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johnw
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Posts posted by johnw
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Just to be ABSOLUTELY clear - the pattern Steve46 identifies is in my opinion valid and perfectly tradeable. If this is the sort of strategy he teaches his students then they could certainly do far worse with other vendors.However, I personally find it unlikely that this type of movement is a source of profit for HFT firms. Steve talks about movements of twelve to sixteen ticks; the average HFT position is reported as lasting approximately 22 seconds. Not many sixteen tick movements occur in 22 seconds.
Even supposing that this pattern is precipitated by the accumulative actions of HFTs, this offers no real insight into how such algos operate for single tick profits.
BlueHorseshoe
I can't answer for Steve, but this pattern is created by s&r zones as has been mentioned, and occurs several times per session on ES.
It is highly accurate and can run 16 tics quite quickly.
The run size and speed depend on two events.
1.. if another s&r zone lies just outside the zone that this pattern is testing then pressure is been added to the Trader to fade the pattern.
2 .. if a third zone lies ahead of the intended fade then the price will run to the this zone almost without doubt and the distance to this 3rd zone can be 12-16 tics.
Granted, the faded trade must push through the original zone that created the pattern, but it's appetite to cause trouble has been largely eroded by the pattern itself as it chewed through stops on the fade side of the congestion.
The premise to keep in mind at all times is that price waves start at the opposite sides of congestion before eventually breaking out.
As for 22 seconds, I am here to learn about HFT so I cannot comment.
But I imagine HFT trades have a long tail distribution and a breakout trade from the pattern we are discussing lies in that long tail or as an outlier.
But does it really matter?
If I kept an analytical log of trades (which I don't) or if I kept a diary (which I don't), I would find that my distribution of my trades was asymmetrical as well, and that is the outcome that I want and work towards.
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search for posts containing "algo,bot" by steve46 in "Day Trading the E-mini Futures" returned 6 results:-Hi Neg,
Thanks for doing the leg work.
I have looked at the Steve's six examples and yes he has highlighted a recurring
pattern of behaviour where price does a test and then retest of a level followed by a retrace.
Usually, as has been mentioned this zone lies to the outer edge of an s&r zone or a zone of little activity.
And yes it is a good setup for a retrace.
But this setup has been around for years in my memory and perhaps bots have picked up
for this very reason.
This conversation concerning bots is a good conversation IMO, but it needs to focus around exactly what bots are doing to the market that Traders are not already doing.
I remember the conversations concerning the use of Indicators and it became apparent
that the latest fashion was to trade without them.
As MM has just pointed out ... the only way to trade is profitably
Or as my Broker points out ... it doesn't matter what you do so long as you make money.
ST makes a good point that bots could effect order entry and I would be interested to hear from someone who knows how solid the order enter queue really is for the CME [as an example]
And so, I like some others here am looking for substance in the matter of bots and their effect on the markets...
I know very little about the subject of bots because I am completely removed from the People who control and build them, and that is why this conversation is important to me.
And because it is important it would be a shame to see it disintegrate into a fashion item because bots are the new new thingy.
Thanks again Neg for your legwork and thanks Steve for posting the six charts .. I know it all takes valuable time.
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Ive spent a good deal of time with students trying to model the "right" mindsetand an equal amount of time recently learning a method that helps retail traders to insulate themselves from the stress of managing a trade.....
There are two parts to the method....one is breath control and now that I have seen it work, I teach it to every student...and the second is what I call "talk therapy"....and in that process I go into the concepts that seem to be at the root of the problem (primarily fear of loss and the loss of self image or self esteem that goes with loss)....
Ultimately one has to have their house in order, meaning that you have to have a system that YOU have faith in....then you have to have a reasonable understanding of your own mental issues, and finally you need a way to manage your emotional response as you trade
For those interested the first step is to identify the problem you have....accurately
The next step is to learn about yourself and how YOU respond to the stress of trading
in that process you learn to anticipate (and to "map" out) the negative responses once you are filled on a trade
and then you put something in place to block or interrupt that negative "chain of responses"
At first it is time consuming and it may seem difficult, as you progress and are able to better manage your emotions, it becomes automatic....
