GCB

The fact that these indicators Carter recommends give such random results leads me to believe that he has a filtering method he doesn't quite explain. I don't think he's consciously withholding information, it's just something that is hard to explain to others.

I was reading in Gary Smith's book this weekend that he didn't look at volume at all. That amazed me. What is it about volume that you consider a distraction, James?

I wouldn't be trading index futures if I hadn't read John Carter's Mastering the Trade. It's one of the best books written about the fundamentals of day trading futures, trader psychology and developing a thorough and professional trading plan. Carter is a very successful and seasoned trader and he knows his stuff. Every trader wonders if there is a better method or technique to trading out there than he or she is using, and Carter does provide several trading "setups" (as he calls them) to consider and study. After studying these setups and writing or obtaining the indicators necessary to apply them (Carter oddly doesn't provide the code for the indicators) it seems that these setups are not that reliable. In fact, none of them seem any more reliable than, say, a basic moving average crossover system. I reproduced the three-bar-reversal indicator for tick bar range trading and it was amazing how many three-bar signals appeared when the run was ending, not beginning. The squeeze indicator produces so many false signals it was laughable. Now this realization can either be disconcerting or encouraging. If Carter can become successful using lame setups like these, then perhaps setups in general are less important than we might think. Or perhaps Carter is using more filtering for these signals than he let's on. Either way, he doesn't tell us.

Well said.

Regarding ease of usage and the functionality and practicality of trading, futures win on just about every checkpoint. The only advantage that stocks have is that they sometimes trend in a nice smooth way that you just don't often see in futures. But the catch is you have to find that stock that is trending among hundreds of other stocks. Also, you have to put up with their sometimes very bizzare intra day volatility.

You are welcome. Another issue is learning not to think about the monetary amounts. When I'm risking per trade more than what I used to make per day at my previous career it's hard not to get dollar signs out of my head and hard not to be affected when my first trade of the day is a loss. But that's what I have to learn to deal with or it's all moot.

TinGull, I'm still working at getting from breakeven to profitable. But I'm pretty sure that it has been cutting losses short which has enabled me to stop losing. As for becoming profitable I can see the light ahead. I'm working with a mentor who is a very successful trader and he is always stressing with me to enter my setups without question. He likes to say, "If there is a valid setup I have to get in. If I don't, I'm just not doing my job." That's the way he looks at it. He says at the end of every day he asks himself (1) "Did I do my job well?" (Meaning did he follow his plan.). Only then does he ask himself (2) "Did I make money?" And if he follows his plan to a T and loses for an extended period, only then does he ask himself if his plan needs tweaking. From my perspective I've been at breakeven for awhile and though my methods have gone through some adjustment I realize it is not getting in when I know I've got a valid setup along with getting out of some winning trades too quickly that is holding me back. My mentor told me in our last session "I wish I had some way to tell you how close you are to success." For me it really comes down to confidence in my method (because you have to KNOW you have an edge or you won't trust the probabilities and you won't trade it right) and not sweating losers and drawdowns. As to my methods, they are very simple. Find the bias and find a good entry, taking into account S/R and internals.

How long now before Microsoft issues an "update" for XP that breaks it in order to force people to move to Vista? Be careful of those "essential updates" from now on.

Breaking even seems to be a matter of cutting losses short. Winning seems to be a matter of nailing the setups as they happen without hesitation and managing the trade according to plan.

I think the point is that broadly speaking, yes, 95% of traders lose--but the mistake is to think that 95% of those who work their butts off, develop detailed trading and money management plans, work to practice winning psychology and who are very, very serious about this business lose. I don't know what the stat is, but its not 95%.

The TRIN has been pretty useless for months now. I learned from a guy who uses very few internals and the TRIN was once one of them. But he stopped looking at it a while back because it's been unreliable.

According to the U.S. Small Business Administration, over 50 percent of small businesses fail in the first year and 95 percent fail within the first five years. It's interesting that this 95% number matches the infamous number of overall losing traders. The problem I have with this stat is that it probabably includes every yayhoo who ever threw $3000 into a futures account and blew it out in a week. The stat I'd like to know is out of all traders who compiled well-thought-out, detailed, written trading plans, what percent wins. Or, for every trader who has traded for more than 3 years, what percent wins. The 95% stat may be a solemn warning, but it also may be innappropriately discouraging. It seems that, according to the statistics, if you become a trader you have roughly the same chances of success as if you start a small business in general. That's actually encouraging news to me.

I recall reading something where Jack Nicklaus said that focus was essential to a golfer but that no golfer including him could focus for four straight hours. He said after he hit a shot he would let his mind wander until he was approaching his ball and then he would begin focusing on the next shot and by the time he was standing over the ball he would be completely focused on the shot. After he hit it he'd let his mind wander and the whole process would start over. I think trading is the same. You can't go through life with clenched teeth and you can trade that way either. You have to find opporunities to relax to conserve your energy for the next "shot."

I've heard MultiCharts is good, but I'm not sure if it's cheaper. Supposedly it will run TradeStation EasyLanguage code.

I like most, started out in stocks and have moved completely to futures. Why? Futures are just all around cleaner. They are built for trading. Day trading stocks is like trying to race in cars built for touring. Futures are built for speed. The only advantage with stocks is that when the overall market is dead in the water there are alway several stocks that are running through the roof or the floor. The problem is finding those stocks before they make their move or as the move is beginning. That's the hard part. The drawback with futures is the flip side. When the market is going nowhere there's nowhere to go. Unless you want to try oil or Euros. But what's your edge there? Except for that, futures are better all the way across the board, e.g.: 1) High liquidity. 2) Better margin. 3) Fairer and cleaner fills. 4) No market makers. First come, first served in the e-minis. 5) Easier execution. Either buy or sell. No complicating "sell short" or "buy to cover" commands. Buy 1, then sell 2, and viola! you are short 1. 6) Easier to place limit orders as targets and stops on shorts. Many brokers will not allow you to enter more than one "buy to cover" order for the same shares of stocks. Thus you cannot place both a standing target and stop order for the same shares. Just makes things harder and they are hard enough. 7) No uptick rule on shorts. I once got filled 30 cents lower than my desired price on a market order short on a day traded stock. Needless to say that trade was a loser. 8) Lower commissions. 9) Lower tax rates. 60/40 longterm/shorterm taxation rule on futures. 10) Easier tax prepartion. A 1099 at the end of the year. No need to log all your trades for the IRS. What did I leave out? The catch? You trade against the best and they know what they are doing.

Thanks for the indicator, Robert. I use RadarScreen and have written some indicators for it. I think it's worth it, especially if you day trade stocks, because it helps you adding specific sorting capabilities to longs lists of stocks based upon whatever you want to sort by.

After watching the video I figured that the program levels for the ER2 premium were the problem, since I didn't see them on index arb. Too bad.

Nevermind, I found the video which explains how to do this.

Can anyone give me a quick run down on how to read and use the index futures premium (specifically $ER2UIX) when trading futures (specifically ER2)? Thanks very much!

I've always been curious about the Bricks indicator. But I installed this one and it locked up TS on me.