Dump it Here

[Skate]

Some members can't stop complaining when they don't agree
Dealing with members who constantly complain & refuse to accept differing perspectives from their own "can be" a significant source of frustration. This is especially true when those members have a fanboy mentality & won't accept any information that challenges their hero. Even when they are presented with compelling evidence, they still fail to see the point.

For balance
It's important to keep in mind that everyone is entitled to their view. To me, it would be more productive to focus on presenting an alternative, rather than taking a stance on "who is right & who is wrong".

Skate.

 

[Skate]

Decision-making can be a tricky process
Many years ago, an article was written about why doctors make mistakes, highlighting the fact that even highly trained medical practitioners can get it wrong. Doctors often have to make their diagnosis quickly due to lack of time & use hunches based on incomplete information.

This raises the question of what chance traders have of getting it right constantly
While it's true that trading is based on incomplete information, traders have an advantage over doctors because we have more time, & access to trading software to make better decisions.

Skate.

 

[Skate]

I believe @barney hit it out of the park with that quote
True knowledge is understanding that we know very little & accepting that there is always more to learn. As traders, we should be open to new trading ideas that can help us grow & evolve as traders.

Skate.

 

[Skate]

Have wondered why some traders seem luckier than others
While luck can play a small role in trading success, the truth is that there are many factors that contribute to successful trading & they are all within our control determined by our own effort. To achieve success as a trader, you need to have everything working for you, from your trading plan to your risk management & a well defined exit strategy to drive that success

Implementing an efficient exit strategy is critical
Exiting a trade quickly & decisively is crucial for optimising profits. However, it is important to employ multiple trading exits effectively, as a quick, clean exit is essential for creating profits. By taking the time to develop a solid exit strategy, you can increase your chances of success & minimise your losses.

Skate.

 

[Skate]

Your posts remind me to trade the price action not what I think may happen.

There are many different types of trading strategies
Choosing the right one for you will depend on your ability to manage yourself when trading is tough. It's important to understand that trading strategies can fail to work when market conditions change, making the strategy less effective than it appears in backtesting. Trading strategies can stop working for a variety of reasons & it is important to understand these in order to maximise your chances of success.

There are tools for trading during changing markets
One such tool is the Volume Weighted Moving Average (VWMA) indicator. By using the VWMA indicator, traders can identify potential trading opportunities more effectively. Additionally, the (VWMA) indicator provides a more accurate picture of the true price action of a security. Knowing this information allows traders to make informed decisions to maximise their chances of trading successfully, "something we all seek".

Skate.

 

[Skate]

We all look for high-probability trades
As a trend trader, it's essential to identify high-probability trades that align with the prevailing market sentiment, that's the first thing to remember. However, even with a reliable trading plan & a good understanding of market trends, there's always an element of risk involved. I should also point out that even trades with a high probability of success can still result in losses.

Making money trading is a hard slog
Don't rely on a backtest. One of the most significant challenges faced by trend traders is being overly optimistic about backtest results & their potential outcomes. However, a well-defined entry & a robust exit strategy will help you trade regardless of market fluctuations. While it's crucial to follow the prevailing sentiment, it's equally vital to keep an eye on longer-term trends & be prepared to adjust your strategy accordingly. This can help you avoid getting caught with your pants down & increase your chances of success.

Skate.

 

[Skate]

I'm a trend trader & I trade with the herd
I take high-probability trades but still, it's a coin toss if they work out. When a trade doesn't perform quickly I'm off the sucker because there is always an element of risk involved in hanging in there waiting to be proven right. Sometimes even trades with a high-probability may not work out as expected, & for this reason, it's why we move on to the next trade.

Developing a solid trading plan takes time & effort
It's similar to any other purchase in life where you have a list of requirements before you make a purchase. System trading is exactly the same. System trading is rule-based trading, where the rules are precisely coded, taking the decision-making out of your hands & thus ensuring trading consistency. As a reminder, successful trend trading requires the willingness to adjust as market conditions change & it is essential to manage your risk effectively & never risk more than you can afford to lose.

Skate.

 

[rcw1]

Have wondered why some traders seem luckier than others
While luck can play a small role in trading success ,...

Skate.

Good afternoon Skate,
Hoping you had a wonderful ANZAC Day, just watching the Roosters v Dragons game ??? ; oh the Dragons... they come to play in the 2nd half they have ... Roosters thought they had the game in the bag...the silly billy's.

re lax ing ... been a monster day, punt free too. Wonders never cease ha ha ha ha

Anyways, for mine, if one has enough skin in the game, sometimes you make your own luck on the dark side of the coin bad luck and 'crash and burn' - not pretty ha ha ha ha ha

Have a very nice week.


