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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

  #61 (permalink)
 SpeculatorSeth   is a Vendor
 
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It looks like Gary may be setting up a course through Scalping Futures - Online Finance Academy

Their site has a few slide presentations describing what will be in the courses. If you want to know more I'd try contacting Gary directly.

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  #62 (permalink)
 MrGekko 
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It costs around 4K as I heard, so it is a bit too much for my budget, and I am afraid a few min/hour chat would be enough for me, but maybe I am wrong.
But one thing is for sure, he knows what he is doing. He is among the few educators who I would trust.

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  #63 (permalink)
 
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 rintin2x 
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He has set of skills that I'm interested in learning, but it's way beyond my budget. As far as I know 1 on 1 unlimited mentoring is higher than that. I thought maybe I can make enough profit from trading and use that to have him as my mentor instead of my own earned from work, but at that time probably I would be unwilling to part with that profit. Anyway, it would be a long time before I can afford it and probably already blow up my account at that point

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  #64 (permalink)
 MrGekko 
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I think you can figure it out yourself. You just need screen time and a little piece of information you were missing. This is what I am going to do as it is way over my budget right now. I am already trading from the DOM and seen some reliable patterns and I know it is not rocket science.

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  #65 (permalink)
 Alexander Savin 
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MrGekko View Post
Don`t expect too much. I read about another trader who trades a similar way, so I am sure it works but this course is the most expensive one I ever heard.
I don`t think you need to be a genius to figure it out, I am just missing something. Maybe I just need to switch product.

I find Mr. Norden's comments about retail traders intriguing, mostly because it challenges my understanding of how the market functions and consequently the way I trade. In a nutshell, order flow (and ‘order flew’, as Pete aka @DionysusToast likes to point out) allows me to see inventory imbalances of liquidity providers. The larger the imbalance, the greater their need to rebalance their excess quantity and the larger the opportunity for intraday traders like me. Without those big players, I wouldn’t know what to look for.

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  #66 (permalink)
guidosl
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Alexander Savin View Post
I find Mr. Norden's comments about retail traders intriguing, mostly because it challenges my understanding of how the market functions and consequently the way I trade. In a nutshell, order flow (and ‘order flew’, as Pete aka @DionysusToast likes to point out) allows me to see inventory imbalances of liquidity providers. The larger the imbalance, the greater their need to rebalance their excess quantity and the larger the opportunity for intraday traders like me. Without those big players, I wouldn’t know what to look for.

He also talks in the back of his book, the End of the Bull - that he trades "inside the spread" in the futures market - This I find hard to imagine - unless the market maker has a different idea about the spread:

I read somewhere that the market maker makes/decides his price before the market opens: so he has a certain range in which he will buy, and a range in which he would sell - then, the spread is not the literal space between the offer and the bid (in which it is impossible to trade using let's say a Jigsaw dome -but and this is just my interpretation of a spread in the futures market) the spread would be the 2 ranges that he decided beforehand. Based on the market behaviour and yesterdays/ overnight price range - unless there has been some event that changes present behaviour. But that means you do not predict where the market goes, you just use the movement of the market as your edge - just like the MM did.(Long time ago I started trading with a (Dutch) guy who's uncle used to be a market maker in Chicago - he taught us something similar, the problem was he did not use a stop loss so you can imagine how that went ;-). He used the last days range, and the range of price in the last weeks (usually a price movement of about 2%) to determine how many futures he could use to not blow up - and then buy going up, selling a point higher - or vice versa) . Mr. Norden would probably be looking to scalp around six ticks away from where price is trading (Opening?) in a volatile index future. That is what I understood from listening to his explanation of his style. Now that he is not opening up about his method is understandable when you consider that his trading style might become more difficult when many people apply it as he is looking for illiquid markets . It is contrary to trading alongside big volume, where it would actually be better if more people follow your trade as it adds to momentum. I don't have enough understanding of the futures market if it would actually make a difference if many people would " follow " his trades. What i do like about his viewpoint is the whole TA discussion - and the different biases we have to deal with randomness (REading Nassim Talebs - Fooled by Randomness gives great insight and info you do NOT want to hear.

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  #67 (permalink)
 tpredictor 
North Carolina
 
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My 2 cents.

I do not know what this guy is doing and haven't studied his work which he hasn't really shared from what I can see. But, I take issue with one item. I will say the idea that a retail trader will be able to trade like a true liquidity provider or market maker is somewhat silly, and I will explain why. Market makers make their money from trading volume and not from prediction of price and to get that volume you need to be able to keep a lot of orders out and manage that risk. The best orders to flip are the first ones that come in first because there are a lot of orders underneath. So, how are you doing to do a ton of volume, remember market makers make their money off of trading volume, when you're not able to get filled? How are you going to fade the retail trade when they are the orders that hit the top of book first?

