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sevensa

Market Wizard
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Posts posted by sevensa

  3. Posted

    Wiz you sound like a guy who actually took the time to put together a trading program before they started trading. That is how it is best done. But for most people sim trading and real life trading are not remotely the same. I deal with rookies every day and I can tell you after a point sim trading does not help them. You can play virual Tennis or you can get out there and hit a real ball. In tennis as in any real sport and trading requires 10,000 hours under pressure. Can you become a doctor playing or watching a video?

    I do not suggest losing large amounts of money to learn. A 500.00 dollar FX acount , trading .10 cents a pip will do just fine.

    I also suggest that if it takes you more than 2-4 weeks to trust your trading system, you may have the wrong one for you. If you can not explain your entry and exits to your 10 -12 year old child you have the wrong one.

    Last if a new trader does not have a good money management system in place no amount of sim trade will help you.

     

    Your anology is a bit off. Sim trading and real trading is not like playing virtual tennis and real tennis. This is like practising tennis with a training partner and playing competition. You are honing your skills and shots while practising and then applying it in match play.

     

    One of the big problems with beginning traders are that they don't stick with one thing long enough to see if this is viable, but continually adding/removing indicators. This is very possible and very likely that any profitable system can have two losing weeks in a row. If you only sim trade for two weeks during that time, you might abandon a good system.

     

    Also IMHO to say one should trade a micro fx account is probably far worse than sim trading. Different markets have different personalities and by trading one market and then switch over to another is most likely not going to work. To use your analogy if you want to play tennis, you should not start playing racquetball and then enter into a tennis competition.

     

    I won't be able to explain my entries and exits to a 10 - 12 year old, but they still work for me. How can you say then that I have a wrong system?

     

    I am wondering if you have any facts to back up all the statements you are making? I would be really interested in reading up more about them for background information.

  4. Posted

    Yeah, most shills are pretty pathetic, I agree. Shameful, truly shameful indeed, Fanus.

     

    You realize that your response makes no sense, right? I realize you are just here because this is the only place where you can even remotely attempt to pretend to actually be someone (even though you just embarrass yourself), but this wouldn't hurt your cause by taking a minute to think first before you post.

  5. Posted

    I work a lot w/ OEC and post the updates here. Most appreciate it but there's always someone that loves to give their opinion where it's not needed. Do you even trade at OEC?

     

    And I am not the same Chris Micciche @ OEC. You are more than welcome to contact OEC and confirm this for yourself. Their 800# is 800.920.5808. If you want names, PM me and I will tell you who you should ask for.

     

    It's kind of flattering just how much you and Tams stalk me around this site though. I'm not sure why you two seem to have this man crush on me, but you do. Maybe it's time to find something better to do with your time? ;)

     

    I wouldn't bother too much with him. This is just "forsearch" who was banned twice before and saw his chance to come back again with a new id when new management took over. He clearly has nothing better to do. Pretty sad really.

  6. Posted

    Good thing then that calling people psychological instable is not part of any of the below...

     

    Personally, I feel that the negative comments, name calling, condescension, and outright egomania are tasteless and poor form, and a definite indication of psychological instability.

  7. Posted

    Momentum is totally real but i just can't trade it...

    Its like jumping in with fools, knowing you are a fool to do so yourself..

    Just don't see how you get good position on the other fools..

    Seems to me to be an easier fade probability wise.

     

    Are you actually making money with all your theories? Are you trading at all? Just curious...

  8. Posted

    I've read advice that a trader should examine multiple time frames when evaluating an equity and when it is best to buy or sell it. However, there seems to be a difference with the information that any one indicator will give with different periods in a time frame. For example an indicator show different information in a time frame of 180 days with 4 hour candles verses a time frame of 6 months with 1 day candles. We know that there are 180 days in 6 months; so the time frame is essentially the same and 4 hours is essentially 1/2 of a trading day. Which is best to use?

     

    So my question is what is the best way to choose time frames and candle intervals to do swing trading?

     

    There is no best way. That is why trading is so hard. If there was a best way, everyone would be doing it. The only way to find what is working for you is to look at different charts and different intervals for many, many hours until you find something that you are comfortable with.

