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Webinar: Gary Norden on The Evolution of Professional Institutional Trading
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Webinar: Gary Norden on The Evolution of Professional Institutional Trading

  #41 (permalink)
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itshamish View Post
Good-day fellow traders. I am new to Big Mike's Trading Forum and this is my first post.

I bought Gary's kindle-book yesterday - and I have not put it down. In nearly six years of daily research and study of FX and following 20 years in stockbroking (on and off) it is by far the best that I have read.

Compliments, rather than my usual disdain, to wily-Wiley for publishing. Most of all, my admiration and respect to Mr Norden for writting with the courage of his convictions in a friendly and easy style. I am certain thta this will become essential, but easy and enjoyable, reading for novice and experienced traders alike.

Hamish.

Are there any references in his book to the techniques he uses to take the other side of retail trades?

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  #42 (permalink)
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  #43 (permalink)
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Overall I found the video to be quite interesting and enjoyable, but a couple of things did make me a little frustrated - equating the retail trader with a losing trader. Yes there are plenty of guys who are clueless who trade their own money from home, there are also "professionals" at banks and prop firm who are losing traders because they fail to adapt or their psychology changes... or you could have a professional who decides to just trade his own money and therefore becomes "retail", so to equate retail traders with losing traders and professional traders to winning traders is unfair in my opinion,
Secondly, the bashing of technical analysis and charts as if they dont work or are inferior to other methods. This is something I have heard from many respectable (and profitable) traders and it caused me to question my own methods and way of viewing the markets, which was quite damaging to my performance and caused me to lose belief in myself. Charts are a way of showing me price behavior, and after a lot of screen time they have given me a lot of edge through pattern recognition. If there's one thing you should take from market wizards its that great traders have different approaches, in the end all that matters is risk adjusted return. It is not up to me, or anybody, to tell someone that a particular approach doesn't work (especially if there are other guys out there who are making money from it). Now I take other traders opinions as exactly that - opinions. I consider them, test them out, perhaps they give me a better understanding of the markets. Take what works for you and discard what does not.

Understanding yourself is just as important as understanding markets.

Last edited by TickedOff; May 18th, 2015 at 10:12 PM.
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  #44 (permalink)
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I agree, in general, with @TickedOff above:

1. The description of the evolution of the professional trader was informative.
2. The anecdotes about the quant trader fails were entertaining. Its nice to know that some of the "gods" we mortals are up against are really just false idols.

3. That said, good luck getting me to throw away my charts. How else am I supposed to sense opportunities in the market without having a pit around me? By just watching Time & Sales and the DOM/OrderBook alone? Knowing how to incorporate those "basic" skills into my repertoire would be great, but arguing that I should use them exclusively without any other tools in a sophisticated market seems anachronistic.

Not bashing Mr. Norden though. It was an excellent webinar based on the first two points. Just trying to provide some honest feedback from this "segment" of the industry.

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  #45 (permalink)
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TickedOff View Post
Overall I found the video to be quite interesting and enjoyable, but a couple of things did make me a little frustrated - equating the retail trader with a losing trader. Yes there are plenty of guys who are clueless who trade their own money from home, there are also "professionals" at banks and prop firm who are losing traders because they fail to adapt or their psychology changes... or you could have a professional who decides to just trade his own money and therefore becomes "retail", so to equate retail traders with losing traders and professional traders to winning traders is unfair in my opinion,
Secondly, the bashing of technical analysis and charts as if they dont work or are inferior to other methods. This is something I have heard from many respectable (and profitable) traders and it caused me to question my own methods and way of viewing the markets, which was quite damaging to my performance and caused me to lose belief in myself. Charts are a way of showing me price behavior, and after a lot of screen time they have given me a lot of edge through pattern recognition. If there's one thing you should take from market wizards its that great traders have different approaches, in the end all that matters is risk adjusted return. It is not up to me, or anybody, to tell someone that a particular approach doesn't work (especially if there are other guys out there who are making money from it). Now I take other traders opinions as exactly that - opinions. I consider them, test them out, perhaps they give me a better understanding of the markets. Take what works for you and discard what does not.

Why did it get you frustrated? Sure some retail traders are profitable, however who would you rather take the otherside of- your average retail trader, or your average institutional trader? Obviously you would rather take the other side of the average retail trader, as institutional order flow is likely to be far more toxic from the perspective of a market maker. From the webinar it appears Gary approaches the market like a market maker.

He also sounds like a pure scalper, possibly trading between the spread eg buying the bid/ selling the ask. Or perhaps looking for a few ticks from specific accumulation patterns/ lures on the tape, eg looking for bids/ offers to get pulled and how orders are being re-positioned & executed in real time. This is something you will never see on a chart, even a footprint chart. Everything is lagging relative to the tape, therefore if you're a pure scalper then charts are irrelevant. The majority of institutional day traders/ prop shops use scalping techniques to trade markets, they're all looking at the tape. Charts are secondary, perhaps used by some to identify specific patterns/ obvious levels of s/r.

