Becoming a student of the market

[arbitrage16]

I’ve been trading for a couple of years and for the last 14 months that has been 6 days a week, afternoons and evenings. I only trade horse racing, and do a mixture of pre-race trading - for which I attended a very useful course - and in-running trading for which I use a reputable service. I am of the opinion that trading is 80% mindset, and focus a lot of my reading time on sports psychology and trading psychology.

About 6 months ago I realised that the perspective I have on the market is not sufficiently in-depth to satisfy my curiosity and have been attending to that side of my understanding. Part of that exploration has been surveying this forum.

The nature of this forum, whilst very useful, means that much of that useful information and aha moments that people have shared are lost in posts from way back when. The aim of this post is to invite members who are willing to impart pieces of knowledge, further thoughts or pose questions for other members to consider as we all seek to become students of the market.

As Mr Webb has alluded to a number of times, there is no point in spoon-feeding an edge, because simply people don’t learn in that way, but if more experienced traders are willing to share insight and learning I believe this thread could become a fruitful knowledge base. Or not, but let’s find out.

[napshnap]

It's a very competitive area.
The really precious technically exact and correct strategies and advices are very rare, cause obviously technically advanced users can easily replicate and integrate it with their boats and destroy edge or make it less profitable. But therу are still few altruists who sometimes give clear instructions (not motivational bullshit).
So don't wait till someone will share it with you. Do your own research, check users profile and posts history, maybe offer them money for their advices.

[iambic_pentameter]

Two bits of advice I've been given over the last two years:

1) To crack this takes screen time and discipline
2) You need to go through a lot of market cycles to truly understand what is happening; in racing it was suggested 3 years.

The recent interview Euler did with Star Sports has some useful information in it; particuarly the part where he mentions how he analyses his performance after each session. To do that after being in the game for 20 years shows a real commitment to your craft.

I'm not an expert on NLP, but I'd imagine modeling successful traders behaviour would go a long way.

Iambic

[dt888]

For me the thing I regret the most is not collecting data and putting in the hours from the start

I went along for a good few years in the my comfort zone, making enough to pay the bills. I just got half decent in amongst the numbers without truely understanding the bigger picture. Switching on the PC just before the first race and switching off straight after the last

Its only the last year or so Ive been trying to understand the markets in much more detail. A usual day for me now would be starting late morning and finishing well after midnight

I often think about how much info and how much of a better trader I would be now if I had done things like I do now from day 1.

So I would say to any newbies to put in the hours from the start and leave no stone unturned

[spreadbetting]

........ there is no point in spoon-feeding an edge, because simply people don’t learn in that way, but if more experienced traders are willing to share insight and learning I believe this thread could become a fruitful knowledge base. Or not, but let’s find out.

'Edges' aren't spoon fed onto the forum because people have generally spent a lot of time and effort working them out for themselves or just as likely they don't have one anyway and regurgitate things they've read that sound good, hopefully with a winky smiley to imply they know something you don't.

A lot of my stuff, and others, is botted so anyone could easily replicate what we do, so 'edges' can easily be given away and learnt. I'd agree it might be a different matter of whether someone would eventually profit from being given a set edge though as in general people get bored, unsatisfied with the returns etc and would self sabotage any edge for more excitement. I've always thought it's a lot easier for the full timers to profit at trading simply because the motivation is there to win whereas part timers in general just don't have or even need that motivation.

I'd be surprised if you get any real insight other than the typical mindset , read these books type posts, but I'll certainly keep an eye on the thread just in case

[ruthlessimon]

As Mr Webb has alluded to a number of times, there is no point in spoon-feeding an edge, because simply people don’t learn in that way

There's actually a slight irony to that. Because I think he would spoon-feed; & I would too (although not in the way your thinking).

If I've found something that looks "good", I'm happy to share that in incredible detail to a trader who I think could add further value to it - & it's vital that they understand every aspect.

[ruthlessimon]

I am of the opinion that trading is 80% mindset, and focus a lot of my reading time on sports psychology and trading psychology.

If Mike Bellafiore interviews you, be sure to keep that on the down-low, because that's his easy red flag to fail an interview (https://youtu.be/DIC0anjuiR0)

I'd love to know how many times the words "predictive analytics" appears on this forum - & compare that to the word "psychology". I hope I'm not the 1st

[ruthlessimon]

Probably correlates quite well to the failure rate

[napshnap]

My advise will be: watch markets for repetitive patterns, notice same amounts appear in a same time at same price ranges, and then try to understand why this trader (most of the time it will be someones bot) doing so, where is value in his actions. If you familiar with botting then log this moves to analyze later.

