timsk
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There are natural or ‘Universal Laws’ that govern us all. Life is so much easier if we accept these laws and harness their power to help us achieve our goals. Fighting these laws is, at best, like swimming against the tide. Damned hard work! A universal law must have an obvious underlying truth to it and that truth must be constant and eternal. It will never change. A well known universal law is that of 'Karma', the Sanskrit word used to describe cause and effect. The idea being that every action (cause) has a consequence or reaction (effect).
In his book ‘Trading Day by Day’, F.H. “Chick” Goslin suggests that it is wise to examine the universal laws (or 'natural' laws as he calls them) - that apply to traders. He is quite dogmatic in asserting that there just three such laws, regardless of time frames, instruments and markets traded etc. They are:
1. The future is unknown
2. Continuation is more likely than change
3. Prices fluctuate
Now, some folks might question my nerve to suggest that a consistently successful trader and respected author such as Mr. Goslin may be slightly wide of the mark with his three laws, but, here goes. . . I agree with laws 2 and 3, completely. However, law 1 is a little bit contentious, I think. There is a whole swathe of traders who believe that the markets conform to some sort of mathematical model. Elliott Wave theory and the Delta Phenomenon do, as I understand it, have forward projections or predictive values. The latest big name exponent of what could be termed ‘magic maths’ is Steve Copan with his ‘Market Matrix’ system. I don't use any of these methods, but I imagine that their devotees would challenge the idea that ‘the future is unknown’ and question its status as a universal or natural trading law?
In addition to the main universal or natural laws, maybe there are additional 'sub-laws'. For example, one sub-law might be: 'There is no Holy Grail'. If there was, then everyone would find out about it and the markets would, through necessity, have to destroy the grail in order to survive. So, the opportunities to profit in the markets are infinite and there is no 'one way' to trade. Two more sub-laws perhaps?
The purpose of this thread is to see if, collectively, we can agree as precisely as possible on the number and characteristics of the universal laws that govern our activities as traders. Additionally, maybe there are 'sub-laws' which, underpinned by the universal laws will provide a very solid foundation for our trading strategies. If so, how many of them are there and what are their characteristics?
Tim.
In his book ‘Trading Day by Day’, F.H. “Chick” Goslin suggests that it is wise to examine the universal laws (or 'natural' laws as he calls them) - that apply to traders. He is quite dogmatic in asserting that there just three such laws, regardless of time frames, instruments and markets traded etc. They are:
1. The future is unknown
2. Continuation is more likely than change
3. Prices fluctuate
Now, some folks might question my nerve to suggest that a consistently successful trader and respected author such as Mr. Goslin may be slightly wide of the mark with his three laws, but, here goes. . . I agree with laws 2 and 3, completely. However, law 1 is a little bit contentious, I think. There is a whole swathe of traders who believe that the markets conform to some sort of mathematical model. Elliott Wave theory and the Delta Phenomenon do, as I understand it, have forward projections or predictive values. The latest big name exponent of what could be termed ‘magic maths’ is Steve Copan with his ‘Market Matrix’ system. I don't use any of these methods, but I imagine that their devotees would challenge the idea that ‘the future is unknown’ and question its status as a universal or natural trading law?
In addition to the main universal or natural laws, maybe there are additional 'sub-laws'. For example, one sub-law might be: 'There is no Holy Grail'. If there was, then everyone would find out about it and the markets would, through necessity, have to destroy the grail in order to survive. So, the opportunities to profit in the markets are infinite and there is no 'one way' to trade. Two more sub-laws perhaps?
The purpose of this thread is to see if, collectively, we can agree as precisely as possible on the number and characteristics of the universal laws that govern our activities as traders. Additionally, maybe there are 'sub-laws' which, underpinned by the universal laws will provide a very solid foundation for our trading strategies. If so, how many of them are there and what are their characteristics?
Tim.
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