Friday, December 7, 2007
Trading is like Life
Great article on how trading need not always be so complicated. It is like Life. We all know Life can get pretty complicated if we allow it to be. - get involved in messy deals or relationships because we were too lazy to plan or give in to temptations.
Sunday, December 2, 2007
Murrey Maths and Fractal Analysis
I have always believed in fractal theory and it is reinforced by another of Gann's studies - Murrey Maths and Fractal Theory .
For my own trading, I see fractal theory repeat itselfs again and again in charts. Why is that so? Simply because of human emotions of hope, greed and fear. These emotions leave their footprints in the stock market every single day. These are the emotions that majority players of the market have and possibly this explain why majority of traders lose money. It has been repeated to death that in order to make money out of trading, one needs to eliminate all emotions . This is where a trading system with fixed entry and exits rules is supposed to assist you.
“Therefore, in order to make a success, the trader must act in a way to overcome the weak points that have caused the ruin of others” - W.D Gann
For my own trading, I see fractal theory repeat itselfs again and again in charts. Why is that so? Simply because of human emotions of hope, greed and fear. These emotions leave their footprints in the stock market every single day. These are the emotions that majority players of the market have and possibly this explain why majority of traders lose money. It has been repeated to death that in order to make money out of trading, one needs to eliminate all emotions . This is where a trading system with fixed entry and exits rules is supposed to assist you.
“Therefore, in order to make a success, the trader must act in a way to overcome the weak points that have caused the ruin of others” - W.D Gann
The Gann Approach.
WD Gann, who invented the Gann family of technical analysis, is one of those traders I feel that uses the abstract art of metaphysics to analyse the stock market.
I personally do not use Gann Angles or Gann Fan etc as I find them too abstract for me but nonetheless, I do realise that they are related to the time and space factor of metaphysics. There is a cycle in every nature of things and the stock market is known to be cyclical and time is a big factor.
For my own trading, I do not try to see beyond the next 4 days as I am a short term trader. It is also I feel the market usually do not move in a direction for more than 4 days before a counter reaction kicks in.
I personally do not use Gann Angles or Gann Fan etc as I find them too abstract for me but nonetheless, I do realise that they are related to the time and space factor of metaphysics. There is a cycle in every nature of things and the stock market is known to be cyclical and time is a big factor.
For my own trading, I do not try to see beyond the next 4 days as I am a short term trader. It is also I feel the market usually do not move in a direction for more than 4 days before a counter reaction kicks in.
Saturday, December 1, 2007
The rhythm of the Market
Everyday there are endless reports on the stock markets ; news on stocks, who buys what and not to mention the endless economic reports. Do they really affect the markets? Definitely there will be people who acts on such reports day in day out but does their actions based on these external stimulus really affect where the market was meant to go?
Is it a egg or chicken first question? Does the market participants reacting to the market tendencies or is it the market that is swaying to the traders wimps? I guess this bring us to the question of who really make up the market. It is very diversified and no one particular party really can move the market or even know where exactly the market is heading. It is the complicated interactions of each participants' limited knowledge that seal the market path as it moves each day. See it as your life. Do you know where you life is heading exactly? Come on..you lived it everyday, no one should know it better than you do , right?? Not exactly right. You might know for the next 10 minutes, next 1 hr , or even next day , what you intend to do with your life but you don't really know what you do each time is going to affect your life and how it is going to change your life. That's life and that's the market for you.
What we hear on financial sites reporting each Wall Street actions are simply just reporting. They might try to forecast here and there, comment a little but seriously, they are just noise. Noise that are trying to drown all the important sign. Just like when you walk down the malls, advertisement, loud music, people blaring non-stop sales slogan...its just noise. But don't we all fall for their temptations? We stopped to listen and think what those salespeople are selling is exactly what we need! And we buy stuffs that we don't need at all. We eat stuff that is bad for us just because of temptations, social obligations etc etc....while all along we know we should eat fruits, less fats , less BBQ meats , less sugars...exercise more, but how many of us actually practise what we know we should do? The market in a sense is affected by all these little "wimps of fancy" that we humans fall prey to. A stockbroker recommend a stock, and we believe and we buy - our action affect the market. Add up all these wrongs actions and you get a volatile market. A market that is trying to balance itself and when sometimes imbalance are too great, external parties are needed to bring balance...or TRY TO bring balance to the best of their knowledge = Fed interference , rates cuts, pump in monetary policies in the hope of trying to bring about a balance. They are just like the doctors prescribing medicines when we play/ eat in excess without care and cause damage to our body. Sometimes they will relieve the pain while they try to find out more reason of our pain. Sometimes they find it and cure it, sometimes they can't and its too late. Isn't this life?
It is a fact that no one can predict the market just as no one can predict Life. So how do we actually reap any profits from the market??
By really listening to the core of what is market is saying and not what all the "experts" are saying. Observe the market reactions , know its current rhythm and know when it is "sick" and changing its rhythm and then play to the new rhythm. Indicators , candlesticks, chart patterns are all signboards along the road that can guide you only. You have to make the journey. If you misinterpret any signboard , then you might skid off the road and crash. You have to constantly keep your eyes wide and brain alert for all signboards and drive carefully. One lax moment, and you could head into a crash. Stop totally by the road if you need to rest and don't drive when you are tired because you might misread a signboard , have an accident even though you are almost near your destination.