The model is much like leaning to drive....at first it seems daunting and difficult and you have to pay attention to what you are doing...later as you have more repetition, you can drive and maintain a conversation with a passenger....
Hope this helps
Steve
hi Steve,
Welcome to the world of Qi (chi) or as you describe it ..'breath control'
Asia knows it by various names according to culture, but essentially it is 'life force'
If you want to give your Students and Yourself a real edge, then I suggest you learn to cultivate Qi .. it will set you apart from the others.
Thoughts such as "block or interrupt that negative "chain of responses" will disappear over time as you remain only in 'the now'
In fact positive and negative will disappear... simplicity will rule the day.
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Hi Curtis,
IMO you are very wise using brackets [OCO]
In fact if you choose to occasionally enter on MOs then you can simply enter a bracket behind the price and when you are ready to enter you can drag the Sell Trigger in front of the price and it will fill instantly.... I never enter naked without a bracket.
I think you are also very wise with your concern that you do not leave open positions unattended or naked Stops in play ... I have learn't the hard way to flatten even after I think that I am flat... check and check again.
Also I agree about weekends and maintenance ... if you are a Day Trader then reward yourself by being a Day Trader ... work hard for a few busy hours during the day and then flatten your account and do something entirely different.
I don't worry about my daily account position whilst trading nor do I set profit targets,
so can't comment on these ones.
IMHO Trading is all about winning and forfeiting trades in order to make money through trading size ..
This means we need to achieve a solid base of ratios [ win/loss% and tics won /tics lost ratio ] as a precursor to trading size ...
So we don't want to FU the basics through stupidity and carelessness and make this game any more difficult than it need be.
I like your approach to planning ..it is thoughtful.
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I think that is a good example.....sports car drivers can as you say be in the zone - until it all goes horribly wrong, and something blindsides them.I also recall an interview with ex Australian cricket captain Ricky 'Punter" Ponting - he was talking about one time where he was batting well and he said he was in the zone and that the balls coming at him were like pumpkins (i think he said that) and that it was easy to hit them.....it did not stop him from missing some balls and eventally getting out.
When it comes to trading my idea of the zone is that you are just seeing the flow of the market with ease, you are not fighting it, there are times whereby you can just 'feel' the turning points......not because you are looking to pick tops and bottoms....but it seems you are in tune with the markets.
My only issue with this is that usually this still involves either a lot of prior homework - Is this is a pre-requisite to be in the zone?
...and that being in the zone is almost like sticking with the plan - even when that plan is not really working.....as often the plan should have contingencies. (if that makes sense)
Well today we have a houseful of Tradesmen and so I am in their zone today.
Speaking of cricketers, Shane Warne is very nicely inside Liz Hurley's zone ..
I doubt if you could lever him out with a crowbar.
I believe you can be 'in the zone' in almost anything you put your mind to doing including learning how to trade and preparing for each session.
Firstly we decide to do it and then we relax into it... there is no stress or willpower as these things cause separation of body mind and soul.
There is no substitute for planing and preparation .. none what so ever.
Ask any one armed Samurai and he will confirm the above statement
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I suppose it may be. I have never been in anything that is similar to what was being described. Can you be in the zone when you are losing or winning? Or, is the zone associated with winning only?As far as driving is concerned, are you driving in the "zone" if you crash?
MM
My belief of 'the zone' is it is a state of existence where action and reaction occur very nearly simultaneously in a state of clarity.
You cannot be winning or losing when you are 'in the zone' because nothing exists other than you and The Price ... if you are aware of winning or losing as you trade then you cannot be 'in the zone'
You can be 'in the zone' and still lose in sports as you can in F1 and still crash.
