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Strategies & Market Trends : Trade What You See, Not What You Think -- Ignore unavailable to you. Want to Upgrade?

To: chris- who wrote (430)	2/25/2001 10:17:19 AM
From: elepet	Read Replies (2) \| Respond to of 867

Thanks Chris. No I am not hurrying through this..reading and relishing every word. I read the Disciplined Trader 3 years ago and had a feeling there was something there, but I couldn't quite get it. Either Douglas has gotten more clear, or my perceptions have changed through experience. One of the problems that has plagued me is simply"why am i doing this anyway? what is the attraction?" And he answers this succinctly. By the way, I would like to send e mails to you, Larissa and Threei. What addresses do i use? Another question. I personally find the chat format not conducive to this sort of discussion. Most RT members do not post here on SI.Is there any possibility, technically, of having something like what we have on SI, in RT itself(not Mirc)?

To: chris- who wrote (430)	3/5/2001 9:06:16 PM
From: Moving Sphere	Read Replies (2) \| Respond to of 867

>>"I wish this book was available about 3 years ago. It would have saved me a lot of time in "figuring" things out by myself."<< If you are ready for the book, then it will make a difference if you get the book 3 years ago. Otherwise, the information would simply fly over your head leaving a "Uhhh....huh... OK....I get it" impression without making a dent on your old belief system. By "figuring" things out yourself, the lessons you learned would leave a deeper impression on your ego- both regular and disciplined, simply because of the amount of effort involved. If your disciplined ego recognized and acknowledged the lessons, you would make the necessary change to improve yourself. And if your regular ego recognized and acknowledged the lessons, some internal struggle would ensue and the result could be confusion depending on how deep the old belief system was ingrained. Reading, while informative, by itself is difficult to move our regular ego when it is not ready to be moved. I've read hundred of trading books in my early and younger days and it didn't do much for me. That was because my mind wasn't ready to receive the information yet. My regular ego was having a tight grip on my mindset. An analogy would be like planting a seed on the soil (reading the helpful information), but did not water it (regular ego would not acknowledge it). The seed is still there; but it will not sprout without water. So, when my mind began to mature enough to start acknowledging and acting on all the information buried in my brain (began to water the soil), I began to have the "AHaaa" experience (the seed began to sprout from the water). After reading Mark's book on "Trading in the Zone", the one thought that came to my mind was "context". We must look at the whole context of trading. "Trading in the Zone", IMHO, discussed the subject of overcoming our fear of taking a trade. Because of our fear, we froze or hesitated when the setup appeared in front of us; thus, it robbed us of the smooth and flowing motion of "trading in the zone". Mark also mentioned that our initial "fearless" attempt in trading before we took our first hit (big losses) was very similar to that stage of "trading in the zone". I like to add that every time I was paralyzed by greed/over-confidence after a big winning trade, that "fearlessness" I experienced also had a similar tone. The only difference is that in "trading in the zone", that fearlessness must be guided by discipline as well. So, discipline remains the KEY issue. Because Mark's book dealt with our beliefs and how we could overcome that old beliefs in order for us to trade without fear, I will say that it is only a micro-issue of the whole context of trading. We must not overlook the overall context of trading: a) Are we in a dominated trading trend- up or down? b) Are we in a congestion? No trend. c) How reliable is our trading systems that we used in giving us better odd? a): Are we in a dominated trading trend- up or down? If the answer is YES, then Mark's fearlessness in trading in the zone is an excellent "tool" to buy all the supports in an uptrend and sell all the resistances in a downtrend. The odd of success increase dramatically with a good simple trend following system. b): Are we in a congestion? No trend. If the answer is YES, then it may not be a good ideas to trade fearlessly because you could be whipsawed to oblivion. Thus, in this context, fearlessness is not the answer but a common sense approach of standing on the sideline to wait out the storm is a better approach. Unless, of course, you are trained and specialized to trade in congestion (which I never get a hang of it). c): How reliable is our trading systems that we used in giving us better odd? Tough question! The whole premise of our ability to trade fearlessly (as in trading in the zone) is our trust that our trading system will give us a better odd in winning (not unlike the casino house odd). IMHO, I believe it is safe to say that in any dominating trend, any trend following system will give us a better odd. This take us back to context a): Are we in a dominated trading trend- up or down? In summary, I would like to take us back to the hunting analogy. A hunter has to take into the whole context of survival into his picture. The survival context need to include the weather outlook. Is the coming winter going to be freezing to the point that outdoor activity is no longer feasible? If that is the case, then, there must be more aggressive hunting during the summer to stockpile the food to weather the coming freezing winter. So, in our case, as a professional or dedicated trader with a full-time job, the last several years of bull market should have made a tidy income to last thru a year or two of lackluster trading activities. For those lucky enough to catch the downtrend from last year, that would be a great supplement to income to last thru this possible lackluster trading activities in year 2001. In fact, the economic uncertainty we are dealing with now may be construed as a "freezing winter" in the hunter mindset, IMHO. Thus, in the survival context, it is wise NOT to go hunting during freezing season. Or in our case, it is wise NOT to engage in bottom picking or actively trading in an uncertainty market condition due to whipsawing effect. Fearlessness in trading, without the guidance of discipline, is as dangerous as a boy playing with a loaded gun. And yet, fearlessness without discipline, is easier to come by (due to the paralyzed greed syndrome) then fearlessness with discipline (which required the effort of our disciplined ego). So, all in all, we are back to square one where we must develop our disciplined ego in order to accomplish the optimal "trading in the zone" mindset or should I say: Fearlessness with discipline? The above is all in my opinion only, of course. Btw: If I'm wrong with my conclusion of Mark's book, please correct me.