What do you do?

[trader_dante]

I would be really interested in other people's opinion on this experience I had and specifically, what you would do in this situation.

I was watching CL for the last three days and I've had a strong feeling that it's going to break $80.70 to the downside.

I wasn't sure whether it was just going to flush out the D1 lows or actually make a sustained break of them but it was the only thing that I felt strongly about when I looked at the markets.

The reason for this feeling was that one of my theories on S/R is that the more they are tested, the more they are likely to give way and CL is currently on it's 12th test on the D1.

At any rate, I was talking to a fellow trader late last night before I went to bed and he also trades CL. And I said to him "watch that Crude tomorrow (meaning, of course, today) because it's going to go down".

Then a short while after I finished speaking with him I fell asleep.

Next thing I know, in the middle of the night, I wake up suddenly with this strong feeling that I have to get LONG CL immediately. The strange thing was that I couldn't remember having any kind of dream before I woke up. I was just suddenly wide awake and I had that kind of feeling you get when your eyes open and you have that split second of intense fear that you have somewhere to be and you've slept through your alarm.

Now I am lying right next to my screens which is how I sleep so I could have got up and just immediately taken a position but instead I just lie there, staring at the ceiling and I say to myself, "Don't be ridiculous, you want to be short, it's sitting right on the level and it hasn't gone anywhere..." And then I get to thinking "Why is that just sitting there with the Euro down over 3% in two days trading?" and soon enough I drift back to sleep.

This morning I am relating the phenomenon to my friend and before I have even got to the end of the story he is scrabbling around for his account login to crack it long.

Now, I've been watching the market today and I've seen no entry (either long or short) that I would normally take and yet the market is now up $3.

Which leaves one happy friend and one slightly bemused Dante.

So the question I am genuinely interested in hearing other traders views on is what would you have done if this had happened to you:

a) Ignored it and done nothing.

b) Immediately taken a position at full size.

c) Immediately taken a position at reduced size so you have some exposure.

d) Something else that I haven't covered.

Thank you for your time reading this.

Tom

 

[Pento]

Option C. No point loading up full size on just a dream. But would have put on say 25% of size on, so I could add when theres a clear up move which I can explain.

On the smaller position I'd have a clear stop in place. If it went offside then I may average if I could see good enough fundamental/technical reasons for it to rise and not just on my hunch.

 

[glyder]

a) Ignore it and do nothing.

trade what you see not what you dream

 

[meanreversion]

a) ... I don't see how dreams are directly relevant to reality - I know mine aren't!

 

[MrGecko]

e) decide to stop taking so many drugs.

 

[meanreversion]

e) decide to stop taking so many drugs.

Surely -

decide to stop taking so many drugs - E

(imagine trading on MDMA, you would love the market like never before)

 

[amit1986]

Option a).

Do you think that sort of trading would have reinforced good trading discipline?

Probabilistically speaking, there is a chance, however small it may be, that gut feeling trades can be profitable. But it's definitely not worth risking your capital on

 

[Hilarymannah]

Depends on how much you've trusted "your" intuition in the past !

There's a fine line between intuition and belief,...it's just most don't believe it
I can recount many occasions I've trusted my intuition and benefited,.... just sayin',...: )

 

[bbmac]

Option a.

Unless dreams/instinct are part of your trading edge....you gave your friend a 'tip' and he acted on it presumably based on his belief in you as a trader....would he stayed the sample if it hadn't have worked out for him ? You didn't follow your own dream/instinct presumably beacuse that is what it was, in the absence of a technical trading set-up to provide an entry into your instinct...probably proving that you trust your tech set-ups/edge over your dreams/instincts. ??

G/L

 

[trader_dante]

a) Ignore it and do nothing.

trade what you see not what you dream

Thanks guys. Some really good answers here.

This answer from Glyder interested me the most because I guess the question I had in my mind after I saw the move today was did I "see" the move coming subconsciously?

My friend said that I had developed a short bias based on my market theories regarding S/R and I was not willing to consider that the market could move up and was therefore not "seeing" the reality which was that if the market isn't doing that which you think it should, that something major is up.

He said that the dream (if that's what it was) was the only way that I could allow myself to accept the truth of the situation by putting the pieces together when my mind was free to interpret the info.

I know it sounds a bit airy fairy - and it is...but still, it makes for interesting thought.

Oh and nice to see you posting again, Gecko. Your "briefcase" posts were some of my favourite posts on this forum.

-Tom

 

[Black Swan]

Now I am lying right next to my screens, which is how I sleep, so I could have got up and just immediately taken a position but instead I just lie there

Er..OK scary man...good luck with that...

 

[wackypete2]

Option a
Stick to what works.

The reason for this feeling was that one of my theories on S/R is that the more they are tested, the more they are likely to give way and CL is currently on it's 12th test on the D1.

Similar to my own theory...like a hammer, the more the line gets pounded the more likely it will break.

If I traded based on my dreams I'd be a pimp.

Peter

 

[barjon]

Td

Log it together with other occasions you can remember when your intuition has given you such a strong kick and continue doing so.

I know from a past life that intuition can be a solid thing not to be ignored - where it's the manifestation of the subconscious filtering of information - but you have to test that it is just that and not whimsical feelings. I once ran a few drug busting teams at one of our major airports and the two guys who had the most success did it purely on intuition and could not explain why they fancied one passenger over another.