The Zone is a state of existence whereas 'a crash' is an outcome, just the same as a losing trade.
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As an accomplished trader, the zone is an experience that you have when you are winning consistently throughout some period. It is an experience you want to relive as often as possible. Time seems to slow down because everything is working out in your favor. You will credit your analysis for your excellent market savvy. You are also in a zone when you are losing consistently throughout the day. This is not an experience that you want to relive over and over. You should also credit your excellent savvy in this situation.It is impossible and unnecessary to trade without mistakes. It is important and essential that you properly trade the mistake; minimize the lose or maximize the win in spite of the mistake.
gm MM,
If your state of mind relies on winning consistently, don't you think that you are describing
'EUPHORIA'
It's opposite is 'DYSPHORIA'
'The ZONE' that is being described here is a place that is quite different
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I tried to get my accountant to allow me to retrench myself. At the time there were certain taxation advantages to their final payouts when someone was made redundant.....alas he did not allow me to do it.I quite understand .. it is a bugger really... particularly if you win in court and then refuse to pay, all the while providing your own legal team on both sides.
But don't lose heart SIUYA, I have every confidence (or lack of) that things will change soon.
When we pause to consider for a moment that Greece Ireland, Portugal Spain and Italy are guaranteeing almost 40% of the EU loans in one form or another, to themselves as they bravely try to borrow their way out of debt, then it becomes obvious that the Politicians are capable of anything, providing that it meets the stupidity criteria.
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................................................... One last observation would be that it is imho that "the zone" is virtually devoid of emotion. Anyway, it's definitely an interesting side topic but like you said, a trader doesn't need to be in "the zone" to be successful
gm Neg,
I would suggest that 'the zone' is a heightened state of awareness where the very essence of a Trader's emotions, feeling, intellect is focused on 'the now'
The Trader and the Price are seamless and rather than being devoid of emotion the Trader attains a state of clarity.
FWIW, I think only dead people can be devoid of emotion and they do not need to stop breathing to be dead.
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I find there are no conclusions to be drawn from the OP that connect 'The Art of Trading' and the success of Traders to Regan.
It is just another sad story of a Conman and his stupid Followers ... please note I did not use the word 'victims' because being a victim of your own stupidity is not a crime... well not as yet, but with the continuing erosion of self reliance and self responsibility I would not be at all surprised to wake up one morning and read that the Law now permits a person to sue themself.
The very occasional person who wants to become a Trader and has the emotional capacity to do so successfully, begins his/her journey from a point of self assessment.
Nowhere does self assessment even remotely include any acts of stupidity.
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..............................................The method uses stoic methodology to limit emotional response to trading..................
good morning,
Interesting comment above.
My question is ... why on earth would you attempt to limit your emotions.
Why not re-train them to work for you when trading.
You seem to want to deliberately handicap your potential
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Ok, well, we could certainly have a lot of fun with this and it would all be on topic, but i will leave the fun for others.The interesting thing is that I think this flies in the face of the common belief that you need to be relaxed or in that zen, meditative state to succeed. Having high testosterone levels on a given day isn't what I would call being meditative.
Nice find.
MM
gm MM
Good question.
I would say that high testosterone levels and qi (chi) are one and the same.
If you improve your qi then testo will follow ...I don't necessarily believe that the reverse applies
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look at the big picture...Greece represents 2.3% of EU's economy.
IF Greece disappears from the face of the Earth,
nobody would notice.
All these market volatilities are just another way to extract money from the weak.
"look at the big picture..."
Unfortunately Tams, The Fractional Reserve Banking System levers Greece's debt ( both public and private) into a very large number indeed.
And to add to the woes, Europeans have permitted their Banking System to lever out to 26:1 ... twice the level that conventional wisdom dictates.
This is a political problem that will only accept a political solution to the angst of Nationalism versus Federalism
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The Euro Bond issue fully exposes the weak underbelly of the common currency ... federalism v nationalism.
