Lost & losing hope - Emini and Emicro Index Futures Trading | futures io social day trading
futures io futures trading


Lost & losing hope
Updated: Views / Replies:13,801 / 184
Created: by xevanchan Attachments:32

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 100,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 32  
 
Thread Tools Search this Thread
 

Lost & losing hope

  #181 (permalink)
Super Moderator
Sarasota FL
 
Trading Experience: Intermediate
Platform: NinjaTrader, Sierra Chart
Favorite Futures: ES, YM
 
bobwest's Avatar
 
Posts: 4,977 since Jan 2013
Thanks: 37,659 given, 16,798 received


Cloudy View Post
Good summary of institutional and hedging volume in futures. I've come to believe the markets especially futures trading isn't a zero-sum game among retailers either. Retail volume while rising in recent years again, is reportedly only up to 3.5% of total CME volume. (https://www.chicagobusiness.com/finance-banking/cme-sees-future-small-fry). So I'd think it's far less likely the opposite side of your profitable trade is only some other losing retailer. It could be an institution, bank or firm on a higher time frame. Or an HFT or algo trade on a lower time frame fractal of price action making trades on pullbacks. All of this trying to "iron out" the inefficiencies as the market searches for price. With all the hft front-running going on since this decade, it could very well be competing algos from different firms taking the opposite side of your contracts anyways. So overall, I'd agree it's moreso value-neutral and we retailers pay a price in hefty fees and taxes. May the FTT never come to pass (along) to retailers..

This is a good post, but I'm afraid I didn't get my point across too well. Probably because I'm so long-winded and try to get too detailed instead of just addressing a point.

So let me say it in a briefer way:

At the end of the day (or when I close a trade, whichever comes first), my account receives money if I have a profit, and it loses money if I have a loss. These are real funds. I could actually take out the profit, so long as I left enough for the margin requirement. This happens to everyone else, hedger, institution, HFT, retail, no difference.

The money I get is real funds and is taken out of accounts that have a loss for the day. Or, if I have the loss, the money that is taken from me goes into accounts that have a profit. All the debits equal all the credits, exchange-wide. The money is just being moved around the table.

This is zero-sum.

It's not like some other markets, such as the stock market, where value can increase or decrease with the value of the company.

Sure, the total amount that is on the table can and will change as more is brought in from the outside, or more is taken out, and this will fluctuate. But once funds are on the table, they are just moved around.

Remember, we are not actually trading real oil, nor stock indexes, we are trading contracts on oil and stock indexes. The zero-sum nature of our trading, in aggregate, is a mechanical or, you could say, an accounting matter. It's automatic, applies to all accounts equally, and is just in the nature of the way that futures exchanges are set up.

It's not a matter of good or bad, it's not something to have a preference about, it's not theoretical, it doesn't mean retailers have to lose -- it's just a factual matter of how all futures accounts function. And certainly, some traders can win consistently.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote

Last edited by bobwest; August 12th, 2019 at 08:43 AM.
Visit my futures io Trade Journal Reply With Quote
The following 7 users say Thank You to bobwest for this post:
 
  #182 (permalink)
Market Wizard
Calgary, Alberta
 
Trading Experience: Advanced
Platform: NinjaTrader 8
Broker/Data: Kinetick
Favorite Futures: ES
 
JonnyBoy's Avatar
 
Posts: 1,031 since Apr 2012
Thanks: 392 given, 2,079 received


bobwest View Post
This is a good post, but I'm afraid I didn't get my point across too well. Probably because I'm so long-winded and try to get too detailed instead of just addressing a point.

So let me say it in a briefer way:

At the end of the day (or when I close a trade, whichever comes first), my account receives money if I have a profit, and it loses money if I have a loss. These are real funds. I could actually take out the profit, so long as I left enough for the margin requirement. This happens to everyone else, hedger, institution, HFT, retail, no difference.

The money I get is real funds and is taken out of accounts that have a loss for the day. Or, if I have the loss, the money that is taken from me goes into accounts that have a profit. All the debits equal all the credits, exchange-wide. The money is just being moved around the table.

This is zero-sum.

It's not like some other markets, such as the stock market, where value can increase or decrease with the value of the company.

Sure, the total amount that is on the table can and will change as more is brought in from the outside, or more is taken out, and this will fluctuate. But once funds are on the table, they are just moved around.

