# Tools used by top discretionary traders



## Gringotts Bank (11 January 2017)

One word - *meditation*.  Just a few snippets to get you interested.  The research support for meditation is overwhelmingly positive on multiple levels.  The forth bullet point includes an exercise to do with a chart.


Goldman Sachs employs a woman named Elizabeth Sudler to teach meditation to traders.

Ray Dalio (Bridgewater) has been meditating for over 40 years. 

https://www.bloomberg.com/news/articles/2014-05-28/to-make-killing-on-wall-street-start-meditating

http://tradingcomposure.com/trading-meditation/


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## captain black (11 January 2017)

It's not a "structured" form of meditation but I'll often start the day with a paddle or bushwalk. The avatar picture in my profile is my favourite spot to go and sit. I often trade the ES in the early morning but when I'm not I'll head down to this spot just on sunrise. It's a 5 minute drive and a 10 minute paddle. It's a lagoon that's off the main river and is always full of birds.

The action of paddling a kayak is quite meditative as well. I've been going to this spot for about 35 years. I also have the picture as a background on all my monitors/laptops.

Like with trading, different things work for different people, I've always found it a great way to clear the mind and keep things in perspective.


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## Trembling Hand (11 January 2017)

Gringotts Bank said:


> Goldman Sachs employs a woman named Elizabeth Sudler to teach meditation to traders.



They also employ a lady to push a tea trolley with cakes. Should I do that too?  Also not too sure how many discretionary traders are left at any of the IB


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## Gringotts Bank (11 January 2017)

Trembling Hand said:


> They also employ a lady to push a tea trolley with cakes. Should I do that too?  Also not too sure how many discretionary traders are left at any of the IB




You know I know you know what's up.  And yes, employ a tea lady if it helps you get in the zone.


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## Gringotts Bank (11 January 2017)

Ivan of tradingcomposure.com will be revealing his earnings from trading at the end of January.
http://tradingcomposure.com/earnings/


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## Trembling Hand (11 January 2017)

Gringotts Bank said:


> You know I know you know I know what's up.  And yes, employ a tea lady if it helps you get in the zone.




Wouldn't it be of more use to have a thread "Tools used to *become *a top discretionary trader".

You have to be careful about confirmation bias when looking at causation and success. Some of the biggest talent factories have woeful facilities. Some of the leading countries in various performance fields produce proportional large success in spite of a low level of overall development compared to other countries. 

Could one fool oneself in being occupied with vague trivialities endlessly to distract yourself from the fact that you are doing it to run from the real work and reality?


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## Gringotts Bank (11 January 2017)

Correlation is not causation, and proof of causation is almost always impossible to determine in any field of research.  That aside, quality decision making [and return performance] in trading is highly influenced by fear and greed.  
Just one study.  There's many out there.
www.*traders*laboratory.com/.../8590d1226866130-emotions-while-*trading*-aerpub.pdf


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## CanOz (11 January 2017)

Stoping by to check out the new site?

Did you find your historical hkfe data?


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## DeepState (11 January 2017)

Almost finished reading "Tools of Titans" by Tim Ferris.  It would be easier to count the number of incredible people in this compendium who did not meditate, or pursue another similar activity, as part of their daily ritual.  Meditation or some form of mindfulness looks about as fundamental to these people as exercise.  

Many have a very structured routine in the morning.  A set of steps that gets them up and in to their peak zone.  It's deliberate.  Meditation is, for some, one part.  Exercise in the morning features highly.  There are all sorts of beliefs about nutrition and some other rituals to increase robustness to adversity (like living on next to no money for a week every quarter).

These may not be sufficient to create outstanding performance in some field, like trading.  However, sure seems like a sensible way of bulding some basics to get your body, mind and spirit in to the state to create what you can from a day.

Also, there seems to be a set of books these people read that is beyond random.  I think I might make it the basis of my reading list in the early part of this year. It looks interesting.


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## Trembling Hand (11 January 2017)

DeepState said:


> Almost finished reading "Tools of Titans" by Tim Ferris.  It would be easier to count the number of incredible people in this compendium who did not meditate, or pursue another similar activity, as part of their daily ritual.  Meditation or some form of mindfulness looks about as fundamental to these people as exercise.




The steps to success are an endlessly complex task to try and unravel. Most of the truly outstanding ones in business and trading were first movers. Have a look at any rich list or the Market Wizards series of books.

