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Trading fast markets

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  #821 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
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bobwest View Post
Interesting concept, not to be managing the trade... sort of hard to understand or to do.

From a theoretical perspective, as well as a psychological one, it's not a bad idea. Theoretical: stay with a decision based on a previously-tested method until proven wrong; psychological: keep your hand off the mouse until there is a pre-set reason to make a change.

From a real-time trading point of view, it's pretty much a matter of self-control, and therefore tough.

I've been trying this the last couple of days, and it has at least made me calmer

Bob, I have seen way too much trades during my trading career, live or demo, that did go to the profit after I cut them short to save it from a loss. And even more losses I did not save with any proactive management.

So this new approach (it's an experiment) is to trade with reasonable target within a reach and reasonable stop, focus on sound entry in line with prevailing forces and then step down and let it do its magic.

Thus said, few filters need to be applied mostly in relation to market volatility and new money flow. Hence limits on end of session or new session and trade life time limits of some sort. But still I don't want to mess with price action. My focus is on a sound entry.

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  #822 (permalink)
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I have gone through a similar thought process, and certainly, I have had the experience of "managing" a trade, when all I did was jump in and out and in again on a long move, when I could have made a lot more money by just staying with it.

And, of course, the experience of holding something too long, thinking that it would run when it didn't. So I am experimenting with ways to try to tell the difference....

One thing is to trade less; not to freak out when there is a pullback, not to jump so much. Well, we'll see. Good luck with your exploration. Nice to see the same issues being worked out from different perspectives.

Bob.

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  #823 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
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Posts: 1,517 since Feb 2013
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bobwest View Post
I have gone through a similar thought process, and certainly, I have had the experience of "managing" a trade, when all I did was jump in and out and in again on a long move, when I could have made a lot more money by just staying with it.

And, of course, the experience of holding something too long, thinking that it would run when it didn't. So I am experimenting with ways to try to tell the difference....

One thing is to trade less; not to freak out when there is a pullback, not to jump so much. Well, we'll see. Good luck with your exploration. Nice to see the same issues being worked out from different perspectives.

Bob.

I know it's been only two days trading with the new approach and it has been successful. However, I believe I can draw some important conclusions and add a twist to this approach for the next week:
1. I am a big proponent of not moving stop loss, more trade moved into profit, more breathing space it gained and more chances it will move more in this direction rather than reverse, no change here
2. I will add a second lot to position to work with two targets, first target will be from 1 to 2 R (i.e. 15 to 30 ticks) according to the market structure, obstacles, swing sizes, volatility; second target will be from 2 to 4 R (i.e. 30 to 60 ticks) also according to the market structure and assuming continuation of the move
3. I will not touch the trade until target 1 is hit,
4. I will look to manage target 2 if market is showing signs of weakness in chosen direction and is less likely to get to the target initially anticipated
5. I will close out my trade before the end of the current session or, or before the beginning of the pit session (if trading before RTH)

I will continue to use 15 ticks stop, I can see that for some entries I could have a smaller stop for momentum trades with smaller target and I anticipated using 8 tick stop and 15 tick target, but for the sake of experiment and data collection (MFE) I will stay with 15 ticks stop for both parts. Later, if my research will show I can reach 15-20 ticks with a smaller stop, I will apply required modifications.

I have had a conversation with Hoag yesterday. I will start my LTP ASAP, however I have requested to do so with Sierra Charts, and their rules stats I have to proceed with the platform I did Combine with, so it's pending approval.
In any case my plan is to start with gold using 5 lot position, and as I get close to or over the target profit to add crude trades. I need to trade all instruments I want to trade live and all have to have a positive average. But my primary focus is on gold.

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  #824 (permalink)
Pittsburgh, Pennsylvania
 
 
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xelaar View Post
BTW, I had a long long debate with @Max Keiser today on Twitter about BTC real value.

You said in that debate, that bitcoin's intrinsic value is the cost of electricity for mining. That doesn't count for the ability to quickly and cheaply transfer money to anywhere. but anyway, I read somewhere that all the computer power being used today for mining is using up electricity costing 11 million bucks. If true and 3600 coins are created a day, after a quick division we get that the cost of a newly mined coin is about 3K dollars....

So BTC being around 850$ is rather cheap...

Edit: That 11 million bucks per day seems very inflated, so I tried to recalculate. Back in April a Bloomberg article said that the electricity used for bitcoin creation is equivalent of 31K US households' usage. Well, I don't look it up but let's say $5 what the average US household's eletricity cost is, and the network is using more now, let's say equivalent 50K house holds, so the math goes like this:

50K x $5 / 3600 = ~70 bucks per coin

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  #825 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
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Trading: DAX, Gold, Euro
 
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The calculator I had used and podted a link to gave me cost of mining one coin currently as 9 bucks. The issue is you mine a blick of 25 coins together and it would take almost 2 years so you need to pull, usr powerful rig clusters etc but the rate is ridiculous by any means.

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  #826 (permalink)
Pittsburgh, Pennsylvania
 
 
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One guy on reddit said his 1st generation ASIC miner's energy consumption for 1 coin is $49. That is pretty damn high and since ASIC miners are rather new and actually energy efficient, that means that mining with GPU back a year ago was probably a losing business.

But anyhow, the point is, if you base intrinsic value on mining cost, it is actually rather high....I wouldn't think the real utility value of bitcoin is more than single digits....

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  #827 (permalink)
prague, czech republic
 
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Pedro40 View Post
One guy on reddit said his 1st generation ASIC miner's energy consumption for 1 coin is $49. That is pretty damn high and since ASIC miners are rather new and actually energy efficient, that means that mining with GPU back a year ago was probably a losing business.

But anyhow, the point is, if you base intrinsic value on mining cost, it is actually rather high....I wouldn't think the real utility value of bitcoin is more than single digits....

I year ago mining was much more efficient. In a year time it will be 60% less efficient, it's a diminishing return. I would place max 5% of my investment into btc long term but more into short term appreciation if I can buy on huge dip.

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  #828 (permalink)
prague, czech republic
 
Experience: Intermediate
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Trading: DAX, Gold, Euro
 
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These bitcoin lovers on twitter is a bunch of anarchist retards, mostly. And they have no clue what are talking about. All their talk is ideological propaganda, same as goverments use just with a different polarity. I am greatly disappointed.

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  #829 (permalink)
Pittsburgh, Pennsylvania
 
 
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xelaar View Post
if I can buy on huge dip.

This gives insurance for traders/owners. There are thousands like you with this sentiment and that gives a safety pillow and doesn't let the price fall too much. That is why it is bouncing like a very much alive cat...

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  #830 (permalink)
prague, czech republic
 
Experience: Intermediate
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Trading: DAX, Gold, Euro
 
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Pedro40 View Post
This gives insurance for traders/owners. There are thousands like you with this sentiment and that gives a safety pillow and doesn't let the price fall too much. That is why it is bouncing like a very much alive cat...

The thing is I don't care if I don't.

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