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The PandaWarrior Chronicles


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The PandaWarrior Chronicles

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  #2001 (permalink)
 pbts 
Bay Area
 
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PandaWarrior View Post
Glad you are enjoying the thread...so many people visit and either don't thank or don't post...its nice when someone does...

I have tried and tried to find 3540 and 3512 on my charts....I am trading NQ which at least on my charts moves in .25 increments....3500,3500.25. 3500.50. 3500.75, 3600...etc....are you watching something different?

Hey @PandaWarrior, your thread is one of my favorite journals as I think your style of trading really resonates with me. I've been trading the NQ and your recent post setups have been extremely helpful to me, so thank you.

Quick question, when do you usually get up and start watching the markets? I usually start around 6:25AM PST but I wonder if I need more time to watch the pre-RTH action.

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  #2002 (permalink)
 PandaWarrior 
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pbts View Post
Hey @PandaWarrior, your thread is one of my favorite journals as I think your style of trading really resonates with me. I've been trading the NQ and your recent post setups have been extremely helpful to me, so thank you.

Quick question, when do you usually get up and start watching the markets? I usually start around 6:25AM PST but I wonder if I need more time to watch the pre-RTH action.

Well for NQ, 30 minutes prior is probably enough to get the levels drawn in, find potential EXIT points both long and short and then wait for the open.

I was trading premarket but the stats are showing me thats not very profitable....my buddy @tderrick would say otherwise but he trades completely different than I do. I like breakouts and momentum. That comes at the open. He likes fade trades and those work pretty well premarket but take FOREVER to develop.

I might mention these NQ trades are SIM...so take them with a grain of salt. I am getting ready to add some money to my account so I can trade it but with all the hubbub with the different brokers I am starting to become reluctant to do so....so I might not although I really want to.

I'm also waiting for a day when this strat doesn't work on sim....it seems almost too good to be true.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #2003 (permalink)
 tturner86 
Portland, Oregon
 
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PandaWarrior View Post
Glad you are enjoying the thread...so many people visit and either don't thank or don't post...its nice when someone does...

I have tried and tried to find 3540 and 3512 on my charts....I am trading NQ which at least on my charts moves in .25 increments....3500,3500.25. 3500.50. 3500.75, 3600...etc....are you watching something different?

I was using round numbers because I didn't remember the exact price level.

Attached are the charts for yesterday and today. Arrows show entry and exit.

Todays trade:


Actual entry was 3537.75. Exit was 3545.00.

Yesterdays trade


Actual entry was 3512.25. Exit was 3516.50.

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  #2004 (permalink)
 PandaWarrior 
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tturner86 View Post
I was using round numbers because I didn't remember the exact price level.

Attached are the charts for yesterday and today. Arrows show entry and exit.

Todays trade:


Actual entry was 3537.75. Exit was 3545.00.

Yesterdays trade


Actual entry was 3512.25. Exit was 3516.50.

I must be dense or something...

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
Started this thread
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  #2005 (permalink)
 tturner86 
Portland, Oregon
 
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PandaWarrior View Post
I must be dense or something...

Its ok, I do it all the time. Get tunnel vision on one thing and miss what someone was saying completely.

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  #2006 (permalink)
Sayounara
Yokohama South Korea
 
 
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Hello Brian! I'm sorry to find out that your wrist has been bothering you. I hope you'll get better soon. while you can't type much, you might have time to read this. Building an equity millipede @ Forex Factory

it's called "building an equity millipede", and it's a thread describing and discussing the building and holding of large forex positions for a very long time. I've seen that you've been trying to do this on your own, therefore I thought that you might find it useful.

Best wishes

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  #2007 (permalink)
 tigertrader 
Philly, Pa
 
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Today was one of those days when you have perfect examples of 2 different markets where price action and volatility were completely different from one another. In one case a trend-day is presented, and in the other case a range-day is presented. Each particular type-of-day calls for a different approach, strategy, management to the trade.






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  #2008 (permalink)
 Silvester17 
Market Wizard
Columbus, OH
 
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tigertrader View Post
Today was one of those days when you have perfect examples of 2 different markets where price action and volatility were completely different from one another. In one case a trend-day is presented, and in the other case a range-day is presented. Each particular type-of-day calls for a different approach, strategy, management to the trade.

it doesn't matter if trend day or range day, using @Fat Tails vwap results in better performance and accuracy




EDIT: I don't always trade, but when I do, I prefer @Fat Tails vwap

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  #2009 (permalink)
 tigertrader 
Philly, Pa
 
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Silvester17 View Post
it doesn't matter if trend day or range day, using @Fat Tails vwap results in better performance and accuracy




EDIT: I don't always trade, but when I do, I prefer @Fat Tails vwap

I'd like to give a shout-out to my boy @Fat Tails for his most-excellent VWAP indicator - no doubt he has earned everyone's respect and deserves our propers, but I tend to be a tad superstitious/ocd, hence my original vwap-indie still clings to my workspace like a stubborn larry clings to porcelain.

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  #2010 (permalink)
 tderrick 
Nashville, Tennessee
 
Experience: Intermediate
Platform: Ninja / Jigsaw / 9G
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tigertrader View Post
I'd like to give a shout-out to my boy @Fat Tails for his most -excellent VWAP indicator - no doubt he has earned everyone's respect and deserves our propers, but I tend to be a tad superstitious/ocd, and my original vwap indie still clings to my desktop like a stubborn larry clings to the porcelain.

I use that new @Fat Tails vwap bit and it is kind of creepy accurate ...


AJ
Nashville, Tennessee


"Life On The Edge of SR"
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  #2011 (permalink)
 Fat Tails 
Berlin, Europe
 
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tigertrader View Post
I'd like to give a shout-out to my boy @Fat Tails for his most -excellent VWAP indicator - no doubt he has earned everyone's respect and deserves our propers, but I tend to be a tad superstitious/ocd, and my original vwap indie still clings to my desktop like a stubborn larry clings to the porcelain.




tigertrader View Post
Today was one of those days when you have perfect examples of 2 different markets where price action and volatility were completely different from one another. In one case a trend-day is presented, and in the other case a range-day is presented. Each particular type-of-day calls for a different approach, strategy, management to the trade.


The VWAP does not look correct. Also, I can see that you start the VWAP at midnight EST, which is somewhere in the middle of the night session. I still do not understand the reason, as all trades between 6:00 PM EST and midnight are now excluded from the calculation - and well the entire volume of the session should be included. However, as volume is typically low during these 6 hours, the error term gets smaller and smaller during the regular session, when the main volume occurs.

Just to please you, I have set my VWAP to start at midnight EST, and as I can see there are a few considerable differences. I have highlighted the differences on the chart below.



While the VWAP itself on your chart is pretty accurate (1831.17 versus 1831.13), the standard deviation bands are completely off. The reason is that the indicator which you use underestimates volatility due to the way it is calculated:

-> it only uses one data point every 15 minutes
-> it only takes into account the close values and not the highs and lows of the bars

For example, there was a spike at 10:00 AM EST. The wide ranging bar should have a considerable impact on the standard deviation of all trades. However, the bands on your chart barely expand, because the close of that bar is near the VWAP.

The indicator that you use is probably crap. I acknowledge that good traders can get excellent results in despite of such indicators.



tigertrader View Post

For the CL chart there seems to be less of a problem, because the wide ranging bar after the news release at 10:30 AM did not close near the VWAP.

However, if you look in detail, you will find a few missed opportunities, when the 2SD band was touched, but your indicator did not alert you!




Why use bad tools, if good ones are available?

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  #2012 (permalink)
 tigertrader 
Philly, Pa
 
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Stay up-to-date and use good tools, my friends!

-tmititw

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  #2013 (permalink)
 tderrick 
Nashville, Tennessee
 
Experience: Intermediate
Platform: Ninja / Jigsaw / 9G
Broker: AMP / CQG
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Brian,

How is the Method working in NQ since the ON's have been trending lately instead of the narrow ranges
we have become accustomed to ?


AJ
Nashville, Tennessee


"Life On The Edge of SR"
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  #2014 (permalink)
 PandaWarrior 
In the heat
 
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tderrick View Post
Brian,

How is the Method working in NQ since the ON's have been trending lately instead of the narrow ranges
we have become accustomed to ?

So far so good....the trending helps actually...had a fake out a couple of days ago but just reversed and ended positive...

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #2015 (permalink)
 tturner86 
Portland, Oregon
 
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PandaWarrior View Post
So far so good....the trending helps actually...had a fake out a couple of days ago but just reversed and ended positive...

I have been loving the NQ the last few days. +70 ticks on 2 trades today for the NQ. I will post the details in my new trading journal tomorrow.

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  #2016 (permalink)
 tderrick 
Nashville, Tennessee
 
Experience: Intermediate
Platform: Ninja / Jigsaw / 9G
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tturner86 View Post
I have been loving the NQ the last few days. +70 ticks on 2 trades today for the NQ. I will post the details in my new trading journal tomorrow.



Embrace the NQ... Let it be your friend


AJ
Nashville, Tennessee


"Life On The Edge of SR"
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  #2017 (permalink)
WillSmithRules
Sugerland, TX/USA
 
 
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tderrick View Post
Embrace the NQ... Let it be your friend

The NQ is one of the best instruments to trade... its like the crude oil of the indexes! I love it too, and its cheap (although commission basically doubles when you trade multiple contracts)....

