Webinar: Private Banker's Perspective on Risk Management Presentation - Psychology and Money Management | futures io social day trading
futures io futures trading


Webinar: Private Banker's Perspective on Risk Management Presentation
Updated: Views / Replies:10,684 / 62
Created: by Private Banker Attachments:2

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 90,000 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 Ė 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 donít 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
 2  
 
Thread Tools Search this Thread
 

Webinar: Private Banker's Perspective on Risk Management Presentation

  #51 (permalink)
Site Administrator
Manta, Ecuador
 
Futures Experience: Advanced
Platform: My own custom solution
Favorite Futures: E-mini ES S&P 500
 
Big Mike's Avatar
 
Posts: 46,240 since Jun 2009
Thanks: 29,353 given, 83,234 received

I don't think it is quite that easy. If you look at the webinars from Scott at Master The Gap on futures.io (formerly BMT) and the Master Homework thread, I believe the conclusion shows gap plays as you described are not so straightforward.

Sent from my Nexus 4

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

Reply With Quote
The following 2 users say Thank You to Big Mike for this post:
 
  #52 (permalink)
Elite Member
Paris, France
 
Futures Experience: Intermediate
Platform: SC, NT, ToS
Favorite Futures: CME & Eurex Futures
 
Posts: 115 since Apr 2011
Thanks: 336 given, 187 received


Big Mike View Post
What did everyone think of the webinar?

Mike

I think it was a good and important webinar.

In my trading journey I slowly understand how much we tend to under evaluate very important aspects of trading like risk, money management/position sizing, psychology, under capitalization and often the combination of all of them. Our focus on entries because we want to be right and because it is the easiest thing to sell/buy in this industry make us blind and very often leads to loss.

I liked this webinar because in the trading examples there is much more information than what you may think. If you are a beginner (like me) you should give real attention to how simple the trading system briefly shown looks (which does not mean it is easy to invent, nor to execute). Try to understand how solid the risk management is (3 lot multiples for simplicity, probably sized in relation to the stop distance, 1 and 2 scales for quick reduction of risk BUT with an 1xRisk expectancy, 3rd scale for having positive expectancy, reentries for pushing your edge when premise is valid, etc...).

I liked this webinar because it talked about risk as a way to build a better business, as a way to increase your confidence, as a way to increase your performance, as a way to have a better life. Think about it, most us beginners are probably out of business for 2+weeks if our computer crashes tomorrow. Shouldn’t this risk be addressed? Don’t you think a daily backup will give you the feeling you are more professional, more confidence and better “peace” when you are trading?

I think this webinar should be seen more than once and probably again in few months for most of us beginners.

W.

-- The rest is silence

Last edited by wwwingman; May 18th, 2013 at 04:09 AM.
Reply With Quote
The following user says Thank You to wwwingman for this post:
 
  #53 (permalink)
Elite Member
La Jolla, CA
 
Futures Experience: Master
Platform: Sierra Chart, X_Trader Pro, OptionsCity
Broker/Data: Advantage, Trading Technologies, OptionsCity, IQ Feed
Favorite Futures: CL, NG
 
Private Banker's Avatar
 
Posts: 1,040 since Jul 2010
Thanks: 1,713 given, 3,759 received



GSREDDY View Post
thanks ben for great clarification.

identifying the day type early is the key. based on the pre market analyses, market open with respect to previous days value, we will have day type expectation.
example: open out of range, expect trend day in the direction of gap or open test drive

based on my observation, if the market trades in the direction of gap for more than 3 points in ES with out filling the gap, then we have very very less chances of filling the gap in that day.

it will be great, if you can explain or give some base point to start analyses to identify day type early in the day based on that days trading session (developing day). at what point of time you will change your initial perception on the market (from trend day to any other type of day or any other day to trend day)

example: based on pre market analyses, expectation is trend day, at that point of time you will start feeling that yes it is trend day.

sorry for lengthy question, looking for some kind of base point to start analyses to identify probable day type as early as possible in the developing day with respect to pre market day type expectation.

OK, sounds good. I'll be covering this very topic in my next webinar here on futures.io (formerly BMT). Great questions though.

