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Dcash
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Posts posted by Dcash
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Observation:- When the problem is clearly, and consciously defined, THEN you start looking for the solution.
I've seen the same price behaviors a thousand times, but until I find the correct and descriptive words to define the situation, then I'm not really looking for the answer, and I won't find an answer. It's kind of bizarre when I think of how this process works. After intuitively, and subconsciously seeing a certain price pattern a thousand times, I can still not really have a conscious understanding of it at the "front of my mind". When the "light bulb gets switched on", and my conscious mind attains some higher level of understanding, I realize, that I "knew" of the situation all along, but it's almost like operating in a "dream state". It's like you can see something in the fog, you know it's there, but there is something clouding your perception.
If 90% of all people who attempt to trade never make any money, then I would guess that they never make it "out of the fog".
But I want to make a point here. I think it's important to define what you are experiencing. I don't do a journal, but that's why a journal would be so helpful. I do make a lot of notes and write things down as I get an "aha!" moment. I think that either a journal, or writing things down is a critical process.
Just tonight I figured out something new about trading. I wrote it down. Then, only a few minutes later, I re-read what I had written. I realized that part of what I had written, didn't make any sense to me. It made sense when I wrote it, but I had not described it very well. So I re-wrote it again. Then I re-wrote it again. Through that process, I am solidifying a very good definition of the market behavior, and wiring my brain to recognize the price behavior when it happens again.
And I may go back and read my note again, and refine it more. That process of trying to accurately define in words what you are thinking, experiencing and trying to resolve, is critical to getting out of the fog.
I agree and I have a like process but for me I observe then write code, test code and observe the results, then rewite the code observe etc. I find that I can describe things untill the cows come home but you must have a much clearer understanding of the action before you can code it.
- When the problem is clearly, and consciously defined, THEN you start looking for the solution.
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Sounds like you got it right.What we like and don't like doesn't change the facts. Not likely that you are putting someone out of business, but you are taking money from someone when we win. It doesn't come from thin air. Its a matter of perspective.
Likewise, we can enjoy a good steak or hamburger without thinking about the fact that an animal was taken and murdered so that we can enjoy ourselves at dinner. Certainly, we wouldn't be the one to kill the animal, but we did pay someone to do it so that we would not have to get our hands dirty or figure out what to do with the rest of the meat until our next meal. So, we can look at it and say that it is meat, or we can look at the meat and understand where it came from.
MM
I do not have an issue with taking money from someone else (play poker and other things) it is just that it does not motivate me and I have no interest in thinking that way. I have no problem with killing my meat also and have processed a lot of game animals in my day, but just like trading it is not killing for the sake of killing but more along the lines of this is the system and it requires X to survive so you do X as well as possible but in the end there is no animosity toward the other trader or the animal.
Sorry not really a good analogy and may upset some to boot. I guess my point is that I try to not look at trading as a zero sum game i.e. the future market allows lots of people to make money, yes some lose money at it but I do not feel that it is a pyramid scam that all the people making money are just taking it from the losers.
I see it as X needs to buy 1000 lot of Y in 2 months and needs to know how much it will cost them so that they can make product Z to sell to A in 3 months and know where to set their price to make a profit. They are looking for insurance that they can get 1000 lot of Y and are willing to pay someone else to assume the risk for providing the 1000 lot of Y at a fixed price. In this case there are no inherent losers just business opportunities and winning or losing is totally dependant on how well each does their job.
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Of course institutions use the futures market for other reasons than speculation. That doesn't mean that they enter randomly. It doesn't mean that they are right when they buy or sell or wrong when they buy or sell. All it really means is there is more size in the market. A lot of traders think that institutions are better informed. I don't think so, but that is just me.Does it make you feel badly that the money might be coming from a small trader?
no not really but I do not think of trading as a competition between me and other traders, more like buying and selling cars at an auction, "buy low sell high" not "I can beat this guy out of his money". it is just that I do not think in those terms, not that I see anything wrong with that mind set, it is just that I do not have that mind set and hope I do not have to have it to be a sucessfull trader.
I view futures trading as providing a service and trying to do it as well as possable, the better I do it the more money I make.
if I sell a contract it is because someone thinks they will go up or is needing to cover an obligation (the reasons are not my concern) and at the same time I think that the price is going down or I need to take profits etc the same for the reverse position.
