If you master the underlying psychology of market moves. They are all the same
For example: at almost any important low, if there is high volume and a fierce battle, the buyers win and price goes up
that left some sellers on the sideline, But how many. Its like two big gangs fighting. Until one side has been wiped out, you havnt finished testing that bottom.
The main thing I look at in price is the speed and size of the countertrend action.
A true high or low (even if its a higher low) will NOT jump fast off that level, It will laugh and tease you until someone with some balls jumps on it.
I know because every day when I miss the top, Im watching it laugh at me.
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I agree with everything you're saying, my statements are meant to be general and different markets certainly exude different characteristics.. This is certainly a hard business and most traders have all the odds against them no question about that.. There is also no question that each link of the chain needs to be strong or the chain will always break at its weakest link and it doesn't take much..
I'm not trying to give advise, nor do I consider my statements to be bold.. The truth is nobody has it all figured out, all we can ask for is an edge and that's all I'm saying.. Do you have it all figured out? The set up is not the edge or everyone with a good set up will become consistently profitable.. If you have an edge to trade at the right side of the market where the larger move is likely to occur, not that's a real pragmatic edge that will have an impact.. That's all I'm saying... I know I don't have it all figured out, but I also know I don't need to.. all I can ask for is an edge... that's all. I'm not trying to have it all figured out because that's the wild goose chase.. I'm always open to learn, but I'm aware every methodology has its limitations..
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I know i'm new here, but one thing I would like to do down the road if I meet the right people, is to form a very small group of traders that REALLY excel in a specific market, and know it inside and out.
Then just have the forum or wherever, open so you could make general notes if you feel something important is brewing.
When I was in the trade room at OFA watching him nail the entries within a tick or two. It hit when I realized the power of daytrading and swing trading. I really adopted tight entries and stops, but then when the trade goes in my favor, I am completely comfortable riding for a while.
There were only 2 days in 2 months that he "net" lost money. But on those 2 days he was losing by going long each time. I was sitting there wanting to tell him no no thats crazy right now. But me knowing the short side like the back of my hand, I saw it clear.
Now from that perspective, imagine if you had a "short sider" a "long" a "currency" guy and maybe a few others that are good calculating long and short term sentiment moves. During a typical day maybe you would say "If the dollar breaks this level look out", or "There is an upside unfilled gap 3 days ago we might try for"
The reason I'm saying this is because whatever you are using to pick trades, A certain % of them are not going to work. You could probably eliminate half of those.
So far it seems that people think there are secrets to trading. The power is in combining viewpoints which would increase confidence which would unlock the the real power of "bigger size". that's what I want to do.
Init, sounds like what you're talking about is like a prop firm. A team of hired traders evaluated daily and overseen and held accountable for their performance. And then some strategies get shared, experimented with or dictated around depending on the policy of the prop firm. Or for another example, I've noticed also having been in a trading room the host usually has control over what is presented and decides what suggestions gets listened to or not. It would take a trading group where one or more members has the power to step in and change the trading style of another through some type of prior agreement to do so. Which is hard to consider since a successful trader usually sticks to the "rules" of his particular type of trading and weathering the system's particular drawdowns and stoplosses. I do get the idea of being able to trade multiple systems at once or a combination even though it can get to be too much for some traders.
Last edited by Cloudy; November 19th, 2011 at 10:21 AM.
There are some brokers that offer offices to trade from with other traders/clients. You can rent an office, a bull pen or a desk space. It just depends on what you're looking for and where you live. You're trading your own money not like a prop firm. The obvious advantages are a professional work environment, contact with other traders who are trading their own money, and access to high level computers and internet speed. I'm not sure of all the locations but I know there are several in Chicago near the exchange. Maybe ask you broker if they offer that service.
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Thanks for the reply. I may not have explained it right.
The people in this group (theoretically) has a clear edge in one particular market. The edge comes from knowing that particular market inside and out. (from political, fundamental, news effects and technical)
Like me for example: I feel that I know the "short side" only, of the ES better than 90% of anybody.
