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The PandaWarrior Chronicles

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  #1701 (permalink)
 PandaWarrior 
In the heat
 
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one trade, pre planned exit, much to soon as it turns out but it worked exactly like what I had planned ahead of time....so perfectly executed trade....one and done....


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1702 (permalink)
 Auric 
Raleigh, NC
 
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Nice day! Do you kind my asking what was your setup and trigger on that trade? I'm assuming it has to do with the break above the congestion resistance there, but I'm not sure what the colored lines represent?

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  #1703 (permalink)
 PandaWarrior 
In the heat
 
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Auric View Post
Nice day! Do you kind my asking what was your setup and trigger on that trade? I'm assuming it has to do with the break above the congestion resistance there, but I'm not sure what the colored lines represent?

Those lines represent the 25, 50, and 75% retracement zones from the high and low of the day. They provide directional and bias filtering.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1704 (permalink)
 PandaWarrior 
In the heat
 
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Listening to Jim Rohn at the gym.....

He defines failure as this:

"Simple errors in judgement repeated every day"

And success as;

"Simple disciplines repeated every day".

Sounds alot like trading.

A personal philosophy is essential to success. What is my (your) personal philosophy about trading, life, etc?

Does my philosophy about trading preclude me being successful? Does it lay the framework for success or failure? Do I act in congruence with my philosophy or do I sabotage my own values?

In the old days, my philosophy was to do as little as possible to achieve an acceptable outcome....and nothing much happened that was good....then an early mentor told me I thought I was to good to dig ditches. I denied but inside I said I would never do that. Then I started a construction company....a small one. My partner and I did a lot of the work ourselves. We were good at it and we worked cheap....one day I found myself digging a ditch to lay some plumbing. I had one of those deja vu moments and I realized that digging a ditch was honorable work....and so I worked harder.

Eventually the construction company did pretty well. I carried the ditch digging mentality over to the next thing which was the mortgage business. I did well from the beginning and it only got better...for 15 years......and then I found myself back in the "I'm to good to dig ditches" mentality again.

This led to a series of errors in judgement as defined by Jim Rohn in the quote above. The result was disaster.

Fast forward to today. Rebuilding from nothing. Scraping money together to trade. Trying to figure out how to do the least amount of work in order to achieve an acceptable outcome. Once again, this has led to predictable unacceptable results.

Coming to the realization that I hate to put out exceptional effort to attain exceptional results is humbling and disappointing at the same time. I am now rebuilding that philosophy that says I am willing to dig the ditch and do the hard work to make it happen.

What does this look like in trading? For me, it means keeping up with my stats. It means defining things simply so I can process it in real time. It means doing the difficult and the unpleasant. That means taking the trade if the system says to take it, it means honoring stops and more importantly, my target zones and objectives. There are other things as well but each one has their own ditch to dig.....suffice to say, its all about the fundamentals. Do the basics well and greatness follows....like Jim Rohn says, exceptional people don't do exceptional things well, they do normal and mundane things exceptionally well over time.

Lately, I've resisted taking trades once I am up nicely. I am afraid of giving some back. I realize intellectually this is just part of trading and to implement an equity trail stop. But that seems difficult from an emotional standpoint. I want to maximize gain by passing on trades out of fear of loss and yet by refusing to take certain trades, I seriously inhibit my profitability.

I have three main setups. The A, B and C set ups. Each produces their own profit projections. I call them the PPPs or price pattern projections. The A set ups are the easiest to see and have the least probability of failure. I get 3-6 of these a day. If I win on the first two, its almost impossible for me to pull the trigger on the third one. Today that cost me $400 per contract. There is no reason not to take the trades....even the C trades if conditions warrant.

This then is failure, me committing a few errors in judgement every day. Each day I try to reduce error....but sometimes the error is not one of commission but one of omission. Omitting the trades I should take. I am getting better at not taking the bad trades but leaving out the good ones has become a failure of mine.

Going forward, I intend to reverse this error.....just take the trade. My risk is predetermined so why not give it a shot.

This then is the holy grail, reduce and as much as possible, eliminate errors in judgement.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1705 (permalink)
 PandaWarrior 
In the heat
 
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One error today. I chickened out on the first trade and closed at +20. It ran 60. Took the trades as they came. Then my computer froze up. Missed a nice long with no heat.....No worries on that one.....took a couple more as they presented. All BE.

No losers today.....but no larger wins either. Finished +33 ticks after commissions. Not to bad but there was a lot more to be had......I did not commit the error of not taking the trade when it presented. A successful day.

I've been thinking about my personal philosophy again. I've identified five stages I've been through.

1. My learned philosophy. My parents were great people but they lived in a world of scarcity. In other words, while we always had enough to live on mostly, I remember always being told, "we don't have enough for that". Simple enough but I learned there was not enough to go around.

2. Somewhere along the way, I discovered there is always more than enough. And I began to live that way. And sure enough, I always had more than enough....so much so that I gave away more per year than I used to make in a year.

3. Hard times came and I quickly reverted to the mentality of scarcity. And didn't realize I had done it. And worse, I lived that way for way to long.

4. I've been working the last few months on rearranging my thoughts to be those of a winner....but winners only win if they believe there is more than enough. And while the changing of my attitude has been positive, its also been hampered by my personal philosophy which laments there is not enough...regardless of whether or not I verbalized it, its what I thought and how I acted.

5. Today, I state verbally and in writing.....There is more than enough. This business is unlimited in its potential, the only limit is myself. I limit the size of my success. I limit the amount I can achieve each day. It is me.....and only me.

On a side note, my kid is learning the same things I did when I was her age. That there is sometimes not enough. That realization alone is enough to make me sick to my stomach and as is often the case, nothing changes until someone gets sick of the status quo and makes the necessary changes.

Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.
Small disciplines repeated every day equals success. Small disciplines repeated every day equals success.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
Started this thread
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  #1706 (permalink)
 AttitudeTrader 
Dallas, TX, USA
 
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PandaWarrior View Post
I've been thinking about my personal philosophy again...

4. I've been working the last few months on rearranging my thoughts to be those of a winner....but winners only win if they believe there is more than enough. And while the changing of my attitude has been positive, its also been hampered by my personal philosophy which laments there is not enough...regardless of whether or not I verbalized it, its what I thought and how I acted.

5. Today, I state verbally and in writing.....There is more than enough. This business is unlimited in its potential, the only limit is myself. I limit the size of my success. I limit the amount I can achieve each day. It is me.....and only me.

On a side note, my kid is learning the same things I did when I was her age. That there is sometimes not enough. That realization alone is enough to make me sick to my stomach and as is often the case, nothing changes until someone gets sick of the status quo and makes the necessary changes.

Uncanny. I am so in the same place right now - especially today. Even with regard to my daughter too. She's older than yours (just graduated college), but I'm constantly telling her that she can be/do/have whatever she wants and not to let our current circumstances dictate what she thinks is possible or thinks she deserves. And yet I'm not providing a very good example of that right now.

As you've said, changing that thinking we've become habituated to is the key. It's amazing how difficult it can be sometimes though.

"Is it hard? Not if you have the right attitude. It's having the right attitude that's hard." - Robert Pirsig

Great post.

-AT

"Is it hard? Not if you have the right attitude. It's having the right attitude that's hard." - Robert Pirsig
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  #1707 (permalink)
 jimjones26 
Tulsa OK
 
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I have been doing some more research on self-talk / affirmations and how it seems to work. If it were me I might rearrange the sentences you are using. For example;


Quoting 
I limit the size of my success.

What your actually feeding your subconscious mind with that statement is the idea that you want to limit your success. I think this the opposite of what your trying to accomplish. Perhaps this would be a better statement;


Quoting 
I am in the process of changing my thinking about success to that of abundance; there is more than enough for me, and as I continue to grow so does my success.

Just a suggestion I thought I would share. I have been working hard to craft better ideals that I can then direct my energy, attention and focus on. I have more to share if you are interested.

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  #1708 (permalink)
 PandaWarrior 
In the heat
 
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jimjones26 View Post
I have been doing some more research on self-talk / affirmations and how it seems to work. If it were me I might rearrange the sentences you are using. For example;


What your actually feeding your subconscious mind with that statement is the idea that you want to limit your success. I think this the opposite of what your trying to accomplish. Perhaps this would be a better statement;



Just a suggestion I thought I would share. I have been working hard to craft better ideals that I can then direct my energy, attention and focus on. I have more to share if you are interested.

I 100% agree with you. I suppose I should have stated it like this:

In the past, I've been the limiting factor on my success.

It was a statement of fact regarding the past.

Now I am restructuring my self talk to simply become statements of abundance, statements of certainty, statements of success and increasing levels of skill and achievement.

It's something I used to do and fell away from it over time.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1709 (permalink)
 Silver Dragon 
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PandaWarrior View Post

5. Today, I state verbally and in writing.....There is more than enough. This business is unlimited in its potential, the only limit is myself. I limit the size of my success. I limit the amount I can achieve each day. It is me.....and only me.

Out of everything you have ever posted in this thread this is by far my favorite and by far your best. There is nothing else which can be said or added beyond this because at the end of the day it all comes back to this one statement; Its all you!!

Robert

nosce te ipsum

You make your own opportunities in life.
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  #1710 (permalink)
 PandaWarrior 
In the heat
 
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Posts: 3,163 since Mar 2010
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I find myself in the odd position of not having made any money this week and feeling good about it....well not that good but something happened to me this week. Something mental and emotional....

I can't really define it....but its in the category of something we all know at least a little bit about...

But first a story.....about health.

How many people do I (you) know that was unhealthy and obese and whose doctor was always telling them to eat right and exercise? But they never did....then suddenly the heart attack happens or they are diagnosed with cancer or some other equally frightening disease. Then it seems if they survive the initial attack or diagnosis, they get it together and turn their health around 180 degrees and live a long and healthy life.

I've always wondered why they just didn't eat right and exercise in the first place and avoid all the pain and suffering.

And now I think I've figured it out......its the motivation behind the required change.