One thing that is rarely pushed in books/pop culture etc on the paths to success is response rates. When you look at any group of elites in the performance field you are looking at people who have found a niche that they for whatever reason improve more than the average population for any give amount of effort. Year after year they are pulling away from the average and no matter what the 'average' does they cannot match that level of improvement. Its well know in talent identification in sports that you can prescribe a certain load and test after it and you get nonresponders, avg responders and then high responders. As a talent identifier you are only interested in the high responders. Sitting in a classroom learning something new its clear that the above applies too. Some people get **** quickly, others take time and the rest will never get it. 

I've been from time to time in all three groups. The trick I reckon is not to waste your life being a non-responder...... Just move on to the next thing.... fast.


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## DeepState (11 January 2017)

Trembling Hand said:


> Some people get **** quickly, others take time and the rest will never get it.
> 
> The trick I reckon is not to waste your life being a non-responder...... Just move on to the next thing.... fast.




Was this guy talking about Writing or Trading?



I am never going to be an Olympic pole vaulter no matter what ML algo anyone creates or however many Tony Robbins books tell me that I can.

Of all the market wizards and sensational wealth creators, could we have reliably picked them from a crowd of 1,000 two years before they embarked on this course of prosperity?

I have worked with sensational discretionary investors (not traders).  Less than 10 in total, they would be worth collectively near 1bn today.  I can't pick much which was in common beyond being extremely dedicated to the craft and what seemed to be an unreasonable degree of self belief.  Most of them started their super businesses at a time when their track records were utterly appalling. They should have starved...how can you plausibly launch a boutique when your numbers are bottom of the table?  By pole vaulter standards, they were diving under the bar and straight in to the mat.  But here they are.


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## skyQuake (11 January 2017)

DeepState said:
			
		

> I am never going to be an Olympic pole vaulter no matter what ML algo anyone creates or however many Tony Robbins books tell me that I can.




Not with that attitude! Just visualize and believe in yourself 




> Of all the market wizards and sensational wealth creators, could we have reliably picked them from a crowd of 1,000 two years before they embarked on this course of prosperity?
> 
> I have worked with sensational discretionary investors (not traders).  Less than 10 in total, they would be worth collectively near 1bn today.  I can't pick much which was in common beyond being extremely dedicated to the craft and what seemed to be an unreasonable degree of self belief.  Most of them started their super businesses at a time when their track records were utterly appalling. They should have starved...how can you plausibly launch a boutique when your numbers are bottom of the table?  By pole vaulter standards, they were diving under the bar and straight in to the mat.  But here they are.




I think dedication to craft and self belief are pre-requisites rather than the magic sauce. In the ranks of those who didn't make it (thanks to survivorship bias), how many worked just as hard with nothing to show?




Trembling Hand said:


> I've been from time to time in all three groups. The trick I reckon is not to waste your life being a non-responder...... Just move on to the next thing.... fast.




I love this. However much harder in practice for say people with 'real' jobs


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## Gringotts Bank (11 January 2017)

Let's stick to the science rather than guessing what influences disc. trading success.

From the article quoted above.


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## Wysiwyg (11 January 2017)

captain black said:


> It's not a "structured" form of meditation but I'll often start the day with a paddle or bushwalk. The avatar picture in my profile is my favourite spot to go and sit. I often trade the ES in the early morning but when I'm not I'll head down to this spot just on sunrise.



Goes without saying this practice is discouraged in Northern Australia. 

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The eye of providence says you have to pay for their tools.
http://www.discotrading.com/


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## skyQuake (11 January 2017)

Gringotts Bank said:


> Let's stick to the science rather than guessing what influences disc. trading success.
> 
> From the article quoted above.
> 
> View attachment 69506




Definitely agree with this, though how far it will affect an _established _discretionary trader with a solid playbook is my question.
When its the same trade taken a thousand times before, P/L swings just become 'whatevs'


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## captain black (11 January 2017)

Wysiwyg said:


> Goes without saying this practice is discouraged in Northern Australia.






I have the occasional emu or red kangaroo give me a fright when I'm out walking and a few snakes swimming past when I'm paddling but thankfully we don't get any salties down here


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## Trembling Hand (11 January 2017)

Gringotts Bank said:


> Let's stick to the science rather than guessing what influences disc. trading success.




Err that study is hardly good science. Its from students doing a 5 week course on how to trade. Thats a long way from "Tools used by top discretionary traders" no matter what you you wanna look at it.


