Short Term Traders, what is your homework?

[skc]

Some were saying confidence is of no influence - so this paragraph is for them.

Who's said that? I think most are just saying confience in and on its own isn't sufficient for trading.

So I actually do see confidence as sufficient in itself.

Every example you've put up merely highlights confidence being necessary. The only evidence of it being "sufficient" is your anecdotal observations of newbies being sucessful at trading. Don't forget there's an element of chance in trading - so you can't use the random success of few people to prove anything.

Show me a professional sports person who didn't have the skills or training or physical gifts and was successful.

In my trading I can feel when confidence is running low and it will invariably show up as:

-- poor or incomplete fills on limit orders
-- a sudden widening of the spread on the very day my system is telling me to sell
-- an unusual lowering of buyer volume on the very day I'm due to sell

Can you explain the mechanism which your personal confidence level affects the volume or buy/sell spread without resorting to paragraphs from "The Secret"?

 

[Joules MM1]

.


?? cant see it.

? is it that you can't see, duck ?

 

[Joules MM1]

...explain the mechanism which your personal confidence level affects the volume or buy/sell spread without resorting to paragraphs from "The Secret"?

magic, skc...pure magic

lulz

 

[McLovin]

Brett Steenbarger is not currently publishing any works as he's under contract to a major firm....he's a successful trader (mostly es) and very smart trainer.....you'll learn a lot.....especially once youve dropped that know-it-all stance youre in......

http://traderfeed.blogspot.com.au/

I'm neither a trader nor a psychologist, so this may seem somewhat naive (although I do have an interest in confidence tricks), but aren't these guys just teaching similar things that 99% of other "self help" coaches do, and just calling it "trading psychology"? If you give anyone confidence in themselves they are going to perform better at anything than they would without confidence. I guess what I'm asking is, what do I get from trading psychologist that I wouldn't get from a guy hitting people in the forehead before making them walk across hot coals on late night TV?

I like your avatar btw.

 

[ThingyMajiggy]

Wouldn't it be hard to just give someone confidence when they might not have the skills necessary to pull it off?

I don't think I could have much confidence until my actions/skills have proven to me that I can make it work, therefore skills are far more important IMO. Confidence feeds off the skill set, not the other way around.

 

[Joules MM1]

I'm neither a trader nor a psychologist, so this may seem somewhat naive (although I do have an interest in confidence tricks), but aren't these guys just teaching similar things that 99% of other "self help" coaches do, and just calling it "trading psychology"? If you give anyone confidence in themselves they are going to perform better at anything than they would without confidence. I guess what I'm asking is, what do I get from trading psychologist that I wouldn't get from a guy hitting people in the forehead before making them walk across hot coals on late night TV?

I like your avatar btw.

Steenbarger is a trader and a trainer....that's the distinct diff, he's in the trenches...

the main thing is the qualitative/quantitative side for someone who's an average joe receiving all the averge joe hits and not understanding, that, in the first instance he/she is clueless about asking even the right questions...that's the key .

easy to get bogged down in the navel staring.....i think confidence is the cream on the practical cake.....

 

[Joules MM1]

(as the thread slowly devolves into best euphemism, best analogy of the year........)

 

[CanOz]

Yeah, lets get back on track...Joules, what do you do prior to trading? Do you have some homework...and i'm not talking about the article searches!

CanOz

 

[Trembling Hand]

Steenbarger is a trader and a trainer.

AND an actual clinical Psychologist.

 

[McLovin]

Steenbarger is a trader and a trainer....that's the distinct diff, he's in the trenches...

Thanks, I guess that does make a difference.

 

[havaiana]

There IMNSHO is your problem.

Expectancy = (Probability of Win * Average Win) – (Probability of Loss * Average Loss)

The easiest, well relatively easiest, way to get your expectancy positive is by working on your 1 in 10 winners that just blow the doors off all your small losses and hugely add to your avg win.

Getting in a trade and just taking the same old target IS the recipe for losing long term...


Remember, support, resistance, range and trend are dynamic. As they shift so to should your approach (stops, targets and size)

Thanks for the advice

Warning, long post and pretty useless (and probably not as entertaining as the 'best euphemism's'. Not sure if i used that word correctly)....

