Posted by: joetradingplace | June 7, 2012

Stuff To Know About

Author: Steve W,

Follow on Twitter:!/nobrainertrades

This blog started approximately three years ago after a hiatus from the corporate world.  I decided to leave my job at a major local hedge fund and essentially go solo.  The market was heading into a recession and things were just simply starting to get ugly in terms of growth.  I always wanted to work for myself and partnered up with some close friends in order to make this happen.

Writing started when I found myself having too many gaps through the course of my day.  I focused strictly on foreign exchange, and with close to zero operational work to keep me busy, started cruising the internet and seeking ways to vent my findings.

In this search I came across a slew of eager traders clamoring over techniques and strategies that simply made zero sense to me. In an effort to simplify things, I drew one line on my charts, posted them, and said “if / when price gets here, it’s going to turn”.  These lines were nothing more than areas of strong historical support or resistance, e.g. magnets for order flows.  I needed a name, so I used the first thing that came to my head: “No Brainer Trades”.  I kept it simple.

The more charts I posted the more questions people reading them had, so I began a series of other posts dedicated strictly to explaining various technical market movements.  This led to many other things that I continue to write about today, including psychological aspects, standard price patterns that usually go under mainstream radar, and behavioral trading.

I love the markets and I’m a complete addict in every sense, but I use my sensibilities when it comes to putting on exposure.  I am still very heavy-centric on foreign exchange and macro environments in general, but I monitor a great deal of instruments.

Things I constantly stress:

Trusting intuition 100%

Laziness / sloppy trading avoidance through deep analysis and taking trades at high-probability areas

Strict risk management because you simply never know

Avoidance of the opinions of others….if you don’t understand it, you shouldn’t be trading it

Patience in all efforts; those that push the pedal to the floor usually end up wrapped around a telephone pole

Advice for those starting out:

Learn the basics, and then learn everything else.  Know your market in and out.

Technical: basic support and resistance and how it works with existing order flows

Fundamental: you are trading markets that react to the expectation and realization of economic data, rumors and geopolitical events.  when something hits the wires, you should know what it means

Intermarket: all major asset classes interplay to a certain degree.  Know the major relationships and how one will affect the other in various circumstances

Take notes: Do it one, fine, but don’t do it again.  Take screenshots and mark them up with all relevant elements as to why the trade / setup worked or failed

Stay on top: The drivers of this market are shifting constantly.  Those that are on the other side of your transaction are usually well aware of what’s causing it on a daily basis: you should be in the same boat.

There is a wide range of posts on this site that cover a massive range of topics, but even in three years I feel as though I have barely scratched the surface.  Keep reading, exploring, and know quality content when you see it.  Just keep one thing in mind when you’re reading other sites:

The retail segment is statistically proven to be the least informed participants in this market.  Get your information from where it counts.  You are likely to gain 100X value in reading a scholarly paper on microstructure compared to a retail broker’s explanation of how a MACD works.  Trust me.

With the vast amount of educational resources available to traders, most of it is pure garbage and very unfortunate.  If the guy teaching you is not posting his verifiable performance, then something is wrong.  Take the hint.  They all lie.

Take your time, and when you think you have learned it all, you are probably 10% to the finish line.  Keep going, and keep your risk to nil while you do so.

Some of my favorite posts – here are a handful:

Take The Easy Ones, and Don’t Do Anything Stupid In The Meantime

Death By Opinion

All About Diagonal Trendlines, Variations and How to Use Them

Short Term Spike Base Example

Liquidity Gaps and Spike Removals

How Well Do Bank Analysts Really Perform?

A Blind Man Drives A Car

3/4 Pull As A Reactionary Point

Quasimodo (Over and Under Pattern)

The Err Interpretation of Technical Analysis

I used to post trades but….

The more popular this site got, the more laziness it attracted.  Some readers were staring to view me as some form of free service, hounding me daily about what to do here, there and everywhere: it had to stop.  I appreciate every visit to this site very much, but I like anyone else, do not want to be responsible for the outcome of others when I am simply not present to assist. For anyone to truly move forward and excel at what they do, the thinking should start and stop in their own brains.  This stands true for everything.  Since then I have added a great deal of information to this site that outlines a huge number of tenets required, in my opinion, for any self-sustaining trader.

Recommended reading:

I don’t / haven’t read many “how to” books on trading, nor do I recommend them much if you are learning.  Forced strategies usually lead to forced losses.  Just the basics, and take the rest in pieces.

The following books cover the processes of some top traders, and insinuate an independent mindset, which is truly most relevant.  The don’t get into nitty gritty strategy but rather open the gates to much, much more.

The Alchemy of Finance – George Soros

Market Wizards – Jack D. Schwager

The New Market Wizards – Jack D. Schwager

Trend Following – Michael Covel


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