Sep
30
Thursday Notes – THIS is Why We Do This
ByTonight’s rather emphatic video gets to the crux of why we created such an intensive and painstaking twenty-day trader training effort.
As I state in the video, seeing the culmination of one trader’s metamorphosis as evidenced by this afternoon’s trading sequence is priceless.
For those unable to participate, I try my best to share the insights of his evolution, including describing what true futures trading is all about, while also summarizing today’s trading action including the two-stage PMI data release and intraday reversal.
Don,
I get the idea of worsening the average price in order to generate aggressive, exponential account growth when “right” with regards to short term market bias but I have problems reconciling one aspect of this in my mind…
If you are trading with the market and happen to add before a move against you, how are you dealing with that on a technical level and, most importantly, on a psychological level?
Doesn’t it happen that you add, forcing yourself out of a position, before it continues in your favour…never breaking the original positions stop/premise??
Thought-provoking post.
MM
PS Congrats to Albert
Hey MM.
There’s no doubt that the acquired skill of knowing when to use this particular technique is critical (which I suppose is sort of like saying a dentist had better know when to stop drilling before he/she hits the undamaged part of the tooth!).
This particular rapid-fire strategy is used when there’s very little doubt of the move, such as a tight 1-minute coil or triangle break in the direction of the underlying momentum (or against the prevailing trend if there’s tons of air ala Wile E Coyote), and/or when traders are clearly stuck leaning on the wrong side right at the tipping point.
Being highly alert and attuned to these conditions as they’re evolving is of course a prerequisite to using this technique.
In the rare event the market halts right when you add (assuming you’re adding effectively at wholesale levels and NOT into the retail flow) and turns violently (again, unlikely but it could happen), any scratch or stop should be a tiny nick at worst.
Call it a manual version of sophisticated program trading where a keen eye and market sense team to play the role of the computer.
One additional thought to remember is that those on the other side of your adds will also have to take action, which will further drive the market in your favor.
Such is why it’s so important to ALWAYS be thinking about the entity on the other side of your trade and anticipating the actions that he/she/it (if a computer, but that would still be run by a human!) must take versus thinking about your own trade or position.
After all, trading IS poker
.
Buy, buy, buy… Sell, sell, sell… Don, thanks for this post and to MM for the comment, it is re-asurring to know I’m on the right track in terms of what I need to focus on, you talk with great energy, emphasis, passion in this video on the subject. This will become a key post for me. I’m early on in my journey as an intraday trader, with some good on-going training and mentoring from a genuine, well respected pro under my belt – I have a fighting chance of winning in this ‘game’. Knowing when to press hard has been a key tenet pushed hard by my mentor and something I’m working hard to achieve, knowing when to do it is key, not easy but key. I’ve followed you quietly for several years, thank you for keeping up the blog efforts, you’re a gifted person and there’s no doubt you will receive several times over in life in one form or another for all that you give.
Kev Mc
Thank you very much for the complete reply Don
I appreciate that’s over a decades worth of experience talking so I won’t pretend I fully understand, but my intuition says it’s something I ought to think about carefully.
MM
I understand pressing the trade, but would these adds also be entries as STAND ALONE trades? In other words , on a third swing higher, if you were FLAT , would you be buying that same level?
Or are the adds somehow valid only as part of the entire sequence?
My five cents:
I am only adding if I have more confirmation/information about the trade. E.g. I fade in front of a resistant and put 1 lot on, if the resistant gets tested and holds I put up a second lot.
Don, please correct if I am wrong.
Cheers,
Markus
A very interesting post I hadn’t thought much about yet in my early trading career. I too will have to check back to get more insight.
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