Our whole lives we've heard it...take care of your health and fact is, some do. For me, anytime I would attempt to take care of my health, it was always out of FEAR of something terrible happening and I suspect that most of us would rather NOT take care of our health but we do it out of fear. Or we don't do it and still live in fear of what might happen and praying it never does. For me, fear is a poor and short lived motivator. It produces results that are difficult to achieve, nearly impossible to sustain and brings with it no satisfaction. Therefore the changes that results from fear based motivation easily dissipates. We feel guilty but not that guilty.

Fast forward to the present post heart attack situation. I'm not afraid to die. I know this sounds weird but I'm not. What I am afraid of is not seeing my kid grow up. There it is again, fear....but this time its different. Its a fear born out of love. Love of my kid and how desperately proud of her I am. How much I want to be part of her life for a very long time. How much I want to see her graduate from college and perhaps get married and have a family of her own. Love of my wife and how much I want to be with her, even on the days it seems like it would be best if we had never met.....even on those days I want to be with her....

Love is a much greater motivator than fear. Fear can last for a while but it always fades. Love lasts forever and people do things for love they would never do out of fear.

Pre heart attack, those emotions were still present, just not present on the surface of life each and every day. Then the attack happens, suddenly the realization this life really is just a breath away from being over at any moment in time sinks in. Those emotions rise to the surface of life and stay there. I suspect over time, they may fade but perhaps not. Life changing decisions made at times like these can last the remainder of ones life and sustain those emotions indefinitely.

Today, I find the motivation to change my health is constant and ever present. Every time I see my kid, its there. Every time I see coca cola, its there. Every time I don't feel like walking my prescribed distance its there. The motivation of love trumps all the other crap that tries to interfere.

Why doesn't this work prior to the attack? Because the realization of the brevity of life isn't front and foremost in our mind. The vitality of youth, the invincibility we feel carries over into middle age when intuitively we know its not true but we act like it is.

Then the wake up call comes. The call to action and we are no longer complacent. Love triumphs over complacency and we do what we must out of love and joy at seeing another day.

Segue to trading;

Why don't we make the changes we know we need to make? Why don't we do the things we KNOW to do? Why do we continue to act in our own self destructive behaviour patterns?

Answer: Because our motivation is wrong. We are greedy. We are fearful. We want to be right. We want bragging rights. We feel the need to conquer.

None of which are good motivators in the marketplace. Greed kills, fear paralyzes, the need to be right leads us down the path of folly, bragging rights turn into embarrassment, instead of conquering, we walk away defeated knowing victory is within reach.

Our motivation is wrong.

For me, my motivation is switching from wanting to be rich to wanting to be the provider and protector of my family as much as lies with my ability. My intention is to increase my ability over time so that my original motivation and my new motivation are congruent. That by becoming rich, I take care of my family in a more and more efficient, more loving, more joyful manner. Its not about lifestyle, it's about security. It's not about travel, it's about the depth of the experience and the memories it produces. Its not about the house, its about the life that's lived under its roof. Its not about the car, its about the journeys we can take in it. Together.

While money is not the end, it is the means to an end and therefore I MUST do what is necessary.....man up if you will and do what is right. Not right for my ego, or my greed or my fear or my need to win.....I must do what is right for my family. In that I am fulfilled. In that I find bragging rights. In that I find sufficiency.

So back to my mental and emotional change. I can't define it. But I've written about it. Perhaps in time I will identify it with some greater degree of accuracy.


There is more than enough.......

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1711 (permalink)
 trs3042 
Holland, Michigan
 
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PandaWarrior View Post
I find myself in the odd position of not having made any money this week and feeling good about it....well not that good but something happened to me this week. Something mental and emotional....

I can't really define it....but its in the category of something we all know at least a little bit about...

But first a story.....about health.

How many people do I (you) know that was unhealthy and obese and whose doctor was always telling them to eat right and exercise? But they never did....then suddenly the heart attack happens or they are diagnosed with cancer or some other equally frightening disease. Then it seems if they survive the initial attack or diagnosis, they get it together and turn their health around 180 degrees and live a long and healthy life.

I've always wondered why they just didn't eat right and exercise in the first place and avoid all the pain and suffering.

And now I think I've figured it out......its the motivation behind the required change.

Our whole lives we've heard it...take care of your health and fact is, some do. For me, anytime I would attempt to take care of my health, it was always out of FEAR of something terrible happening and I suspect that most of us would rather NOT take care of our health but we do it out of fear. Or we don't do it and still live in fear of what might happen and praying it never does. For me, fear is a poor and short lived motivator. It produces results that are difficult to achieve, nearly impossible to sustain and brings with it no satisfaction. Therefore the changes that results from fear based motivation easily dissipates. We feel guilty but not that guilty.

Fast forward to the present post heart attack situation. I'm not afraid to die. I know this sounds weird but I'm not. What I am afraid of is not seeing my kid grow up. There it is again, fear....but this time its different. Its a fear born out of love. Love of my kid and how desperately proud of her I am. How much I want to be part of her life for a very long time. How much I want to see her graduate from college and perhaps get married and have a family of her own. Love of my wife and how much I want to be with her, even on the days it seems like it would be best if we had never met.....even on those days I want to be with her....

Love is a much greater motivator than fear. Fear can last for a while but it always fades. Love lasts forever and people do things for love they would never do out of fear.

Pre heart attack, those emotions were still present, just not present on the surface of life each and every day. Then the attack happens, suddenly the realization this life really is just a breath away from being over at any moment in time sinks in. Those emotions rise to the surface of life and stay there. I suspect over time, they may fade but perhaps not. Life changing decisions made at times like these can last the remainder of ones life and sustain those emotions indefinitely.

Today, I find the motivation to change my health is constant and ever present. Every time I see my kid, its there. Every time I see coca cola, its there. Every time I don't feel like walking my prescribed distance its there. The motivation of love trumps all the other crap that tries to interfere.

Why doesn't this work prior to the attack? Because the realization of the brevity of life isn't front and foremost in our mind. The vitality of youth, the invincibility we feel carries over into middle age when intuitively we know its not true but we act like it is.

Then the wake up call comes. The call to action and we are no longer complacent. Love triumphs over complacency and we do what we must out of love and joy at seeing another day.

Segue to trading;

Why don't we make the changes we know we need to make? Why don't we do the things we KNOW to do? Why do we continue to act in our own self destructive behaviour patterns?

Answer: Because our motivation is wrong. We are greedy. We are fearful. We want to be right. We want bragging rights. We feel the need to conquer.

None of which are good motivators in the marketplace. Greed kills, fear paralyzes, the need to be right leads us down the path of folly, bragging rights turn into embarrassment, instead of conquering, we walk away defeated knowing victory is within reach.

Our motivation is wrong.

For me, my motivation is switching from wanting to be rich to wanting to be the provider and protector of my family as much as lies with my ability. My intention is to increase my ability over time so that my original motivation and my new motivation are congruent. That by becoming rich, I take care of my family in a more and more efficient, more loving, more joyful manner. Its not about lifestyle, it's about security. It's not about travel, it's about the depth of the experience and the memories it produces. Its not about the house, its about the life that's lived under its roof. Its not about the car, its about the journeys we can take in it. Together.

While money is not the end, it is the means to an end and therefore I MUST do what is necessary.....man up if you will and do what is right. Not right for my ego, or my greed or my fear or my need to win.....I must do what is right for my family. In that I am fulfilled. In that I find bragging rights. In that I find sufficiency.

So back to my mental and emotional change. I can't define it. But I've written about it. Perhaps in time I will identify it with some greater degree of accuracy.


There is more than enough.......

@PandaWarrior

Excellent post Brian. Thank you for reminding us why we do what we do and the reason for doing it.

Have a great weekend,

Rick

"If you're going to panic during a trade............. panic early."
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  #1712 (permalink)
 josh 
Georgia, US
 
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Wow Brian, what a sobering and heartfelt post. I can feel your sincerity in your words, and your words have motivated me. Thank you very much for writing this today.

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  #1713 (permalink)
 Big Mike 
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PandaWarrior View Post
There is more than enough.......

We all love you Brian for all that you do and share. I have had my own health scares of late and can relate, as I am sure many can.

Trading is a great occupation, but living is the true gift and my favorite pass time. Too many people quite literally work themselves to death, never happy, never really enjoying the fruits of their labor. They may surround themselves with expensive toys, but still be miserable. I am speaking from experience.

I owe the act of actually becoming a good trader much more than just trading profits that come with it. In fact I can unequivocally say that the last 6 years or so of my life since I have been going full time on trading, I have learned more about myself than at any other time, and the best thing about that is that I learned what truly makes me happy. I am in my mid 30's so perhaps it is early, or perhaps late, to find this out. But having found it, I have a constant sense of calm now because like you, I am not afraid to die - because I am happy. That's not to say I that I welcome death naturally, but I am at peace with it. And for me it has nothing to do with religion because I am not a religious person. Instead it's just about being happy with myself for the first time in my life.

The act of becoming a trader is what allowed that, or forced that more aptly, to happen. I consider myself a different person these days and am much happier for it.

Thanks for sharing all that you do, I know that it benefits many because I know so many can relate and have faced similar struggles whether it is with trading, health, or just life in general. You are a good friend and a good member of the community, and I am thankful for you, and all the others like you, for making futures.io (formerly BMT) the special place that it has become.

Enjoy life, enjoy living, enjoy your family, and enjoy your weekend!

Mike

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  #1714 (permalink)
 Big Mike 
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  #1715 (permalink)
 xelaar 
prague, czech republic
 
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Big Mike View Post
We all love you Brian for all that you do and share. I have had my own health scares of late and can relate, as I am sure many can.

Trading is a great occupation, but living is the true gift and my favorite pass time. Too many people quite literally work themselves to death, never happy, never really enjoying the fruits of their labor. They may surround themselves with expensive toys, but still be miserable. I am speaking from experience.

I owe the act of actually becoming a good trader much more than just trading profits that come with it. In fact I can unequivocally say that the last 6 years or so of my life since I have been going full time on trading, I have learned more about myself than at any other time, and the best thing about that is that I learned what truly makes me happy. I am in my mid 30's so perhaps it is early, or perhaps late, to find this out. But having found it, I have a constant sense of calm now because like you, I am not afraid to die - because I am happy. That's not to say I that I welcome death naturally, but I am at peace with it. And for me it has nothing to do with religion because I am not a religious person. Instead it's just about being happy with myself for the first time in my life.

