A Lesson from a Trader
January 02, 2009
– Comments (21)
Alstry has become a trader since starting CAPs. I owe a significant gratitude to a blogger formally known as FloridaBuilder who provided great trading perspectives in his blog. In honing my trading skills, I have taken bits here and there from my formal training as an attorney and my life experiences. What I think has served me best is an ability to read people...much of that has come from a variety areas....including playing poker. When one plays poker, he doesn't play his own cards, but rather the cards of his opponent by reading your opponent through his various observable characteristics.
That is not too different from playing the stock market. Although in the long run, the fundementals will play out, in the short term you must understand the behavior of individuals aggregating into a collective environment. If you understand people, it will assist you to understand the market. There are times when the market is rational. There are other times it seems schizophrenic, bipolar, or manic depressive. As a trader, you must understand what kind of market you are facing in order to try to make an educated decision on how you should play.....if you so choose.
On New Years Eve, DaretothREdux, posted a satirical blog dedicated solely to me. If I had posted something similar, TMFDeej's bikini bottoms would have been wound up so tight up his backside, that he would have promptly commented and admonished me on one thing or another. But true to my perspective of him, he was conspicuously absent on Mr. Dare's blog. The only reason I mention Deej is that I think he is an employee of Motley Fool, and as an employee, one would think he would be consistent in the application of his admonitions. Deej, if you are not an employee of Motley Fool, please accept my appology for expressly implying you are a hypocrite.
Appreciating hyprocracy can be applied to the market, or a wall street analyst, or any number of salient issues relevant to trading. Just because a corporate executive, government official, or analyst says one thing, if hypocracy rules the day, you must consider that in weighing the content of the language against what trading decision you wish to make.
Unlike some, I have no problem with Dare's blog. It is simply part of the game and without a doubt I invite bantering and gamesmenship. Quite frankly, I was flattered by Dare's blog. It is evident that Dare lives on the East Coast. Based on the timing of the blog, Dare chose to spend the most of the time leading up to 2009 thinking and writing about me while my wife and I were dancing the night away. It is obvious that my blog has made quite an impression on Mr. Dare.
For fun, let's size up Mr. Dare and pretend he represents the market de jour. It is obvious, Mr. Dare wants to be a "player" in CAPs in both blogging and the contest to score points based on the following evidence in his comment on December 19th.......
Yesterday I was the #1 7-Day Hottest Member
24 hours later I was the #1 1-Day Coldest Member
My score went from 94.76 to around 24. Sigh...
So what does this tell us....simply that Mr. Dare is a chip counter while he sits at the table. As a trader, never count your chips while sitting at the table. This is a sure path to failure because it demonstrates you are an easy read and don't have much conviction in your success.....consequently you are liable to make stupid mistakes. For example, let's look at a stupid mistake of Mr. Dare........
In his blog on December 20th, he makes the following two statements within three sentences of each other.......
This is not a shameless attempt to bump my own blog and I don't care if you read it or not
My last blog was not as well recieved as its prequel-blog.
Regardless of the truth of the statements, we can determine that they are inconsistent and thus Mr. Dare lacks credibility.
Now we have a chip counter who is a terrible bluffer. This kind of market is fun to play in....because you simply go both ways because your opponent probably has a personality disorder and thus makes behavior unpredictable. Not only that, playing your oponent is easy and getting him Full Tilt is almost effortless.
For example, it is clear that Mr. Dare is a very intelligent person. He is an employee working in the shadows of someone else but probably given a decent amount of autonomy. That someone else is probably very successful. He hangs out and provides information to the "big shot" but carries very little weight at the end of the day. He strives for material trophies but is usually left wanting in his own eyes.
In knowing this about your oponent, or the market in this case, we can play accordingly. The market will strive to deceive you in the short term and fundementals take a back seat to psychotic shallow behavior. However, playing against such a market can be fun once you understand.
For Alstry its just a game. Solving puzzles is a passion and I always keep the following in mind:
Focus long on resolve in defining a better understanding in learning definitive executable rationals.
RSS Headlines
Fool UK