The Germans believe [rightly or otherwise] that a Federacy will solve the currency problem AND permit them to retain their nationalism since they are the largest Nation.
Smaller, weaker Nations see federalism as the arch enemy of Nationalism and do not want a bar of it.
This leaves the situation at best as an unworkable compromise.
Germany/Netherlands believe they have a ready export market within Euroland at ex factory pricing since there is no exchange mechanism to artificially inflate the sale price of their exports to weaker corners of Euroland ... plus the icing on the cake is that the PIGS are holding back the value of the Euro, which leaves German exports to US, China etc more competitively priced.
So where does that leave the gross imbalance in productivity between North and South Euroland ... well it leaves it flapping in the breeze because every time it becomes the centre piece of conversion we return back to Federalism v Nationalism ... which remains unsolvable as we know.
No doubt, at some stage some bright spark is going to bring up the two tier system as practised in South America where the dollar has been used to hedge the local currencies and bring some stability to real estate.
This type of wooly thinking would buy time for the Euro Leaders to complete their terms thus leaving an even bigger mess for the next guy, but since they are already dropping like flies at the polls, this is hardly relevant anymore.
The latest mutterings that default by Greece would be dreadful for the Greeks, tends to indicate that a quick clean exit will probably go rather well for them.
I imagine that Russia or China would be more than accommodating to gain a backdoor in Europe plus a Mediterranean Port or two.
And wouldn't a France/Italy combo be a far better fit than the unworkable Franco/German dream of Sarko and his girlfriend ..golly even Spain might join in the fun.
With China well on it's path to a hard landing, taking Asia with it (and this includes it's southern province of Australia), all the Japanese need to do is devalue the yen 40%+ and they will not only solve their internal dilemmas but they will unseat S. Korea and put a further dent in China for many years to come.
Nobody can say that our brave little world is a boring place and our brief flirtation with social democracy over the last hundred years is dying as we speak ... this makes Obama's foray into socialism even more difficult to comprehend as he is arriving at a party from which everyone is leaving because they have drunk all the alcohol.
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I was reading an article about EU summit today and it made me wonder since I am not familiar with bondsWhy do others push for euro bonds and why does Germany stand against that?
Very briefly Euro bonds will be underwritten by the Tax Payers in ALL Euroland equally.
The Germans hold the view that the PIGS will relax back and let the Germans do the heavy lifting since they have more to lose [ie AAA rating].
Also they are afraid that their cost of borrowing will increase since Euroland will be viewed as one identity rather than individual Countries as is now the case.
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JD,
We know that Price is an absolute simply because it is correct 100% of the time.
Therefore we trade Price and Price alone.
Then there is you ... JD the Trader ... the man who is going to turn Price into Profit.
Therefore you need a methodology to achieve this worthy goal ... Price into Profit.
Once you have defined yourself and your methodology, the amount of pre-planning should drop into place and that is what you will do each and every trading day.
My suggestion is to keep planning to a minimum, since the more you think you know then the more you will screw up.
Price has a plan and the plan is to go where it wants to go ... it is never wrong.
FWIW I think that if you are required to spend more than a couple of minutes pre-planing the day then you are over complicating the task at hand and you are bound to fail.
My Broker always says "it doesn't matter what you do just so long as you are making money" .... I never forget it.
And so I think that planning should be a sub function of your methodology to turn Price into Profit
goodluck
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Thank you, John!I am not sure whether it was a conscious decision when I was a teenager. The decision I took consciously was that I did not want to get involved in team sports as I never liked teams (and still don't do... that's why I like trading, by the way
). So I choose individualistic sports after trying some team sports. The sport in which I've excelled was also an individualistic sport.But whether it was my sports or my career I did what I liked, to what I was naturally attracted. I think I was and still am very good at listening to my inner voice. So, I guess it have been more subconscious choices I've made at that time.