  9. Posted

    No, Svensa you are misleading the Newbies. Even if your are successful its not likely that others will be. In fact if you are a successful scalper then you should KNOW that they don't stand a chance. Lets be real, if Derek Jeter came up to you and said "I play baseball for the yankees let me show you what I do and you can do it to!". Do you really think you would play for the yankees?

     

    Very few people can trade successfully let alone scalp. That's just the way it is. Its like trying to become a pro athlete, it not something you just decide to do and can "learn" to do. You need to have the talent.

     

    With that said there are different types of trading some more difficult than others. The problem is that people say they want to "trade for a living" when they should be saying they want to be a successful (profitable) trader. The latter is more realistic although stll difficult.

     

     

    Johnny

     

    I don't see how this is misleading to say that if you have an edge that result in average profit that covers commissions and then some, that you do not have to be concerned about commissions and that you can make a decent living that way. Maybe you can explain if you average $12.5 a trade and pay $5 commissions to achieve that for an average profit of $7.5, how commissions will cause a trader to fail, even if trading 4 contracts, 5 times a day? I still stand that comissions is probably the last reason why a trader fail and the main reason is over leveraging and lack of a real edge.

     

    I also fail to see the relevance of your example and look to be a bit of a stretch. Why would your Derek Jeter example above only relate to scalping and commissions and not any kind of trading? I don't see how you draw the line from that to scalping, nor to your statement about commissions.

     

    I think this conversation has run its course since the topic has moved on from the original premise and apparently now is if one can learn to be a trader or not. An interesting topic indeed, but not one I am interested in debating.

  10. Posted

    Sevensa, commissions ARE important. In any business you have to manage your costs. If you tade for 2 points on the ES you are making $100 less $5 commissions for a net of $95. The Commission percentage is only 5%. In your example its 40%. That is why scalping for ticks is a losing proposition. Its like playing the slot machines - you can't win.

     

    You have to manage commissions, slippage and every other cost. Including the cost of losing trades. In your scenario you win every trade. 5 trades per day. You won them all! Are you really going to tell me your are right 100% of the time? If you traded for 1 ES tick and won 4 trades and lost 1 tick on one trade you would make $30 for the 4 winning contracts (12.5 * 4 - $20 commissions) and lose $17.50 on the one losing trade ($12.5 + $5 commission) so your net is $12.50. You went from a $37.50 profit to a $12.50 profit with only 1 loser and 4 winners per day.

     

    If you traded four contracts in a $10k account that 80% winners would net you $250 or 2.5% per month (20 trading days). And you need to be right 80% of the time to do it.

     

    If you hit 3 out of 5 you make $22.50 (12.5*3 - $15) and lose $35 (12.5*3 + 10) for a net loss of $12.50 per contract. If you trade 4 contracts in a 10k account you lose $50 per day or $1000 per month. (10% loss per month!)

     

    That is the math, we can use words to try and confuse but the numbers are what they are.

     

    As for your other question...

     

    I live off my investments. I have others besides trading.

     

    I said average profit per trade and never said you have to win them all. Average profit per trade of 1 tick means that sometimes you will win more and sometimes you will lose, but on average after 5 trades you would be 5 ticks ahead, minus commissions. I am surprised that you do not understand the concept of average profit per trade.

     

    In your "math", your average profit is less than 1 tick ((1 + 1 + 1 + 1 -1)/5 = 0.6). You are changing the math to try and prove your point. You don't need to be correct 80% of the time. You can easily be correct only 50% of the time and still net 1 tick average profit per trade.

     

    Scalping is not a losing proposition. Scalping is a losing proposition for you. There is a difference. Just because you cannot do something does not mean it cannot be done. You are not helping any newbies by not understanding core concepts and making generalizations based on your own inability to trade a certain way.

  11. Posted

    Svensa, in your example the trader makes $250 and pays $100 in commissions. 40% goes to the house so explain to me how commissions are not the least of his worries.

     

    I'm not suggesting that $500k is required. I also make more than 1% per month but 1% is my goal. As for very few making a living with a 10k account - very few will make a living at it period. Most people on this site don't even make a living at it. The 95% losing stat is true here too. Forget trying to make a living, very few will do that. Simply try to make a good return on your capital. That should be the newbies goal before trying to trade full time.

