Hi ,
This is my very first post, and I don't foresee myself becoming a regular poster (though I wouldn't bet against it ). Nevertheless, I've learned a great deal from this location and also the realizations that it's helped elucidate, I felt it incumbent upon myself to discuss a few of the a number of my Profession beliefs.
As with any good disclaimer, please be aware these are my views, and that many may find failure or success doing drastically different things. I'm by no means making egorical statements, but merely expounding on a few of my market customs. Some may find them some may find them helpful, and some may find them absurd. Additionally, I'm interested in sharing my systems, or some of the specific methods that I use. As with most aspects of life, I find it very gratifying to help steer motivated folks to workable sources of information which will favorably affect their learning, however very much resent doing the job for them.
I believe it is not possible to ever'predict' the movements of the market. Its funny, when folks ask me something similar to what do you believe the dollar is going to do in whatever time period, I say I have no idea. This sometimes causes people to look at me with disbelief, presumably wondering how someone who seemingly has such remarkable returns understands so little about what the market can perform. Ironically, it was very realization - and figuring out how to the way interpret that into a practicable, mechanical structure - which lent the kind of profitability which I desired. And this is a statement that many, many traders would disagree with, and that's exactly why I believe that the vast majority fail to make substantial money, and why the analysts look wrong almost as frequently as they're right. When you first see that particular technical trading setups move a particular direction more frequently than not, you start to believe that any setup WILL or SHOULD proceed in that direction, instead of that it merely has a marginally higher than xpercent chance of moving in that direction. It's a key distinction that most traders - including many great technical men I have known, who are able to expertly read the complexities of price movements, and who occasionally even give theoretical lipservice to these very concepts - neglect to substantively understand, or at least effectively put into practice.
It's ultimately about ego. So many get caught up in trying to be so smart with their charts and indiors, in an attempt to win all of the time. I certainty did myself, revelling in my winning trades and chastising myself for the losers. I should have seen the resistance at 1.3729, and it was clearly breaking out of the trendline, espechially once I draw it like this. How could I've missed that variable - I will never make that mistake again. This, however, implicitly assumes you're somehow responsible for this loss; which you were actually in control of what the market was likely to do. It's a dangerous mindset to have, and one which is sadly born from the equally instrumental realization which you may really earn money from trading the market. I think the basic tool of drawing a support or resistance line on a chart is potentially hazardous, as its precise placement is truly so random, but as soon as you put it there it suddenly sounds so authoritative - like a constraint that you have craly imposed upon the market. I prefer to OBSERVE concepts like support and resistance in the functioning of my systems, instead of trading based on my imperfect, random, and absolutely biased understanding of the specific placements. Unlike many traders, I do not even establish targets for transactions, because I think that even that would be calling. I exit the trade reactively when the market tells me . It might be at a large profit, a small profit, breakeven, or a small reduction - and I couldn't care less about which it ends up to be on any given trade; only the statistical outcome within many, many transactions is within the appropriate range. Among the shrewdest statements I heard on this is that the only way to make a million dollars in trading (rather than investing) would be to make 10 million dollars and shed 9 million dollars (in concept, at leastsome of you may well be making 10 million and losing only 8, or 7, or 6.2...)
In essence, one could view this as a discussion between reactive and proactive modes of thinking. In most - if not most - regions of life, proactive behaviors are rewarded. CEOs and heads of industry are generally educated people - decision makers who exercise control over their situations and environments. It's the reactive folks that society generally doesn't benefit: the guy who waits for life to present him a chance instead of actively trying to make one. I myself am a control freak - a characteristic which served me well in life before I encountered the insanity of the markets. I wanted so desperately to control them - to be smart, to be right, to triumph, to see that the complexities in a movement others'foolishly' overlooked and bask in the ensuing accolades - and almost drove myself crazy in the process. My closing advice is not to do this, though I think it's almost an inevitability of the learning process - I'm forever envious of those that don't need to experience this, or who can somehow consistantly profit from it. In short, it's knowing that randomness and making money from the market aren't almost as mutually exclusive as it might intuitively seem. To the diversified'buy and hold' men as to many an active trader, they're seemingly incommensurable opinions - but I've discovered it is an entire surrender to the randomness of any one trade which allows for a grounded assurance in a statistically significant outcome over many instances.
Best of luck,
Chris