Relaxing In The Sunshine Strategy

Trading Discussion Trade Journals
41

I was browsing a non trading related forum and came across a thread about, you guessed it, trading lol ([I]Get a life huh, i know![/I])

Anyway, they were discussing how it’s impossible to make a living from daytrading and how anyone who says any different is lying etc etc blah, blah, blah.

What was obvious from the discussion though, was that none of them had actually traded for any substantial period of time or put any effort into it; including the minority who said it was possible to make a living daytrading.

What made their lack of knowledge immediately obvious was the way they looked at trading. I started thinking about how i looked at trading when i first started out and how that has evolved and continues to evolve and it reminded me of a conversation i had with an experienced design Engineer for a telecommunications company when i was still a student.

Without going into masses of detail what he ended up saying/advising was that…“In Engineering, understanding the question is the hard part.”

Doesn’t sound like much but is genius.

You want to build a solution to a problem or a question, at the research stage you begin to understand that you don’t really know what the real question or problem is!

Once you find the question, you can work on the answer…which is much easier than finding the real question.

In the thread i mentioned; these guys had no idea of what the question or problem a daytrader attempts to “solve”. What they thought or believed the question to be…perhaps that was solvable or perhaps not, but it wouldn’t matter either way because it wasn’t the right question(s)/problem(s)

Confused??? lol

Summarise… the “real” question hasn’t changed. The way you look at things has changed which has allowed you to find the “real” question(s) or to be on your way to finding it. Having found it you can work on a solution.

When the solution is wrong it might be because you answered the wrong question correctly :wink:

Forex is easy!

More relaxation, more sunshine!

42

What was the question ? :slight_smile:

43

Hi mihk,
Good question! :o

Seriously though, when you started trading, the way you traded was your solution. You probably trade very differently now you have more experience… but has the question also changed?

Very basic example:

Do you want to make winning trades? If the answer is yes… do you take all trades that look like winners?
Perhaps the answer[B] was[/B] yes but is [B]now[/B] no…therefore you are solving a different question. Perhaps; do you want to make winning trades with a risk reward ratio of 2:1? …is now the question you want to solve

As you progress the question you are trying to solve changes; which in turn means that initially you/we didn’t even know what the “real” question was :wink:

44

You made your point very clear.
I read again post #1 rules: 3,4,5
Obviously you compressed the whole trading business in few words: take the train, bet bigger, and get out.

Hmm, I will be here for a while, maybe you will reveal a real question in between the riddles :slight_smile:

45

Hi again mihk,

No riddles intended and i would prefer not to get into the type of conversation we have had in the past :wink:

What i will say is imagine a complex maths question. I could give someone with high school maths knowledge both the question and the answer and it would mean nothing to them…they wouldn’t be able to use it and would have no use for it. What would be more useful would be showing them a thought process so they could find their own question and ways of solving it. The technical part is the easier part of the process.

In trading much of what you are trying to solve is based on you, so it is[B] very individual[/B]. You know yourself better than anyone else so you are the best person to “reveal”, as you put it, the real question.

If i said here put on this great shirt it’s my favourite. Think of all the reasons that the shirt could look terrible on you or why you might hate it. You would choose your shirt according to your own criteria not mine. However, by me explaining why i think this is a great shirt might help you to choose your own great shirt which may be totally different to mine.

See, no riddles.

46

Sunshine Law of Imbalance,

The bigger the imbalance the more obvious the problem is.

A bodybuilder with a massive upper body but skinny legs = obvious why he is not winning competitions.
A tennis player with a worldclass forehand but no backhand= obvious why he is not winning tournaments.
A guy who works 100 hrs per week but has no time for his wife= obvious why she left

You might be really good technically at trading but still be a losing trader; so you go and learn even more technical stuff. Even though the technical side of trading might not be your problem learning more technical stuff at some point will create such an imbalance that the real problem will become obvious.[B] Then you have something to work on![/B] ([I]Of course the technical stuff isn’t wasted[/I])

This is not the ideal or way to go about things but we live in an imperfect world. As long as we get where we want to go in the end…

You will most likely make your money and/or be successful from your strengths not your weaknesses so imbalance is good [B]but[/B] your weaknesses can’t be so bad that they cancel out your strengths.

Have a great weekend guys!

Relax.

48

Hi HaydenHyde,

Look at post 1 on page 1. Thats the best palce to start. Its very important you understand the basics of the strategy , it will make your life alot easier.

49

It’s Monday morning and the middle of the month. If you got in some quality relaxation and sunshine this weekend then you are feeling fresh and ready to go, if you didn’t… then you probbly feel like sh*t and it’s your own fault! [I]unless it’s someone elses of course[/I]

If you are up or down this month so far doesn’t matter unless you are on the extreme end of an “ass kickin” in which case you shouldnt be trading today anyway. Everyone else… [B]EXECUTION[/B].

Focus on execution and the process of execution.

50

At the beginning everyone is focused on time, “How long will it take?”

When you are no longer concerned with how long it will take; you are no longer a beginner.

A fcuked up perception of time will keep you poor forvever. Use time to your advantage instead, build.

51

Not for negotiation, the “Non-negotiables”.

