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What Does It Take?
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The greatest games have always been dominated by the masters of obfuscation, misdirection, misinformation, if not outright deceit. Of course the financial game is no exception and the price of admission to be paid every single day differs depending on personality, cunning, intelligence, fortitude, discipline, greed, market type, market cycle, liquidity, etc. Although we are all trading the very same market, the hurdles we encounter in our respective journey are a product of exogenic and endogenous factors.

Long term participation and success therefore has always been limited to a very select minority. To quote Jesse Livermore: The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, or for the get-rich-quick adventurer. They will die poor. 

Most of us would list intelligence for instance as a cardinal predicate to becoming a successful trader. But like with many things in life the real picture is a bit more complicated. Because if it was just a matter of intelligence then why don’t we see more billionaire mathematicians or scientists? Many of them die poor and are often considered social outcasts. As I mentioned above, we all must face our own personal hurdles and challenges. Very gifted people don’t get a pass here as intelligence comes with a price. Former software engineers for example are more often than not inspired by complex models and convoluted solutions. Their own intelligence and ability becomes the drivers of their endeavor as they assume that the key to success lies in cracking some secret code hidden inside the market’s gyrations. The fact that chaos rules the day is an inconvenient truth equally ignored by the smart and those with lesser neuron counts. As such a smart but righteous or misguided individual may be no different to someone of lower ability who ventures nomadically from one trading site to the next or absorbs dozens of trading books in hopes of finding that one system that beats them all.

The motivations may be different but the eventual outcome will be the same as the underlying premise feeding ones action is identical. One that is inspired by an assumption that we may one day overcome some final hurdle and from then on it’ll be easy time. Make no mistake – as soon as you overcome that last hurdle there magically will appear a brand new one. Because as human beings we are wired in a certain way that assures an unlimited supply of hare brained cognitive biases and misconceptions – no matter how smart or talented we are individually. In other words – intelligence or talent doesn’t offer us a free pass. Your journey will simply be a different one and success is not guaranteed. As a matter of fact all of the most successful traders I have come across are or were a lot more street smart than brilliant. Of course there is a baseline on the IQ front and I would hazard to put it somewhere around the 120 mark. But that’s not exactly a high bar and I have met traders dumber than that who did just fine pressing that one button that they somehow figured out works on a long term basis. As such success is a side product resulting from a series of positive choices. In fact this place was created years ago to aid us all on a daily basis.

Some of you may wonder why I often crack the whip early when I see signs of decay, impulsiveness, or an abandon of some of the prime directives we all aspire to abide to here at Evil Speculator. Naturally the dynamics of a virtual community, whilst permitting global collaboration and instant communication, also serve a certain bubble mentality with little to no personal consequences. For one we seek information that already supports our current view and we are quick to dismiss anything that at the surface violates any of our core beliefs. But there is also a social aspect to this. In the past the guidance of a mentor or group of peers came with implications and personal responsibilities. Your seat at the table had to be earned (with significant hurdles to entry) and cutting and running was frowned upon and may cost you your career. At the same time success and especially failure were exposed to the people around you and there was no easy way of hiding them either.

In a digital world we are however free to simply extract ourselves in periods of discord and thus avoid personal consequences of actions, decisions, or personal behavior. Stomping your foot and running off is a character trait mostly exhibited by children but online it seems to have become the norm these days, often after angry insults have been exchanged. It takes quite a bit of discipline to overcome the temptation of avoiding negative experiences and stress but I believe cutting and running to be a cowardly choice with long term implications. Successful people are never the product of easy choices and a careless upbringing. Like a good sword the friction of life, e.g. personal strife, being forced to overcome personal limitations, creates a person who is able to face challenges with easy that would quickly thwart others.

Money is just the result of being successful. You can chase simply money but drug dealers and career criminals do that a lot more effectively than the rest of us. Personal growth however bestows wisdom and experience which will lead you to new challenges you didn’t even know existed. And that my dear steel rats is what we really should aspire to as it is the real key to happiness and a successful life. Not one of convenience and easy answers. If you seek those, well – there are plenty of people selling that out there and I’m afraid you’ve come to the wrong place for that.

And there’s your answer – I crack the whip early because you need it. We all do – nobody gets a free pass. You may curse me today but you’ll thank me later (one hopes).


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • RoastBeeph

    Thanks for the post. I hope gold retraces a bit so I can get a small long position in.

