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I think more people than many would admit come to trading with some vendetta against the real world. I came and tried to get even with the markets - making money by force!
The whole thing was fuelled by a testeestone demon - lot of big wins made me dizzy but it all ended whenthe account had blown up. Dazed shock aftermath - why a sane and logical man did this is still a mystery.
Also, studying harder on techniques, patterns, 'secrets' was good and seemed like progress but was the completely wrong path.
I woke up only after a dazed acceptance that the market had punched me super hard, and getting up seemed impossible but the demon made sure I was back in the arena.
But only when I really understood what inside made me tick that I could pretend any semblance of control. After the AHA moment was when I approached markets asa sane man should. Indeed few do, and fewer persist in the sane state. So currently I am making money, but I still touch wood :-).
Many more times that I would have liked I have had a position on during a major news event. Though all the times I escaped unscathed, the whole idea is worrisome that I would place my faith in 'let's see what happens when.....' type of scenario.
Basically the goal of a price action trader is to recognize a setup and then profit from it. How can one see a setup AND predict the future during a 'coin flip' type of event - what will be the meaning of chart / price reading in such an environment?
Why should I not argue that I am gabbling and definitely NOT trading if I find myself news trading?
However sometimes the price actin even makes sense before, during and after the news event. The stops need to be wider, the size smaller - but it makes me wonder if it is really worth it....
Would be interesting to hear others views on this.
Some things that are troubling me over my past week's trading:
1. I keep trying to predict reversals
Regardless of whether I make money on this or not (I do) it boils down to - is this the way I wish to make money? Common sense says the proper way is to aim for trend continuation and enter or increase position at pullbacks. However are there some times when this trading style is better - like last two days when the 'switches' were many?
2. Doing something at a round number level just because 'something will happen there'
This seems to be based on an assumption or rather multiple experiences that shade me as a trader - 'something' happens there and I feel my way around that feeling of happening - probing - being alert, scanning my old memories of what 'that thing' is - somehow I thrive in this sort of intuitive stuff, but again, can I quantify my edge?
I've been posting more because I have actually stopped to read and re-read everything I wrote in my journals since the day I joined this forum - it started with me posting my entry in gold in real time followed by the exit and followed by @Big Mike congratulating me on the trade. I wish I could continue that - actually I do that on my live streaming channel, but avoid talking because I find that I distract myself.
Lot of my trades happen just before a freight train of a trend resumes - in that sense I am a countertrend trader and I am not really very comfortable with that. But internal conflict aside, I always have managed to be out in time - clear of the tracks before the freight train arrives.
Guess I will continue picking pennies in front of the steam roller....
Here is an interesting exercise if faced with fear of losing (discussed on PriceSquawk):
Tip
In this trading exercise, for just one or two trading session try and LOSE as many ticks as possible based on short term order flow and price swings (and not just crossing the inside market spread). You might surprise yourself and find that your win to loss ratio plateaus at some point. This will also give you a better understanding of the probabilities of trading; instead of constantly worrying about how many losers you are taking, you will be in the opposite case and realise that you cannot help but take winners. This can assist in dealing with fear of losing issues when trading.
Scalping with a simple chart without any indicators need not be a daunting exercise.
I usually do not know about what my odds in a particular type of entry are - and variance usually makes it hazy to quantify.
But what we as traders can and must do is define the points where getting out is the only solid plan.
So whether you read tea leaves, do volume profile, read the order flow etc. and act based on the feelings resulting from your judgement of the current market dynamics, the tipping point of bailing out and the DEFINED target are more important for trading success than any 'other' thing.
The illusion is that the answer is always in the math.
Something inside always gets me when I MISS A MOVE.
It then feels that there is an angel and a devil sitting on each side of my ear and whispering. I then feel I would have been better off with TWO LOTS instead of one. One I scalp, the other I ride till the end of this 4 sigma event giant move.
But then I realize the fallacy of this argument and realize it has smaller basis in reality - my emotions would need to be dual for this to work.
I believe that focusing too much on stringent parameters of a PATTERN are a too obvious way of getting stop hunted or pillaged without reaching target. The way double thinking works is to Trade the traders themselves - hence the more obvious the pattern the more you need to think about the consequences of trading it,
Usually when I trade the whole zig-zag and mishmash of movement matters - the pattern usually has no name but I am sure what exactly I will do if it will breakout - in that way I am ready for the whole event but just cannot name the name or file the 'pattern name'.
Trading is more subtle than textbook stuff, just like really real life.
One of the disadvantages of trading a very small account is that there is the possibility that you do not treat the small account with as much care as you normally do a large 'more meaningful' account.
One more proof of the holy grail's location - 'its all inside you between the ears'.