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You can think of it any way you like. Nothing will change the fact that when you enter a live trade, you are trading against other traders. You win if someone or some others lose. Someone else wins when you lose. You can suspect that when you enter a trade the rest of the traders, who are opposite your position, would prefer that you lose money to them. No one makes money if money isn't there to be taken.I do not think it is critical to accept this to make money trading. Some people think of it as surfing or as a video game or whatever makes them feel better.
I can see that but is it also true that some of the money is coming from institutions that need the futures contract?
and infact the trader is providing liquidty to the market?
is that not in fact the base purpose of the futures market? and the fact that a lot of traders/speculaters are there is secondary to the purpose/primary volume driver of the market?
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You should start on figuring out the risk/reward based on your limited risk capital before creating your own system.feel free to correct any error in the following (please)
risk/reward is figured out durring backtesting and as to creating my own system I'm trying not to spend my limited risk capital on buying a system (which have mixed results) but instead researching systems that are explaned on the web and testing the heck out of them.
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You do not have to think that way. But, if you don't take money from other traders where do you think it comes from?I'm know that the money (in futures markets) is coming from other speculators and from institurions looking for insurance on outside buisness intrests (like an oil refinery that needs to know what their cost will be for crude in 2 months etc). I know all of this but in my mind i'm competing with the market ie price movement and while one needs to undestand herd mentatility to help predict the price movement I do not think in terms of taking money from other traders.
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Dcash,In trading money is the only thing.
Money is the way you keep score in trading.
It is true that a lot of people get more out of trading than just money, which is probably a justification of not making money in the same way that blackjack players "enjoy" playing blackjack while the casino picks their pocket.
As a trader you have to learn how to take money from other traders before they take it from you. You are trading with other traders and collectively we all want you to leave your money behind when you exit a trade.
MM
I agree with most of the above (not that my agreeing means anything more like I understand most of it) but I do not get the taking money from other traders, I do not think that way, do i need to in order to trade well?
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ok noob here, but after studying delta volume for a while along with cumulative Delta, wouldn’t the delta volume divided by total volume be more telling after all 500 delta means 1 thing when there are 600 traded and another when 5000 are traded or did I miss something?
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It doesn't sound messed up at all. In fact, it sounds to me at least, very sensible. Creating aversion to bad habits, instincts or desires surely has to benefit you in the long run. But are there any negatives to this approach? Does it also create a dependence on the plan? Does it just create the desire to always take the setup? It really depends on what sort of trader you are. System or discretionary. It sounds to me like it's a good thing although if you can force yourself to take the trades that specifically don't meet your criteria to create the aversion, I suppose the question to ask would be why can't you also force yourself to adhere to your plan anyway? Just a thought...definatly working on being a system trader, and I do work on forcing myself to adhear to the plan also but isn't that Backtesting? and I was responding to your post of "Is there anything in particular that you believe helps you to stay out of non-setup trades and stick to your rules?" and the previous post refering to itchie fingers or specificaly not trading when there is no clear setup or before the setup fully completes. for me these are 2 diffrent cases. so to roll these 2 togeather my method is to trade the plan (backtesting) and trade the plan wrong on purpose (anti-backtesting?). for me one of the largest problems is to "sit on my hands" and not take trades untill they are there.
in the end sym trading and backtesting are the path but by specificaly concentration on problem areas I feel that I get better results.
my untimate goal is to devolope a trading tool to get into the trade with me there to manage the trade once in it (in my 10 year goal)
once again I'm not offering any advice just sounding out what I'm going thru.
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Dcash,Is there anything in particular that you believe helps you to stay out of non-setup trades and stick to your rules?
Cheers,
yes negative feed back of doing it intentionaly and observing the results (in sym only) kind of like learning that this does not work and this is the results. I just put my trading plan in frount of me and not trade it, and observe the results and after many losing days I develope an adversion to taking any trade that is not part of my plan (unless I get lucky or unlucky depending on how you define it and the off plan trade makes money but this is not offten). for me I have to make it clear in my mind that this is not part of my plan and trade it with the proper trade in mind. I will work on taking trades early before the setup is complete or late or some other variation that is tempting for me to take.
this not advice from me but just my method of conditioning myself to trade properly and may be very messed up.
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Too right Dave. It's better to have rules that sometimes keep you out of winners than no rules at all. Remember, and I know this seems really obvious, missing a winner is not the same as taking a losing trade. There are plenty of opportunities for you if you are diligent and trade to your plan. Trigger happy traders or 'itchy' trigger finger traders usually have to get burned before they realise their error. Some never learn. But hey, if you disagree then let me know!TheNegotiator.