It has Its limitations because it is nearly impossible to evaluate bar by bar psychology and then flip your mind over to the long side to view it at a different angle.
In todays market and why its tough, is because in order to really tilt the odds, You need to be able to recognize as soon as possible what the market is keying off of that day. On a typical day I need to see what is leading us. Is it the DAX, Italian bond yields, rising forclosures, Is 2 year bond $ flows the cause or effect, Is the dollar moving on its own fundamentals or being driven by another currency. This is a huge edge if you can identify it early. And a specialist in their particular market will know sooner than anyone.
There are NO buy/sell calls, Just a few people that may type in something special that they see.(A heads up)
like an ECB anouncement at say 2:00 I may have not factored that in and be carrying a big position. No 1 person can keep up with it all.
There would not have to be a moderator in that chatroom (im hoping one could be set up here at futures.io (formerly BMT))
the hidden benefit in this would (for me at least) is to keep my mind on the right track (my ADHD)
Sometimes while swing trading, I get excited about my longterm shorts and start adding, because im too impatient to wait for the setup in swing. I dont mind a huge loss in the core accounts(part of the strategy), but in swing and daytrayding, I want to punch the computer on a $200 stop loss.
I am just trying get my mind to be able to trade large enough to make over $2000/day
Right now, I am averaging between $200 and $1200/day. But everytime I get in the 1500-2000 range, I go to scale out and within 4 min I am flat. My sell rules go right out the window. When I was in the trade room and talking commenting a little, That mental block was gone.
If I have this mental block (where size changes your rules) then prob everybody does.
This i'snt a hobby for me, but it is extremely fun.
This is not the easiest pursuit to make money and its not for everyone but it is fun and it is very possible. Perhaps a paltalk or skype room where traders can post their thoughts, levels and trades can accomplish the same goal. Its often fun to communicate with other traders during the day. If you can get a strong group together, it should be very worthwhile. I average between $700-$1500/day with occassional $500-$1k losses. I'd be glad to post my trades and share some concepts with the right group and there is some level of trust, respect and friendship.
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Good points Init. I guess I didn't get what you meant at first. I agree having a heads up on news events can keep one out of trouble. I've been caught myself one too many times on large event driven news. Maybe a simple icq or aol im text chat group would suffice. I know what you mean about larger contract size. Do you scale in winning or losing trades or both? I was averaging down, scaling in losers and eventually I got hit big even though I was getting above $2k a day for a good run. Then I had the same trouble with sell and stop rules as you mentioned. Now I'm back to not scaling at all, but I don't know, it's tough to trade right now or make anything.
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It's useful to be working among a large group of people with different types of market knowledge. In the pit there was always someone to give you a heads up about an upcoming number (along with market expectations or anything else you wanted to know about it), to mention support/resistance levels, floor pivots, etc. You could hardly avoid it if you wanted to. One of the things I miss about the floor is the community of informed traders. I went in basically clueless every morning except if there was a really big number, and within a couple of minutes I knew pretty much all I needed to know for the day.
"You don't need a weatherman to know which way the wind blows..."
Last edited by jstnbrg; November 23rd, 2011 at 10:48 AM.
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I think it would be a good idea as long as the points being made were not trivial. But it would prob morph into something not close to what it was meant to be. Like today for example; Since I only short, I have to identify strong bid bays and chop days to determine the size to trade. This morning I noticed that the ES was a little weak but Gold was strong, which told me that It shouldnt be another big down day because people were not in "capital raising" mode. The S&p locals couldnt even get a solid read on the day, The tape didnt make any sense so I didnt place any trades today. Plus I stayed up late and couldnt get my feelings into the price action. Half the battle is avoiding low probability situations.
When I go to short a level, I go all in and try to risk less than $100 if i'm wrong. Then I will add a little more at the next level up. Until I find the high, The worst days take three try's, but the risk reward is about 5:1 or better. I try to only look at my account every 3 months or so and keep my daily P&L behind me. Emotions help me in the market but kill me every time I think about the money. But then again, I dont do anything like normal people.