Thesis - futures trading

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A statement or theory that is put forward as a premise to be maintained or proved.

Source: typical English dictionary definition.

Below are quotes of how a thesis is relevant/necessary for trading:

A true understanding of what is happening in the market relative to fundamentals, sentiment, and price action. This in turn, leads to the formation of a thesis; and, time spent confirming that thesis. once the trade is made, risk is acknowledged and controlled, and the trade it is exploited to it's fullest.

Source (with edits):

Observe the market in an attempt to gain an understanding of what is truly driving price. this inevitably leads to the formation of a thesis which is yet to be proven. if you believe there is an opportunity to prove the thesis, take the trade. If the premise behind the thesis proves to be flawed, simply get out of the trade. However, if price action confirms your thesis, then exploit the trade to it's fullest.

Source (with edits):

Why is all this fundamental shit important? Because it offers confirmation or refutation of one's thesis regardless of one's p&l. Whether the market moves your way or against your position, you usually have a pretty good idea if your original thesis for initiating the trade was correct. Trade assessments are not based on whether you have money in the trade or not, but rather on what the market fundamentals are doing relative to your thesis. This allows you the ability to give your trades the room they need to succeed and better mange your risk, and more importantly, allows you to lever up when you are right in your thinking. If you are simply adding to a trade because you have money in it and it's going your way, or getting out of trade, because it is going against you, you are trading blind. You are making random trades that are essentially based on random decisions.

Source (with edits):

The same is true of formulating a thesis about the market. If you don't have a thorough knowledge of the market, you are simply going to be making guesses based on some misguided bias.


If a trader takes a random approach to the market, he will make random trades, have random luck, and random results. he is simply making binary bets and doesn't have a thesis to support his decision, nor the feedback necessary to either confirm or refute his bias. The trade starts going against him and he panics and gets out, or the trade starts going his way and he panics and gets out. There's nothing to tell him if he should stay or if he should go. If a trader understands what is happening in the market and why the trade is working or not working, then he has a much better chance of exploiting the trade. If he continues to receive the same feedback he had before he initiated the trade, while he's in the trade, he has a much better chance of optimizing the trade. There has to be a reason based approach, otherwise you're just gambling. If you're gambling then you are a willing loser who occasionally wins, because you are playing a game with a negative expectancy. A trader on the other hand, is a willing winner who occasionally loses, because he is playing a game with a positive expectancy. Traders trade to make money, but sometimes pay the price for the risk they incur. A gambler may think he is out to make money, but his reward is usually non-monetary.

Source (with edits):
Created by  steve2222 , April 10th, 2016 at 08:53 AM
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