I have been learning this part
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After reading these posts, I too would agree with the Negotiator as this is my fundamental practice as well. We are not in the market to just make a bundle of money even though that is the most simplest of answers and most obvious. The real question you want to ask yourself is this.. Is it the money you are seeking or is it what that money can buy you in terms of creating memories and purchasing material objects and having the money to buy what your heart desires? Or ..you may have other motives.. like 'keeping up with the Jones' or 'bragging rights/showing off'. You have to really dig deep and find out why you want the kind of money you are seeking in trading the markets. What are your true motives and intentions. Once you discover this, the clouds will part and the fog will be lifted. You have to be totally honest with yourself on this one. In the end, money is just a tool. Use it to improve the quality of your life and invest it wisely and enjoy it !to be honest some of the bad things creap into my mind like keeping up with the jones/bragging rights etc but I keep working on that part. My defined goal is to become self suficent trading part time with the objective of meeting my financial needs with trading and then move away from current occupation to provide stable secure life that does not keep me away from family. this is a long term goal (10 years) although I would not object to getting there sooner.
anyway thanks for the input
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Dcash,One thing I have noticed in my time trading is how many people really do understand trading and how to make money. I mean they really do understand. The difference is whether they can bring everything together and have the discipline and commitment to make it work. This is where people trip up. So whatever you do, don't kid yourself into thinking you are a good trader because you understand a good amount of things about the business(or not - always a learning experience for me). This is an easy mistake to make. The other point I'd like to comment on is about being in it to make money. Wrong. You are in it to trade well. Money is a great reward for being an excellent trader. How many top sports pros are there who are purely in it to make money? Maybe a few. But the top top pros want to be the best to be the best. Money flows to them naturally as they begin to achieve this.
TheNegotiator.
first off thanks for taking the time to read my thread, you (and the others) point out some things that are on my radar already except for the part about not being in it to make money I do not know that I agree with that (not that you need me to agree with you or that I'm disagreeing with the point so much), my search is to develop a second income to build into a primary income (already a well paid profesional engineer), I'm not striving to develope something else to take over my life, I enjoy and want to be good at trading, I will put in the work to become good at it, but I do not intend to go thru for a second time in my life having a career be the purpose of my life. so I guess my mission statment would be "trade to live not live to trade", I guess that where my view point differs is that I do not derive my self worth in being a "Better Trader" than someone else (this comes hard for me) and I'm trying to keep it from being an ego thing.
Am I off base with that?
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this site is great and I have/am learned/learning a lot and have progressed to sym trading a paper account. I'm not the expert here and this post is IMO so take it with a grain of salt.
1. there are a lot of differing openions here with a lot of strong emotions about who is right and who is wrong. one of my aha moments was when I realized that a lot of this is like the 3 blind men describing an elephant they all have valid discriptions of the part that they are describing but are not describing the same part so they all disagree.
2. my progress has been directly linked to time spent learning how to best use the indicator/methology that is in front of me and not looking for new indicators/methods.
3. pratice pratice pratice even when I know what im going to do (or more importantly not do) I do it wrong in the heat of the trade.
4. trades are all over the place so do not try to force a trade it either fits the trading plan to a high degree or pass on it (still working hard on this)
5. write the trading plan down and reread it often, I'm supprised how often I get off track and my trading plans gets mentaly modified durring trading, in the end the plan needs to be revised if and only if the changes have been tested and the results are +.
6. it is about making money not being right so if the trade I just made is not working out the way I planed it and the results are going aginst me, get out and look for a new trade do not hope it will get better. I only need to get a few right to make a lot of money unless I hang onto bad trades hoping they will get better untill they create a hole that I later have to climb out of to have a + day/week/month.
7. how I deal with a loss is going to be a big bridge for me to cross (sym trading currently).
8. it is very important to pick a type of trading that fits with my personality (this was a supprise to me)
just random thoughts that some may find helpful or not.
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pay attention to the volume behavior at your perceived "ideal" entry point.all the clues are there.
Tams any pointers as to what to look for in the volume?
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send me your code, I have a paper account with IB and I would be happy to back/forward/sideways test it for you
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I would be interested also
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You might want to look here TradersCALM - Calculating risk of ruin to answer your question about what sort of return a competent trader might expect to make. All you need to know is here. You will quickly see that it depends on the nature of your edge (%winners - average winning points - average losing points) and the biggy what sort of risk you are prepared to accept. (By risk I mean risk of blowing up your account not risk on any particular trade though the 2 are correlated).You can probably find an excel spreadsheet knocking around that will allow you to see how changing different variables effects things. These variables will be different for every trader which is why there is not one size fits all.
thanks BF i will do that and many thanks to Tams for time spent in helping me understand several things
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"future margin is the amount you put up when you initiate the contract."
thanks Tams this part i missed i kept looking at the stock margin % and futures margins do not work the same so you have to have cash in the amount of the intraday margin amount in order to trade 1 contract ok another one down which would explane why people are indicating that 5k is enough to trade single car in the fx futures market.
