Efficient Trading

SOCRATES · Apr 7, 2006

tsuntzu said:
I liked this post, yet again Soc you have bought a smile to my face. I was wondering if you felt one could draw any comparisons on the 'quiet as mice' vs 'the noisy traders with problems' and the number of posts one might make on a trading orientated web site?

Yes I can, Tzunzu..

The number of posts I make is not related to what I do in front of screens and what is more important is how I do it.

Posting for me is a luxury.

It may be an aggravation for others because they expect me to spill the beans and reveal my methods and give away my edges.

That, I am not prepared to do.

Therefore you have to content yourselves with what I am willing to talk about and to what extent and no further. I am pleased you liked the post and that it caused you to smile.:cheesy:

SOCRATES · Apr 8, 2006

tsuntzu said:
Indeed I did, and i would be most surprised if you of all people hadn't got my drift. Saying that I just checked the traderpedia and there is no reference to it. If I can motivate myself I shall make one, but in the mean time, you can look here NFPR .

That is very helpful tsuntzu, but you realise it is only helpful at an academic level and not at a practical level. At both levels, I may add, the NFPR serves to baffle nearly everybody as no matter what is declared, the market then goes on to do what the market does, good figures or not.

Its only use is to know the date and time of the release in order to be prepared for whatever happens at that point in time, and nothing else.

SOCRATES · Apr 8, 2006

Kiwi said:
The perfect Socrates reply. Always humble.

Yes, well, but you have no idea what appointed house psychologists have to deal with when confronted with traders who are persistent failures.

Some of them ought not to be trading at all.

You would arrive at the same opinion if you were priviledged to have seen what I have been able to see.

I have seen one individual finally lose his rag and put his fist through the screen.

Another one hurled his chair across the room with such force that it became embedded in the wall and stayed there like some sort of weird sculpture. Not funny.

Both of these incidents occured in the United States by the way.

Therefor there is no point in you making flippant remarks out of context., I happen to be very well informed whereas you are obviously not.

The successful ones in the other room on their own just get on with it , quiet as mice.

OpenMind · Apr 8, 2006

Guys,
I wouldn't have posted here (I don't normally take part in weekend fights like these), but I have been told by a very good full-time trader who knows Socrates personally, that Socrates is an extremely, extremely accomplished trader: a genius. And yes, there really is a star chamber.

I will not name the trader in question without his permission, suffices to say he is a respected member of this board. He was invited by Socrates to his house to have lunch and have trading-chats. So guys, it's all true.

Thank you.

rossored · Apr 8, 2006

irrelevant/flaming/aggressive/(insert your variable here) posts deleted... lets try and keep it on track fellas

jimbo57 · Apr 8, 2006

OpenMind said:
Guys,
I wouldn't have posted here (I don't normally take part in weekend fights like these), but I have been told by a very good full-time trader who knows Socrates personally, that Socrates is an extremely, extremely accomplished trader: a genius. And yes, there really is a star chamber.

I will not name the trader in question without his permission, suffices to say he is a respected member of this board. He was invited by Socrates to his house to have lunch and have trading-chats. So guys, it's all true.

Thank you.

I think we all know that - there have been various posts and threads related to this before, but frankly I cannot be bothered to find the links, but rest assured, they are all there. (if not already removed). I would also remind you that there was a Star Chamber, a quick google will clarify this for you.

As for old Soccos abilities, who cares? This thread is for the sharing of knowledege/experience. Socco manifestly says he will not do this, but 'knows' something we don't know. He will cast off clues in his wordy manner but never offer resolution.

It is the magician masquerading as the doctor c.15thC.....funnily enough around the time that the first Star Chamber was ratified.. But of course Socco would kmow this, but he may not know that the original Star Chambers meetings were public from its ratification under the Tudors.

'Pen and Tell her' indeed. We've seen it and heard it all before.

charliechan · Apr 9, 2006

tsuntzu said:
Probably this discussion would be better served in the merits of NFPR thread. That aside we will have to agree to disagree on the level of helpfulness of this figure. I wouldn't go so far as to say it is the figure release i look forward to the most, but I generally find the market reaction to the component breakdown fits the underlying market expectation and sentiment at the time. I guess it comes down to the time scale over which you judge the market to have priced in its significance. With the sentiment at the moment fixed on the hourly earnings and the employment rate, the headline number is almost second tier in comparison.

im gunna get off my butt and do something bout this.

its an interesting subject, and although i do tend to lean with socrates on this one, i am open to persuasion (esp by cute chicks