Somewhere on this planet of ours there is a dude telling another dude that he is tired of having round wheels on his car and that if he really put his mind to it he could get triangular wheels to work!

So… Mr Triangle doesn’t want round wheels, he wants to negotiate. This negotiation of course; is going on in his own head and Mr Triangle is determined to win. After hours if not days…success Mr triangle has done it, negotiaions won, no more round wheels! He’s got some equipment in the garage so he gets to work on making those triangular beauties.

In the mean time Mr Triangle’s Fiat is going nowhere. 10.2 days later the wheels are ready. Mr “Tri” mounts the wheels gets in the car, starts her up and… nothing. The Fiat wont move, wtf?

Mr “Tri” goes back to the drawing board… rinses and repeats, determined not to give in to the round wheel enemy.

People do some crazy “ish” in life and [B]some [/B]will try to negotiate themselves out of absolutely everything. However, all of us do this negotiation thing to some extent. Defining your Non-negotiables is essential to success.

No one cares if you study or not but if you want to be a Doctor it’s a non-negotiable. Accept it and get on with it.

Forex is the same, don’t waste your energy trying to negotiate yourself out of what you know you need to do to be successful.

How many people have their non-negotiables written down? :wink:

52

Unless you are a member of the Maffia or the Bernie Madoff trading fellowship there is a lot of value in writing stuff down.

The thing is though, that 82.4% of that value is lost if you never read what you wrote later on, [I]later on being 2 weeks later, a month later 6 months later, years later [/I]etc etc.

Years ago when i would have one of those; what i called “disaster days” where i lost more than i should, i would write down exactly what had happened and what i’d done. I did this while it was all still fresh and painfully painful, usually an hour or 2 after i i’d messd up.

The next day while still feeling a little fcuked up i would write down what i thought the problem was and later i would go looking for solutions once i had decided it was worth giving it all another shot.

The funny thing is, that when you have a small ([I]hopefully small[/I]) collection of these “Disaster Day Texts” (DDT) and you read them you cant help but notice that it’s the same few problems that come up again and again.

Of course it easy to look back and think how little you knew way back then and how much better you are now…BUT, if you look really closely, you see that a good portion of the mistakes you make today are mini versions of the ones you made back then.

It’s like seeing someone you haven’t seen for years and now they are 50kgs heavier or look 10 years older, seeing people everyday you don’t notice the change. Reading old DDT’s makes things really obvious.

53

Competition Logic

Who is your competition?

Does a Bank or Institution see “us” the retail trader as competiton? No, we are liquidity
Who do Banks and Institutions see as their competitors? Other Banks and instituitons.

[B]Know who your comeptitors are and what they are doing.[/B]

Are BMW and KIA fighting eachother for the custom of a company director who has £70 000 to spend on a new car? No, KIA is not a competitor there so although they both make cars it’s not an issue. However, BMW will want to make it as difficult as possible for carmakers that are not already in that segment to enter that segment.

A bank doesn’t care about the "average Joe trader " but will make it difficult enough so that Joe doesn’t grow.

Is Mercedes worried about BMW? Hell yeah…direct competion!

A company will reverse engineer the competitions product to see what they can use to improve their own product. If the competitors product is far superior they will steal the lot and try to disguise it. On the release of a new BMW some dude from Mercedes R&D is putting in his order, believe that.

Do the Banks know what the other banks are seeing on that chart?.. of course.
How do 2 giants do battle? Carefully!

How does a guy new to boxing fight the world champion? He doesn’t, he buys tickets to watch the world champion fight another elite fighter or orders the fight on pay per view… thats how the champion and the promoters make money.
The new fighter can of course work his way up the ladder, takes years of hard work etc but keeps the sport alive…

How does Joe Trader fight a Bank? He doesn’t, he piggy backs trades at some stage of their development or feeds on the scraps left behind when 2 Banks collide.

Does the Bank see what Joe Trader sees on a chart? Of Course.

If Bank dude had to guess where Joe Trader is going to enter the trade and put his SL considering that resistance line on the 4hr chart… what odds would you give him of guessing right? 80%+

Does Bank dude know that the other Bank dudes see this too? Of course

Action: Bank dudes push a few pips to hit the stops then ride the reversal…nice fade guys.

For Joe trader to piggy back a trade he has to let it get some momentum first so he can spot it…thats why he cant get in on at the top or bottom. When the bank gets out he is no longer piggy backing he is swimming freestyle in deep as sh*t water with the other joe traders…going to get choppy, time to get out?

How often will 2 giants collide? Not often, they will avoid eachother unless the prize is too big or one giant thinks he has a big edge. Joe trader can feed off of the scraps of the loser when the winning giant is too full to eat another mouthfull.

Soooooooo… Bank dude doesn’t care about me, i am not a competitior. Bank dude and his mates will bust my SL’s once in a while to make it just difficult enough for me to gain entry to his market while keeping liquidity.

I make cash waiting for Bank dudes moves and piggy backing the rich mfa and getting out of the shark infested, deep as sh*t water when he is gone. I can also make cash when bank dude beats Bank dude 2 over the head with a sledge hammer and steals his wallet…the coins he leaves behind are mine.

Forex is easy!