 
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  #2018 (permalink)
 PandaWarrior 
In the heat
 
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tderrick View Post
Embrace the NQ... Let it be your friend


11 handles yesterday....that's pretty friendly,

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
Started this thread
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  #2019 (permalink)
 tigertrader 
Philly, Pa
 
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it is not only easy to get sidetracked, spun around, and derailed by the markets, but one can also be misled if the information they are receiving is apocryphal. everyone wants to make money, but with respect to what? everyone one wants to wrestle the gorilla, until the door opens. so, instead of making rational decisions based on heuristics, they make emotional decisions that make them feel safe and comfortable. they develop a compulsive addiction to this stimulus-response loop which reduces them to instant-gratification junkies. they may have a seemingly effective methodology that generates profitable trades, but in the end, they never get ahead because they end giving it all back in the rake and grind. they either choose the markets-they-trade and the strategies-they-use arbitrarily, or once again, make the decision based on comfort. they choose markets that mete out justice quickly, irrespective of liquidity concerns or participatory interest.

naive traders continue to fall prey to the sirens call of the scalp; which encourages its participants to take small profits, and teaches them to maximize of the chance of gain, rather than to maximize the gain. they become consumed with the mindset of the scalp and lose perspective and focus on the the big picture, sacrificing long-term performance for short-term gratification. its very easy to come up with reasons for getting out of trending trades, but trading friction guarantees that one will have to trade more and pay more vig just to keep up and not fall behind. the less you pay in commissions, and bid asked spread, the more money you'll end up with at end of day. if a system or methodology is not scalable and the market traded is not liquid enough to afford scalability, then one is condemned to running in place or even losing ground. real opportunity comes from capturing the real move.

rational traders incorporate risk into the determination of their expectation. because their approach is reason-based rather than driven by emotion, they are able to build positions, add to their positions, and follow the trend-to-the-end. they focus on getting bigger, and size their trades to get the maximum compounded growth of their capital relative to the amount of risk they are willing to incur, and they trade the markets and use the strategies that allows them to accomplish these goals. it's why i trade es, zb and gc. they realize and accept that markets vary from day-to-day and even intra-day, and that it is unwise to trade the market the same way, on days that aren't alike.

people continue to take the markets for granted. they believe they will be there forever, or at the very least will be tradeable forever; but nothing is forever. as an ex-floor trader i can lay testament to that reality; so can sears and j.c. penney! if you're just here "to make a better return on your money," or make a living” you may want to give your raison d’etre more consideration. What are you willing to accept as risk, how will you contain that risk. What's the time horizon? You can’t continue to delude yourself - long-run expectations are inextricably divergent from the reality of finite time. What are you doing here and when do you need to get it done by? And are you willing to do, whatever it takes to get it done? without a goal, without a specific, well-articulated criteria, you cannot craft the plan to execute — you are just waffling about in an aimless but comfortable stupor.

forums can be beneficial and i would certainly argue that more education is preferable to less, in any field, provided the education doesn't impede someone's ability to reason things through for themselves and provided the knowledge that is imparted is accurate and doesn’t mislead it’s recipients - to effectively convey ideas to others, we must amend their perspective and their point of reference, so that they may see it anew, and from an entry point that they will understand. To spare them the inevitable beatings of otherwise learning it the hard way is not often appreciated until its too late.

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  #2020 (permalink)
 researcher247 
Chicago, IL
 
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tigertrader View Post
it is not only easy to get sidetracked, spun around, and derailed by the markets, but one can also be misled if the information they are receiving is apocryphal. everyone wants to make money, but with respect to what? everyone one wants to wrestle the gorilla, until the door opens. so, instead of making rational decisions based on heuristics, they make emotional decisions that make them feel safe and comfortable. they develop a compulsive addiction to this stimulus-response loop which reduces them to instant-gratification junkies. they may have a seemingly effective methodology that generates profitable trades, but in the end, they never get ahead because they end giving it all back in the rake and grind. they either choose the markets-they-trade and the strategies-they-use arbitrarily, or once again, make the decision based on comfort. they choose markets that mete out justice quickly, irrespective of liquidity concerns or participatory interest.

naive traders continue to fall prey to the sirens call of the scalp; which encourages its participants to take small profits, and teaches them to maximize of the chance of gain, rather than to maximize the gain. they become consumed with the mindset of the scalp and lose perspective and focus on the the big picture, sacrificing long-term performance for short-term gratification. its very easy to come up with reasons for getting out of trending trades, but trading friction guarantees that one will have to trade more and pay more vig just to keep up and not fall behind. the less you pay in commissions, and bid asked spread, the more money you'll end up with at end of day. if a system or methodology is not scalable and the market traded is not liquid enough to afford scalability, then one is condemned to running in place or even losing ground. real opportunity comes from capturing the real move.

rational traders incorporate risk into the determination of their expectation. because their approach is reason-based rather than driven by emotion, they are able to build positions, add to their positions, and follow the trend-to-the-end. they focus on getting bigger, and size their trades to get the maximum compounded growth of their capital relative to the amount of risk they are willing to incur, and they trade the markets and use the strategies that allows them to accomplish these goals. it's why i trade es, zb and gc. they realize and accept that markets vary from day-to-day and even intra-day, and that it is unwise to trade the market the same way, on days that aren't alike.

people continue to take the markets for granted. they believe they will be there forever, or at the very least will be tradeable forever; but nothing is forever. as an ex-floor trader i can lay testament to that reality; so can sears and j.c. penney! if you're just here "to make a better return on your money," or make a living” you may want to give your raison d’etre more consideration. What are you willing to accept as risk, how will you contain that risk. What's the time horizon? You can’t continue to delude yourself - long-run expectations are inextricably divergent from the reality of finite time. What are you doing here and when do you need to get it done by? And are you willing to do, whatever it takes to get it done? without a goal, without a specific, well-articulated criteria, you cannot craft the plan to execute — you are just waffling about in an aimless but comfortable stupor.

forums can be beneficial and i would certainly argue that more education is preferable to less, in any field, provided the education doesn't impede someone's ability to reason things through for themselves and provided the knowledge that is imparted is accurate and doesn’t mislead it’s recipients - to effectively convey ideas to others, we must amend their perspective and their point of reference, so that they may see it anew, and from an entry point that they will understand. To spare them the inevitable beatings of otherwise learning it the hard way is not often appreciated until its too late.

__________________
Well-thought out post. Frankly though, I don't think traders are non-emotional enough in trading. This ain't no job; it is PURE risk on/risk off. I don't see 9 to 5'ers (well paid or not) making the transition EVER to short-term and/or swingtrading.

Less than 0.5% for daytraders long term (making 100K+) and then less than 3% swingtraders (making yearly income @say 75K+).

Higher I.Q. doesn't equate to success. Nor does 'hours put in = $'s out.' A 'hard-stop for time involved is good. Having a successful career that allows one several years of part-time avocational pursuit (w/o too much risk on) is probably best.

But who follows any specific path? Trading is HIGHLY discretionary and personal. I like that enough new traders enter the arena every year to keep this never-ending game of chess rolling along.

I tell anyone that asks me for daytrading to have a higher reward to risk target (2.5 to 1 or a bit higher) vs higher win% to cut down on slippage and commissions. A true edge is only a true edge @ a certain % or higher of 'hypothetical gains/edge.'

Good post on a Sunday though...

peace/hedvig

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  #2021 (permalink)
 wldman 
Market Wizard
Chicago Illinois USA
 
Experience: Advanced
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really say a lot. I am curious @tigertrader what you view as "scalp" and "small profits"? Also, I suspect that most readers here are not financially capable of riding a trend adding along the way to an ES position.

For me, I am always trying to expand timeframe to trade a longer view. I agree totally with the idea that short timeframes draw guys into a scalp mentality. I find myself exiting profitable positions at predetermined targets based on some area of perceived S/R instead of adding to and pressing my runners. I think one possible root of that weakness is the floor mentality of not missing out on any good trades. I'm not trading firm capital or even part of a joint back office anymore, so the risk consideration jacks with both my view and what the charts are saying.

So I have to consider the aimless but comfortable stupor comment. I have daily goals or a number to hit and that is really counterproductive because I'm off the screens the minute I make the number. 200 times the daily number will pay the bills for sure but it is miles away from "floor money". I am a 1 lot to 5 lot guy now, not 50 or 100 up.

I think what you where saying is that you trade each day based on what is given and that each day is different and independent of the the next. I think I do that. I be aware now to see. My fear is that I'm just a hobbyist now, hanging on to something that is gone. While I believe that I made the transition to screen reasonable well the fact remains that I made twice as much money last yer in the "investment" account as I did trading.

Anyway, hope things are well with you. I'd love to read your expanded thoughts on that.

Dan

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  #2022 (permalink)
 tigertrader 
Philly, Pa
 
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@researcher247 is quoted as saying, >>But who follows any specific path? Trading is HIGHLY discretionary and personal.<<which is exactly the point i was trying to make. having a plan and executing it is a vital part of the process. strategies may be discretionary and individualized, but they are either geared to making money or not.

the outcome, irrespective of the p&l is constant. the goal is to uncover exploitable nonlinear relationships of price to price - to find ways to identify path dependency/persistence/auto-correlation, or trendiness within the massive amount of noise/ randomness, or non-linearity the market generates. this is an absolute constant that never changes. at the same time, we must project losses, manage risk, while finding signals that produce trades that are well defined, have a proven edge, and are reproducible. we must make these decisions objectively, and not allow cognitive load, stress, emotions and bias, to affect our decisions. this is an absolute constant that never changes.

the process by which we reach this outcome and the path we take determines if we lose or make money and more importantly, how much money we make. imagine the process as a living entity, not an inanimate process. these entities have a finite life and go through phases of growth, productivity, decline, obsolescence, and demise. the markets however are like energy - never created, nor destroyed, they simply change forms. if one is to continue to profit- and if one is to survive, one must continually adapt the process to the changing market. the idea is to optimize the process, so that it is always being as productive as possible while staying true to the path's course.

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  #2023 (permalink)
 tturner86 
Portland, Oregon
 
Experience: Intermediate
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wldman View Post
really say a lot. I am curious @tigertrader what you view as "scalp" and "small profits"? Also, I suspect that most readers here are not financially capable of riding a trend adding along the way to an ES position.

For me, I am always trying to expand timeframe to trade a longer view. I agree totally with the idea that short timeframes draw guys into a scalp mentality. I find myself exiting profitable positions at predetermined targets based on some area of perceived S/R instead of adding to and pressing my runners. I think one possible root of that weakness is the floor mentality of not missing out on any good trades. I'm not trading firm capital or even part of a joint back office anymore, so the risk consideration jacks with both my view and what the charts are saying.

So I have to consider the aimless but comfortable stupor comment. I have daily goals or a number to hit and that is really counterproductive because I'm off the screens the minute I make the number. 200 times the daily number will pay the bills for sure but it is miles away from "floor money". I am a 1 lot to 5 lot guy now, not 50 or 100 up.