)

http://www.trade2win.com/boards/showthread.php?p=247043#post247043

charliechan · Apr 9, 2006

tsuntzu said:
What do you mean, what is there to be done and what is it you intend to do?

im gunna get me short 2000000 long guilt contracts on next months number and.......

only kidding (really

!!) ive started a new thread..... see above

Danger Field · Apr 10, 2006

SOCRATES said:
I disagree with you because all of this is about competing and not about sharing at all.All of what? What is the 'this' of which this is all about? Trading? In which case I agree. Trading Bulletin Boards? In which case I disagree. The majority are here not to compete. They are here to understand, learn and seek advice and guidance.

i, personally, have no difficulty in discerning which class is which according to the posting content and quality, because this is a dead giveaway. It is totally obvious to me, if to no one else.

I am quite sure you at least are able to make such distinctions. I doubt the majority are.

SOCRATES · Apr 10, 2006

Danger Field said:
I am quite sure you at least are able to make such distinctions. I doubt the majority are.

Yes, precisely.

The great majority are apt to view bulletin boards as an open university with a sort of free classroom arrangement, available "just like that" to anyone who becomes either a member or a visitor.

Anyone who needs to learn is best off getting a tutor and later on a proper mentor.

I am not offerring to fulfil etither of these roles, whether paid or unpaid, by the way.

The minority are here to discuss topics of mutual interest with like minded individuals who already show higher levels of proficiency and expertise, but without straying into inadvertently
freely dispensing t;uition and mentoring, whether paid or unpaid, or rewarded in any other way.

Therefore what can be prudently discussed in detail in public has to be limited, it has to clear censorship, so to speak.

This serves to infuriate information beggars whose sole interest is to pick everyones' brains, sometimes with impunity and sometimes with guile and sometimes with threats and sometimes with disagreeable attitudes and occasionaly, if frustrated, with rudeness.

The result is that what can be allowed to filter through the censorship mechanism results as mainstream. Because it is mainstream, all these closed discussion loops develop again and again, whereas elswhere, information exchange takes place in the minority sector out of sight and earshot of the great majority.

This is not elitist, snobbish or cruel, it is the result of what the great majority force the absolute minority to resort to. It serves to infuriate some individuals.

I will give you one example.

DB Phoenix created a forum to discuss trading by price.

Result ? Zero response.

Why ? Simple, the minority who are absolutely proficient at it will not contribute, on the basis it is not wise to give away methods, strategies, tactics, or edges.

So there you have it.

the blades · Apr 10, 2006

SOCRATES said:
Yes, precisely.

The great majority are apt to view bulletin boards as an open university with a sort of free classroom arrangement, available "just like that" to anyone who becomes either a member or a visitor.

Anyone who needs to learn is best off getting a tutor and later on a proper mentor.

I am not offerring to fulfil etither of these roles, whether paid or unpaid, by the way.

The minority are here to discuss topics of mutual interest with like minded individuals who already show higher levels of proficiency and expertise, but without straying into inadvertently
freely dispensing t;uition and mentoring, whether paid or unpaid, or rewarded in any other way.

Therefore what can be prudently discussed in detail in public has to be limited, it has to clear censorship, so to speak.

This serves to infuriate information beggars whose sole interest is to pick everyones' brains, sometimes with impunity and sometimes with guile and sometimes with threats and sometimes with disagreeable attitudes and occasionaly, if frustrated, with rudeness.

The result is that what can be allowed to filter through the censorship mechanism results as mainstream. Because it is mainstream, all these closed discussion loops develop again and again, whereas elswhere, information exchange takes place in the minority sector out of sight and earshot of the great majority.

This is not elitist, snobbish or cruel, it is the result of what the great majority force the absolute minority to resort to. It serves to infuriate some individuals.

I will give you one example.

DB Phoenix created a forum to discuss trading by price.

Result ? Zero response.

Why ? Simple, the minority who are absolutely proficient at it will not contribute, on the basis it is not wise to give away methods, strategies, tactics, or edges.

So there you have it.

The thing is Soc, I'm sure people will completely understand why experts would not want to share their secrets. All credit to those that help, but fair play if they don't. What is unfathomable is why someone would take all but 3,000 posts to explain that they won't share. Surely an expert with no interest in sharing should have better things to do with their time? This isn't a dig, it's pure, honest, bafflement.

I suggest it's the search for the answer to this alone that you categorise as "infuriating to others".

