Friday, February 26, 2010

Friday Notes - Wrap on a Busy Week

Some closing thoughts and perspectives on a highly productive week, including follow-up to Tuesday's heartfelt post, perspectives on today's action, trading news, continued emphasis on trader preparation & aggression, reversing backward trader mindsets, and other insights from the trader training effort.

And perhaps the chant of "M.A.T.D". will soon overshadow that of the Olympic "U.S.A."!


steve said...

Excellent video Don! Since comments are open, here's short rant I've had in my head for a bit.

I've been reading a lot more psychology type books (both sports and trading)in the last few months and keep finding the recurring themes - being in the zone, going with intuition, trusting instincts, not being biased by others, etc. I've also been reading a lot of John Assaraf's material that he in turn has studied for 30 years about how the brain works, how learning can work, and how to reach an optimal-or-better mindset for business achievement. One of the things he highlights is the different levels of learning, ending with "unconscious competence". This is the ultimate state to be in for trading I believe, and something traders like Don, Ziad, and other professionals who have positive consistency have reached, month after month. Don has spoken and written about having a feel for the market and being able to teach that feel. Ziad has written about being open to learning. While I do truly in Don's statement "is success possible - absolutely", without being open to learning one will not acquire market feel to achieve success. So, the real trick is finding ways to learn and get this stuff in our heads correctly so we can operate correctly! "Buying wholesale and selling retail" sounds easy, sounds right, is common sense, but is a hard thing to learn to do in the trading environment.

We want to get the right information imprinted in our subconscious so we can act "unconsciously competent", but eradicate other distractions and limitations that get in the way. Assaraf states we can stay in a comfort zone even if that comfort zone is miserable. This could equate to doing the wrong types of trades every day, and losing just a few points every day. If we can identify this "comfortable" behavior, accept it, and just reverse it (as Don has suggested) we would change a losing mentality. How many times have we looked at a chart pattern and an impulse hits us that says "thats a buy" or "thats a sell"? Thats the unconscious mind working correctly from the experience of looking at many charts. But how many times have we looked at a chart, thought about it, worried about it, and then acted but in the wrong way opposite of that impulse? What made that happen? What was the outcome? Was there some kind of subliminal image that we saw or read that made us "change your mind" and do something wrong? Did it cater to the comfort zone we were already in? After all, a winning trade would be outside of the comfort zone and a losing trade would be in it.

Rich Harris said...


Wow...all week long trading and teaching and you still had it in you to give one of the best videos that you have ever posted.

I hope you are enjoying a well deserved weekend of rest. Keep up the great work.


Ziad said...

Nice post Steve. Doing this kind of study and thinking deeply about things in this way is what will propel you along the learning curve and make you get out of comfortable bad habits while cultivating initially uncomfortable good ones. So ur definitely ahead of many traders and on the right track there!

nqtraderjay said...

Hi Don. Good stuff. I've been reading a lot of ur blog and the recordings over at TM.

I'm into the attitude and psych stuff, it's all good. I am just wondering tho, I don't really have a clue how you trade. Large volume, aggressive anticipation, standard TA, support & resistance of price or moving averages, confirmation (I have a feeling that you would consider any confirmation as being a 'retail' trade?) 3 ticks, 5 ticks, holding for points, trading midday, volume considerations, re-entries, I know you use NYSE TICK, VIX and ADX, do you consider TRIN, advance decline & AD volume, put call ratio, etc. I saw back on TM in 2004 to 2006 you vary the time frame on the bars to find what works best for readability of patterns. I've been also looking for any trade lines (in-out) or trade videos, etc. I have no idea where your actual entries might be. Just one of those mark ups or vids might be nice.

I'm not looking for a method, I have one that works. Just wondering beyond what I've seen so far, (unless I missed it) how you actually trade. If you'd rather not disclose actual entry exit points, that's fine.

Did I get it right that by 'wholesale' you mean you don't wait for a reaction of price on a support/resistance level, but you enter before that happens, or maybe you make that happen? ...not sure your actual volume ;-)

Hope these questions aren't too personal - Thanks - J