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## Gringotts Bank (11 January 2017)

Trembling Hand said:


> Err that study is hardly good science. Its from students doing a 5 week course on how to trade. Thats a long way from "Tools used by top discretionary traders" no matter what you you wanna look at it.




You wouldn't do an experiment  like that on experienced traders because such traders would find it impossible to extricate themselves from their personal trading history.  Experienced traders would be adding all sorts of trading rules unconsciously.  So it's a very good experiment, imo.  The whole idea is to isolate emotional reactivity and make the trading set ups standardized as much as possible.

I don't believe such an experiment could ever be carried out on experienced traders, unless they were told they could only trade say the 10-period MA cross [entry and exit], and leave it them which crosses to take and which to leave.  Even then, most would be looking at all sorts of other confirmations within the chart, adding uncontrolled variables.

A different study design could be performed with experienced traders, by simply adding meditation and observing what happens to the group profits before and after.  Then you'd need to corroborate that obviously.


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## Lone Wolf (11 January 2017)

Gringotts Bank said:


> Let's stick to the science rather than guessing what influences disc. trading success.




Wouldn't you naturally expect people who are performing well to be less emotional?


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## Gringotts Bank (11 January 2017)

Lone Wolf said:


> Wouldn't you naturally expect people who are performing well to be less emotional?




I would expect that, but it's good to have some solid evidence.  Since meditation is known to reduce emotional reactivity better than any other technique I know of, there's the reason for the thread.

[edit] Oh you mean as an effect...  No I wouldn't expect that.  I would expect most people to be pleased by winning and annoyed at losing.


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## Trembling Hand (11 January 2017)

GB I'm a little confused about the thread topic and your posts? Can you link them for me?


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## Lone Wolf (11 January 2017)

Gringotts Bank said:


> [edit] Oh you mean as an effect...  No I wouldn't expect that.  I would expect most people to be pleased by winning and annoyed at losing.




Yes that's what I meant. Hope and fear are big emotional drivers and someone under performing has reason to feel more of both. If you're having a good day then "Hey look, another win to add to the list." or "A loss eh, no matter, I'm still up for the day".

A new trader on a bad day would be more "Yes! A win! There's still a chance to be up by the end of the day". Or, "F me another F'ing loss. The brokers are hunting my stops!". 

But that's just my opinion. Regardless of the findings of that particular study, there have been many studies over the years that show the various benefits of meditation. And I think all would agree that approaching any task with a calm mind is more conducive to success than being emotional.


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## Gringotts Bank (11 January 2017)

Trembling Hand said:


> GB I'm a little confused about the thread topic and your posts? Can you link them for me?




Don't be confused, the title is my opinion, worded in such as way as to generate traffic.  There's zillions of threads on thousands of forums on the web, so you have to have a catchy title, eh.

You and others are free to try to disprove that opinion.  No holds barred.


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## Lone Wolf (11 January 2017)

Trembling Hand said:


> One thing that is rarely pushed in books/pop culture etc on the paths to success is response rates. When you look at any group of elites in the performance field you are looking at people who have found a niche that they for whatever reason improve more than the average population for any give amount of effort.




I think this is a a very important point. Training plans are designed to elicit a positive response from the person. It's not just about how good the plan is but how well you respond to it. 

The other part I feel goes with this is focus and commitment. When the average Joe looks at the elite, I think they often underestimate the behind the scenes effort they put in to get there in addition to their natural ability. Not only do you need a training plan that you respond well to, but you also need to be putting in the consistent effort required to get a response.

I think it's important that effort is focused in the right place, on a structured plan designed to produce a positive response. Many people, such as myself, expend much effort but get nowhere because that effort was not appropriately focused. Look at the local gym for example, people spend many hours every week in the gym doing random exercises but six months later they look no different. Then they quit. It's not because they were non-responders, they were unfocused and thus didn't give themselves the opportunity to see a response.

Anyway, that's my 2c. Now I should take my own advice.


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## Gringotts Bank (12 January 2017)

A bit off topic, but related...

True discretion in trading is very hard to isolate.  I think many times disc. traders are actually trading a system, just that it's not been validated (not that it needs to be, but that's my observation). 

eg.  You have a bunch of set ups or 'plays'.  These are almost identical to the strict BUY conditions of a systems trader.  When x and y and z happens, I buy or short sell.  How different is that to a systems trader?  Hardly any. So I see value is systematic back/fwd testing as a way of saving time and avoiding frustration.

