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Trapped traders - a source of consistent profitability?
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Trapped traders - a source of consistent profitability?

  #11 (permalink)
Trading for Fun
Canada
 
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Tradetronics View Post
You are right, adaseb... I think many people ignore the DOM, because it is very difficult to learn. I am planning to record a session and then to watch the Dom in combination with T&S in slow motion...

You can leave Ninjatrader running to record that also. However its more of a snapshot every second rather than real live tick movement but should be good enough to learn.

Stare at the DOM long enough and it will all start making sense.

And pay attention to what the DOM is doing around important areas.

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  #12 (permalink)
Elite Member
Pennslyvania
 
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Just a thought. IB is not a tick by tick service, they take a snapshot. They said they prefer this to avoid bad ticks.
Also have you checked your download speed periodically for lag time or running other programs? For some reason at times I have to hit F5 to update the indicators.

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  #13 (permalink)
Membership Temporarily Revoked
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Tradetronics View Post
This is the first thread that I have started on this great futures.io (formerly BMT) forum. Like all of you, my goal is CP, consistent profitability. Right now, I am in the phase of CL, consistent losing. I think that most traders start out as losers and then give up or continue to learn, which will eventually lead to CP. It is interesting to observe that most traders start out as losers, which is a contradiction to efficient market hypothesis (=EMH). EMH actually does not allow for the existence of CL and CP. It is quite interesting to observe that if you give money to a non-trader and tell him to trade, you will notice that he will SIGNIFICANTLY lose money. This is really interesting! Another interesting thing is that all of us are in this great forum to learn new ways of taking money from each other (taking money from each other is called trading profitably).

Since futures trading is a zero sum game, the markets take money from the loser and transfer it to the winner. Trapped traders are losers. They enter a position and find out that they are on the wrong side of the market. There are some nice setups that try to exploit traders, such as 1-2-3 reversals, trader vic's 2b pattern, etc...

Now my question is whether you think if it is important to always put yourself into the situation of this trapped trader. Does it make sense to locate these trapped traders by using the Volume Ladder (Market Delta, Footprint chart)? Would it make sense to use the footprint chart to confirm the chart patterns mentioned above? Failed breakouts are one example for trapped traders. What do you think about combining these "failed" patterns with the footprint chart?

Lots of stupid questions, I know... ;-)

Good luck to all of us...

Regards,
Tradetronics


It's nice to read a post where the person has actually clocked onto what trading is about. I wouldn't bother with the foot print, everything you need is on your order book. I posted this video a couple of weeks ago YouTube - Day Trading ES 18th October.avi

Most people just made a post saying they had no idea what was happening in the video, and if that's the case, it's simply because you're apart of the 95% that's looking at trading from completely the wrong angle. Once you clock onto the fact that trading consistently is just taking advantage of people trapped in the market, then you can start to progress. If you think it's about patterns, indicators and trends, then join all the other people that are going around saying day trading is dead because they can't earn a living.

This is how capitalism works, to profit, you got to take advantage of someone's unfortunate position. Once they buy and realize they're wrong and have to get out, that's when you start selling. Once they all sell and realize they're wrong and have to get out, that's when you start buying. That's trading, anything else is just being an analyst... and no one grew up wanting to be an analyst

Trying to guess the next big trend is a mugs game, but you can always bank on people being stupid and wrong.

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  #14 (permalink)
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RE

Hi Bids,

Thanks for this great comment. It is a compliment for me if someone who is labelled as a master gives me this kind of feedback.

Guess what... I am just watching Al Brooks webinar, which you can find here in this forum. He is saying something that has just banged in my head:

Al Brooks: "In trading, if you don't know who is trapped, you will soon discover that it is you"

Guys, I think this says all about trading...

Bids, let me respectfully disagree with you on the issue of patterns, indicators and trends... I think there are patterns that show you that there are trapped traders...

But, Bids, infact you are using indicators in your video on youtube... You are using volume and another indicator...

However, I think this is one of the most significant insights that I have ever had about trading... It is nice to receive confirmation from you, Bids, and Al Brooks...

Regards,
Tradetronics

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  #15 (permalink)
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Tradetronics View Post
Hi Bids,

Thanks for this great comment. It is a compliment for me if someone who is labelled as a master gives me this kind of feedback.

Guess what... I am just watching Al Brooks webinar, which you can find here in this forum. He is saying something that has just banged in my head:

Al Brooks: "In trading, if you don't know who is trapped, you will soon discover that it is you"

Guys, I think this says all about trading...

Bids, let me respectfully disagree with you on the issue of patterns, indicators and trends... I think there are patterns that show you that there are trapped traders...

But, Bids, infact you are using indicators in your video on youtube... You are using volume and another indicator...

However, I think this is one of the most significant insights that I have ever had about trading... It is nice to receive confirmation from you, Bids, and Al Brooks...

