# My three trading rules



## Trembling Hand (8 January 2009)

From Tech's outliner post I promised to show how I grab my odd outliner days without actually aiming for outliner trades. That is how I pull the odd outsize winning days without changing the way I trade or trying to catch the +20 R winners. 

You often see trading "plans" with a heap of "rules" - entry, exit, MM, pyramiding and on and on. I have no such rules. Like someone has said I just go about swinging punches. 

Here are my trading rules,

1. I never want to lose more than 0.5% of my account per day. NEVER (again). If my losses for the day hit anymore than half a percent of capital I stop. Or mostly go onto sim, just to keep practicing. 

2. I want to have as few down days as possible. Or put another way I want to trade in a way that reduces the likely outcome of negative days.

3. I want to be very aggressive with my capital.

I believe rule number 1 is the most important rule for intraday traders. You simply can’t go about risking 2% of capital per trade and trade actively. 5 bad trades in a row and you are down 10%. If you are active, like me, that could be in the first 10 min of the day!! Simply if you are intraday forget the big winners. My focus starts on not losing capital. When I look back through draw-down’s its obvious that excluding the largest down days makes a huge diff to where my account balance would be. Losses are unavoidable that’s just the game we are in but most definitely large losses can be avoided and that’s my main focus when the day starts. I know my “system” has positive expectancy but I also know that some days I just trade crap. So I have a drop dead level to stop the crap days having an effect on my capital.

Rule two is important to me. My income comes from trading. I trade to pay the bills firstly then to increase my capital base. So like anyone who goes to work each day it’s important to actually take home some $$ for your effort. A couple of years ago I noticed that one of the benefits of very short term trading is that if you can cover cost(brokerage, spread) you will have a very smooth equity curve. You would expect, as a simple example, out of any positive expectancy system after 50 trades you would be ahead. If it’s a swing system that could take a month, if it’s a 5 trades a day intraday system that would be two weeks. With my system it’s an hour. From these two rules I can approach each day fresh knowing that yesterday I didn’t dig a huge hole that will take 3 days to get back to square and that more than likely I am going to have a day that will comfortable cover my daily “wage”. This is a very nice position to start each day. Believe me you trade very nicely if the next 10 trades don’t mean the diff between making the rent or not. Or are not a hit to the ideal “gun trader” vision you have for yourself, that the next trade is just going to happen and it in the scheme of things doesn’t matter one way or the other to your success.

Rule 3 is where my system rules really turn from paying the rent to hitting the home runs and last year it was often. Now this rule would seem completely counter to the first 2. But this is how I approach trading. Start of the day focus is on not losing too much, not digging a hole (rule 1). As I build profit the target becomes getting towards making enough for the wage (rule 2). But as the day progress from time to time things just go your way. That is the benefit of being in the market each day. If for example I have worked out that 50 ticks is plenty to cover me as I pass that profit target I will start increasing position size. The further I move into profit the bigger my position sizing gets. To the point where I could be trading 10 times the size I started with. This has resulted in some truly outliner days without any one or even group of trades actually being large winners. It’s a way of milking big winners while still only risking 0.5% of capital per day. It’s a way of making your own outliners. F... what the market wants to give you I say, go get what you want. Yes sometimes it doesn’t work and I give back profit but then I just scale back and build again. I find this works even better the more big days I have. The more profit I have over previous days the more aggressive I build size during the day. 

This is not going to suit a lot of people as they will not be comfortable with trading 5 times their normal size but when you make 100s of trades a day you soon get over the next couple of trades having to prove you right. In a sense I don’t give a toss about the next couple of trades. I’m very comfortable with the way I trade and that’s the difference. When for what ever reason (large range day, couple of lucky trades, random falling of numbers) i'm seeing the ball well I will swing harder.


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## prawn_86 (8 January 2009)

*Re: My three trading rules.*

Nice stuff TH 

Thanks


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## awg (8 January 2009)

*Re: My three trading rules.*

Hi TH,

A question if I may.

Hopefully relevant to many others that follow your posts.

In a recent thread, you made a remark along the lines that;

in 60% of cases the Aust SPI moves in the opposite direction to the overnight S&P 500 direction ( this is not the exact quote), rather than following it

it is the 60% figure you mentioned that is of specific interest to me.

I wonder if you would mind stating whether that figure is as a result of your data keeping and research, or an approximation?

or any further detail you may be able to cast

60% would seem like a reasonable "edge"

apology if my inquiry is of track, I slowly try to learn much from your posts, and prefer not to try and re-invent the wheel


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## Trembling Hand (8 January 2009)

*Re: My three trading rules.*



awg said:


> I wonder if you would mind stating whether that figure is as a result of your data keeping and research, or an approximation?
> 
> or any further detail you may be able to cast




Awg just a guesstimate. Mostly indices, which I trade, seem to be in a continual gap and fill motion. Whenever I wake to see a large move in the States I always think of reversals points. Like what we had yesterday at 12:00. Which by the way was about 1 1/2 hours after I guessed it would reverse.


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## Chorlton (8 January 2009)

Hi TH,

Some interesting insights into your own approach....

Thanks for sharing,

Chorlton


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## BentRod (8 January 2009)

> Nice stuff TH
> 
> Thanks




Ditto  :iagree:


TH,
    If you have a daily loss limit of 0.5%, how much do you risk per trade when you start fresh?

Also, are you still going to post up some vids?

cheers


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## Trembling Hand (8 January 2009)

BentRod said:


> If you have a daily loss limit of 0.5%, how much do you risk per trade when you start fresh?




Obviously a tiny amount of 0.5%. I always run small stops but on the open of the spi it's pretty thin & sometimes wild so I start with 1 or 2 contracts. With 4 - 6 points (mostly) stops. That would enable me to take a bit of a beating as far as losses in a row and still not hit the drop dead level to soon. Nothing worst than being out for the day at 9:59 

But really its about surviving long enough that my slight but yet still positive expectancy has a chance to work into profit. That's always my first concern, getting away comfortably from the day stop.


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## BentRod (8 January 2009)

> Obviously a tiny amount of 0.5%.




Think I need a larger account.  

Looking to start scalping the Treasuries and maybe the Bund this year.

Have you ever traded them?


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## Trembling Hand (8 January 2009)

BentRod said:


> Think I need a larger account.
> 
> Looking to start scalping the Treasuries and maybe the Bund this year.
> 
> Have you ever traded them?





Nope. 

But setting stops like I do really depends on the amount of trades you "normally" do. If its 20 a day maybe you would start at 0.025%.

Or

Risk 1% per day. or more. This has really been a work in progress. I spend a lot of time doing what ifs in my head. Trying to remove the many mistakes as they re-appear and working with the positives. This has how these rules have come about.


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## BentRod (8 January 2009)

Thanks mate.


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## Nick Radge (8 January 2009)

> in 60% of cases the Aust SPI moves in the opposite direction to the overnight S&P 500 direction ( this is not the exact quote), rather than following it
> 
> it is the 60% figure you mentioned that is of specific interest to me.
> 
> I wonder if you would mind stating whether that figure is as a result of your data keeping and research, or an approximation?




AWG,
The table below shows how the XAO reacts to an o/night move in the US. This was compiled a year or so ago when commoditites were belting along so the upside correlation could be deemed higher than normal. TH's guess is not far off the mark either way. The interesting thing is how the correlation increases dependent on the size of the US move. 




I would also add that the SPI will tend to move against the US move at open on about 54% of occasions which is mainly due to an over reaction from traders on open. Those long term followers of mine will be aware of my 3DS trading system that fades the SPI open. 3DS was built in 1998 and remains a very strong performer today.


_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision._


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## chops_a_must (8 January 2009)

Just to clarify, those percentages are up close on SPI vs down close YM, and down close vs up close YM etc. etc.?


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## sinner (8 January 2009)

Hi TH,

I like your rules, they are similar to the ones that self-formed for me once I was putting my own cash in the market. I feel if someone hasn't come up with very similar rules to the ones you posted then they probably shouldn't be trading!

I scalp and trade forex for a bit of entertainment and extra cash when I work nightshifts. 

The amount of capital I accept as losable is slightly higher, about 3% think at last check. 

However I have one extra rule which I follow, maybe I have this luxury because I don't rely on it as income. This rule is of course: EXTREMELY LOW RISK SETUPS.

i.e. I only short or long if there is obvious channel trading going on, or if the ticker hits a major trendline or similar techniques for scalping.

This allows me to place extremely tight stops (possibly the minimum) for example 4 pips in EUR/USD therefore utilising leverage better as well as keeping losses to a low that can usually be recovered in one or two trades.  If it is a trade rather than scalp I will tend to only use support and resistance from longer term charts for the same effect.

To give you an idea, I am home today and for a bit of fun am scalping EUR/USD. Here is my last few trades, nothing serious, for "fun" I only enter about 50USD into the account and take profits anywhere above 1USD per trade.


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## Ashsaege (8 January 2009)

Trembling Hand said:


> Rule 3 is where my system rules really turn from paying the rent to hitting the home runs and last year it was often. Now this rule would seem completely counter to the first 2. But this is how I approach trading. Start of the day focus is on not losing too much, not digging a hole (rule 1). As I build profit the target becomes getting towards making enough for the wage (rule 2). But as the day progress from time to time things just go your way. That is the benefit of being in the market each day. If for example I have worked out that 50 ticks is plenty to cover me as I pass that profit target I will start increasing position size. The further I move into profit the bigger my position sizing gets. To the point where I could be trading 10 times the size I started with. This has resulted in some truly outliner days without any one or even group of trades actually being large winners. It’s a way of milking big winners while still only risking 0.5% of capital per day. It’s a way of making your own outliners. F... what the market wants to give you I say, go get what you want. Yes sometimes it doesn’t work and I give back profit but then I just scale back and build again. I find this works even better the more big days I have. The more profit I have over previous days the more aggressive I build size during the day.




