One Method or One Market ?

[pedro01]

Right. Apparently this forum is going darnhill. Not enough trading talk so to speak. Too much trash.

OK - so here is my attempt at a trading related thread.

Let's say for a second that you had to choose between the following. I mean really have to choose, you can't have both. Imagine your balls are on the line ( girls - you should be in the kitchen anyway, give hubby back the mouse for heavens' sake).:

- Trading one stock/futures market/forex only, getting to know it like the back of your hand and then trading that market only
- Trading one setup but across multiple markets - trading any symbol but only that one setup

Which do you think would be better & why ?

I have my thoughts but will keep them to myself for now.

Pete

 

[timsk]

- Trading one stock/futures market/forex only, getting to know it like the back of your hand and then trading that market only
- Trading one setup but across multiple markets - trading any symbol but only that one setup
Which do you think would be better & why ?

Hi Pete,
Interesting options.
For the most part, it's the temperament of the trader that's the critical factor in determining which option is best. Horses for courses. As it happens, this pretty much sums up why I'm switching from trading multiple U.S. stocks to trading just one single index future. Keeping track of lots of stocks simultaneously, in different timeframes, plus their respective sector indices and the main market index is something I have to concede I'm not really suited to. Too many plates in the air at any one time. I partially solved the problem by having a basket of stocks that I got to know and traded most days. My favourite - and the one that returned the best profit - was POT. However, as the credit crunch took hold in autumn last year, it's value dropped by 50% and, critically for me, its character changed, completely eroding my trading edge in the process. In a matter of a few weeks, the opportunities that it had given me on a daily basis in August, had all but disappeared by the end of October.

I stopped day trading U.S. equities last Christmas and, when I reflected on my year, I concluded that the way forward for me is to focus exclusively on just one instrument and get to know it well. I realise that by putting all my eggs in just one basket, I could suffer the same fate that I experienced with POT. However, while I believe that markets are in a constant state of flux and a strategy that works today may not work tomorrow, the characteristics of the main market indices are less prone to such wild and dramatic changes that can - and did - affect individual stocks such as POT. In other words, if I study the market every day - as I intend to do - I will be alert to the way the ebb and flow of the market and adapt my approach accordingly. As in so many aspects of trading, there is no right or wrong, it's purely a matter of what floats your boat, mows your grass and sends your elevator to the top floor.
Tim.

 

[cuotes]

My choice:

Trading one stock/futures market only, getting to know it like the back of my hand and then trading that market only.

My reasons:

I've already try the other option. I've programmed and backtested loads of setups, and no satisfactory outcomes achieved.

Knowing (within my possibilities) the market, the news, the personality, the conditions around a particular market seems to fit better with my personal traits, and therefore i feel more confident and achieve better results.

Different markets, different attack's plan

 

[arabianights]

no one with a brain would choose a setup. Setups change and become efficent marketed out far more than markets disappear

 

[cr6196]

i've never really understood how you trade just one market...i mean do you mainly rely on experience/intuition ?
i think as an idea trading one market is preferable as trading a setup and i have often assumed you can only trade setups, but i can't see how it works...

 

[barjon]

fwiw I have half a dozen ftse100 shares in my stable which I know extremely well and on which I trade a range of set-ups which vary depending on which share I'm dealing with. In addition, I have a favoured set-up and I scan the other ftse100 shares for that and bring any that are approaching the trigger point into my stable temporarily to trade with minimum position.

So, a bit of each for me I guess

good trading

jon

 

[cuotes]

Setups change

True. patterns evolve.
If you don't evolve with them then you die.

i've never really understood how you trade just one market...i mean do you mainly rely on experience/intuition ?

As i said before, IMO different markets require different approaches.
I learnt that the hard way

There are markets that are easy to follow by the book and others that react mainly with the news. Others go up faster than go down, others are the opposite.

In my case, i try to know the market and find some regular 'traits'. I wouldn't call it exactly intuition.

 

[cr6196]

what does by the book mean then? i would say most of that stuff is obvious and you can see it by looking at a chart...what i mean is i know different pairs in forex act differently that doesn't help me trade them...it just helps me manage my position...
what are traits? i have seen some "traits" in markets, i.e at a certain time this happens more than half the time...but none of them you can base your income on, as they like a setup would fail at some point.
Setups could be more reliable because everyone has different motives for entering a trade, whereas if someone sees a "trait" it won't be long before someone tries pushing the other way???

