Plain Vanilla Options Trades.

[dc2000]

I would normaly like to help you with the comming week but IV an idea you should already know things in advance

 

[dc2000]

seem to have frightened Soc away

 

[Profitaker]

what you mean you cant work out the damage ? sorry I forgot you cant work out spread margin and exposure either

Nope, he wouldn't have a scooby.

 

[A Dashing Blade]

. . .
As in other professions, such as top-level sport, once the years of work have been devoted to the task of development, a mind-map results, which makes the task (to an outsider) seem deceptively easy because it has become so for the proficient practitioner. If asked to explain how the task is carried out it will never be done so to the satisfaction of the amateur, because it can only be explained in general terms at the level of understanding of the amateur. The amateur is not the expert and cannot get into the mind-set of the expert unless and until he becomes one.
Your knowing of the market takes the form of visualisation prior to the event. This is often experienced by top athletes as well and may take the form of other sensory activity - some talk of feeling, others of hearing for example.
. . .

Trading psychology 101 surely.
This point was made in Market Wizards 1 iirc with the story about the snipers.

 

[SOCRATES]

Trading psychology 101 surely.
This point was made in Market Wizards 1 iirc with the story about the snipers.

Charlton's post interests me.

I am willing to expand on it.

First of all when I am in front of a screen I have no emotions whatsoever, none,

Therefore the question of feelings does not arise, because I have mastered a mindstate which is akin to autism, a form of artificial autism, in the sense that all feelings are blocked, irrelevant.

What is the interesting part that I can relate to is the sounds.

In another thread I started I asked the question whether volume can be heard.

There are two distinct types of sounds.

The first is the little voice that tells you what to do next and the second is that as prices unfold, it is as if it were music being played, with each note and each anticipated note taking its place and each bar expected. Probably that is what the author means by sounds, I don't know.

 

[CYOF]

You are very close to the truth funnily enough, though you may not realise it. You see Crapbuddist, the education system is not there to make the public free, it is there to make the public prisoner. It is there to imprison people into fixed ideas. And it is these fixed ideas that server to keep people on treadmills. These treadmills are necessary to keep people doing "Jobs", having life insurance, credit cards, mortgages, paying taxes, payng tolls, maintainint bank overdrafts, having excruciating obligaitons and accepting them as the norm, and generally occupied in what they percieve to be productive endeavours, and what is more to prevent them from thinking freely, and if that is not bad enough, to encourage them to believe everything they read in textbooks, as a further insidious aid to keep them completely misdirected in the prison planet they inhabit, and docile.

But traders, real traders, are not subject to this imprisonment of mind and body. They have broken the bonds that tie everybody to the treadmills. They have been able to jump out of the box and become free. These are in the very smallest minority, because, in order to achieve that, they have to change themselves first. This is percieved as very difficult if not impossible for the great majority, hence the torpor encountered on these boards when thinking out of the box is presented.

Yes Socrates, and what is more, was this tragedy not highlighted in 1580, and it is now 2007

 

[SOCRATES]

Yes Socrates, and what is more, was this tragedy not highlighted in 1580, and it is now 2007

Yes, and now look at my previous post. Do you think anyone understands it ? No.

Now here is some more..

What I have explained is only part of it, not all.

What happens, is that when you get yourself really tuned, the chart on the screen does not get confined to the perimeter of the screen. It wafts away to the right, beyond the right hand edge, into thin air, and it displays quite clearly what is going to happen next.

It does not appear in solid display, in solid form like it does on the screen, it appears with a smoky quality and sort of translucence that you need to adjust your vision to percieve it, not to see it, but to be able to percieve it, as part of the cluster of abilities. It is a skill and arrives with experience, knowledge and many hours of screen watching.

There you have it.

 

[the blades]

Yes, and now look at my previous post. Do you think anyone understands it ? No.

Now here is some more..

What I have explained is only part of it, not all.

What happens, is that when you get yourself really tuned, the chart on the screen does not get confined to the perimeter of the screen. It wafts away to the right, beyond the right hand edge, into thin air, and it displays quite clearly what is going to happen next.

It does not appear in solid display, in solid form like it does on the screen, it appears with a smoky quality and sort of translucence that you need to adjust your vision to percieve it, not to see it, but to be able to percieve it, as part of the cluster of abilities. It is a skill and arrives with experience, knowledge and many hours of screen watching.

There you have it.

Soc,

I suspect many people's frustration on this, and many other threads, is not with your apparent success or mastery of what you do. It's the suggestion that this is the way, and the only way. There are many people, I'm sure, enjoying success who can't see off the end of the chart, or hear volume (yes, and many more who aren't successful). Do you not acknowledge this?

UTB

 

[SOCRATES]

Post Number 1352 on this thread, as follows:~

Quote:
Originally Posted by barjon

I have never traded options (nor will I) but I can say that in over thirty years of trying I have never had twenty winning trades on the trot

Profitaker replies:~

Ok, I can easily change that for you and will guarantee you 20 consecutive winning trades. AND I won’t try to charge you £ 400 for doing so. Ready ?