  • http://evilspeculator.com molecool

    Don’t hope – just be there if it happens. Hope is a slippery slope to directional thinking which is a sure ticket to failure.

  • BKXtoZERO

    Thanks#2, I have a long way to go, I started and have a few decent qualities but I realize I am nowhere yet other than at least having a shoulder off the mat now.

  • tradingmom

    A while ago (more than a year I think) Scott wrote a couple of posts on how/where to place entries in trending markets. If you look for his posts, the commentary / concept of accelleration lines including charts were excellent. You can watch this play out across multiple timeframes in multiple markets daily.

  • http://evilspeculator.com molecool

    We all do – but it should be fun! Consider where you were a year or two ago and then ponder on how you have changed since then. How much you have learned, how you have grown. That is the real reward – the money you may have banked is just the icing on the cake. The trading game is very unforgiving as it is red pill as fuck – there is no politically correct or whining after losing. There are only your daily choices and whether or not you followed your rules. It’s one of the greatest games ever and although it’s sometimes frustrating and draining as hell I wouldn’t want to do anything else.

  • RoastBeeph

    Thanks, I’ll search for it.

  • Huey

    Good post. Bang on with the point about focusing on personal growth and success will follow. As for trades, I had short EUR/CAD on my list too. Spike high on the monthly with an inside candle that was slightly broken this week. Looking for a short setup on the daily.

  • Skynard

    If someone can share with me an easy way to transfer my manuscript electronicly would be happy to share the results of a recent client of mine. Had difficulty in the begining since the R value is less but finally was able to figure it out. I do not post my results usualy because it grows my head. My approach is very aggressive but very rewarding:) SPX tested 2K and if /ES 1980 fails we will see new lows. Called that possibility of a SPX 2K retest with the 1970 gap fill. Be careful now with those FN longs, not the time to be heavily vested. In SPY NOV 180 Puts, bear flag 5 min.

  • RoastBeeph

    180 is a pretty bearish strike price. That’s almost a 10% haircut from here! :)

  • Kidd Cudi

    SPX is obviously in a trading-range, or at least has been since the end of August (looking at the daily). In that lens, we are at the top boundary of the range, so going long here would indicate a belief that the range is about to end. Since my personal philosophy is that things remain in-trend or in-range more often than they switch, it would require significant evidence of range exhaustion for me to consider trading on the presumption of a range-breakout or location-shift. Thus, I’m short here, in expectation of some localized mean reversion (dip to at least 1940).

  • BKXtoZERO

    The biggest change is feeling better about myself as a person. Scott’s beatings have sunk in though…. That is a weird combo. Kind of like being a Marine I guess and I am still a maggot, just a better maggot now.

  • Skynard

    We are about to enter a major bear move

  • BobbyLow

    Excellent post Mole.

    If I had to choose one word to describe the markets it would be Obfuscation or Machiavellian.

    I have a friend who blew up big time and his last words were “this is one of the only businesses that no matter how hard I worked, I could not succeed”. That was a few years ago and it took me awhile after that to learn that the major obstacle impeding my own success in this business was myself. Even after many years, I can not honestly say that I’ve made it to where I want to be.

    I suppose being able to survive a long time is some kind of victory but that’s not enough. This is why I get up every morning, put my blinders on, trade my rules and try to improve my game. If I don’t try to improve everyday, market obfuscation will win and I’ll just be another guy who bit the dust.

  • Kidd Cudi

    Why do you think that? (Not that I disagree)

  • BKXtoZERO

    Good to see you brother

  • Skynard

    We are extremely bearish at this juncture, many clues and very few buyers.

  • Skynard

    It is a market phase and the timing is right on.

  • Skynard

    /NG on the move as planned:)

  • saltwaterdog

    Sky, NG dropped 10% from when you were calling the long side around sept 25/26, new contract lows on the way down (Nov). If you held it, you’ve at best made back half of your losses. If you traded around it, nobody here knows that bc you went dead silent on it during the selloff.

  • RoastBeeph

    Platinum is also running.

  • tradingmom

    Event Risk — Fed minutes released at 2 pm eastern today.

  • Skynard

    Excellent:)

  • Skynard

    Bought the entire way down, currently +16 /QG, AVG 2.516

  • RoastBeeph

    Is that chart from the thinkorswim platform or from TR Ameritrade’s own platform?

