Trading Lessons Through Pictures - Psychology and Money Management | futures io social day trading
futures io futures trading


Trading Lessons Through Pictures
Updated: Views / Replies:2,958 / 29
Created: by mattz Attachments:3

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 – 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
 3  
 
Thread Tools Search this Thread
 

Trading Lessons Through Pictures

  #21 (permalink)
Market Wizard
Boca Raton
 
Futures Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
 
mattz's Avatar
 
Posts: 2,059 since Sep 2010
Thanks: 1,933 given, 2,786 received
Forum Reputation: Legendary


Big Mike View Post
Well he is a quant. Nothing wrong with that. But I would like to see how trading faster will make more money per trade than a longer duration trade.

I suspect that the argument is in your illustration and the interpretation of it. My interpretation is that the more trades you make, the less money you make per trade. So he would need to argue that he can make more money per trade by taking more trades.

But I suspect that his interpretation is for overall profit, and not per trade. So the real argument is perhaps on the interpretation of your illustration. Perhaps you can clarify what you intended.

Mike

There is nothing wrong with quants as people, of course. Except that periodically they blow up a few hedge funds, banks, etc just to proceed to find another research job due to their highly mathematical research skills.

My argument was simple: every trade has a "noise" level, where you enter and it goes against you. Typically beginner traders always flip flop from long to short due to this noise level while trying to determine what is the market direction.
This indecision causes losses and above all frustration.
Second, there are scalpers who try and scalp back and forth while not getting executed on orders, exercise risk to reward that mathematically hard to beat, etc. Sadly, the brokerage world in its competitive nature has dropped the margins to levels that simply create over leveraged traders on a daily basis.

We must acknowledge that we live in the world of algos, HFTs, etc and we just cant compete with their speed of execution, ability to recognize discrepancies, therefore I suggest to lower the number of transactions, increase the time frame in the hopes that one could find his niche.

There are always exception to the rule, but what I said above would help most.

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
Reply With Quote
 
  #22 (permalink)
Elite Member
Manchester, NH
 
Futures Experience: Beginner
Platform: thinkorswim
Broker/Data: TD Ameritrade
Favorite Futures: Stocks
 
Posts: 902 since Jul 2012
Thanks: 603 given, 1,785 received


mattz View Post
We must acknowledge that we live in the world of algos, HFTs, etc and we just cant compete with their speed of execution, ability to recognize discrepancies, therefore I suggest to lower the number of transactions, increase the time frame in the hopes that one could find his niche.

There are always exception to the rule, but what I said above would help most.

My above analysis can be extended to any kind of strategy with more complex payoff and distribution behavior (in the residual term ep). It only doesn't apply to unskilled trading. Indeed, unskilled traders should lower their number of transactions. The same is true of unskilled surgeons - you should carry out as few surgeries as possible to maximize your success rate.

Reply With Quote
 
  #23 (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



artemiso View Post
I thought it was fairly obvious. Let us assume "skilled trading" is simply recognizing when to choose to allocate to a risk-free asset with return Rf or the market portfolio with return Rm. Then, just using one-factor CAPM,

Rp - Rf = a + b*(Rm-Rf) + c*Max(0, Rm-Rf) + ep, Rf < Rm

I think most traders should recognize that Max(0, Rm-Rf) has the payoff of a free call option, and if I give you a free option, you want the volatility to increase because then it is priced higher. All else equal, if you want exposure to higher volatility, you want to trade more frequently.

If you have an edge you want to press that edge by trading it more. I get it.

But I think that was not at all the intention of the illustration which is why I said you can argue anything, but it's probably only for sake of argument and not actually beneficial to the end discussion.

Mike

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
 
  #24 (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


mattz View Post
There is nothing wrong with quants as people, of course. Except that periodically they blow up a few hedge funds, banks, etc just to proceed to find another research job due to their highly mathematical research skills.

Let's not put everyone in a bulk category. There are good quants and bad firms for example, and there are bad quants making bad decisions.

Having quants around on futures.io (formerly BMT) is helpful to the community...

Mike

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 user says Thank You to Big Mike for this post:
 
  #25 (permalink)
Market Wizard
Boca Raton
 
Futures Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
 
mattz's Avatar
 
Posts: 2,059 since Sep 2010
Thanks: 1,933 given, 2,786 received
Forum Reputation: Legendary


artemiso View Post
I thought it was fairly obvious. Let us assume "skilled trading" is simply recognizing when to choose to allocate to a risk-free asset with return Rf or the market portfolio with return Rm. Then, just using one-factor CAPM,

Rp - Rf = a + b*(Rm-Rf) + c*Max(0, Rm-Rf) + ep, Rf < Rm

I think most traders should recognize that Max(0, Rm-Rf) has the payoff of a free call option, and if I give you a free option, you want the volatility to increase because then it is priced higher. All else equal, if you want exposure to higher volatility, you want to trade more frequently.