I think what you where saying is that you trade each day based on what is given and that each day is different and independent of the the next. I think I do that. I be aware now to see. My fear is that I'm just a hobbyist now, hanging on to something that is gone. While I believe that I made the transition to screen reasonable well the fact remains that I made twice as much money last yer in the "investment" account as I did trading.

Anyway, hope things are well with you. I'd love to read your expanded thoughts on that.

Dan

I see a scalp as a 1:1 risk/reward. A swing is 1:2+, and a position trade is long time (Buffet style).

The market moves in cycles. You have to understand what cycle of the market you are in, in order to trade correctly. A lot of traders make the mistake of trying to trade the wrong way at the wrong time. Swing when you should scalp, scalp when you should swing.

Breakout to Trend, Trend to Channel, Channel to Range, Range to Breakout. There are opportunities in each cycle, as well as risks and nuances that need to be understood. This cycle happens on all timescales and one maybe a different cycle in a larger time frame. I.e. a trading range is a pullback on a larger time frame. A trend may be a leg inside of a trading range, etc.

The key is to understand what the market has done, what it is doing now, and the probabilities of what it will do next (within the context of your trade).

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  #2024 (permalink)
 PandaWarrior 
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@tigertrader, @wldman, @researcher247 keep it up, this is the kind of discussion I'd like my thread to embrace and encourage.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #2025 (permalink)
 trendisyourfriend 
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tigertrader View Post
...the goal is to uncover exploitable nonlinear relationships of price to price...

Please explain to me what a nonlinear relationship of price to price is and how do i identify one?

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  #2026 (permalink)
 tigertrader 
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trendisyourfriend View Post
Please explain to me what a nonlinear relationship of price to price is and how do i identify one?


a reference to analyzing information from a price series, and extracting returns from that information
whether it is done through testing or optimization
or by analyzing a price series by observing distribution patterns in pa and the similarities to and the implications thereof with previous events.
or we can amend that distribution based on predictive correlations
or how we foresee the future converging or diverging with the past

in either case...

the path we take and the model we follow must be well defined and remain constant.
but, the process must constantly adapt and evolve;
not merely to profit, but simply to survive
while pitted against ever-evolving competition(better informed traders, algos, hfts, ai)
in an ever-changing market.

one should not fall prey to the restrictive culture of comfort.
if one does , they are in trouble -they just don’t see it yet.
focus on the process and not past outcomes -
you are only as good as your next trade;
but if you choose the best markets and use the best process,
your best trades are ahead of you.

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  #2027 (permalink)
 sixtyseven 
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researcher247 View Post
I tell anyone that asks me for daytrading to have a higher reward to risk target (2.5 to 1 or a bit higher) vs higher win% to cut down on slippage and commissions.

I thought a higher win% would cut down on slippage - and would imagine commissions be about the same - therefore a higher win rate would be preferable, additionally you could risk more due to the lower std dev of returns.

Assuming of course you exited winners on a limit, and the losses with a market order. Perhaps the exit method changes when you get to the next level and have the proven ability to trade based on what the market is telling you, rather than what your fixed level exit backtesting has told you.

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  #2028 (permalink)
 tigertrader 
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trading forums are helpful

if the information is relevant

it forces you to organize and filter your ideas

allows you to improve your strategies.

it allows you to discover new strategies

it allows you to reason and draw your own conclusions

it allows new or conflicting ideas to generate new conclusions


trading forums are not helpful


if the knowledge is false

if you yield to trends and fads

if you follow popular opinion

if you are convinced you know better

if you insist on doing it your way

if are unwilling to admit your own ignorance


risk is as important to profit, as failure is to success
if you are afraid of either, you will accomplish neither


-tt

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  #2029 (permalink)
 trs3042 
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Hello @PandaWarrior

I was curious to know if you have ever traded your method on an NQ tick chart? If so, what tick settings did you use?

Thank you Brian,

"If you're going to panic during a trade............. panic early."
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  #2030 (permalink)
 PandaWarrior 
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trs3042 View Post
Hello @PandaWarrior

I was curious to know if you have ever traded your method on an NQ tick chart? If so, what tick settings did you use?

Thank you Brian,

In fact I do not. I trade NQ much differently than CL. Attached is a screen shot of my trades today. I exited around the 3 day ADR and its gone another 75 ticks from there....I made 20 handles and left tons on the table.

However, my NQ method is dead simple. I plot the opening 5 minutes using @Fat Tails handy little indie, wait for a bar to close outside it and take the break of that bar either long or short. Stop goes on the opposite side of the OR. I sometimes go BE at +20 ticks but I'm learning thats generally a bad bet.

The trade was originally built on a 40 tick target but that was before the range expanded. Now it seems almost anything is reasonable...currently its at 140 ticks from my entry.....with NO pull backs....

I have a buddy trading NQ on a tick chart and he's doing well with it but he's scalping 7-8 ticks at a time but I'm taking one or at the most two trades a day. If the OR break doesnt work, I reverse at the stop and let it run...if that fails I am done. Thats happened once I think.....

Anyway, hope this answers your question.....one last thing, you should know this is sim....I plan on going live with it end of the month....that will be three months of testing and thats enough....I just hope the cycle is not over when I do....but I'll be able to tell right away if it is...the trade will stop working and I'll be able to determine that almost immediately.


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  #2031 (permalink)
 Adamus 
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PandaWarrior View Post
Anyway, hope this answers your question.....one last thing, you should know this is sim....I plan on going live with it end of the month....that will be three months of testing and thats enough....I just hope the cycle is not over when I do....but I'll be able to tell right away if it is...the trade will stop working and I'll be able to determine that almost immediately.

Don't you want to download some market replay days for Feb 2013 and test out how it acted last year?

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #2032 (permalink)
 tigertrader 
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Adamus View Post
Don't you want to download some market replay days for Feb 2013 and test out how it acted last year?

imo, any relation between today's events and those of 1(x)year(s) ago is random

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  #2033 (permalink)
 tturner86 
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PandaWarrior View Post
In fact I do not. I trade NQ much differently than CL. Attached is a screen shot of my trades today. I exited around the 3 day ADR and its gone another 75 ticks from there....I made 20 handles and left tons on the table.

However, my NQ method is dead simple. I plot the opening 5 minutes using @Fat Tails handy little indie, wait for a bar to close outside it and take the break of that bar either long or short. Stop goes on the opposite side of the OR. I sometimes go BE at +20 ticks but I'm learning thats generally a bad bet.

The trade was originally built on a 40 tick target but that was before the range expanded. Now it seems almost anything is reasonable...currently its at 140 ticks from my entry.....with NO pull backs....

I have a buddy trading NQ on a tick chart and he's doing well with it but he's scalping 7-8 ticks at a time but I'm taking one or at the most two trades a day. If the OR break doesnt work, I reverse at the stop and let it run...if that fails I am done. Thats happened once I think.....

Anyway, hope this answers your question.....one last thing, you should know this is sim....I plan on going live with it end of the month....that will be three months of testing and thats enough....I just hope the cycle is not over when I do....but I'll be able to tell right away if it is...the trade will stop working and I'll be able to determine that almost immediately.


What is a handle? a Tick?

I got in around 3529 today, I just got out too early. But overall very good day.

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  #2034 (permalink)
 pbts 
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@PandaWarrior I've taken some of what you have been trying out with in my live trading and it seems to work.

Today was an exact mirror to yesterday, fake out and then pretty much a linear trend (for NQ). I made the mistake of trading on YM which was the weaker one. I've noticed that the ES NQ and YM are all generally directionally correlated, but one is stronger than the other two every day. Today it was the NQ and that is where I should have put my trades on. From what I've noticed lately, the stronger instrument moves farther in the direction you want and less so in the opposite direction and I'm going to try picking the strongest of the 3 to trade on each day.

You can tell the which one is strongest by where the bars move in the first +-15 minutes of the RTH open.

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  #2035 (permalink)
 researcher247 
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sixtyseven View Post
I thought a higher win% would cut down on slippage - and would imagine commissions be about the same - therefore a higher win rate would be preferable, additionally you could risk more due to the lower std dev of returns.

Assuming of course you exited winners on a limit, and the losses with a market order. Perhaps the exit method changes when you get to the next level and have the proven ability to trade based on what the market is telling you, rather than what your fixed level exit backtesting has told you.

______________
I just found out for me that managing my trade @+100% of risk and then @150%+ of initial risk allowed enough trades to run to 2.618 reward to risk in DAYTRADING.

I need 25-35 rt's per week to have my edge play out very well.

For swingtrading methods I use 2 to 1 reward to risk and manage @150%+ of initial risk. I use 3 methods and they are each non-correlated.

I can't get my swingtrading win% much above 62% ish and in daytrading it is just a touch higher. I am a grind with size trader if I label myself.

I don't know how to dynamically raise my reward levels in terms of initial risk. I DO know how to add into open winners with additional w/trend or confirmed breakout trades.

This adds greatly to my overall profitability. Being a size trader takes care of some issues smaller traders have in terms of grinding out a quantified edge with size is still worth it just because of the absolute $$$'s being earned for the simplicity and routine of it all.

peace/hedvig

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  #2036 (permalink)
 PandaWarrior 
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pbts View Post
@PandaWarrior I've taken some of what you have been trying out with in my live trading and it seems to work.

Today was an exact mirror to yesterday, fake out and then pretty much a linear trend (for NQ). I made the mistake of trading on YM which was the weaker one. I've noticed that the ES NQ and YM are all generally directionally correlated, but one is stronger than the other two every day. Today it was the NQ and that is where I should have put my trades on. From what I've noticed lately, the stronger instrument moves farther in the direction you want and less so in the opposite direction and I'm going to try picking the strongest of the 3 to trade on each day.

You can tell the which one is strongest by where the bars move in the first +-15 minutes of the RTH open.

I don't watch the other two but I know what your saying...maybe just trade all three and ride the strongest one as far as you can....spread the risk and the reward around a bit....

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 PandaWarrior 
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Adamus View Post
Don't you want to download some market replay days for Feb 2013 and test out how it acted last year?

