“Who
says math has to be boring?”
I’m going to be dealing today with 3
critical areas you all need to know and understand; 1) “groupthink”, 2) the
algorithm and specifically the exhaustion lines, and 3) “balance”. Search the
web, go to the bookstore, shop online, and/or get hustled into a trading
seminar; it isn’t going to make any difference because what you read today you
will find nowhere else. I’m actually
trying to help people “escape to success” and become financially independent
via trading versus those who simply want to occupy a place in your wallet right
alongside your credit card.
Your potential success does not in any
way detract from my trading; if you “make it”, that doesn’t mean I have to
trade less volume, make less money, or scramble to find how I’m going to get
the “slice” of the market you just took for yourself, and by default in the
logic of this, away from me.
I get asked all the time, “Umm, -vegas man … hey, this stuff you got
and teach is worth a fortune … how come you give it away … I mean, you could
sell it and make millions … you know traders would pay it … so what’s the deal
dude?” And my answer to this is always fourfold; 1) I’m not interested in
your money, I got my own, 2) I don’t want any barriers between people who truly
are sincere about making trading a career and are starting on a “shoestring”
budget and would have to struggle just to pay me what I don’t need or want, 3)
I don’t have to worry about people trying to “scam me”, by taking my ideas and
reselling them somewhere else when everybody knows I have a website and give it
away, and last but certainly not least 4) the entire trading universe can see
algorithm results at any given moment in time and prevents spammers from
trolling me by saying my algorithm or trading ideas are full of shit. Well, if
they are, “let’s just check the tape,
shall we? Give me the date and time you claim you lost a fortune, and not just
me, but thousands of other traders can check the same thing and know in an
instant that you 1) didn’t follow the rules, or 2) when it comes to ‘full of
shit’, you are king.” In a “nutshell, it’s freedom for me to teach without
having money complicate the equation, and by default also strips away the
nutjobs whose only purpose in life is to bitch about something.
Now, don’t get me wrong; I’m no “saint”
sitting here [although, the dog hasn’t been polled]. Sure, it’s kind of a
“karma” thing, but in my life my mentor Bert, back when I was a dumb ass
college graduate who knew everything but in reality didn’t know Mr. Jack Shit,
took me under his mighty wings when he
didn’t have to and spent thousands of hours really teaching me the trading
business, that you have to thank. I’m just a “link in a chain”, that both
stretches back as well as [I hope] goes forward with others.
The more trading changes, the more it
stays the same. In other words, it doesn’t matter what decade or century you
look at; of course, technology makes markets more accessible and easier to
navigate than in the past, but advances in technology have nothing to do with
“groupthink” and how it has affected traders throughout trading history. Over the decades and centuries collective
trader behavior has always remained the same; the public still “buys the high”,
“sells the low”, tries to “reason with” the market [pick ‘em] to “behave”
[please?], and ultimately gives up when the money runs dry; only the names
change through the ages.
The first questions I always ask new
traders are, “why are you here, what’s
the REAL purpose? Does your wife/husband need a babysitter? Are you looking for
action? Or are you here for the money?” And most importantly, “seriously, can you follow fucking
directions?” Because, right out of the gate, your first “enemy” is
“groupthink”. “OMG, it’s going higher, I
have to buy it!!” 90 seconds later; “WTF,
I think I’M GOING TO BE SICK cuz I think I bought the high of the move; why did
I do this?” SHORT ANSWER: “you’re a
Newbie and you let your emotions suck you in because you thought it was ‘easy
money’.”
We are “traders”, not analysts; we need
a battle plan that makes markets our own personal ATM on a daily basis and
“brings home the bacon”.
“Go
ahead genius, explain to her why there are no trading profits for the month.”
I spent over a year and a half
developing my original floor trading algorithms decades ago; today those algos
don’t work so well because they are too slow. Back in the Spring, I developed
the “volatility” algorithms from those originals and they perform spectacularly
in today’s HFT world.
The exhaustion lines are a critical
element of success for trading using the algorithm; “I will simply say, they are the very best indicators in REAL TIME you
will ever see in capturing ‘tops & bottoms’". And while greed has your
emotions running at full throttle when a market is going straight up and you’re
long, and part of you says this will last forever why get out, when price hits
the exhaustion lines it’s time to put emotions aside and book the trade.
