The sharing/not sharing dilemma - Traders Hideout | futures io social day trading
futures io futures trading


The sharing/not sharing dilemma
Updated: Views / Replies:9,819 / 32
Created: by xplorer Attachments:1

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 100,000 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 Ė 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 donít 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
 1  
 
Thread Tools Search this Thread
 

The sharing/not sharing dilemma

  #31 (permalink)
Denver
 
Trading Experience: Intermediate
Platform: Bookmap and Jigsaw DOM
Broker/Data: Stage 5 Trading
Favorite Futures: ZN
 
lax99's Avatar
 
Posts: 433 since Jun 2015
Thanks: 623 given, 809 received


tpredictor View Post
@AuthenticTrader I wasn't going to comment but this logic posted by Grady is nonsense. That logic doesn't make any sense because if I know where you will buy and your entry has an edge then why wouldn't I just buy everything in front of you?

What would really happen if 2,000 are trading exact same method and buying at same time? Just thinking about it off the cuff, all orders will arrive at random. So, if those 2,000 traders are trading 5 lots, that's 10,000 contracts: absolutely enough to cause issues for some methods. Now, if you want to say that you don't care to share because you already know the competition is better and/or that what you do is so difficult then possibly or to demonstrate your abilities-- that can make sense.

Traders do share actual edges for free though and yes sell them. For example, let's imagine 2 traders develop a good strategy. It takes 6 months. We'll say the sunk cost on that is $50,000. For a firm, the cost might not be significant but for an individual trader -- it means you have to make 50k to break even. So, that's going to be much more difficult to do for an independent trader.

1) If you know where I'm going to buy, then you're the reason that I'm buying. I know that this probably seems flippant and argumentative so I'll expand on it. Scalpers are looking for the next guy who has a reason to buy 10k. Grady trades treasury futures. There are times in the ZN when it'll take 15k to clear a price, so knowing who is going to buy 10k can be very useful information.

If you know that I'm going to buy at 10, and you frontrun me by buying 4k at 11, then that's one more reason for me to buy. You help create the reason for me to get long. If you're buying 11, then chances are you're willing to buy 12 and maybe even 13. I'll buy somewhere in there as well, and then I'll look for signs that you're done buying. If you're long on average at 12, you might keep buying 13s into your offer at 14, 15, and 16. Then, as you scale out size at 14/15/16, I'll offer out there as well.

This is what he means by it being Manna from Heaven. At the core, scalpers look for momentum. If you're willing to contribute to that momentum, then you're a scalper's best friend.

2) Not to speak for Grady, but I believe that not caring about sharing because the competition is better isn't what he means by the statement. For scalpers of any size less than 500 in ZN (by a very rough guess), you really don't represent any competition whatsoever to any other market participant. If retail folks could trade 1500 in ZN, then that would be a different issue. The market would be completely changed. I think more to his point is what he mentioned; if all 20 traders hit a 50 lot to total 1000 contracts, then that motion might represent one domino in a chain of dominoes to fall. If there are enough people trading enough size that do exactly what he (or any other trader) does, then it's pretty damn easy for him to get paid on the trade. Or, at least, get a free look on the trade.

3) I realize that this is simply a random situation you're outlining so we can't really take it at face value. However, it takes more than 6 months to learn to trade. Even if a trader had 20 years of a track record, I would still expect it to take longer than 6 months and $50k to create a "good strategy" out of the blue.

Reply With Quote
The following 3 users say Thank You to lax99 for this post:
 
  #32 (permalink)
North Carolina
 
Trading Experience: Beginner
Platform: NinjaTrader, Tradestation
Favorite Futures: es
 
Posts: 644 since Nov 2011

@lax99

1. Okay, right so you shared the problem in your analysis. We'll also be offering out at the same prices: so we can't all get the exit. And we got in at random prices. Even if all the traders only moved the market 1 tick then that's a problem, it means you will be giving up at least 1/2 tick on average. It is 1/2 tick because 50% of time you will get in before the others and 50% after. On the exit, you can also expect -- even if it is 1 tick then that's another 50% or a total of 1 tick. There are very few specific scenarios where this can benefit you. The only real scenario is that if you can drive up the price enough to trigger stop losses or entice new buyers. I should point out that any trading designed with the intention to create a disruption is prohibited. But even if you trigger the stop losses, you only need enough buyers to trigger those stops. You don't need more. Why? Because there won't be but so many stops. It means you still have a constraining factor.

2. Look you can use a limit order or a market order. Both are constrained by scarcity in time/price.

3. It is very possible to develop a quantitative/systematic strategy in 6 months (even 1-3 months). The 50k is your time cost for the development of the strategy. My point is if you spend 6 months on a strategy at average ~20 hours per week at a professional rate, you have to make 25k-50k to cover your time cost. This is a real problem if you are an independent trader with limited capital. On the other hand if you can sell the strategy for $1k: you only need to sell 25-50 copies to recoup your time cost. More importantly, you did that without taking market risk.