I've found this to be a complete waste of time. Supply/demand, political policies, regulatory personnel, production capacity...etc constantly change. I've read other threads where traders are looking at previous years behavior and predicting future results and I just want to laugh. Yes there are seasonalities across asset classes from year to year.....but to just rely on month over month data as some sort of probability factor is foolish.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #2038 (permalink)
 PandaWarrior 
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tturner86 View Post
What is a handle? a Tick?

I got in around 3529 today, I just got out too early. But overall very good day.

A handle is a full point in the instrument. In this case 4 ticks. So 20 handles is 80 ticks.

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  #2039 (permalink)
 sixtyseven 
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researcher247 View Post
______________
I just found out for me that managing my trade @+100% of risk and then @150%+ of initial risk allowed enough trades to run to 2.618 reward to risk in DAYTRADING.

For swingtrading methods I use 2 to 1 reward to risk....
I can't get my swingtrading win% much above 62% ish....
I am a grind with size trader if I label myself.
peace/hedvig

Hi Hedvig,
Thanks for the reply. I'm not sure how it related to my post about win% and slippage, but that's ok.

I don't understand what you mean by manage the trade @+100% of risk. Would you mind explaining that more fully?

2R and 62% winners. I wouldn't label that a grind. Given random 2R generates ~33% winners, with roughly 37% needed to breakeven, I'd say you are doing much better than grinding.

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 PandaWarrior 
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A couple of probe trades today prior to the number. Those were scratch trades then flat for the number....wide open book, unsafe to enter.....then nothing with acceptable risk....missed the entire move. Done for the day.

Got a scratch on NQ. It went up, pulled back and if added. It went back up, reversed and I ended up scratching the whole thing. Of course I was taking a shower while that was going on and I left the house about ten minutes later....

So nothing today.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #2041 (permalink)
 researcher247 
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sixtyseven View Post
Hi Hedvig,
Thanks for the reply. I'm not sure how it related to my post about win% and slippage, but that's ok.

I don't understand what you mean by manage the trade @+100% of risk. Would you mind explaining that more fully?

2R and 62% winners. I wouldn't label that a grind. Given random 2R generates ~33% winners, with roughly 37% needed to breakeven, I'd say you are doing much better than grinding.

_______________
Grinding for me means daytrading about 2 hours or a touch more per day in 3 different markets at different start times and then doing my swingtrading stuff for 90+ minutes @the end of each day 4X's per week (M-Th) and then @my leisure on the weekend.

You know--like a job.

Say I risk 12 ticks in NQ--@100% of open profits (of initial risk)--so @+12ticks I then reduce my risk to just over 1/2 of my initial risk--then @150% of open profits or +18ticks I move my stop to theoretical entry minus 1 tick.

My final target(s) are always (if the session is fresh and NOT in deep lunch) 2.618 gross reward to risk (rounded up to the nearest tick). @times I catch a runner and close out 1/5th of my position (or 1/4th) @+423% gross reward to risk (rounded up to the nearest tick).

I am a breakout w/confirmation and pullback within confirmed trends trader and use 2 timeframes only. One is the bigger picture--the other is my trigger timeframe. I have good hand/eye coordination so I can use smaller tick/volume timeframes and I trade with SIZE.

Same thing for 6E, CL ZN ES or DAX or FTSE 100 or BUND or KOSPI or Hang Seng or GLD or daytrading high-beta stocks (though I stick mainly with derivatives).

I have found in daytrading that after throwing out scratches & 'near' b.e.'s that if I get my 30 trades per week in my edge GRINDS out big time.

I had a 'deep thoughts' thread in ET a few years ago that detailed my trading style and my size back then (in the psychology section) and it also went into sordid detail about my predilection for Green Dragon, young skanks & generally stalking 'meat' in various seedy areas of lakeshore towns in the midwest and S. Florida and California.

Though that was indeed 'deep thoughts.'

peace/hedvig

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  #2042 (permalink)
 researcher247 
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Here are #'s for single lot traders; it is TRULY a numbers game imho.

If you can STOP giving a single shit about any day's trading outcome. Pure #'s game and NEVER hesitate on a legit setup--just take it and manage it and MOVE on!
_______________
12.5 hour per week is 2.5 hours per day--round down to 45 minutes max per session

3X sessions per day @avg. of 40 minutes per session

is--2 hours per day

We want a trade every 30 minutes or 4 trades per day

20 trades per week

avg. net net per trade over time should be in small timeframes around $20.00 net net or so

that is around $450 per week on 20 trades

on 25 trades per week that is $500 per week

Winning trades net +$92.50 per trade--they LOSE $41.00 per trade @2.5 to 1 gross reward.

20 trades per week should be

8 winners/6 losers/6 b.e.'s for 57% winners/43% losers (disregard b.e.'s)

40% winners--8 wins @+$97.50 wins so +740.00
30% losers--6 losers @$43.00 losses so -$258.00
30% b.e./scratch--6 b.e.'s @$7.50 losses so -$30.00

So around +$452.00 net per week on 20 trades

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  #2043 (permalink)
 sixtyseven 
Golden Bay, New Zealand
 
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researcher247 View Post
Say I risk 12 ticks in NQ--@100% of open profits (of initial risk)--so @+12ticks I then reduce my risk to just over 1/2 of my initial risk--then @150% of open profits or +18ticks I move my stop to theoretical entry minus 1 tick.

Thanks for the explanation.
So with the 12 tick example the target is 31 ticks, and when open profit got to 30 ticks (250% of initial risk) your stop would be at +11 or 12. At certain points along the way your stop would be 23-24 ticks behind the last price until it clicked up to the next 50%, where it would be ~18 ticks behind. You'd then exit 3/4 of your contracts and continue on in the same way with the runner. Have I understood correctly?

Do you exit any other way, or just stick to the above format?


researcher247 View Post
....my predilection for Green Dragon, young skanks & generally stalking 'meat'.

Good times it seems when you aren't in front of the computer.

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  #2044 (permalink)
 PandaWarrior 
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researcher247 View Post
Here are #'s for single lot traders; it is TRULY a numbers game imho.

If you can STOP giving a single shit about any day's trading outcome. Pure #'s game and NEVER hesitate on a legit setup--just take it and manage it and MOVE on!
_______________
12.5 hour per week is 2.5 hours per day--round down to 45 minutes max per session

3X sessions per day @avg. of 40 minutes per session

is--2 hours per day

We want a trade every 30 minutes or 4 trades per day

20 trades per week

avg. net net per trade over time should be in small timeframes around $20.00 net net or so

that is around $450 per week on 20 trades

on 25 trades per week that is $500 per week

Winning trades net +$92.50 per trade--they LOSE $41.00 per trade @2.5 to 1 gross reward.

20 trades per week should be

8 winners/6 losers/6 b.e.'s for 57% winners/43% losers (disregard b.e.'s)

40% winners--8 wins @+$97.50 wins so +740.00
30% losers--6 losers @$43.00 losses so -$258.00
30% b.e./scratch--6 b.e.'s @$7.50 losses so -$30.00

So around +$452.00 net per week on 20 trades

Random thoughts after reading the last few posts.....

Over a LONG period of time, my average profit per trade is around $34-36 and increasing as my wins get bigger....this is something I did not understand for a long time. Its ok to have a low per trade profit factor, as long as its increasing over time and you are executing on the edge without taking to much risk.

As a primarily single lot trader, I've found what you have written to be true....I am taking 1-5 trades per day. Most of the time its two or three.....small losers or scratches looking for the winner. Letting that single lot run can be tough, but in my mind, its the holy grail of trading....letting that winner run as long as you have the stomach for it.

My win rate is substantially lower than 57%.....its more like 37-40% and I'm having trouble getting it any higher, but I am profitable....more importantly, I haven't had a losing month since April last year....plenty of losing days, one losing week but no losing months.

Am I as profitable as i want to be...NOPE....I figure I have left around 300% or more above and beyond what I actually made if I had managed my trades differently....in this case, I mean leave them alone. Let them run at a minimum to my intended target. I know @tigertrader might say targets are ill advised....trade with no target is something he might say but leaving that aside for the moment, just using the targets I did use, letting the trades play out until either it was obtained or a full stop was taken would have produced MUCH better profit numbers.

To that end, I am attempting to slowly develop my emotional mindset and my skill set to actually allow this to become part of my 2014 trading plan. I can't seem to increase my win rate much, so I MUST increase the size of my winners in both ticks and contracts.....and in my case, ticks must come first.....then add on size as initial entries warrant and add on size as the trade progresses...however, this last bit seems ill advised until I am actually letting trades run further than I am now.

One thing I've finally come to grips with, a single bar opposite my trade direction does not a pull back or reversal make....I closed a LOT of trades after a single bar went against me only to see it continue on to my target zones.....I did this a LOT....more importantly, I knew I was doing the wrong thing when I did it but emotionally I was unable to let that happen.....but earlier this week, I was thinking about how wrong headed this was.....with some word of wisdom from @tigertrader thrown in..and something clicked inside....its ok to let price come back on you a little bit.....maybe even two or three bars. Its just that you need to be aware of the context and content of whats going on in the larger picture and behave accordingly. I'd say 90-95% of the time, I'd have been better off never moving the stops....the other times it would have been the "right thing" to do are just enough to convince myself that I should do it all the time....time to "reverse" that line of thinking.

The picture is just one more example of just leaving stops alone.....I added because its; 1. Sim and 2. Because I am good at letting NQ run....maybe thats due to #1 although thats not something I ever done well in CL even in sim.


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 researcher247 
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Thanks for the explanation.
So with the 12 tick example the target is 31 ticks, and when open profit got to 30 ticks (250% of initial risk) your stop would be at +11 or 12. At certain points along the way your stop would be 23-24 ticks behind the last price until it clicked up to the next 50%, where it would be ~18 ticks behind. You'd then exit 3/4 of your contracts and continue on in the same way with the runner. Have I understood correctly?

Do you exit any other way, or just stick to the above format?



Good times it seems when you aren't in front of the computer.

No, @200% I move stop to b.e. or +1tick and unless way TOO much time has passed or we go into massive consolidation--I take the full winner or b.e.