Sounds like the Antimartingale system - increase your risk when you win


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## Naked shorts (8 January 2009)

You make a good point about betting small when starting the trading day.

I find that as i progress through the day, I can anticipate the price action better. It only makes sense to start increasing lot sizes.


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## Cartman (8 January 2009)

Trembling Hand said:


> The more profit I have over previous days the more aggressive I build size during the day.
> 
> In a sense I don’t give a toss about the next couple of trades. I’m very comfortable with the way I trade and that’s the difference.  i'm seeing the ball well I will swing harder.




hey TH --- (luv ya work   )

this kind of method is used by 'GOOD" punters in the racing game as well --- (not that im saying punting is anything like day-trading  lol     --- well actually thats exactly what im saying 

when a professional punter is 'in the zone'  ----- the instinct becomes so focused that the brain seems to decipher the information on a higher level  --

and that is when the 'punter' SHOULD be aggressive ---

i think the biggest mistake many of us make as punters/traders is to try and play 'catch up' on our bad days ----  when we should be walking away ---  and going in hard when the Karma gods are smiling -----


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## MRC & Co (8 January 2009)

Ah, I thought you were talking of individual outlier trades TH.  But yes, I know what your talking about in the post.  I guess once your capital grows too large to even do .5% of it per day on the SPI, you can then just start with as bigger size as suits your style (including the type of day it is) and not give yourself an exact daily stop (allowing you enough trades to let your expectancy come into play), and just let your stop be down to your own intuition........

Cartman, that last paragraph of yours, is very true.  On my own down days (luckily haven't seen one in quite some time ) I have to check myself from trying to play catch up and become even more tight with my trading and try to slowly chip back to the green.  When I'm in the zone, I will swing for the fences, like I did shorting that close today (after cash settlement) after being well up


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## Cartman (8 January 2009)

MRC & Co said:


> When I'm in the zone, I will swing for the fences, like I did shorting that close today (after cash settlement) after being well up




  onya Mirc ---- that would represent a 'Spike play"  ---   

id be inclined to take profits on that around todays low (if yr still holding) --

but i could be wrong  


TH may correct me, but what he is getting at is 'play with the house's money when u r in the zone ---- cause that is the most likely time u r gona 'beat the house'!!   --- u wont beat the house when u r battling to break even and second guessing yr positions !!


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## MRC & Co (8 January 2009)

Na, not still holding the short, could've, should've, would've but didn't!    Did night SPI fall much from it's highs after close at 4:30pm?  Don't have charts available here.  

Still ensured I banked a little of the house money.

Yeh, I agree with what TH is saying, but sometimes, when it just looks right or a big move is on after an early announcement, I will load up regardless of whether or not I have a buffer to use (always a bit edgy doing so though).  But I'm in a bit diff scenario, if I hit my stop, I can just ask for more


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## cuttlefish (8 January 2009)

MRC & Co said:


> But I'm in a bit diff scenario, if I hit my stop, I can just ask for more




So how many times do they let you ask for more ... before showing you the door?


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## Cartman (8 January 2009)

MRC & Co said:


> Na, not still holding the short, could've, should've, would've but didn't!    Did night SPI fall much from it's highs after close at 4:30pm?  Don't have charts available here.




a sell any time up to 7.30 our time was a good move --- well done



MRC & Co said:


> But I'm in a bit diff scenario, if I hit my stop, I can just ask for more




lol --- i want more too ---- but my wife says do it with one contract !! --- (im under more pressure !!!   lol )


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## MRC & Co (8 January 2009)

Cuttle, no idea.  But they cut you off daily at a certain level unless you can justify otherwise.  Big guys decide for themselves, but they are exceptional traders.

Cartman, I am talking about SPI, anytime upto 7:30pm you are talking of?  I don't have any shorts on through night SPI (nor do I have any idea what it's done since 4:30pm), so no well done required.


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## tech/a (8 January 2009)

Good/Sound business management TH


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## Cartman (8 January 2009)

MRC & Co said:


> Cartman, I am talking about SPI, anytime upto 7:30pm you are talking of?  I don't have any shorts on through night SPI (nor do I have any idea what it's done since 4:30pm), so no well done required.




sorry Mirc --- thought u meant u shorted on the spike close and were still holding till ???   which would have meant a sell at any time up till 7.30 our time was a winner ----   

that wasnt the case ??  --- my misunderstanding ----- 

its the burbon lol !!! Cheers.


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## Wysiwyg (8 January 2009)

Cartman said:


> hey TH --- (luv ya work   )
> 
> this kind of method is used by 'GOOD" punters in the racing game as well --- (not that im saying punting is anything like day-trading  lol     --- well actually thats exactly what im saying
> 
> ...





As tech/a said, it`s a different game because during the race you can get out if you`re losing or increase you`re stake if you`re winning.

Frequency is the main difference between a long term punter and a short term punter.


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## MRC & Co (8 January 2009)

Cartman said:


> sorry Mirc --- thought u meant u shorted on the spike close and were still holding till ???   which would have meant a sell at any time up till 7.30 our time was a winner ----
> 
> .




  Na, shorted on the spike, especially hard towards the end, but closed out all intraday (4:29.59pm).  Expected a further retracement towards the very end.  Should have held until night SPI opened and then closed out.  But there is always next time for that punt.  

Thx for the post though TH, videos post if you get time should be good.

Cheers


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## Trembling Hand (8 January 2009)

Cartman said:


> this kind of method is used by 'GOOD" punters in the racing game as well --- (not that im saying punting is anything like day-trading  lol    --- well actually thats exactly what im saying
> i think the biggest mistake many of us make as punters/traders is to try and play 'catch up' on our bad days ----  when we should be walking away ---  and going in hard when the Karma gods are smiling -----




I often think that punters never get anywhere because they are always betting for the big win instead of managing loses.



MRC & Co said:


> Ah, I thought you were talking of individual outlier trades TH.  But yes, I know what your talking about in the post.  I guess once your capital grows too large to even do .5% of it per day on the SPI, you can then just start with as bigger size as suits your style (including the type of day it is) and not give yourself an exact daily stop (allowing you enough trades to let your expectancy come into play), and just let your stop be down to your own intuition........



 yep figure you may have seen this 



tech/a said:


> Good/Sound business management TH




That's all it is really. taking care of Biz.


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## Trembling Hand (8 January 2009)

MRC & Co said:


> Thx for the post though TH, videos post if you get time should be good.




Next couple of weeks holiday time again tomorrow. Spend some of the out-liners


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## MRC & Co (8 January 2009)

Trembling Hand said:


> yep figure you may have seen this




lol, yeh, but many get pretty damn aggressive from the get go each day.  As aggressive as their style permits.  While many (including myself), trade with a strategy more similar to yourself.

I guess they gather, if your risking even 2% of your capital per day (and your win % is not based on per trade but per day, and this being like 90%), then the probabilities of even a 20% DD are slim.  Of course, if a bad patch arises, they will then scale down their lots until they get back into the swing of things.  One way to look at it.

Holiday time again, ha ha ha!  You have the life!


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## Cartman (8 January 2009)

Trembling Hand said:


> I often think that punters never get anywhere because they are always betting for the big win instead of managing loses.




im talking 'smart punters' TH ------ smart punters know when the game is against them and walk away (and dont chase losses) ---- which i think is what u r describing with yr system ---

U know when yr 'in the zone'  and push the limits ---- if its not working, u know when to walk away ----- most punters (ive been guilty in the past, but fixing that issue) do the opposite ----


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## tech/a (8 January 2009)

> That's all it is really. taking care of Biz.




As simple as it seeems your 3 keys are a guarentee for success in any business.

(1) Dont be undercapitalised.Trade within your limits and stay in the game!
Knowing that if you have consistent profits and low overheads you'll be nett profitable.
(2) Increase your capital base.(Then go to (1))
(3) When you get it right---compound---do it again and again.
Then go to (2)

Most turn the most simple into the most complex.
You have proven that just isnt necessary.

The real message here is in the simplicity.
Brilliant.


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## noirua (8 January 2009)

There is only one trading rule really, "Don't invest what you can't afford to lose."


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## BentRod (8 January 2009)

Trembler,
             What about if you have an exceptional day and it is still early.

Will you call it a day while you are ahead or keep plugging away?


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## Cartman (8 January 2009)

tech/a said:


> The real message here is in the simplicity.
> Brilliant.





Agree Tech --- the hard part is becoming good at 'simplicity' ---- i believe TH's simplistic rules only work when u (we) have a foundation of 'positive expectancy' ---- and there are a kazillion ways of finding a positive expectancy edge --- thats where the aesthetic beauty of trading comes into play ---

after all ------- when its all said and done ----  its just a GAME isnt it !!


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## Cartman (8 January 2009)

BentRod said:


> Trembler,
> What about if you have an exceptional day and it is still early.
> 
> Will you call it a day while you are ahead or keep plugging away?




i'll beat TH to this one (maybe) ---------------

he goes for the throat !!!!!!