Cheers

Jon

 

[glyder]

Thanks guys. Some really good answers here.

This answer from Glyder interested me the most because I guess the question I had in my mind after I saw the move today was did I "see" the move coming subconsciously?

My friend said that I had developed a short bias based on my market theories regarding S/R and I was not willing to consider that the market could move up and was therefore not "seeing" the reality which was that if the market isn't doing that which you think it should, that something major is up.

He said that the dream (if that's what it was) was the only way that I could allow myself to accept the truth of the situation by putting the pieces together when my mind was free to interpret the info.

I know it sounds a bit airy fairy - and it is...but still, it makes for interesting thought.

Oh and nice to see you posting again, Gecko. Your "briefcase" posts were some of my favourite posts on this forum.

-Tom

Hi Tom,
I think you are right, the subconscious knows a lot and can inform us. But knowing how and when to trust it when there is risk involved is not easy at all.
I remember one of the traders interviewed in the market wizard books had similar experiences with dreams / subconscious feelings.

 

[DionysusToast]

Option f) take a holiday, perhaps consider getting a girlfriend.

I just posted a link to a video by futurestrader71 - who likens trading to playing the piano. A novice will be thinking about which keys to hit and music will sound will be contrived. An experienced player will be doing it effortlessly and focus on the whole.

After a while, our work becomes a natural thing just like golf, driving, sex, skateboarding, water ski-ing or anything else you have to repeat to get good at. So whilst you don't need to be fixated on a rigid framework per se, you should probably draw the line at trading in your pyjamas,

If you are dreaming about the markets, then I think it's time to take a breather. Like I say, a girlfriend would be a healthy diversion.

 

[DionysusToast]

One more thing to consider.

If you'd dreamt long and the market had gone down, the experience would have been unremarkable and you would have quickly forgotten about it. For sure you would not have started a thread about it.

So - be careful about reading too much into this. As much as people want to believe that there is something remarkable going on here - there was a very good chance your dream would have turned out correct. The fact it did turn out correct is totally unremarkable.

The problem is - we tend to see the remarkable in the unremarkable.

Confirmation bias (also called confirmatory bias or myside bias) is a tendency for people to favor information that confirms their preconceptions or hypotheses regardless of whether the information is true. As a result, people gather evidence and recall information from memory selectively, and interpret it in a biased way. The biases appear in particular for emotionally significant issues and for established beliefs.

 

[William King]

Ignore it and
f) Don't trade while sleeping

 

[Hoggums]

You can't trade every opportunity. If you enter the trade now then your stops are going to be large and risk/reward poor.

Let it go - a better, clearer trade will be along soon.

 

[qsera]

a) Ignore it and do nothing.

trade what you see not what you dream

Yes trade what u like, don't go according to others

 

[spinola]

On Dream Analysis.

What do you do?

By all means I'll enjoy a nice dream, but, then I'll look at the market to assess (as best I can) and see what directional bias it (the market )is still positioned in.


Dream or not, I need (because I understand the principles of an auction market and the general facilitator characteristics required to support that environment) to consciously understand the markets evolving valuation bias on a continual basis.


Because I observe one market on a passive basis on a continual basis,(sometimes for extended periods, sometimes not etc) it is not unreasonable to expect feelings of price or some other market behaviour , to permeate up from the subconscious into the conscious now and then, but, whilst I am aware of this, it does not prevent me from remaining unimportant in the matter, I cease to exist in some way, yet I am a part of the market that thinks in a non thinking way because I am simply just being, molded into and with the market. This should come as no surprise though, due to the amount of market exposure to one market over many thousands of hours.


I have become very comfortable with my expectant knowledge need requirement that tells me " Yes I am happy to participate " and have little emotions of my human self that distract me from enjoying being with the market and placing trades with its rhythm, this is probably because our rhythms are fairly well matched and in sync on the whole, save for any intra day skirmishes and volatility , but because of little emotions to distract and our suited rhythm, I don't just stare at intra volatilty , but , EAT IT ! (If it's prudent to do so).


Now could your dreams and inaction be indicative that you as a trader wish to understand and know more of the markets behaviour and directional bias, hence you have ideas of what might happen here,say a short at support, but then, wake thinking NO it's long ?


And therefore I conclude and I put it to you that these dreams is your inner desire to simply evolve to know more of your chosen pursuit, specifically to develop deeper understanding and expertise of the markets evolving valuation process on a continual basis, enabling you to gain that (felt) needed ? expectant knowledge requirement that tells you internally " Yes I am happy to participate. " For we now know what we are doing, going to do , based on what the market does. This is the union of the trader and the market.


Now you can imagine me sitting down with a random market theorist and second word, OFF, but in an affectionate way and with an appreciation of healthy competition. It might be good for them , but I am just not built that way to settle for (dare I say, less care?) And in some ways they have the benefit of not having the PERSONAL need? to understand what on earth is happening out there, but I think if or when a trader feels union, then a greater potential reward is not only possible to be realised, but felt and experienced, and that is the by-product of effective trading.



Bit of humour in my post above, but , sincerely, that's how I am with it all.




I hope yoodoo voodoo like Idoo.