I only trade when volume and size traders are trading any market. Report times within 90 seconds of release EARLY London, 1st 90 minutes or less of old session opens such as DAX @3am est, FTSE @4am est, Notes @8:20am est CL @9am est NQ/ES @9:30am est or 10am est and used to do Beans & Corn sometimes @10:30am est but they changed that open to 9:30am est.

DO the same thing on foreign markets such as in forex for Aussie open/Yen open & if around and in my trading plan for the Hang Seng and Kospi et al.

peace/hedvig

p.s. Yea--I get high on my own supply (green dragon & vaporizing) 'cause my shoulders and back hurt even when working out alot and doing yoga--it is better for you than drinking and taking pills...I support anything one wants to put into their adult body--but that is my humble opinion and off topic.


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 tigertrader 
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what is a target anyway, @PandaWarrior? it's an arbitrary line you've chosen to draw in the sand; some assumption laden decision you made during the analysis period prior to executing the trade - essentially a prediction of where the market is going to be at some point in the future. sometimes the market reaches the chosen target, sometimes it doesn't, and sometimes it blows right through it. now the market reaches your target, or it falls short and you get out, because your inherent risk-management instincts tells you to, not because of a strategic reason like changed fundamentals or expectation. the problem is that there are no logical underpinnings to the decision. its an emotional decision, that is fear based and shortsighted, especially if made during a period when the market is trending. if the market is in a range, it just may be the prudent choice, but an objective evaluation of the market should preclude any decision.

trading breaks down to the analysis stage i referred to above and the execution of the trade and its management. the first two parts are relatively devoid of stress. initially, your cool analytical side is control; it is a period of calm, quiet refection, that is summarily interrupted, once the trade is made and real money is on the line. they are 2 different modes as different as time and price, and can be viewed in much the same way:

analysis +, execution + = elation and self-satisfaction

analysis +, execution - = regret and sadness

analysis - , execution + = relief

analysis - , execution - = self-loathing and depression


obviously, the goal is to spend the majority of your time in the first quadrant. the way to meet the challenge is to treat the analysis side and the execution/management side of the equation in the same way.

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 PandaWarrior 
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tigertrader View Post
what is a target anyway, @PandaWarrior? it's an arbitrary line you've chosen to draw in the sand; some assumption laden decision you made during the analysis period prior to executing the trade - essentially a prediction of where the market is going to be at some point in the future. sometimes the market reaches the chosen target, sometimes it doesn't, and sometimes it blows right through it. the market reaches your target, or it falls short and you get out, because your inherent risk-management instincts tells you to, not because of a strategic reason like changed fundamentals or expectation. the problem is that there are no logical underpinnings to the decision. its an emotional decision, that is fear based and shortsighted, if made during a period when the market is trending. if the market is in a range, it just may be the prudent choice, so an objective evaluation of the market should preclude any decision.

trading breaks down to the analysis stage i referred to above and the execution of the trade and its management. the first two parts are relatively devoid of stress. initially, your cool analytical side is control; it is a period of calm, quiet refection, that is summarily interrupted, once the trade is made and real money is on the line. they are 2 different modes as different as time and price, and can be viewed in much the same way:

analysis +, execution + = elation and self-satisfaction

analysis +, execution - = regret and sadness

analysis - , execution + = relief

analysis - , execution - = self-loathing and depression


obviously, the goal is to spend the majority of your time in the first quadrant. the way to meet the challenge is to treat the analysis side and the execution/management side of the equation in the same way.

Lol... @tigertrader, I knew you'd have something to say about targets.....and I was right...analysis + execution = elation and self satisfaction.....

In all seriousness though, you are correct, trend days, targets are unnecessary and counter productive. On range days, maybe you can use them constructively...or you can just close the position when you feel like price has reached the maximum favorable excursion it will be going for that trade.

My point was as I know you surmised, was that even using fear based arbitrary profit targets, had I just allowed those to be hit, even on trend days where I left lots of money on the table, I would be much further ahead than I am now......not using targets on trend days would be even better.....by how much I do not know but it would be substantial to be sure....

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  #2048 (permalink)
 sixtyseven 
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tigertrader View Post
if made during a period when the market is trending. if the market is in a range, it just may be the prudent choice, but an objective evaluation of the market should preclude any decision.

Would you mind going into detail on your personal method for objectively evaluating whether the market is trending or ranging. And how would you recognise during the trade that it's finally time to change that evaluation.

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 tigertrader 
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Would you mind going into detail on your personal method for objectively evaluating whether the market is trending or ranging. And how would you recognise during the trade that it's finally time to change that evaluation.

its a topic thats been covered many times on this forum, but briefly speaking....

what we are looking for are departures in value that offer persistence while moving between two points, which is not as easy as it once was. so methods need to consider the constantly changing nature of a market's path dependency in terms of variability, duration and signal. a greatly reduced holding period and strategies that take account of variable future paths are now the rule rather than the exception.keep in mind that traders operate at different time-frames, markets are inter-connected, and themes abound, and that is the probabilities and departures from value that govern trading opportunities.

using es as proxy for the market


pre-trade analysis

current trend of market- is the nascent trend consistent with the cyclical or secular trend
large contraction in range, especially a NR7- trend days are usually preceded by range contraction days
price action during previous eth/ european price action
news- is there news that hasn’t already been priced into the market
technical context / support and resistance- could the market be breaking out
inter-market price action- are there + correlated markets that are trending
seasonality- is it consistent with a possible trend move
price drivers/themes- convergent or divergent to price action


post execution


price action
internals/ $ tick, i.e., opens positive or negative and stays that way
vwap - consistent slope in the direction of the trend, expanding value area, price remains below/above the vwap
location/size of opening - relative to pivot benchmarks, i.e. market opens above/below pivot and never trades below/above and the relative size of the opg.
relative volume and volatility- the greater the volume and volatility the greater the chance for a trend day

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  #2050 (permalink)
 wldman 
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tigertrader View Post
what is a target anyway, @PandaWarrior? it's an arbitrary line you've chosen to draw in the sand; some assumption laden decision you made during the analysis period prior to executing the trade - essentially a prediction of where the market is going to be at some point in the future. sometimes the market reaches the chosen target, sometimes it doesn't, and sometimes it blows right through it. now the market reaches your target, or it falls short and you get out, because your inherent risk-management instincts tells you to, not because of a strategic reason like changed fundamentals or expectation. the problem is that there are no logical underpinnings to the decision. its an emotional decision, that is fear based and shortsighted, especially if made during a period when the market is trending. if the market is in a range, it just may be the prudent choice, but an objective evaluation of the market should preclude any decision.

trading breaks down to the analysis stage i referred to above and the execution of the trade and its management. the first two parts are relatively devoid of stress. initially, your cool analytical side is control; it is a period of calm, quiet refection, that is summarily interrupted, once the trade is made and real money is on the line. they are 2 different modes as different as time and price, and can be viewed in much the same way:

analysis +, execution + = elation and self-satisfaction

analysis +, execution - = regret and sadness

analysis - , execution + = relief

analysis - , execution - = self-loathing and depression


obviously, the goal is to spend the majority of your time in the first quadrant. the way to meet the challenge is to treat the analysis side and the execution/management side of the equation in the same way.

@tigertrader the four quadrant metric stated here is brilliantly stated. Something I've always been aware of but without this specific and accurate metric upon which to build the critical or emotional response needed to move to and stay in the +,+ quadrant.

Someone will ask if there is programming help for an indicator that measures this and then what are the settings...lol.

Gary, is this part of your own cognition based on your experience. The idea incidentally, could be the topic for the next guru trading book...worth a chapter or two at least. I try very hard to make my cognitive process a response to what is empirically available from the market, rather than hope the market conforms to my method indication or view. The fluidity, or better the viscosity of that process is something I still get hung up on. For me anyway discretion of the precise and skilled guy will always beat "system". The current governing weakness is fear. I'm not consistently trading with authority and conviction. I sometimes take little winners and get happy, that will not provide over time. I almost always cut winners too soon as well and that good analysis, poor execution quadrant has become a familiar place.

Today for example, missed both nice moves in 6E because I recognized but I did not believe, then I thought it too late. I managed to be on the indicated but mediocre trades and even pressed the size at the right time. So 6/6 with one scratchish trade makes me almost 150 ticks gross and on review I regret the missed trades and I'm sad that I left so much on the table. Did not trade the long entry at 7:30 because of the numba...did not have the best entry short just after 9 am cause shit the response to the numba.

Does that make me a scalper...looking for 20-40 ticks followed up with just a one lot runner? I mean most guys, I believe, in the forum would say that 150 ticks should not make a guy regretful and sad, but I'm missing in similar ways every day and it is really pissing me off.

Should I consider a grey box type of program where I get prompted that a trade is indicated? Would that reminder be enough to trade what I see not what I think...or in my case trade not avoid due to fear? Feeling like an idiot at times.

So who has real experience with that type of thing and how do you best treat tiny ball syndrome. My wife says I need to go on vacation, but all I will do is check quotes and listen to financial news.

Dan

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  #2051 (permalink)
 wldman 
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@PandaWarrior

I am sorry if I'm jacking with your journal thread. I lost track of where this conversation is happening so of course I defer to you. When someone posts valuable shit that hits right in the face I get after it as to not lose track and miss the value points.

Dan

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 PandaWarrior 
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wldman View Post
@PandaWarrior

I am sorry if I'm jacking with your journal thread. I lost track of where this conversation is happening so of course I defer to you. When someone posts valuable shit that hits right in the face I get after it as to not lose track and miss the value points.

Dan

Hi Dan,

No worries, I am drawing value from the conversation as well. In fact I encourage this kind of dialogue. Feel free to hijack like this more often.

Brian

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 PandaWarrior 
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I think @tigertraders short hand of +\+, +\-, -\+, -\- is a good wy to represent future performance without all the attending wordiness.

So I'll use this short hand from now on.

Today was +\-

Analysis was good, entry was good, projected profit zone was good, profit exit poorly executed.

Sadness.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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 tigertrader 
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PandaWarrior View Post
I think @tigertraders short hand of +\+, +\-, -\+, -\- is a good wy to represent future performance without all the attending wordiness.

So I'll use this short hand from now on.

