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New Daytrader...Questions
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New Daytrader...Questions

  #11 (permalink)
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You can have the same tools and price levels from the best trader at Goldman Sachs, if you do not know how to use it properly and if you do not have a understanding of the market, you will commit suicide. Mainly if you trying to do what you just said " if it is a session high, then I would place a buy stop one tick about the line of the session high".

Just because let's say you are driving a McLaren-Mercedes F1 car, it does not mean you can compete with Jenson Button and Lewis Hamilton.

And if you are a beginner you should not trade futures and you should not daytrade or scalp also anyway...


Last edited by mrphr; April 20th, 2012 at 11:00 AM.
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  #12 (permalink)
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bmcduffie7 View Post
I think its a pretty good method of trading ... because i am losing ALOT of money ...

OK then.

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  #13 (permalink)
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bmcduffie7 View Post
Hi,
I got into daytrading about 6 months ago. I am not doing very well. I met a mentor who is teaching me to trade like wall street professionals, but the method is not working well for me.

Is it true that good traders never use indicators or systems? Do professional traders only use levels to trade? i.e. session high, session low, pivot high, pivot low and then place a futures order one tick above or below one of those highs or lows. For example, if it is a session high, then I would place a buy stop one tick about the line of the session high?

This is the method that I am being taught. My mentor says this is the only way the pros trade.

Many good traders use indicators and develop their own systems. Depending how you define a Wall Street professional most are trading very large accounts. Very large accounts are in most cases traded differently than 99% of the way most futures.io (formerly BMT) members trade. They are a different animal. I personally do not want to trade like a professional wall street trader. Can make plenty of money playing on their playground but doing things differently.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #14 (permalink)
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Don't try to trade like a wall street trader unless you are wall street trader, with a wall street sized account and wall street resources. Those traders' methodology are suited to their own approach and resources. Placing your stop 1 tick above well known S/R levels is a sure way to get preyed upon by stop hunters, unless your entry method is upon confirmation once price has clearly bounced off the level, after all the stop hunting shenanigans are done. I believe to properly trade S/R levels you have to view a level as a zone. Scaling in around that zone is probably the best approach, otherwise you will routinely get stopped out by a few ticks, only to see the zone hold and price move in the direction you desired.


Last edited by monpere; April 21st, 2012 at 07:39 PM.
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  #15 (permalink)
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bmcduffie7 View Post
Yea,
I think its a pretty good method of trading, but I do not think its the only method that i need to stick with because i am losing ALOT of money with these "high prob" trades. They only yield about 5 ticks max most of the time because I was taught to kind of "get out" as soon as you see a profit.

The problem that I see with this method is that every time the market breaks through that lower low or higher high, it stalls out and comes right back down. It comes right back down or up (depending) right after it breaks through those levels. I am all for floor trading, but there must be a safer way.

Just walk (run) away from that...that is the oldest one in the book and is a loser for sure.....I'm surprised a "mentor" would even introduce you to that ....it's basically setting you up to get stopped out and then flipping to get stopped out again and again and again.....but I guess your figuring it out which is good.

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  #16 (permalink)
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there are some great educational videos posted at cme group on some of the fundamental basics Getting Started With Trading

on a side note , i often hear traders that have either gone from floor to electronic or are floor traders and have screens open, using bands as a guide they use for some reference, keltner bands or bollingers or something like that in addition to their own methods using pivots etc... and then their knowledge and access to who's who and what the big guys are doing even though they try to be sneaky, they say you can tell all the newbies getting tossed around as they sneak up in the corner and fire off some stealth moves....

take a listen to the pits if you have not previously, there is a free 3 day trial , to get a feel for what is happening , maybe that will be helpful || Traders Audio ||

"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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  #17 (permalink)
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bmcduffie7 View Post
Yea,
...losing ALOT of money with these "high prob" trades...

Reading about the most common trading mistakes in many great threads here I point out that
new traders tend trying to use a heck of strategies on many instruments. And they lose / lost
money doing this with real money instead of optimizing on sim until there are consistent results.