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## Trembling Hand (8 January 2009)

BentRod said:


> Trembler,
> What about if you have an exceptional day and it is still early.
> 
> Will you call it a day while you are ahead or keep plugging away?




Like cartman has said. Swing like all buggery when its going your way.

The only thing that stopping early on a good day will get you is a lower average day for that period.

If you push it you may give a bit back..... But some times it turns a good day into something very special. After all you have to ask why have you done so well so quickly. A lot of the time its because the day is an unusual large range day or high vol etc. That's what daytraders dream of. Why take that off and come back tomorrow when its probably going to be an inside day.

Take the bad days off. milk the good ones.


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## Cartman (8 January 2009)

Trembling Hand said:


> If you push it you may give a bit back.....
> 
> Take the bad days off. milk the good ones.




and there lies the essence of becoming a good trader i think 

( ive been a sh*t trader in the past but i like to think i 'think' like a good trader nowdays)

Knowing when to 'hold 'em --- and knowing when to 'fold 'em !!!!   ----- 

its called experience --- and from where i sit, experience only comes after stufffing up, then 'waking up' !!!


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## Cartman (9 January 2009)

Wysiwyg said:


> As tech/a said, it`s a different game because during the race you can get out if you`re losing or increase you`re stake if you`re winning.
> 
> Frequency is the main difference between a long term punter and a short term punter.





yep agree with that Wys --- just making the point that a good punter will compound his winnings on his good days and take the flat stake loss on a bad day ---- this style of punting bigger with 'the banks money' is a popular one in racing circles ---- takes ballz though cause u r risking yr profits ---- but if yr system is good y not.


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## inenigma (9 January 2009)

Good Posts.  Thanks guys as this is very helpful to a newbie.......


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## Cartman (10 January 2009)

inenigma said:


> Good Posts.  Thanks guys as this is very helpful to a newbie.......





im still a newbie too lol ----- but im  a newbie thats been thru the mill a cupla times so i like to think i know the other side of the street so to speak --

TH can come in and bump me off if he disagrees here ---- but i think from a newbies pov its important to realise that what he does is 'irregular, unnatural, and outside the square stuff '  --- and 'should not be tried at home' by us newbies until u have a proven strategy ----- otherwise risking yr profits just cause u r having a good day will most likely end up in losing ALL yr profits (+ some !!) on most days --------- 

the strategy of compounding on a short time scale is only for *Elite* traders who have *proven their system is sound* --------- just thought it was important to say that cause a lot of punters see what people like TH are doing it and say ---- ill copy that and make a squillion ----- 

*doesnt work that way !!* -- u have to learn to trade with a proven positive expectancy b4 going for the throat --------- 

personally im still going for the kneecaps --- but working my way up lol --


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## tech/a (10 January 2009)

Cartman.

These three rules can apply to anyone.


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## Cartman (10 January 2009)

tech/a said:


> Cartman.
> 
> These three rules can apply to anyone.





Tech,  u may have misinterpreted the meaning of my post  ----- 

not discounting 'the rules' at all  -----trying to get a bit closer to the bone than that ------ 

just dont want uninitiated newbies thinking they can go out and wreak havoc on the markets cause they r having a good day -----

they/all of us need to prove that their good days are *the 'norm'* b4 they start *compounding* their way to financial freedom   ----- slash *Oblivion*


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## It's Snake Pliskin (10 January 2009)

tech/a said:


> As simple as it seeems your 3 keys are a guarentee for success in any business.
> 
> (1) Dont be undercapitalised.Trade within your limits and stay in the game!
> Knowing that if you have consistent profits and low overheads you'll be nett profitable.
> ...



Not to mention its context and situational relevance for the individual.


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## johenmo (13 January 2009)

I'm a newb like inenigma, but I have woken to to the fact that adequate capitalisation is needed.  People make it through with "small" capital amounts but simple maths on brokerage shows you need to make x% just to cover these costs.

Just a few days ago something clicked and I can see how complicated I have been making the building of my plans (something tech/a commented on a few months back - it's now sunk in).  I realise I need a mechanical system, rather than discretionary.  And the impatient urge to enter the market again has gone.

So now I will start from scratch but it will be quicker!  Thanks for all the food for thought over the last 6 months!

So I would list, in no particular order:
1) Correct frame of mind/mindset/psychology (call it what you like = think right)
2) exit strategy
3) money management - such a broad "rule"!


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## Trembling Hand (13 January 2009)

johenmo said:


> 1) Correct frame of mind/mindset/psychology (call it what you like = think right)




This means nothing if you are trying to turn $5000 into $500,000 and have no skills.

Its a scam the mindset crap. Forget that and replace it with skill development and review.


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## It's Snake Pliskin (13 January 2009)

johenmo said:


> So I would list, in no particular order:
> 1) Correct frame of mind/mindset/psychology (call it what you like = think right)
> 2) exit strategy
> 3) money management - such a broad "rule"!



What about entries?


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## MS+Tradesim (13 January 2009)

Trembling Hand said:


> This means nothing if you are trying to turn $5000 into $500,000 and have no skills.
> 
> Its a scam the mindset crap. Forget that and replace it with skill development and review.




Have to disagree TH. Having skills won't help if you can't keep your head in the right place. And having right mindset won't help if you don't know what you're doing.


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## aarbee (13 January 2009)

Trembling Hand said:


> Its a scam the mindset crap. Forget that and replace it with skill development and review.




I would think that skill development itself is a subset of mindset and not the other way around. 

One has to have a proper mindset to even begin the journey towards skill(s) acquisition. With a coachable mindset a person can begin the journey towards skill development and being conscious of the need for personal development can undertake the skill development in an even more efficient way. 

Successful people have acquired that particular way of thinking or mindset either by happenstance (or unconscious effort) or consciously which johenmo is indicating. I suspect you belong to the former category. Goodonya. 

For the rest of the folks, understanding their own current mindset and it's limitations is a great step towards doing something to improve it. 

Cheers


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## Trembling Hand (13 January 2009)

BS. 

I have been been involved in performance activities of one sort or anther to make my living for more than 20 years. From my observations the mindset rubbish comes from observing the end product of skill development. That people of very high ability are completely in control of their emotions - tiger Wood being the prime example here. But that's the end product. The result of practise and the confidence of ones skills and abilities to achieve something.

I could bang on about this for ever but read this

http://traderfeed.blogspot.com/2008/12/can-i-trade-for-living-quest-for.html

Its a good mind opener.


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## MS+Tradesim (13 January 2009)

Trembling Hand said:


> I could bang on about this for ever but read this
> 
> http://traderfeed.blogspot.com/2008/12/can-i-trade-for-living-quest-for.html
> 
> Its a good mind opener.




I read it. It's 100% aligned with my comment. From the link:



> Mindset is critical in sustaining motivation, interest, and focus during the learning curve, and mindset is crucial in the consistent application of one's skills. The wrong frame of mind and emotional/cognitive/physical state can disrupt the best of skills, but the best of mental outlooks cannot substitute for developed skills. No positive mindframe and "method that suited me" can provide competencies--in any performance field.


----------



## James Austin (13 January 2009)

Trembling Hand said:


> BS.
> 
> I have been been involved in performance activities of one sort or anther to make my living for more than 20 years. From my observations the mindset rubbish comes from observing the end product of skill development. That people of very high ability are completely in control of their emotions - tiger Wood being the prime example here. But that's the end product. The result of practise and the confidence of ones skills and abilities to achieve something.
> 
> ...





TH,

did i read somewhere recently that you wrote you stopped trading for a few weeks a while back due to not being in the right frame of mind?

In this instance, despite your skill level, you recognised that your frame of mind would influence/offset your skill set.

James


----------



## tigerboi (13 January 2009)

Cartman said:


> hey TH --- (luv ya work  )
> 
> this kind of method is used by 'GOOD" punters in the racing game as well --- (not that im saying punting is anything like day-trading lol  --- well actually thats exactly what im saying
> 
> ...




I used to be a professional punter back in the early 90's so for me its all about discipline...as for 1 or 2% of capital that doesnt do it for me...

if you've got absolute discipline & confidence in your abilities then 75-100% of your coin on the table is no problem...

its all about discipline...tb


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## Trembling Hand (13 January 2009)

> Mindset is critical in sustaining motivation, interest, and focus during the learning curve, and mindset is crucial in the consistent application of one's skills. The wrong frame of mind and emotional/cognitive/physical state can disrupt the best of skills, *but the best of mental outlooks cannot substitute for developed skills*. No positive mindframe and "method that suited me" can provide competencies--in any performance field.




The red bit is the important bit. Yes if your messed up you may trade **** But If you have no skills no matter how hard you try and have the right "mindset" you will lose.

Answer me this,

You & your partner are captured by Somali pirates. They give you the opportunity to go free is you can shoot an apple off your partners head with a pistol from 10 meters. A Jeannie turns up and grants you 1 of two things. The mindset to perform the task calmly OR the skills to shoot an apple from 10 meters,

Which one will you take? Shootings skills or a calm approach to blowing your partners head off???


----------



## jersey10 (13 January 2009)

Trembling Hand said:


> Which one will you take? Shootings skills or a calm approach to blowing your partners head off???




LOL


----------



## MS+Tradesim (13 January 2009)

Rephrased: I think you're looking for disagreement where none exists. I am in agreement with the article. Both are important. To push for either/or creates a false dichotomy.

Again: Having skills won't help if you can't keep your head in the right place. And having right mindset won't help if you don't know what you're doing.


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## Trembling Hand (13 January 2009)

My point is MS if you have to work on something like johenmo has put as three points he will work on you are far better working on skill. The rest will follow.