Reply With Quote
The following 2 users say Thank You to Private Banker for this post:
 
  #54 (permalink)
Elite Member
La Jolla, CA
 
Futures Experience: Master
Platform: Sierra Chart, X_Trader Pro, OptionsCity
Broker/Data: Advantage, Trading Technologies, OptionsCity, IQ Feed
Favorite Futures: CL, NG
 
Private Banker's Avatar
 
Posts: 1,040 since Jul 2010
Thanks: 1,713 given, 3,759 received


RichardHK View Post
Hi Ben,

Many thanks for taking your time for the webinar. Most valuable and much appreciated. Look forward to future offerings.

Ref your website setup, note that your non-www domain does not work. ie, The Private Banker does not work (and it should). Most people these days do not bother typing in the www (or should not bother) so you need to fix your site htaccess file to open up this domain.

PS. Mike - thanks for fixing the video replay. Assume you have done something as webinar played from start to finish with no skipping back. Wonderful.

Thanks for reminding me of this. I had it set up initially and it appears to not be taking correctly. I'll look into this further for a resolve. Just so you know, you're talking to a very non-savvy guy here when it comes to this technical stuff, lol! I've always had an IT guy handle this stuff for me.

Cheers,
Ben

Reply With Quote
 
  #55 (permalink)
Elite Member
seoul, Korea
 
Futures Experience: Intermediate
Platform: Multicharts
Broker/Data: CQG, DTN IQfeed
Favorite Futures: YM 6E
 
treydog999's Avatar
 
Posts: 894 since Jul 2012
Thanks: 291 given, 1,006 received

Overall Reward Risk Ratios, are they important?

@Private Banker

Using just the original entry / Core position, does the reward risk ratio have any impact on your stop/target settings?

I see you scale out at 1 and 2 pts everytime. The 3rd target is selected from structure. Let me work through your Trade Example 2 (video time 1:14:00) This is because it seems like the simplest example without any adds. I have no idea if my thinking is correct or not.

Your Initial Average Trade Location is 1609.50 with 3 contracts risking 1.75 pts.
Currently your risk is a total of 3*1.75=5.25

1st Scale is hit at 1610.50 = +1pt (on 1 lot / 2 remaining)
1st scale #2 is hit at 1611.50 = +2 (on 1 lot / 1 remaining)
Final Target 1613.25 = +3.75 ( on 1 lot / 0 remaining)

So as a total sum your earning 6.75 pts (each scale out on 1 lots totalled) while risking 5.25 pts ( 1.75 for each contract) this is a reward risk ratio of 1.28:1

Does that matter at all? I mean is that something that should even be considered? I know you mentioned looking at MAE and MFE is not really something people should focus on. Is there a minimum Reward:Risk ratio you have that you won't take trades, say 1:1? I know that having a successful satellite/addons will help you earn more points, but they may or may not increase your reward:risk ratio depending on how they are structured on an individual basis.

Reply With Quote
The following user says Thank You to treydog999 for this post:
 
  #56 (permalink)
Elite Member
La Jolla, CA
 
Futures Experience: Master
Platform: Sierra Chart, X_Trader Pro, OptionsCity
Broker/Data: Advantage, Trading Technologies, OptionsCity, IQ Feed
Favorite Futures: CL, NG
 
Private Banker's Avatar
 
Posts: 1,040 since Jul 2010
Thanks: 1,713 given, 3,759 received


treydog999 View Post
@Private Banker

Using just the original entry / Core position, does the reward risk ratio have any impact on your stop/target settings?

I see you scale out at 1 and 2 pts everytime. The 3rd target is selected from structure. Let me work through your Trade Example 2 (video time 1:14:00) This is because it seems like the simplest example without any adds. I have no idea if my thinking is correct or not.