OY VEY a+B, I (Am) X (Not an Academic) +Realistic*MAX (100%) = Happy

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
Reply With Quote
 
  #26 (permalink)
Market Wizard
Boca Raton
 
Futures Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
 
mattz's Avatar
 
Posts: 2,059 since Sep 2010
Thanks: 1,933 given, 2,786 received
Forum Reputation: Legendary


Big Mike View Post
Let's not put everyone in a bulk category. There are good quants and bad firms for example, and there are bad quants making bad decisions.

Having quants around on futures.io (formerly BMT) is helpful to the community...

Mike

Wall street is dominated by quants today. I have nothing against quantitative theories and conclusions.
But, the reality is that I can present a simple argument based on REAL EXPERIENCE while they "prove me wrong" with theories and numbers.

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
Reply With Quote
 
  #27 (permalink)
Elite Member
Manchester, NH
 
Futures Experience: Beginner
Platform: thinkorswim
Broker/Data: TD Ameritrade
Favorite Futures: Stocks
 
Posts: 902 since Jul 2012
Thanks: 603 given, 1,785 received


Big Mike View Post
Let's not put everyone in a bulk category. There are good quants and bad firms for example, and there are bad quants making bad decisions.

Having quants around on futures.io (formerly BMT) is helpful to the community...

Mike

Thanks Mike. I didn't take any offense.


mattz View Post
I am particularly interested in the "empirical" part.
Let's see if he resorts this argument to some quant fund that has nanosecond execution while most of us still argue in the millisecond domain.

I should dispel this myth. There's no quant fund with nanosecond execution. Everyone gets a fixed length of fiber to the order gateway, through which the transmission time already puts you in the microsecond region.


Quoting 
But, the reality is that I can present a simple argument based on REAL EXPERIENCE while they "prove me wrong" with theories and numbers.

Unfortunately, experience has nearly no forecasting ability in this field.

Reply With Quote
The following user says Thank You to artemiso for this post:
 
  #28 (permalink)
Market Wizard
Boca Raton
 
Futures Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
 
mattz's Avatar
 
Posts: 2,059 since Sep 2010
Thanks: 1,933 given, 2,786 received
Forum Reputation: Legendary


artemiso View Post



I should dispel this myth. There's no quant fund with nanosecond execution. Everyone gets a fixed length of fiber to the order gateway, through which the transmission time already puts you in the microsecond region.

Whether micro or nano, the retail trader has no access to that.

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.

Last edited by mattz; April 3rd, 2013 at 12:27 AM.
Reply With Quote
 
  #29 (permalink)
Elite Member
Manchester, NH
 
Futures Experience: Beginner
Platform: thinkorswim
Broker/Data: TD Ameritrade
Favorite Futures: Stocks
 
Posts: 902 since Jul 2012
Thanks: 603 given, 1,785 received


Quoting 
But I think that was not at all the intention of the illustration which is why I said you can argue anything, but it's probably only for sake of argument and not actually beneficial to the end discussion.

Right, I think I'm dragging this discussion off-topic, I'll leave it at this.


Last edited by artemiso; April 3rd, 2013 at 12:51 AM. Reason: Privacy of a third party
Reply With Quote
 
  #30 (permalink)
Market Wizard
Boca Raton
 
Futures Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
 
mattz's Avatar
 
Posts: 2,059 since Sep 2010
Thanks: 1,933 given, 2,786 received
Forum Reputation: Legendary



artemiso View Post
Right, I think I'm dragging this discussion off-topic, I'll leave it at this.

I truly respect any opinion, especially in this area where experience from different aspects could shed light on many areas. I was just hoping for more evidence that retail does have a chance with higher frequency of trading (despite my observations from day one since future trading was offered online). I hope you understand that all I am trying to do is help most traders.

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.

Last edited by mattz; April 3rd, 2013 at 01:49 AM.
Reply With Quote
The following 2 users say Thank You to mattz for this post:

Reply



futures io > > > Trading Lessons Through Pictures

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
Rachel's Trading Journal: lessons learned Rachel Elite Trading Journals 1073 March 25th, 2016 09:16 PM
Long Term Automated Trading , Plattform and Broker , experiences & lessons learned LoboTrader German Traders 1 August 16th, 2012 04:11 PM
Finding Life's Trading Lessons, In the Strangest Places tigertrader Psychology and Money Management 1 February 5th, 2012 10:51 AM
Pictures taken at exactly the right time PositiveDeviant Jokes 0 March 26th, 2011 01:40 PM
How to Attach/upload pictures/images to your post Big Mike Beginners and Introductions 1 June 19th, 2009 01:45 PM


All times are GMT -4. The time now is 04:11 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 0.14 seconds with 20 queries on phoenix via your IP 54.90.92.204