Philosophical ramblings and blues notes

Hi Everyone,

I have decided to give a whirl at posting a trading journal.
In the journal I have asked everyone not to post questions or comments in my journal. I am not looking for feedback on the journal - at this time.

From some research on trading journals one of the items mentioned is the emotional and mental state at the time of the trade. One example was "you're late getting to the office because of taking the kids to school and traffic and are in a rush and don't have time for your regular daily preparation, the market's moving and you rush a trade giving a bad entry."

For myself, one of the factors that may effect my trades is current things on investing I am reading or new ideas I am working with. So I have started this thread for some of those factors.

On these more general or philosophical ideas I am receptive to hearing other peoples thoughts and that is why I started this thread in the Lounge.

I'll post an example.

... nnn ....

Originally posted by spliton

Thanks blue!

As for why I did it in a blog format I figured three things. 1) It would be something I haven't done before and thought maybe it would be fun. 2) I like how it auto archives my posts and has a readily available search feature(currently I have disabled) for when I reach x amount of trading days. It will be great for looking back on trades as a trade diary. 3) Yea to avoid negative feedback from people I do not know. I have my way of trading and I believe it works and I do not need to get in a heated argument or waste my time with a forum troll who thinks differently.

Hi Spliton!
Please PM me your email address - thanks.

It's Saturday. I've had a good sleep and thoughts things over.

My conclusions are:
1. Writing a journal is a good discipline.
2. Posting a journal in a friendly place with intelligent and thoughtful review is possibly a

good idea.
3. Posting a journal where the forum trolls can attack it is a bad idea (at least for me).


At a company I used to work at the where two bosses - both wealthy men and the founder partners

of the firm. One used to take delight in nasty belittling comments and the other was always

polite and courteous, a real gentleman.

After a few years I approached he gentleman partner of the firm and asked him why his partner was

always cutting people down. He said, "There are some people who are insecure and to try and make

themselves feel bigger they try to belittle others." I realized it was like the load mouth guy in

the bar with a big bankroll. To look big amongst his crowd of hangers on (hoping for another free

round of drinks), he shouts out an embracing comment to the new young waitress. Men of character

pull away and would buy their own drinks - or if they cannot afford them do without. The price of

the free drinks is too high. The braggart comes home and boosts of "clever" remarks to his wife.

She gives him a sad smile because though she loves him she knows from the other wife's what his

"friends" really think of him.

In a forum that does not enforce guidelines, older members of the firm who say nasty and

belittling comments are tolerated. The hangers on are hoping for another round of free drinks (a

market call), will tolerate and even defend him and refer to him as "a respected member of the

board." further enhancing the offender's ego.

I believe that if one authors a thread, and a poster violates the guidelines then the post should

be deleted if the author asks it to be deleted.

We have on this board some guidelines, I feel these were violated, specifically:

3. No intimidation. The board must stay as a friendly and welcome place to make a post, ask a

question or express an investment view without worry of ridicule or angry replies.

4. If you have nothing nice, positive or helpful to say then just don't post. The golden rule

governs here. How would you feel if you were the author and received a reply post like that?

Remember there is no one forcing you to reply to everything (other than your own ego). If you

don't like the thread - move along.

I have asked for the offending post to be removed and the moderator has declined to do so. I

could be in a flame war but that goes against my principles and is just what the offender would

like a nice little scrap.

If a board does not maintain a friendly, welcoming atmosphere, then new entrants will post for a

while and drift away. Eventually hardly anyone (except a small core of old-timers) is left to

post. A good university thrives when fresh new thoughts are welcome and allowed to grow and

flourish. These new thoughts rejuvenate the "old-salts" and everyone prospers.

I will maintain my journal privately but suspend posting it.
"Don't wear your heart on your sleeve for the crows to peak at."

should be
"Don't wear your heart on your sleeve for the crows to peck at."

editing is not functioning today.

Originally posted by blue

In a forum that does not enforce guidelines, older members of the firm who say nasty and belittling comments are tolerated. The hangers on are hoping for another round of free drinks (a market call), will tolerate and even defend him and refer to him as "a respected member of the board." further enhancing the offender's ego.