  • Skynard

    And you, drywall is a PITA:)

  • saltwaterdog

    and that’s your thing which I think everyone here gets, but as Mole and a few others have said, if you are posting the trades (which seem to add to the forum and are enjoyed by many), then what is the purpose? If it’s to help others, then a 10% adverse move from an entry, that blows through all historical context (for ISL placement), while averaging in to your position is (I hope you’d agree) a unique approach. Any dummy here that heeds your guidance and went long would’ve gotten killed. Have to be careful that newbs will say “Sky’s the man I’m taking a flier”

  • Skynard

    Learned the hard way and do not allow anyone to shake me off my trade any longer. If you are trading less than a 100k account you will have difficulty.

  • Huey

    Same thing right? Not sure but I opened this account before the TOS was bought by TD so I guess TOS??

  • saltwaterdog

    the always fun USDA WASDE report is tomorrow at 12p EST

  • RoastBeeph

    Ok, gotcha. Nice looking chart.

  • saltwaterdog

    I happen to be long as well but I am not sure this will be the low. The recent low was also the lowest daily RSI reading, which typically warns of a lower low ahead

  • BKXtoZERO

    I agree, I’ll admit to: following into a very small position which I figured I’d leave for 2 months. I added more at the lows (which we should not do) and I traded myself out for a flat seeing what you see that there is likely another move lower. These were all lessons to me and I freely admit these.

  • BKXtoZERO

    taping/ mudding worse! 2 rooms at once….

  • saltwaterdog

    That’s a recipe for disaster BKX… stop trading my friend, do the work. Scott has said (stating he’s echoing what Ivan has said), that wandering in the dark like that is simply making the necessary work longer, as you ingrain bad habits and emotional baggage that will take multiples of time longer to unwind. Plus, you’ll blow up in the process. More taping knife and research on a ruleset!

  • Skynard

    Indeed

  • BKXtoZERO

    small was the key word, lesson= not small.

  • BKXtoZERO

    basically looking for some things that have value that are not so market related to leave on in a 401k, still like nat gas but lower

  • Skynard

    Printing one bear flag after another, spike to stop. Added puts, turn and burn

  • CandleStickEmUpper

    Covered my NQ short for 20 handles. Looking to reshort later. ZL is not confirming enough for me yet

  • RoastBeeph

    Apple, Amazon, Tesla are really doing a number on NQ today. ES is barely red while NQ is down almost 1%.

  • Skynard

    Big move coming! Shorts have left the building, time to crucify the longs:)

  • Skynard

    Closed the gap, party

  • Skynard

    This is very dificult to overcome, time and meditation.

  • Skynard

    Allot of res here, very recognizable.

  • CandleStickEmUpper

    Now we’re cooking with onions

  • CandleStickEmUpper

    Reshorted NQ 4290

  • RoastBeeph

    4,261.75 is the next unfilled gap.

  • Skynard

    Next move should be a minor 3 for a test of 1967.5, biggie:) At B/E on /ES

  • Round we go

    still here, just not much to do but wait 😉

  • RoastBeeph

    2 PM EST should be fun to watch.

  • BKXtoZERO

    although nothing happened yet the fact that Nasdaq is leading down is perhaps telling

  • RoastBeeph

    Biotech continues to flounder, IBB down another 2% so far today.

  • Skynard

    You must be ready for anything here, stops will be run and to be honest days like today have been good for me.

  • Kevin Mcdonald

    What do you mean shorts have left the building?

    NYSE short interest is almost higher than summer of 2007 levels…

  • Huey

    There’s been some discussion lately about equity curve filters, etc. Came across this post about meta-strategies, or a strategy to trade your trading systems:
    http://jonathankinlay.com/index.php/2015/10/improving-trading-system-performance-using-meta-strategy/

  • tradingmom

    This range compression is killing me. I can’t wait for a breakout…I don’t even care which direction!

  • Skynard

    lol, very possible we see a pop to 2010-2015 here, prepair yourself.

  • http://evilspeculator.com molecool

    Google docs?

  • RoastBeeph

    Looks like a valid arrow printed on 5 min ES ZL.

  • Skynard

    Exactly, shorts have exited stage right.

