Profits resulting from the violation of one’s own system or methodology constitute the most treacherous mirage of success. We’ve all been tempted at one time or another to suspend our collection of pre-defined rules (so painstakingly accumulated, yet so easily put aside) for the possibility that for this one particular moment, distinguished from all others, things might be different. And perhaps we were right — this time — and the register rung. Yet for those of us who have chosen the way of the System, the momentary suspension of discipline is a transgression beyond profit or loss. For no matter the what the outcome of the trade executed, the damage has already been done — any gains secured in such a manner will only serve as future tuition until that particular lesson is learned. This must be understood before forward progress can occur, for unless process takes precedence over result, the cycle repeats ad infinitum.
Archives of “forward progress” tag
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Profits resulting from the violation of one’s own system or methodology constitute the most treacherous mirage of success. We’ve all been tempted at one time or another to suspend our collection of pre-defined rules (so painstakingly accumulated, yet so easily put aside) for the possibility that for this one particular moment, distinguished from all others, things might be different. And perhaps we were right — this time — and the register rung. Yet for those of us who have chosen the way of the System, the momentary suspension of discipline is a transgression beyond profit or loss. For no matter the what the outcome of the trade executed, the damage has already been done (more…)
Four Basic Points on Technical Analysis
The true trader, the consistent winner, is not concerned with any price or where prices started from. He or she is concerned with what it takes for people to believe strong enough, and with enough commitment, that they will place their capital at risk.” So, with that in mind, the four basics:
1. A price chart is simply “a pictorial representation of the sum total of all the market’s belief structures.” No matter what we believe the chart does not lie.
2. “Because every potential trader in every market is seeing it differently, every printed price will mean something different to everyone.” Our entry may be someone else’s opportunity to exit and vice versa. We should always remember this the next time we believe we have a sure thing.
3. Prices eventually have to stop their forward progress, in either direction. “When every potential trader has executed for an entry, in any time frame, the market is vulnerable. When no one is doing anything, and what’s been done is done, prices must stop.”
4. No matter what indicator we use “every technical indicator designed is based solely on combining or dividing prices in some way.” Volume and open interest, however, “chronicles the true state of what is happening inside the minds of the market participants.”