Your Initial Average Trade Location is 1609.50 with 3 contracts risking 1.75 pts.
Currently your risk is a total of 3*1.75=5.25

1st Scale is hit at 1610.50 = +1pt (on 1 lot / 2 remaining)
1st scale #2 is hit at 1611.50 = +2 (on 1 lot / 1 remaining)
Final Target 1613.25 = +3.75 ( on 1 lot / 0 remaining)

So as a total sum your earning 6.75 pts (each scale out on 1 lots totalled) while risking 5.25 pts ( 1.75 for each contract) this is a reward risk ratio of 1.28:1

Does that matter at all? I mean is that something that should even be considered? I know you mentioned looking at MAE and MFE is not really something people should focus on. Is there a minimum Reward:Risk ratio you have that you won't take trades, say 1:1? I know that having a successful satellite/addons will help you earn more points, but they may or may not increase your reward:risk ratio depending on how they are structured on an individual basis.

First, I'm trading more than 3 contracts but I break them into 3 "units". These units can consist of whatever amount of contracts I feel is reasonable given the risk on the trade. The scales in this example as I said in the presentation are one point and two points out of simplicity in explaining the scenario. Its up to each individual on where they want their scale outs to be. In this example, we had a very tight range move. I took the scales at 1 point and 2 points to lock in profit in the event the market did not trade up to the final target. Would the trade be more profitable if I held on to the full position all the way to the target? Yes but that's a flawed way of thinking in that you're only focusing on the potential outcome vs. the process of active risk management. What if the market didn't trade up to the target and came right back at you while you're holding a full position?

Anyway, hopefully that makes sense. Larger opportunities may require larger risk which then would require larger scale outs to ensure your position is protected. The exact levels in which one decides to place their scales is up to them. The goal with this is to simply protect your core position in the event the market does not reach your target area and comes back against you and stops you out of your core.

Reply With Quote
The following 9 users say Thank You to Private Banker for this post:
 
  #57 (permalink)
User requested to be banned
Orlando, Florida
 
Futures Experience: None
Platform: shoes
Favorite Futures: happy
 
GaryD's Avatar
 
Posts: 6,462 since May 2011
Thanks: 2,090 given, 5,026 received


Private Banker View Post
... I took the scales at 1 point and 2 points to lock in profit in the event the market did not trade up to the final target. Would the trade be more profitable if I held on to the full position all the way to the target? Yes but that's a flawed way of thinking in that you're only focusing on the potential outcome vs. the process of active risk management. What if the market didn't trade up to the target and came right back at you while you're holding a full position?

Anyway, hopefully that makes sense. Larger opportunities may require larger risk which then would require larger scale outs to ensure your position is protected. The exact levels in which one decides to place their scales is up to them. The goal with this is to simply protect your core position in the event the market does not reach your target area and comes back against you and stops you out of your core.

That concept was something I always struggled with intellectually, but recently is making sense. I believe @greenr called it "banked risk" when we were chatting sometime in the past month or two (which may have come from you as I know he has great respect for you), and that terminology shifted something in my perspective.

On paper, given normal human logic (which is not always relevant to trading), taking a small profit on a majority of a position does not seem like a good strategy. And to a trader who has not yet secured an understanding of precise trade location and/or precise reading of market conditions, order flow, whatever the edge of the moment is, mathematically that approach does not work.

But as understanding of what is likely to happen and why, and more importantly, where, even though I could not explain the benefit as well as you could, it is making sense to me and it is something I have started to become comfortable with.

I used to have such internal debates about small moves versus long moves, what is "noise", is it better to win 80% of the time or 30%?

But for me, I settled into a belief that there is no right answer, because that would suggest that the future is more predictable than it is. What we CAN control, is risk, and that is it. And in futures, conditions change rapidly, timing is a very critical piece to refining trade skills.

Your comments initially seem to contradict the well known saying "let your winners run, cut your losers short", but that saying, as I am finding nearly everything in trading, needs to be viewed in context. As a swing trader, absolutely, but as a day trader it gets a little muddled.

Reply With Quote
The following 2 users say Thank You to GaryD for this post:
 
  #58 (permalink)
Elite Member
Malaysia
 
Futures Experience: Beginner
Platform: Multichart DT
Broker/Data: MB Trading
Favorite Futures: Fx
 
torroray's Avatar
 
Posts: 273 since Nov 2009
Thanks: 52 given, 59 received

Hi PB,

You mentioned the have the fastest internet connection you can afford.

My question is, Why?