Today was +\-

Analysis was good, entry was good, projected profit zone was good, profit exit poorly executed.

Sadness.

the hat trick...

+, +, + positive analysis, positive execution, positive wife = positive life

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 Anagami 
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tigertrader View Post
the hat trick...

+, +, + positive analysis, positive execution, positive wife = positive life

I sometimes wonder if positive wife is the toughest part of that equation.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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 Big Mike 
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Anagami View Post
I sometimes wonder if positive wife is the toughest part of that equation.

There should be no doubt.



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  #2057 (permalink)
 tderrick 
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tigertrader View Post
the hat trick...

+, +, + positive analysis, positive execution, positive wife = positive life


One cannot undervalue the importance of your spouse being on board with an occupation
such as trading. I am quite blessed in this circumstance and thank the stars often.

A wife giving you grief all the time would make it unbearable. One or the other would have to
go .


AJ
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 Anagami 
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tderrick View Post
One cannot undervalue the importance of your spouse being on board with an occupation
such as trading. I am quite blessed in this circumstance and thank the stars often.

A wife giving you grief all the time would make it unbearable. One or the other would have to
go .

Yes, and I think I made the right choice.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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 Adamus 
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tderrick View Post
One cannot undervalue the importance of your spouse being on board with an occupation
such as trading. I am quite blessed in this circumstance and thank the stars often.

A wife giving you grief all the time would make it unbearable. One or the other would have to
go .

I consider this another challenge. Of course it's always a downer when someone really close to me says or does something displaying a complete lack of faith in what I'm doing. But the theory is to stay calm and not lose the plot, ever - but as Einstein said, in theory, theory and practice are the same - in practice, well

You could view it like trading. A win is when you manage to make a point that is accepted, a loss is where you lose your temper or your point is rejected. So account equity = significant other's belief and faith in my trading.

Of course you can argue that an aspiring trader should unload as much excess baggage as possible, but sometimes that's not an option. Sorry for dragging the thread more OT, Panda.

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WillSmithRules
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tderrick View Post
One cannot undervalue the importance of your spouse being on board with an occupation
such as trading. I am quite blessed in this circumstance and thank the stars often.

A wife giving you grief all the time would make it unbearable. One or the other would have to
go .

right on!

 
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 PandaWarrior 
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Thursday and Friday were both loser days for my NQ ideas....Today it was back to winning.....

One trade at confirmed breakout bar, add on at +10 move stop to just above the doji bar and hold on....

+40, +30...gross +35 on blended entry....


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 tigertrader 
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PandaWarrior View Post
Thursday and Friday were both loser days for my NQ ideas....Today it was back to winning.....

One trade at confirmed breakout bar, add on at +10 move stop to just above the doji bar and hold on....

+40, +30...gross +35 on blended entry....


@PandaWarrior

just something to consider...

nq is showing relative strength to es

so why short the stronger of the 2 instruments ?

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 trendisyourfriend 
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tigertrader View Post
@PandaWarrior

just something to consider...

nq is showing relative strength to es

so why short the stronger of the 2 instruments ?

What difference does it make when both showed an opportunity with clear risk/reward and beside the NQ is what PandaWarrior trades?


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 tigertrader 
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What difference does it make when both showed an opportunity with clear risk/reward and beside the NQ is what you trade?

in your rush to cynicism, why don't you stop and take a moment to think and reason?

the question is, which one showed the BEST opportunity?

if you have the choice of whether to sell the weaker or the stronger of two like instruments, what does logic dictate?

if you have the choice of whether to buy the stronger or the weaker of two like instruments, what does logic dictate?

what offers you the best chance of making money?


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 tflanner 
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during earnings season it seems that each separate index is in their own world. it was a trend day down in the YM early on....while nq and tf had a very delayed reaction.

with exception of this past Friday it seems like you been getting paid much quicker on YM shorts of late....

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 PandaWarrior 
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@PandaWarrior

just something to consider...

nq is showing relative strength to es

so why short the stronger of the 2 instruments ?

$5.00 vs $12.50

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 tigertrader 
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tflanner View Post
during earnings season it seems that each separate index is in their own world. it was a trend day down in the YM early on....while nq and tf had a very delayed reaction.

with exception of this past Friday it seems like you been getting paid much quicker on YM shorts of late....

to say they're in a world of their own, might be going a little too far

it's still about flows and they're still arbed against each other

and whether its a flow oriented phenomena or value oriented one

it still boils down to relative strength

which means you buy strength and sell weakness

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 tflanner 
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today:

YM: -.47%
NQ: +.66%
ES: +.18%
TF: +.46%

over a 100 bp difference between nq and ym today

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 Anagami 
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When considering the BEST opportunity, I feel there is another issue when comparing them (ES vs. NQ vs. YM), and that is the clarity of signals (it's not just about strength, tigertrader). When you look at your setup(s) and compare across instruments, which instrument gives the most reliable signals? Which one the least? False triggers? Clarity? Traps? How do your exits work with each of these?

I studied all three carefully over the years with respect to my setups. BY FAR, the least trappy was ES and the worst one was YM. That finding shocked me... we are told ES is poor for day trading... NQ and YM are supposed to offer better opportunities...etc. Not the case.

ES 'protects' the price levels better (not as frayed)... and makes more sense as an instrument, at least for me.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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  #2070 (permalink)
Sayounara
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tigertrader View Post
to say they're in a world of their own, might be going a little too far

it's still about flows and they're still arbed against each other

and whether its a flow oriented phenomena or value oriented one

it still boils down to relative strength

which means you buy strength and sell weakness

hello tigertrader, I think your words make a lot of sense. your +/- categorisation is currently on my wall right above my trading computer. I'm curious to know how do you compare the strength of 2 similar instruments. by the look of the 2 charts posted by "trendisyourfriend", I would have determined that ES was the stronger one instead, since its uptrend leading to the crash was relatively more orderly and had a better angle.

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  #2071 (permalink)
 tigertrader 
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Sayounara View Post
hello tigertrader, I think your words make a lot of sense. your +/- categorisation is currently on my wall right above my trading computer. I'm curious to know how do you compare the strength of 2 similar instruments. by the look of the 2 charts posted by "trendisyourfriend", I would have determined that ES was the stronger one instead, since its uptrend leading to the crash was relatively more orderly and had a better angle.

look at the sub-chart which is nq/es



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  #2072 (permalink)
 tigertrader 
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Anagami View Post
When considering the BEST opportunity, I feel there is another issue when comparing them (ES vs. NQ vs. YM), and that is the clarity of signals (it's not just about strength, tigertrader). When you look at your setup(s) and compare across instruments, which instrument gives the most reliable signals? Which one the least? False triggers? Clarity? Traps? How do your exits work with each of these?

I studied all three carefully over the years with respect to my setups. BY FAR, the least trappy was ES and the worst one was YM. That finding shocked me... we are told ES is poor for day trading... NQ and YM are supposed to offer better opportunities...etc. Not the case.

ES 'protects' the price levels better (not as frayed)... and makes more sense as an instrument, at least for me.

for me its more a question of liquidity risk, than what you mention above-

in any event,

it all boils down to what affords me the best chance to make the most money, whether it is the strategy i employ or the instruments i trade

and that is contingent upon my interpretation of market structure, the current theme, news, & price drivers and how inter-market relationships are affected

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  #2073 (permalink)
 tturner86 
Portland, Oregon
 
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PandaWarrior View Post
Thursday and Friday were both loser days for my NQ ideas....Today it was back to winning.....

One trade at confirmed breakout bar, add on at +10 move stop to just above the doji bar and hold on....

+40, +30...gross +35 on blended entry....


I thought about you today with the first big bear breakout. Once I placed my trade I asked myself, 'I wonder if Panda is in at the moment!'. Nice to see you were successful today! If I can keep my same pace I will go live on M6E in Feb.

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  #2074 (permalink)
 PandaWarrior 
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NQ failed again....no worries.....it's just a test.

CL.....+/+ today. Had to leave or it would have been +++++++++!

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #2075 (permalink)
 PandaWarrior 
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I continue to be surprised by how often I get it right in terms of the intraday analysis and get it completely wrong on time frames higher than an hour.

Today I reduced my trigger chart and added two higher time frames for decision making. All I'm interested in is finding the level and then finding a low risk entry point.

I added to my CL trade today. I ended up having to close early but the add was perfect and I was able to hold it for a bit....interestingly enough, I was able to have a blended risk on two lots less than I took on the first lot. It worked brilliantly. I'll be doing it a lot more.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #2076 (permalink)
 sixtyseven 
Golden Bay, New Zealand
 
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Anagami View Post
When considering the BEST opportunity, I feel there is another issue when comparing them (ES vs. NQ vs. YM), and that is the clarity of signals (it's not just about strength, tigertrader). When you look at your setup(s) and compare across instruments, which instrument gives the most reliable signals? Which one the least? False triggers? Clarity? Traps? How do your exits work with each of these?


tigertrader View Post
for me its more a question of liquidity risk, than what you mention above-

in any event,

it all boils down to what affords me the best chance to make the most money, whether it is the strategy i employ or the instruments i trade

and that is contingent upon my interpretation of market structure, the current theme, news, & price drivers and how inter-market relationships are affected

@tigertrader, do you backtest the same strategy on different instruments? If so, would you only trade that strategy if it produced a tradeable edge across all instruments? Say it shows a good edge in one, but only a slight edge in others - would you discount that strategy entirely, trade only the one where you had the probabilities on your side, or occasionally trade the so-so instrument if the relative strength, market themes, market structure and news seemed to line up?

How do you implement liquidity risk in your decision making? Do you backtest it as part of strategy development so you know that poor liquidity lowers expectancy for that particular strategy, or is it a general/global rule - i.e liquidity is no good here so I'll take no trades until it improves?

As I understand your last sentence, you use these as global filters - i.e - these elements look good, so I'll trade one of my strategies in this instrument if an opportunity arises, or, they look bad, so I won't consider an opportunity even if it arises. So when you deploy a new strategy for the first time there are no final hard probabilities, but rather an assumption that if the elements look bad it will adversely affect the trade. You can of course compare the hard back tested results against the actual trades over time to give you the confidence that you are doing the right thing - and this then gives you the adjusted probabilities to rely on.