However, with hindsight I can say that it were excellent choices (subconscious or not) that made a lot of sense and explain my success (to a larger extent with my career though, than with my sports). I am able to see now the bigger picture or the "central themes" in my life and how everything fits together. By listening to my inner voice at that time I had a "natural fit" to my personality. Does that make sense?
What is your background? You sound like you have also (like Rande) a professional psychological background.
No ... I am just an enthusiastic amateur .. a perpetual student of life
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I am comfortable with the way I think or do things, but I do not cap my potentials. Actually, it's quite the opposite... .......................................!
Well done and good for you.
Might I ask what sport and career did you chose to fit your personality.
The reason I ask is because these activities seem to find people early in life without conscious thought and children just grow into them through the natural ability of youth and the encouragement of Elders.
Later in life they may question their choices to the point where they make huge life changes and that tipping point is normally the result of an overwhelming desire to change
and seek one's true potential.
But it appears that you are different ..quite different indeed.
You consciously chose a sport and a career that suited your personality, presumably at an age when Kids still think they are bullet proof and are capable of achieving anything.
What made you do this ... can you remember the defining moment in your life when these choices presented themselves and you narrowed your selection to those of sport and career.
Mostly, my experience with thoughtful children is that it makes them timid and they need encouragement to take chances, just as reactive children need encouragement to think through 'cause and effect'
In the end both these groups of kids grow up to be just fine.
But you seem to be special and I am curious to know your background.
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No, I am referring to basic personality traits. I don't think they will change.Things in our world change within the limits which are set by our personalities. Though, I admit you can improve some weaknesses one might have in certain areas but you cannot change your whole personality...........................................
You seem to be very comfortable with capping your potential by your thoughts.
I imagine this locks you into a self fulfilling prophesy.... the old perfect circle ...as I think then so I do ... as I do then so I think.
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Exactly!...... I say, the mind is a given and cannot be changed. .................................
Fascinating point of view.
Firstly, can I say that if this is what you believe, then nothing in your world will/can ever change.
But how do you account for Tiger Wood's sudden drop in performance and his incredible struggle to regain his form.
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gm larry,
It is the same story with employment.
If employment is improving then why are the monthly payroll tax receipts dropping at the IRS
yoy.
If you believe as I do that we are in the eye of the storm and if you are a Yachtie, then you will know that the back end of the storm is far more dangerous and far more prolonged.
The boat is stuffed, the crew are stuffed and it is no wonder that delusional fantasy takes hold in the eye of the storm .... experienced Yachties know that the eye offers a window of false stability in which to repair, regroup and rest before the nightmare continues.
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Folks that trade or follow light sweet crude would have noticed the nice rebound from two days ago. I for one wasn't expecting it to retrace. I'm interested to know if other CL traders were expecting the retrace, and if so, why? Was there a technical reason to the move? I'm interested in what your thoughts are for the move between Feb 29 and March 01.Probably triggered a solid wall of stops by the look of the chart
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Better To Buy Strength Or Weakness?
Always BUY into Strength, but buy into it by fading into the price.
This keeps you close to your protective stop and gives you Sellers to buy from.
Remember that buying the breakout can leave you unfilled when you read the move correctly, but you will always be filled and a long way from your stop, when you read the price move incorrectly.
Trading is just a game .. however the winning methods may seem unfamiliar.
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One too many thoughts IMO but rather than sidetrack this discussion I will leave my thoughts on this for another place, another time.It is all to do with waiting for momentum to washout before taking a position.
If you are trading ES from say a 5 minute chart you really don't have a chance of seeing it.
Are New Traders Who Are Successful Hated ?
in Beginners Forum
Posted
You would need favorable winds if six months is your time line ...very favorable indeed.
This is a game where experience and time in the market means everything and so
after six months of training our Trader would be entered into the race of his/her life.
Can he/she accumulate experience at a rate sufficient to stay alive ... this would mean that he/she would need to accumulate profits at a faster rate than the next lesson would absorb.
My question to you Db is "would you bet on this Trader succeeding"