I was considering just posting this in my thread but i feel i would get a larger response from the community in a seperate post. I have personally been trying to refine my systems but what i really uncovered was that I was refining how i looked at the market, what information i could extract and filter out (there is alot if info and most of it is useless), and then how to best put myself in a position to profit from it. I am a completely discretionary trader but i would really like to hear how all traders think about the market.
Here are some key things i take on in my thinking about the market that i try to envision before i put on a trade. Now I dont say that i can understand every move behind the market or have a crytal ball. But Why do people use the set ups that they do? What reasons do they have behind them? How did you come up with these set ups? I want to determine how people in this forum conceptualize the market as well as turn that concept into in actionable plan.
For me I try to determine the following to help me get a grasp of the market. During the times we are close to or about to create a set up. I can not think the entire market through but these things go through my mind when i want to put a trade on.
Determine the players in the game. (Commercials, institutions, sovergeins, hedgers etc)
Understanding the state of play. (fundimentals, sentiment, news, macro factors)
Under the current circumstances what is the objective of the players?
with these players and their objectives, under the current market conditions how will they best accomplish their goal? What are the tools that would best suit them to accomplish those objectives most effectively?
After determining, the players, the environment, the players, their objectives and their most probable tools. Then we can see who has the most factors in their favor.
then my job is to try to put myself in a position to best take advantage of these factors, and ride their waves.
Maybe this analogy will help put it all together in a way that people can understand. I am really trying to pull this out of my head and never had it structured before.
Its like a football (soccer) game. You have your players the wings, the defense, the mid fields, and they all have different jobs and try to do their job to the best of their ability. We have 2 teams the bulls and the bears, each trying to push price in their direction. The ball is price it bounced back and forth between the 2 teams but eventually 1 team will win, in the battle of supply and demand push price farther in their direction to achieve their goals. The current market environment is the statium is it a home game or away game, whose side is the crowd on, who has the most support. The tools the teams will use to accomplish their goals are like the plays the teams will use, will the drive it up the left side and pass for a shot on the opposing teams goal, or punt it away from their own goal to create space where they have room to manuever. But all those things move them closer to their objective.
So now as a trader I just want to find which team has the most support behind him and the strongest kick. Finding price levels where price will be pushed away with the strongest force and with the most amount of support from the big boys. Then I get in to take advantage of those factors.
You know what this came out way more convoluted than i had hoped. I am a price wave surfer find the directions of the wave and the largest wave machine and ride it to their destitation, which in turn will take you to yours.
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Now the question is HOW DO YOU SEE THE MARKET?[/I][/B]
Hey MeiHua
Im a swing trader not a day trader so I don’t really need to know all about the technical aspects of the big players and most of the fundamentals, since im not a day trader I wouldn’t know if you needed to know it or what specific things you needed to know, but if I have to guess what day traders needed to know about news and what the big players are doing i’d say they probably don’t need to know too much, the reason being is it’s really hard to for me personally to determine what news or fundamental’s affects the price (I havn’t spent much time researching it though). If I was in your shoes though I would try and figure out what unnecessary stuff that you wouldn’t need to be a profitable trader, I mean Warren Buffet Berkshire’s Hathaway firm doesn’t even have computers for trading they use old ticker or whatever you call them machines, and pen and paper methods, so what Im trying to say is you shouldn’t need to know all these technical details of players etc. All you need to know is a few important details, which since im not a day trader I wouldn’t know you’d have to figure that out, but for a wild guess i’d say 1-2 things and that’ll be about it (for this fundamental stuff).
Let’s say you’ve mastered all the techniques you’ve mentioned above, I’d guess some of the fundamental knowledge would be useless, other fundamental’s would work only 50% of the time, and the few thats rest will be the most important.
And to answer your question on how I see the market, as a swing trader I see the market as a big mush of piggie mush food rolled up together and I have to sort out which is the parts I need and which is the parts I don’t need. The best way to figure out what you need and what you don’t need is logic, you need to test, test each method, timing, back test, and more tests. Even though testing takes alot of time each test eliminates risk.
All river and lake fishes are good for human consumption, but salty water fishes are a different story, some are poisonous. That’s why i am a twisted mix of positon/swing trader + fundamental/technical operator.
I am specializing on British economy and matching it with Yakusa economy, figure it out what pair i trade.
Looking at the chart and wait for an opportunity to show up is just boring, no fun on it. What i do is to find a trend channel and follow it watching at economic reports. Whe price seems to slower and to get close to one of the trendlines and news reports yields the contrair directon it means one thing, reversal and i put my trade. On the other hand if price breaks the line and fundamentals shows the same direction i also put my trade on.
Once my position is set, i just keep watching the market, studying it unbiased, even if it turns against me i keep studying the market. If the position is still open, i watch the calendar and make my plan for the week. If reportsa and b do this will happen this, and so on. It makes me feel confortable to predict the shape of tomorrows candle shape and see it happen as i’ve said eventhougt it’s against my positions. It is realy cool seeing market behaving as i expected to behave. It feels great to be the judge and the defendant at the same time and remain neutral.