I'm so caught up in mechanical hard probabilities that I'm having a hard time freeing up my mind to comprehend how other elements fit into the picture. I appreciate and want to thank you for your posts and the thoughts they have generated.

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  #2077 (permalink)
 PandaWarrior 
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NQ won by 1 tick....the Globex was pretty robust and there were a couple of trades I was quite clearly pre market but I was busy getting ready to leave the house for a parent teacher conference and so had limited time early on.

The BO trade worked by one tick. Had I gotten filled one tick worse, it would have been a loser.....but thats the way the ball bounces sometimes....exactly 40 ticks from my entry price....


On CL, +/+ today....I had a couple of small losers early trying to get in long...even though I was once again short biased as the daily looks poised for a pull back of sorts....proving once again I often get the daily wrong but the intra day right...go figure....Anyway, finished with 35 ticks....

I took a couple of deep pull back trades today as well....not used to this so closed them early...shame, those were pretty big winners......not counting those in the total......

some different looking trades on here for me.....I am experimenting with these kinds of trades...they are pull backs on a higher time frame chart.....so pretty nerve wracking for me at this point but getting less nervous about them already.


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  #2078 (permalink)
 PandaWarrior 
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Today: -/-

This week +/+


Short bias all week yet traded long....


Short bias today, traded long....

NQ paid 40 ticks on the first bar after entry. it pulled back to the entry and is still running. The BO trade worked perfectly today though....

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #2079 (permalink)
 tturner86 
Portland, Oregon
 
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PandaWarrior View Post
Today: -/-

This week +/+


Short bias all week yet traded long....


Short bias today, traded long....

NQ paid 40 ticks on the first bar after entry. it pulled back to the entry and is still running. The BO trade worked perfectly today though....

Thank you for pointing out the post yesterday. I took your NQ BO this morning, just grabbed 25 ticks. I should have let it ride. But it was a good show today!

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  #2080 (permalink)
 PandaWarrior 
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Thank you for pointing out the post yesterday. I took your NQ BO this morning, just grabbed 25 ticks. I should have let it ride. But it was a good show today!

The risk was 40 ticks.....taking less bordered on foolish.

Were I to quantify the edge, it was on risking the opening range for 40 ticks.....nothing less or more....essentially it either won or lost....and leaving it open until either one or the other was obtained....without regard to the actual risk involved.

Some days ended without 40 ticks but greater than zero. Other days ended without a stop out but a loss none the same.

Most days ended with a profit and not moving the stop at all was part of that test.

Unless you are prepared to trade it under these circumstances, don't bother. Find another edge. One that suits your risk more appropriately. I don't mean to be harsh but these are the conditions I've been working with.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #2081 (permalink)
 tturner86 
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PandaWarrior View Post
The risk was 40 ticks.....taking less bordered on foolish.

Were I to quantify the edge, it was on risking the opening range for 40 ticks.....nothing less or more....essentially it either won or lost....and leaving it open until either one or the other was obtained....without regard to the actual risk involved.

Some days ended without 40 ticks but greater than zero. Other days ended without a stop out but a loss none the same.

Most days ended with a profit and not moving the stop at all was part of that test.

Unless you are prepared to trade it under these circumstances, don't bother. Find another edge. One that suits your risk more appropriately. I don't mean to be harsh but these are the conditions I've been working with.

40 ticks was may initial risk, but I had no actual risk. Once I was filled price never went against me. I took this trade in mind of your NQ BO technique, but I also took the trade because it was near the PLOD and I believed if it broke that level it would want to pop. When the 4th bar pulled back I took my profit, and then looked to enter later. Which I did once price started to break the low of the day at that time.

3 Trades total in the NQ, if I would have been more patient I could have held my initial entry all day.

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  #2082 (permalink)
 Silver Dragon 
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@PandaWarrior

Brian,

Saw a post where you started entering a position where your stops would normally be. To that end; would it not make sense to add to a position where your trailing stop would be?

BTW-I caught up on your journal this weekend. The past couple of months worth of posts by everyone has been outstanding! You could not buy nor put a price on the information / knowledge / wisdom that has been posted.

Robert

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  #2083 (permalink)
 PandaWarrior 
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Silver Dragon View Post
@PandaWarrior

Brian,

Saw a post where you started entering a position where your stops would normally be. To that end; would it not make sense to add to a position where your trailing stop would be?

BTW-I caught up on your journal this weekend. The past couple of months worth of posts by everyone has been outstanding! You could not buy nor put a price on the information / knowledge / wisdom that has been posted.

Robert


Indeed it would. I've been adding in places where my combined risk is the same or less than the original stop value.

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  #2084 (permalink)
 PandaWarrior 
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+/-

Been looking at a 30M chart for a few days.....its interesting to say the least....I've always looked at it from a Breakout standpoint....and while it works, the risk is huge....however on a support/resistance standpoint, it looks better....then using projections of risk to find potential targets means reward is in the 2-3 times risk area...very nice....anyway, I had the mark up on the 30M chart done last night, I knew where the level was to short today.....but didn't have the balls to take it..Risk was 34 ticks...within reason but outside my comfort zone for the moment....

Turns out I should have taken that risk....66 ticks of reward to first target.....oh well....

I finally got short much later....after going down to a smaller time frame and getting long twice....the short made up for the two losers and thats about it. A scratch day when it could have a really nice one trade day.

NQ paid on one trade again. Today I got 80 ticks....and left a little on the table. EDIT: Ok make that a lot of money on the table!




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  #2085 (permalink)
 Zondor 
Portland Oregon, United States
 
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Funny you should mention that now, I have a 30M chart open of YM and it's been showing steadily increasing average trade size over the last couple of hours as the down side has accelerated. Are we headed for a runaway down day today? The stabilizers don't seem to be working the way they are supposed to, need more POMO!


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  #2086 (permalink)
 Superdoug3 
Vernon, BC, Canada
 
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does this trader look familiar

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  #2087 (permalink)
 PandaWarrior 
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-/+....lucky today. Sometimes its better to be lucky than good.


I believe that trading should be simple (not to be confused with easy) and over the last few weeks I've gradually introduced new and more complicated analysis and charts into my thinking and set up, all without realizing I was doing it. While all of these new things have value, its the context thats important and even more important is HOW I perceive the new variables.

Today I was fixated on the 30M chart to the detriment of watching what was going on in the lower time frames. I quickly realized I was wrong and flipped my position which allowed me to cover my losses from the 30M chart....but still, the complexities I have introduced over the previous few weeks has corresponded with a period of BE trading. Time to return to the simplicity which got me profitable in the first place.

Further I realized today that I might be posting charts for the purposes of either validation or simply to maintain a conversation here. The public journaling process no longer seems to be as beneficial to me as it once was. Especially since I also maintain a private paper based journal. Therefore it must be for validation or something else. I also realized the need for validation is harmful to my trading. Therefore I am going to stop posting charts for a couple of weeks and see how my mental game changes. I intend to simply post @tigertrader's short hand for the day.

Interesting point on NQ today. I set the profit target at 80 ticks, it went exactly 40 ticks from my entry and reversed all the way to the stop. It took the stop out by one tick and now as I write this, the price is back to the entry price I took at 7:40AM. Thankfully this is a sim trade still, no chance I would have taken the full stop with live money...when price failed to break through the 40 tick level, I would have trailed out at some point or perhaps gotten a BE on the trade. This would have been a case of allowing a nice winner to become a loser and with real money, I'd never do that. But for the purposes of creating a track record of straight wins vs losers, I let it play out. BE's really do nothing to validate an idea unless they are purely rule driven and even then its completely arbitrary.




This image prompted the thinking about my own need for validation:


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  #2088 (permalink)
 pbts 
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Hey @PandaWarrior, I for one find a lot of value in seeing your charts so I will be sad to see them go. In regards to the action (in NQ) today, if you watched the first 15 minutes of price action you would have noticed very obvious ranging activity. I have found that this type of behavior seems to lead to very low volatility / range bound behavior. This kind of day is actually quite rare, rarer than trend days (from what I have seen that is), I think the last time it happened was back in Dec... just a thought.

If you see this happening, you would typically look for entry / exit ranges at about the third lower high push up (2nd shoulder of head and shoulder) and support / double bottom below VWAP. I actually did anticipate this price structure but I did not trade it like that. Instead I held and hit BE but was able to enter in long from support later on.

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  #2089 (permalink)
 PandaWarrior 
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pbts View Post
Hey @PandaWarrior, I for one find a lot of value in seeing your charts so I will be sad to see them go. In regards to the action (in NQ) today, if you watched the first 15 minutes of price action you would have noticed very obvious ranging activity. I have found that this type of behavior seems to lead to very low volatility / range bound behavior. This kind of day is actually quite rare, rarer than trend days (from what I have seen that is), I think the last time it happened was back in Dec... just a thought.

If you see this happening, you would typically look for entry / exit ranges at about the third lower high push up (2nd shoulder of head and shoulder) and support / double bottom below VWAP. I actually did anticipate this price structure but I did not trade it like that. Instead I held and hit BE but was able to enter in long from support later on.

Hi @pbts,

I'm glad you enjoy the charts, however the purpose of a journal is to benefit oneself....and I find that I am benefitting less and less...and the reasons I continue to post becoming less and less clear....to the point where I questioned my motivation....the. I saw the pic In my last post and the motivation of continued outside validation became apparent.

So I'll still post but without charts and analysis and less frequently.

Thanks for reading...

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #2090 (permalink)
 tturner86 
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PandaWarrior View Post
Hi @pbts,

I'm glad you enjoy the charts, however the purpose of a journal is to benefit oneself....and I find that I am benefitting less and less...and the reasons I continue to post becoming less and less clear....to the point where I questioned my motivation....the. I saw the pic In my last post and the motivation of continued outside validation became apparent.

So I'll still post but without charts and analysis and less frequently.

Thanks for reading...

You are the one pushing the button, do what you need to trade correctly for yourself.

I have found the posting to be beneficial for me, it requires me to review and write down what I did and why. This was a missing piece from my first trading attempt. And since I am posting it, I feel like I need to be as honest as possible, I can't lie to myself. Which I might do if it was private.