UTB

jezza888 · Apr 10, 2006

Correct me if I am wrong but this is, as far as I am aware, a discussion board. Therefore designated for discussion about whatever the title of the thread suggests. Whether this person is new to trading or has 20 years experience, discussing to the extent of their own willing is therefore each persons choice.

I also find it strange that every so often you post something along these lines yet continue to contribute to threads. If you are not willing to discuss, but rather state that people know, or don't know, and repeat that you are willing not to share, why post at all? It is of no assistance.

Your opinion is yours and you are naturally entitled to it, but these posts drag the thread away from its original intention and then they are no longer of any purpose to anyone.

Is it really a wonder most end up leaving these boards....

SOCRATES · Apr 10, 2006

the blades said:
The thing is Soc, I'm sure people will completely understand why experts would not want to share their secrets. All credit to those that help, but fair play if they don't. What is unfathomable is why someone would take all but 3,000 posts to explain that they won't share. Surely an expert with no interest in sharing should have better things to do with their time? This isn't a dig, it's pure, honest, bafflement.

I suggest it's the search for the answer to this alone that you categorise as "infuriating to others".

UTB

But I do explain a lot, but it does not land, that is the problem.

You take this thread for example,OK ?

I make a valid comment and then it starts to attract abuse, and the mods have to step in with a fat finger. Why ? Because i give as good as I get, if not better, I always respond fiercely if I am attacked.

Let's talk about this thread.

What exactly does Brett Steenbarger do his best to solve ?

( I have had PM traffic with him and he seems a very decent chap, btw.)

The problems that beset him, and any other house psychologist for that matter is that he has to find a way to bring people to proficiency, to stop them doing silly things, to stop them taking flyers, to stop them reacting incorrectly to market prompts, to help them retain control of themselves, to help them prevent themselves from becoming serial traders out of control, to stop them overtrading, to help them not be emotional, reactive, impatient, and all these things.

What could be at the root core of all these problems ?

Is it the fault of the house psychologist ? No, he is himself, and trying to do his best.

Is it that the people he is trying to help are maniacs ? No they are ordinary human beings in an environment that requires a different attitude, conduct and responses to those they are accustomed to in ordinary life.

Now who avails himself of the help offered by the house psychologist ?

Obviously those who need it, the ones who are having problems, because according to their frame of reference they are doing the right things, but then, frequently, the outcomes they get are not the ones they expect. This is because this group, fro whatever reason, persist in having the wrong responses, the wrong attitudes, the wrong reactions, the wrong way of going about things, the wrong way of dealing with problems, the wrong way of meeting problems and resolving them, the wrong way of responding, of self monitoring, of self governance, of self responsibility and ultimately of control. Nearly all of it is a problem of control.

These are the cases a house psychologist has to deal with to try to help put them right.

Now I get a lot of abuse because I contradict mainstream thinking on all this.

Consider the quiet ones in the corner, who don't fall prey to doing all of the above. They don't need any help and have no reason to ask for any. They keep themselves to themselves. You don't hear them whinging and complaining because they have no reason to.

The house psychologist's skills are not needed by this group. They have a totally different way of going about things and tackling problems. The house psychologist acquires a template to help individuals with problems.

He does not acquire a template for the other group. There is no need for one. The other group do not even comment, they just get on with it. Therefore you could say that the template for the successful ones is missing.

Additionally, the successful ones are apt to guard themselves against being asked too many questions, as it is in their interest to protect their proficiency (notice that I say proficiency and not an edge, because that comes much later) so what happens ? Everyone gets to be familiar with the nature of problems but everyone remains in the dark about non problems.

When I bring this up, I get a lot of abuse.

Now another example.

Some time ago the question of stops was being discussed.

Again, when I commented incisively on it, it served to stimulate the rowdy element as well.

Without going into deep details I explained that efficient traders use very tight stops because efficient traders get it right many many more times than they get it wrong, that is why they are efficient traders, OK ?

Therefore efficient traders are surprised and shocked when they get it wrong. The fact that they use very tight stops immediately limits losses.

Inefficient traders are apt to use wide stops and some blighters none at all !
They now begin to argue, yes argue, that to use a wide stop is the right thing to do because it allows a position to "breathe" and other nonsenses. When it is pointed out that wide stops used by inefficient traders who get it wrong often and really ought to fiercely control losses, they get abusive, or, begin to argue.

That is why I have so many posts under my belt. I have tried in the past to illustrate lots of ideas. These ideas are immediately recognised by a few who go on to use them beneficiallly which pleases me enoromously. The great majority see fit to argue and argue and do not progress.