Enforcing guidelines means that a small number of moderators get to enforce their values on to a large crowd of traders. What is probably fairer and more indicative of free markets is a democratic system where members can vote topics and replies up or down. We have just started implementing that here. Let's see how this pans out and if we can democratically solve this problem together.

See Voting and Reputation

Once, on a business trip, I went to Vegas. In the evenings after work I went to the casino to play roulette. I picked the Bellagio because it was nice looking and went to the same roulette table each night - a quieter table with a nice operator.

My theory I wanted to test was that if red had not come up as often as black, that it would need to start coming up more often to balance the black and vice-versus. I kept a cumulative total of red and black and waited til one was ahead by more than certain amount (I think it was 5). Whichever colour was behind I would play it.

The first thing that happened was that it took quite a while for one colour to get ahead by more than 5. They had free drinks and the boredom of waiting and free drinks meant that I had a few. I had a set limit for the 3 nights of $500. I never made much and lost some. (by the end I had lost $350 including the chips I gave away).

On the last night a young newlywed couple came up to watch the play as they had run out of chips. I asked the young lady which colour she thought was lucky and bet on that. Each time her call won I gave her a couple of chips of the winnings and one to the operator. Her calls were doing well. After about 10 minutes I decided to just give her and her husband my seat and all the chips I had remaining, keeping one chip as a souvenir. (They were quite pleased.)

I wished them well and then went to say goodbye to the operator. I explained my theory, and asked her what her thoughts were.

She said; "I would play the colour that has been coming up. If the table was running red I would play red."

Interesting!

So a person who doesn't gamble and watches people gamble every night for years had the opposite opinion to my theory! I wish I had asked her on night one.

----
I bring up this story because a couple of people in a forum expressed their discouragement over their losses. I got to thinking - If one makes $300 on a winning day and loses $250 on a losing day, trades 5 days a week loses 3 days and wins 2 days, then one is down $150 for the week.

By cutting out a losing day then 2 days winning and 2 days losing one would be up $100 per week.

But, how to know which day not to trade?

It occurred to me that the beginning way to answer this question is to track the results in a little table Monday to Friday across the top and the dates down the left, filling in the table with the win/loss for the day.

A pattern might occur. Perhaps, you lose almost every Wednesday. Perhaps Friday is a big winning day for you. Perhaps you win in a streak and then lose in streaks (analogous to "the table running red"), so that you win 8 out of 15 days and then only win 4 out of the next 15 days.

Other entries in your table could be the setup used (setup 1, setup3, setup3) etc if you use multiple setups.

I thought that sharing this might spark some ideas for myself and perhaps others might benefit as well.

Happy trading!

Sorry dude but if you knew anything about how probabiliy works you would know that the chance would always be 50% for red/black in roulettes and so on (i dont gamble but there are only two colours right?) regardless of what came up before.

For example if you tossed a coin 100 times and came up with all heads, the chance of the next coin toss being heads/tails is still 50%.

Originally posted by feng456

Sorry dude but if you knew anything about how probabiliy works you would know that the chance would always be 50% for red/black in roulettes and so on (i dont gamble but there are only two colours right?) regardless of what came up before.

For example if you tossed a coin 100 times and came up with all heads, the chance of the next coin toss being heads/tails is still 50%.

The roulette table has 38 numbers of which 18 are red, 18 black and 2 green, in America. In Europe they have 37 numbers with 1 green.

In the United States the odds of red or black coming up are 47.4% and for either of the green's it's 4.3%.

See Is day trading gambling? and Trading versus Poker.

Originally posted by blue

But, how to know which day not to trade?

It occurred to me that the beginning way to answer this question is to track the results in a little table Monday to Friday across the top and the dates down the left, filling in the table with the win/loss for the day.

You might get tripped up by the Heisenberg Uncertainty Principle with this. If for example you found that Mon, Tue, and Wed were always loosing days and Thu and Fri were winning days then you might want to cut out Mon to Wed but by doing so you might find that the practice (for example) that you got Mon through Wed is what made Thu and Fri wining days.

However, this is a weak theory and I think that there is more merit in your idea than my theory.

Many thanks Leob.

May God keep you and bless and your family.