LeonWavegarrick » Sun Oct 01, 2017 3:09 pm wrote:Hi Charles,
"Being in the Trenches",
I've had a long and hard look at the words you describe in your thread. Powerful words indeed and so true. I know, I slept and fought in the trenches in my younger days, a warfare I did not want to partake in but something I was forced to do. The longer you stay in the trenches the more chance of getting into harms way.
I believe the same applies to trading. Why not be a sniper? Get into the trenches, make the kill and get out.
Something I am trying now in my trading, thanks to your thoughts.
I have gone back over many Ea's and Re assesed my original thinking and believe I am making headway.
I hope to share at some point.
Many thanks
Leon
I think I know what you are referring to when you say you slept and fought in the trenches - can't even begin to think what that must have been like - I hope my analogy is not offensive.
Let me address your question more directly.
If the expected outcome is profit then sniping may work as well as trench warfare. - The military have developed the terminology and traders call them scalpers and day traders at one end of the spectrum (Snipers) and swing or position traders at the other (trench warriors).
On that (profit making) level it probably does not matter which one you are.
However at another more basic level I do think it matters and in fact it ultimately impacts the ability to make profits as well.
You may have seen my latest book review on Dr Tharp's work. A key area he identifies as weak in most traders is decision making, stress control and emotional balance.
Now we don't need Dr Tharp to tell us that these three areas and particularly making decisions is fraught with difficulties for most people in many aspects of their lives let alone something as difficult as trading. Ever seen people in a supermarket trying to decide what flavour of something or other to buy ? You get the drift.
Sniping (scalping, day trading, low TF trading) requires continuous decision making that many people find difficult and uncomfortable. This discomfort induces a level of stress and emotional imbalance which makes the next decision even more difficult to make and so on.
Again with a military analogy - you know when you have had a number of straight losses how it becomes increasingly difficult to "pull the trigger" on the next trade.
I think this is why people often look for affirmation that their "sniping picks" are valid. They want their decisions validated and given meaning by others.
In an earlier post I wrote this decision making responsibility is shifted squarely back onto price in GTWV. In the trench you have no option but to do what price tells you. The critical element here is price action is making the decisions by virtue of confirming the direction and levels of participant interactions in the markets.
As a trader you then have confirmation and affirmation that what you are doing is reasonable and right. You just follow the ultimate leader and decision maker - Price.
Is there more risk doing it this way ?
I honestly don't think so. The only thing may be that as a sniper I erode my position far slower, by virtue of trading less, but if I am a poor sniper I will still be taken out eventually.
Charles
ps - Ever wondered why Index tracker funds are generally more profitable than actively managed ones ? - Decision making ! The former just follow the index no thought, no invention. The latter try to "beat" the market with (very) mixed results mostly not good.