Mark Douglas

[Graham_S]

A Mark Douglas Interview if you've not come across it.

http://tinyurl.com/ckmd3n

or if that doesn't work

http://www.4shared.com/file/96740657/227e2748/Mark_Douglas_-_Mind_Over_Market.html

[toyogo00]

Hi Graham,

This video is awesome. Thanks!

FibMaster system has a high probable winning odds but only over a series of trades (not any single trade) with proper money management (reward ratio, position sizing, capital etc).

Regards,
Toyogo

[FibMaster]

Graham, thanks for posting that link.

Everyone really should listen to the whole session. Mark is a good speaker.

Here is one concept that traders should get from that recording.

Even when we have an edge, a profitable strategy over a series of trades, each individual trade result (win/loss) is random. And we can incur a series of losses randomly.

We have to accept that mentally, and from a risk control perspective, so that we can keep trading to the positive result.

There is no way to know the outcome of any one trade. We expect a positive result over time. We must accept losses along the way, in order to be profitable in the end.

-Neal.

[FibMaster]

A losing streak can be brutal. They do happen though. Just about every long-term trader has experienced them. Most have reached their limit of endurance, had to face the decision about continuing the path of trading.

We all know that each trade has an equal chance of being a winner as the prior trade. Yet after 5 losers, the 6th one, 7th one etc makes us second-guess our strategy, ourselves etc. We suffer with it, doubting our ability. We feel fear of more losses. This actually causes us to change how we trade, can actually cause mistakes.

One suggestion: If you get x number of losers, cut your trade size by half, or 75%, or paper trade. Then resume normal size when you have confidence. It takes longer to regain the losses, but it limits the size of losses and the mental strain.

Better to reduce the risk and the mental cost, than to make fear-induced mistakes and take bad trades. A severe loss or a streak of losses can end a career, or cause you to abandon what you have learned, abandon your hard-earned skills. Better to lift your foot off the accelerator, take the stress away for a while.

[Graham_S]

Only just managed to watch the video all the way thru. Wonder if there is another half of it on the site as there is mention of a Qand a session.
I've never thought of the risk of a trade as how much I'm willing to spend to find out whether other traders agree with my market view (or my methodology's). It's put into perspective how successful traders can put on trade after trade and not blink an eye at losing a few thousand dollars cos they know over time the odds are ontheir side - providing they stick to their plan and, as Neal sais, don't second guess it.

A couple of months ago, during a discussion with someone about taking/not taking trade set ups according to your trading plan (eg 2nd guessing it as Mark mentions in the video) we worked out some basic probabilities based on number of available trades to take according to our plan, (knowing what our expected win/loss ratio is over x no. of trades) vs number of trades actually taken. Can't remember exactly what we did, but along the lines of (using very simple figures), saying we took only two thirds or half of the trades available to us according to our plan. Initial logic would say that the probability of a winner stays in the same ratio, - eg if you take half the trades you expect half the number of winners). Probability wise, not true cos the winning percentage of trades is based on the number of trades available to you, not on those you actually take, so for half the number of trades you end up with something like a third the number of winners. That's without taking into account profit as opposed to no. of trades, spread, the true no. of trades available cos of those we miis by being asleep and so on) etc. (The first bit was complicated enough for us - but htere again, probability theory can be a bit hypothetical sometimes:-) )
I'm sure someone will put me right if we got it wrong.

G

[janerikchr]

Hi

I think this is the whole interview on mp3 format.


http://www.orbitfiles.com/download/id3789709257.html

[sall44]

Many Thanks for posting the link for the whole seminar.

In a short conclusion we have to be produce consistency over the randomness of trading. If this is the case then surely the methodology could be a simple MA crossover system which would return more than a complex system such as Dinapoli based taught by the Fibmaster. I say this because the number of variables involved are far far less and therefore reduces ones outcomes and expectations. The more variables one creates and hunts for in one's quest for knowledge in this game, the more we naturally expect which can easily cloud ones judgement within ones own trading plan.

[FibMaster]

Your message is very puzzling. If you really think trading is random, you have a lot to learn. If it were truly random like flipping a coin, traders would consistently win or lose 50% of the time, there would be no point in trading.

If you use my TRSI you already have a simple system which incorporates the benefits of a moving average system.

After you have some experience with simple moving average systems, you will know they are weak. These systems have been studied for many years, by myeself and many others.

If you can make one work for you consistently over time, you will be the first ever to achieve that, and I would be very surprised. Don,t let anyone discourage you though. Trading is a personal path of research and discovery.

Learning what does not work is as important as what does.

[sall44]

Apologize to create any confusion, it’s not intended, and I will rephrase, it’s a fact that function of price in Trading is random. I believe Trading is equivalent to flipping a coin mainly because no one will never know which one of those flips are going to give you the intended positive outcome of a particular trade. That is the main reason where we need an edge to produce consistency.

I have seen the TRSI work and it seems to just turn at any point in the chart which is support or resistance/ swing highs and lows, so nothing different from what the chart tells you anyway.

For me personally over a number of years I have found the moving average system produce far better results and consistency with less decision making and having much less judgment as compared to expecatations at each variable defined in the fibmaster/dinapoli system such as confluence, expansions,Fibnodes etc etc. I can produce charts and result if need be for any particular instrument to validate this if need be.

That is my own personal view and interpretation and I agree 100% trading is a path of research and discovery.

[FibMaster]

I believe Trading is equivalent to flipping a coin mainly because no one will never know which one of those flips are going to give you the intended positive outcome of a particular trade.

I have seen the TRSI work and it seems to just turn at any point in the chart which is support or resistance/ swing highs and lows, so nothing different from what the chart tells you anyway.


You are making assessments with very limited information. Keep studying, you will improve with more knowledge.

I wish you well with your endeavors. Check back in a year, let us know how you are doing.

Best wishes,
-Neal.

[sall44]

Thank you very much for you well wishes Fibmaster I certainl will try to remember to come back and report however need be next year.


Wishing you all the best in trading