The act of becoming a trader is what allowed that, or forced that more aptly, to happen. I consider myself a different person these days and am much happier for it.

Thanks for sharing all that you do, I know that it benefits many because I know so many can relate and have faced similar struggles whether it is with trading, health, or just life in general. You are a good friend and a good member of the community, and I am thankful for you, and all the others like you, for making futures.io (formerly BMT) the special place that it has become.

Enjoy life, enjoy living, enjoy your family, and enjoy your weekend!

Mike

I think it's a feeling of acomplishment. You feel complete by achieving your goal and thus in peace with yourself. I can also relate to that.

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  #1716 (permalink)
 tigertrader 
Philly, Pa
 
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Becoming a successful trader doesn’t happen by accident. It is exceedingly difficult to derive a method that is consistently profitable, and it is even more difficult to successfully apply such a method in actual practice. Near randomness and efficiency in the market almost guarantees failure. And, of course, the principle of ever-changing cycles works to force quick and drastic changes of results sequences when the public happens to get wise to a winning idea. But, you've been able to identify 3 precise patterns and execute trades to position, that demonstrate a statistical tendency behind these patterns. Managing the risk in the trade appropriately, perhaps "adjusting" the position as the trade develops.

On the surface, this appears to be a very positive development, and it is. But it can also be very limiting. When you trade patterns in the market–you actually trade the underlying imbalances that create those patterns, i.e., more buying than selling and the market moves higher and the converse. Patterns reflect this reality but don't explain what is driving price. Without a broader knowledge of the market and an understanding of the bigger picture you cannot develop a dependable sense and feel for the market. And while these set-ups are dependable to a degree, they tend to make you focus on the few broad outcomes that appear the most probable and probably the most obvious, and ignore the low-probability scenarios. And, its usually the moves you don't expect, that are often the most profitable, and which coincidentally, are often found at the beginning of trends.

Compared to trends, range trading, is far more difficult due to the random nature of short term price action and the omnipresent HFTs. Unfortunately, it is exactly in this environment where you are trying to "grind" it out. And if you read Bacon and substitute the market for the track, the "grind" privileges are spoken for and taken. Of, course, any percentage can be overcome by enough winners at fat enough prices. However, you must first be able to identify when you have a "clean swing at a fat pitch." And this comes from developing an ability to interpret, and assimilate a much broader base of knowledge and information, than you are currently looking at. But it will be worth it, because you will be able to recognize "low-probability" trades, that have a high probability of being big winners. It will also give you the confidence you need to take trades, press trades, and add to your trades.

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  #1717 (permalink)
 rubyslippage 
Phoenix, AZ
 
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tigertrader View Post
Without a broader knowledge of the market and an understanding of the bigger picture you cannot develop a dependable sense and feel for the market. And while these set-ups are dependable to a degree, they tend to make you focus on the few broad outcomes that appear the most probable and probably the most obvious, and ignore the low-probability scenarios. And, its usually the moves you don't expect, that are often the most profitable, and which coincidentally, are often found at the beginning of trends.

However, you must first be able to identify when you have a "clean swing at a fat pitch." And this comes from developing an ability to interpret, and assimilate a much broader base of knowledge and information, than you are currently looking at. But it will be worth it, because you will be able to recognize "low-probability" trades, that have a high probability of being big winners. It will also give you the confidence you need to take trades, press trades, and add to your trades.

Your use of the phrases "low probability" and "dependable sense and feel for the market" is unclear to me.

I'm wondering if you're describing the difference between setups that "feel" comfortable or uncomfortable to trade (that one might think are low probability in real time because of the look/feel of them) and setups that have proven positive expectancy despite the fact they appear "scary" at the right edge.

If you run statistical analyses of setups (patterns) to determine their chances of hitting profit G before hitting stop L and identify contextual filters to know when to trade these setups and when to ignore them, you'll come up with high probability setups that still may look or feel very uncomfortable to trade in real time.

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  #1718 (permalink)
 ratfink 
Birmingham UK
 
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rubyslippage View Post
Your use of the phrases "low probability" and "dependable sense and feel for the market" is unclear to me.

To me the phrases say 'infrequent and low risk' and 'where and why'.


rubyslippage View Post
If you run statistical analyses of setups (patterns) to determine their chances of hitting profit G before hitting stop L and identify contextual filters to know when to trade these setups and when to ignore them, you'll come up with high probability setups that still may look or feel very uncomfortable to trade in real time.

Yes indeed, and the statistics always give the 'how' or more accurately the 'how much' and 'how often', but they will never give you the 'why'. An old adage says if you know the 'how' you get to be a good worker but if you know the 'why' you get to be the boss. I do know the 'why' but I'm still a worker, darn it.

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  #1719 (permalink)
 xelaar 
prague, czech republic
 
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tigertrader View Post
Becoming a successful trader doesn’t happen by accident. It is exceedingly difficult to derive a method that is consistently profitable, and it is even more difficult to successfully apply such a method in actual practice. Near randomness and efficiency in the market almost guarantees failure. And, of course, the principle of ever-changing cycles works to force quick and drastic changes of results sequences when the public happens to get wise to a winning idea. But, you've been able to identify 3 precise patterns and execute trades to position, that demonstrate a statistical tendency behind these patterns. Managing the risk in the trade appropriately, perhaps "adjusting" the position as the trade develops.

On the surface, this appears to be a very positive development, and it is. But it can also be very limiting. When you trade patterns in the market–you actually trade the underlying imbalances that create those patterns, i.e., more buying than selling and the market moves higher and the converse. Patterns reflect this reality but don't explain what is driving price. Without a broader knowledge of the market and an understanding of the bigger picture you cannot develop a dependable sense and feel for the market. And while these set-ups are dependable to a degree, they tend to make you focus on the few broad outcomes that appear the most probable and probably the most obvious, and ignore the low-probability scenarios. And, its usually the moves you don't expect, that are often the most profitable, and which coincidentally, are often found at the beginning of trends.

Compared to trends, range trading, is far more difficult due to the random nature of short term price action and the omnipresent HFTs. Unfortunately, it is exactly in this environment where you are trying to "grind" it out. And if you read Bacon and substitute the market for the track, the "grind" privileges are spoken for and taken. Of, course, any percentage can be overcome by enough winners at fat enough prices. However, you must first be able to identify when you have a "clean swing at a fat pitch." And this comes from developing an ability to interpret, and assimilate a much broader base of knowledge and information, than you are currently looking at. But it will be worth it, because you will be able to recognize "low-probability" trades, that have a high probability of being big winners. It will also give you the confidence you need to take trades, press trades, and add to your trades.

An excellent post thank you! I am always amazed to listen when people say they don't care to know why market moves like that as long as they trade their lines, channels, averages and it works for them. I believe a thorough study of the markets, price discovery mechanism, different types of traders and their base strategies, and especially HFT approach and it heavy influence on market microstructure warrants deep understanding of market mechanics and will help to be able to stay in tune with the market and evolve as market does, and be able to keep discovering inefficiencies we call high probability trading opportunities.

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  #1720 (permalink)
 tigertrader 
Philly, Pa
 
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That one trades have an unerring capacity to avoid giving one a profit. If you hold a position over nite, they move so much that you can't hold them without staying up the whole nite, for two days in a row, which for most people is impossible. Other markets only let you get out of a position when it's going to go in your original direction by a fast 1 or 2% like sp over nite today. If they won't let you out then they are ready to go down 150 bucks like gold yesterday. when you try to trade them in normal hours they go bak and forth so thata your vig on a small sized position taking account of the bak and forth is inordinaly large to be unprofitble. when I trade gold, I find that it likes to move a fast 10 bucks in 2 minutes everry now and then so you can't leave limit orders profitably to catch the reversal. If your position is too large, it will move so far against you thata you will be margined out, especially over nite when you don't have data to provide a buffer as to which way it's going. If you appen to have a position in the rite direction and it moves a fast 10 bucks in your favor, why then it's impossible to get out. Within 1 1/2 bucks because only 1 or two contracts is bid or offered within 30 cents, and by giving up that much of an edge to trade a reasonable number of contracts, you lose your expectncy. If you trade with a small size, then the hourly wage from doing all the work is less than a construction worker. worst of all are the markets where just a few hardended members on t he rules committee make the markets. Many of the options markets are like this. They will maneuver the prices and the rules against you so that it's impossible to make a profit at the settlement or hold the position thru it because of marks and margins against you. if you trade for small gains and losses, that's worst of all becuase the high frequency people are ahead of you on each tick, so by the time you pay the bid asked and take account of the fact that you never get your limits until it's way against you like in the old pit days, you're giving up infinitelly more vig than at vegas. The book on baseball betting says that you only pay 2 1/2 % vig on baseball betting, much less than any other market or our market. However, you have to live in vegas to speculate there, and they treat you like a persona non-grata there and the chances for being comped or otherwise ennobled are close to zero. vic

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  #1721 (permalink)
 Patrick S 
Raleigh NC
 
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Read Walking with God by John Eldridge
I know this is not the place to discuss such things but I did not want to send a PM when I thought others reading your heartfelt post may be searching for similar answers to your statement.
Thank you Thank you Thank you for your post.

If you always do what you have always done you will always get what you have always gotten.
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  #1722 (permalink)
 PandaWarrior 
In the heat
 
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I've been trading for 4 years. I like it. I am mostly profitable now. Not like I want but better than losing most of the time. I know I have a lot to learn and that comes with time and possibly a mentor. I don't have one but wouldn't mind one IF 1) I knew where to find one and 2) We had similar values. 3) That person was MUCH further down the road than I am with an excellent reputation.

I am mentoring a couple of people and I like it. It forces me to think and to prepare. It has also created the realization that I could use one as well.

As time has gone by, I've begun to miss the challenge of building something. I've always swore I would never have employees again. But never say never. I have time on my hands, you can only play so much golf....well none for me but you know what I mean. My other projects are not time intensive and only require brief spurts of activity throughout the year.

