Many Views

Trading Discussion
1

I really want to make something of this thread. I was hoping for just random views (views as in perspectives if you were wondering) on various aspects in trading that can help when entering the market, while in a trade or about trading in general. Normally though, it is kind of tough to get responses, but I will do my best to keep this thread alive and in time it will become a stepping stone no a corner stone for at least 7 people(I just like that number plus it will be hard with the 80:20 rule if you know what I mean). Ok I’ll start the thread with one aspect and I’ll probably do one every week (if I can find this thread by the next week that is!). So I’ll start with the topic of conforming. This one won’t be that great because it is indirectly directed at myself but don’t worry they’ll be better. Hesitancy is natural but when action calls you might as well rename it failure. One who can overcome this hesitant behaviour can overcome the abyss. Risk is seen as failure and this is then molded into the term useless. It is in essence knowing the risk initially and then assessing the situation that calls for action. Ignorance is useless not risk. Work is viewed as time and time is viewed as money and the typic (typical critic Don’t worry I don’t make up new words often) views this as a sin. Yet, sins are naturally occuring all the time and sometimes never thought upon. There are two paths - conform to the norm or conform beyond the norm. Complain, avoid, follow, and slide. Accept, confront, go against, and trek. Whichever way you go it is your own choice, any mistake is your own. Some are more fortunate but “True greatness is to start where you are use what you have, and do what you can.” Arthur Ashe. Push through the pain it is only through failure in which you can succeed.(many greats have quoted this in some way). Mistakes are the epitome of success. If you fear mistakes you fear that which you desire. Go forth continue, success is yours only if you conform to it’s ways - ways most opposite to the norm.

Best Eh!

2

Ahem… I humbly submit my nomination of Shadow for the title of “The Philosopher General.”

This is thick. I’ll be back with something…

3

Remember that you are unique� just like everyone else.

WARNING! Rant/Sermon Alert!!! (You can skip this paragraph if you want�)
We all must act within certain standards in order to achieve success in life and as investors. We conduct our activities within a structure of rules, social guidelines, and behavioral expectations. We go to school, get a job, earn a paycheck, and dutifully invest a portion in the company 401k, an IRA, and a couple really good mutual funds offered by the broker down at Big Giant Global Financial Conglomerate Company, LLC ( a subsidiary of BGGFCC International, LP�you get the picture.) We buy a house, get a dog, get a spouse, squeeze out a couple kids, and take a few vacations�not necessarily in that order. Pretty soon the kids are out of school, the dog has long since expired, and we�re ready to retire to watching countless hours of high quality cable programming. We are satisfied in knowing that our kids will follow a similar path to success. These are the social norms. We conform. We comply with the �rules of the game�, so to speak. Accomplish these things and everyone will think you�re smart. Plus they�ll all say nice things about you at your funeral. You can probably arrange to be interred next to your dog�or your spouse, if you prefer. Let me suggest strongly that there is not one single thing wrong with living a �normal� life or following a traditional path. It�s far easier to navigate a well marked channel than to venture into uncharted waters. End of rant.

Whew! I feel much better now. Can I have an �Amen�?
The following is my spin on Shadow�s topic:

Conformity: acting according to certain accepted standards; also the state of meeting the requirements; taking action in accordance with customs, rules, prevailing opinion.

If you are exploring trading as a profession, then you�re already looking to break the mold and exceed the expected norms. (See rant above.) You want to be different. You want your trading income to significantly improve your life. You want to make better decisions without hesitation. Hmmm. You�re a nonconformist!

There�s always a panoramic view and a microscopic view. For starters, we know that we all must act within certain standards in order to achieve success as independent traders. We conduct our activities within the structure of laws, regulatory guidelines, and mechanical processes involved in trading. We comply with the �rules of the game�, so to speak. We also know that trends and reversals would not occur without the herd acting on its emotions of fear and greed. These rules and tenants can not be broken. What then can we do separate our trading performances from the crowd? Maybe we can take a few cues from some really smart guys.

A really smart guy named W. Edwards Deming said something like, �If we continue to do what we�ve always done, then we�ll continue to get what we�ve always gotten.� (Sorry if I trampled on this. I didn�t find the verbatim quote.) Mr. Deming pioneered the theory behind minimization of variance in industrial production. We broadly call this Quality Control. He noted that QC procedures can only succeed if upper management - the decision makers � understand and fully support the implementation of QC procedures. Deming�s ideas were overlooked by US auto makers back in the 1950�s. The Japanese car companies saw the value and implemented the ideas in their processes. What kind of cars are in your driveway and on the streets in your town? Right. Exactly.