 

[tomorton]

Money management is harder and more important than brilliant TA or the most detailed market knowledge. MM is easier to control on a single market only, and preferably a single position only. Just buy it for a rise, short it for a fall.

 

[megamuel]

no one with a brain would choose a setup. Setups change and become efficent marketed out far more than markets disappear

So if you don't have a setup, on what basis do you enter a trade? Be gentle with me - I am not the brightest spark!

 

[pedro01]

no one with a brain would choose a setup. Setups change and become efficent marketed out far more than markets disappear

No one with a brain would reply in that way.

There is no reason why any set up would become have its edge 'efficient marketed' out of existence unless the creator of said setup was a complete gobzhite. If you have experienced this, then I am sorry for your loss.

Honestly - do you get a kick out of trying to appear superior on the interweb ?

For the overly anal, allow me to explain. The spirit of the question is intended to ask whether you prefer to focus on specific markets or specific styles of trading.

For the Excessively anal - go check a dictionary & see if I spelt excessively correctly.

Original Post Re-phrased for the anal:

Would you prefer to trade a single instrument - just getting to know it & trading it by 'feel'

OR

Would you prefer to take your entry technique(s) that work across a set of instruments you don't need to know ?

CAVEAT : Over time, your mouth may cause your techniques to stop working. Should you experience this, sew your lips together. This thread is by no means to be a replacement for adapting to the markets over time. Should you want to use this thread as a vehicle to showing how great you are on the internet, be aware that I may ask my 7 year old son to come on here & own your ass to the extent that you never post again.

 

[Rossini]

So if you don't have a setup, on what basis do you enter a trade? Be gentle with me - I am not the brightest spark!

A trading edge does not necessarily need to be a setup. For instance, you might not have a technical setup but if you have inside information, you have a massive edge on almost every other trader.

 

[pedro01]

Money management is harder and more important than brilliant TA or the most detailed market knowledge. MM is easier to control on a single market only, and preferably a single position only. Just buy it for a rise, short it for a fall.

Tom - that discussion should be had here : http://www.trade2win.com/boards/general-trading-chat/71472-money-management-mystique.html

 

[arabianights]

So if you don't have a setup, on what basis do you enter a trade? Be gentle with me - I am not the brightest spark!

That's not what I'm saying, what I'm saying is that no setup will last for ever, because it will eventually be picked up on by enough market participants that it will no longer work.

On the other hand, most markets are here to stay for a while, and if one setup stops working then you can always find another

 

[arabianights]

No one with a brain would reply in that way.

There is no reason why any set up would become have its edge 'efficient marketed' out of existence unless the creator of said setup was a complete gobzhite. If you have experienced this, then I am sorry for your loss.

There is every reason to believe it would, and plenty of evidence of this happening too

Honestly - do you get a kick out of trying to appear superior on the interweb ?

Yup. Seriously, I creamed myself.

 

[megamuel]

A trading edge does not necessarily need to be a setup. For instance, you might not have a technical setup but if you have inside information, you have a massive edge on almost every other trader.

I know what your saying but I meant specifically what does Arabian look at when he is making his decision to trade. If its not a 'setup' (lets define setup up as chart patterns/indicators/S&R etc.), then what do the proffesionals use? Is it inside info? News? Instinct? Sorry if this seems like a stupid question but I genuinly have no idea what the answer is!

 

[cr6196]

I think AN is right to a certain extent, some setups are obvious and you can see the times when they are vulnerable to someone stopping everyone out...
i think what sam and i are wondering is if you don't trade with setups then what?
Reading your journal AN it seems like half fundamental-half order flow-half market making kind of thing? do u still trade that way? I for one, wish i could trade without any setups/indicators/trendlines etc or anything just price and use my brain a bit...but it is easier said than done.

 

[arabianights]

that journal is ancient, if you tried to trade like that now you'd get your **** handed to you

because markets change

which is my point

 

[pedro01]

There is every reason to believe it would, and plenty of evidence of this happening too

Yup. Seriously, I creamed myself.

OK - you have your little anal 1 side debate with yourself.

For the rest - try to understand that nothing is black & white. This includes our little world.

As such the question can be taken to mean 1 market or 1 method, even though your method may change over time, the concept is similar.

Do you look for setups across markets or do you look at a market for setups ?

 

[pedro01]

that journal is ancient, if you tried to trade like that now you'd get your **** handed to you

because markets change

which is my point

and your point isn't relevant to be honest.

Although I do think you are wonderful for actually having a point. Seriously, I bow down to you for your pedantry skills...