So I've been thinking about building something.....what I've had no idea. I'm a fan of Tim Ferris, The Four Hour Work Week. But that required a muse and I've never had one so that was out.....but now that may have changed. I'm in talks to join a small start up based in the Bay Area....well 4 years old and profitable but they want to go national and international. The pay is minimal but the challenge is huge and I think I'm ready for that again....there is the potential for a massive payoff in the future and that certainly is enticing.

To really seal the deal (potentially) they are involved in the health field and I'm pretty interested in that right now. So the potential exists for it to satisfy the 4HWW requirement for a muse.

Lots to think about.....

I confess I'm excited about what may lie ahead.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1723 (permalink)
 PandaWarrior 
In the heat
 
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Patrick S View Post
Read Walking with God by John Eldridge
I know this is not the place to discuss such things but I did not want to send a PM when I thought others reading your heartfelt post may be searching for similar answers to your statement.
Thank you Thank you Thank you for your post.

I'm a John Eldridge fan.....but of the earlier works.....Wild at Heart radically changed my life......more so than any other book I've ever read....it was the beginning of an awaking for me.......I gave over 200 copies away to friends and clients......and I like The Sacred Romance but Walking with God seemed to be a rehash....perhaps I missed something there......worthwhile to be sure but it didn't create a paradigm shift in me like Wild At Heart did.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1724 (permalink)
 Big Mike 
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The startup sounds like a good fit for you, you seem excited about it which is very important.

As for the trading part, I think about this often because of posts I read on futures.io (formerly BMT) where others are struggling and seeking out a mentor to guide them.

I guess the thing is for me, I just can't follow someone elses lead any more. Thru futures.io (formerly BMT) I've had the opportunity to get to know a lot of really fantastic traders. And unfortunately, several really big names in the industry who are largely perceived to be good traders, but who I wouldn't go near after learning more about them.

Even if you focus on just the fantastic ones, first none of them are interested in hand holding a rookie. The occasional email exchange to talk about the markets is fine, but actual coaching - they don't want any part of it. And I can completely understand. I took on a few "students" for a while a couple years back, and I felt like I spent hundreds of hours trying to help them while they spent basically no effort trying to help themselves.

I imagine that pattern holds largely true on a bigger sample. Perhaps you've seen this yourself.

I do agree that being a mentor to someone (I dislike that word) can definitely sharpen your own trading, and that's always a great thing. But for me personally, I do not want and cannot/will not follow someone else. I don't really ask advice from anyone anymore. Instead, my ongoing education (and believe me, I learn more every day) is more about my own interpretation of what others are doing and incorporating the bits and pieces (usually, small small pieces) that I like from someone else into my own strategies.

I know everyone is different, and I know so many look to simply be taught or told exactly what to do, or look for someone with more experience to answer difficult questions. And all of that is totally fine, but be extremely careful. In my own experience, the amount you can take away from any single person is probably very small in terms of what is truly compatible with your own method, your own personality, your own strengths and weaknesses, etc.

Have fun!

Mike

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  #1725 (permalink)
 PandaWarrior 
In the heat
 
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Big Mike View Post
The startup sounds like a good fit for you, you seem excited about it which is very important.

As for the trading part, I think about this often because of posts I read on futures.io (formerly BMT) where others are struggling and seeking out a mentor to guide them.

I guess the thing is for me, I just can't follow someone elses lead any more. Thru futures.io (formerly BMT) I've had the opportunity to get to know a lot of really fantastic traders. And unfortunately, several really big names in the industry who are largely perceived to be good traders, but who I wouldn't go near after learning more about them.

Even if you focus on just the fantastic ones, first none of them are interested in hand holding a rookie. The occasional email exchange to talk about the markets is fine, but actual coaching - they don't want any part of it. And I can completely understand. I took on a few "students" for a while a couple years back, and I felt like I spent hundreds of hours trying to help them while they spent basically no effort trying to help themselves.

I imagine that pattern holds largely true on a bigger sample. Perhaps you've seen this yourself.

I do agree that being a mentor to someone (I dislike that word) can definitely sharpen your own trading, and that's always a great thing. But for me personally, I do not want and cannot/will not follow someone else. I don't really ask advice from anyone anymore. Instead, my ongoing education (and believe me, I learn more every day) is more about my own interpretation of what others are doing and incorporating the bits and pieces (usually, small small pieces) that I like from someone else into my own strategies.

I know everyone is different, and I know so many look to simply be taught or told exactly what to do, or look for someone with more experience to answer difficult questions. And all of that is totally fine, but be extremely careful. In my own experience, the amount you can take away from any single person is probably very small in terms of what is truly compatible with your own method, your own personality, your own strengths and weaknesses, etc.

Have fun!

Mike

I'm so not interested in learning about someone elses trading method. Like you, I bring on small pieces if I think I can integrate into to something I already do or may have wanted to try. Instead, a mentor to me is just someone that may be able to help you navigate the areas you may not know about, someone that can occasionally hold up the mirror in a trusted manner and show you where you have deviated from plans and goals you've stated are important to you. I have a couple of trader friends that do this on an informal basis for me and its helpful.

I envision it being a skype call once or twice a month with perhaps an email exchange or two per month......nothing formal but someone older (in the markets) than me with experiences I may not have had yet. Its always good to lean on experience if you can instead of having to go through it all yourself.....idealistic perhaps but nevertheless, I had one in my mortgage business, it was valuable to say the least.

Lastly, it really must be a good fit for it to work and for that reason alone, it will probably be difficult at best to make this happen.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1726 (permalink)
 iqgod 
Market Wizard
Mumbai, India
 
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Big Mike View Post
I guess the thing is for me, I just can't follow someone elses lead any more. Thru futures.io (formerly BMT) I've had the opportunity to get to know a lot of really fantastic traders. And unfortunately, several really big names in the industry who are largely perceived to be good traders, but who I wouldn't go near after learning more about them.

Even if you focus on just the fantastic ones, first none of them are interested in hand holding a rookie. The occasional email exchange to talk about the markets is fine, but actual coaching - they don't want any part of it. And I can completely understand. I took on a few "students" for a while a couple years back, and I felt like I spent hundreds of hours trying to help them while they spent basically no effort trying to help themselves.

I know everyone is different, and I know so many look to simply be taught or told exactly what to do, or look for someone with more experience to answer difficult questions. And all of that is totally fine, but be extremely careful. In my own experience, the amount you can take away from any single person is probably very small in terms of what is truly compatible with your own method, your own personality, your own strengths and weaknesses, etc.

Have fun!

Mike



PandaWarrior View Post
I'm so not interested in learning about someone elses trading method. Like you, I bring on small pieces if I think I can integrate into to something I already do or may have wanted to try. Instead, a mentor to me is just someone that may be able to help you navigate the areas you may not know about, someone that can occasionally hold up the mirror in a trusted manner and show you where you have deviated from plans and goals you've stated are important to you. I have a couple of trader friends that do this on an informal basis for me and its helpful.

I envision it being a skype call once or twice a month with perhaps an email exchange or two per month......nothing formal but someone older (in the markets) than me with experiences I may not have had yet. Its always good to lean on experience if you can instead of having to go through it all yourself.....idealistic perhaps but nevertheless, I had one in my mortgage business, it was valuable to say the least.

Lastly, it really must be a good fit for it to work and for that reason alone, it will probably be difficult at best to make this happen.



I got into this exact dilemma last week.

The fact is I can even see him trading for twelve hours each day sitting in front of his screen.

He stays right in the opposite building.

He states his charges upfront which are $500 in which he will teach you for 2- 3 days and then you have to be in touch with him for three to four months everyday on the phone. I asked if I could get my laptop and trade alongside him, but he said he would find that distracting and I totally can understand.

He allowed me to watch his live trading and I could see some fantastic discipline e.g. he did not chase the market even though he had a target marked out on the screen and missed the entry while talking to me me (I felt bad, but watched the discipline part)

He was trading 15 or so managed accounts.


He has been trading for 10 years - he left a cushy job in 2003 as a manager. He freely admits that he has blown up multiple times.

He uses hardly any indicators (one to be precise if you leave out two moving averages).

He does come across as a seasoned trader however in 2008 I found him marketing MLM products and selling insurance - perhaps that might have been the blowout period and he was 'working' again. The fact is I cannot know anything for sure hence am oscillating between trust and distrust.

However the following things raised red flags:

He says I can open a managed account with him minimum sum $2000. He expects the amount to run up to $3000 within a month. However what made me cry inside was he said he will run up each clients $2000 to $80,000 at the end of the year. He showed me a commodity account which was opened a few days ago and was up 150%. He did say he was using a miniscule stop and the risk was well defined and I think can trust him on that.

He says after 10 years his hard work is sprouting and hence he can state such figures.

I walked over to his house in the spur of a moment and hence found myself talking to him sitting next to him while he was trading and I was impressed.

I think having a mentor would make it more like a job with a boss and that is where the value really lies.

What do you think?

P.S.: In a mentor the first thing is TRUST. I find the mentor - trading student relationship to be a complex one so if @PandaWarrior permits this discussion can continue.

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  #1727 (permalink)
 xelaar 
prague, czech republic
 
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Great conversation here. About mentor, I think it's not a trading system that is important but a mindset of successful trader, consistent, disciplined, and importantly evolving as no system works too long. The best mentor can give is a belief you you can make it and roadmap how to make it. Ability to look into successful trader's mind and routines. But it woth nothing if you can't trust him. And how can you trust if mostly none of them show any trading track record to prove it?

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  #1728 (permalink)
 Big Mike 
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That is why I would deemphasize a "mentor" and just take pieces out of whatever looks useful from whomever.

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  #1729 (permalink)
 hectormas 
Charlotte, NC
 
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I believe a good mentor can help you travel the road with fewer accidents, and may help you go further than on your own. The sports analogy that "Tiger Woods still has a coach" is a valid one. Another example is that most of the traders in Market Wizards talk about having had a mentor. Unfortunately, it is a reality that in our business is very hard to find a very good mentor.

I have found the very best mentors to be on the threads here on futures.io (formerly BMT). There are many members that share their wisdom. There are specially a few ones that when you read their comments, it makes you "think" and evaluate the actions that you are currently taking on your trading. Which is what good mentors do.

