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Sure, I'm not saying it has to be something that can be programmed. I'm just saying these people DO HAVE logic or method to their madness, wether or not they can explain it or teach it to someone else.
As long as 95% of traders think they will be one of these people, as long as the majority think they can feel their way to profitability, there will be threads like this one. It will never change. I believe that thinking is built in our psychology, that's why most defend it so vehemently even though they cannot define it. I guess it is the natural way of things, because they are the ones who sustain the accounts of the elite 5%. The day every trader starts trading the markets objectively, is the day the markets will stop working, so trust your guts, your instincts, and try to feel the markets subconsciously. Without you guys there would be no reliable statistical data in the market for us objective guys to take the opposite side of your trades. The markets would then come down just to HFT vs. HFT. So, feel on, You are supporting the natural workings of the markets, you are doing you your part by design
I agree completely. My would argument was just that the brain is quite powerful, and we are still a few decades away from AI on that level.
Successful discretionary traders are just extremely good at modelling the markets at the sub/unconscious levels of the mind. There is nothing "magical" about it.
Sure I did not take the test results as gospel, I merely used them as a tool to help me understand myself and find the trading technique that will work best for ME.
I do not think being an I or E is relevant to trading because you trade a system on a computer these days and most are not Pit Traders.
As for INTP, I think an INTP are more likely to be Zen like traders who trade by feelings that is not number driven
As an ESTJ with strong J, I am prone to extreme hard work, discipline, focus, and I will follow the rules and regulation without exception and believe in only doing the job right. Hence when I developed my trading system then taking trades not within my system is out of the question. Also I am prone to control my emotions within relationships and hence I carry this over to my trading so I do not get excited or angry when I win or loss. In my head it is merely a business and I expect to win with a sound trading system and losses are the normal cost of doing business.
Also one of my weaknesses is being a ESTJ with strong J, because I tend to over work and get burnt out without the thought of taking some time off. So This year during the school year when my kids are out of school I do not trade. This allows me to take time away from the game and recharge and also adds more family time. During the summer months I take off when the kids want to do something away from the home and any time a friend wants to play golf.
Been trading 2.5 years in total. I would say that the first year to a year and a half was a big waste of time. It was all wasted finding systems, coding EAs, buying tick data to backtest, following 'bullshit' people on twitter, etc.
But you gotta keep in mind unlike most people I did this pretty much fulltime for the last 2.5 years. Generally every weekday I would dedicate between 12-16 hours. So if you add up all the hours, you can say i've been doing this for over a decade when compared to someone who learn't how to trade part time. I honestly don't think the average person should take this long to learn how to trade as I did. I consider myself a very slow learner.
Also living in North America it was a big pain in the ass staying awake throughout the London to the end of the NY session. For months I literally put my body through constant abuse by pretty much sleeping 2 hours every day. I pretty much lived on that Michelangelo sleep cycle where you sleep like 15 mins every few hours at different times of the day rather than just sleeping once like most people. And I would literally do nothing during the weekends except sleep throughout most of the day. Pretty much all the missed sleep throughout the week caught up with my during the weekend.
The core idea to how I trade took maybe a few months to learn, maybe about 2-3 months. And ever since then I just keep improving and adapting to the ever changing markets. For example, I used to only trade currencies, but then I decided to add commodities and had amazing success. I used to only scalp, but these days when I notice that my scalp can be turned into a swing trade, I always hold a portion of the trade. For example, if I go long and that trade keeps running and breaks some resistance hard, I will HOLD that trade because that resistance might be support. I also change when I trade. During the summer I avoid most Asian sessions, and if the market doesn't move after NY lunch such as today, I call it a day. This is very important and I will get into this later.
The way I see the market is pretty much like a game of pong. However instead of just 2 paddles, there are infinitely many paddles going both directions. Price will pretty much go to a paddle bounce and go the other way until it hits another paddle. The paddles I consider supply, demand, resistance, support, certain fib numbers, daily MAs, trendlines, etc. Generally price travels from supply to demand (or vice versa), from resistance to support (or vice versa). However not every support or resistance area holds, you can consider that when the paddle misses hitting the ball, and what happens then, it will go to the very next resistance (paddle) . I have no idea if this makes any sense. Its a stupid analogy.
All I am saying is that price travels from resistance to support (or vice versa), because it has too. What makes trading more difficult is that there are many timeframes and generally the higher timeframes lead the way. So if I take a scalp long on some pair on the M5 chart but I also noticed that this pair just found support on the daily, I will always hold a portion of the trade, and I just let that fucker run.
Now does this mean you should just enter blindly whenever price hits a support or resistance level? That depends. Because many times I missed great trades because price just went to support and rallied strongly without any chance for me to jump in. I consider that a missed opportunity but under no circumstances will I ever chase price. One thing I learnt in life is to never chase women, buses and price. Just wait for the next trade.
You need to understand that when price reaches a certain support/resistance area, one or two things will happen. It will either go through it like it doesn't exist and in this case you should ignore that area, or momentum might decrease in that area, price might stall in that area and fail to go lower, and that means that area was respected and you should find an entry somehow.
I think there are a few thousand people around the planet that trade exactly the way I trade. We all see the same setup and we all enter the market in the exact same moment and that creates momentum. That's why every trade I take puts me immediately into profit, if it doesn't then something isn't right and I will be looking to bail. This isn't just the traders looking to open a position, many traders also take profit this way. You just need to know which areas to look for. If I enter a trade and it doesn't move immediately my way, I need to bail as soon as possible. Why? Well for one it could be a trap and another reason is that there were probably a few hundred of thousand other traders that entered at the same moment as me, and if your the last trader to bail, you will have a big loss. This sometimes might happen when the markets are choppy. You shouldn't be taking any trades then either, because you need to understand you aren't going to move the market with your order, you need either a big player or a bunch of other retail traders to help you out. And these other traders think exactly the same way and they avoid the trade also for the same reasons.
