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Friday, November 4, 2016

FALLACIES IN TRADING


“See, there’s your problem right there … you don’t have enough screens!”
“Yes, I know … the DOW30 info & charts didn’t make it up to the website last night … the culprit? Well, it wasn’t for lack of effort on my part, but some kind of problem at Google that wouldn’t allow me to upload anything into the website. Finally, about 11 P.M. last night, whatever the problem was got fixed, and everything finally got working.” However, it takes about 45 minutes to upload the info to box.com, and then create the necessary shared link to the website, and at that time last night even the dog was looking at me like, “hey boss, you need to get some sleep … tomorrow morning you got a big job ahead of you … that’s right … you got that ‘impenetrable bacon box’ to open early tomorrow morning and get me my bacon!” So, third time’s the charm as tonight it will get posted.
I don’t want to spend too much time today on “deep thoughts”, since it’s Friday and we all know what that means. However, I do want to point out that one of the biggest fallacies facing traders is information; specifically too much information. Throughout my very long trading career, I’ve seen the destructive nature of having and trying to control more and more information; it’s as if people are thinking, “God, if I only had just a little more info … yea, I’ll watch this market over here … and this one over here … and I’ll have CNBC, Bloomberg, & Fox Business News on as well … I’ll also get all the Chinese and Japanese markets too … oh yea, can’t forget the Ruble & Chinese Yuan … Russian bonds are rallying, is that bearish for gold? … maybe if I had 16 or 24 screens up in front of me, not only would it look like I know what the fuck I’m doing, but maybe … just maybe … I could be as successful as that –vegas guy!”