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## Cartman (13 January 2009)

tigerboi said:


> then 75-100% of your coin on the table is no problem...




not all on one race i hope TB  



Trembling Hand said:


> Which one will you take? Shootings skills or a calm approach to blowing your partners head off???




mmmm --- are we talking business partner or girl friend?  --- might alter the answer    lol



Trembling Hand said:


> you are far better working on skill. The rest will follow.




its a good point TH ----- i know a cupla pro boxers  ----- without the skill level in place, all the head stuff would be a waste of time --- but the brain stuff is important at the tapering stage to *hone in on the zone*


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## aarbee (13 January 2009)

Trembling Hand said:


> BS.
> 
> That people of very high ability are completely in control of their emotions - tiger Wood being the prime example here. But that's the end product. The result of practise and the confidence of ones skills and abilities to achieve something.
> 
> I could bang on about this for ever .




MS+Tradesim is quite right in pointing out that it is not one or the other. 

TH,
Your Somali pirate analogy is really irrelevant in view of above. 

I am sure you can go on forever on the subject. It’s typical of “Bee in the Bonnet Syndrome”
As for your Tiger Woods example, think of the The Shark’s example of choking repeatedly. It wasn’t that he suddenly lost his skills at the crucial time. It was just that he did not have the mindset that sets Tiger Woods apart from the rest. "people of very high ability are completely in control of their emotions" - Don't you think this ability to control emotions would be a function of mindset. Perhaps, you would say it is skill development. If that is the case, then you are working on your mindset while honing that particular skill. 
It’s the mindset that ensures that so many people in all walks of life throw it all away after overachieving in their own field. It was the skill that made Heath Ledger famous and it was his mindset that cost him his life. Without the winning mindset the most skillful can lose all. 

I repeat, that in your case despite your protestations to the contrary, development of a particular mindset most likely came about subconsciously or by external nurture or by association or in the guise of "skill development". 

Cheers


----------



## Trembling Hand (13 January 2009)

Ok gents knock yourself out working on mindset. Just keep an eye out for traders that have been at the game for a while people like Nick Radge and Frank D. See what they talk about. More to the point see what they don't


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## beerwm (13 January 2009)

Hi TH

I'd just like to know why you stop trading when u hit a 0.5% loss.

Your system is obviously designed with a positive expectancy which can only be guaranteed the more you trade, likewise your approach to increasing your position size on 'good days.'

wouldnt the more you vary your system the more gamble you take on your expectancy being recognized.

Is your system partial to your daily attitude/mindset? or specific mechanical entry/exits?

thanks


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## Trembling Hand (13 January 2009)

Beerwm do you have stops on your trades?


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## beerwm (13 January 2009)

..yes


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## Trembling Hand (13 January 2009)

So do I, its at 0.5 % of capital. Game over for the day, come back tomorrow without having done any damage to my business.

At any instant in time its more important to do no harm than do good


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## beerwm (13 January 2009)

sorry, i wasnt clear.

my stops are more technical/volitility, etc not based on my overall account.

just from a purely mathematical point of view.

everyday you start of with 100% capital, youjr expectancy would obiously expect some gain.
now after losing 0.5%
your capital is at 99.5%, and your expectancy would similarily expect a gain.

say you made 2% capital in a day,

102%, you say u might increase your position sizing up to 10x.

im sure you undestand what im getting at.

does somehow your first portion of the days trade give you a signal about how stocks/or whatever are trading on that particular day?

do you place a weekly stop at 1-2%?


----------



## aarbee (13 January 2009)

Trembling Hand said:


> Ok gents knock yourself out working on mindset. Just keep an eye out for traders that have been at the game for a while people like Nick Radge and Frank D. See what they talk about. More to the point see what they don't




I am pretty sure that Nick Radge appreciates the importance of mindset in successful trading for he listens to and sells a CD with positive affirmations. 

Cheers


----------



## Trembling Hand (13 January 2009)

beerwm said:


> just from a purely mathematical point of view.



 Actually that's kinda how it came about. Take your last 100 days of trading then with the worst 10 days half there damage. Your account looks better.

Now I know that that is a hindsight stat but it actually makes you trade with the right mindset (LOL). Where your first concern is not to lose money, if you take care of that at some stage you will just fall over some $'s sitting on the ground.


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## Trembling Hand (13 January 2009)

aarbee said:


> I am pretty sure that Nick Radge appreciates the importance of mindset in successful trading for he listens to and sells a CD with positive affirmations.
> 
> Cheers




Well there you go. I'm full of ****. Still you worry about approaching the day with the correct mindset and I will continue going about building skills that take the avg annual wage in a week. And not worry about the odd smashed mouse or keyboard. :


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## beerwm (13 January 2009)

heh.

mindset. i knew it


----------



## Cartman (13 January 2009)

beerwm said:


> I'd just like to know why you stop trading when u hit a 0.5% loss.
> 
> Your system is obviously designed with a positive expectancy which can only be guaranteed the *more you trade  *




positive expectancy is not guaranteed by trading a system *more* (unless it is a *totally* mechanical system) and even then any past backtesting may crash and burn !! --- it is guaranteed by trading a system under the guidelines of what u have *proven to make it positive* ---- ie testing the system in *real time 
* ------


----------



## cuttlefish (13 January 2009)

beerwm said:


> im sure you undestand what im getting at.





Even if TH doesn't, we do 


From TH's first post in the thread ...



			
				Trembling Hand said:
			
		

> Believe me you trade very nicely if the next 10 trades don’t mean the diff between making the rent or not.




How does this affect your trading if mindset is irrelevant?


I can see your point about skills development being the most important thing to focus on - but mind set is essential as well.   The first mind game for complete beginners to get past is to take exits.


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## cuttlefish (13 January 2009)

> Well there you go. I'm full of ****. Still you worry about approaching the day with the correct mindset and I will continue going about building skills that take the avg annual wage in a week. And not worry about the odd smashed mouse or keyboard.




Sorry- I see the game over buzzer had already sounded before I submitted


----------



## cuttlefish (13 January 2009)

Trembling Hand said:


> From my observations the mindset rubbish comes from observing the end product of skill development.




This is a great point by the way and well worth taking note of - I can see your point that a focus on skills development will lead to a confidence that implicitly helps develop mindset.


----------



## Cartman (13 January 2009)

aarbee said:


> Nick Radge  sells a CD with positive affirmations.
> 
> Cheers




Y does he need to sell stuff??  (no offence intended Nick)  ----  




aarbee said:


> I am pretty sure that Nick Radge appreciates the importance of mindset in successful trading
> 
> Cheers




i appreciate the importance of mindset also ---------- i am so pi#sed off that i was such a sh#t trader in the past, that i now have a positive mindset to increase my *skill levels* ----------   pretty sure Nick's CD wont help me though


----------



## Trembling Hand (13 January 2009)

cuttlefish said:


> Sorry- I see the game over buzzer had already sounded before I submitted




Cephalopod I honestly believe there is just far too much focus on mindset/psych stuff. Sure you don't want to be playing Russian roulette with each trade and you don't want to be getting into a state of complete frustration and anger or fear (I prefer just mild frustration & anger ). This goes without saying. But to say that you will be successful by getting in the right state of mind is delusional if you have no skills to have that confidence.


----------



## beerwm (13 January 2009)

Cartman said:


> positive expectancy is not guaranteed by trading a system *more* (unless it is a *totally* mechanical system) and even then any past backtesting may crash and burn !! --- it is guaranteed by trading a system under the guidelines of what u have *proven to make it positive* ---- ie testing the system in *real time
> * ------




where each trade is exclusive of one another,

i cant see how trading more would not deliver more positive results, unless your expectancy is wrong.


----------



## cuttlefish (13 January 2009)

Trembling Hand said:


> Cephalopod I honestly believe there is just far too much focus on mindset/psych stuff. Sure you don't want to be playing Russian roulette with each trade and you don't want to be getting into a state of complete frustration and anger or fear (I prefer just mild frustration & anger ). This goes without saying. But to say that you will be successful by getting in the right state of mind is delusional if you have no skills to have that confidence.





Cheers TH - don't worry I get your point (see my post just above) - just having a bit of fun.


----------



## Trembling Hand (13 January 2009)

cuttlefish said:


> Cheers TH - don't worry I get your point (see my post just above) - just having a bit of fun.


----------



## MS+Tradesim (13 January 2009)

Trembling Hand said:


> But to say that you will be successful by getting in the right state of mind is delusional if you have no skills to have that confidence.




So who *is* claiming that? From what I see, respondents are affirming that *both* are important.


----------



## Cartman (13 January 2009)

beerwm said:


> where each trade is exclusive of one another,
> 
> i cant see how trading more would not deliver more positive results, unless your expectancy is wrong.




Beer ---- scalping is more like caressing the high 'C' out of a Stradivarius ---- it definitely 'aint driving a 'Mack' down the 'Hume" ----

mechanical vs. discretionary r not on the same page if u r good at it ---

ps  i'm not good at it, but i like to think i can see a distant light in the tunnel


----------



## Trembling Hand (13 January 2009)

MS+Tradesim said:


> So who *is* claiming that? From what I see, respondents are affirming that *both* are important.




I see that people are saying both are important. My point is skills must come before the mindset, Infact mindset can only come from the skills otherwise its not the correct mindset, its fantasy. 

Therefore *MY* point is that skills are the start and end.