  • http://evilspeculator.com molecool

    “this is one of the only businesses that no matter how hard I worked, I could not succeed”

    This is actually a lesson I learned and one I should write about. I’m sure he was working hard but it doesn’t matter if you exhausting yourself doing the wrong thing over and over again. People equate hard work with results but some veteran traders only show up 30 – 60 minute a day and blast through their routine. They don’t even really think about it – it’s become muscle memory. Now before you start slacking – it’s the big circle – you have to walk through the valley of the shadow of death first before you are able to do this.

  • http://evilspeculator.com molecool

    Okay, guys – here’s a little quizzer – what do you see? What stands out?

    .

  • CandleStickEmUpper

    Nothing. Seems like market’s waiting for 2 PM.

  • http://evilspeculator.com molecool

    yes, could work out – small positions though – fortunately your stop is not further than that spike high

  • Huey

    Yesterday was an outside day and today is, so far, an inside day. Indecision.

  • http://evilspeculator.com molecool

    Only problem is – Fed notes in 20 minutes. So treat lightly folks.

  • http://evilspeculator.com molecool

    Tape is parked here – indeed.

  • http://evilspeculator.com molecool

    Resolution should come shortly.

  • http://evilspeculator.com molecool

    Detach yourself – be the range… LOL 😉

  • ridingwaves

    hard to short with October so seasonally bullish…vix target 16 is what I’m waiting for with no positions except bio play mentioned yesterday…

  • RoastBeeph

    Markets are very range bound the past 15 minutes and trading volume is going down. It must have to do with the 2 PM fed minutes.

  • tradingmom

    10 up candles on the hourly that can’t recapture the high of one down candle.
    Negative divergence on the hourly zero.
    But…positive signal on 5 min zero.
    No negative ZL signal all day.
    Pressing against upper boundaries of Mole bubble.

  • tradingmom

    Anyone use the Zweig Breadth Thrust indicator? I’ve seen a couple mentions of a bullish trigger w/ a close over 0.61 floating around recently, but I’ve never used this before and have no feel for it or data on accuracy / results.

  • http://evilspeculator.com molecool

    here we go…

  • RoastBeeph

    There goes SPX 2000 lol

  • Skynard

    Selling hard

  • RoastBeeph

    Wow, look at that trading volume.

  • Skynard

    Just have to wait it out like you said, come to daddy:)

  • Kevin Mcdonald

    out of curiosity whats your downside target amigo?

  • Skynard

    first stop 1967

  • RoastBeeph

    Yeah, just waiting for things to settle down. :)

  • germatrix

    Seriously – You short when it is long – Long when it is short.

    2 days ago you went short at the first stop target – not trying to knock you, but do not understand why so impatience. Skynard wish you all the best – I was once where you are now, and lost my complete gambling account

  • AcoBrasil

    Hm. Its been a while since we last saw $VIX puncture that lower BB.

  • tradingmom

    The vega move on way OTM puts could easily be a 50% loss by now.

  • Skynard

    Pinned 2 k /ES

  • Skynard

    -19%

  • Billabong

    No CL discussion? Another HOD … it’s been making a new HOD every hour today. Also, miners have been making new HODs every hour …

  • BobbyLow

    Been out for the past few hours did I miss anything?

    Seriously though allthough my Forex Stable has been biting me on the ass, I’ve been more than making up for it with Crude. Just goes to show that like I said yesterday, EIA oil reports are not worth the toilet paper they are written on.

    BTW, Crude appears to be in a strange kind of Wave 4. I’m lovin this. :)

  • Billabong

    I waited for a failed sell signal this morning and entered … :-)

  • Skynard

    Huge stop run IMO.

  • germatrix

    Now onto the Skynard vessel – short based on technicals 15 min – overall long technicals weekly + monthly – yes technical system not EWT, but works for me 😉 DO NOT FOLLOW!!!

  • BobbyLow

    I don’t have an Index Position and I hope they work out for you. However, I’m going to respectfully ask you to not project your positions with so much certainty. If it works you become a hero. If it doesn’t work you become a zero.

    I haven’t heard proclamations like this since I was on the Yahoo Message Boards years ago. You’re better than this Sky.