I have said this before and I will say it again:~

Writing options is professional activity, whereas buying them may or may not be.

Now, (hahahaha)....Profitaker says that writing options does not constitute an edge....he further argues that the risk is enormous....(hahahaha_ in case a ....Black Swan appears.....which does not worry me in the slightest as I am well prepared with the rolled up newspapers just in case.)....he......if he is going to demonstrate 20 trades right in a row to contradict me.....(and it is not wise to contradict me as DC2000 has found out) ......then these 20 trades must be buying options and not writing them....because writing them is what I do and not what he does and which he thinks I am doing is wrong and dangerous, etc,, ......... ......so let us see what happens next here and what it is he decides to buy....... .......and Bully is watching and grinning.......:cheesy: .....and so am I.....:cheesy: ....funny...

 

[SOCRATES]

Soc,

I suspect many people's frustration on this, and many other threads, is not with your apparent success or mastery of what you do. It's the suggestion that this is the way, and the only way. There are many people, I'm sure, enjoying success who can't see off the end of the chart, or hear volume (yes, and many more who aren't successful). Do you not acknowledge this?

UTB

Yes, u r right.

Each to his own and very good luck to everybody, and I mean this, truly, sincerely.

But I must act in accordance with my experiemce which is considerable and my expertise accumulated over many years and therefore, my concern is that the writers have the edge over the buyers, because, as I explain above, "Writing" is professional, whereas "Buying" may or may not be. I hope this now makes it clear for you.

 

[ducati998]

Oh, and by the way there are Star Chamber Members watching and waiting in the Gallery to see what it is Profitaker is going to finally buy....:cheesy: ...we are all waiting, Bully too..... ....and now even ducatti has appeared....you hoo ! I can see you peeping.......this is fun !

Soccy peanut

You don't have 20 winning trades.
You have 10 winning trades [or whatever the actual number of closed trades are]
And, open trades.

The Open Trades will not be winning trades until they are closed.
If they could have already been closed, as has been demonstrated, you would have closed them, as they are time bombs while they are open.

Plenty of time for a hard correction to materialize.
jog on peanut
d998

 

[SOCRATES]

Soccy peanut

You don't have 20 winning trades.
You have 10 winning trades [or whatever the actual number of closed trades are]
And, open trades.

The Open Trades will not be winning trades until they are closed.
If they could have already been closed, as has been demonstrated, you would have closed them, as they are time bombs while they are open.

Plenty of time for a hard correction to materialize.
jog on peanut
d998

The fuses on these bombs are still too long. When they get shorter I will then act by passing them on to someone else......... .......... It is all a matter of timing, certainty and knowing what is going to happen next.

That is why I am not showing my next 20 trades, for you to see here. As you lot don't deserve it, the next series will be hosted somewhere else.....:cheesy:

 

[ducati998]

Soccy peanut;

Come back..............trouble ahead

jog on peanut
d998

 

[jimmy1jag]

Yes, and now look at my previous post. Do you think anyone understands it ? No.

Now here is some more..

What I have explained is only part of it, not all.

What happens, is that when you get yourself really tuned, the chart on the screen does not get confined to the perimeter of the screen. It wafts away to the right, beyond the right hand edge, into thin air, and it displays quite clearly what is going to happen next.

It does not appear in solid display, in solid form like it does on the screen, it appears with a smoky quality and sort of translucence that you need to adjust your vision to percieve it, not to see it, but to be able to percieve it, as part of the cluster of abilities. It is a skill and arrives with experience, knowledge and many hours of screen watching.

There you have it.

As I understand it, this is akin to extracting the correct slide from the sub conscious mind's box of millions of images and super imposing it on the screen in front of you and then focusing the image (a bit like adjusting your eyes and mind to see those coloured 3D pictures you find sometimes, where you have to adjust you vision to see the 3D image in front of you). And once you've done that, you have to act correctly in accordance with the information in front of you... and all that with the conscious mind banging away inside your head (unless you've tamed it of course!) encouraging you to do the wrong thing.

 

[SOCRATES]

As I understand it, this is akin to extracting the correct slide from the sub conscious mind's box of millions of images and super imposing it on the screen in front of you and then focusing the image (a bit like adjusting your eyes and mind to see those coloured 3D pictures you find sometimes, where you have to adjust you vision to see the 3D image in front of you). And once you've done that, you have to act correctly in accordance with the information in front of you... and all that with the conscious mind banging away inside your head (unless you've tamed it of course!) encouraging you to do the wrong thing.

