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What is it suppose to mean to play when your edge is screamingly apparent? How often have we read passages from Big Mike or tigertrader say i need to be in the market to get a better read or better feel what does Mr Market want to accomplish? How often did they write that if you wait for all the cards to be revealed before getting involved you risk to be the bitch in the end (not their exact words but that's what they mean).
I think another way to look at it too, as others have mentioned previously is the "price-risk vs information-risk" dilemma. Do we:
a) wait to gain enough information so that we are confident our trade has a high-probability of success (and in the process risking optimal trade-location)
or
b) see a glimmer of an opportunity and take advantage of current price and ideal trade-location (and in the process risking money under less information).
I think the idea was that b) is the better choice in the long run but that is my 2c and choosing a) is equally valid for some.
EDIT: this probably explains it much better than me
I think it depends on the traders temperament. I'm more of a risk averse person and have a hard time holding trades even when my edge is screamingly apparent. That's why I agree with trendisyourfriends sentiment more; because "not being a bitch" is a useful idea for me. Maybe for Salao, he needs more discipline, and that's why he said what he said.
I took a suggestion from @bobwest* and I did a market replay session for learning purposes. I found it very useful. I downloaded a few random days...this one is ES March 7.
I didn't post my trade locations because I don't want to emphasize the results of each trade (for better or worse). I want to practice reading the market, learning to maximize expectancy AND THEN document what I learned in the process hoping that something sinks in to my rather dense skull...
The globex session had formed a channel up and then a breakout from the channel. The breakout went above the low of the previous day and found resistance at a measured move target (measured using the height of the channel). This was a breakout failure from the channel, and a breakout failure over yesterday's low.
I sold the breakout bar. The next bar tested the breakout and sold off, forming a one bar BO test. I drew up my MM target using the open from the first bar in the BO leg and the close of the BO bar. My profit target was hit and the market continued to sell off. In hind-sight it became clear that the measured move target should have been measured using the height of the trading range preceding the BO. This is where the market had found support.
BUT, looking left on the chart, I couldn't find any other support. So I thought there could be another leg down. So I used a sell stop to sell one tick below the pull back. My order was filled and I quickly became trapped. Realizing that I was in a trading range I anticipated the market to return to entry price. I had to take alot of heat but exited with a smallish loss. This highlights a pattern in my trading. I seem to get trapped more often when I use STOP orders then when I use LIMIT orders...
...Probably because I use STOP orders to enter the wrong side of the trading range. I try for BO's too often. I entered on the long side, buying the close of a strong bull reversal bar. There was a higher-low here, but not yet enough bars in the pattern to make a reversal likely. This was pretty close to a 50/50 trade. I could have skewed the probability more in my favor by buying in the lower portion of this trading range. My initial Reward to Risk was ~2/1, but I was able to move my STOP up improving my RR to greater than 2.
The market went up for two legs and tested the breakout and reversed.
@Zachary Standley absolutely, I think I do both, in fact, I would say when I'm using stop-buy/sell orders, many times I am looking for confirmation (more information) and trying to gain off of momentum (worse trade-location). Many times when I'm using limit-orders I am acting on trying to get better trade-location.
Note: sorry @Salao I am always rambling in your journal.
I agree with you TIYF. I think what Dr. Brett was saying was that traders should use the opportunities present in the marketplace as a basis for being in a trade, and to not use the 'need for involvement' alone, as a basis for being in a trade. He made his 'bitch' analogy to interject humor, but muddled the message. This is my read on the matter, anyhow...
I read the quote as being about compulsiveness and neediness. You're someone's bitch when you're such a nothing that they can dominate and push you around (well, actually, that's not all they can do to you, but we'll keep this clean .)
I'm pretty sure the point being made is a different one.... If you have to be in the market because of a compulsion, because you can't help it, because you lose your ability to act on your own, that's when you're the market's bitch.
That's not you assessing the market's intentions and acting appropriately. That's you without any will of your own.
Or so I read it.
Also, it's a joke. Explaining jokes ruins them, but they can still have a point.
I meant the market certainly made me its b#@$! on Thursday! But now I feel like I dragged this forum into the gutter. So I'll clean up my act a little...elevate the discourse and what have you ()...