  • Kishore Kumar

    Options do offer some advantages over futures. Easier to hold on to a position, for the “overconfident” or “strong believers”, despite wild gyrations. No danger of a margin call. Can probably do without a stop, thereby avoiding danger from stop runs, fake breakouts or traps. Even if the market goes against the position, at least the time value (for next month or further out) is not lost. Accurate timing is indeed required but so it is for futures. Even leverage can be higher. Most of all, the downside is limited. Probably even easier to hold overnight. Learning to voluntarily avoid getting married to a position while making it a habit of voluntarily taking a small loss, instead of being forcibly kicked out at a disadvantageous time by a stop loss order. Despite all mistakes, the loss can never be more than 1R. Views?

  • mugabe

    they’re inherently much more complex and are more like lottery tickets because of how they are priced … you can get the direction right and still lose money.

  • mugabe

    Here’s a question:
    What do you do if you’re in a position and then get another signal to enter the same position – either in the same direction or in the opposite direction?

  • ridingwaves

    I have been dead on re: the vix over last 10 days…thank you trading algo gods…

  • saltwaterdog

    In a market and get a signal to enter the same market, either in the direction of the existing position, or against it

    Does your ruleset state that you take all signals?

  • RoastBeeph

    That was one hell of a take off.

  • BobbyLow

    I’ve traded a considerable amount of just about every kind standard option and Simple to Exotic Option Spreads, as well as Leaps.

    If someone were to hold a gun to my head, about the only options I would trade right now would be current week Index options only. I would also only trade options with a Bid/Ask Spread of 1 or 2 cents and no more than 5 cents at an extreme. Vega can really screw you badly and if you don’t understand how Delta, Gamma, Vega, and Theta work than I suggest that a person not trade options at all.

    The “only can lose the cost of the options” is the biggest joke of all and it’s a bad one. After awhile these small losses become like candy and they don’t seem to matter until one day you look at your account and realize that most of it is gone. I know this first hand because it happened to me.

    IMO, Forex, Futures and Equities are much more fair games than Options.

  • mugabe

    a fair question …
    you’re obviously doubling your risk if it’s in the same direction (although the stops are different) …

  • saltwaterdog

    The two scenarios are totally different (same vs opposite direction), each with their own considerations, but made much easier if the system/ruleset states clearly that all setups/signals are to be entered (orders to be placed)

    Next question is where does the existing position stand… in or out of the money, and by what amount, measured at the exit pt of course

  • Skynard

    2016.5 SPX, Hehehe. Get em

  • saltwaterdog

    It’s never simple, but it really is if you string together enough simple stuff. Consider that for an entry in the same direction, does the new entry, relative to it’s ISL, give you the chance to increase your size?

    It’d be worth knowing the dependency of successive signals in your system. If you can backtest the success rate of the 2nd signal, 3rd, etc, you’d have a good idea of whether getting them in the same direction indicates a build of momentum (and higher chances of success), or a flag that warns instead of a movement that is long in the tooth and perhaps due for a reversal or stall

  • Skynard

    This is the one to short, have been planning for it.

  • mugabe

    in the case I’m talking about the existing position could either be showing a profit or loss, but has not hit the stop loss or limit (profit target) levels. so you could be adding to a winner or a loser if the trade is in the same direction.
    as you seem to imply, there’s no generic answer to this – system-specific

  • ridingwaves

    16 vix….been saying it was on the way….da plane da plane……october is notoriously strong equities month…

    https://www.youtube.com/watch?v=zTs3uzChx8k

  • Kevin Mcdonald

    die bitch time… heheheh

  • germatrix

    Mr Skynard – I hope this pays of for you – you have a crazy style – Do not get Tom Cruise to do your stunts – all the best with this one !!

  • Skynard

    Good for you mate, lets watch and see some green develop.

  • Kevin Mcdonald

    Good lord even with all that upside.. zero hourly still leveled off….

  • Huey

    I would test those scenarios (add or reverse, in profit or not) independent of your current system and see if they make money. To me it’s the same thing as trading a correlated instrument so if I have max exposure according to my rules I pass but if I have room to increase risk in that symbol I’ll add.

  • mugabe

    yes . v good point about max correlation risk

  • Billabong

    Interesting divergence on NASDAQ … NQ +15 and the big boys red …. AAPL, GOOG, AMZN, etc,…

  • Huey

    Nice trade btw. I know you’ve been pounding the table that there is no evidence that this rally is over, dead on.