But I also see value in developing pure discretionary insight, free of pre-defined set ups, patterns and 'plays'.  I might do a thread on using a simple MA cross for entry and exit.  We know that about 40% of the signals will be profitable, regardless of the MAs period.  Such an experiment would attempt to isolate discretion, as _*then*_ the only decision is which signals to take and which to leave.


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## tech/a (12 January 2017)

I agree

Both Technical and fundamental.
I think a lot of ''Accepted" truisms are traded.
EG Value investing OR
Buy anything trading above its 150 day ma (Weinstein) etc. (I'm aware Weinstein has a few more conditions).

More to add but no time now.


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## Trembling Hand (13 January 2017)

Gringotts Bank said:


> A bit off topic, but related...
> 
> Such an experiment would




GB you read that bit from Lone Wolf about appropriately focused effort and ,


> Look at the local gym for example, people spend many hours every week in the gym doing random exercises but six months later they look no different.


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## Gringotts Bank (13 January 2017)

Trembling Hand said:


> GB you read that bit from Lone Wolf about appropriately focused effort and ,




No ****!  The amount of hours I've wasted trying to come up with something better is a hard slog.  If you can suggest a way of being more efficient, great.


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## Trembling Hand (13 January 2017)

Gringotts Bank said:


> No ****!  The amount of hours I've wasted trying to come up with something better is a hard slog.  If you can suggest a way of being more efficient, great.



GB you seem to have a a new approach every other day. I've been a fulltime trader for longer than a decade and have only traded 6 instruments with close to the same approach. (well 98% of my trading anyway)

Accumulated load...... it's hard....


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## Gringotts Bank (13 January 2017)

Trembling Hand said:


> GB you seem to have a a new approach every other day. I've been a fulltime trader for longer than a decade and have only traded 6 instruments with close to the same approach. (well 98% of my trading anyway)
> 
> Accumulated load...... it's hard....




I have my standard systems which I continue with and  I'm ahead this FY.  I'm looking for something better because it's not enough.  So yeh I push the envelope.  Are you going to help me or anyone else?  Nope, not a chance of that.  So you're successful FT trader - great, thanks for letting me know.


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## craft (13 January 2017)

Tools used by top discretionary traders




Although I think this may be the tool being used by a lot of potato heads strutting their stuff on forums


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## Gringotts Bank (13 January 2017)

another useless contribution brought you by craft


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## craft (13 January 2017)

Gringotts Bank said:


> another useless contribution brought you by craft




Why thankyou - your welcome.


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## Trembling Hand (13 January 2017)

Gringotts Bank said:


> I'm looking for something better because it's not enough.  So yeh I push the envelope.  Are you going to help me or anyone else?  Nope, not a chance of that.  So you're successful FT trader - great, thanks for letting me know.




LOL you skip your meditation ses today?

Have a look at what Modest has done. Thats the way to do it. Actually admitting that consistent work is what is required no matter how hard it gets. Documenting it and daily assessment. Not like yourself who comes up with a different stupid idea every second day to cover up your laziness, lack of skill and out right cluelessness.

Lets face it if you have been at it for more than a few years and you're not well on your way *you are a non-responder.* *There is no way around it*. No amount of sitting quietly on a rug is going to change you from poor to great. What may help though is actually doing some constant work on the same thing day in day out. Or do what most including myself do once they realise they are making no progress. Quit. It will make you a much better person and happier.


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## Klogg (13 January 2017)

Gringotts Bank said:


> I have my standard systems which I continue with and  I'm ahead this FY.  I'm looking for something better because it's not enough.  So yeh I push the envelope.  Are you going to help me or anyone else?  Nope, not a chance of that.  So you're successful FT trader - great, thanks for letting me know.






Gringotts Bank said:


> another useless contribution brought you by craft




You might want to take a breath or two before posting again...

The two people who just posted seem to be some of the most knowledgable on this forum. Yet, when they comment, you take offense to it... Ego never helps.


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## Valued (17 January 2017)

A person wanting to become a top discretionary trader probably needs to focus on macroeconomics over meditation. Sure, you can do both, but the former is much more important.


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## CanOz (17 January 2017)

Valued said:


> A person wanting to become a top discretionary trader probably needs to focus on macroeconomics over meditation. Sure, you can do both, but the former is much more important.




