Market moves - right or wrong?

[Iron]

That chart looks perfectly tradable to me.

You could have ridden the initial drift up, and then got out when the trend came to an end.

You probably wouldn't have been able to catch the exact reversal point, but once the trend started to reverse you could have ridden the steam.

I think the only way you'll get chopped to pieces in a market like that is if:

- You over-stake.

- You repeatedly go counter-trend, trying to predict a top or bottom.

- You trade haphazardly, constantly entering and exiting the market as you try to second guess the significance of every micro movement.

Jeff

Take a look at this crazy graph just posted on Peter's facebook for the type of nonsense I'm talking about:

https://www.facebook.com/photo.php?fbid=772296486150212

[Zenyatta]

That chart looks perfectly tradable to me.

I don't know whether to laugh or cry. Surely you're you're joking?

You could have ridden the initial drift up, and then got out when the trend came to an end.

You can only see where the trends start and stop in retrospect!

In practice here's what would have happened to me if I had tried to trade this race:

The long-term trend suggested by the first-half of the chart appears to show an absolutely clear-cut, unstoppable drift that is set to continue.

Following JollyGreen's advice about 'trusting what the market tells you', I would have fired in huge lay bets when the price was between 2.50 and 2.75, expecting to capitalize on the continuing drift. I would then have been chopped to bits, when for no apparent reason, the price suddenly and viciously does a total reversal, and steams back in from 2.75 all the way back down to 2.00, a reversal of nearly 40 ticks!

[Iron]

Nope, I'm not joking!

You can't predict with certainty what the market will do. At any point, it can continue in its previous direction or reverse. You just need to be flexible enough to respond to its twists and turns, rather than believing strongly it will do one thing and then getting frustrated and acting irrationally when it doesn't conform to your expectations.

In the words of Bruce Lee: https://www.youtube.com/watch?v=APx2yFA0-B4

Jeff

[Iron]

In other words, you would have made the cardinal mistake of over-staking (something which I believe JG doesn't advocate).

You should stake an amount such that, if the market does a sudden and sharp u-turn, your bank won't be affected too much.

If your stake was such that you would have lost one percent of your bank when the market did an about-turn, you would have shrugged your shoulders and said, 'Whatever' when it happened, closed out and possibly reversed your position. As things were, you'd have probably been bricking it and/or thinking 'Those f***ing manipulators! I've just lost my shirt again!'.

Jeff

Following JollyGreen's advice about 'trusting what the market tells you', I would have fired in huge lay bets when the price was between 2.50 and 2.75, expecting to capitalize on the continuing drift. I would then have been chopped to bits, when for no apparent reason, the price suddenly and viciously does a total reversal, and steams back in from 2.75 all the way back down to 2.00, a reversal of nearly 40 ticks!

[Zenyatta]

As things were, you'd have probably been bricking it and/or thinking 'Those f***ing manipulators! I've just lost my shirt again!'.
Jeff

Yup, that's just what I would be thinking

With respect Jeff, anyone silly enough to rely solely on 'charts', 'indicators' and 'prices' (which are really just numbers flashing back and forth like smoke and mirrors) will inevitably be taken to the cleaners by manipulators time-and-time again.

[Iron]

What do you suppose the people who trade profitably rely on then? ESP?

Jeff

With respect Jeff, anyone silly enough to rely solely on 'charts', 'indicators' and 'prices' (which are really just numbers flashing back and forth like smoke and mirrors) will inevitably be taken to the cleaners by manipulators time-and-time again.

[Zenyatta]

What do you suppose the people who trade profitably rely on then? ESP?

Jeff

Ideally, they should be using a combination of fundamentals (knowledge of the sport, form, information from the external world - for instance pictures, commentaries etc., which might explain the price moves) , supplemented with additional evidence from the price action, charts, indicators etc.

[freddy]

It may well help some to be better traders having all that info , but it's not essential.

Personally

I dont know a thing about horse racing,
I dont have live pictures and I dont listen to commentry.

In fact ive automated most of my strategies,
so it clearly can be done, just with all the flashing numbers as you put it .

[Zenyatta]

It may well help some to be better traders having all that info , but it's not essential.

Personally

I dont know a thing about horse racing,
I dont have live pictures and I dont listen to commentry.

In fact ive automated most of my strategies,
so it clearly can be done, just with all the flashing numbers as you put it .

Well yes, successful traders such as yourself are proof it can done on the numbers alone, but I would say that the trading gig is a very tough ask for the average Joe

[seanmould14]

Hi, this is my first post, been lurking and reading! I can resonate with both sides of the argument because money is clearly being won and lost using technical and fundamental analysis. I have probably traded in about 3000 pre race markets and study my videos and store data on spreadsheets for roughly 3 hours every night, so by now I should be a decent trader right?
Wrong, i still cannot stick to what I know and take impulse trades and losing, resulting in me missing entry points on my one slightly profitable strategy! Unfortunately it apparently cannot be automated. I lack the discipline at this present time to be able to trade effectively.
I will continue to trade as I have an incredible passion for it and will see where I go as, maybe naively, I struggle to quit on things! Sorry to drivel on, had to get that off my chest. What I'm trying to say is, people cannot be good at everything, but in my case, need to find what suits, whether technical or fundemental and roll with it, not argue that one is better than the other.

[Iron]

Indeed. But not because of its complexity.

Jeff

I would say that the trading gig is a very tough ask for the average Joe

[Hambleden]

Hi Ferry,
U wrote:
Indeed. But not because of its complexity.[/b][/color] Why is that then..can you expand?. I am a complete newbie..however have gambled with some success for many years when riding out in racing stable. Now lost contacts so trying this. Am pretty resourceful and determined..but must admit it all looks very complicated at present. Will i succeed or not??!

[freddy]

Jeff is correct, it's really not Rocket Science and you dont have to be a genius to get good results,
trust me i would know

That doesnt mean it's easy though ,
alot of people tend to over complicate things for a start and of cause you have to be able to controll your emotions, which alot struggle with, whatever their intelligence level.

[Iron]

Hi Hambleden,

There are all sorts of things that can make following a simple methodology very difficult, including fear, greed and boredom.

When you're trading, you're not so much battling against the market as your own mind.

I'd recommend Mark Douglas's excellent book Trading In The Zone as an introduction to the kinds of psychological challenges traders face.

Jeff

Hi Ferry,
U wrote:
Indeed. But not because of its complexity.[/b][/color] Why is that then..can you expand?.

[Tonto]

I'm a total novice when it comes to all this betting malarky but thought that I'd give it a go.My old dad,bless him,used to tell me to 'do your homework first' so that's what I'm doing.My thoughts are that I should treat the market as my guide and look for a trend (just as Jolly says).For example,if the trend on a horse is up,I should lay and look to back later at higher odds.Likewise,if the trend is down,I should back and look to lay later at lower odds.As long as the trend continues,I should stay in until the trend reverses or the start of the race is imminent,in which case I should close out the trade, take my profit and run.If the trade goes against me at any stage, I should admit my mistake and trade out for a small loss.Using this strategy,I should maximise my gains and minimise my losses.

My question to you all is: It can't be this simple.If it were, we'd all be winning and there would be no losers.Where is my logic flawed?