Friday, 23 July 2010

Einstein on Trading

A hidden part of the genius of Albert Einstein's life was that he must have been a trader. Why do I think that without any tangible evidence? Because of the words from Einstein's own mouth.

"Everything should be made as simple as possible, but not one bit simpler"

"A man should look for what is, and not for what he thinks should be."

"Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted."

The way I taught Kiki and what I am teaching the attendees at the current training is to think about what is possible and trade what you see. I try and not over complicate matters as it should be obvious enough. If it isn't obvious enough with the simple things then just complicating it to force a view won't help. If it isn't obvious enough then don't take the trade. The fact that it isn't obvious means that you would wait too long to enter and get a worse trade location which may end in a stop out or very little profit. I teach that an early aggressive entry is more profitable as you will get a better trade location and know sooner if you are wrong and will stop yourself out for a smaller or no loss.

The second saying quoted above refers to trading what you see. Although we try and create a vision in order to have a bias, if what you see does not fit the bias then obviously the bias is wrong. Our technique of re-evaluating at every bar close is important so that you know where you are and what the other market participants are doing.

And finally, the third quote refers to my "pictures". Readers of the blog know that I trade discretionary. I trade a picture of what I see. sometimes one colour (one of the things in my charts) has more importance than another. Sometimes something will be ignored when at other times that same thing is important.

It all depends on context. At times you can't quantify something. Sometimes its good if its at 2 and at other times I want to see it at 3. Depends on context.

All in all, I try and don't over analyse and get bogged down as if I did, I wouldn't be able to pull the trigger in time, if at all.

The chart below just shows some of the Euro FX future trades today. They were everywhere.


  1. So you're no longer using 0.0009R charts for 6E? Yup, 6E was a lot of fun today.

  2. Wow! You were even using a 5 range bar... Pretty amazing when it starts to move...
    Thanks for posting this...what happened to the cvd for this chart? I find that on pullback trades cvd is not needed as it is usually the wrong color...VB does help though.

  3. EL< thanks again for the great blog.I was wondering if you would comment on trades 4,5,6 and 7 today. What would cause you to take these as opposed to 2 bars back in each case? Or were these spots second entry. I see nothing in the context to cause you to wait, although I may be missing something, as per usual.

    Thanks, Tom