ΔP, MATH, & TRADING

“Your future without trading; plenty of opportunity!”


Of course I come at this with a bias; I’m a trader, and there isn’t a single thing in the world I would rather be doing than taking Chumps money trading financial markets. My entire adult life has been spent listening to “experts”, “advisors”, assorted “gurus”, and of course all of those stuck gainfully employed in the “Pudding Business” tell me I can’t exist. Of particular interest to me are the “educated” class; the ones who spend their entire life telling other people what to do, how to do it, and what to think about it while they are doing it.

For me, since day one when I went to work with Bert to be his “grasshopper”, it’s been one thing … and one thing only … that occupies my senses when I approach a market; “how do I make this puppy my own personal ATM?”

I will do whatever it takes; I will read books, scour libraries, create and pour over spreadsheets, become better at mathematics, logic, mathematical philosophy, the history of science & investigation, try to understand the problems scientists, mathematicians, & logicians faced in the 19^th & 20^th centuries and how they overcame what seemed at the time insurmountable problems, and finally I will never stop learning and tell myself I am comfortable where I’m at … never.

One of the hardest concepts to grasp in trading is the idea that the psychology of the marketplace is tied at the hip with mathematics; “I can never know what you the individual are thinking, but in the ‘collective’ sense of millions of you, I can predict what types of behavior can lead to your destruction and how you most likely will trade.” The math gives me the ΔP [change in psychology], and the quicker the change, the faster price changes and the higher the volatility.


As I touched on yesterday, one of the biggest problems Newbies face as they navigate the “learning curve” of the biz, is to face the stark reality that nothing in life prepares them for success here; everything you have learned in school, from your business and/or maybe business associates, to those in your family, can be succinctly summed up by the stare your Mom is going to give you directly below.

“You’re gonna do what?”
“You’re gonna do what?”



Skills and “what the world thinks is the right thing to do” aren’t going to help you here; and so, what you are left with is the math to guide you, and most people get “queasy” when placing their entire financial future in the hands of a math equation. “Yes, the ‘Pudding Business’ has treated you so well up to this point in your life hasn’t it? And all that advice, student loan debt, and crock of crap you were indoctrinated with by Leftist professors hasn’t quite translated into money in the bank has it? Right, better play it safe and stay put.” And there ladies & gentlemen, in a nutshell via the prior sentence, is THE full throttled conventional wisdom for NOT becoming a trader.

Nobody knows better than little ‘ol me just how hard it is to trust the math; nobody had their “worldview” blown to pieces more than mine with Bert, as I had to come to grips with him making millions with North Mode of the Moon & Mercury ephemeris calculations in Lumber. When I got to the trading floor, it makes the infamous trading scene in orange juice futures from the movie “Trading Places” look like a Mormon girl’s pajama party from 8^th grade. 

Everything I have experienced as a professional trader has been learned, and more importantly, initially fought against by me and my modern day college educated brain. Essentially, what you are going to learn and come to grips with is the following: “You want to make money, be successful, and do whatever the hell you want when you want to, OR do you stubbornly refuse to face reality and hold on to the delusion that you can ‘figure out’ any market? Well Bunkie, what’s it going to be?”

For me, it’s an easy decision; “when in Rome, do as the Romans!” The only thing I care about is making money. Sadly, for many people this isn’t enough; they want to be analysts, so everybody can think they are smart. They want to be thought of as “gurus”, desperately wanting public [as well as private] acceptance to mask their insecurities, so trading takes on additional problems it was never intended to deal with at any level. There are a million stories in the “Naked City”, and your experiences along with mine are just grains of sand on a long Caribbean beach. I’m here to tell you, even with the imperfections of the math, without it you are “toast”.

Turning to gold today … crickets … it’s NFP Friday … Bureau of Unicorns & Fairy Tales releases make believe job numbers at 9:30; Dr. “Uncle” Joseph Goebbels please call your office … markets likely asleep until the numbers show up … I’m wondering how many new bartenders and waitresses [no doubt with shiny new worthless college degrees] will be added to our “robust” economy this month?

Ok, fairy tale numbers out of the way … nice move in USDJPY … gold a bucket of slop … looks to me like markets will be slowing very soon into the weekend, where Sunday night’s referendum in Italy will move markets come the Sunday night open … should it fail, Italy’s government will fall, and the existence of the Euro is back in the headlines … latest poll from there showed it failing by about 10%, but that was 2 weeks ago.

We’re a little over one and a half hours post “everything is f-ing awesome Baby!” fairy tale numbers from the math hacks, and with the previously mentioned Italian fiasco due Sunday night, I don’t see anything but crickets the rest of the day … maybe I’m wrong on this for today, but I’m willing to risk it so I don’t have to sit here and watch paint dry and pretend something is about to happen when it most likely won’t.

Got a lot of work to do getting the USDJPY manual & tutorial finished, so after a little Vitamin C therapy at the beach [medicinal purposes only], I’ll be back to work later today. So, with this “nothing burger” of a day a complete waste in gold, I’m outta here … Until Monday.

Have a great weekend everybody!

-vegas

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