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## beerwm (13 January 2009)

Your mindset of cutting 0.5% capital losses on down days, and gambling higher* on up days, cant really improve your bottom line over the long run.

really just saving yourself from those 2%+ down days that make you


----------



## Trembling Hand (13 January 2009)

beerwm said:


> Your mindset of cutting 0.5% capital losses on down days, and gambling higher* on up days, cant really improve your bottom line over the long run.
> 
> really just saving yourself from those 2%+ down days that make you




Sorry don't follow?


----------



## beerwm (13 January 2009)

thats under the impression that your next trade isnt dependant/influenced by your last


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## Cartman (13 January 2009)

beerwm said:


> gambling higher* on up days, cant really improve your bottom line over the long run.




 -----  no offence Beer, but do u know what TH actually does ??? -----  

its not gambling when u know when to attack and when to retreat ---- 

out of curiousity TH --- how many days out of, say 30, do u have to retreat


----------



## MRC & Co (13 January 2009)

Trembling Hand said:


> Therefore *MY* point is that skills are the start and end.




But perhaps people need a certain mindset, to attain those skills?

I.e. A dash of ego and the ability to take a beating!    I know this is a factor trading firms look for at interviews.


----------



## pilbara (13 January 2009)

beerwm said:


> where each trade is exclusive of one another,
> 
> i cant see how trading more would not deliver more positive results, unless your expectancy is wrong.



one reason to cut your losses early for the day is because you are "out of form", reading the signals wrong or just a bit too late in your decisions.  Then you can go to a demo account to practice and see if it's something new in the market that you haven't seen before, or whether you aren't up to your best on that day.


----------



## beerwm (13 January 2009)

Cartman said:


> -----  no offence Beer, but do u know what TH actually does ??? -----
> 
> its not gambling when u know when to attack and when to retreat ----
> 
> out of curiousity TH --- how many days out of, say 30, do u have to retreat




not particularly,
please excuse a newbie,

i just assumed each trade was separate


----------



## awg (13 January 2009)

Trembling Hand said:


> I see that people are saying both are important. My point is skills must come before the mindset, Infact mindset can only come from the skills otherwise its not the correct mindset, its fantasy.
> 
> Therefore *MY* point is that skills are the start and end.




One thing is you will not be able to obtain the skills, without the needed mindset, as they are not so easy to acquire:frown:




beerwm said:


> Your mindset of cutting 0.5% capital losses on down days, and gambling higher* on up days, cant really improve your bottom line over the long run.
> 
> really just saving yourself from those 2%+ down days that make you




Think this reply is ironic?


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## Trembling Hand (13 January 2009)

Cartman said:


> -- how many days out of, say 30, do u have to retreat





As an average about 4 times in 20 trading days I hit drop dead.


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## MS+Tradesim (13 January 2009)

beerwm said:


> Your mindset of cutting 0.5% capital losses on down days, and gambling higher* on up days, cant really improve your bottom line over the long run.
> 
> really just saving yourself from those 2%+ down days that make you




Sit down with a spreadsheet. Put in a heap of different percentages, positive and negative symbolising up days and down days. Apply each "day's" return against a nominal account starting balance.

Then limit all the negative ones to 0.5%. Process again. You'll find the difference is substantial.


----------



## MRC & Co (13 January 2009)

Trembling Hand said:


> As an average about 4 times in 20 trading days I hit drop dead.




I reckon it's worse giving back all your open profits!  I've done it 3 days in a row now!!!!!  Could walk away with a handy profit, but always push my luck with my daily trailing stop near B/E!  

Either way, childlike tantrums are always funny to watch!


----------



## cuttlefish (13 January 2009)

beerwm said:


> Your mindset of cutting 0.5% capital losses on down days, and gambling higher* on up days, cant really improve your bottom line over the long run.
> 
> really just saving yourself from those 2%+ down days that make you





I think beerwm's point is that if each trade you take is an independant event, and the outcome is not influenced by mindset, and they all form within the same positive expectancy strategy, then by taking the down days off you are not actually saving yourself money and by aggressively trading the winner days you are not making yourself more money.   (i.e. in theory these decisions have zero effect, positive or negative, on your overall results in the long term - you will have the losses anyway and you will have the wins anyway).

But by adjusting your trading timeframes in this way what you are achieving is that you are feeling like a winner more often than you are feeling like a loser.

This doesn't mean to imply that there isn't positive expectancy in your system or that you are not profitable - more that it is possible you are subconsciously adjusting your trading timeframes to aid your state of mind/mental approach under the misimpression that it is actually aiding your physical results.

The other alternative is that the down days are caused by a skill deficiency - that there is some type of market that you simply don't have the skill to trade as effectively as others - or even that there is some physical factor on these days (tiredness, distractedness) that contributes to them being down days - and that by pulling the pin on those days you are acknowledging you don't have the skill or conditions to trade those types of days - and thus it IS having a positive impact financially on your results.

Or the third alternative is that your trading results are influenced by your mindset and that a positive mindset is a key factor in the positive expectency of your particular system.

(just throwing around ideas related to what beerwm  is bringing up, not drawing any conclusions).


----------



## Cartman (13 January 2009)

cuttlefish said:


> I think beerwm's point is that if each trade you take is an independant event, and the outcome is not influenced by mindset, and they all form within the same positive expectancy strategy, then by taking the down days off you are not actually saving yourself money and by aggressively trading the winner days you are not making yourself more money.   (i.e. in theory these decisions have zero effect, positive or negative, on your overall results in the long term - you will have the losses anyway and you will have the wins anyway).
> 
> But by adjusting your trading timeframes in this way what you are achieving is that you are feeling like a winner more often than you are feeling like a loser.
> 
> ...




C/F --- I am constantly impressed by the way u think ---- people should read yr posts with great attention  (i thunk !! ..... where the hell *is* Kauri ??


----------



## beerwm (13 January 2009)

cuttlefish said:


> I think beerwm's point is that if each trade you take is an independant event, and the outcome is not influenced by mindset, and they all form within the same positive expectancy strategy, then by taking the down days off you are not actually saving yourself money and by aggressively trading the winner days you are not making yourself more money.   (i.e. in theory these decisions have zero effect, positive or negative, on your overall results in the long term - you will have the losses anyway and you will have the wins anyway).
> 
> But by adjusting your trading timeframes in this way what you are achieving is that you are feeling like a winner more often than you are feeling like a loser.
> 
> ...




thanks cuttlefish, exactly what i was getting at.


----------



## Trembling Hand (13 January 2009)

MRC & Co said:


> Either way, childlike tantrums are always funny to watch!



 MRC you sit in a room full of big swing D***s. Tell me who seems the less emotional. The ones struggling on 2 contracts a trade or the loud pissed off 10-20 contract trader?

From my experance the quiet ones are the ones that are about to be kiicked out the door.



cuttlefish said:


> I think beerwm's point is that if each trade you take is an independant event, and the outcome is not influenced by mindset, and they all form within the same positive expectancy strategy, then by taking the down days off you are not actually saving yourself money and by aggressively trading the winner days you are not making yourself more money.   (i.e. in theory these decisions have zero effect, positive or negative, on your overall results in the long term - you will have the losses anyway and you will have the wins anyway)



 No this is absolutely wrong.

You are missing the point completely. Rule 3 is very important. It has a F'in huge diff to your account. HUGE. 

Whats going to be the result at the end of the day trading the last 2 hours on 10 contracts rather than 3 if you take 40 points? $7,000 just on the last 2 hours. Do that a couple of times a week and there is no questions about "in theory". :


----------



## cuttlefish (13 January 2009)

Cartman said:


> C/F --- I am constantly impressed by the way u think ---- people should read yr posts with great attention



Cheers! (I thunk!) - and when I'm generating the same sort of results as TH does I'm sure they will!  .   (and I'm really just rephrasing beerwm's ideas anyway) 



> ..... where the hell *is* Kauri ??




Actually I was wondering that very same thing when gold did its cliff jump last night - haven't seen a coily thingy or a wedgy thingy for a while now.


----------



## cuttlefish (13 January 2009)

Trembling Hand said:


> MRC you sit in a room full of big swing D***s. Tell me who seems the less emotional. The ones struggling on 2 contracts a trade or the loud pissed off 10-20 contract trader?
> 
> From my experance the quite ones are the ones that are about to be kiicked out the door.
> 
> ...





TH's - thats fair enough - and I believe that it is true - but then what I'd say, based on everything you are implying here, is that your mindset is a signficant factor in your positive expectancy  (so the third option I described in my post is the one that applies to your situation).

This makes sense too because since you are a skilled trader - with a lot of rules becoming ingrained into your subconscious with time and experience and manifesting as 'intuition' - so your trading style is probably more similar to a sports person than a chess player - and sports people have times when they are 'in the zone' (in the right mental state) and excel - and they have times when they can't win a trick.  

This would also tie up with the shorter timeframes that you trade and why you prefer those shorter timeframes to longer timeframe, strategic types of trading strategies.


----------



## beerwm (13 January 2009)

Trembling Hand said:


> No this is absolutely wrong.
> 
> You are missing the point completely. Rule 3 is very important. It has a F'in huge diff to your account. HUGE.
> 
> Whats going to be the result at the end of the day trading the last 2 hours on 10 contracts rather than 3 if you take 40 points? $7,000 just on the last 2 hours. Do that a couple of times a week and there is no questions about "in theory". :




ok i get it now,

each trade's result has a dependancy in relation to the day.

is that in relation to your skill[on the day], mindset[on the day] or price movements[on the day.]