     

    You also said that I "lost my shirt trying". You clearly took that WAY out of context.

     

    Here is my quote...

     

    "I have always been successful as an options trader and in the past when I tried to trade contracts instead of options I lost my shirt."

     

    I said I lost my shirt trading what is not my expertise.

     

    I do agree with you 100% that over leverage and no edge are major factors. But, commissions are definitely a factor as well. In fact I would say that no edge is the biggest factor. If you re-read my post I said they can't make enough profit to offset "loses and commissions". I was illustrating that they have to pair winning trades against both. Not to mention slippage.

    How can they possibly do this when they are basically shooting blind?

     

    I'm not ignoring average profit per trade. But, how will they make this profit?

     

    I know a lot of guys laugh when I tell them my goal is 1% per month. Its funny that none of the people who laugh are pros.

     

    Johnny

     

    Ok to quote you:

     

    "I have always been successful as an options trader and in the past when I tried to trade contracts instead of options I lost my shirt."

     

    I said I lost my shirt trading what is not my expertise.

     

    If this is not your expertise, why do you think then you are qualified to provide advice on this topic?

     

    You are focussing on the percentage commissions of the total account. If you are profitable after commissions, the commissions you pay will not be the reason you fail as a trader. The ratio of commissions to contracts stays the same . Actually in many cases it comes down as you can negotiate lower commissions with higher volume.

     

    In my example the trader is profitable with 1 tick profit that is enough to cover commissions and make a reasonable return per month. My point is that comissions are not such a big deal as you want to make it sound. Comissions are the least of his worries, since even with one contract, he still makes 7.5% which is still much higher than the 1% you advocate. Why then are commissions a concern?

     

    In your arguement above if 40% goes to the house on 4 contracts, then 40% is going to the house in 1 contract. If you pay $5 for 1 contract, you pay $10 for two. If you are a scalper type trader, your percentage pay for comissions will always be higher than if you hold for bigger profits. If your average trade is 1 tick for one contract, it is 2 ticks for two contracts. If you are profitable for 1 contract after commissions, you are profitable for 2 contracts after commissions, regardless of what percentage you pay for comissions. That is all that matters. A trader needs to be more concerned about levarage and make sure that even a small drawdown wouldn't wipe him out. That is what would wipe him out. Not comissions.

     

    Do you trade for a living with trading profits your sole income? Is 1% enough for you to live on? How much of that 1% do you actually take out each month as I assume you also like your account to grow, so you would actually live on less than 1% a month?

  12. Posted

    In my opinion, with the low commissions obtainable nowadays, commissions are the least of your worries and is not the reason why traders fail. I think most traders fail due to no edge and low margin requirements allowing them to trade far more contracts then they should and cannot survive a drawdown. You cannot just look at commissions and number of contracts traded and ignore average profit per trade. If your average profit per contract covers your comissions per contract and then some, then commissions become irrelevant and you need to look at leverage and drawdowns. No one should be trading 4 contracts if they are not profitable trading 1.

     

    Assuming your average trade is 1 tick profit in ES, then using your example, for the 5 trades of 4 contracts each, your gain for the day is: 12.5 * 4 * 5 = $250. Subtract the $100 commissions and you come to $150 a day and $3000 a month. That is 30% on a 10K account. Not bad for 1 tick profit per contract. Even if you trade one contract, this is still $750 a month, or 7.5% on a 10K account.

     

    I don't see how anyone can make a living trading by going for 1% a month, unless you have a very large account. With a 500K account, 1% is $5000. Very few will make a living trading a 10K account, but you surely don't need 500K either and to suggest this is what is required just because you lost your shirt trying, is not very sound advice.

  13. Posted

    Attila,

     

    FWIW, look at your avg time in a trade. The the next time you have a trade set up, take your trade set up with 2, put in your stop and target, and take a walk for exactly 2 x your avg time in a trade. And in time, increase the time you take a walk. Your anxiety will dissapate even if you get stopped out. You will quickly be able to sit there and follow the rules of your plan without the desire to botch it up.