  • Kishore Kumar

    Thanks. Yes, the spread is a killer. So, pretty much restricted to only a few index options, or for stocks like AAPL, with large volume. I sometimes find a good trade on weekly options on their expiry day. But can play those only with lottery ticket money. As it is, the $ volume on those is quite small. Indeed, time erosion does make most options like hot potatoes. The timing has be exact. Could work for a short period just after a trend has been confirmed.

  • RoastBeeph

    Alcoa misses earnings yet ES keeps going up. Buyers really are in control. :)

  • Kevin Mcdonald

    sweet moses… $nymo at 95.36…. thats gotta be an all time high….

  • Grant

    What is your risk vs reward? Which is the easier lift?

    Change in direction should be a hand off at price point certain.

  • http://evilspeculator.com molecool

    Okay, anyone want to thank me now from keeping you goofs from loading up on shorts?

    Unappreciated in my own time…

  • http://evilspeculator.com molecool

    You guys are blind… sigh…

  • http://evilspeculator.com molecool

    The answer to today’s puzzler: the Zero had remained above the mark all day. There wasn’t even a hint of bearishness – therefore there was no reason to even think about short positions. Simple. Fortunately papa Mole had your back…

    .

  • http://evilspeculator.com molecool

    And thereafter…

    .

  • Kevin Mcdonald

    Thanks Mole!

  • http://evilspeculator.com molecool

    That’s what I do… you’re welcome.

  • BobbyLow

    The last time I did my own taping and mudding was my last time. Never again. The amount of money I saved vs. the amount of time it took me to do it worked out to where I worked for about 17 Cents an hour. :)

  • Scott Phillips

    My rules: If the original position I can move my stop to breakeven or better I take the new position also. (effective pyramiding)

    If there is a setup in the opposite direction I raise the stop to the entry point of the new position.

    If there is a setup in the opposite direction in a related market (which sucks) for example I’m long gold and get a silver short, I take them both.

  • Scott Phillips

    If it’s a trend following system it is generally a good risk.

  • Scott Phillips

    No. No. No. Wrong on every level.

    The spread in options sucks ass. It seems like a small deal, but over time you get hosed by the market makers.

    The exponential decay as options expire is exceedingly tricky to deal with, something only true masters can due.

    There are precisely ZERO traders posting here who have a long term track record of profitability in options. This includes Mole, myself, Bobby… everyone.

    Zero. Out of thousands. All lost money.

    Futures your risk is to your stop loss, plus a few ticks of slippage. Worst case is not going to break you.

  • Scott Phillips

    Don’t do it mate. Until you have a full year of consistent profitability with futures or stocks options is a TERRIBLE idea.

    It’s like a carnival game, one that looks easy but in reality is very very hard.

  • Scott Phillips

    It’s a 6 month trend. Likely a stop run has some legs to it.

  • Scott Phillips

    Yep…. this will happen… that will happen.

    Complete crap. I don’t know and neither does anyone else.

  • Scott Phillips

    You should post your results as I suggested yesterday. That tends to shut naysayers up 😉

    If you can’t or won’t the obvious conclusions can be drawn

  • Scott Phillips

    Marty Zweig is one of the legends of the industry from the 1970’s. Most of the fundamentally type TA from back then doesn’t work now, because the fed rate was above 10%. Different game

  • Scott Phillips

    You think too much – this is exactly the type of thing which leads to paralysis by analysis

  • mugabe

    v useful – thank you

  • Scott Phillips

    Oh God thats terrible. Wash your brain out with soap!

    It’s called the widowmaker for a reason!

  • Scott Phillips

    Gambling in your 401K is NOT going to work out for you.

    You are the literal sucker at the table right now. How about you work at not being the sucker before you start risking your retirement eh?

  • Scott Phillips

    The problem for guys like him (and me) is that the things which made me good at other businesses made me suck at this.

    I’m tough. I’m determined. I won’t back down, I stick to my guns. All these things were very useful when I was selling drugs or porn, but not such a big help when I’m trading.

    Now I trade like a pussy. It’s the way to survive

  • Scott Phillips
  • Scott Phillips

    Ed Seykota does NOT believe in pyramiding at all in any circumstances. With thhe standard trend following approaches it tends to increase both upside and drawdowns to an unacceptable level (think 60% drawdowns)

  • Scott Phillips

    Depends on whether your original position is at stop at breakeven. If not you are taking double risk.

    If you are you are risking the profit on your existing position. In any case you are by definition increasing both upside and downside, which makes for a lumpy equity curve.

    So it depends on the character of your system

  • http://evilspeculator.com molecool

    Did you guys hear about this? Spencer Stone was stabbed in the the chest today by some idiot:

    http://www.airforcetimes.com/story/breaking-news/2015/10/08/airman-1st-class-spencer-stone-stabbed-chest/73578902/

  • Scott Phillips

    Been long for a few days now :) Still long

  • mugabe

    the opposite :) not stopped out yet

  • Billabong

    Its QE party time … the Fed is going to add a different form of QE … $21B US auction yesterday at 0% interest says it all. Markets should be making new highs in a few weeks … LMAO. Just when you think you know what’s going to happen … SPLAT!

  • Scott Phillips

    I think longer term the odds still favor you :) I’ll be gone in a day or two

  • Billabong

    Police are searching for the two men who did it. They picked the wrong person to stab in a fist fight…

  • mugabe

    hope I won’t!

  • Billabong

    I still have a couple of shorts that haven’t hit R SL yet …

  • mugabe

    that makes 2 of us ,lol

  • Billabong

    Only time I made money in options was either selling them as income against an equity position or buying multiyear LEAPS …otherwise forget it.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • CandleStickEmUpper

    The way last Friday ended, most here agreed this week would be bullish. How quickly we forget last week’s action in the midst of daily tape analysis.

  • RoastBeeph

    Thanks Mole. Today makes me want to learn ZL better. I am still a novice at learning how the indicator works but it seems pretty damn useful so far.

  • RoastBeeph

    Exactly. I should have just went long at the close last week until the direction changed. The bar to end last week was as severely green as you could ask for, finishing the day green with no wick. If a person had ended last week long one ES contract he/she would be up 64 ES points, or $3,200 per contract right now.

  • RoastBeeph

    Gangbangers in hard as hell Toyota Camrys.

  • CandleStickEmUpper

    Exactly

  • http://greenlander1.blogspot.com/ Greenlander

    Been riding the pain train by going long since last Thurs although I lightened up 1/3 yesterday. Only bugger is my long crude position got stopped out yesterday but that happens. If it takes off, it takes off. This is the best 1 week period I have had in months.

  • RoastBeeph

    Good job. :) I really respect how you let your intraday trades be true intraday trades, not pulling the trigger because of smaller time horizon signals during the day. Even though i only trade one or two future contracts per trade, I’ve been averaging 12 trades a day which is way too much IMO since I consider myself a swing trader, not a day trader.

    Do you only look at hourly / daily charts? Do you pay attention to 5 minute or 15 minute charts?

  • http://greenlander1.blogspot.com/ Greenlander

    I’m sorry that makes no sense at all. You can answer everything you said by holding a smaller position w wider stop. The people generally making money w options are the ones selling time premium.

  • TheRooster

    “The problem for guys like him (and me) is that the things which made me good at other businesses made me suck at this.”

    Dude, this is so profound it’s untrue. In many endeavours in life I have found shortcuts that can give the uninitiated a big advantage very quickly. In trading I have found the only route is to do the work.

  • RoastBeeph

    Yeah, the money from options seems to be in selling them but that takes up a lot of margin and can blow up in your face horribly.

  • Scott Phillips

    I bailed my short on the open this week, and went long. Still long

  • Scott Phillips

    The question arises – how do you know if 12 trades a day is too much?

    If you can not point to a completely updated record spreadsheet or journal, complete with comments about things you could have done better or mistakes you have made – THEN YOU WASTED YOUR FUCKING TIME YESTERDAY. You got not learning value, except for embedding bad habits.

    Personally journalling 4-5 trades a week is a major job requiring a lot of time. I sincerely doubt you (or Sky or anyone who trades that much) keeps accurate records of performance.

  • Scott Phillips

    The easy part of this move up is done

  • Scott Phillips

    YES. Selling time premium in a low volatility bull market is a very good way to make coin.

  • http://greenlander1.blogspot.com/ Greenlander

    RB, I generally don’t makes intraday trades. I can’t trade those little timeframes in themselves and I have lost a shitload of money trying to do so. I’ll try to have a predetermined target before the day begins. The afternoon dip in QQQ in yellow where it hit the lower zone would’ve been the kind of thing I would jump on. The risk to reward would be good roughly 3:1 intraday w a clear stop and potential for more if the move continued the next day.
    I highly prefer entering positions as late in the day as possible.

