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Dump it Here

Discussion in 'Beginner's Lounge' started by Skate, Dec 17, 2018.

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  1. Newt

    Newt

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    Missed quite a few posts in Oct and catching up now found the comparison of daily and weekly approaches from so many contributors fascinating. Thanks again Skate for stirring up such thought provoking discussions.

    So many ways to trade, but love seeing the rules and discipline each brings to their chosen approach.
     
    tyson2710, barney and Skate like this.
  2. KingJim007

    KingJim007

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    You forgot fortune telling!
     
  3. Skate

    Skate

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    Hi @KingJim007, I didn't forget - it's all covered, see below
    There is also a free copy of my downloadable eBook if interested - found here: https://www.aussiestockforums.com/posts/1014728/

    Skate.
     
    Last edited: Nov 10, 2019
  4. Gringotts Bank

    Gringotts Bank

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    So many automatic thoughts are triggered when you're wrong. When "I'm clearly wrong here" is bouncing around in the mind, very soon after comes "mummy and daddy only love me when I'm right" or whetever your particular circumstances might dictate ("I'm bad, I'm hopeless, god hates me", etc. etc.). And then it cascades because a lot of the time it's hidden from cosncious awareness - like a virus that interferes with your computer, but you don't even know you have one. Why do my shoulders feel so tight? Why does my back hurt? Why do I feel irritable? I wonder.

    Ego defense mechanisms protect us from experiencing these painful feelings. We deny being wrong, repress the pain, project it onto others, ruminate, rationalize, intellectualize, becomes withdrawn, etc. There's a huge range of possibilities for avoiding emotional pain via ego defense. And every one of these defenses creates more problems down the track. For example, we lose objectivity, we get triggered and don't know why, we lose access to subtle feelings which can guide decision-making (especially important in discretionary trading), and so on.

    "Cutting your losses is liberating". Yes, because it brings an end to the tension inherent in holding excessive open losses. But the end goal is to cut losses early and without tension, not because the tension is repressed, but because the triggering memories have been processed and released from your system.
     
    Last edited: Nov 11, 2019
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  5. Skate

    Skate

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    @Gringotts Bank what a great post.

    A a species we are flawed
    Winners take responsibility. Losers place blame as clearly stated above "We deny being wrong, or repress the pain or project it onto others".

    One step further
    The difference between winners & losers is their psychological outlook. Your psychology plays the biggest part when it comes to trading because it controls your perception driving your reactions. You can condition how & what to think, meaning you can train your "psychological outlook" allowing you to be able to overcome or handle the stress & pressure when things go horribly wrong.

    Self control
    It’s vital and very important to learn how to train your mind to accept stress when trading. Controlling your emotions, training your mind to stay calm under pressure, responding, rather than reacting to a situation, controlling how and what you think is so important in this game.

    Summary
    How you react to stress IMO will decide whether you’ll be a success or a failure at trading.

    Skate.
     
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  6. Gringotts Bank

    Gringotts Bank

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    Thanks. Yes I hadn't considered that here, but it's definitely possible to create and attach new meanings to negative events. We can re-associate "I am clearly wrong here" with positive thoughts such as "...and I always learn new things when I'm wrong, so my process is always improving". Actually, you can re-associate it with anything positive, even an image of your dog smiling and wagging his tail. "I'm wrong" -> happy dog. Re-association. One potential difficulty with re-association is the reverse effect, ie. that your happy dog can now remind you of losing trades and send you into a negative spiral.

    There's a bit of a debate about whether the old associations (eg. "...and mummy/daddy only love me when I'm right") can ever be overriden this way. If we use a process of re-assocition with positives, it's likely we end up with a split mind (like a partitioned hard drive). This then requires enormous strain and continual effort to stay on the right track. Any lapse in effort willl have us back on the wrong track where we feel overwhelmed and ineffectual, with a tendency to make bad decisions.

    My understanding is that a release of the negative is required for full functioning of the mind. That's not necessarily a comfortable process.
     
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  7. Skate

    Skate

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    @RickyY has two recent lengthy threads prompting me to make a few comments about trading with an edge.

    Trading System
    When you have a trading system - Confirm that your strategy has an edge that you can confidently trade remembering "an edge needs time to work" as @peter2 has remarked below. If you are after an edge please read @peter2 "p2-asx-weekly-portfolio" thread as the results of his style of trading is fully discussed & his recent trading results speak for themselves - https://www.aussiestockforums.com/posts/1045628/

    Peter2 "condensed comment" from his "p2-asx-weekly-portfolio" thread
    Entries and money management are as important as trade management (exits). A trailing stop (TS) is designed to protect open profits. There's no point using one until there's sufficient profits to protect. Traders starting out don't understand that an edge needs time to work out. The smaller the edge the more time it needs to appear. Once a portfolio that is operating on longer time frames is established, there is not a lot to do. Remember, we're collecting winning trades. We ditch our losers. Don't sabotage a robust system by fiddling with it. The most important thing is to create and apply a consistent approach.

    @tech/a posted in Peter2 "p2-asx-weekly-portfolio" thread

    Confirmation
    I'm re-posting a screen capture from the "p2-asx-weekly-portfolio" thread without permission confirming Peter2 trading method has an edge & is profitable.

    Peter2 Capture 2.JPG

    Peter2 Capture 1.JPG

    All roads lead to Rome.
    Which means, the same outcome can be reached by many methods or ideas. Peter2 uses a lot of discretion when trading based on his interpretation of current market observations & current sentiment whereas I lack those talents relying on a coded systematic weekly trend trading system with the same end game in mind - generated profits over time. Trading is a marathon not a sprint.

    Trend trading is not complex
    After reading till my eyes bled I soon realised why I shouldn't re-invent the wheel. Trend Trading is a simple process & easy to code that never goes out of vogue. Trend traders buy confirmed breakouts & sells when the trend ends. Boring but profitable.

    Trend Trading - Confirmation of my trading results
    I'm posting a screen capture of my Hybrid Strategy for the same period, Jan 2019 till end-of-trade today confirming trading with the trend still works. The Equity Curve below confirms trading is not always a smooth process.

    Equity Curve Capture.JPG

    Skate.
     
    tyson2710, Ante, Skatersteve and 12 others like this.
  8. tyson2710

    tyson2710

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    I think Skate was right about this one 3 weeks before the $hit "hit the fan", yes I believe someone knew something to quickly offload their shares before a negative news announcement was release. The ASX has suspended ISX since the 1st October and I wonder what will happen when the suspension is lifted, I'm glad I don't own it.
     
  9. Newt

    Newt

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    I'm still enjoying listening to the "Trading Story" Podcast at the moment.

    Episode 99 with Dr Brett Steenbarger was a goodie - there is a fantastic analogy where BS compares creativity in trading to "recipes". Nothing wrong with following established recipes starting out, but as you become more experienced you need to use some creativity and follow your own instincts, skills, personal strengths to customise your own "recipes".

    You wouldn't expect 10 restaurants to serve the same meal for a dish, and neither should 10 traders with similar systems follow identical paths.

    https://podtail.com/en/podcast/trad...rading-psychology-2-0-with-brett-steenbarger/


    Spoiler - the host gives up on mastering trading (again) by podcast 113. Its a jungle out there....!
     
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