So? What�s that got to do with the price of Rinmimbi in China? Well, for prospective traders it could mean an awful lot. On the personal level, [U]you[/U] are your own upper management. Put first things first. Step away from the trading environment and evaluate where you are [U]in life[/U]. Review your personal �constitution� and beliefs. We simply can not act outside of our core beliefs. If your personal life is in disarray, then your trading will be in disarray. If you exhibit self-destructive behaviors in your trading, then you will keep blowing out your account. Trading is a thinking process. It is not just prices, indicators, and button pushing. Without exploring your core belief system, you can�t improve your �processes� or increase the quality of your �product�, which is decision making. (This is a huge problem for traders � and a completely different topic. Maybe next week�)

Another really smart man named Howard Raffia, who studies the decision making processes we are all innately coded with has demonstrated something called the �Status Quo Trap.� That is, we instinctively choose to stay with what is familiar and we tend to look for decisions that involve little change. More choices = more effort. The more possible choices there are, the more likely that we will stay with the status quo. We also don�t like to take choices that prove us wrong. (Hmmm� is that why we don�t cut our losses quickly? Ouch! You stepped on my ego! :eek: )

We all read the same research. We look at the same charts. We trade through the same brokers. Every system can be boiled down to just a few basic things. We look for direction, price extremes, and areas of fair value. We use them to identify predictable patterns. It can be argued that the fact that we all employ the same tools is the only thing makes them useful. There is no secret �mold breaking� answer hidden within a trading system. � No matter how much you paid for it. :smiley:

Do you really want to be different? Do you really want to set yourself apart from the crowd? Learn to make better decisions. You may discover that you don�t like trading. You may find it too difficult or even boring. You may never make money. You may find that your core values include beliefs like �the love of money is the root of all evil.� Regardless of the balance of your trading account at the end of the day, you will exceed the norm if you choose to apply yourself to the rigorous task of becoming a better trader - and a more evolved person - through self-evaluation and better thinking. Nonconformist!

4

Amen :smiley:

:slight_smile:

5

Man that was a Sermon. :smiley:

[U]Non believer[/U] : Money is the root of all evil.

[U]Believer[/U] : The Love of money is the root of all evil.

Remember, money is just a tool. No reason to love it. Just use it to help others. :stuck_out_tongue:
The poor have a hard time helping the poor. The wealthy can help easily.

Much Love and much finances to the many families of the world.

:slight_smile:

6

I agree with the revised quote, but I’d be interested in any original documentation. The Gospel of Thomas (suppressed by Catholic Church) revealed that Jesus spoke about Illusion and Enlightenment, not Sin and Redemption. I like the original version better more than the rubber stamped for the masses version.

I was listening to Sum 41 earlier, “Fat Lip”.
“I don’t wanna waste my time, becoming another casualty of society … become another victim of conformity.”

I noticed our society has a tendency to sacrifice our best to feed our worst. Status quo becomes something the emotionally and financially invested defend because they are committed to a social structure. We spend too much of our time working to keep living and don’t spend enough time growing, intellectually, emotionally, socially, spiritually. What happened to introspection?

I probably don’t watch the same reports as everyone else. Here are the last two I read: China Leans Less on U.S. Trade - The New York Times The Establishment Rethinks Globalization
The last article I read about the domestic economy was a calculation for M’ pronounced “M Prime” by Mish which is the most accurate leading indicator for predicting depressions (moreso than M1 or M2 even with filters).

I have discovered in my studies of human history and systems theory two apparent truisms. #1 The people in power want to stay in power. #2 Apparently unsustainable conditions causes a split into opposing groups leading to conflict.

My goal is to make a sustainable civilization. It is possible to have a sustainable human race without civilization, but I’m not ready to climb back into the trees, and there aren’t enough trees to go around. We need cities that work well, that accept their output as input, respect entropy, and actually does the math to determine optimal behaviors before making radical changes.

The point isn’t misinformation, greenhouse gases, rising ocean levels, or declining species to me. The point is that we’ve never done this before, and we should probably think twice about doing something we can’t undo. We can’t unmake cement without vast amounts of power. We haven’t even counted how many new compounds we release into our environment, but we notice they spread and end up in our bodies (usually as toxins we can’t metabolize). We have never recorded this much CO2 in our environment before in 7+ million years of verified data.

The CO2 norm (trading range) is 220-300 parts per million, we never saw over 310 ppm until the Industrial Revolution. Now we’re at 384 ppm and climbing - and will continue climbing even if Kyoto were complied with worldwide. The oceans are becoming more acidic, the ice is definitely melting, we won’t know the “tipping point” until well after a disaster.

We need smaller input/output cycles. We need to respect people who create. We need to appreciate and connect with each other. We need to understand something before we try so hard to change it. We need to stop lying to ourselves with misinformation. We need to restore accountability and privacy both.