If you would rather take the other side of the retail trader, instead of the other side of the institutional trader( as per my first question), then why would you want to be using the same techniques as the retail trader( eg Technical analysis using charts). Wouldn't it make more sense to do what the institutional trader is doing? eg reading the tape. I think that's the point Gary was trying to make.

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  #46 (permalink)
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Neo1 View Post
Why did it get you frustrated? Sure some retail traders are profitable, however who would you rather take the otherside of- your average retail trader, or your average institutional trader? Obviously you would rather take the other side of the average retail trader, as institutional order flow is likely to be far more toxic from the perspective of a market maker. From the webinar it appears Gary approaches the market like a market maker.

He also sounds like a pure scalper, possibly trading between the spread eg buying the bid/ selling the ask. Or perhaps looking for a few ticks from specific accumulation patterns/ lures on the tape, eg looking for bids/ offers to get pulled and how orders are being re-positioned & executed in real time. This is something you will never see on a chart, even a footprint chart. Everything is lagging relative to the tape, therefore if you're a pure scalper then charts are irrelevant. The majority of institutional day traders/ prop shops use scalping techniques to trade markets, they're all looking at the tape. Charts are secondary, perhaps used by some to identify specific patterns/ obvious levels of s/r.

If you would rather take the other side of the retail trader, instead of the other side of the institutional trader( as per my first question), then why would you want to be using the same techniques as the retail trader( eg Technical analysis using charts). Wouldn't it make more sense to do what the institutional trader is doing? eg reading the tape. I think that's the point Gary was trying to make.

I was frustrated at the point that people assume retail traders to be losers, or that big money or professionals always win because its simply not true, ofc you want to be taking the side of retail traders because as a whole they are less skilled than professionals. Charts might be irrelevant to him but its very useful to others and I tire of traders who seem to imply that they have the best edge or best system and everything else is moot and they shrug off other approaches, I think it is arrogant and disrespectful. Its like how some fundamentals traders think technical analysis is rubbish and technical traders who think fundamentals are rubbish and yet both traders make money.

Understanding yourself is just as important as understanding markets.
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  #47 (permalink)
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TickedOff View Post
I was frustrated at the point that people assume retail traders to be losers, or that big money or professionals always win because its simply not true, ofc you want to be taking the side of retail traders because as a whole they are less skilled than professionals. Charts might be irrelevant to him but its very useful to others and I tire of traders who seem to imply that they have the best edge or best system and everything else is moot and they shrug off other approaches, I think it is arrogant and disrespectful. Its like how some fundamentals traders think technical analysis is rubbish and technical traders who think fundamentals are rubbish and yet both traders make money.

The whole premise of his trading style is to act like an institutional trader, and assume that retail traders are losers( or at-least that they're not paying the true market value when they buy/sell), so he's looking to take the other side of their trades. eg have them selling into his bids, and buying his offers. As you agree retail traders are less skilled than professionals, therefore it makes sense to use this approach. Sure there's outliers, however charts aren't just irrelevant to him, they're irrelevant to most professional/institutional traders- especially to those who still scalp the tape. I don't see how pointing this out is arrogant or disrespectful, it's just a fact. There's no point getting angry about it

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  #48 (permalink)
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I like the no BS approach but at the same time if not for the purpose of selling books or coaching I would like to know his motivation behind the webinar.

mpx

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  #49 (permalink)
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TickedOff View Post
I was frustrated at the point that people assume retail traders to be losers, or that big money or professionals always win because its simply not true, ofc you want to be taking the side of retail traders because as a whole they are less skilled than professionals. Charts might be irrelevant to him but its very useful to others and I tire of traders who seem to imply that they have the best edge or best system and everything else is moot and they shrug off other approaches, I think it is arrogant and disrespectful. Its like how some fundamentals traders think technical analysis is rubbish and technical traders who think fundamentals are rubbish and yet both traders make money.

It doesn't presume that ALL retail traders are losers....

It DOES presume that when there is short term bullishness, that you sit on the bid and wait for someone that doesn't know any better to hit you. That person is a retail trader because if he keeps doing that in a firm, he'd lose his spot on a desk.

You have to remember that this guy was trained as a market maker by a major bank. It is not disrespectful, nor arrogant, it's just the way the game is played there.

Lots of these trades won't get filled because often there's no-one entering any dumb trades at that point - but they really aren't the smartest trades in the world.

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  #50 (permalink)
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DionysusToast View Post
You have to remember that this guy was trained as a market maker by a major bank. It is not disrespectful, nor arrogant, it's just the way the game is played there.

I would be interested to know how he actually trade. he didn't really say much in the video

Based the little information in the video it seems to me his method would be very similar to prop shops - reading the T&S and using X trader DOM, ignoring charts

I would be surprised if banks do market making in this way

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