Regards,
Tradetronics

I respectfully disagree back lol

The reason why I took the trade in that video is because what was happening on the order book. The volume etc is all just secondary support information that has little say in any trade I take. A lot of the times I don't even use a chart.

I stand by what I said in my original post, patterns and indicators isn't what trading is about, they are merely support tools. The key word there is 'support'.... they have a place in trading, but are by no means a primary tool. If you're looking for patterns, by the time you notice it, the opportunity has gone and you're just another mug that's late to the party. There's only a specific condition that you can profit in.

Been in this industry for many years and i've seen it all come and go. I've seen the flash in a pan traders, different market conditions, boom and bust cycles etc. The pattern guys only make money at the top of a boom cycle where there's a massive margin for error due to volatility. An example would be the dotcom bubble where every man and his dog became a multi millionaire trading tech stock in their spare bedroom in their pants. Everyone thought of themselves as an elite trader with their MA cross overs and chart patterns, when the reality was you could just throw a dart at the board during them times and make money. Market conditions change, then bang, no one can make money anymore except for the people who actually know how to trade properly. Dotcom millionaires are now selling insurance for $50k a year. I had one guy who wanted me to teach him how to trade, he said during the dotcom time he made around $30 million USD through trading tech stock and investing in tech companies. By the time he came to me he was down to low 6 figures as the millions had been spunked up the wall chasing patterns and indicators.

We've just seen the same again happen in the market. Many retail traderas came to day trading in 2007/2008 at the top of another boom cycle. There's massive one way moves in the market, and once again every man and his dog is an expert trader..... then it goes bang again, markets go back to normal, and no one can make money again. Now posts like 'day trading is dead' are appearing everywhere. On the other side of the coin, you go down to a decent prop firm and there are traders making hand over fist day in day out and they couldn't even name one chart pattern or even tell you how to setup a chart.... Most retail traders know more about technical analysis and patterns than professional traders.

Look at pit traders... ok the world has moved on since the days of the pits, but the only thing that has really changed is the way we place our orders which are now electronic. To make money trading, you need to read whatr is trading and make a judgement based on what is trading. That is trading... period... you never saw anyone in the pits looking at chart patterns all session. How the markets trade is still exactly the same, the only difference is that electronic trading has made technical analysis available at your finger tips second by second, which in turn has brought even more mugs to the table with their opinions and patterns who think they're onto something that no one has worked out, which in turn allows the professionals to make even more money due to increased liquidty, which is because of all the lemons now in the market. Trading isn't hard, you just have to accept it for what it is.

When people send me their resume and they list trading systems that they've developed and indictors etc, I just chuck their resume straight in the bin.

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  #16 (permalink)
Market Wizard
Columbus, OH
 
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Bids View Post
I respectfully disagree back lol

The reason why I took the trade in that video is because what was happening on the order book. The volume etc is all just secondary support information that has little say in any trade I take. A lot of the times I don't even use a chart.

I stand by what I said in my original post, patterns and indicators isn't what trading is about, they are merely support tools. The key word there is 'support'.... they have a place in trading, but are by no means a primary tool. If you're looking for patterns, by the time you notice it, the opportunity has gone and you're just another mug that's late to the party. There's only a specific condition that you can profit in.

Been in this industry for many years and i've seen it all come and go. I've seen the flash in a pan traders, different market conditions, boom and bust cycles etc. The pattern guys only make money at the top of a boom cycle where there's a massive margin for error due to volatility. An example would be the dotcom bubble where every man and his dog became a multi millionaire trading tech stock in their spare bedroom in their pants. Everyone thought of themselves as an elite trader with their MA cross overs and chart patterns, when the reality was you could just throw a dart at the board during them times and make money. Market conditions change, then bang, no one can make money anymore except for the people who actually know how to trade properly. Dotcom millionaires are now selling insurance for $50k a year. I had one guy who wanted me to teach him how to trade, he said during the dotcom time he made around $30 million USD through trading tech stock and investing in tech companies. By the time he came to me he was down to low 6 figures as the millions had been spunked up the wall chasing patterns and indicators.

We've just seen the same again happen in the market. Many retail traderas came to day trading in 2007/2008 at the top of another boom cycle. There's massive one way moves in the market, and once again every man and his dog is an expert trader..... then it goes bang again, markets go back to normal, and no one can make money again. Now posts like 'day trading is dead' are appearing everywhere. On the other side of the coin, you go down to a decent prop firm and there are traders making hand over fist day in day out and they couldn't even name one chart pattern or even tell you how to setup a chart.... Most retail traders know more about technical analysis and patterns than professional traders.

Look at pit traders... ok the world has moved on since the days of the pits, but the only thing that has really changed is the way we place our orders which are now electronic. To make money trading, you need to read whatr is trading and make a judgement based on what is trading. That is trading... period... you never saw anyone in the pits looking at chart patterns all session. How the markets trade is still exactly the same, the only difference is that electronic trading has made technical analysis available at your finger tips second by second, which in turn has brought even more mugs to the table with their opinions and patterns who think they're onto something that no one has worked out, which in turn allows the professionals to make even more money due to increased liquidty, which is because of all the lemons now in the market. Trading isn't hard, you just have to accept it for what it is.