I’m working on making some of these things happen now. Creating nonprofit ventures, developing prototypes, using forex to generate ongoing revenue from one time donations, setting up Introducing Broker arrangements to people can contribute without costing them any money, using the traded proceeds that money to fund nonprofits with transparent accounting.

My 2 cents rounded up to 2 pips, worth as much as you invest in it.

7

daraknor,

Interesting views.

I would love to be able to read Hebrew or Greek.

Two pips is two pips.

:slight_smile:

8

Hey, Daraknor. Look at your post! Dang. You’re all… smart… and stuff. :smiley:

(I’m a little bit of a smarta** sometimes. Cause we like having fun at other peoples expense… Mockery is the sincerest form of flattery! It’s a minor offense. Respect.)

I agree with the revised quote, but I’d be interested in any original documentation.

I’m not certain either version of the quote is entirely accurate. Depends on which Dead Sea Scroll you read. :rolleyes: … Just to clarify, it’s not so much about the accuracy of a particular quote. It’s more about a trader’s general way of thinking. If your core beliefs include “money is bad”, you’re going to have a hard time making money trading. You’ll also have a hard time accumulating meaningful amounts. It is human nature.

I have discovered in my studies of human history and systems theory two apparent truisms. #1 The people in power want to stay in power. #2 Apparently unsustainable conditions causes a split into opposing groups leading to conflict.

This is the type of thinking that will help you be a better trader. Break those ideas down. Compare them to your observations on currency and interest rate movements. It shows up on your charts. You’ll still have to synthesize it into trading ideas. Don’t count on me, to let you know when. (There’s more here. Anyone? Anyone?)

Religion and politics? Egad! Interesting article links. Based on this single post and the links you included, your political views are nearly opposite to mine. That’s OK; I still like you just as much. Left-coaster! :stuck_out_tongue:

I looked at your web site. I’m not trying to change the world. No doubt, there is a great deal of shrill politicizing of “global warming” and the related issues you mentioned. For purposes of this forum, my only interest is interacting with other traders and improving as others improve. My only question is = how can I make money on this? Hope you didn’t get snowed on last week. (I know. I know. Don’t even bother responding…)

9

Somebody has been reading my play book.

My son and I were going to start a thread along this line and you have pretty much covered the basics.

Good work.

:slight_smile:

10

Don’t let my babbling stop you from structuring something more understandable and more useful. I guarantee that there are a load of traders reading this that have not yet begun to consider the implications.

Let’s go deeper. Fire up a new thread! I’ll stop by and take a couple pot shots at it… :smiley:

11

All is good. :slight_smile:

You saved me a boat load of time pondering what to say and how.

I would rather others bring up the subject and I will just link to it. I have linked to this twice now on the[U] Post you[B]r[/B] pips[/U] thread.

I’ll make you a deal. You babble and I will link. :smiley:

:slight_smile:

12

Thanks eh! The responses are great. And they got me thinking again. In fact I have and will continue to meditate upon my trading and my person aspects that may hurt my trading. I’ll give you an example. For one I have always been disorganized. It was reflected in the messy desk at school when I was a youngster. My father even said if your not organized you can’t function and I bet a part of me has been trying to prove him wrong:o. Well all that is now changing. Every night I set aside some time to meditate and reflect to see what happened with each trade. I’ll give you an example, last week I was in a profitable trade which I could have hit my profit target had I stayed the course. Now most people say that you shouldn’t marry a trade, and in a sense I believe that, but the way my style works is that is sort of contrary to that in the fact that I must hold it to a trade to make a profit. Now the trade was going well, and then the position started to turn. Needless to say I began to watch the screen and therein lies my downfall. Whenever I watch it, I always exit when the market is not doing what I want it to. And after that, it will begin again in my favour once the trade is exited. So, I coped out and entered the opposite way. Now to be fair I had conflicting signals, however this happens many times and it is quit profitable to add at this time. Of course I haven’t incorporated this into my method yet. But I should have stayed the course, there is no excuse, only my fault. I still ended up with a miniscule profit, but that means nothing to me since it is long term which I should dwell on, not one trade. And there again comes a downfall. But I believe that the fact that we are tied to money causes us to lose in real trading. We are so scared to lose the thing we “love” that we end up doing just that. I still need to develop myself further, but it’s not my emotions I have to control, it’s my beliefs. I’ve heard this many times, but it has never really hit home until now. Strange, but I like it…Alright enough, enough stop talking to yourself. Sorry about that, it seems I’ve turned this post into an internal conversation and there is no need for that. I don’t believe I “love” money but I think that I hold it in higher regard than I should. Again thank you, especially pipgod, I know toptick07 it seems I should give you more, but I probably wouldn’t have caught that point had it not been emphasized. But yes much thanks to you toptick07 I didn’t expect get help that was so deep. Reflection is in essence a step toward knowledge, best eh!