Its not like you be downloading or uploading huge file for trading.

Reply With Quote
The following user says Thank You to torroray for this post:
 
  #59 (permalink)
The Narrow Road
Belgium
 
Futures Experience: Intermediate
Platform: Ninjatrader
Broker/Data: Ninjatrader Brokerage, CQG
Favorite Futures: FDAX, FDXM ...maybe
 
podski's Avatar
 
Posts: 379 since Sep 2012
Thanks: 443 given, 457 received

@Private Banker

Great webinar you rattled through a lot of important stuff and I think that 90% of it was really put to bed Clear and clean no need to rehash it in any way. It is one of the top webinars I have seen.

Whether it is a webinar or a book, a thread or a post we all look at it differently. Our trading experience, emotional state and where we are on the road to consistency is what forms our individual lens or viewpoint. I think about this webinar differently today than I would have done a year ago for sure.

From my point of view the Core/Satellite concept is certainly something that I think you can build around. It is hard for a beginning trader to listen to a (very generous and open and much appreciated) 15 year vet and really take in things like:
"Don't focus on your W/L ratio" or "Don't worry about your P/L on a daily basis"


However this webinar very much delivered. You explicitly showed us why the process is valuable and why the immediate P/L is a bit of a distraction. It is the challenge of every trader to get to the stage where they can look at your trade examples and abstract them to their own markets and positions.

If I could suggest content for a 2nd Webinar or even just a 15 minute video it would be to
a. redo the 3 examples of the successful trades but dwell a little on
i. how the top down analysis was done
ii. the thought process when taking the initial position and the scale outs
iii. the end game where you said ... OK .. this is it I'm out ...
b. do a couple of examples of where you got it wrong and had to reconsider your long or short bias
i. where you can successfully say .. I was wrong so I looked to get short instead of long
ii. I was wrong .. wrong .. wrong ... so I went for a run with my dog ..
In any case , I recommend this webinar to everyone but especially people who:
i. chicken out of good trades at the beginning because they are unsure of their top down analysis (or don't have any).
ii. who sees their trades go into profit but then have the trades come back to their entry point or hit their stops.
This webinar shows you the tactical structure of what you need to do to make sure you make consistent profits and don't give it all back. It has the potential to strengthen your weak hands.


Thanks again PB,

p


Last edited by podski; May 20th, 2013 at 09:09 AM.
Reply With Quote
The following 3 users say Thank You to podski for this post:
 
  #60 (permalink)
Elite Member
La Jolla, CA
 
Futures Experience: Master
Platform: Sierra Chart, X_Trader Pro, OptionsCity
Broker/Data: Advantage, Trading Technologies, OptionsCity, IQ Feed
Favorite Futures: CL, NG
 
Private Banker's Avatar
 
Posts: 1,040 since Jul 2010
Thanks: 1,713 given, 3,759 received



torroray View Post
Hi PB,

You mentioned the have the fastest internet connection you can afford.

My question is, Why?

Its not like you be downloading or uploading huge file for trading.

My reference to this was in regards to latency.

Reply With Quote

Reply



futures io > > > Webinar: Private Banker's Perspective on Risk Management Presentation

Thread Tools Search this Thread
Search this Thread:

Advanced Search



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

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Webinar: Ernest Chan on Capital Allocation and Risk Management (Kelly) Big Mike Psychology and Money Management 27 May 2nd, 2016 07:06 PM
Webinar: FuturesTrader71 (FT71) on Risk, Sizing, Scaling and Trade Management Big Mike Psychology and Money Management 135 March 13th, 2013 06:45 AM
Webinar: NinjaTrader Strategy Development on Risk Management Big Mike NinjaTrader Programming 19 September 22nd, 2012 06:32 PM
Risk Management embedded in charts Treggs NinjaTrader Programming 4 November 9th, 2010 09:16 PM
Free Risk Management Game... Jugador Psychology and Money Management 0 August 20th, 2009 10:58 AM


All times are GMT -4. The time now is 11:50 PM.

Copyright © 2017 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
Page generated 2017-12-15 in 0.19 seconds with 20 queries on phoenix via your IP 54.163.210.170