Brian, best to you on all your endeavors, and maybe it applies here: "When the Student is ready, the Teacher will appear"

Hector

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  #1730 (permalink)
 arnie 
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PandaWarrior View Post
Why don't we make the changes we know we need to make? Why don't we do the things we KNOW to do? Why do we continue to act in our own self destructive behaviour patterns?

Answer: Because our motivation is wrong. We are greedy. We are fearful. We want to be right. We want bragging rights. We feel the need to conquer.

None of which are good motivators in the marketplace. Greed kills, fear paralyzes, the need to be right leads us down the path of folly, bragging rights turn into embarrassment, instead of conquering, we walk away defeated knowing victory is within reach.

Our motivation is wrong.

For me, my motivation is switching from wanting to be rich to wanting to be the provider and protector of my family as much as lies with my ability. My intention is to increase my ability over time so that my original motivation and my new motivation are congruent. That by becoming rich, I take care of my family in a more and more efficient, more loving, more joyful manner. Its not about lifestyle, it's about security. It's not about travel, it's about the depth of the experience and the memories it produces. Its not about the house, its about the life that's lived under its roof. Its not about the car, its about the journeys we can take in it. Together.

While money is not the end, it is the means to an end and therefore I MUST do what is necessary.....man up if you will and do what is right. Not right for my ego, or my greed or my fear or my need to win.....I must do what is right for my family. In that I am fulfilled. In that I find bragging rights. In that I find sufficiency.



This is one of the most insightful things I ever read.
I got goose bumps while reading this.

If I become half a percent smarter each year, I'll be a genius by the time I die
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  #1731 (permalink)
 tigertrader 
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PandaWarrior View Post
For me, my motivation is switching from wanting to be rich to wanting to be the provider and protector of my family as much as lies with my ability. My intention is to increase my ability over time so that my original motivation and my new motivation are congruent. That by becoming rich, I take care of my family in a more and more efficient, more loving, more joyful manner. Its not about lifestyle, it's about security. It's not about travel, it's about the depth of the experience and the memories it produces. Its not about the house, its about the life that's lived under its roof. Its not about the car, its about the journeys we can take in it. Together.

While money is not the end, it is the means to an end and therefore I MUST do what is necessary.....man up if you will and do what is right. Not right for my ego, or my greed or my fear or my need to win.....I must do what is right for my family. In that I am fulfilled. In that I find bragging rights. In that I find sufficiency.

[/I]

Nothing wrong with wanting to be rich - it's part of human nature. It just needs to be put in the proper perspective.

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  #1732 (permalink)
 Patrick S 
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PandaWarrior View Post
I'm a John Eldridge fan.....but of the earlier works.....Wild at Heart radically changed my life......more so than any other book I've ever read....it was the beginning of an awaking for me.......I gave over 200 copies away to friends and clients......and I like The Sacred Romance but Walking with God seemed to be a rehash....perhaps I missed something there......worthwhile to be sure but it didn't create a paradigm shift in me like Wild At Heart did.

The Very first time I went snorkeling was in Guam.
My friend apologized for taking me. With a puzzled look on my face I asked why are you sorry?
He said because your very first trip snorkeling was to one of the top 5 places in the world. Everywhere else will pale in comparison.

Like you, the Wild at Heart book was a paradigm shift for me. I hope that one day we can get together and talk about it.

Another 2 years and I hope to be living in Northern Nevada. I know you live somewhere in AZ.
One of my west coast play grounds are the Sand Dunes. As I recall there are some in Yuma?

For those of you wondering what the heck is this book all about?

https://en.wikipedia.org/wiki/Wild_at_Heart_(book)

If you always do what you have always done you will always get what you have always gotten.
Celebrate because you executed your edge. Not because you won.
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 PandaWarrior 
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Oh man...... this is incredible

MacAskill's Imaginate - Gear Patrol

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 PandaWarrior 
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Patrick S View Post
The Very first time I went snorkeling was in Guam.
My friend apologized for taking me. With a puzzled look on my face I asked why are you sorry?
He said because your very first trip snorkeling was to one of the top 5 places in the world. Everywhere else will pale in comparison.

Like you, the Wild at Heart book was a paradigm shift for me. I hope that one day we can get together and talk about it.

Another 2 years and I hope to be living in Northern Nevada. I know you live somewhere in AZ.
One of my west coast play grounds are the Sand Dunes. As I recall there are some in Yuma?

For those of you wondering what the heck is this book all about?

https://en.wikipedia.org/wiki/Wild_at_Heart_(book)

The sand dunes look best when seen in a rear view mirror as you drive to San Diego!

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1735 (permalink)
 tigertrader 
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tigertrader View Post
And while these set-ups are dependable to a degree, they tend to make you focus on the few broad outcomes that appear the most probable and probably the most obvious, and ignore the low-probability scenarios. And, its usually the moves you don't expect, that are often the most profitable, and which coincidentally, are often found at the beginning of trends.

To wit: Trend-days appear ~16% of the time. Trend -days like today take place even less. But, it's exactly these days, where the money is made. If one trades these days as if they are range days and doesn't take advantage of these "low-probability" events, then they will never attain significant profitability.

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  #1736 (permalink)
 PandaWarrior 
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To wit: Trend-days appear ~16% of the time. Trend -days like today take place even less. But, it's exactly these days, where the money is made. If one trades these days as if they are range days and doesn't take advantage of these "low-probability" events, then they will never attain significant profitability.

While I agree with your statement, I have a quick question....devils advocate here: If these days occur ~16% of the time, would it not make sense to trade 100% of the time as though it were a range day, thereby obtaining profits ~84% of the time and allowing the outlier day like today become the "losing" day. As long as you don't trade against the major trend that is....In other words, not rely on outliers to make your money?

On the other hand, if one trades every day expecting a low-probability day to happen, then by default, the trader would be trend trading in a range day 84% of the time. And in theory anyway, losing 84% of the time.....

It appears then, the real question is not whether you trend trade or range trade but the real question is this: Do you have a way to determine the difference between the two ahead of time......the million dollar question if there ever was one. And one I haven't answered yet.

The only way I would think it could work would be to always take profits fast on a portion of the position...say some multiple of risk....1:1 perhaps and always leaving a portion to run.....this would produce small wins in a range day along with some breakevens, and a lot of small losers....this also means for one lot traders, lots of disappointment and frustration.....driving the one lot trader to scalp....looking for smaller profits and fewer disappointments.....desperately trying to protect fragile egos and emotional states......and bleeding greed on a trend day.......and it means that for traders trading more than one lot, but not huge accounts, you have to enter with perhaps more than your desired size in order to have something to take off early....

Random thoughts.....

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1737 (permalink)
 Big Mike 
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I prefer range days myself. When I say prefer, I mean I do better with them. And lucky for me, they happen more often.

Usually if there is a strong trend day we end up outside the normal volatility, outside the VP value areas, etc etc, so that is my clue to not try my typical trade setup.

Mike

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  #1738 (permalink)
 tigertrader 
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PandaWarrior View Post
While I agree with your statement, I have a quick question....devils advocate here: If these days occur ~16% of the time, would it not make sense to trade 100% of the time as though it were a range day, thereby obtaining profits ~84% of the time and allowing the outlier day like today become the "losing" day. As long as you don't trade against the major trend that is....In other words, not rely on outliers to make your money?

On the other hand, if one trades every day expecting a low-probability day to happen, then by default, the trader would be trend trading in a range day 84% of the time. And in theory anyway, losing 84% of the time.....

It appears then, the real question is not whether you trend trade or range trade but the real question is this: Do you have a way to determine the difference between the two ahead of time......the million dollar question if there ever was one. And one I haven't answered yet.

The only way I would think it could work would be to always take profits fast on a portion of the position...say some multiple of risk....1:1 perhaps and always leaving a portion to run.....this would produce small wins in a range day along with some breakevens, and a lot of small losers....this also means for one lot traders, lots of disappointment and frustration.....driving the one lot trader to scalp....looking for smaller profits and fewer disappointments.....desperately trying to protect fragile egos and emotional states......and bleeding greed on a trend day.......and it means that for traders trading more than one lot, but not huge accounts, you have to enter with perhaps more than your desired size in order to have something to take off early....

Random thoughts.....

If I were going to choose one day over the other, I think I would be better off trading trend days only. Yes, that amounts to about 35-36 days a year, but in practice, it would account to more than that, while I manage the trade and until volatility dies down. Otherwise, I should be able to switch gears from one kind of trading day to another. This is in part, one of the most important skills a trader can have. Once again however, I would concentrate on developing my methodology and strategies for trend days first and then range days

range days may be more prevalent, but are also the most difficult to trade and the least profitable days to trade

they also reinforce and reward bad habits; i.e., premature profit taking, poor risk/reward ratios, because of the mean-reverting price action -then when a trend day occurs, you're unprepared to trade it optimally, or ignorant of it implications


Ironically, trend days were made for a purely technically motivated directional trader like yourself.

So, indeed the first step is anticipating the move; watching for patterns in price and volatility at predetermined critical inflection points to assess when traders at the margin might be setting off a series of events that can lead to trends and larger market swings - the low probability events I refer to

step 2 is recognition of the move, hopefully as early in the trading day as possible, e.g., the market opens (especially gaps) above/below value, VWAP, and pivot and is accepted

step 3 alter your strategy to trend mode, contemplate the very real possibility you might be initiating trades that won't be closed until MOC or later

step 4 is levering up - time to up your size, this is a special day that requires special measures

step 5 is adding to your position, decreasing pyramid on strength

step 6 is pressing your position - no reason to get out if this is indeed a trend day

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  #1739 (permalink)
 josh 
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tigertrader View Post
range days may be more prevalent, but are also the most difficult to trade and the least profitable days to trade

they also reinforce and reward bad habits; i.e., premature profit taking, poor risk/reward ratios, because of the mean-reverting price action -then when a trend day occurs, you're unprepared to trade it optimally, or ignorant of it implications

I agree in principle tt, but if I read you correctly, you're saying that premature profit taking is a bad thing only in the context of a trend day. In other words, on a range day, if I buy low and sell high, and sell high and buy low, then my profit taking is not actually premature, it's simply smaller than it would be if it were not a range day. Ditto for R:R--I think that it's much harder to define risk and reward on a trend day, because some go 10, 15, 30, 40... on a range day, the range is pretty well set, so it can be quite straightforward to buy/sell at the edge of value, where risk is relatively small, and simply close or reverse at the other side. Risk clearly defined (too far outside of value), reward clearly defined (the other side/middle of value).