PS; i know this topic has been beaten to death


----------



## Cartman (13 January 2009)

cuttlefish said:


> (and I'm really just rephrasing beerwm's ideas anyway)




i totally appreciate that u were just paraphrasing Beer's idea ----- 

my point was ----- whether people agree or disagree with yr comments,  u always put forward a pov with great thought and content ----

whether or not punters agree with u is irrespective ---- yr posts have content --- and that is a good thing !! ---- always food for thought


----------



## cuttlefish (13 January 2009)

Cartman said:


> yr posts have content --- and that is a good thing !! ---- always food for thought



thanks mate I'll take any complements I can get!


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## Cartman (13 January 2009)

Trembling Hand said:


> As an average about 4 times in 20 trading days I hit drop dead.




and u've 'walked away' each time?


----------



## Lone Wolf (13 January 2009)

TH,

How did you arrive at the 0.5% figure? Did you just pick a number that you felt comfortable with or did you try trading with various stop levels and found 0.5% to work best for you?

You say that you get shut down for the day about 4 out of 20 days. So that's 20% of your year that you don't get to trade. I know that you will say "That 20% of the year is where my biggest losses would be, why not cut them out?" But maybe if you increased your stop level to 0.75% you'd find that x% of the time you make a comeback and finish with a profit for the day. Then you need to ask, are the extra profits I gained from a larger stop greater than the extra losses on the days I lose? Obviously 0.5% works for you, just wondering how you decided on it.


----------



## Trembling Hand (13 January 2009)

Cartman said:


> and u've 'walked away' each time?




Mostly. It is very hard to do. And of course I give myself a couple of extra ticks to play with from time to time but its still around the 0.5% mark maybe 0.55%


----------



## tigerboi (13 January 2009)

Cartman said:


> not all on one race i hope TB




ive often thrown 100% of my coin on trades...

on the punt the 2 times in my career i backed 8 winners in a row i just took out my stake & started with 50% of the profit then kept going...

go check out my race tip thread,followed bart cummings for over 35 years & yes i did back viewed at 50/1 pre post,youll see i tipped him in the brissie cup at 4/1...started backing him after the cup,bart cummings...THE ONLY TRAINERS HORSES I IGNORE THE PRICE as i know hes a genuis...(won over $1m on lets elope in 1991/92)

cartman its all in the discipline but you also gotta have the ticker/balls to pull of that biggie...cheers


----------



## MS+Tradesim (13 January 2009)

Trembling Hand said:


> Mostly. It is very hard to do.




Mindset? : 

[/joke]


----------



## Trembling Hand (13 January 2009)

LW its based very loosely on what the median up day is X 0.33


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## Cartman (13 January 2009)

Trembling Hand said:


> Mostly. It is very hard to do. And of course I give myself a couple of extra ticks to play with from time to time but its still around the 0.5% mark maybe 0.55%





that answer just proves yr honesty TH ----- u know u r good at what u do --- so even when u hit yr mark --- u give yrself  the benefit of the doubt for a little breathing space ----- its a difficult thing 4 humans to 'walk away' at an arbitrary 'point' in space ---- kinda like doing 68km in the 60km zone ---- if u do 71km  and get pinged u've just gotta wear it ---- 

my biggest downfall, and im guessing many punters ---- is that i hang on to 'the dream' (losses)  much longer than i should, even when i know i should be out -----

its a fine line between being smart and dumb --- U've obviously found that line and keep on the right side of it ---- takes discipline --


----------



## Cartman (13 January 2009)

tigerboi said:


> ive often thrown 100% of my coin on trades...
> 
> on the punt the 2 times in my career i backed 8 winners in a row i just took out my stake & started with 50% of the profit then kept going...
> 
> ...





i understand exactly where yr coming from TB ---- and  i think what u did and what TH does is very similar in a lot of ways (others may disagree) ---

ballz are definitely required for this type of punting --- but from my humble experience the better u get, the bigger yr ballz get too -- lol  --- ---- mine are still to reach puberty ---lol ----


----------



## tech/a (13 January 2009)

Forget Kahunas they're too close to your A*rse.

The only thing he is using is his noggin.
The 3 trading rules have zero to do with nuts.
Its only those who dont understand who think it takes balls.


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## MRC & Co (13 January 2009)

To throw on big size and risk your open profits, takes nuts (others may call it discipline).  Period.


----------



## tech/a (13 January 2009)

> Period.




Oh----2 explaination marks
Others again would call it sound business practice,Semi colon.


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## MRC & Co (13 January 2009)

And no high risk:high reward plays take nuts in business, you should understand entrepreneur.  Full stop.


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## tech/a (13 January 2009)

Who mentioned high risk--??

If thats what your doing then your brains are down there with your Kahunas.


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## Cartman (13 January 2009)

tech/a said:


> Kahunas who think it takes balls.






MRC & Co said:


> takes nuts






Cartman said:


> ballz are definitely required  better u get, the bigger yr ballz get






MRC & Co said:


> high risk:high reward plays take nuts






tech/a said:


> down there with your Kahunas.





LOL ---- hope u r happy with everyone discussing the size of yr nuts TH :arsch::22_yikes:

u may enlighten us all --- does it require nuts ---- or is it totally stress less?


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## Trembling Hand (13 January 2009)

Cartman said:


> LOL ---- hope u r happy with everyone discussing the size of yr nuts TH :arsch::22_yikes:




What if I am :girl:


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## MRC & Co (13 January 2009)

tech/a said:


> Who mentioned high risk--??
> 
> If thats what your doing then your brains are down there with your Kahunas.




Putting down 5mil on futures involves low risk?  

Sometimes you just take a flogging, that is the risk you take if you want to swing size in this game, and that takes nuts.


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## tech/a (14 January 2009)

MRC & Co said:


> Putting down 5mil on futures involves low risk?
> 
> Sometimes you just take a flogging, that is the risk you take if you want to swing size in this game, and that takes nuts.




There may well be traders out there who ride around on Black Horses 6 guns blazing,cigars hanging out of every orifice,tattoo's on every appendage,more girls than Hugh Hefner and bank accounts like Fort Knox---albeit temporary--with egos to match---albeit temporary.

Traders punching in over sized orders like Boxers on Ice---jumping around like psychopaths who have lost their car keys and looking like bad actors alongside Michael Douglas in "Wall Street". 

I'll back brains over balls every day.


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## Trembling Hand (14 January 2009)

LOL


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## julius (14 January 2009)

I remember reading it put this way as it relates to elite sprinting  -- "When the body is ready, the mind knows it". Basically, get the skills in place and the head will follow.

Every time you rehearse a skill you are conditioning the mind to respond in a certain way. I think that most of the psychological problems people encounter are related to a lack of adequate preparation...


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## tigerboi (14 January 2009)

Cartman said:


> i understand exactly where yr coming from TB ---- and i think what u did and what TH does is very similar in a lot of ways (others may disagree) ---
> 
> ballz are definitely required for this type of punting --- but from my humble experience the better u get, the bigger yr ballz get too -- lol --- ---- mine are still to reach puberty ---lol ----




I think some really complicate things with way too many techie stuff like this spreadsheet,that flag formation etc...from my experience its best to keep it simple,have the confidence/balls in your ability & discipline to back your judgement...never let emotion cloud your judgement...tb

1.keep it simple

2.confidence

3.discipline


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## MRC & Co (14 January 2009)

tech/a said:


> There may well be traders out there who ride around on Black Horses 6 guns blazing,cigars hanging out of every orifice,tattoo's on every appendage,more girls than Hugh Hefner and bank accounts like Fort Knox---albeit temporary--with egos to match---albeit temporary.
> 
> Traders punching in over sized orders like Boxers on Ice---jumping around like psychopaths who have lost their car keys and looking like bad actors alongside Michael Douglas in "Wall Street".
> 
> I'll back brains over balls every day.




Miss the entire point tech.  It's not an agruement of brains V balls, it's the fact that even with brains, you need balls if you want to make any decent money in this game.


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## tigerboi (14 January 2009)

MRC & Co said:


> Miss the entire point tech. It's not an agruement of brains V balls, it's the fact that even with brains, you need balls if you want to make any decent money in this game.




correct mrc as i first said 0.50% would never do it for me...to make decent coin you gotta show some dash...

no dash no cash


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## MRC & Co (14 January 2009)

tigerboi said:


> correct mrc as i first said 0.50% would never do it for me...to make decent coin you gotta show some dash...
> 
> no dash no cash




Yeh, but you have tradies who sit back and live off their company profits, punting tiny little amounts on their stocks and mock big traders with diatribes of pathetic metaphors.

Try telling a guy who runs a 2000 lot on the S&P for 100 points that he will soon be broke and does not need balls.  You really have no idea.

As for the woman, cigars and egos, you really do watch too many movies!


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## nunthewiser (14 January 2009)

i cant even spell metafor


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## MRC & Co (14 January 2009)

nunthewiser said:


> i cant even spell metafor




Ask tech, he tells everyone how it is.  His the man!