Is it a egg or chicken first question? Does the market participants reacting to the market tendencies or is it the market that is swaying to the traders wimps? I guess this bring us to the question of who really make up the market. It is very diversified and no one particular party really can move the market or even know where exactly the market is heading. It is the complicated interactions of each participants' limited knowledge that seal the market path as it moves each day. See it as your life. Do you know where you life is heading exactly? Come on..you lived it everyday, no one should know it better than you do , right?? Not exactly right. You might know for the next 10 minutes, next 1 hr , or even next day , what you intend to do with your life but you don't really know what you do each time is going to affect your life and how it is going to change your life. That's life and that's the market for you.
What we hear on financial sites reporting each Wall Street actions are simply just reporting. They might try to forecast here and there, comment a little but seriously, they are just noise. Noise that are trying to drown all the important sign. Just like when you walk down the malls, advertisement, loud music, people blaring non-stop sales slogan...its just noise. But don't we all fall for their temptations? We stopped to listen and think what those salespeople are selling is exactly what we need! And we buy stuffs that we don't need at all. We eat stuff that is bad for us just because of temptations, social obligations etc etc....while all along we know we should eat fruits, less fats , less BBQ meats , less sugars...exercise more, but how many of us actually practise what we know we should do? The market in a sense is affected by all these little "wimps of fancy" that we humans fall prey to. A stockbroker recommend a stock, and we believe and we buy - our action affect the market. Add up all these wrongs actions and you get a volatile market. A market that is trying to balance itself and when sometimes imbalance are too great, external parties are needed to bring balance...or TRY TO bring balance to the best of their knowledge = Fed interference , rates cuts, pump in monetary policies in the hope of trying to bring about a balance. They are just like the doctors prescribing medicines when we play/ eat in excess without care and cause damage to our body. Sometimes they will relieve the pain while they try to find out more reason of our pain. Sometimes they find it and cure it, sometimes they can't and its too late. Isn't this life?
It is a fact that no one can predict the market just as no one can predict Life. So how do we actually reap any profits from the market??
By really listening to the core of what is market is saying and not what all the "experts" are saying. Observe the market reactions , know its current rhythm and know when it is "sick" and changing its rhythm and then play to the new rhythm. Indicators , candlesticks, chart patterns are all signboards along the road that can guide you only. You have to make the journey. If you misinterpret any signboard , then you might skid off the road and crash. You have to constantly keep your eyes wide and brain alert for all signboards and drive carefully. One lax moment, and you could head into a crash. Stop totally by the road if you need to rest and don't drive when you are tired because you might misread a signboard , have an accident even though you are almost near your destination.
Friday, November 30, 2007
Metaphysics at its finest....
Maths and Metaphysics go hand in hand...sciencific but yet very abstract is the core of the study , Jim Simon's fund is a prime example.
A study between Metaphysics and Trading
I have come across many websites, blogs on trading stocks, options. People teaching how to many money from trading , people showing how they day trade stocks ...everything you can imagine. But no one has really touched on the topic on Metaphysics and the financial trading.
So what exactly IS Metaphysics?
Metaphysics is: The branch of philosophy that investigates principles of reality transcending those of any particular science, traditionally including cosmology, ontology, and speculative philosophy.
Ontology: The branch of metaphysics dealing with the philosophical theory of reality, including consideration of the universal and necessary characteristics of all existence, also, a particular theory of reality.
Cosmology: The general philosophy of the universe considered as a totality of parts and phenomena subject to laws.
I would not try to short circuit readers' brain with more definition as metaphysics itself is a study so profound that I know my explanation cannot do justice to it.
But as a trader for almost 8 years myself , I have read too much blog, try too much strategies and as I delve deeper into what works and what do not, I began to see a link between metaphysics and trading. Trading itself resemble Life and Life and all its complexity is the gist of metaphysics. Understand how metaphysics works; how to it influence your existence and ultimately, you might learn how to trade the markets profitably.
In this blog, I will share my thoughts and discoveries on metaphysics and trading.
So what exactly IS Metaphysics?
Metaphysics is: The branch of philosophy that investigates principles of reality transcending those of any particular science, traditionally including cosmology, ontology, and speculative philosophy.
Ontology: The branch of metaphysics dealing with the philosophical theory of reality, including consideration of the universal and necessary characteristics of all existence, also, a particular theory of reality.
Cosmology: The general philosophy of the universe considered as a totality of parts and phenomena subject to laws.
I would not try to short circuit readers' brain with more definition as metaphysics itself is a study so profound that I know my explanation cannot do justice to it.
But as a trader for almost 8 years myself , I have read too much blog, try too much strategies and as I delve deeper into what works and what do not, I began to see a link between metaphysics and trading. Trading itself resemble Life and Life and all its complexity is the gist of metaphysics. Understand how metaphysics works; how to it influence your existence and ultimately, you might learn how to trade the markets profitably.
In this blog, I will share my thoughts and discoveries on metaphysics and trading.
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