Remember, we are not actually trading real oil, nor stock indexes, we are trading contracts on oil and stock indexes. The zero-sum nature of our trading, in aggregate, is a mechanical or, you could say, an accounting matter. It's automatic, applies to all accounts equally, and is just in the nature of the way that futures exchanges are set up.

It's not a matter of good or bad, it's not something to have a preference about, it's not theoretical, it doesn't mean retailers have to lose -- it's just a factual matter of how all futures accounts function. And certainly, some traders can win consistently.

Bob.

I am not sure why the concept of zero sum in the futures market is a struggle for some people to comprehend. You have summarised it here well enough @bobwest, but I know this topic doesn’t really seem to get quashed.

Just like the futures market cannot be oversold or overbought, you still get traders that think it is a real “thing”. The futures markets are specifically designed to ensure that doesn’t happen, this same market efficiency also ensures that it is a zero sum proposition.

Zero sum meaning just that. When all accounts have been settled, there isn’t an odd amount of cash left over in the pot. There is zero left, because all they have done is transfer money from one account to the other. It is as simple as that. It’s just like one big ledger, and at the end of the day its bottom line will always read zero. No exceptions.

--------------------------------------------------------
- Trade what you see. Invest in what you believe -
--------------------------------------------------------
Visit my futures io Trade Journal Reply With Quote
The following 5 users say Thank You to JonnyBoy for this post:
 
  #183 (permalink)
North Carolina
 
Trading Experience: Beginner
Platform: NinjaTrader, Tradestation
Favorite Futures: es
 
Posts: 644 since Nov 2011


I do not think it changes the difficulty of trading. However, the whole zero argument is provably false, i.e. that is not necessarily true. Of course, it could be true in most cases but it is not true as a matter-of-fact. In fact, I shown this already. Below is the simple proof:

I buy 1 ES contract at market. An HFT hedges that contract instantly against an ETF/basket of stocks for a profit. Now, I am speculating on the outcome and the HFT has locked in a guarantee profit. They are short 1 ES but long the equivalent at a profit. At the end of the day, the S&P 500 index rises to place my trade in profit. I close it at a profit. Now, on the futures side, all transactions will net to zero. The HFT will appear to have a loss but actually has made a profit off of there futures trading.

If you make the counter argument that zero sum only means all futures trades net to zero then it implies then it is still meaningless to make the zero sum claim because a trader can turn an actual realized profit on a losing futures trade.

You can compare it to a secondary market even like NADEX. Let us imagine there are 3 traders. A bullish trader. A bearish trader. And a market maker. I speculate the market will rally and buy a binary at market and at the same time a bearish trader shorts the same binary. In this case, the market maker/liquidity provider takes both sides of our trade and profits from the spread on each. The market maker is perfectly hedged. I have the diametrical opposite to the other trader. However, there is no competition or "cross-trade" between myself and the other speculator. A similar dynamic is found in futures markets. More over, in this dynamic, the outcome of our profits or loss is completely non determined by any participant. It is wholly determined by where the market closes. This again raises serious question that trading is competitive because none of the participants in this case have any determination of the outcome. Of course, you might be able to make an argument that the only real +EV trade was the market maker/liquidity provider-- however, if you believe that then you shouldn't trade at all, in any case.

Again, please carry on. I do not think it changes the sentiments.


Last edited by tpredictor; August 12th, 2019 at 01:22 PM.
Reply With Quote
 
  #184 (permalink)
Super Moderator
Sarasota FL
 
Trading Experience: Intermediate
Platform: NinjaTrader, Sierra Chart
Favorite Futures: ES, YM
 
bobwest's Avatar
 
Posts: 4,977 since Jan 2013
Thanks: 37,659 given, 16,798 received


tpredictor View Post
I do not think it changes the difficulty of trading. ...

I buy 1 ES contract at market. An HFT hedges that contract instantly against an ETF/basket of stocks for a profit. Now, I am speculating on the outcome and the HFT has locked in a guarantee profit. They are short 1 ES but long the equivalent at a profit. At the end of the day, the S&P 500 index rises to place my trade in profit. I close it at a profit. Now, on the futures side, all transactions will net to zero. The HFT will appear to have a loss but actually has made a profit off of there futures trading.

I think we do not have a disagreement. My post was entirely about what the accounting is on the futures side, exclusive of whether hedging against assets outside of the futures market may allow for a net profit or loss that is not within the futures market by itself, although the futures position is a part of it overall.

I agree that actually, whether the futures market is zero sum or not, the issue in the original post is about whether a retail trader can make money in this market, which is another question, and actually whether the futures market is "zero sum" or not is irrelevant to it. I was expanding on a prior post that raised the issue, and probably should not have.