Also, certainly the absolute returns on a trend day can be enormous when compared to range days, but some people prefer less volatility in their returns. If I rely on 1 out of 10 days for most of my returns, then I am going to be (1) very pissed when I miss one of those, even if I rarely take a day off, and (2) unfortunately, due to my human nature and inexperience, anxious for that day to come, and possibly be creative and imagine a trend day when it is no such thing, because I am looking for that type of day.

Just pointing out that ideally we would all be great trend traders, and still be able to play the ranges like a champ, but the fact is that different personalities, trading methods, and requirements on returns will make that darn near impossible. You are the most interesting trader in the world, so you can play a trend day without mucking up the other 9 out of 10 days; others of us are not so interesting and may have a tougher time!

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  #1740 (permalink)
 tigertrader 
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josh View Post
I agree in principle tt, but if I read you correctly, you're saying that premature profit taking is a bad thing only in the context of a trend day. In other words, on a range day, if I buy low and sell high, and sell high and buy low, then my profit taking is not actually premature, it's simply smaller than it would be if it were not a range day. Ditto for R:R--I think that it's much harder to define risk and reward on a trend day, because some go 10, 15, 30, 40... on a range day, the range is pretty well set, so it can be quite straightforward to buy/sell at the edge of value, where risk is relatively small, and simply close or reverse at the other side. Risk clearly defined (too far outside of value), reward clearly defined (the other side/middle of value).

Also, certainly the absolute returns on a trend day can be enormous when compared to range days, but some people prefer less volatility in their returns. If I rely on 1 out of 10 days for most of my returns, then I am going to be (1) very pissed when I miss one of those, even if I rarely take a day off, and (2) unfortunately, due to my human nature and inexperience, anxious for that day to come, and possibly be creative and imagine a trend day when it is no such thing, because I am looking for that type of day.

Just pointing out that ideally we would all be great trend traders, and still be able to play the ranges like a champ, but the fact is that different personalities, trading methods, and requirements on returns will make that darn near impossible. You are the most interesting trader in the world, so you can play a trend day without mucking up the other 9 out of 10 days; others of us are not so interesting and may have a tougher time!

@josh: Hey, no one said this was supposed to be easy. Once again this is a big picture idea, i.e., what works most of the time (or at least appears to work) is usually the opposite of what works in the long run. I have compared trading to the American venture cap model before; where a vc invests in a portfolio of companies, but where the bulk of the return is generated by a very small percentage of the portfolio companies. These are the companies that produce " home run" returns.

Personally, I think range days are trade-able, but also very choppy and a consistent source of losses for most traders. PA is certainly more random because the market is in balance. However, on a trend day that balance has shifted, as large scale and long time frame buyers enter the market. IMO, these are the most reliable patterns for technical traders because there is finally a real buying or selling imbalance. In opposition to what you stated, it is often easier to define risk points for these kind of trades; with some of the cleanest, easiest trades coming from initiative trend trades.

Catching trend days are a game changer. If you make a bad trade, you can always take your small loss. But if you miss a trend day or don't take full advantage it, you're putting yourself behind the eight ball. Catch them with any kind of regularity and you will see your year-end skyrocket.

I don’t trade often my friend, but when I do I make sure its a trend day -XX

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  #1741 (permalink)
 josh 
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tigertrader View Post
IMO, these are the most reliable patterns for technical traders because there is finally a real buying or selling imbalance.

This makes the most sense from a technical standpoint to me, thanks for saying this.


tigertrader View Post
I don’t trade often my friend, but when I do I make sure its a trend day -XX

Maybe "stay trendy my friends" would be in order Thanks for the reply as usual Gary!

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  #1742 (permalink)
 Big Mike 
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Very glad to see @tigertrader posting regularly again, and he's already re-earned his Wizardly status.

But please remember everyone, this is Brian's journal.

Mike

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 PandaWarrior 
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Big Mike View Post
Very glad to see @tigertrader posting regularly again, and he's already re-earned his Wizardly status.

But please remember everyone, this is Brian's journal.

Mike

I'd rather see @tigertrader, @josh and others discuss these important topics than bore myself and others with mundane posts all about more of the same.... so have at it....but don't stray into silly territory like the last time....

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1744 (permalink)
 tigertrader 
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Thanks Mike, and of course a big thanks to Brian for so graciously allowing me the use of his real estate.

...stumbled upon these Dr. Brett quotes - thought @PandaWarrior would enjoy

Brett N. Steenbarger, Ph.D.

I've never seen a trader succeed whose explicit or implicit goal was to not lose. The trader who
trades to not lose is like the person who lives to avoid death: both become spiritual
hypochondriacs.

No union was ever destroyed by a failure of romance. It is the loss of respect, not love, which
ends a relationship.

Love, once present, never dies. It must be killed.

Sometimes we select markets--and trading styles--much as we choose romantic partners: by their
ability to validate our deepest-held images of ourselves. Our choices generally succeed, for
better or for worse.

Many a trader fears boredom more than loss, thereby experiencing the two in sequence.

Goodness of character is measured in loyalty to others; greatness of character is measured in
loyalty to principle.

A measure of the soul: the degree to which the surpassing achievements of others evoke
inspiration rather than envy.

If you listen to the words, you'll understand the brains of the speaker. If you listen to the tone,
you'll understand his heart.

Show me what a man loathes, and I will show you what he cannot accept in himself.

Two traders: one increases size after a loss; the other gets smaller. Both continue to lose.

One encounters losing traders as often as one encounters losing golfers--and for much the same
reason.

The absence of self-acceptance too often masquerades as the desire for self-improvement.

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  #1745 (permalink)
 jimjones26 
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tigertrader View Post

Show me what a man loathes, and I will show you what he cannot accept in himself.

The absence of self-acceptance too often masquerades as the desire for self-improvement.

These two sentences really jumped out at me. Not sure why.

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  #1746 (permalink)
 podski 
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I'm very glad that this journal has become a watering hole for all sorts of stuff.

It certainly has widened our perspective on Brian and reminded us of the most important thing in trading and in life - balance. We are our worst enemies.

On Mentors:

I like Mike's remark on him having taken a number of students and that he spent hundreds of hours helping them whilst they spent little time helping themselves. When I say I like it, what I mean is it cuts to the bone.

A good mentor or a good coach doesn't have to have to be a superstar performer. It might help but only if they have the more important people and communications skills too. They do have to know a superstar when they see one. They also have to be able to tap a student/athlete on the shoulder and tell them to pack it in and get on with other areas of their life when it is appropriate.

There is both food and drink in every page of Dr. Brett's work. In his books he speaks to the individual reader as their coach. He knows that he cannot be there "live" to support that trader but wrote the books so that his words could linger. He uses an analogy from therapy, that each individual should be able to "trade from the couch". We should be able to take a step back from our trading and do the most difficult of exercises - examine what it is that we are really doing.

In order for the mentor/student relationship to work it is the student that has to bring it and do the work. The chemistry has to be right, the stage of development has to be right and the long term goals have to be right. Most importantly the successful performer needs that rage to succeed. This thing of ours (sic) is something where many are called and few are chosen. A mentor can accelerate the development of a winner and also help a loser throw in the towel.

I think that if it works it can be a very important role.

For anyone that feels that they are competent , experienced and have something serious to give then I would encourage them to be a mentor. Just be brutal about who you choose as a student. Develop your talent for picking winners. If you are your own mentor, examine where your rage to succeed is now. That is where you should be working.

p

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 PandaWarrior 
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I've been looking at ZN now for a few weeks. Another trader turned me onto it. Well to be fair, I thought it was boring at first....and it still is for the most part. But what I like about it is that seems pretty directional. Unlike CL with it's multiple stop runs and direction changes each day, ZN seems to pick a direction and move that way pretty methodically.

Another thing that seems nice, is that it appears to respect levels much more than CL or even ES does. The edges appear nice and clean with clearly defined breaks and pullbacks.

So I traded it in sim for a couple of weeks alongside CL. I would put on a trade and then hide the chart and forget about it only to hear, target filled an hour later. Whoops, I had forgotten about it by that time. So decided to take a flyer on it this week live. Yesterday was pretty good but I exited the second trade a bit early as I had already taken a nice profit on the first one and on the second one I was merely trying to end up with a small winner or at worst a BE.

Today however was a monster day.....with one lot. But I let it run all the way out to the projected profit objective and sure enough, it hit it within one tick. $587 on one lot......for me, that represents close to the largest single lot trade of my short trading career. And most definitely the longest held trade ever.

I had opportunity to add another lot to the trade but elected not to since I am so new to this instrument. Next time I get the chance, I'll add on.

I'll be trading both live and sim over the coming days and weeks in this instrument as I attempt to learn some of the nuances it possess.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1748 (permalink)
 tigertrader 
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Yesterday Brian asked me about trading ZN and because I was pressed for time, I gave him a very brief and inadequate reply to his query. Ironically, I made only one trade today, and it wasn’t until I sat down to trade at 3:15 PM ET. There must have been some kind of subliminal forces at work, because I made the trade in ZB (I don’t trade notes), which is a non sequitur of sorts, because I have been trading Gold (and some ES) almost exclusively as of late.

The trade was essentially a scalp from my perspective although the time from entry to exit was over 4 hours. Nevertheless, it does provide a chance for me to explain in more detail, some of the data points I consider when making and managing a trade.

Reiterating what I have posted previously; traders operate at differing time-frames, markets are interconnected, themes abound in the markets, and probabilities and departures from value govern trading opportunities. Recency bias - identifying what is driving price at the current time and in turn what techniques or strategies are effective at the current time, always play a role in making an informed decision. While I won’t cover every data point I considered, I will mention the most salient.

