Realistic Expectations (Part 2)

In an attempt to formulate a position on what I believe is reasonable to expect as a trader, I have begun by reviewing “trader wisdom” that was the focus of my last blog series.

Continuing on:

> It’s not that you can predict the future with it but you get comfortable with how [the market] reacts.

Yes, I can be comfortable on most days with how the market reacts:  until a day rolls around when I am not.  At some point the market will make a three, four, or greater standard-deviation move that can potentially knock my socks off.  This is what I must prepare for each and every day even though I will only see it on rare occasion.

> I sit here in front of the screens all the time watching the 5-minute bars on all the futures and I’ve
> gotten very comfortable with my trades because I kinda know… I get decent entry points because I
> know how the market is moving around when I’m getting my trades on and I know when to just…
> hold off… doing my adjustment for 5, 10, or 15 minutes to see—you know, typically it’ll reverse here
> so I’ll wait and see and maybe get a better price.

This is too general to be meaningful.  To me, the underlying tone suggests this happens regularly, which is not realistic.  The subjective terms “comfortable,” “decent,” and “better” are all true if I am on a profitable streak and false if trading has hit the skids for my account.

> On this trade, I think it’s important to really understand how [the market] works so you can see
> the graph and see how these candles affect the trade.

This sounds good and I can see a large audience nodding heads but it becomes meaningless nonsense when I try to analyze it.

> You’ll see patterns among the stocks.”

I find it unrealistic to expect any patterns to be evident in live trading at the hard right edge of a price chart.

I’ll go more into realistic expectations in my next post.