even say - but this can ALL be conquered not by smiling and artificially pumping 'Positive Thoughts' but by actually doing something for someone other than you, living for others - that works!

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Bharatiya View Post
Hi iqgood all the best for your combine.

BTW 1 tick in 6E is $12.50.... 15 tick loss is $187.5 loss plus $5(round trip) fees & commission per lot. 3 losses in a row will be ($562.50+15) $577.5 you will cross you daily loss limit for $30k account which is set at $500.

Regards


Aaah, thanks! My intuition was telling me that something was amiss as I typed the post, never thought it would be something basic like this!

Thanks for pointing that out and @iqgod, all the best for your combine - you will need lots of stinking luck if you forget the basics like this.

I will update that post soon.


[jest] ... so it does take a village to raise a trader. [/jest]

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  #18 (permalink)
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Rechecked - its a 10-pip stop


iqgod View Post
Aaah, thanks! My intuition was telling me that something was amiss as I typed the post, never thought it would be something basic like this!

Thanks for pointing that out and @iqgod, all the best for your combine - you will need lots of stinking luck if you forget the basics like this.

I will update that post soon.


[jest] ... so it does take a village to raise a trader. [/jest]



So I rechecked my backtests.... I am placing a 10-pip stop. The other part is still the same - Once price moves up +50 ticks the stop moves up to +30 ticks making the reward average 3 times the risk.

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iqgod View Post
Knowing the market state.




Intuitive function affords you a glimpse into the market state as your hard work peels off layer after layer of deceit and finally you stare wonder-eyed at singular the universal truth that was earlier so warped and distorted by your ego and internal conflicts.


One of the best things I have done for my trading, was a mechanical definition of market state. For me this is a evaluation of direction, volatility, and follow through.

"If I agreed with you, we'd both be wrong."
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  #20 (permalink)
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Beliefs


My core beliefs are the pillars of the whole trading foundation.


Some examples of my trading beliefs:

1. Trends continue much farther than anyone can possibly imagine. Hence continuation trades are higher probability trades than fades in a trend.

2. In a trading range most breakouts fail.

3. The market alternates between volatility contraction and volatility expansion.

4. If the market does something twice and fails it usually tries to do the opposite.


Some examples of 'me' beliefs (identifying these helps me forsee their effects on my trading):

1. I detest putting data in Excel and crunching it. This belief (which sometimes turns out ill-founded because I do enjoy it when the graphs throw out some 'revealing' moments.

2. I am a slow learner. Perhaps because I have no faith - I do not believe something till I turn it over and over and study it to shreds and even then I have my doubts.

3. I love perfection. It makes me want to be right all the time.

4. I love and embrace risk - I'd rather enter without confirmation at a nicer price than wait for confirmation and get in when 'confirmed'. I consistently have decided the former in place of the latter because it fits my personality. This approach is inherently risky hence only with-trend entries for me!

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