Last edited by tpredictor; April 21st, 2018 at 02:15 AM.
Reply With Quote
 
  #33 (permalink)
Denver
 
Trading Experience: Intermediate
Platform: Bookmap and Jigsaw DOM
Broker/Data: Stage 5 Trading
Favorite Futures: ZN
 
lax99's Avatar
 
Posts: 433 since Jun 2015
Thanks: 623 given, 809 received



tpredictor View Post
@lax99

1. Okay, right so you shared the problem in your analysis. We'll also be offering out at the same prices: so we can't all get the exit. And we got in at random prices. Even if all the traders only moved the market 1 tick then that's a problem, it means you will be giving up at least 1/2 tick on average. It is 1/2 tick because 50% of time you will get in before the others and 50% after. On the exit, you can also expect -- even if it is 1 tick then that's another 50% or a total of 1 tick. There are very few specific scenarios where this can benefit you. The only real scenario is that if you can drive up the price enough to trigger stop losses or entice new buyers. I should point out that any trading designed with the intention to create a disruption is prohibited. But even if you trigger the stop losses, you only need enough buyers to trigger those stops. You don't need more. Why? Because there won't be but so many stops. It means you still have a constraining factor.

2. Look you can use a limit order or a market order. Both are constrained by scarcity in time/price.

3. It is very possible to develop a quantitative/systematic strategy in 6 months (even 1-3 months). The 50k is your time cost for the development of the strategy. My point is if you spend 6 months on a strategy at average ~20 hours per week at a professional rate, you have to make 25k-50k to cover your time cost. This is a real problem if you are an independent trader with limited capital. On the other hand if you can sell the strategy for $1k: you only need to sell 25-50 copies to recoup your time cost. More importantly, you did that without taking market risk.


Rather than say that either one of our analyses is problematic, let's just suppose that they differ in view.

You mention the only time it matters is when people drive up the price to trigger stop losses. This is what everybody's trying to do every single day in the market! Maybe there's a legitimate Corn farmer who puts on a couple of ZC to truly hedge his crop. But everybody else is trying to screw over everybody else!

I would absolutely love it if my 1 lot created such a disruption that somebody had to buy 10,000 in response. Because that means that I'm getting paid in a huge way! Spoofing goes on all the time too--it can be disruptive but it's part of playing the game.

It's not about competing for the fill. Maybe if you traded SI at 500 per clip then you'd have an issue with getting your fills. Let's suppose that some given market is very thin and that 500 lot trader Jim can only get on 20 of his 500 before everybody else sees him and front runs him. That's still a great position to be in! Now Jim has partial size on and he's getting paid for it almost immediately, because all of those other orders are helping push the market in his favor. Soon enough, there will be other people who join the side. This pushes it even more in his favor... And Jim is free to put on more size at any time to even further exacerbate the move.

Exiting the position is simply a matter of finding the point at which "the flush" happens. Assuming that Jim knows what he's doing, he will scatter orders throughout the market to exit as it pushes in his favor (again, if he's a large player in a thin market). When the market hits an inflection point, the losing side is going to have to exit. They'll bail right into Jim's orders to exit. In the extreme case in which an untold number of traders are watching over Jim's shoulder, and clicking along with him, there still isn't a huge issue. If Jim hits the market button to get in, everybody jumps on board with him, he's staring at an immediate winner, and the last guy to the party is on the hook for being slow. If he hits the market button to exit, he will still be out before the move comes back in his face.

But in a more realistic, thicker market, this issue really drops away.

Reply With Quote
The following 4 users say Thank You to lax99 for this post:

Reply



futures io > > > The sharing/not sharing dilemma

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)
 

futures io is celebrating 10-years w/ over $18,000 in prizes!

Right now
 

$1,000 in Amazon Gift Cards being given away right now from GFF Brokers

Right now
 

$250 Amazon Gift Cards with our "Thanks Contest" challenge!

Right now
 

Show us your trading desks and win over $5,000 in prizes w/Jigsaw Trading

August
 

Webinar: Suri Duddella (TBA)

Elite only
 

Webinar: Richard Bailey (TBA)

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Sharing data between two indicators Erez NinjaTrader Programming 8 May 9th, 2014 10:01 AM
Chart sharing para6ut Emini and Emicro Index Futures Trading 4 December 2nd, 2013 03:46 PM
New and sharing my plan. Manshevits Beginners and Introductions 5 March 2nd, 2013 06:34 AM
Market data sharing rounder8 The Elite Circle 5 May 27th, 2012 03:47 AM


All times are GMT -4. The time now is 08:45 AM. (this page content is cached, log in for real-time version)

Copyright © 2019 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