     

     

    Regards,

     

     

    MM

     

    And then hope you do not come back and find you lost internet connection, or your trading software terminated for some reason while you were away as this will not have the desired affect on your anxiety level.

  14. Posted

    Take December off and enjoy your self. If you havent made your yearly goal by the end of NOV, you should stop trading and come back in JAN.

     

    What's the point then of having a yearly goal if you stop early without reaching it? If you want to take December off, your trading plan and goal should take that into account.

  15. Posted

    TAMS - i appreciate the guidance, however i'm not seeing the logic in the crossover. I'm sure its something simple that i'm missing; Is there another indicator that you can think of that currently does what i'm looking for where i can use that as guide?

     

    Thx

     

    How would you explain to someone what it means for it to change color from one bar to the next? Write out the condition of each bar and see if that helps.

  17. Posted

    Didn't you ask in another thread about how to get a demo account with IB since you don't have the minimum deposit of 10K to open an account? So, you rather spend your money on something that look cool, but is not practical nor necessary instead of spending it to open an account and actual learn something and have potential to make you a better trader?

  18. Posted

    I've had my eye on a particular stock that's tripled in price in the past year or so. It had no P/E for quite a while and now I look back and the P/E is 184 - the average for its industry is 17. Not a good P/E but at least they're finally making money. I'm considering buying some because their price has gone up consistently for the past year or two - it's actually tripled. Should I just forget about buying this (for swing trading) because of this P/E?

     

    What do the rules in your trading plan say? Do they allow you to buy it?

  21. Posted

    I currently trade off of my Ninja charts & trading DOM that ties into my account at my broker (Mirus). A one-stop shop.

     

    I want to move to a different charting software such Ensign, Sierra or Investor-RT.

    Here's is my newbee confusion. I am assuming that these charting software will require me to subscribe to a data feed such as IQFeed. But these charting software do not have a trading DOM to execute trades into your account at the broker. So I am assuming, I will be using my brokers trading DOM to execute trades.

     

    To me, it doesnt make sense to execute trades based on a chart that has a different data feed from the brokers trading DOM. Is there something I am missing? wont there be a difference/slippage? or the difference is so minor, its no big deal? I am thinking it is a big deal, cause 1 tick difference could mean a full stop out or not....

     

    Your trades are executed on the exchange and not on your broker's servers/DOM. Your trades will be executed based on the current price on the exchange and not on what your broker's datafeed, or any other datafeed for that matter shows you. The more accurate your feed is, the closer it will match what is happening on the exchange.

  23. Posted

    Really? Tell us more, Fanus....:smoking:

     

    I keep on being amazed by the sad lives some people have if this is the best they can do with their time digging up months old posts and making fools of themselves. As pathetic and desperate a ploy to draw attention to oneself as I have ever seen. This could have been funny, until one realize this is geniunely the highlight of someone's day. Can't help but to feel sorry for people like that.

  24. Posted

    Hi everyone,

     

    im new here, i also have had the same problem. I have been studying the markets for 2 years and trading for 1. I feel like i could still do with some improvements and could be more profitable. The problem is, i have been too a few seminars, and to be honest, i end up being able to teach the class. There is a serious lack of knowledgable people to learn from. Its hard to cut through all the BS and the good traders. The good traders neva have the time to teach anyone, and why would you if you were concentratign on making money? I was hoping to find a community, or chat area where everyone can share there ideas. Does anyone know of any mirc channels or anyhting of that nature where people can share there ideas?

     

    You are already in a community that do exactly that right here.

  25. Posted

    Actually, so I can learn something here as well. Can some one please size up the position that I have posted above and have attached here as well.

     

    This is a short trade.

    The entry price is 1.6239'5

    The stop price is 1.6249'5

     

    Tell me how large your position would be with a $70,000 account. How would you size your position? I am asking this to learn because I really do not understand this fixed ratio position size model.

    Now after you are sized and you exit at 1.6136'9 how much did you make?

     

    I would appreciate if anyone could give me a serious answer.

     

    Thanks

     

    The Pip Thief

     

    This can really not be answered based on the information provided. This depends on your starting capital and the delta being used. Read this article for a fairly painless explanation and you should have a better idea how it works: Fixed Ratio

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