Trust me Newbies, it’s not as easy as it
sounds. Once you let a few of these “moments” slip through your fingers, and
you want to hit yourself for being a dumb ass, you’ll come around and learn to
“trust” the exhaustion lines for liquidation. I know because I have walked in
your shoes; it took me a full 3 months when I was on the trading floor in Chicago many years ago to
“trust” the exhaustion lines and the algorithm. I got so tired of seeing the
algo make consistent money while my “thinking” repeatedly got me into trouble
and/or made me scramble to eke out a living; I was ready to give up. It
literally came down to a day when I said to myself, “if you can’t follow it, get the fuck out … Micky D’s is hiring dumb
ass.” On that day I made over $1,000, something that up until then I had
never done before; the rest is history.
I will point out absurdity by being
absurd; you can’t go out drinking and partying, all night every night days on
end, and expect to bring your “A” game to trading; sooner or later this
“unbalance” will be your downfall and you’ll be back in the Pudding Business.
Likewise, you can’t be a “computer jockey”
sitting in front of a computer screen 20+ hours a day without turning into some
kind of Zombie; you have to prioritize your life and get into some kind of
balance. That means 1) a life outside of trading, 2) proper rest & sleep,
and most importantly 3) when it comes time to trade, telling the rest of the
world to “leave me the fuck alone, I’m
making money!” I can’t over emphasize #3 enough.
Well, somebody must have emailed the
Chuckleheads in Asia last night, because there was no “buying spree” to speak
of in gold; maybe Mrs. Wantanabe has to wait for her husband’s check to clear
before she [loses] trades again. Now, remembering what I said yesterday about
the only way gold can rally, and what do you suppose we see today?
“The
dog is nodding his head, that yes, I’m a frickin’ genius. On the other hand, my
sample of ‘one’ for this poll is eating a Beggin’ Strip, so maybe he’ll agree
to anything? Nahhh, just a coincidence.” No need to recap the highlights; for
those of you that need a refresher on yesterday, simply scroll back, take some
notes and take a look at action today from the New York open. “Time travel sure makes trading easy doesn’t
it?” The ‘nitty gritty’ details directly below.
And just to show you I’m not perfect [“here’s another Beggin’ Strip … now vote
again.”], I missed the exhaustion line by about 3-4 minutes and had to
settle for a profit of about $3 instead of $4 … “I can deal with it.”
Now, I have no idea where this shit goes
from here today after this early move. From where I sit, though, after seeing
the damage gold has suffered over the last couple of weeks, it’s going to take
one hell of a bond market, stock market, and finally FX rally to get gold to go
up and expand the daily range from where it is now around $10 to above $15+ on the upside of things.
Quite frankly, I don’t see it for the very simple reason that the $3 trillion
in risk-parity funds can’t possibly be finished with their selling to readjust
everything from “alpha to gamma” with
what has happened over all markets [not just gold] in the last month. So, with
that scenario in mind, I don’t see risk/reward as being in my favor going
forward today after this profitable first trade; it’s too early for the daily
charts to “turn around”, and if you want gold to go higher, the technical damage
has to be “worked off” before prior day’s highs can be taken out and the shorts
scramble. So far, the serious well funded shorts from higher prices have no
reason to get really worried and “pay up” to cover.
For you Newbies out there, you should
realize everything that is math related in the algorithm is visual on the MT4;
you don’t have to do squat except follow directions and watch your computer
screen for signals; “yea, it’s that
fucking easy.” And so, going back to what I said earlier in the post, “can you follow easy fucking directions?
Yes? Good, then you booked a profit just like me and got no worries. No? Taking
a quick look at the charts as I write, you got a problem cuz we sold at or near
the high [so far] and now ‘hope’ gets to be installed into your trading
strategy $4 - $5 bucks lower and you find yourself in a very compromising
situation.”
“Master,
I voted 3 fucking times in ‘you are a genius poll’; can we go to the beach now
for cryin’ out loud?” It’s hard to argue with his logic; the dog and I are
soooooooo out the door even though it’s a little early. I think before we hit
the beach, we’ll stop off at the island Pet Smart, cuz the nurfball is getting
a little skanky, and he always loves the attention when the girls in the store
fawn all over him & stuff him with treats. As for me, I’ll be lucky if
somebody there says “hi” to me, cuz when he’s around I’m invisible; he’s got a
great life and that’s enough for me to be happy as his BFF. Until tomorrow amigos …
Have a great day everybody!
-vegas
OPEN A DEMO AND/OR LIVE ACCOUNT AT THE LMFX
LINK IN THE “DOWNLOAD LINKS” SECTION OF THE WEBSITE TITLED “OPEN TRADING
ACCOUNT – DO IT NOW!”
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