Nah, not necessarily, depends on time frame. I'm a fan of Macro, but daily weekly CONTEXT is more relevant if you're an intra-day equity index trader. Context is also very relevant intra-day equities....


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## Valued (17 January 2017)

CanOz said:


> Nah, not necessarily, depends on time frame. I'm a fan of Macro, but daily weekly CONTEXT is more relevant if you're an intra-day equity index trader. Context is also very relevant intra-day equities....




Agreed. The trap many day traders probably fall into is they trade their setup based on price action or volume then have no idea what the rest of the market is doing. I recall Modest falling into that trap early on.


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## CanOz (17 January 2017)

Valued said:


> Agreed. The trap many day traders probably fall into is they trade their setup based on price action or volume then have no idea what the rest of the market is doing. I recall Modest falling into that trap early on.




Allot of traders seem to be able to trade price action alone, I can't and see it a huge edge to be able to have the theme of the day/week behind me....TH was responsible for that light bulb moment and i never forgot it....If you can can align some kind of fundamental overlay to your trade plan, its 100% easier to pull the trigger and stick with the plan....for me. I need a rational reason for trend.


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## Wysiwyg (18 January 2017)

CanOz said:


> Nah, not necessarily, depends on time frame. I'm a fan of Macro, but daily weekly CONTEXT is more relevant if you're an intra-day equity index trader. Context is also very relevant intra-day equities....



This is hard if not impossible to code and why the human brain is still far superior to machine.


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## Valued (18 January 2017)

Wysiwyg said:


> This is hard if not impossible to code and why the human brain is still far superior to machine.




It wouldn't be that hard to code market context if you knew what to look for. How hard can it be though to get information from live feeds on gold, bonds, soft commodities, oil, various indices, various spreads etc? I would imagine it's been done already for intra day trading. I am not a coder but I know you can easily code things like if x1 says y1 and x2 says y2 then filter trades by x3 and y3 e.g. if bond yields are down and gold is up, code your system to not look for trades in indices or equities until the situation changes. The reason it works well for intra day trading is you don't need a human brain to forecast 6 months or 12 months down the track based on incomplete information. The shorter the time frames you're dealing with then it should be easier to code.


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## Wysiwyg (18 January 2017)

Valued said:


> It wouldn't be that hard to code market context if you knew what to look for.



Yes I suppose if one could define "their" context then it could be coded. That is what makes the market less predictable, your context derived short or flat bias and my context derived long or flat bias. Beauty is in the syntax of the beholder. 



> How hard can it be though to get information from live feeds on gold, bonds, soft commodities, oil, various indices, various spreads etc?



I think to do the sort of context you refer to would require a computer read of data. This is something I am presently investigating. E.g. ---  http://mgto.org/free-concordance-keyword-frequency-text-analysis-tools/ You could search keywords and mine for whatever you think is market moving.


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## Valued (18 January 2017)

Wysiwyg said:


> Yes I suppose if one could define "their" context then it could be coded. That is what makes the market less predictable, your context derived short or flat bias and my context derived long or flat bias. Beauty is in the syntax of the beholder.
> 
> I think to do the sort of context you refer to would require a computer read of data. This is something I am presently investigating. E.g. ---  http://mgto.org/free-concordance-keyword-frequency-text-analysis-tools/ You could search keywords and mine for whatever you think is market moving.




I don't know why you need keywords though for market context on a intra-day basis. The statistics are all integers. As for economic releases, just read them yourself. It is more reliable.


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## Wysiwyg (18 January 2017)

Valued said:


> I don't know why you need keywords though for market context on a intra-day basis. The statistics are all integers. As for economic releases, just read them yourself. It is more reliable.



The idea of coding it is to not have to physically read every announcement or news release where words are the method of communication. Numbers can be incorporated into the data mining.


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## tech/a (18 January 2017)

This thread reminds me of a Friend of mine.

She was amazing.
Health nut
Owned a health food store, drank juices was amazingly fit and admired by
everyone ---radiated glowing health. She bombarded all who would listen
on all the latest known things to do with health, stories of how to cure the common cold to cancer
there were so many stories from all areas and all walks of life accepted without question---and so should we all---.

Wouldn't have anything to do with anyone who actually practiced medicine.
2 years after contracting breast cancer she died.

Cryptic-----If you get my drift.


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