Wait, wait... no. It's the people like me that enjoy Monday mornings, at least this one because I got to wake up, be super tired, and go right back to sleep again :) Now here it is 12:58 in the afternoon in New York (state) and I am just chilling. I just treated myself to some Arby's and yes, that is a treat for me. Usually it's free because I fuel enough to get free food, but I shelled out my own cash today just because. And like usual, I swiped the card without even paying attention to the total.
On the one hand that is an irresponsible mentality, yet on the other, it is a freedom and I love not even for a moment considering the cost in a situation like that. That reminds me of another thing I love NOT doing, considering the time. Years ago I read a book called "Something you should know" by Clement Watt. In the book he urges one to forget about time altogether, as it enslaves the mind of the person watching the clock. So, I took his advice and have since then been more and more free to simply enjoy the moment. I have taken it a step further and usually don't know or care what day it is, day or number wise... It's pretty fucking awesome.
On to the next thought now. I figured today I would talk a little about some trading shit. Not sure exactly what but I have some charts I want to show you and some things I want to say about them. To the average person who knows nothing about trading and thinks its all confusing magic and super smart people on wall street... its really not that at all. You don't have to be "Smart" to trade, but something different. You'll see as I will explain a lot over time. For now just don't concern yourself with any other thought besides this: Trading is simple swapping the value of something for the value of another thing. It's that simple and need not be a more complex thought in your mind right now. So, as you look at these charts, don't worry about what the chart is for, just look at is as a history of the change in the value of something.
These images are from my phone so... yeah, but anyhow this chart shows 2 red triangle/arrow things pointing down. Those are the points Canadian dollar.
Wow... I already feel pretty irresponsible for sharing a chart without covering some things first haha! I think the reason I feel this way is because I was on a trading Forum last night reading in the "Newbies" section and it was so filled with garbage it literally started to piss me off...
A few things have really upset me lately.
#1 Taxes. How much you have to pay, and you don't even decide where the hell they go... but lets not get into the government and politics.
#2 I ride a streetbike and have been shifting without the clutch for about 50k miles. I have been hearing total idiots on YouTube talk about how shifting without the clutch will screw up your transmission... It has become a seriously aggravating thing to me because these people obviously don't know what they are talking about. It's gotten to the point that I am pretty sure I am going to produce a very in depth video explaining it for all the myth spreading egg heads out there.
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| My Bike |
#3... seeing just how many people want the quick way to riches in trading... it just doesn't exist except for the few who get lucky in a spectacular way by being part of a huge move they are uneducated enough to even understand. people just want a sure-fire, "Never lose" approach to the markets and trading, but it doesn't exist for the average person.
For example this post Post your mistake here These people don't even realize that the "Mistake" that they are making, is entirely how they are approaching the market to begin with. I think I'd like to take some time eventually and work on a post or several posts explaining each persons line of thinking and how it is the thinking itself that is the problem rather than specifically the action they think is the problem.
Back to charts.
As you can see both I took 2 positions on this trade and on this screenshot both of them happen to be at a profit. This particular method of trading is what beginners tend to do, which most of the experienced people tend to shun. Adding to a losing position is basically breaking one of the cardinal rules to profitability, however, there are so many ways to trade profitably.
There is a stark difference between principles and rules. Principles exist for the guidance towards what is "Right" or "best" and we often create rules out of the desire to have the path strictly adhered to. The problem is, rules do not often allow for flexibility in a dynamic world. For instance, a stop sign is a rule that says "You must stop here before proceeding". The very existence of the stop sign came from the principle of safety at intersections. In a crowded city intersection, it makes a lot of sense to stop at that stop sign each time, because the chances are higher that a car will be coming from the adjacent street into the intersection.
Now lets imagine a deserted intersection out in the middle of nowhere. You are approaching that intersection and even from a mile away can see in all directions that there is no traffic at all. It''s just you, approaching a stop sign. Now the entire reason that stop sign is in place is for the principle of avoiding a collision, but the rule that says you MUST stop at every stop sign, provides for no flexibility even in this case where you can clearly see it would be harmless and completely safe to roll through the stop sign.
There are basically two types of people in this world when it comes to a situation like this. There are those who will follow the rule, because the rule is the rule, and there are those who will break the rule because they understand the basis of that rules creation. For example, as a truck driver I see a lot of signs that say "No trucks allowed in left lane". These are almost always right before a mountain climb. Now, the rule is "No trucks in left lane", but what do you think the principle behind that rule is?
The principle behind having no trucks in the left lane while climbing a mountain at least partly involves the fact that a loaded truck weighing 80,000 lbs will not be able to maintain a safe minimum speed and will thus block the flow of traffic. Some climbs will easily slow a truck down to 25 mph, and being stuck in the left lane when the flow of traffic should be moving at 65 mph is a pretty annoying and unnecessary. Now, once again we are faced with two different types of people. Those who give more respect to the rule than the principle and those who do not.
If I am empty, and I know I can maintain my speed through a climb, I will pass slower trucks in the left lane because I am not violating the principle behind the rule. Make sense?
The problem with most people in life and in trading, is that they want a set of rules to follow that will lead to success, but they fail to realize that stiff rules are often not robust enough to take them to what they want in a dynamic world. College doesn't equal a great paying job and a trading system that works for someone else doesn't mean it will work for you. Becoming a person who sees and understands the principle of things is what sets many struggling people apart from the successful ones.
So, even though its heresy to add to your losing positions in the religion of trading, if done under the right principles it can lead to overall profitability. I'll get into how you can manage that later.
Here is that same trade from earlier now at a loss because I have not yet exited. My conviction is that it will go lower. I will keep you updated on how that is going.
The is a trade from awhile ago that is quite unprofitable and I may let it go.
As I stated before, there are many ways to trade the markets. I did say that right??? I don't use nor have an interest in using them all, but I think it would be good fun to explain some of the ways I am aware of so that you can see the beauty in the Art of trading. These charts show only one way and I will explain that at a later time :) Enjoy your Monday and I will see you tomorrow hopefully!
-Francisco
Newburgh, NY
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