The Discipline Trader......M. Douglas

[Terra]

A difficult one...."Not reversing your position even when you clearly sense a change in market direction"

[Terra]

d

[Rams]

Makes perfect sense, let the market take you out. Having a "sense" of changing direction is second guessing and reversing is pre-empting. If the market does change direction and you have set your stop loss, then the market will take you out.Anyway that is the information that I have gathered from the Zone Book and this forum and you've guessed it: THE presentation by Simon.

[SimonPB]

yip, let the market take you out .. anything is exactly that; trying to be overly clever, pre-empting, etc ..

[Terra]

Interesting views, thanks.

[zwi]

It makes perfect sense, the market is usually perfect and in your trying to outdo it you ending up in the fire. Rather have a plan and stick to it.

[#7]

Sure it makes sense, in black and white, but can you actually say that you have never had a moment, even briefly, that you tried to outplay the market? As much we all profess the emotionless robot style, we are but human and that "best colleague" in the next booth just has to say the wrong thing at the right time and your emotional deprivation goes for a short holiday. Plans change, usually of no doing of your own (unless you have no confidence in your plan) usually just when you have it figured the market has sussed your plan and made the required adjustments.... cé la vie.

[SimonPB]

then you still a wanna be trader ..

[#9]

Absolutely, its about the game not the money....learning is the ultimate tool. Wealth happens when you understand risk.

[koos2]

or you are using erratic 3rd world infrastructure and platforms that you havnt included in your trading plan.

[SimonPB]

Koos .. Lame excuse .. The only blame is yours ..

[Terra]

My question is why it is so difficult to change direction. I'm not suggesting changing your mind and rules the whole time, but when you clearly see that the direction you took is wrong, why not change it after the loss? Is it fear of being wrong again, or do you perhaps want to proof to yourself a point that you could have been right if you hold on longer (ignore stop)?

[#13]

You answered your own thoughts, have a rules book for both directions. You make money up and down. Losses are lessons be be integrated into the plan. Just be strict when you jump and if you dont know why, and what downside you are risking.

[Terra]

100%. I write these thoughts down on my Risk Sheet, but clearly I need some tuning. Sometimes I recognise a clear price formation opposite of my position, but can not cut my loss and do the opposite. I guess rules are rules..

[koos2]

i need to have a plan when eskom goes dark and when vodacom goes offline( mtn is my backup cause cell c does not feature in my neck of the woods)and when my platform goes beserk with incorect or nonperforming info. what i am saying is that i need a plan for this also. or hasnt this happened to you ( yet? ). it has happened to me, and the price fell through my stoploss. any case i aint making excusses. its my money. i take full responsibility for it.

[SimonPB]

sure (an not dissing you, you was just the poster/example) .. but yes need back up power plan (laptop with decent battery life and/or long life ups? latter maybe over kill), internet (adsl and speedstick) .. and then also very important, the call center programed in your phone and a few others (in case your phone is dead/gone) so that you can call the call center and exit the trade ..

my response to power or internet down is to exit .. I don't try and trade under those conditions, so while I have laptop with 8 hours battery and a speed stick (and a mobile on a different netowrk and adsl) if things start to fail I just cntact OST and exit ..

[G_V_V]

There is only one way to beat the market and that is to manage your liquidity correctly. Be prepared to buy all the way at predetermined levels when the market goes against you and then sell as those levels come into profit. If you think you can time the market correctly all the time you are illuding yourself and you will eventually become bankrupt. Own the market at all the levels within range more so when it is inexpensive and less so when expensive. Trade with a portion of your assets and invest long term the greater part of your investment.

[Terra]

GVV, maybe we are saying the same thing, but just in different words. It is not about being right all the time, it's about being wrong, admitting it, and change your position... but I guess everybody will see it differently....according to his/her own experiences and set of rules....

[#19]

But then again its got absolutely nothing to do with being right or wrong ... I could be wrong 90% of the time and still make money or being right 90 % of the time and lose money ...BUT then i ask you would you trade one of these systems ?

[Rams]

GVV, is that not the traders worst crime, Averaging when the market goes against you? Because buying at predetermined levels within a range is averaging,is it not?