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  #2091 (permalink)
 Adamus 
London, UK
 
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Hi Brian,
I don't mean to pry, but it piques my curiosity whenever you mention your private journal. Just curious to know if you maintain your paper-based journal because it's easier to write stuff by hand, or do you think it's not structured / complete enough to post here, or does it contain details of your edge you prefer to keep under wraps?

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #2092 (permalink)
 PandaWarrior 
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Adamus View Post
Hi Brian,
I don't mean to pry, but it piques my curiosity whenever you mention your private journal. Just curious to know if you maintain your paper-based journal because it's easier to write stuff by hand, or do you think it's not structured / complete enough to post here, or does it contain details of your edge you prefer to keep under wraps?

I have elements of my daily routine I'd rather not make public, I make notes while in a trade, its is very structured with checklists, etc.....I draw things in there I could never duplicate online....

But its less about that than about my motivation to keep a public journal....and that has shifted over time to the point where I question its value. My private journal suffices for what I need a journal for.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #2093 (permalink)
 tigertrader 
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a seemingly marginal trade, turned out to be extremely profitable, and a trade that appeared to have a high probability for success disappointed. there is always going to be uncertainty before a trade; which may not or may not be readily abated, upon initiation of the trade. but, you really don’t know until you’re in the market.

not so surprisingly, there are a lot of contradictions in trading. you have to be vigilant and patient, but on the other hand, you have to be creative and aggressive. you must synthesize these seemingly contradictory disciplines in the proper ratios and contexts, so that you can create upside optionality. keeping this in mind, we neither act on every signal, nor do we always wait for the perfect setup. in the case of over-trading, the implications are obvious. but when it comes to under-trading, the negative implications might not be so recognizable, although they can be equally responsible for under-performance or even ruin.

once again, i must reiterate, that it is imperative to have a logical understanding of positive expectation on a total outcome basis. and once again, i must reiterate, that risk in an inherent component, if not a prerequisite, of profit. failure to come to grip with either of these facts will inevitably inhibit your profitability as a trader. the obsessive hunt for “low risk” entry points, tight stop placement, trailing stops, hackneyed technique, and a myopic perspective, all contribute to the stultification of a trader's growth. one needs to operate from a perspective that allows one to avoid flawed assumptions and overly simplistic comparisons.

a trader does not have the responsibility to find the perfect spot to enter the market. the sooner he absolves himself from this guilt or fear, the better he will be for it. there is no perfect spot; and one's perception of a spot being better or worse, and even the perception of risk itself, is entirely assumption laden. perfect entry, being defined as an entry point where the market doesn’t have to move very far before you know you are wrong, is like trying to find the battery compartment lid of your remote control - an exercise in futility. so once again, i must reiterate, that trade initiation should be relegated to a tertiary role and sizing and management must become the primary focus.

the problem with being a breakout trader is you consider only two pieces of structural information, the high and low of a given time period, and ignore all the structure in between, and all the feedback from related markets. summary data does not present a complete picture of the market. the days of trading any instrument in a vacuum are gone; the markets are inextricably interconnected by theme and by arbitrage. there can be no alignment between concept, price action,and execution, if related markets are not scrutinized. understanding the context of the market leads to the ability to make fluid situational assessments and opportunity of position. a trader’s opportunity set will grow proportionally, as his “signal flow” grows, which will lead to vetted opportunities and high probability set-ups.

once a trade is initiated, subsequent trade management decisions should not be predicated on what the entry price was - the entry price (and your p&l) cease to have relevance, and has nothing to do with the validation of the trade. if your appraisal of the situational context of the market is accurate, and signals remain consistent with your expectation of the trade, you stay in the trade and add if you are given the opportunity. you exit when the trade is no longer good.

@PandaTrader once asked me what i meant by a trader’s attitude. and, as i contemplate past and present traders, there are a few traits that come to mind. a willingness to accept risk, the ability to estimate that risk based on the information available, the ability to recognize opportunity in a situational context, an understanding that expectation is different than distribution, and that p&l should be viewed over an extended period of time, and what i believe is #1 - the desire to do whatever is necessary to make money, even if it goes against your personal grain.

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  #2094 (permalink)
 tderrick 
Nashville, Tennessee
 
Experience: Intermediate
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tigertrader View Post
a seemingly marginal trade, turned out to be extremely profitable, and a trade that appeared to have a high probability for success disappointed. there is always going to be uncertainty before a trade; which may not or may not be readily abated, upon initiation of the trade. but, you really don’t know until you’re in the market.

not so surprisingly, there are a lot of contradictions in trading. you have to be vigilant and patient, but on the other hand, you have to be creative and aggressive. you must synthesize these seemingly contradictory disciplines in the proper ratios and contexts, so that you can create upside optionality. keeping this in mind, we neither act on every signal, nor do we always wait for the perfect setup. in the case of over-trading, the implications are obvious. but when it comes to under-trading, the negative implications might not be so recognizable, although they can be equally responsible for under-performance or even ruin.

once again, i must reiterate, that it is imperative to have a logical understanding of positive expectation on a total outcome basis. and once again, i must reiterate, that risk in an inherent component, if not a prerequisite, of profit. failure to come to grip with either of these facts will inevitably inhibit your profitability as a trader. the obsessive hunt for “low risk” entry points, tight stop placement, trailing stops, hackneyed technique, and a myopic perspective, all contribute to the stultification of a trader's growth. one needs to operate from a perspective that allows one to avoid flawed assumptions and overly simplistic comparisons.

a trader does not have the responsibility to find the perfect spot to enter the market. the sooner he absolves himself from this guilt or fear, the better he will be for it. there is no perfect spot; and one's perception of a spot being better or worse, and even the perception of risk itself, is entirely assumption laden. perfect entry, being defined as an entry point where the market doesn’t have to move very far before you know you are wrong, is like trying to find the battery compartment lid of your remote control - an exercise in futility. so once again, i must reiterate, that trade initiation should be relegated to a tertiary role and sizing and management must become the primary focus.

the problem with being a breakout trader is you consider only two pieces of structural information, the high and low of a given time period, and ignore all the structure in between, and all the feedback from related markets. summary data does not present a complete picture of the market. the days of trading any instrument in a vacuum are gone; the markets are inextricably interconnected by theme and by arbitrage. there can be no alignment between concept, price action,and execution, if related markets are not scrutinized. understanding the context of the market leads to the ability to make fluid situational assessments and opportunity of position. a trader’s opportunity set will grow proportionally, as his “signal flow” grows, which will lead to vetted opportunities and high probability set-ups.

once a trade is initiated, subsequent trade management decisions should not be predicated on what the entry price was - the entry price (and your p&l) cease to have relevance, and has nothing to do with the validation of the trade. if your appraisal of the situational context of the market is accurate, and signals remain consistent with your expectation of the trade, you stay in the trade and add if you are given the opportunity. you exit when the trade is no longer good.

@PandaTrader once asked me what i meant by a trader’s attitude. and, as i contemplate past and present traders, there are a few traits that come to mind. a willingness to accept risk, the ability to estimate that risk based on the information available, the ability to recognize opportunity in a situational context, an understanding that expectation is different than distribution, and that p&l should be viewed over an extended period of time, and what i believe is #1 - the desire to do whatever is necessary to make money, even if it goes against your personal grain.

Brother, TT

If you have never contemplated composing a book on trading, you must do so immediately. Your insight on
all facets is startling.


grazie, for all you do


AJ
Nashville, Tennessee


"Life On The Edge of SR"
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  #2095 (permalink)
 alejo 
madrid spain
 
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tderrick View Post
Brother, TT

If you have never contemplated composing a book on trading, you must do so immediately. Your insight on
all facets is startling.


grazie, for all you do

really, @tigertrader has gave me some key push with his lessons, thank you

alejo

La lucha es de igual a igual contra uno mismo
The fight is fair against oneself
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  #2096 (permalink)
 Anagami 
Market Wizard
Cancun, Mexico
 
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While reading @tigertrader 's excellent recent post, it occurred to me that a great exercise (for new AND not so new traders) might be making a random entry on your favorite instrument (ON DEMO) and then focusing on managing the trade (i.e. minimizing losses, maximizing wins).

This exercise may force one to deal with the market contextuality you speak of, instead of obsessing over 'setups' or 'perfect entries'. I would further surmise that the best traders would be profitable with a random entry, as their edge lies in position management and sizing... but that's just my intuition.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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  #2097 (permalink)
 Silver Dragon 
Legendary Data Wizard!!!
Cincinnati Ohio
 
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Real life example outside of trading of finding an edge and hammering it home.

Robert


Quoting 
A talented “Jeopardy!” contestant has found a new strategy for winning the game, but his unique playing style has die-hard fans of the quiz show up in arms.

Arthur Chu is a three-time "Jeopardy!" champ who has won the competition using game theory. Instead of going for the easy questions first, he plays by jumping around the board in search of the coveted Daily Doubles. He also works to keep points away from his opponents.

“I don’t think I’m particularly smart,” Chu told The New York Post. “It was all about looking for the right strategy for studying and the right strategy for playing the game and drilling myself on it until it became second nature.”

But Twitter users have been quick to complain about Chu's strategies.

"Arthur Chu needs to stop. He's ruining Jeopardy," one fan wrote.

Another added, “Who is this dude that ruins the organization of the #Jeopardy board by hunting down the Daily Doubles? You give me a headache.”

But that kind of criticism doesn't bother Chu. He told The Post he plans to keep playing his version of the game, even if it angers some audience members.

“All of the things I’m doing are very obvious, logical ways to maximize your chances of winning that are well within the rules,” he said. “It’s hard for me to take seriously the argument that I should give up that kind of money just for the sake of making the viewing audience feel comfortable."

And some "Jeopardy!" viewers are seem to agree with him. They're praising Chu for shaking up the normally predictable game.

"Are people really upset about this guy's strategy? I think it makes sense and I'm surprised he's the 1st one to do it," one user noted. Another wrote, "Arthur Chu has been killing it on Jeopardy. Making it so much better. #Chu."


nosce te ipsum

You make your own opportunities in life.