Let me state, if you can do it as a retail trader: it is still within the realm of retail trading. That's the point: there is nothing preventing retail traders from using limit orders or fading moves. That's retail trading too.

I will state, if you are a top notch tape reader then it is possible to get filled on limits by picking spots and often to the tick. This is something that many will state is not possible. Sure, that's possible but it is still retail trade because you're still going to be in the back of book. The book is essentially already cleared when you get filled. Imagine the spread is worth say 2,000 contracts. You are going to be in that last part (back part). And, also, without HFT type infrastructure, when wrong your orders will be the dumb flow because you will be the trader hitting out into the book with your stop orders or you will need to keep your leverage really low and use big stops.

I mean think about it, what orders are the first to go off? The stop orders. So how are you going to get filled those? You cannot normally. If you are trading overnight markets or whatever then there is a higher risk for a reason. Also, it is worth understanding why retailers lose and a good argument presented by Michael Harris from Price Action Lab shown that retailers lose primarily because of the spread in futures.

Also, it is not hard to understand where retailers are trading. Retail traders will be understood to (1) be buying with the crowd and you cannot know if that volume is retail or institutional because it is all mixed together or (2) will be getting stopped out at inadvertent times. As for (2) the only thing that will prove to you it is bad orders is if the level doesn't clear but it won't help you because you cannot get filled to take the other side. Also, in many cases a stop run will lead to subsequent price action follow through.

Also, why do futures traders focus on institutional traders? Because institutional traders move the market. You need the market to move to make money. It is also understood that normally futures is a negative summed game. However, if bigger longer term traders are active then the game might become non negative summed because you aren't competing directly with them, i.e. if your holding period is shorter.

I think if the futures markets weren't engineered against the small speculator then you would be able to take an HFT style approach and that would be the way to trade. But as is, it is very difficult. Unfortunately, the large spreads favor longer holding times. And, the large contract sizes favor trading with an edge for the small trader i.e. not market making.

If a retail trader really wanted to trade like the market maker, I'm thinking the best bet would be to trade it in stocks or perhaps forex (but only at institutional brokers) because you could keep your size really small and you could quote several markets. By keeping your size small, you won't be forced to stop out which will kill your profits.

But can a retail trader scalp? Yes. That's retail trading too. It is difficult because you need to overcome the fees and the market that is engineered against you.

Think about it, why are the market makers able to make a profit? Because their profits are based on volume. They capture the spread hundreds or thousands of time. And presumably they are hedging and when they get hit all those volume profits will offset the losses. Even if you were to trade just like them, it is unlikely you will be able to do enough volume to offset the hits. Also, it is somewhat likely that they are able to manipulate the markets, at least close to the "market price", with their large size to their advantage which you cannot do either.

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  #68 (permalink)
guidosl
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Thanks for the post - some thoughts: One could put out a series of limit orders on prices above and below an area of volume, with a small stop and 2-3 tick profit, depending on the product. Then one would avoid the institutional traders, and one would avoid trying to predict which way the market is going but just use movement as a trigger to get filled and exit. Hence the name "market maker style trading"?

Assuming that retail traders, using (candlestick) charts to enter, have poor entries - one would be trading 'against retailers' - is how i understand his theory - especially as he trades in markets with few limit orders at one price, the problem of a large book is not present. It might explain why he does not want too many people following his style of trading.. I have not tried this out btw ;-).

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  #69 (permalink)
 tpredictor 
North Carolina
 
Experience: Beginner
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This is unlikely to work unless you can predict future price (or you can say found a statistical edge) or have some hedging mechanism. The losses from the stop outs would end costing your profits and more.


guidosl View Post
Thanks for the post - some thoughts: One could put out a series of limit orders on prices above and below an area of volume, with a small stop and 2-3 tick profit, depending on the product. Then one would avoid the institutional traders, and one would avoid trying to predict which way the market is going but just use movement as a trigger to get filled and exit. Hence the name "market maker style trading"?

Assuming that retail traders, using (candlestick) charts to enter, have poor entries - one would be trading 'against retailers' - is how i understand his theory - especially as he trades in markets with few limit orders at one price, the problem of a large book is not present. It might explain why he does not want too many people following his style of trading.. I have not tried this out btw ;-).


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  #70 (permalink)
 
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 xplorer 
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Guys in case you're not aware there's a thread specific to reviews for Gary Norden, here it is


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