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## nunthewiser (14 January 2009)

The way i see it is ......... IF one is using a set of guidlines that work for them THEN they are correct regardless of what any one else has got to say .it works ..simple

what works for some ppl may not work for others 

if we all stuck to the same rules , there would not be a market .simple really

i for one pay no heed to others telling me how i should or should not trade ......i do alright , why would i follow someone thats just another anomonous typist when my sytem of making a quid works already


by the way i truly am in it for the cigars and bimbos


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## nunthewiser (14 January 2009)

PS

dont get me wrong 

i do listen , and if i read something that makes sense i will look into it , BUT just because someone states that "this is how its done " dont make them right


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## Naked shorts (14 January 2009)

nunthewiser said:


> The way i see it is ......... IF one is using a set of guidlines that work for them THEN they are correct regardless of what any one else has got to say .it works ..simple
> 
> what works for some ppl may not work for others
> 
> if we all stuck to the same rules , there would not be a market .simple really



You are right nun, but these conflicts of interest sure make for a good argument.

I think where tech is coming from is that he treats his trading as *business*. Very little emotion involved.
This attitude is to be expected considering his background.


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## nunthewiser (14 January 2009)

Naked shorts said:


> You are right nun, but these conflicts of interest sure make for a good argument.
> 
> I think where tech is coming from is that he treats his trading as *business*. Very little emotion involved.
> This attitude is to be expected considering his background.




all trading should be regarded as a business


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## Naked shorts (14 January 2009)

nunthewiser said:


> all trading should be regarded as a business






> I'll back brains over balls every day.




Business in the way he perceives business is done (which of course isnt jumping around on ice).


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## nunthewiser (14 January 2009)

need brains AND balls in ANY business otherwise you will always be playing second fiddle to the other bloke


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## BBand (14 January 2009)

Trading Rules

1  I have a trading method that suits my personality - if you do not have this right, then you are doomed from the start
Most of us may wish to join the ranks of the ellite day traders - but thats just not gonna happen! for the majority of us

2  Use "tools" that you understand and are comfortable using.
I use indicators, and trade of their support/resistance/extreme values

3  Accept complete responsibility for YOUR results!
"Trading" of the back of a guru is just transferring the responsibility to the guru
If you have a system that fits you, and has been tested and proven over the long run - why would you ever have to ask for an opinion?

4  Have a DETAILED trading plan and have the discipline to trade it - no matter what!!
This is the most important rule, "trading" tends to become easy, boring, effortless and stress free

Skills and Mindset ? - my take on this is that one tends to improve the other and for me this happened naturally without realising it

Just my thoughts
Peter


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## tech/a (14 January 2009)

MRC & Co said:


> Miss the entire point tech.  It's not an agruement of brains V balls, it's the fact that even with brains, you need balls if you want to make any decent money in this game.





No I do understand what your saying and you may know people who actually trade like this (The trade they are in could send them bankrupt). I would not and do not place myself in that position in ANY business I'm involved with and wouldnt be involved with anyone who was.
People base jump---I dont. I dont have to.
To make a $ trading I dont have to put my nett wealth or even close to it at risk.
Trading is enjoyable and continually challenging.

Almost as much as talking to you guys!



Naked shorts said:


> Business in the way he perceives business is done (which of course isnt jumping around on ice).




Yes thats true. We have all met the all or nothing guys and very few have it all and many more have had it and now dont. My perception has stead me fast for 35 yrs of various business and I have started again twice--I have no intention of doing it a third time.



nunthewiser said:


> need brains AND balls in ANY business otherwise you will always be playing second fiddle to the other bloke




There is truth in this statement.

Life is all A about B when it comes to starting businesses.
Young entrepeneaurs have no choice but to take on un acceptable risk that COULD and often does wipe them out.
They are ill equiped to handle these situations.
Old heads on young shoulders wouldnt help as they have no choice if they wish to attempt it---the rewards can be great and the downside just as great.

But having said all that Ive always found the turtle does beat the hare over a long enough distance.


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## IFocus (14 January 2009)

julius said:


> I remember reading it put this way as it relates to elite sprinting  -- "When the body is ready, the mind knows it". Basically, get the skills in place and the head will follow.
> 
> Every time you rehearse a skill you are conditioning the mind to respond in a certain way. I think that most of the psychological problems people encounter are related to a lack of adequate preparation...




Ahhhh Julius this is the path to enlightenment.............


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## IFocus (14 January 2009)

MRC & Co said:


> Miss the entire point tech.  It's not an agruement of brains V balls, it's the fact that even with brains, you need balls if you want to make any decent money in this game.





I have day traded in the past with what I call size (nothing like you guys are taking about) using all the money management stuff etc.

Not sure I would call it balls but it dose mess with your head and is a completely different game mentally in some respects to to swing or position trading. 

Another trader said  once to me driving a normal car or a V8 super car or F1 are all driving but only some are mentally able to handle the top end.

As you and TH are I take it scalping of course that takes it to another level.


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## MRC & Co (14 January 2009)

tech/a said:


> No I do understand what your saying and you may know people who actually trade like this (The trade they are in could send them bankrupt).
> 
> We have all met the all or nothing guys and very few have it all and many more have had it and now dont. My perception has stead me fast for 35 yrs of various business and I have started again twice--I have no intention of doing it a third time.




They are not all or nothing, they pyramid aggressively when they are onside, and very very quickly.  These guys do it year in and year out, sometimes they take a HUGE flogging, but they KNOW they can easily get it back with time.  Read about Paul Rotter, he is the best day trader on the planet, takes large beatings and still makes packets year in and year out, the same as these guys.  He runs by NO conventional money management, same as these guys.  They are supremely confident in their skills and have nuts to match.

You may be a turtle, and that is fine (I'm more of a turtle myself), but it's not the only way and it does not mean these guys are all or nothing, most will retire with a very healthy nest egg (it's quite different to a guy like Andrew Forrest, now that is an all or nothing guy).

IFocus, yes, trading intraday is definately more emotional.  The thing is when I talk of size, is most do it very quickly, things will align, it just feels right, and you will wack on far more size than you would normally.  Now if it runs, you hit it big, if it doesn't, you cut it quick but still take a bruising.  Either way, that takes nuts to me, to be able to pull the trigger and lay down that size (many will not be able too), but in the long-run, with the correct intution, you will outperform those not able to pull the trigger, by a country mile!


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## tech/a (14 January 2009)

MRC

Do you really think *THEY* think they have balls or do you think *traders who cant* imagine/precieve trading with the size they do think they MUST have huge kahunas?

Packer played poker with bet sizes I couldn't get as a loan from a bank.
I don't think he had big nuts (Nor did he I'm sure) just a huge pit of money.
If we all had the same pit---



> you will outperform those not able to pull the trigger, by a country mile!




Or go broke trying.
There are no guarentees in this game.


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## MRC & Co (14 January 2009)

tech/a said:


> MRC
> 
> Do you really think *THEY* think they have balls or do you think *traders who cant* imagine/precieve trading with the size they do think they MUST have huge kahunas?




By the stress and anger when it goes wrong, it is pretty obvious it's not a standard procedure and if the moment is right, it's encouraged to up your size too, seems to be worldwide protocol for Prop traders, surprised me considering what is slung around on this site as gospel and why I try to give a different insight (their money, not mine, and they must know something right tech, it is their business afterall?)..........


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## tech/a (14 January 2009)

Its said that 90odd % fail in both Business and Trading.
Its also said that most fail in the first 3 yrs.

How many of these guys have 3+ years under their belt?
Sure there will be the top % that do survive and generally those that do survive very well.

Not for me.


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## MRC & Co (14 January 2009)

tech/a said:


> Its said that 90odd % fail in both Business and Trading.
> Its also said that most fail in the first 3 yrs.
> 
> How many of these guys have 3+ years under their belt?
> Sure there will be the top % that do survive and generally those that do survive very well.




Plenty survive and plenty have well over 3 years under their belt, a lot have been in this game a lot longer than yourself.

Sometimes tech, your just not right.  Plenty of gray in this game, despite your firm belief in rules.


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## BentRod (14 January 2009)

I'm not getting involved Chaps but all this talk of Balls reminded me of Paul Tudor Jones.

http://video.nytimes.com/video/2007/10/12/business/1194817106985/long-distance-dealing.html


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## MRC & Co (14 January 2009)

MRC & Co said:


> Plenty survive and plenty have well over 3 years under their belt, a lot have been in this game a lot longer than yourself.




BTW, as a scalper, it would be evident well under 3 years whether or not you would cut it.  The trades you would do by that time would be many many thousands.  

All my point is, is to make enough to live a decent life in this game, you need balls (whether that be doing a 2000 lot as an already big trader, or uping your size from 1 lots to 10 lots).  As does any businessman, including yourself tech.  A 9-5 job would be a very viable option otherwise.

This is really crossing into idle semantics now, so I will leave it at that.  

All the best with the trading.


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## Naked shorts (15 January 2009)

MRC & Co said:


> Read about Paul Rotter, he is the best day trader on the planet, takes large beatings and still makes packets year in and year out, the same as these guys.



Just read about him. He takes 5digit positions 

Seems to me scalping is the way to go. I checked out a recruitment website for hedge funds and all they want is traders who can scalp.


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## BentRod (15 January 2009)

> Just read about him. He takes 5digit positions




Yep, that's the flipper. 

Started from nothing, now worth craploads.
All from plugging away at the computer day in day out.

Big inspiration for me even though I don't even scalp .


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## spibok (22 October 2010)

Back to the future! I see TH has post 5001 up (welcome back?) Question on this  post (which I have pinned on my wall at my trading desk), and have read many, many hundreds of times. TH,you mention scaling up during the day once you have made your wage. Can you provide me some brief details on how you do this? I have been giving this a lot of thought and would be interested to know your take on it.