If there is more on this topic, let's take it somewhere else and let the original discussion continue.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
Visit my futures io Trade Journal Reply With Quote
The following 4 users say Thank You to bobwest for this post:
 
  #185 (permalink)
desert CA
 
Trading Experience: Intermediate
Platform: NT7, TOS, IB
Broker/Data: AMP/wCQG, TDA, IB
Favorite Futures: CL,NQ,YM
 
Posts: 2,087 since Jul 2011
Thanks: 2,310 given, 1,640 received


bobwest View Post

The money I get is real funds and is taken out of accounts that have a loss for the day. Or, if I have the loss, the money that is taken from me goes into accounts that have a profit. All the debits equal all the credits, exchange-wide. The money is just being moved around the table.

This is zero-sum.

It's not like some other markets, such as the stock market, where value can increase or decrease with the value of the company.

Oh, ok, I see what you mean when taking the futures market as a contained system for the day. In this context I would think a retail trader in profit is taking in funds from the "losses" of a hedge or higher time frame trade of a fund, rather than an outright other retailer. I would think there are also plenty of contracts that are held on a longer time frame overnight so they may not necessarily be losses and could just be offsets or actually making profits from an earlier position days earlier if they were indeed speculative trades and not used as hedges for an external position involving other types of markets.


tpredictor View Post
If you make the counter argument that zero sum only means all futures trades net to zero then it implies then it is still meaningless to make the zero sum claim because a trader can turn an actual realized profit on a losing futures trade.

You can compare it to a secondary market even like NADEX. Let us imagine there are 3 traders. A bullish trader. A bearish trader. And a market maker. I speculate the market will rally and buy a binary at market and at the same time a bearish trader shorts the same binary. In this case, the market maker/liquidity provider takes both sides of our trade and profits from the spread on each. The market maker is perfectly hedged. I have the diametrical opposite to the other trader. However, there is no competition or "cross-trade" between myself and the other speculator. A similar dynamic is found in futures markets. More over, in this dynamic, the outcome of our profits or loss is completely non determined by any participant. It is wholly determined by where the market closes. This again raises serious question that trading is competitive because none of the participants in this case have any determination of the outcome. Of course, you might be able to make an argument that the only real +EV trade was the market maker/liquidity provider-- however, if you believe that then you shouldn't trade at all, in any case.

Again, please carry on. I do not think it changes the sentiments.

I tend to still lean toward this being an overall-overlapping context of different market types or strategies and market reactions that end up valuing overall price, rather than an absolute speculative zero-sum endeavor. Maybe it's true that those of us who've learned to profit in the futures markets have come across too much of an advantage able to leverage up so much and make decent profits without having to cover the notional values. Maybe as retaliers , we "help" the big money make their hedges, contributing to the liquidity and price valuation in the smallest ways, where some would still say "overpaid" to do so. (And sorry to see this poster was just banned(?))


Last edited by Cloudy; August 13th, 2019 at 04:51 PM.
Visit my futures io Trade Journal Reply With Quote

Reply



futures io > > > > Lost & losing hope




Upcoming Webinars and Events (4:30PM ET unless noted)
 

futures io is celebrating 10-years w/ over $18,000 in prizes!

Right now
 

$1,000 in Amazon Gift Cards being given away right now from GFF Brokers

Right now
 

$250 Amazon Gift Cards with our "Thanks Contest" challenge!

Right now
 

Show us your trading desks and win over $5,000 in prizes w/Jigsaw Trading

August
 

Webinar: Chart Patterns and Practical Trading Stats w/Suri Duddella

Elite only
 

Webinar: Richard Bailey (TBA)

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Hope Springs Eternal Quick Summary News and Current Events 0 November 18th, 2011 09:10 AM
University Of Michigan Finds Hope Surges The Most Since 2009 Quick Summary News and Current Events 0 November 11th, 2011 10:30 AM
The Price of Hope in the Mayhem of US Manufacturing Quick Summary News and Current Events 0 November 10th, 2011 01:20 AM
EU Leaders Meet on Debt Crisis, Hope for Wednesday Deal Quick Summary News and Current Events 0 October 23rd, 2011 02:20 AM
Bob Hope - (only for republicans) stephenszpak Jokes 2 February 7th, 2011 04:41 PM


All times are GMT -4. The time now is 11:30 AM. (this page content is cached, log in for real-time version)

Copyright © 2019 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts