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Does the market know your positions?


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Does the market know your positions?

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  #1 (permalink)
 blackgrey45 
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Do you think the market knows your positions and actively trades against you? Or does the market not care about you?

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blackgrey45 View Post
Do you think the market knows your positions and actively trades against you? Or does the market not care about you?


If you are holding 100s of contracts, there are probably firms watching you (or at least guessing about you), waiting for an opportunity to force you out.

If you are a retail trader trading small size, no one cares about you.

BUT

I will say it FEELS like many times the market is out to get you. Like, how many times have you bought at a high, compared to how often you buy at a low? It definitely seems sometimes like someone is out to get you!!!

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 bobwest 
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blackgrey45 View Post
Do you think the market knows your positions and actively trades against you? Or does the market not care about you?


kevinkdog View Post
If you are holding 100s of contracts, there are probably firms watching you (or at least guessing about you), waiting for an opportunity to force you out.

If you are a retail trader trading small size, no one cares about you.

BUT

I will say it FEELS like many times the market is out to get you. Like, how many times have you bought at a high, compared to how often you buy at a low? It definitely seems sometimes like someone is out to get you!!!

I find this pretty often. It does feel as though "they" are not just "out to get me," but are actually doing it. Pretty effectively, too.

But I know that no one is going to make any money out of picking off my small-contract trades. No matter how often "they" seem to do it.

The fact is -- I believe, at least -- that many traders will have their orders at about the same levels, and for about the same reasons, as I do. So there is often a good reason for the market to move to a certain price, absorb all the orders there, and then move on. My orders are sitting there with a lot of others. Is anyone carefully tracking my orders in order to get me? Hell no. They'd be crazy to. There's no money in my orders, why would anyone care?

But I act along with a bunch of other people, because group psychology makes us all think similar things at similar times. So we act in concert, and our bunched-up orders affect the market, not to our advantage. If everyone who is currently interested in a certain level thinks price will go up from there, and is therefore long, who will remain to push it up by buying more? Not that many. But can it go down? Sure. It just takes some sellers, once the buyers are done. This is what makes the markets move.

I have read this exact question in the forum, in many variations, over the years. It's something of a classic, and I'm glad that @blackgrey45 asked it again. It absolutely does seem, as @kevinkdog says, that "someone" is out to get us. But they aren't. It's in us, not them. Specifically, in our decision-making, which has us making similar decisions at similar times as a lot of other people.

We simply are not going to make any money in the markets doing what everyone else does, when they do it. We are going to have to do something a little sooner, a little better, and before the crowd arrives. I have noticed many times that I should have sold at the price I bought, or vice-versa. There is a reason for this, and it is in my decision-making, not in other people manipulating the market against me. They don't know me, after all.

But we are all going to naturally act at least somewhat like the other members of the crowd do. This is the effect of crowd psychology, and it is going to affect us all, and it is part of why we do not profit. To the extend that we can be independent of the general group consensus, and in the right direction, even by a little or a little bit earlier, we can succeed. If not, we then will act along with it, which means, buying too high, selling too low, along with everyone else. Which is not something that works very well.

How to not do that is, of course, another matter. But this is why the cookie-cutter methods don't generally work too well, and why each trader has to end up doing things their own way, based on what they have found for themselves. Unfortunately, but truthfully. At least, that's my opinion.

Thanks, @blackgrey45, for the question. It's an important one to understand. I hope I have helped to understand why this "always happens to me." It actually happens to everyone, until they are not acting together with everyone else. Which is not easy, but is possible.

Bob.

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 Silver Dragon 
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blackgrey45 View Post
Do you think the market knows your positions and actively trades against you? Or does the market not care about you?

@bobwest @ kevinkdog

Yes..IMO.. if you want to understand how the AI markets evolved I would suggest reading the following book. It will give the history of electronic trading which led to the rise of the Bots. Good read.

Robert


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 bobwest 
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Silver Dragon View Post
@bobwest @ kevinkdog

Yes..IMO.. if you want to understand how the AI markets evolved I would suggest reading the following book. It will give the history of electronic trading which led to the rise of the Bots. Good read.

Robert

Without having read the book, it does sort of give a different meaning to the question of "who is actively trading against you."

Among them, we now have bots. There have been bots doing this for some time, I believe.

From an individual's perspective, it may change the details of who is taking the money from you, but I think the process and the underlying reality is similar. Of course bots, and High Frequency Traders, and many others, are trading against you. You, and everyone else who trades with the crowd, following group psychology, which is most of us at one time or another.

But I would say that a hundred years ago, traders who traded with the general crowd psychology of the time also bought at the tops and sold at the bottoms, and for the same reasons. They just got their money taken from them by people who didn't have computers, but who also didn't buy/sell with the crowd, which is how it is done.

I am absolutely sure, however, that computers, and AI, have made the process more efficient.

But are they particularly targeting me, individually? Or you? Not until I become big enough to matter, which I don't. When/if I do, well, then we'll have to see.

Until then, I am just one of a large group, when I do buy the top/sell the bottom, not an individual target of anyone/anything. And if I do not act in concert with the group, then I don't.

Bob.

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-- Cervantes, Don Quixote
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 Arch 
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Yes, of course I once thought the market was out to get me. Almost every trade I took, the price went against me or would hit my stop loss then reverse in the original direction. While finding more evidence supporting my conspiracy theory, I realized I was trading on a SIM account.

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 bobwest 
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Arch View Post
While finding more evidence supporting my conspiracy theory, I realized I was trading on a SIM account.



I've found the same. There was no "they" there.

Bob.

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HiLatencyTRDR HLT
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I have a much different view. The mkt is mapped and clearing information is exchanged with each trade. Large hft firms and Algo trading firms understand that it is a zero sum game... Someone must lose and that should be primarily the retail fcms and their customers. Open interest is end of day but fcms have this information in real time and many Algo programs try and keep track of real time open interest.

Why do traders want to remain Anonymous? Because they are being tracked.
Why does the mkt gun for stops and making people puke? Because they understand customer order flow. They fill and know who is doing what.

I have lost plenty of money over the years maybe 10 to 50k just 1 little 50 dollar loss at a time. Now multiply that by millions of people around the world.

Yes you are the mark and in this age of supercomputers every lot is accounted for.. no one trades against you unless they have a tangible advantage.

256,000 lots is nothing for computers to keep track of...
Or even 2 million on a busy day in the es. Imagine stocks where billions are traded in shares not lots. The volumes dwarf futures. Futures are the most easily watched. Stocks you can be more anonymous due to sheer amt of share volume and participants.

Cme maybe has 7000 logged in to trade at night. Yes the cme knows in real time how many traders are logged in at any time as well as if professional or non professional.

It's not about fees it's about knowledge. During the day 25 to 50 thousand traders are logged into globex. Not that many compared to millions to hundred of millions in stocks. Futures volumes are small but the leverage is big. This means you are easy to watch and force out.

Trade smaller and don't worry about the mkt going against you

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 GFIs1 
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blackgrey45 View Post
Do you think the market knows your positions and actively trades against you? Or does the market not care about you?


Of course the markets know about our trades:

Because
they read carefully the journals here on fio!


Happy Sunday
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 SMCJB 
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bobwest View Post
I am absolutely sure, however, that computers, and AI, have made the process more efficient.

Agree. Bots, AI, HFT, whatever your term are just doing what specialists/locals did on the floors/pits, they just do it more efficiently and faster.

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