| If you are, you breathe. If you breathe, you talk. If you talk, you ask. If you ask, you think. If you think, you search. If you search, you experience. If you experience, you learn. If you learn, you grow. If you grow, you wish. If you wish, you find. If you find, you doubt. If you doubt, you question. If you question, you understand. If you understand, you know. If you know, you want to know more. If you want to know more…then you are alive. |
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rssTrading Success
“Trading success is a function of possessing a statistical edge in the market and being able to exploit this edge with regularity. Trading failure is most likely to occur when you trade subjective, untested methods that possess no valid edge or when you are incapable of consistently applying edges that are available. Improving your psychology as a trader by itself will not confer an objective edge. Developing or purchasing a valid trading system will not in and of itself make you a great trader. The development of trading methods and the development of yourself as a trader thus must proceed in concert. You are only as good as the methods you implement and your ability to implement the methods.”
Thought For A Day
Thought For A Day
Floored
You must see this movie.
People lament the decline of the print news media, the victim of computer culture. The trading floors of the exchanges have also had a sharp decline in the number of floor traders who populate the floor, as the trading business is being increasingly facilitated by computers. In 1992, there were 10,000 traders on the floors in Chicago, today there are only a few hundred and 95% of the volume is electronic. James Smith, the producer of “Floored,” the movie, examines the life of past and present traders both off and on the floor. He discusses the culture, environment, wins, losses, personalities and future of traders, past and present. He pays close attention to the struggles the ex floor guys are having without the edge that the pit gave. He examines the character of the players involved, and lets them reminisce about their floor days. He compares and contrasts the differences between local traders and computer traders. He interviews ex floor traders trying to make it on the screen. He pays particular attention to the off floor lives of traders and gives them a free reign in telling their stories. The stories are great as everyone that was successful in the pit has a great story, and ego to boost. The movie has many great shots of the action in the pits a few years ago and today. Many of the floor traders don’t realize that they’re subjects of the forces of natural selection, just like any other creature in nature. One of the interviewees said that a big difference between watching the pit and watching a screen would be equivalent to watching an entire football game on TV or just watching the scoreboard. This, and many other observations bring clarity, and numerous trading lessons that might be useful to anyone interested in trading. Also interesting to note is the obvious lesson in humility that is learned by ex-denizens of the trading pits. “Floored” is 87 minutes long, and can be found in its entirety in 8 segments, here.
(I highly recommend this movie to anyone interested in trading, futures, trading floors, etc. It’s a 150 year old way of life that’s sadly disappearing very quickly.)
Incidentally, for what it’s worth, there’s still some floor action in the cattle and hog markets, which have resisted the encroachment of electronic trading to some degree. Also, many options are still primarily traded by open outcry.
The entire global economy. In one chart.
HOPE IS A 4 LETTER WORD
Technical Analysis Fact and Fiction
“Technical analysis, I think, has a great deal that is right and a great deal that is mumbo jumbo…
“There is a great deal of hype attached to technical analysis by some technicians who claim that it predicts the future. Technical analysis tracks the past; it does not predict the future. You have to use your own intelligence to draw conclusions about what the past activity of some traders may say about the future activity of other traders.
“For me, technical analysis is like a thermometer. Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature. But, of course, that would be sheer folly. If you are a responsible participant in the market, you always want to know where the market is — whether it is hot and excitable, or cold and stagnant. You want to know everything you can about the market to give you an edge.
“Technical analysis reflects the vote of the entire marketplace and, therefore, does pick up unusual behaviors. By definition, anything that creates a new chart pattern is something unusual. It is very important for me to study the details of price action to see if I can observe something about how everybody is voting. Studying the charts is absolutely crucial and alerts me to existing disequilibria and potential changes.”
– Bruce Kovner, Market Wizards
Bruce Kovner pulled billions out of the markets, over multiple decades, before handing the reins of his fund, Caxton Associates, to the next generation of traders.
As an academic in a past life, Kovner was known for his deep dive fundamental analysis — but he also used charts extensively, as the Market Wizards excerpt shows. (more…)
Just do it!!!!!
So we not taking the Blue pill………