To which my response was/is/ always will be, “Yea Ok, you just keep thinkin’ that … as if my ability to make money trading for the last 4 decades and running is directly attributable to having more & more worthless shit around me and in my face. Getting in a position I only … and I MEAN ONLY … watch the algorithm; getting out almost the same, except when spikes don’t carry us to the exhaustion lines … then, if gold happens to be correlating or inverse correlating with either USDJPY or SP500, I may find that info helpful. And while you have all this info coming at you, your brain is working overtime trying to decipher it all so you can literally attempt to wring the last fucking penny out of every trading position. Me? I don’t give a shit about that; all I care about is the concept of ‘buying it at 1, and selling it at 3’; you can take everything else that is flowing by you and plant it in the garden for your tomatoes cuz they need fertilizer … I don’t.
And the real “kicker” is this; as traders lose more and more money, they desperately desire to want/need more information. In other words, failure in trading leads to a very nasty and undesirable negative feedback loop.
“Nahhh, it can’t possibly be your trading method or algorithm is a piece of shit, and if God himself were using it couldn’t make money either … also, couldn’t possibly be you’re using much too much leverage, and every little ‘squiggle’ in price has you literally ‘shitting your pants’ because you don’t have enough equity to play at the level you’re playing at … and finally, what’s the point of having any ‘game plan’ if at the drop of a hat you’re flying solo by the ‘seat of your pants’ cuz some guy from Vampire Squid on CNBC said that gold was a sell 30 seconds ago? No, your answer is TOO HAVE MORE of this shit!”
So, bigshot trader wannabe types; “All those screens and all that useless crap will do wonders to impress the ladies, but it will not make you rich. You want rich? Ok, stroll over into the right hand column and download everything you need to. READ, STUDY. THINK. ACT. PROSPER. It’s all there, with more ‘proof’ and spreadsheet information you can absorb in one sitting. Or, continue what you’re doing and wonder why guys like me call guys like you ‘morons’: definition of a Moron = somebody who does the EXACT same thing over and over again and expects a different result.”
Now, please understand, there are no “born traders”; everybody who comes into this biz is truly a complete fucking trading idiot, who definitely has about a 99.99% probability of being a “moron” when he/she first starts trading. And believe me, I can remember back at times when Bert would look at me like the other day when the dog got into it with Mr. Meany Cat next door and got his panties bunched up with a fast claw to the side of his nose; no need for talk, the look in his eyes said it all. “What the fuck were you thinkin’? … what special level of ‘idiot’ has you in the ‘Hall of Fame’? … do you ever listen to anything I say? … Seriously, how fucking dumb are you?”
And of course, what I shared with Bert like the dog shared with me, was that special look back; “yup, I fucked up … how did that happen I wonder?” And the issue isn’t whether or not you “fucked up”; hell, as adults we do that all the time. No, the issue here is whether or not you’re going to do something about it so it doesn’t happen again. In life, many times your actions take time to manifest the consequences; in trading not so much. So, the “oh shit” moment for habitual losing traders is simply this; adapt or die the way of the dinosaurs. “You can’t cling to fallacies in trading; you don’t have enough capital to weather the storm of consistent losing. Change your behavior so that you can model success, and whatever is necessary to make that happen. For my part, I can only take you so far in that I have the algorithm for profitable trading and the proof to back it up; you have to ‘pick the damn ball up’ and run with it. Reality is the market; what goes on in your head that keeps you losing is delusional.”
Oh fun, oh joy … another NFP Friday and all the bullshit that comes with it; countdown is T – 20 minutes to nuclear trading.
Well, that escalated quickly didn’t it? Trade of the day directly below.
Lower exhaustion lines hit; I went to  buy it and my screen is showing 1296.40 bid on the spike down … I get my fill at 1295.95 … basically one minute later as the price goes up through 1301, when I see 1301 bid I hit liquidate and get filled right at 1301.00 cuz market is on its way to 1301.55 bid as the high and the LP, at that millisecond, is seeing rising bids … but from my viewpoint it’s a great fill … seconds later it starts puking from that 1301.55 high and I couldn’t get a 1301.00 fill in my dreams.
“Ok, I’ll take that ‘hair less than $5 profit after commissions’ and see ya!! Mr. Market, do whatever the fuck you WANT; take it to 1320, I don’t care! I’ll see you again on Monday, cuz if you think I’m giving any part of this back to you, then you’re nuts!
And so, while the guy with 24 trading screens is getting stops hit off on both sides for losses, we calmly ‘buy’ the lower exhaustion lines “hit” and wait a few seconds so we can give it back to ‘em $5 higher … no need for greed here … I walk into an ice cream store when it’s 105° in the shade and get an ice cream cone … walking out seconds later, some guy with his little girl sees the line is a mile long and says to me, “hey, I’ll give you $50 bucks for that cone so I don’t have to wait in line, how about it?” … well, that was easy.
And for you Newbies, just joining us here on the most consistently profitable and proving it every fucking day website on the planet for gold [and soon to be DOW30 stock index], directly below the pure power of the gold volatility algorithm with not 1, not 2, no my friends not even 3, but 4 exhaustion line “hits” as if I was drawing them into the chart myself. And now, I know what you’re thinkin’; “Wow, bet he wishes he hadn’t sold at 1301, huh”? No, I could care less; I’m a trader not an analyst. Directly below, the 4 exhaustion hits in blue.
And, since I know you think your eyes are betraying you, after that last exhaustion hit high of 1307.17, now look at me and say, “hmmm, nice random moves … no way of knowin’ that high up there could be the time to sell if you’re long.” Only, move quickly away from me before you get hit!
And of course, all of these exhaustion moves in gold [equal or greater than 9 minutes] will be catalogued and archived by us in our new chart database [up in the cloud] at the end of each month, so that everyone can see past historical performance either via online viewing or by downloading the file [day, month, or entire database of charts], over in the “Download Links” section of the website.
“I know, I know … you don’t want to believe it … been there done that … walked in your Newbie shoes before you were most likely born … struggled for 3 months refusing to believe and I created the damn thing! … so I know how hard this is for new or losing traders … but hang in there … one day you will wake up and all this will have been ‘your idea’ and you’ll run with it … when that day comes, email me and share your success, cuz I’d love to hear it!”
OMG, the dog is going nuts; the Mrs. is back from the deli with cold meats and cheeses for sandwiches and he knows the sun is shining and I’m ready to “hit the beach”; it’s early still, but I don’t care. A “double whammy” of sensory delights that has him just short of “happy insane”. We’re sooooo outta here, you have no idea … until Monday mi amigos!
[“Wait … what? Why does he get 3 pieces of roast beef AND a piece of cheese, and I only get 1 piece of roast beef?]
Have a great weekend 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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