The trade was initiated from the short side at a time of the day that was consistent with higher volatility and consistent with the current theme (scaled back QE) and trend (down) in treasuries. ZB had been trading below the VWAP since 8:30 AM and failed to trade above the intra-day VaH. At the time I initiated the trade the NOB was strengthening, which has been a leading indicator throughout the recent selloff in the bonds. And for the day at least, the bonds negative correlation to equities had reemerged. With the ES higher into the 3 p.m. hour, there was a high probability of the ES moving higher into the 4 p.m. close (70%), which meant there was a high probability ZB would continue its selloff. Which it did.

I took the trade into the close and did not cover because my expectation was still lower for ZB. When ZB reopened at 6:00PM ET it gapped up a few tics. I noticed that the yen was getting hit at the same time and decide to add to my position by 40%, which proved to be an auspicious move as the yen traded lower and the bonds followed. I made one more add in decreasing size on a cue form the yen and decided to target the 133.20 level as a potential point to cover. It was -2SD from the VWAP and the bottom of value from the previous day. However, I would first see how ZB traded at that level and what if any cues the yen would give me.

The yen did in fact start to rally and the bonds lagged far enough behind that I was able to cover near the low of the move. Otherwise I would have been looking to add more and press further.

The lesson to be learned is that there is no hurry to cover a trade just because you have money in it, and you are worried about that profit dissappearing before your very eyes.

Get out of trades because you dont expect them to continue working.



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 josh 
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tigertrader View Post
The lesson to be learned is that there is no hurry to cover a trade just because you have money in it, and you are worried about that profit dissappearing before your very eyes.

Get out of trades because you dont expect them to continue working.

The above is very much appreciated Gary--thanks for posting it.

As a side note:
1) Why do you prefer bonds instead of notes?
2) Why does your VWAP begin at midnight instead of the globex open time at 18:00 ET?
3) Can you talk a little more about the yen-bonds correlation you used?

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 tigertrader 
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josh View Post
The above is very much appreciated Gary--thanks for posting it.

As a side note:
1) Why do you prefer bonds instead of notes?
2) Why does your VWAP begin at midnight instead of the globex open time at 18:00 ET?
3) Can you talk a little more about the yen-bonds correlation you used?

1) I traded Bonds on the floor for 25 years and also, the farther out the curve the more volatility in the instument - I like volatility

2) I've always used the VWAP this way and found tht it works for me

3) I mentioned themes and recency bias - there is a theme in the markets that is au courant becuase of a comment that Bill Gross made back in May; and that is that he expected bonds and equities to become positively correlated moving forward - he went on to state that the global levered trade is depndent upon a stable yen, JGB yield, and Treasury yield, and that if these were to become unstable the highly levered trade would begin to unravel
,
ever since he made those comments there has been increased scrutiny on all of the above

the professional trading community is smaller than you would think and they talk to each much in the same way that people on this forum share and exchange ideas - that is why you will often see large desks implementing the same strategies, often at the same time, in the same direction - but more importantly; they all look at the same things in an almost trendy way

i mentioned how the desks were all keying off Italian credit spreads at the height of the euro crisis - for a while this was all they were following and and was the driving force behind their decisions

then conditions change and its something else, like china or commodities, or whatever the theme may be that is relavant or percieved to be , at that point in time

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 josh 
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the professional trading community is smaller than you would think and they talk to each much in the same way that people on this forum share and exchange ideas - that is why you will often see large desks implementing the same strategies, often at the same time in the same direction - but certainly they all look at the same things

Very cool--so, the Yen has been in the news a lot since the JGB fiasco a few weeks back, and since the Nikkei was up something like 80% over such a short time period--yes? Can you be a little more specific regarding the relationship of the Yen currency to US bonds? You have been talking a lot about what drives price. In this case, can you link fundamentally the Yen to US treasuries? As in, why would a weak yen cause you to add short on your bonds trade? Please forgive my numerous questions and what must seem like total ignorance of the subject, but I am trying to connect the dots in my mind.

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 tigertrader 
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josh View Post
Very cool--so, the Yen has been in the news a lot since the JGB fiasco a few weeks back, and since the Nikkei was up something like 80% over such a short time period--yes? Can you be a little more specific regarding the relationship of the Yen currency to US bonds? You have been talking a lot about what drives price. In this case, can you link fundamentally the Yen to US treasuries? As in, why would a weak yen cause you to add short on your bonds trade? Please forgive my numerous questions and what must seem like total ignorance of the subject, but I am trying to connect the dots in my mind.

yen and treasuries are correlated because they are both safe haven/ flight to quality/risk-on-risk-off vehicles

and are both sensitive to the central bank policies of their respective countries

additionally...

consider the yen carry trade and the unwinding of the carry trade

putting on the trade: selling yen and buying US equities

taking off the trade: buying yen selling secuirities

if bonds are negatively correlated to equities then they will be positively correlated to the yen

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 Silvester17 
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tigertrader View Post
yen and treasuries are correlated because they are both safe haven/ flight to quality/risk-on-risk-off vehicles

and are both sensitive to the central bank policies of their respective countries

additionally...

consider the yen carry trade and the unwinding of the carry trade

putting on the trade: selling yen and buying US equities

taking off the trade: buying yen selling secuirities

if bonds are negatively correlated to equities then they will be positively correlated to the yen

if you don't mind me adding 2 more things:

- japan is very famous for using the above mentioned vehicles "safe haven/ flight to quality/risk-on-risk-off"

- not to forget, japan is the 2nd largest us treasury holder

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 tigertrader 
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impact on asset markets

the broader liquidity story

US, Japan, China

leading market volatility

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 PandaWarrior 
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This trade might end up BE as I am moving my stop to BE once I make this post.

Anyway, this has been a work in patience today.....but so far its worked out according to plan....but we are right at the support levels for the break up so if its gonna work, it needs to get through these levels....I think it will but how long and will it pull back prior to breaking down? Who knows but I am now BE on this trade with lots of down side potential......

I thought it would be good to post mid trade for review later and see how it plays out with the benefit of a static pic of what I was thinking and how I managed the trade......

I'm goofing off with @Fat Tails thrust bar indie for fun today.....I like the colors....


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 PandaWarrior 
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stop moved to lock in some profit....if it reverses from here, I dont want it anymore


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 PandaWarrior 
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A lot of work for little payoff....it happens sometimes....

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 PandaWarrior 
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My thanks to visitor ratio is about 5%. I find that odd......

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 tigertrader 
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@Panda: you do realize there was a 5 year auction today?

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 PandaWarrior 
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@Panda: you do realize there was a 5 year auction today?

Uh.... No. My news feed said no news after the CL number. I sat that out and made some money but didn't see anything related to notes.

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 PandaWarrior 
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@Panda: you do realize there was a 5 year auction today?

If you want to quote me, you need to spell out the entire name. There's another user named panda.

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 tigertrader 
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Uh.... No. My news feed said no news after the CL number. I sat that out and made some money but didn't see anything related to notes.

@PandaWarrior: +21 tic move in the ZB on the results ( not me , the bonds) - heavy foreign demand

5 yr note auction - Indirect bidders, a group that includes foreign central banks, bought 53.0%, versus 43.9% in recent sales. Direct bidders, which include domestic money managers, purchased another 3.6%, versus an average of 17.1%.

bonds now leading the yen

es would not trade lower on yen and bond weakness and i was having a hard time buying them, so i got long the es before the auction results

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 PandaWarrior 
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@PandaWarrior: +21 tic move in the ZB on the results - heavy foreign demand

5 yr note auction - Indirect bidders, a group that includes foreign central banks, bought 53.0%, versus 43.9% in recent sales. Direct bidders, which include domestic money managers, purchased another 3.6%, versus an average of 17.1%.


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 Silvester17 
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PandaWarrior View Post
Uh.... No. My news feed said no news after the CL number. I sat that out and made some money but didn't see anything related to notes.

@PandaWarrior,

don't know what news feed you use. I really like this one:

Economic Calendar - Investing.com

not only it has the auctions, it also updates a few seconds after the release. you don't need to refresh the site.

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 josh 
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es would not trade lower on yen and bond weakness and i was having a hard time buying them, so i got long the es before the auction results

Euro, yen, pound, aussie, cad, franc, krona, all of them getting hammered and neither ES nor notes budging at the moment. I suppose my attitude should be "that's some useful information" but at this moment it's "damn"

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 Silvester17 
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PandaWarrior View Post
My thanks to visitor ratio is about 5%. I find that odd......

how about looking at a different statistic. look at your ratio posts and thanks received. it's about 3.57. now look at the most valuable poster @Fat Tails: his ratio is "only" 2.16. for me that's an indication that members really like what you post.

and then there're visitors like me. I'm not reading journals for learning or making a comment about the trades (most of the time anyway). I like to see if I can add some worthless input.

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 tigertrader 
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josh View Post
Euro, yen, pound, aussie, cad, franc, krona, all of them getting hammered and neither ES nor notes budging at the moment. I suppose my attitude should be "that's some useful information" but at this moment it's "damn"

it seems the yen carry trade is alive and well for now

and that the defensive china trades are unwinding

but it does have my head spinning a tad

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 PandaWarrior 
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Silvester17 View Post
how about looking at a different statistic. look at your ratio posts and thanks received. it's about 3.57. now look at the most valuable poster @Fat Tails: his ratio is "only" 2.16. for me that's an indication that members really like what you post.

and then there're visitors like me. I'm not reading journals for learning or making a comment about the trades (most of the time anyway). I like to see if I can add some worthless input.

Ego boosts.....nice....

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 josh 
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tigertrader View Post
5 yr note auction - Indirect bidders, a group that includes foreign central banks, bought 53.0%, versus 43.9% in recent sales. Direct bidders, which include domestic money managers, purchased another 3.6%, versus an average of 17.1%.
...
es would not trade lower on yen and bond weakness and i was having a hard time buying them, so i got long the es before the auction results

1) This does not seem like a very good auction. Maybe average at best. So, why such a positive response from the bond market after the auction?

2) "I was having a hard time buying them" -- buying which one? Also, if you are saying that your bias was short equities (which I suspect it was but I'm not sure), can you briefly talk about the mindset that it takes to shift your bias and go the other way, particularly if you are buying pretty well off the lows?