    I use a combo of 1 hr, 2 hr, and daily charts to set up entries for the week (ideally I want them all to say the same thing or close to it) and only use the short term charts to make sure I am being precise. In other words, I don’t use the 5/10/15 min charts as a reason to enter, only to sharpen the entries and exits.

  • Scott Phillips

    Red Flag indicators of someone who either doesn’t trade (and pretends to trade posting public stuff for amusement) or doesn’t make money.

    – Posts predictions
    – Believes they can foretell the future
    – Adds to losing positions
    – Tries to catch every little wiggle of price action
    – Believes in nonsensical predictive theories like wave and gann
    – Does not use near identical campaign management every time, altering only sightly. Instead tries to time to the tick every exit
    – Overtrades – this is a key indicator of losing traders
    – Trades a number of correlated markets simultaneously, which dramatically increases the risk without acknowledging it
    – Uses a variety of different setups instead of a handful that they know and can explain inside and out
    – Is deliberately vague about the reasons for a trade
    – Rationalises losing trades eg “its just a stop run”
    – Does not keep long term records
    – Will not post records
    – Spends most of their time talking about what the market will do, as opposed to talking about managing risk, and trading well.

    Bad traders talk about where the market is going tomorrow. Good traders talk about how to improve their systems, discuss new trading ideas, talk about risk management and portfolio management. Good traders are concentrated on mistake free trading, and beat themselves up over mistakes more than anything.

    Good traders are records focused. Good traders post their stop levels at the time of entry.
    Good traders keep records.

    Everyone here needs to ask “am I a good trader, or a bad trader?”

    When you read the comments of a poster here, run everything you ever read by them through the above filter.

    The good and the bad traders here are very easy to see, when you know what you are looking for

  • RoastBeeph

    Appreciate the insight.

  • http://greenlander1.blogspot.com/ Greenlander

    Yeh you must self-audit. You are driving blind without it. Impossible to know what’s working.

  • Scott Phillips

    And yet you still will not stop trading to do the work.

    That is a workable definition of addiction

  • Billabong

    Thanks for sharing it. Reading Mole’s work in 2010 sounds like today … It was also interesting to see how many of those commentators are no longer here.

  • Grant

    Scott, why don’t some of us post our weekend analysis / markup of our trades for the week? Complete with journal entries etc…

  • Scott Phillips

    And if the 30:1 leverage in futures isn’t enough for you…. options is not the solution to your problem

  • Scott Phillips

    Sure. I’ll go first!

  • BobbyLow

    On the bright side, that was going on 5 years ago. Between Moles post and the next one that was by Scott, I saw GG, Racer, NYSE, Ronebadger, Skynard, Newb, Rightside and myself so there are at least 8 of us who have survived since then plus Mole and Scott. I might have found some more if I had looked at a few more old posts.

    In looking back, there was a lot of wild and crazy shit that happened over those 5 years. :)

  • Kevin Mcdonald
  • hellbent

    Short ES with close stop at 2015. Purely on odds of test fail Sept 18 high (2010ish). Target at 1.5R. Shift stop and target if we get to 1R and I catch it. Otherwise Que sera, sera. Flip to long, if and when it goes, probably has better odds but I’m not in the mood today.

  • hellbent

    1R. Happy days.

  • Scott Phillips

    It is an exceedingly good tactic if you can recognise a low volatility bull market.

    Low volatility bulls tend to last years at a time.

    Unfortunately the low volatility bull just ended

  • Bernie

    Shorted ES at 2004 with a stop at 2010.75. 1R risk.

  • hellbent

    I got filled at 2007. Stop is near as damn it stopped.. 2000 seems quite strong below..

  • hellbent

    Stop filled at 2007 on the button. Nearly put my stop back up to join you but that’s against the rules. Short south of 1998 still looks good to me though. Failing that long above 2010 somewhere. Good luck :)

  • http://evilspeculator.com molecool

    I think 2010 was a watershed moment for me – I finally started to see the light.

  • CandleStickEmUpper

    Everything is pointing to staying long here except moving avg touches. I’m still short NQ 4300 from Monday , but will exit if I see conviction breaks of certain price levels

  • http://evilspeculator.com molecool

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  • evilasevildoes

    2019…on es coming…then…..early next week will let chart tell me