Example: watch for someones bot putting 3 lay orders on every selection for 500-1000-2000e, 20 ticks from each other 60 tick form lastmatched price, 1.5 minutes before official offtime. Why he do so? Is it profitable? Something like that.

[napshnap]

I am of the opinion that trading is 80% mindset, and focus a lot of my reading time on sports psychology and trading psychology.

If Mike Bellafiore interviews you, be sure to keep that on the down-low, because that's his easy red flag to fail an interview (https://youtu.be/DIC0anjuiR0)

I'd love to know how many times the words "predictive analytics" appears on this forum - & compare that to the word "psychology". I hope I'm not the 1st

This word should be banned at traders forums. This is kindergaden stuff like "wash your hands before dinner".

[ruthlessimon]

This word should be banned at traders forums. This is kindergaden stuff like "wash your hands before dinner".

What does me, is the tantalising idea that traders "aren't aware of it". Yet hopefully I've literally just shown they are aware & it's one of the most common subjects vs. things that could really help (i.e. data-mining, modelling properly etc)!

If psychology was a straight up tradable edge, in its own right, it wouldn't be a very good one - what with all the material available

[ruthlessimon]

About 6 months ago I realised that the perspective I have on the market is not sufficiently in-depth to satisfy my curiosity and have been attending to that side of my understanding.

I missed this bit; I think the red-mist descends the moment I see the word "psychology" (ironically)! I'm not sure if this is how Peter does it; but here's how I'm currently attempting to further my own knowledge.

I'll take a basic strategy (i.e. if price x gets touched, back), then I'll create x no. of variations of the strategy (i.e. vary by time). Then trade it for a month, & analyse the results (i.e. median low time etc). Then I take a further months worth of data & compare the results.

If the two results (i.e. low time) don't match, no edge, no predictability. If they do match (or are close), then perhaps this could be a bias & a tradable bit of info.

But there's hardly any material to read up on about this stuff - hence why I get frustrated when psychology is blamed for a trader's failings! People simply aren't aware of the right way to go about learning their craft

[ShaunWhite]

But there's hardly any material to read up on about this stuff - hence why I get frustrated when psychology is blamed for a trader's failings! People simply aren't aware of the right way to go about learning their craft

+1

[arbitrage16]

This word should be banned at traders forums. This is kindergaden stuff like "wash your hands before dinner".

What does me, is the tantalising idea that traders "aren't aware of it". Yet hopefully I've literally just shown they are aware & it's one of the most common subjects vs. things that could really help (i.e. data-mining, modelling properly etc)!

If psychology was a straight up tradable edge, in its own right, it wouldn't be a very good one - what with all the material available

Thanks Simon, I appreciate your thoughtful posts. However, on this point I have to disagree because the notion of it being a 'straight up edge' is not accurate. If one's strategy in the market is the blade, then in my opinion psychology - a better word for this is actually mindset - is the hilt. One's edge/blade can be sharpened and refined, but without the correct mindset to apply this in the market, it is useless. I know I have an edge, it has worked for me countless times and I am confident in its ability to return significant profits. However, the challenge for me and many others is creating the appropriate mental conditions for this edge to be applied.

From your posts I am assuming that you are more analytical than I am, pragmatic and logical, assumptions I am making because your approach to the markets appears to focus on these areas, presumably because the mindset is already in place - either due to you being wired that way, or it not being an issue because you automate where possible. So, for you and people who are similar to you, predictive analytics etc will always be of far more use than understanding one's own psychological make up, whereas for me my focus is on creating the most appropriate set and setting from which to trade with.

Also, the idea that there is a 'right way' to learn the craft of trading seems rather reductive - you're displaying a cognitive bias here, whereby because something isn't important for you, it is dismissed as being irrelevant, when you can see from its prevalence amongst traders, in PW's case and many others, that it is very important.

Performance activities are regularly touted as being 80/20 in terms of mindset/skill, and I believe trading to conform to this notion.

[arbitrage16]

This word should be banned at traders forums. This is kindergaden stuff like "wash your hands before dinner".

Reading through the forum I've seen you say some fairly ridiculous things, but this is possibly the pinnacle. However, I don't doubt your ability to climb to ever greater heights