I know I didn't mention psychological numbers but sometimes during the NY session there are large option expiries during a certain hour. This doesn't happen everyday but usually there are certain areas that a large player will protect, usually its China. China is usually a large player in the option world so if you notice that price fails to break a certain psychological number (for example 1.4000 on EU), realize that the barrier might be protected and watch what happens when the option expires. Generally the player protecting the option will have a huge exposure and try to liquidate it as soon as possible as the option expires. So if by coincidence as soon as the new hour hits that psychological is not longer supported, realize that there is going to be a massive sell off and jump in quick.
I take many loses, most of my trades end up at break even. I sometimes bail a trade at the wrong time and miss a great profit. This is just something I learn't to live with and I would never jump in the trade out of revenge, never.
If you are trading crude oil or Eurusd, it also helps to look what the dollar index is doing. If the DX reaches resistance it might affect your oil trade. Also sometimes during the start of the session looking how the stock indices are performing, they sometimes might be a leading indicator.
I don't know if I answered the question that was asked even. Im tired, its been a long week and I think I will go golfing in the rain today.
But everything I learn't I pretty much learnt on my own just by observing the markets. I didn't learn any of this by reading a book, forum, video course, etc, etc.
I really hate posting charts in hindsight but this is the only way this can be explained.
I know many of you guys only trade the ES, so I posted an SP500 trade, see the 2 attachments.
In the first picture see that red line that I highlighted. The reason why that line is important because if you look to the left you will find that it was an important pivotal area on a very high timeframe. At first it was major resistance and then it broke and it "might" be support. The reason I say "might" is because we will pretend this trade didn't happen yet.
Look at the 2nd attachment.
Now you need to understand what is happening, there was a major sell-off and most of the market sentiment is short. It broke 2 important areas of support and most likely any longs were whipped out.
Now common sense says when you are short you want to buy it back as low as possible for the most profit and if you want to go long, its best to buy at the lowest price.
Now most traders who know what they are doing are paying very close attention to that "dont fvck with me support" line.
Look what happens, price makes a low very close to that line, rallies a little bit and then it makes a failed low.
Now what is most of the market thinking?
The longs see an opportunity to buy near a very important support area.
The shorts are getting pissed off because that support held and put in a trailing stop for their entire position or at the very least at least a partial amount, it would be retarded for a short not to take some profit off the table at this point.
Now where do you think most people will buy?
Most likely at that yellow line.
The shorts will cover when it breaches that line and the longs will buy to go long. There should be a surge of buying when that area is breached.
If you bought at that line price would never go against you, this is a confirmation of what you want to see.
If price breaches that area and it stalls and starts going down, that simply means that there is a large supply still in the market and it might go lower, which means get the fvck out because it might be a trap.
Later on it tested that area and it held and this is good news for the longs and bad news for the shorts. Eventually more shorts started covering because it didn't look like it was going to go any lower and price kept on rallying.
Now tell me what is so complicated to understand in this trade?
The reason why price rallied in that area is because the longs knew it was a good area to buy and shorts decided it was time to take some profit off the table. Price rallied because it had too.
A properly sized stop is a function of the market price action. Of course, after considering your own personal risk management.
To state another way, a stop is when you are wrong about a trade. If your stop is 5 ticks, and the market moves against you 6 ticks, does this invalidate the entire trade? If so, then a 5 tick stop was correct. If 5 ticks is pulled out of your ass because it's a comfortable number to risk, then it makes no sense and has no useful function except to make you feel good.
In trading, the best trades are often the ones that are the hardest to put on. This isn't golf. In golf, when you nail the ball in the "sweet spot" you can really feel it. It's an amazing feeling and you know instantly you've just killed it. In trading, it is almost the opposite many times - the best trades are the hardest ones to put on. Remember we're talking about a collective of people here, in general you want to do the opposite of what the crowd does but all the while you need to know what it is they are doing.
In a recent survey about webinars, a lot of members expressed interest in learning more about the elusive "price action" that many traders talk about and refer to.
It is my intent with this thread to try and document price action from my point …
Intuition is just a form of experience. Life experience, trading experience, etc. It's hard to quantify intuition or experience, but you can just say that the more experience you have, the more likely you are to succeed at something.
I believe it is also important to believe in what you are doing, which is why I say you need to create your own methodology and not follow someone else's.
People who go from one commercial trading website to another, one vendor to another, one room to another -- these people aren't trying to trade. They are trying to get rick quick. Good luck
You would think with my user name I would have used this example, where was I at on that one, Cheers Big Mike.
On a serious note, I use a critical system stop on all my trades, meaning I have a stop that is 3% of my trading account for system outages. I then close the trade when it meets my criteria to exit a trade whether it be against me or in the money. I never set a profit target that will be hit, because you will make the most profit if you let your trades run.
My profit targets are very large also in case I want to step away from the PC for an extended amount of time and can't manage the trade manually, ie.. take my wife out to lunch or my favorite, hit the links early.
Another note I would like to add is that I believe people are under capitalized on their trading, I actually know people who have started trading full time with only 7K and expect to be successful, this is one of the worst things I think a trader can do, but with these Brokers allowing $500 intra-day margin, this is drawing in people who are not financially ready to do this full time. This I think is what leads people to these stops that are unreasonable for the volatility in the futures market. A 4 point stop on the ES is a $200 hit per contract. And most people want to trade multiple contracts because they have money fever. This is another reason I think people fail and get scared of losing.