Best way to get a feeling for a market under any condition is to concentrate on this very market.
This is more time consuming than thought at the beginning. But with that feeling one is getting
a feeling for a different market more easily.
Think of learning to ride a bicycle first - not an easy task - and then to move on to motorcycles
which seems to be learned much faster. If you start learning motorcycle without ever have had
experience on a bike - ouch!

Happy Riding!

GFIs1

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  #18 (permalink)
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bmcduffie7 View Post
Yea,
I think its a pretty good method of trading, but I do not think its the only method that i need to stick with because i am losing ALOT of money with these "high prob" trades. They only yield about 5 ticks max most of the time because I was taught to kind of "get out" as soon as you see a profit.

The problem that I see with this method is that every time the market breaks through that lower low or higher high, it stalls out and comes right back down. It comes right back down or up (depending) right after it breaks through those levels. I am all for floor trading, but there must be a safer way.

Also I would opt for swing trading as opposed to day trading, do something else with your time. Trade less, which swing trading lends itself to and having another interest or income other than trading will immediately remove a lot of anxiety, fear and stress as well as expectation.

Good luck

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  #19 (permalink)
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bmcduffie7 View Post
Yea,
I think its a pretty good method of trading, but I do not think its the only method that i need to stick with because i am losing ALOT of money with these "high prob" trades. They only yield about 5 ticks max most of the time because I was taught to kind of "get out" as soon as you see a profit.

The problem that I see with this method is that every time the market breaks through that lower low or higher high, it stalls out and comes right back down. It comes right back down or up (depending) right after it breaks through those levels. I am all for floor trading, but there must be a safer way.

Vendors love to throw around the "High Probability" buzz words. They know that gets newbie's attention. When they throw that term around, ask them exactly what that means, what percentage it is, then ask them to provide the backtest that proves it. If they cannot, it's bull patties.

They also use that term because new traders believe that high probability means profitable, it does not. You can have a 90% win/ratio trade set up that you follow to the letter and it may still loose money. Why? because it is expectancy that makes a method profitable not win ratio / probability. Plenty of traders are making money with a 30% win ratio method if the expectancy of that method is positive.

Expectancy is how much money a setup generally makes on average when it wins versus how much money it generally loses when it takes a loss. So, as a loose example without specific data calculations, a setup with 90% win ratio will probably lose money if it makes 5 ticks on each winner but loses 100 ticks on each loser. A setup with a 30% win ratio will make money if it loses 5 ticks on each loser but makes 100 ticks on each winner. Look up how to calculate expectancy and use it as the basis for measuring potential profitability of a trading method.

The next time a vendor says 'high probability' ask for the data. If they use that term, then it must have been derived from data, or it's just a sales spiel.


Last edited by monpere; April 22nd, 2012 at 11:12 AM.
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  #20 (permalink)
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monpere View Post
Vendors love to throw around the "High Probability" buzz words. They know that gets newbie's attention. When they throw that term around, ask them exactly what that means, what percentage it is, then ask them to provide the backtest that proves it. If they cannot, it's bull patties.

They also use that term because new traders believe that high probability means profitable, it does not. You can have a 90% win/ratio trade set up that you follow to the letter and it may still loose money. Why? because it is expectancy that makes a method profitable not win ratio / probability. Plenty of traders are making money with a 30% win ratio method if the expectancy of that method is positive.

Expectancy is how much money a setup generally makes on average when it wins versus how much money it generally loses when it takes a loss. So, as a loose example without specific data calculations, a setup with 90% win ratio will probably lose money if it makes 5 ticks on each winner but loses 100 ticks on each loser. A setup with a 30% win ratio will make money if it loses 5 ticks on each loser but makes 100 ticks on each winner. Look up how to calculate expectancy and use it as the basis for measuring potential profitability of a trading method.

The next time a vendor says 'high probability' ask for the data. If they use that term, then it must have been derived from data, or it's just a sales spiel.

Yes, but do not you think that the actual track record results is much more important and valid then a backtest?
The forward results [track record] is far much more important than the backward results [backtesting].

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