Kind regards
rcw1

 

[rcw1]

There are many different types of trading strategies
Choosing the right one for you will depend on your ability to manage yourself when trading is tough. It's important to understand that trading strategies can fail to work when market conditions change, making the strategy less effective than it appears in backtesting. Trading strategies can stop working for a variety of reasons & it is important to understand these in order to maximise your chances of success.

There are tools for trading during changing markets
One such tool is the Volume Weighted Moving Average (VWMA) indicator. By using the VWMA indicator, traders can identify potential trading opportunities more effectively. Additionally, the (VWMA) indicator provides a more accurate picture of the true price action of a security. Knowing this information allows traders to make informed decisions to maximise their chances of trading successfully, "something we all seek".

Skate.

Good afternoon
100% true that Skate.

Found Investopedia to be a really good educational tool. rcw1 is at times forgetful of definitions and what certain term mean. Direct link to Investopedia is always a life saver...

This link provides the reader with information regarding both Volume-weighted average price (VWAP) and moving volume-weighted average price (MVWAP). For mine, as was clearly indicated by Skate, most important trading construct.

Trading With VWAP and MVWAP

Volume-weighted average price (VWAP) and moving volume-weighted average price (MVWAP) are used by traders to ensure they are getting the best price.

www.investopedia.com

Kind regards
rcw1

 

[Skate]

at times forgetful of definitions and what certain term mean.

@rcw1, just to clarify
I sometimes use trading terminology without explaining what the acronym stands for. In the case of my VWMA Strategy, VWMA stands for volume-weighted moving average. I particularly like this indicator because it takes into account the trading volume, which can provide insights into the strength of a particular security.

The VWMA identifies trends with higher trading activity
In a nutshell, the VWMA (volume-weighted moving average) is an indicator that emphasises trading volume over price, making it useful for identifying trends with higher trading activity. As a trader, I prefer to use the VWMA to buy into strength & sell when the trend loses momentum. This means that I look for securities that are in an uptrend with high trading volume, before taking a position. I will then exit the position when the trend loses momentum or when the VWMA begins to flatten out.

Skate.

 

[Skate]

Mark Minervini nailed it
Discipline is a crucial aspect of successful trading that involves adhering to a well-defined trading plan, implementing sound risk management practices, & maintaining a consistent approach. Traders must be aware of potential risks & have exit strategies in place, including appropriate stop-loss levels. Patience & perseverance are key to achieving long-term trading goals.



Skate.

 

[Gringotts Bank]

Mark Minervini nailed it
Discipline is a crucial aspect of successful trading that involves adhering to a well-defined trading plan, implementing sound risk management practices, & maintaining a consistent approach. Traders must be aware of potential risks & have exit strategies in place, including appropriate stop-loss levels. Patience & perseverance are key to achieving long-term trading goals.

View attachment 156307

Skate.

Yep, although I'd change it slightly. It's about the vibe. If your frequency isn't high enough, nothing works.

Vibe refers to the frequency of the microtubules in the brain, which will be a match for the lack of conceptual thought. Lack of thought = high frequency. Another way of saying 'awareness'. The degree of awareness alone creates the outcome, not the system.

Some poeple are more consciously aware than others, though we all have exactly the same potential. And our level of awareness changes, moment to moment. If you watch, you'll see the 1:1 correlation.

 

[Gringotts Bank]

So why create a system?

Because it helps quiet the mind and stop anxious thoughts. It's a perverse way to go about it, because a system in itself has no value until you know who will be trading it. Even if you manage to create a 10-year backtest with a straight line 45 degree-angle equity curve... it counts for nothing without a quiet mind to implement it. We're all entranced by the idea of the winning algo, but it doesn't work that way. It certainly appears to work that way, but it doesn't. It's actually an illusion. That's the single biggest thing I've ever learned about trading.

 

[Gringotts Bank]

There are certain basic truths about markets, but not many. And they only provide a small edge.

1. High volatility and low volatility follow each other in waves. Excitement - relaxation - excitement - relaxation. This is even true when an instrument is trending strongly.

2. The more momentum, the more momentum. In other words, the more an instrument rises, the safer the holders feel, therefore the less likely they are to sell, thereby creating more upwards momentum. Same applies for downwards moves. The higher/longer the momentum, the more likely the top/bottom will have several waves before reversing. Like turning the Queen Mary.

3. Markets both 1). trend and 2). swing within a range (mean revert). But most instruments spend most of their time in a range, swinging back and forth.

4. When buyers and sellers believe the price is fair, they exchange freely, creating high volume. Conversely, when they believe the instrument in unfairly priced, either the buyers or sellers retreat, creating value gaps (aggressive, one-sided buying or selling) and quick movement in price.

5. At major turning points (ie. pivot points with high turnover), both buyers and sellers have a strong belief they are correct, which is quite strange when you think about it. The higher the turnover at the pivot, the more the losing side has to lose, therefore, the stronger the rebound. Converse applies to pivots with low turnover.

6. Banks move the markets. They go to great lengths to hide their intentions and take us our of our position at a loss. Their moves can only be spotted by looking at the bid/ask data.

7. Strong momentum or trend is indicated by narrow volatility and vice versa.

8. Buying volume (ie. ask volume) can be considered 'effort'. High effort and low reward (low price rise) is considered bearish, and vice versa for bid volume.

 

[Gringotts Bank]

How to spot a pump and dump.

The only way is to download the course of sales and compare the bid and ask volumes in a spreadsheet.

Say a stock rises 200%....

If the run volume up is all at the 'ask', you're going to end up with a market where almost everyone is a holder. It has to unwind, and when it does, it will probably end up near where it started or below.

If the run up includes a reasonable amount of bid volume (and yet still prints a 200% rise), it will have a reasonable chance of continuing or holding its gains.

Generally if an ASX speccy jumps and starts turning over >$3 million per day over several successive days, it's unlikely it's all at the 'ask'. That's a quick and dirty way to tell, but nowhere near as accurate. AR3 proves that!

 

[ducati916]

So why create a system?

Because it helps quiet the mind and stop anxious thoughts. It's a perverse way to go about it, because a system in itself has no value until you know who will be trading it. Even if you manage to create a 10-year backtest with a straight line 45 degree-angle equity curve... it counts for nothing without a quiet mind to implement it. We're all entranced by the idea of the winning algo, but it doesn't work that way. It certainly appears to work that way, but it doesn't. It's actually an illusion. That's the single biggest thing I've ever learned about trading.

Interesting.

I think what you have identified is that any system that is created/designed/implemented, must, correlate very closely with the user's individual psychology. Timeframes are an obvious variable. Directional or non-directional is another. Highly concentrated or widely diversified another. On it goes.

The variable that seems to get people/traders into trouble is trying to optimise a strategy and then flippe-floppes between the different possibilities (hard stop, trailing stop, target, no stops, etc as a variable that provides many different outcomes).

The single biggest issue however is 'edge'. What is it, do you have it, how do you know that you have it?

If you truly have an edge, you should be able to name it in a single sentence or equation.

If your edge is simply a psychological toughness to execute 100% of the time...watch out, the market has a nasty way of burning that edge out of you.

jog on
duc

 

[Skate]

If your edge is simply a psychological toughness to execute 100% of the time...watch out, the market has a nasty way of burning that edge out of you

I'm with Duc, mental toughness is not an edge
While many traders believe that mental toughness & perseverance are key traits for success in the markets, the reality is that a smart exit strategy is often the true key to making money. Knowing when to exit a position can be the difference between a profitable trade & a catastrophic loss. That's why it's essential to avoid being "that trader" who learns this lesson the hard way.

When in doubt, pull out
This doesn't mean that you should panic & sell every time you experience a small dip in the market. Rather, it should be a reminder to take a step back & evaluate your strategy if you are consistently losing money. Also, in my opinion, identifying your edge is an ongoing process that requires continuous evaluation & adaptation to changing market conditions "than persisting" with the same strategy or approach.

Skate.

 

[Skate]

Don't rely on over-optimistic results
One of the most significant challenges faced by trend traders is being presented with overly optimistic results & their potential outcomes. Results can be misleading, & relying solely on them can lead to overly optimistic expectations & disappointment. Conducting a proper backtest is crucial for obtaining accurate, believable, achievable, & repeatable results. It is important to understand that overly optimistic backtest results can often be misleading & do not guarantee future success.

“Tell him he's dreaming” ( A quote from The Castle)
The equity chart featured in this post has been sourced from Twitter. If only I had traded this strategy since 1995, I could have turned my initial investment of $100k into a comfortable $50 million or more. However, it's important to note that achieving that result is fanciable & should be viewed with caution to avoid over-optimism. While it's tempting to imagine what could have been achieved if we had traded a particular strategy since 1995, it's more important to focus on the present.



Skate.

 

[Skate]

Twitter is always good for a laugh
Twitter can present a distorted view of reality, as my previous post demonstrates. It's important to fact-check information to understand the limitations of what is being presented. Failure to do so can lead to unrealistic expectations & a whole lot of disappointment.



Skate.

 

[Skate]

Actual results from a "purchased trading strategy"
Social media, & Twitter in particular, has now become an integral part of my life. People often share only the highlights, creating a false impression of success. However, one trader who purchased a trading system back in 2020 has provided ongoing monthly results for others to follow. When traders post their actual results it allows for benchmarking rather than relying on over-optimistic reports. (April results are due shortly)



Skate.