As an example, if trading 1 contract with daily wage goal of $250.
1) at $500, go to 2 contracts. Back to 1 contract if you lose 25% of the $500
2) @ $1250 go to 3 contracts, stop if lose 25% of $1250

etc etc etc

How quickly do you get aggresive, at what rate (ballpark is fine here, feel free to use a hypothetical trader in an example), and when do you call it quits for the day if things start going south once you have scaled up the position size.

Thoughts from TH, or others, appreciated.


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## Logique (23 October 2010)

Just in case anybody is interested 

My three trading rules:
1. Invest in what you understand
2. The trend is your friend
3. Don't fall in love (with a stock or index)


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## moreld (23 October 2010)

Hi spibok
If you haven't read the anything about the Turtle traders then I'd encourage you to read the Original Turtle trading Rules at the least http://bigpicture.typepad.com/comments/files/turtlerules.pdf

Richard Dennis or maybe it was someone else said they could make money on even less than a fair coin toss, as their edge came from the betting strategies, which are anti-martingale, ie increase your bets when winning.


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## spibok (25 October 2010)

Moreld, have read those rules thoroughly. Yes, they do provide a basic protocol for adding to your position, just interested in how others go about this, particularily in TH's case where he ramps up risk as a result of his P&L on the day.


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## Frankie (26 October 2010)

Hello Everyone,

My three trading rules are as follows:

1.	Find a Guru 
Find someone who already trades successfully.

2.	Write down their trading rules. 
Their trading rules must be crystal clear for me to continue.

3.	Paper trade using their trading rules 
I need to find out if their system could work for me before I commit real money.

Later on, I may decide to adapt their strategies to suit me.


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## ThingyMajiggy (26 October 2010)

Frankie said:


> Hello Everyone,
> 
> My three trading rules are as follows:
> 
> ...




Wow, you sound like a real expert. No wonder you have a site with Guru this and Guru that, and even trading strategies on there. Impressive! I nearly need a new set of steak knives too, its almost worth signing up.


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## nunthewiser (26 October 2010)

ThingyMajiggy said:


> Wow, you sound like a real expert. No wonder you have a site with Guru this and Guru that, and even trading strategies on there. Impressive! I nearly need a new set of steak knives too, its almost worth signing up.




Now im impressed!!!!

taken from site 

 yet another wanka.

no offense intended of course


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## brty (26 October 2010)

Frankie,

from website...



> So then, how the heck do I find fundamentally strong companies to trade in?




If you are trading from charts, then why do you need to find fundamentally strong companies?? I find that when trading using charts it does not matter about the fundamentals of the company.

brty


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## Frankie (27 October 2010)

Hello brty,

My “ideal situation” is to continuously trade in and out of the same stock repeatedly over a long period of time. 

To answer your question though, it gives me great piece of mind knowing that a professional research firm is recommending a stock that I’m trading in because it believes the company has strong fundamentals.The analysts at these research firms earn a living studying the fundamentals and recommending stock. For an analyst to survive in the long term their recommendations need to work. 

I like to start with a list of recommended stocks from my chosen research firm. (That’s a whole topic in itself!) I then bring up a chart for each stock they recommend on their list. If I see a chart I like, I set my profit and loss targets based on the price action of the chart.

By doing this I feel that I am using a holistic approach – combining fundamental and technical analysis together.

Both types of analysis are very important in my trading plan.


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## Gringotts Bank (1 November 2010)

It's all about the psychology.  Feeling like a winner creates winning trades, which is why the outcome of your most recent trade(s) have great importance.

If trading had _anything at all_ to do with method or technique, don't you think the big funds would be raking it in?  They'd just employ some super-nerd Ivy League technician, leverage up to the eyeballs and away you go.  As it is, most funds struggle to crack 10% pa.  

The spoils go to the guys who can create strongly positive mind states > trade off that > win > trade off stronger winning mindstates > snowball profits.  The opposite applies also: lose > more losses > feel like a loser > shut it down for the day (or until you can regain some feel-good vibes to trade off).  That's all there is to it.


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## Trembling Hand (1 November 2010)

Gringotts Bank said:


> *If trading had anything at all to do with method or technique*, don't you think the big funds would be raking it in?  They'd just employ some super-nerd Ivy League technician, leverage up to the eyeballs and away you go.  As it is, most funds struggle to crack 10% pa.
> 
> The spoils go to the guys who can create strongly positive mind states > trade off that > win > trade off stronger winning mindstates > snowball profits.  The opposite applies also: lose > more losses > feel like a loser > shut it down for the day (or until you can regain some feel-good vibes to trade off).  That's all there is to it.






Haven't posted here for some time but this rubbish has pulled me out of ASF hibernation.

If you think that a positive mindset makes a winner then why don't you "think positive" then go win the Aust Masters Golf? 

Why not??

Because you haven't the SKILL. Mind set comes from skill not the other way around.


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## nunthewiser (1 November 2010)

hehehehe 

Good to have ya back TH 

theres been some rumours floating around ASF that you dissapeared due to snowflake inhalation and cocktales on the beach.

can you confirm or deny said rumours?


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## tech/a (1 November 2010)

> but this rubbish has pulled me out of ASF hibernation.




Saw it but see it (and similar) so often couldnt be bothered.
Now I know how to get you if I have a question T/H!


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## Trembling Hand (1 November 2010)

nunthewiser said:


> theres been some rumours floating around ASF that you dissapeared due to snowflake inhalation and cocktales on the beach.
> 
> can you confirm or deny said rumours?




Yes a very bad case of Snow-Flake-itis. Only treatment for it is relaxing on the beach and restricting the :alcohol: . Able to for fill half the treatment.


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## explod (1 November 2010)

Frankie said:


> Hello brty,
> 
> My “ideal situation” is to continuously trade in and out of the same stock repeatedly over a long period of time.
> 
> ...




How long have you followed this method and how has it worked for you.

Interested in your chosen analyist's and cap sizes of the stocks.

Sounds good, the least complex the better I have found.  But I am but a simple man.


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## Broadway (1 November 2010)

Frankie. If your method and strategies are so good, why are you a book salesman? And why are you pushing someone else's 'secret strategy'..?

I love when these guys show up. All hot air.


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## Gringotts Bank (1 November 2010)

TH, you're one of those guys who's successful and yet doesn't know why.  If you taught your method to 100 guys, not one of them could replicate it, proving that it's not about method or technique.

Golf is about physical skill and mind set.  It takes no skill to read a chart, just good intuition and a positive mind set.  It's like watching the weather and calling "looks like it's going to rain soon".  Some have good intuition, most don't.


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## mazzatelli (1 November 2010)

Gringotts Bank said:


> If trading had _anything at all_ to do with method or technique, don't you think the big funds would be raking it in?  They'd just employ some super-nerd Ivy League technician, leverage up to the eyeballs and away you go.




Agreed.
All you need is a big penis. That must be how all the derivative prop desks make money.


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## Trembling Hand (1 November 2010)

Gringotts Bank said:


> TH, you're one of those guys who's successful and yet doesn't know why.




lol. One of us "doesn't know why."

Your logic is so flawed I can hardly be bothered but...... tell me where this great mindset comes from? With some substance not assumption that you can just state a 2 line sentance of myth and BS as fact.


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## Julia (1 November 2010)

Gringotts Bank said:


> TH, you're one of those guys who's successful and yet doesn't know why.



Hah, there you have it, TH.  Good to know you have actually no idea about what you're doing, huh?  
(Welcome back, btw).


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## skc (1 November 2010)

Gringotts Bank said:


> TH, you're one of those guys who's successful and yet doesn't know why.  If you taught your method to 100 guys, not one of them could replicate it, proving that it's not about method or technique.
> 
> Golf is about physical skill and mind set.  It takes no skill to read a chart, just good intuition and a positive mind set.  It's like watching the weather and calling "looks like it's going to rain soon".  Some have good intuition, most don't.




I suppose you have read this cover to cover.

http://www.thesecret.tv/

And this is how most normal people think about it.

http://www.youtube.com/watch?v=usbNJMUZSwo


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## Gringotts Bank (1 November 2010)

TH, it looks like you have a group of acolytes ready to jump to your defense.  :  Little sycophants are so sweet, and terribly hard to come by nowadays.

Where does it come from?  From wherever you learnt it.  Either that or you create it de novo.  But I have a feeling I'm trying to sail upwind here, so there's no point me laying out my thesis in full.  Maybe I better read that book 'Secret' and become a TV spruiker!    Now there's a money making venture!  Cha-ching.


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## Trembling Hand (2 November 2010)

Gringotts Bank said:


> Where does it come from?  From wherever you learnt it.






Xactly you learn it from *Skill development*. If you are relying on a "positive mind set" to get you through your trading career it will last until about 10:10 am the first day. Its just laughable to be told that traders "Feeling like a winner creates winning trades" from a non-trader. You will never spend more time feeling like a loser than when you are a trader.

You need to rethink your approach. Very hard getting to a destination while traveling in the wrong direction, in your case west when you need to go north :


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## Naked shorts (7 November 2010)

Saw this post recently which sums things up well I think, with timely comments about The Secret too.



> "Competence precedes confidence: Winning mind-sets result from mastery, not the reverse." - from Enhancing Trader Performance by Brett Steenbarger.
> 
> Deals quite a blow to traditional trading literature, but is something Dr. Steenbarger finds among all peak performers. Solid mindsets come from solid action. You need to develop successful habits before you can become successful. Unfortunately, The Secret isn't going to make you a trader.




http://anon-marketnotes.blogspot.com/2010/08/good-losers-usually-lose.html


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