I am accused of being among other things, a charlatan, a wordsmith, an autocrat, etc.,

The problem is that a lot of people forget about the message being delivered to them and only concentrate on the way the message is delivered and so miss the content altogether.

SOCRATES · Apr 10, 2006

jezza888 said:
Correct me if I am wrong but this is, as far as I am aware, a discussion board. Therefore designated for discussion about whatever the title of the thread suggests. Whether this person is new to trading or has 20 years experience, discussing to the extent of their own willing is therefore each persons choice.

I also find it strange that every so often you post something along these lines yet continue to contribute to threads. If you are not willing to discuss, but rather state that people know, or don't know, and repeat that you are willing not to share, why post at all? It is of no assistance.

Your opinion is yours and you are naturally entitled to it, but these posts drag the thread away from its original intention and then they are no longer of any purpose to anyone.

Is it really a wonder most end up leaving these boards....

What are you trying to imply, Jezza ?

I am not trying to drag the thread away from anything, to the contrary. What I am doing is putting the searchlight on it, but from a point of view that is apt to make some people feel uncomfortable. Why is this ? Simple. All it is, is an unwillingness to confront and to concede that not everyone is riddled and burdened with problems. For people to be riddled with problems seems to be the norm, and it makes for very depressing reading, but it is not the absolute norm by any means.

I am willing to discuss, but not beyond a certain point, is what I am saying, and I give the reasons, surely that is clear enough, is it not ? I concede that my views are not mainstream,
and I recognise it to be the root cause of dissent, but there again, my norm is not yours, and yours is not everybody elses'.

As to why people end up leaving these boards is either because they came here with the intent of gaining valuable knowledge at someone elses expense and failed or as a consequence of having deep knowledge and experise and becoming weary of argument, quite apart from putting their attention on really meaningful matters.

Is that selfish, no, I think not.

I only post when I have the time. I do not sacrifice other priorities to posting here. Oh, and I forgot to mention, you are right this is a discussion board, pure and simple. It is not a lecture room, an amphitheatre or a classroom.

SOCRATES · Apr 10, 2006

tsuntzu said:
Efficient traders are surprised and shocked by getting it wrong? hmm this is an interesting one. I thought getting it wrong was part an parcel of the challenge. However, are you saying that efficient and inefficient traders are equally as bad as each other in that both groups experience the same level of negative emotion vis a vis a loser? Thus is there a third group laying outside of the domains of these two categorise, that is if we allow ourselves to categorise for the sake of your example.

I am saying the response to getting it wrong is very different for each group.

I am also saying the expectation is very different for each group.

And I am also saying the provision is very different for each group.

That is what I am saying.

SOCRATES · Apr 11, 2006

tsuntzu said:
The response is very different. Ok so the first group, the efficient traders, are both shocked and surprised by a loss. The other group, the inefficient group, how do they respond, are they not also shocked and surprised. Going out on a limb here but presumably you fall into neither of the above categorise, that being those you have chosen to define a trader as on a very simple level, efficient or inefficient. So what category do you fall into?

Neither.

I have to approach all of this from a very different angle to what is the norm, either for efficient or inefficient traders.

I justly expect to get it right every time, and I very nearly do. Because of this I am aware that from time to time I may make an error, or, suddenly conditions change just as the buttons have been pressed. Therefore, statistically speaking, the greater the number I get right in a row, the more alert I make myself become to the possibility that the next one, or the next one after that, etc., could be the one to break the run.

This causes me to become more and more guarded and more and more "super alert" to such a possibility. Therefore I always use a ridiculously tight stop. I expect any pozzie to get at the money immediately, and in the money very quickly. If this does not happen quickly and efficiently, then I concede that what I did was right, but conditions suddenly have changed, or that conditions are about to change, or that conditions synchronously changed while the buttons were being pressed, or that I misread the market in gereral terms or the specific conditions existing at the time, or walked into an ambush, because that is also possible.

As a consequence of very long experience spanning several decades in this profession, I have to force myself not to be complacent. I have to be very aware of unexpected risks, just like everybody else.But, therefore, for the opposite reason to many others, I have to be be particularly guarded against lulling myself into a sense of false security, on the basis that a long successful run is going to continue as such. Therefore I have to prepare myself against these dangers, the greatest being dereliction of action (response) as a consequence of viewing an unexpected outcome as a contradiction, as a personal affront, if you like. Then for me rigid adherence to a tight stop policy is crucial in order not only not to damage performance and have to do unnecessary work to recover what is avoidable but also to assist in the emotional disconnection necessary.