I don't really want to digress into this too much but, the subconscious as I understand it, contains the sum of all our experiences and knowledge. We must learn to listen to it. It does not lend itself for us to hear it if we are agitated, excited or worried or anxious or impatient. When all the emotions attached to these feelings are removed the subsconscious gives us the correct informatiion in a sort of little voice if you like. This little voice is intuition. Intuition often lies contrary to perception. This is why perception can be so misleading, because if the emotions are not dealt with first and cleared, they serve to mask and distort the truth that intuition is trying to get through to us for us to act upon. You see how the very first sentence contains experience and knowledge ? This is because the intuition you will have will depend upon the quality and quantity of the knowledge and experience you have in your data bank for it to access. As intuition itself does not recognise time, I would suppose, an extension of intuitive thought involves or must involve the added bonus of not being restrained by it,

 

[jimmy1jag]

I won't take your thread off subject... but it's fascinating nonetheless!

As far as time is concerned... I agree!

And I'll leave you to it!

 

[Bez]

Would the word premonition be more appropriate :?:

I know Mark Douglas talks openly at dinner party about premonition but I carn't recall him ever publishing it

 

[dc2000]

or maybe high on prescription medication?

When the going gets tough
dust and sunset come to mind

Beep Beep Vrroooooooommmmmm

 

[ducati998]

I don't really want to digress into this too much but, the subconscious as I understand it, contains the sum of all our experiences and knowledge. We must learn to listen to it. It does not lend itself for us to hear it if we are agitated, excited or worried or anxious or impatient. When all the emotions attached to these feelings are removed the subsconscious gives us the correct informatiion in a sort of little voice if you like. This little voice is intuition. Intuition often lies contrary to perception. This is why perception can be so misleading, because if the emotions are not dealt with first and cleared, they serve to mask and distort the truth that intuition is trying to get through to us for us to act upon. You see how the very first sentence contains experience and knowledge ? This is because the intuition you will have will depend upon the quality and quantity of the knowledge and experience you have in your data bank for it to access. As intuition itself does not recognise time, I would suppose, an extension of intuitive thought involves or must involve the added bonus of not being restrained by it,

Kahneman et al showed that human psychology [in aggregate] sought minimisation of loss, over and above the seeking of profit.

Viz. the psychology registered greater pain, on a loss, than pleasure on a win.
This was also the central credo of Game Theory, that the correct *rational* strategy was one of *not losing* rather than trying to win.

When linked to probability studies, the following was calculated;

Example;
An investor who can earn a return of 15% in excess of the Treasury rate, with 10% volatility. Calculated via standard deviations;

Probability of making Money
Scale...................................Probabilit y
1yr.........................................93%
1Quarter.................................77%
1month...................................67%
1day......................................54%
1hour.....................................51.3%
1min......................................50.7%

In the short-time frames, it is a 50/50 proposition, but stretched out to the longer time frames, the probabilities rise very high.

The longer time frame, is generally associated with the *investor* rather than the trader, although that is inaccurate as longer term trend following systems such as TT will exceed that timeframe.

What does become apparent however is this;
If, loss, effects a negative psychological reaction due to the aforementioned greater pain due to a loss, you will by trading short-time frames build up a lot of psychological damage due to the lower probabilities of success.

This aversion to the psychological pain, will affect function of the decision centres within the cortex that are vital for efficient and unbiased processing of information, thus exacerbating the breakdown of optimal *rational* functioning, and the change to *emotional* decisions.

Thus, in a chart, you no longer look at it in a rational manner, you look at it in an emotional mind-set, looking to minimise further losses.
This is the path that erodes, and eventually destroys discipline

Noise Theory which quite simply defined market noise in the context of deriving market prices. This theory was developed from work completed by Keynes.

Further work and refinement within Noise Theory has been completed by Tetlock.
Each day in the Wall St Journal, with some three million daily readers, follow the daily column, Abreast of the market

Cutting to the chase, the research has shown that articles, either positive, or negative, account for 0.081% points in the following days market.

Considering the average return from the index from 1984 to 1999, was 0.051 the noise factor looms as a critical component.

This of course correlates directly with; The market price is influenced by the psychological state of the participants, but, the price itself influences the psychological state of the participants

Thus, we now tie in the Behavioural Psychology component of the equation, to the Efficient market crowd, who, despite the title, are looking for inefficiencies with which to beat the market


Which brings us to some of the adaptations within psychology for dealing with, or thinking about the management of psychological issues.

From NLP we have; The map is not the territory

Very simply, the map, [methodology, psychology] is not the [market/reality] territory.

This has been bourne out certainly within the two forms of analysis. This confirms further the requirement of money management techniques to be bolted onto chart and technical based methodologies, but more importantly, why the discipline required to execute money management strategies, seemingly is so difficult, particularly for discretionary based methodologies, and less so for mechanical based methodologies.

 

[SOCRATES]

Would the word premonition be more appropriate :?:

I know Mark Douglas talks openly at dinner party about premonition but I carn't recall him ever publishing it

Yes, obviously, because what can prudently be included in textbooks is limited,.... if you understand what I mean.... ...I am certain that you do.