I usually let one contract out of the 2 run and have the other one fixed or else my strike rate will be even more crap than it already is.

When i say move out my range by a tick, i mean on the entries.

For simplicity sake, assume we are in a certain market condition that my stats say on average will have a distribution of moves 4 ticks or higher in the frequencies below;

4tick move- 15% (15% of all moves from high to low are moves of 4 ticks)
5tick- 20%
6- 15%
7- 10%
8- 10%
9- 10%
10+- 20%

So if i was previously entering all moves with a limit order of 4 ticks (my entries and stops are more discretionary in real trading) and stopping out on 7 tick moves or higher, then theoretically my win rate should be about 50%, winning when swings are 4-6 ticks and losing if they are 7+ ticks. I can still hold for as many ticks as i want when i am in the trade

If i changed that requirement of entries by +1 one tick, so i enter on a 5 tick move with limit, stop out on 8+ tick moves, then my win rate should be now be about 53%. So i take less trades missing swings of 4 ticks, but the win rate improves slightly as i am now taking entries further from the mean. There is a certain point though where this has a negative impact (when i start missing most of the moves in that particular timeframe and start getting **** entries on the moves in the timeframe above. Data above is just made up)

In reality my win rate is below 50% because of the previously mentioned execution problems. That's why i was trying to improve it.

I think i get your point and will definitly take your advice, because the stuff above is really not improving my results much. I will spend my time on looking at catching the odd larger runner and developing my dynamic support and resistance prediction skills

 

[Trembling Hand]

Havaiana this is probably reverse to peoples normal trading logic but as the volatility increases I increase size. VERY important i reckon. makes the winners BIG. Trick is to have the skill to get it right....

Or maybe its just cuz I'm confident......

 

[havaiana]

Interesting. Kind of like a way of letting your winners run and cutting your losers short in terms of opportunity

I have some things to think about now whilst in Italy for next month, before deploying Haviana short term trading method 2.0 next year

 

[barney]

Wouldn't it be hard to just give someone confidence when they might not have the skills necessary to pull it off?

I don't think I could have much confidence until my actions/skills have proven to me that I can make it work, therefore skills are far more important IMO. Confidence feeds off the skill set, not the other way around.

Exactly.

(as the thread slowly devolves into best euphemism, best analogy of the year........)

Don't mind a good analogy myself!

I walk into a bar and a pretty crook Karaoke singer is belting out "Long way to the Top" by AC-DC ... He thinks he is ..... but is actually


He comes on again later after he's had 6 beers and sings another tune. He's relaxed and full of "confidence" .......... He still sounds crook

Moral of the story .... Crook is still crook no matter how much "confidence" you have



I leave the bar, go up the road and have 6 beers at another pub. I come back and old mate is singing another tune .... He is actually sounding ok .....

My ability/"skill" in discerning how crook he really was has been diminished (pun for the musically inclined) ..... I am hesitant to blame the beer because that would represent common sense, which is the exact opposite of what I am experiencing!

Moral 2 ....... Either I need to stop drinking ... or he needs singing lessons .... maybe both!!

 

[Gringotts Bank]

Every example you've put up merely highlights confidence being necessary. The only evidence of it being "sufficient" is your anecdotal observations of newbies being sucessful at trading. Don't forget there's an element of chance in trading - so you can't use the random success of few people to prove anything.

Can you explain the mechanism which your personal confidence level affects the volume or buy/sell spread without resorting to paragraphs from "The Secret"?

I haven't read The Secret, but I have read other similar books. The whole idea became interesting to me when I first found out that thoughts are extremely influential in determining outcome for one's health. In the behavioural sciences and medicine, expectancy (psychological, not statistical) is one of the most powerful determinants of outcome. The large majority of health care providers still believe that their pills and techniques and surgeries and manipulations are making the patient better. Whilst such interventions may have some efficacy on their own, they are rendered completely powerless when prescribed or performed with an attitude of indifference and low confidence. There's heaps solid scientific proof for this.

So this idea of thoughts influencing outcomes: can it be extended to things outside of the body.... things like trading? In terms of evidence, there's not yet a lot of good experimenting going on; it's more like blind faith. But a guy called Rupert Sheldrake is worth a look because he is very strict with his protocols. http://www.sheldrake.org/Research/overview/ There's also this page, which is useful: http://www.sheldrake.org/experiments/expectations/ Note that these are not articles about trading. They are articles about how the mind can influence things outside the body. See what you think.

What I base my statement on is hundreds of personal examples. In terms of trading, anyone can test this idea for himself quite easily. Before you click 'buy', make a note of how confident you feel that the trade will work out profitably, then score that confidence or expectancy out of 10. Write it down for each trade you make. The tricky part is to really understand your feelings accurately. Bravado, pumping oneself up, acting confidently is not the same as real confidence. Then look back after a month or two if you're a frequent trader, that is. You'll see a strong correlation.

 

[skc]

I haven't read the Secret, but I have read other similar books. The whole idea became interesting to me when I first found out that thoughts are extremely influential in determining outcome for one's health. In the behavioural sciences and medicine, expectancy (psychological, not statistical) is one of the most powerful determinants of outcome. The large majority of health care providers still believe that their pills and techniques and surgeries and manipulations are making the patient better. Whilst such interventions may have some efficacy on their own, they are rendered completely powerless when prescribed or performed with an attitude of indifference and low confidence. There's heaps solid scientific proof for this.

So this idea of thoughts influencing outcomes: can it be extended to things outside of the body.... things like trading? In terms of evidence, there's not yet a lot of good experimenting going on; it's more like blind faith. But a guy called Rupert Sheldrake is worth a look because he is very strict with his protocols. http://www.sheldrake.org/Research/overview/ There's also this page, which is useful: http://www.sheldrake.org/experiments/expectations/

What I base my statement on is hundreds of personal examples. In terms of trading, anyone can test this idea for himself quite easily. Before you click 'buy', make a note of how confident you feel that the trade will work out profitably, then score that confidence or expectancy out of 10. Write it down for each trade you make. The tricky part is to really understand your feelings accurately. Bravado, pumping oneself up, acting confidently is not the same as real confidence. Then look back after a month or two if you're a frequent trader, that is. You'll see a strong correlation.

GB, you are still confused and extending "confidence is important" to "confidence is sufficient" without a trace of logic. Examples like personal confidence influencing health - of course it can - because my brain, my thoughts and my body are all connected.

The reason confidence cannot be sufficient in trading is because the market doesn't know jack about your confidence level (unless you are James Packer and confidently buy $200m in TEN network). There are no means to connect through so any correlation you see are either pure chance or indirect / secondary feedback effects.

But it's not up to me to tell you how you should approach your trading, and we've crowded this homework thread for far too long. I will stay out of your trading psychology musings from now and may be you will find an audience with others.

 

[Trembling Hand]

The large majority of health care providers still believe that their pills and techniques and surgeries and manipulations are making the patient better. Whilst such interventions may have some efficacy on their own, they are rendered completely powerless when prescribed or performed with an attitude of indifference and low confidence. There's heaps solid scientific proof for this.

Links please? Peer reviewed studies? Not pseudo-science crap thanks.

 

[Gringotts Bank]

Links please? Peer reviewed studies? Not pseudo-science crap thanks.

I've just chunked this off Wikipedia. Let me know if this interests you and I'll go to a bit more effort to find some really juicy stuff.



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[Trembling Hand]

I've just chunked this off Wikipedia. Let me know if this interests you and I'll go to a bit more effort to find some really juicy stuff.

GB you stated

Whilst such interventions may have some efficacy on their own, they are rendered completely powerless when prescribed or performed with an attitude of indifference and low confidence. There's heaps solid scientific proof for this.

Where is your "heaps of solid scientific proof for this" for what you have STATED?? That is that medical procedures "are rendered completely powerless" without confidence ?

 

[Gringotts Bank]

GB you stated



Where is your "heaps of solid scientific proof for this" for what you have STATED?? That is that medical procedures "are rendered completely powerless" without confidence ?

I just gave you hundreds of studies on how negative expectation affects outcome in medicine. Confidence = positive expectation. Lack of confidence = negative expectation. Read the articles!!

If you want me to dig up an article about a drug made completely ineffectual by low confidence, that will take me some time. I can do that if you're interested.