13

Rather than chart watching you might want to look at other indicators. If CCI and RSI both say a reversal is coming soon, you might be more willing to hang on to a position moving against you a little.

I don’t think I actually have any political views. It isn’t something that makes sense to me. I have opinions and research on issues, but I don’t think that dictates policy. I have a few simple policies, and collected they are my politics.
Honor and integrity before short term profit and self indulgence.
Defend your own back yard, only your help your neighbor with his if he asks (international politics) or you have rapport and offer.
Don’t suffer continuously incompetent people, more is at stake than your patience.
Try to understand something before you try to change it.

I think that is nearly my whole sum of politics. What party does that put me in? Philosophically I could possibly be labeled as post objectivist systemic taoist.

14

Me too, I wish it was easier to find references to data too. Google is a decent start, but there is no organization. Wikipedia started to organize, but we still need more. It would be nice if we could grasp meaning and content, instead of glance at some content and guess meaning.

I’m too tired for that to make any sense. They say cell phones cause cancer, because they had some mice with cell phones and the mice caught cancer. Mice NORMALLY die of cancer. They had more cancer in the right cage than the left cage. They said X% more likely, but they didn’t say what the base rate was. Most doctors can’t calculate your chance of having cancer if you positively test for cancer. Most people think that means they have cancer, but it means that you have a modified chance of having cancer. My point in a phrase: information is manipulated and incomplete.

15

To quote my son, (thepipkid)

“Man, I’m feel’n ya”

:smiley: :slight_smile:

16

I actually don’t chart watch it’s just that I happened to be looking at the chart when it was moving erractically, and thus I exited early, not following my system. I hate indicators, they seem to just lead to optimization, so I use a better method now. I do reversals without the indicators, but thanks for the response eh

17

You appear to have very high purpose as well as academic ability. You have heard the old saying: “Don’t fight the tape.” I’ll humbly submit that this applies to your stated goals of sustainable civilization. Policy is the only tool by which you may accomplish your goals. Remember your two observations from your studies of human history? You can’t change the essence of the animal, you can only manage the beast for a period. Best of luck…

18

I think you touched on one of my deepest concerns. Kudos to you. How do we know the nature of something? We see how people react and how they act, sometimes it is hard to tell the difference. Which one is the nature? How do we know when one of those is the leader?

So I propose a social experiment. Give people food (cafeteria style), give them housing (bunkbed style) and give them the opportunity to learn (free education) and grow (optional work). Will the people work even though they don’t need to? If you do the experiment 10 times, what is the key factor that determines the difference in results?

I’m not an academic. I didn’t attend college, but I taught Linux at a community college. I’m one of the people who gets things done, and I try get the appropriate things done.

19

I don’t know if you’ve heard of the 80:20 rule but this would probably apply as to the fact that it applies to pertineer everything. Basically called the Pareto Principle. Read up on it if you want (unless of course your 80% of all people), it’s actually quite interesting.

20

So I propose a social experiment. Give people food (cafeteria style), give them housing (bunkbed style) and give them the opportunity to learn (free education) and grow (optional work). Will the people work even though they don’t need to? If you do the experiment 10 times, what is the key factor that determines the difference in results?

Key factor: Human nature. The nature of human behavior is well documented as it pertains to civilization and social structure. There are periods of peaceful coexistence and cooperation. There are also periods of great desperation and destructive behavior. Just look at the historical record. Some individuals may transcend these generalizations, but not the whole. The average �non-thinker� will take the path of least resistance. Once that person feels entitled to benefits, he will defend them � sometimes violently. It takes work and desire to improve your self and to be productive. Remove incentive, remove productivity.

Your idea may work in small, select groups of high minded and purposeful individuals. Compare your proposed experiment to current documented real world experience. Observe welfare and social services where you live. Decide for yourself if your ideas and ideals are scalable to a larger population.

Examples (quick and dirty):
Free Housing: Take a drive to the �projects� in your city and see how many residents are employed � I mean legally, not selling crack.
Education: In the US, public schools are �free�. What is the commencement rate in your city? If you do well in high school, you can get scholarships and attend college at very low cost.
Free Lunch: Did your school have a free or reduced cost lunch program? It�s a Federal subsidy. Also, just about anyone can qualify for food stamps or other state and local assistance.

I’m not an academic. I didn’t attend college, but I taught Linux at a community college. I’m one of the people who gets things done, and I try get the appropriate things done.

OK. I didn�t mean to paint you any particular color. Keep getting things done.