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which URL did you get this information ????how many time do I need to tell you to get the URL and copy the text ????
from this http://www.traderslaboratory.com/forums/24/possible-start-trading-forex-1000-a-84-10.html
"I haven't read through all the posts in this thread, but in my opinion you should know what is the lowest starting amount based on your system. For me, I hit between 50% and 60% and I know this because of my trading data, not backtested data. As with any system, the risk of ruin is highest at the starting gate, so I would give yourself enough room to place at least five trades (unless you have a much higher win rate), with the 5th starting at a balance of around $510 if your margin is $500. I know that at some point I will run off a few losers in a row, so this takes into account the chance that it may happen at the start. While my balance is much greater than the $1,000, this is not different than the way I trade everyday. Each time I up the number of contracts I trade, I make sure that always eat 5 losses in a row before I am required downsize due to margin. So to answer the question, if your average loss is around $100-$150 per contract, then yes, you can easily start with around $1,000. At the same time, if you do not use sound money management, you will eventually get crushed. I move cash from my trading account to my bank account each time I double, and I maintain a cash reserve in order to post up more cash for those times when I experience a number of losses in a row which happens a few times a year."
this is the kind of thing that confuses me as i calculate it I would need to have about 30k in my acount to trade 1 fx future contract where this post indicates that you can start with 1k ?
so again my question is how does margin work for future contracts?
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I think you are confusing yourself.dig up the commission chart and do the math properly.
maybe you are correct I will recheck that, also i take it that the $8 per round trip with IB on CME fx future contracts does not sound right?
thanks
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in a public forum, you are free to post questions,in a public forum, anybody is free to post answers,
including those you do not comprehend, or those you do not agree, or those you might find irritating because it is not the answer you are looking for...
you can choose to ignore those responses...
but... don't ever think you can ask people to stop responding to a public forum.
you can stop posting, but asking others to stop posting ??!?!?! LOL
when did i ask anyone to stop posting I mearly stated that I understand if you do not want to post. I never ask or told you to not respond just stated that I understand if you do not want to respond and on top of that have thanked you in all of my responces to your posts. ontop of that in my mind it is rude to ask a question and not atleast acknowage that someone has taken the time to attempt to answer your question so for me the chosesing to not respond to someone who post to my thread is not an option
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you missed the whole point of the post.the key phrase should be:
without the proper reference, no wonder nobody wants to give you any response.
and really, if you think it is too much trouble to reference the URL or copy the text from your source, I don't think we can ever be on the same page.
frame of refrence
question : how does margin work for a futures contract?
given assumptions: $10k account, 4 to 1 margin fx futures contract (eurusd for instance) on $125k worth of currency ie how many contracts can I work with at the same time, is there something specific i missed?
I really do not know how to be any more specific.
Thanks for the help
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as in any forum, treat each response as an independent response.great except the responce is in refrence to a previous responce and as such cannot be responded to without responce in part to original responce
as in any forum, treat each response as an individual response.
also great except the respondant joined the thread by agreeing with other individule as such I must assume that original individuals responces are included
as in any forum, YMMV with each response.
thanks but this is a given and should be a foundation for anyones presence on the internet
as in any forum, no response is absolute.
would also agree with this
as in any forum, ignore what you don't want to hear, and move on.
no need to tell people not to response, simply don't respond to the response yourself.
as the person starting the thread and asking the question I feel the responceability to point out any discrepenacys or missconceptions and to re-focus the discussion when it misses the original point, which I have been doing. also for you to tell me to not respond instead of pointing out the option of not to respond to people that appear not to want to offer valid responces or become irritated by the question posed, as the original thread poster, i find this to be somewhat of a hoot. in short if you want the last word you can have it just start your own thread
6 months from now, when you revisit this thread, you will see things differently.
you are right I most likely will and I think that this can be said of most anyone that is truely learning.
Thanks for the information and hopefully someone can answer the other questions that i asked
Trend & Momentum - Indicators of Choice II
in Technical Analysis
Posted
how about trading the CL?
I'm following along and hope to learn a lot.