I am fibstalker, and you may have seen one of my posts on FF (especially on the EUR/USD-related threads). I welcome you to my thread and I am pleased to meet you.
This is the first post of this thread and it is structured as follows:
- INTRODUCTION & OBJECTIVES
- TRADING SUCCESS IN MODERN MARKETS
- RULES OF THE THREAD
In every thread I will anticipate what I will publish next and this is usually discussed at the end of the thread post (it's a bit like that famous series 'the world round-trip in 80 days', where the main character would know in one episode what material and tools they needed in the next one... ).
Let's get started... hope you enjoy the journey.
INTRODUCTION & OBJECTIVES
I created this thread to publish on the key principles and concepts that, in my personal view and experience in trading (since 2001), can back a correct trading behavior. My hope is that a healthy discussion can spring up from what I write and from your own thinking and answers, so that we can all learn something.
I can guarantee you that what I will write will be though-provoking. Some of the views will not be accepted by the majority and this is what, in my idea, will make the content of this thread very interesting. I think that - when dealing with markets - the fact that the majority does not accept an idea is always an important warning sign. Yes, when that happens it means you are on the right path in your search...
As you will learn, I also write a bilingual blog which I called "Elite 5". Why that name? Well, I believe up to 5% of traders and market players are ever right and make consistently money out of the markets. The remaining 95% of participants or more keep losing money or staying at break-even. So, now you see it, is the majority right? The majority is not, and when the majority opposes and idea, you have to take the 'other side of the trade' so to speak.
I will be sharing the main principles I use everyday in my trading since now a few years and those concepts will generate controversy and, potentially harsh discussions. I think having opposing ideas is good because that generates healthy thinking, discussions and, eventually, growth. Provided you are able to put your ego aside (when needed, not always) and able to listen and, most importantly, to show integrity, intellectual honesty and respect for others, controversy can and will be handled positively. I will make every sensitive, intellectual effort to consider your views, when they are different from mine. I will use respect at all times and when I will not be able to reconcile your views with mine I will tell you and there will be a known difference. That's it. I ask you to do the same.
My content posts and interventions will not be improvised but will be extracted from the research work I do on my blog, the feedback of traders I talk to and, mainly, from my first e-Book that I am going to distribute freely on my blog starting from next week. That book is called: "Key Concepts to Correct Trading Behavior - A guide to relevant concepts for trading success in a market governed by High Frequency Trading (HFT) and Program Trading" (find more info here: http://elitefive.wordpress.com/2012/...behavior-ebook)
TRADING SUCCESS IN MODERN MARKETS
The subtitle of the eBook makes reference to High Frequency Trading (HFT) and Program Trading. These are two classes of modern Algorithmic Trading (AT) that has an overwhelming presence is today's markets. While HFT can hardly be relevant for retail traders (like us!) because it's too fast to allow a reaction (so I suggest you don't even try to trade during BCE or FED days, unless you know what you are doing), Program Trading is a more silent, less visible but very powerful class of automated trading. It is very important to know what Program Trading is doing on different timeframes as I will try to explain in the posts of this thread.
Relatively few people care about the right trading behavior that we all should carefully study and adopt, in a world where 30% to 75% of trading volume is generated by High Frequency Trading (HFT), and probably even more if we consider the totality of Algorithmic Trading (AT) techniques and systems. Not caring is always a mistake. Learning price behavior and the price structure induced by Program Trading, for instance, can be very beneficial to our trading.
It is definitely beneficial to me as my trading edge is based on observing the effects of Program Trading, and in that way I can generate trading plans that have clear entry, stop and targets levels, and have a very limited risk. The main reason for this is that the entry levels I target usually show strong participation by professional traders and Program Trading. So you will often see price reacting from such levels (and you can find the proof in several of my posts on FF), and this also allows advanced risk/money management strategies, like the so called 'free trades'.
And it is not our job as traders that of managing risk? Generally my trading plans are created in a way that when stops are hit I know that the trend (in the weekly, daily and/or 4-hour charts) has failed and it is about to change. Interwining such behavior and price explanation on different timeframes, on which several program trading algorithms work together - often trading one against the other - you can get closer to a better explanation of price structure and as of the why price very often 'reacts' in unexpected ways. More about this in this thread.
RULES OF THE THREAD
We all have different views about what price move means on different timeframes, how trading should be done, what the market should or will do next. What I ask you is to express those views and share our knowledge in truly mature and respectful way. It is up to us all what will happen with this place and the potential help that other people could get if we call work to not alienate them – please remember that before you post your comment.
I will not be there with my button ready to take people to the door. I start from the belief that the majority of us will know when a behavior is too extreme and when enough is enough. Please be mature and respectful and I suggest you follow the rules hereunder:
- Respect other members, their trading style and market views.
- If you have a problem with somebody or strongly disagree – private message him/her about it, don't bring your personal divergence to us all.
- Post only comments about trading and thread-related topics
- If you publish your calls and/or make comments on others' charts do it with a reasoning behind it.
- Fights between members are forbidden.
We all are creating this thread and it is ours. Anybody can participate. New (and low vouched) traders are very welcome as they are those who can learn the most from this thread, and maybe get a start with the right foot. But I believe also seasoned traders will find highly provoking thoughts having the potential to initiate an important mind shift, deeply connected to a significant change to their approach or trading results. This is what almost invariably everyone is looking for, and my wish is that you can find it here.
Participate to this thread with an open mind and always asking "if that was the truth?". Fight the information that will be disclosed and, maybe, you may lose an important opportunity to grow, at least a bit, your trading experience. It's up to you to choose and make your own future. I hope you are among those who will benefit from reading and participating this thread.
Please private message me if you have any ideas, suggestions or questions related to the thread.
In the next posts I will talk about:
THREAD ORGANIZATION and
EDUCATION FOR NEW AND INEXPERIENCED TRADERS
Thank you
Good luck to you all.
Giuseppe Basile (-fibstalker)