When people send me their resume and they list trading systems that they've developed and indictors etc, I just chuck their resume straight in the bin.

I have to respectfully agree. lol

except one thing. you could have done it without any pants in the spare bedroom.

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  #17 (permalink)
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Tradetronics View Post
Hi Bids,

Thanks for this great comment. It is a compliment for me if someone who is labelled as a master gives me this kind of feedback.

Guess what... I am just watching Al Brooks webinar, which you can find here in this forum. He is saying something that has just banged in my head:

Al Brooks: "In trading, if you don't know who is trapped, you will soon discover that it is you"

Guys, I think this says all about trading...

Bids, let me respectfully disagree with you on the issue of patterns, indicators and trends... I think there are patterns that show you that there are trapped traders...

But, Bids, infact you are using indicators in your video on youtube... You are using volume and another indicator...

However, I think this is one of the most significant insights that I have ever had about trading... It is nice to receive confirmation from you, Bids, and Al Brooks...

Regards,
Tradetronics


Silvester17 View Post
I have to respectfully agree. lol

except one thing. you could have done it without any pants in the spare bedroom.

It's all about the pants... that's when you know you've made it lol.

General rule of thumb here in the city is that the guys wearing $5000 suits and going to brunch are the guys with no money. They scruffy guy sat in his shorts in the corner eating a mc donalds who comes in for 3 hours a day, they're the people to watch

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  #18 (permalink)
Trading Apprentice
USA
 
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Posts: 7 since Oct 2010
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Bids View Post
It's all about the pants... that's when you know you've made it lol.

General rule of thumb here in the city is that the guys wearing $5000 suits and going to brunch are the guys with no money. They scruffy guy sat in his shorts in the corner eating a mc donalds who comes in for 3 hours a day, they're the people to watch

hi bids. i am very new to trading and want to learn and absorb everything i can. however, i don't want to go down the path of all those mugs u were talking about. how do i go about learning the correct way of trading and not be trapped as a consistent loser?

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  #19 (permalink)
Membership Temporarily Revoked
United Kingdom
 
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dwusbu View Post
hi bids. i am very new to trading and want to learn and absorb everything i can. however, i don't want to go down the path of all those mugs u were talking about. how do i go about learning the correct way of trading and not be trapped as a consistent loser?

The first step is just to accept what trading is. As we all know, trading is a zero sums game, money is never lost it is merely transfered from those who were wrong to those who are right. 99.9% of what you read on the internet about retail trading stems from the dotcom days where the markets were one way to the upside, so the majority of the market is trying to follow trends based on technical analysis. Then to make things even worse for themselves they try to apply it to day trading.

A lot of people make assumptions about technical analysis and indicators etc. What I mean by this is someone will go buy a book about technical analysis, read about all the indicators and the trend is your friend stuff, then apply it to day trading. If you stop for one moment, you'll realize that any established published book never mentions using any of this type of stuff for day trading. If you want to follow trends and patterns then you need to be looking at monthly time frames and above.

If you want to trade then you need to learn how to play the dog eat dog game as that is what trading is and that is how you should view it. To do this you need to read the orders that are trading and resting at each price too see what is actually happening, then you will learn the games that are being played every day. Stay away from software like market delta as it's just a gimmic. If it did what it said on the tin, then every investment bank and prop firm would be using it. The fact is they're not, they're all using just a front end dom as that is what you need. Most people on the floor here that have looked at it simply laughed at it. Don't waste your money on gimmics. There's always going to be some dounut that tries to tell you otherwise, but that's the same in any walk of life. Every dog will have its day, but there's hardly anyone outside of the professional community that have done it day in day out for over a decade simply because they choose to believe they know better than the professionals.

Don't think about trends and patterns, profits come from opportunities where you take advantage of other traders. Put it this way... are you going to make more money trying to guess the next big trend in bottle water sales or are you going to make more money by waiting in the desert with a truck load of bottled water and waiting for people to come along who have no water, are dying of thirst and have no option but to buy your water at an extortionate price so they can live? Ruthless yes, but that's capitalism.

If you're going to day trade then you're going up against the most savy and ruthless people in the markets. Don't hate the player, hate the game as they say.

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  #20 (permalink)
Elite Member
Pennslyvania
 
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Hi Bids:
I've been pondering this question for quite awhile and still haven't found the answer. Who is moving the market? Everybody out there are using high tech quants, TA, fundamentals etc.etc you name it, waiting to jump on the next rally or decline. The pits know who the big guns are so they too are watching. So how can any big gun move the market to their desired level without being discovered and front run'd?

TIA,

Dominick

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