You can see that I approach this differently to nearly everybody else, and the reasons for my approach being so.

charliechan · Apr 11, 2006

SOCRATES said:
Neither.

I have to approach all of this from a very different angle to what is the norm, either for efficient or inefficient traders.

I justly expect to get it right every time, and I very nearly do. Because of this I am aware that from time to time I may make an error, or, suddenly conditions change just as the buttons have been pressed. Therefore, statistically speaking, the greater the number I get right in a row, the more alert I make myself become to the possibility that the next one, or the next one after that, etc., could be the one to break the run.

This causes me to become more and more guarded and more and more "super alert" to such a possibility. Therefore I always use a ridiculously tight stop. I expect any pozzie to get at the money immediately, and in the money very quickly. If this does not happen quickly and efficiently, then I concede that what I did was right, but conditions suddenly have changed, or that conditions are about to change, or that conditions synchronously changed while the buttons were being pressed, or that I misread the market in gereral terms or the specific conditions existing at the time, or walked into an ambush, because that is also possible.

As a consequence of very long experience spanning several decades in this profession, I have to force myself not to be complacent. I have to be very aware of unexpected risks, just like everybody else.But, therefore, for the opposite reason to many others, I have to be be particularly guarded against lulling myself into a sense of false security, on the basis that a long successful run is going to continue as such. Therefore I have to prepare myself against these dangers, the greatest being dereliction of action (response) as a consequence of viewing an unexpected outcome as a contradiction, as a personal affront, if you like. Then for me rigid adherence to a tight stop policy is crucial in order not only not to damage performance and have to do unnecessary work to recover what is avoidable but also to assist in the emotional disconnection necessary.

You can see that I approach this differently to nearly everybody else, and the reasons for my approach being so.

i get the impression reading this that you are very focused and CONSCIOUSLY paying attention to every tick when you say this. you are very strict in these disciplines.

however, on the other hand, from personal experience i find that i am at my best when in a more relaxed state. when i am in the zone, every tick is registering, but not necessarily at a conscious level. then the trade comes to me. sometimes i have entered an order almost automatically without much thought or realisation on a conscious level. when i am in this place, the trades come to me, i dont go out looking for them. from your description, you are operating on a conscious level rather than letting yourself do what you need to do with your more 'animal/trader' instincts that have been honed over time.

if we consciously think or force something, imo, we close the doors of perception and thus opportunity. perhaps i have missed something........

SOCRATES · Apr 11, 2006

charliechan said:
i get the impression reading this that you are very focused and CONSCIOUSLY paying attention to every tick when you say this. you are very strict in these disciplines.

however, on the other hand, from personal experience i find that i am at my best when in a more relaxed state. when i am in the zone, every tick is registering, but not necessarily at a conscious level. then the trade comes to me. sometimes i have entered an order almost automatically without much thought or realisation on a conscious level. when i am in this place, the trades come to me, i dont go out looking for them. from your description, you are operating on a conscious level rather than letting yourself do what you need to do with your more 'animal/trader' instincts that have been honed over time.

if we consciously think or force something, imo, we close the doors of perception and thus opportunity. perhaps i have missed something........

Yes, absolutely, and at the highest level of proficiency this zone you talk about can be "stretched", for want of a better word. The higher the level of proficiency and the greater the level of general and specific "awareness", the more the zone can be stretched.

But in my reply to tsunzu I restricted my explanation to mercilessly efficient stop loss management and instantaneous conditional reflex relating to deadly accurate timing, and the reasons why. They are two different matters. This also relates to both entries and exits, by the way.

Stretching is another separate topic altogether.

blackcab · Apr 11, 2006

Socrates, would you mind commenting on the following?

SOCRATES said:
I justly expect to get it right every time, and I very nearly do.

A winning percentage (the % of trades that are exited at a profit) of something like 90% would fit this description. Much less than 90% wouldn't fit it, to my mind.

SOCRATES said:
I always use a ridiculously tight stop.

A win/loss ratio (the size of the average winning trade divided by the size of the average losing trade) of something like 10:1 would fit a description of a stop as being ridiculously tight - again, to my mind.

Purely out of curiosity, am I right in inferring that around 90% of your trades are winners, and your average win is around ten times the size of your average loss? If so, that is phenomenal. If not, did I make a big mistake with my estimates?

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