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 tigertrader 
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josh View Post
1) This does not seem like a very good auction. Maybe average at best. So, why such a positive response from the bond market after the auction?

2) "I was having a hard time buying them" -- buying which one? Also, if you are saying that your bias was short equities (which I suspect it was but I'm not sure), can you briefly talk about the mindset that it takes to shift your bias and go the other way, particularly if you are buying pretty well off the lows?

@josh: 1) true dat - The bid-to-cover ratio, which measures the dollar amount of bids versus the dollar amount of bonds actually auctioned, came in at 2.45, down from 2.79 at the May auction – marking the weakest demand for 5-year notes since September 2009

however, I think it was the surprising number of foreign investors buying bonds that rallied the bond market

53% of the notes at today's auction were awarded to indirect bidders, a group of investors that includes foreign central banks. That marks the highest share of a 5-year note auction going to indirect bidders since January 2010.

2) I was refrring to the ES- I shifted sentiment because I saw the ES was not trading lower on weak bonds and a weak yen

I was short the ES and i was trying to cover but was having a "hard time" doing so

whenever it is dificult to buy/sell you know the market is going higher/lower

i finally covered my shorts @ 92.75-00 and got long at 93.25

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 gretaro 
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@PandaWarrior I just wanted to say thank you for this thread and to all who are participating at the moment. Very interesting discussion. The discussion is opening up my mind to many important truths. I am in a middle of a Combine right now and what I find most difficult is knowing when I should hold for more and when the market is telling me it isn't going further. Because I am inexperienced I often wait to long and give up a lot of my profit. Something to work on.

Anyways just wanted to say thanks.

YES!
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 PandaWarrior 
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Exited before the news. The news spike would have filled the second exit and then trailed out the third, but since this instrument seems to respond violently to news, best to sit it out.

The entry price on the chart is a blended entry, see the trade details for the specifics if interested. My first entry was late by several ticks....otherwise this would have been an even better trade....anyway, its not the entry that counts but the exit.......






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 PandaWarrior 
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gretaro View Post
@PandaWarrior I just wanted to say thank you for this thread and to all who are participating at the moment. Very interesting discussion. The discussion is opening up my mind to many important truths. I am in a middle of a Combine right now and what I find most difficult is knowing when I should hold for more and when the market is telling me it isn't going further. Because I am inexperienced I often wait to long and give up a lot of my profit. Something to work on.

Anyways just wanted to say thanks.

Unrealistic profit goals often lead to stress which leads to self destructive behavior.

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 arnie 
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Unrealistic profit goals often lead to stress which leads to self destructive behavior.

What about when you have a realistic profit, price misses by one tick, but you're so blind looking at your target, at the missing tick that the trade ends up reversing against you and amazingly, you're still lock on that missing tick?

Talk about self destructive behavior.

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 tderrick 
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Nice twist on the charts, my friend

I like the black transition bar gag....


...hope all is well


AJ
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 PandaWarrior 
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What about when you have a realistic profit, price misses by one tick, but you're so blind looking at your target, at the missing tick that the trade ends up reversing against you and amazingly, you're still lock on that missing tick?

Talk about self destructive behavior.

There is a phrase for that issue. It's being a dick for a tick. And it applies to entries as well as exits.

We've all done it at some point. I still do sometimes, but if its close to target and not a staged exit like my ZN trade, I trail behind 75-80% of the target and let it play out.

A staged exit like today demands more patience while being aware of things like news so being filled on one at target while exiting with less than MFE on the rest is ok with me. I gave it every chance while still protecting some profit.

Don't be greedy if its unwarranted.

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 PandaWarrior 
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Nice twist on the charts, my friend

I like the black transition bar gag....


...hope all is well

It's just @Fat Tails thrust bar indicator with all the inside bars black and the dojis yellow. I like the colors, I don't use it to trade. At least not yet anyway.

Hope you find paradise to trade out of soon!

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 Silver Dragon 
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Silvester17 View Post
how about looking at a different statistic. look at your ratio posts and thanks received. it's about 3.57. now look at the most valuable poster @Fat Tails: his ratio is "only" 2.16. for me that's an indication that members really like what you post.

and then there're visitors like me. I'm not reading journals for learning or making a comment about the trades (most of the time anyway). I like to see if I can add some worthless input.


PandaWarrior View Post
Ego boosts.....nice....


@PandaWarrior

Taking a look at thanks received, you get 9.46 thanks per day so you should hit 10,000 in less than 6 months give or take a couple of weeks.

Robert

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  #1779 (permalink)
 PandaWarrior 
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  #1780 (permalink)
 addchild 
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PandaWarrior View Post

It's ok. I picked up one of those in tribute.

.
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  #1781 (permalink)
 PandaWarrior 
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Read something yesterday from a well known and successful trader.

"Do not become deluded by the idea of "the trend" on an intraday basis."

Things that make you go hmmmmm.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #1782 (permalink)
 Big Mike 
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PandaWarrior View Post
Read something yesterday from a well known and successful trader.

"Do not become deluded by the idea of "the trend" on an intraday basis."

Things that make you go hmmmmm.



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 rubyslippage 
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PandaWarrior View Post
Read something yesterday from a well known and successful trader.

"Do not become deluded by the idea of "the trend" on an intraday basis."

Things that make you go hmmmmm.

Hmmm...this has been my most profitable delusion for quite some time now

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 PandaWarrior 
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rubyslippage View Post
Hmmm...this has been my most profitable delusion for quite some time now

I think it means don't be deluded into think every trade is gonna run and run.....at least that's my present interpretation

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  #1785 (permalink)
 Big Mike 
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PandaWarrior View Post
I think it means don't be deluded into think every trade is gonna run and run.....at least that's my present interpretation

Or to look at the bigger picture.

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  #1786 (permalink)
 josh 
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Big Mike View Post
Or to look at the bigger picture.

Mike

And I think this applies for all time frames. A market that is trending up in the last 5 years does not mean it will be up this year; "trending" up for the year may not continue to do so next month; "trending" up for the month does not imply this week will continue to be so; "trending" up for the week does not mean to simply buy today; and finally, "trending" up in the morning does not mean it will continue into the afternoon.

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 Big Mike 
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josh View Post
And I think this applies for all time frames. A market that is trending up in the last 5 years does not mean it will be up this year; "trending" up for the year may not continue to do so next month; "trending" up for the month does not imply this week will continue to be so; "trending" up for the week does not mean to simply buy today; and finally, "trending" up in the morning does not mean it will continue into the afternoon.

Yes. But the quote was talking about intraday. "Do not become deluded by the idea of "the trend" on an intraday basis."

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 josh 
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Big Mike View Post
Yes. But the quote was talking about intraday. "Do not become deluded by the idea of "the trend" on an intraday basis."

Mike

I understand that--what I'm saying is that the principle may very well apply to all time frames, and in effect I'm extrapolating the principle, in one interpretation as: "Do not become deluded by the idea of 'the trend' at all."

An investor who buys the S&P at 700 in March '09 because it's very undervalued does not care about a weekly or monthly down trend; he sees the all-time trend as up, and is looking to invest money for perhaps years to come. So a swing trader playing trades lasting a week or two has the very "zoomed in" (aka "delusional") view relative to the higher time frame player who is looking years ahead. In this case, the March 2009 trader playing in the weekly to monthly time frame would be deluded to consider the 2008 activity as a down trend, given the context of the stock market since its inception (as only UP).

The weekly/monthly trader's perspective (circled area is early 2009):


The long-term investor's perspective (same circled green area as prior chart):


Which player is delusional? Or does the use of the past "trend" in any way constitute delusion? Is either right or wrong, or is either delusional? If I'm an intraday trader, does it matter what the weekly trend is? If I'm a swing trader holding trades for weeks, does it matter what the all-time S&P trend is? Just thoughts, nothing more.

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  #1789 (permalink)
 PandaWarrior 
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  #1790 (permalink)
 PandaWarrior 
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no ZN trades today. I was short biased, there was huge volume 2 ticks above where I wanted in and price never made it below that edge....there was a signal to go long, but with the bearish sentiment I had along with the bearish filter tools I use, I was not excited about the longs. I did put a limit order to go long after the signal bar had closed up but it never filled and I'm glad it didn't. While there would have been no heat on the trade at all, it was definitely against the current bearish sentiment I was observing. So it might have worked and currently it still is but its not going anywhere and for now, I am flat and just observing.

If I get the short signal I was looking for, I'll take that....otherwise, no go....

I filled my daily quota in CL or at least what I was hoping for today so done with that instrument for today.


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 tigertrader 
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PandaWarrior View Post
no ZN trades today. I was short biased, there was huge volume 2 ticks above where I wanted in and price never made it below that edge....there was a signal to go long, but with the bearish sentiment I had along with the bearish filter tools I use, I was not excited about the longs. I did put a limit order to go long after the signal bar had closed up but it never filled and I'm glad it didn't. While there would have been no heat on the trade at all, it was definitely against the current bearish sentiment I was observing. So it might have worked and currently it still is but its not going anywhere and for now, I am flat and just observing.

If I get the short signal I was looking for, I'll take that....otherwise, no go....

I filled my daily quota in CL or at least what I was hoping for today so done with that instrument for today.


why were you short biased?

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 PandaWarrior 
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tigertrader View Post
why were you short biased?

My feeling about the larger time frame at resistance, broken structure to the down side on my trading chart and the filtering tool I use that says if below, then generally bearish.

The long eventually failed today and so did the short I was waiting for. Overall ZN did not follow through on any of the trade set ups like it has been over the last several weeks.

I did take the short which was a loser. My first net losing day on ZN since u began trading it three weeks ago.

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  #1793 (permalink)
 kronie 
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PW,

I am catching on late, and sorry to hear about your short circuit,

I am glad the power is back on, and you're recovering. Sure seems your trading skills are none the worse...


ATB buddy, ATB!





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  #1794 (permalink)
 PandaWarrior 
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well if you're a break out trader on the daily, I guess you're long....


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  #1795 (permalink)
 tigertrader 
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