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SIUYA
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Posts posted by SIUYA
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I had my first OEC outage today - been using for 3 months now and this was the first.....not a problem as i was ready to pack up and had no positions on.
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pairs trading = double the risk with half the profit.
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Ok My first idea for discussion.Identifying changes in trend.
I think we can all agree that one of the most important aspects of trading is anticipation. When we take a position, we are anticipating a move. The difficult part, is how we can identify a move, and how we can use that to profit.
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As part of a discussion mainly with regard to mental frame of mind and jargon.... I disagree.
I believe one of the most important aspects of trading is participation.
I try not to anticipate moves, as to me this is like trying to pick tops and bottoms, but rather I try to participate in moves as and when they occur based on signals/patterns/triggers/context of the market.
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pretty easy to google as this info is already in the public domain.
lesson is - if it sounds too good to be true, it probably is,
- anyone who charges a lot of money to reveal secrets for info that is freely available on the net probably does not offer much
- it pays to do some research
- don't you love the internet
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Trading like anything can be taught, its just that some people will be ok at it which usually means break even after commissions, some will make a reasonable living, and a very small few will really succeed.
As has been mentioned that you need to fit your personality and style, I am sure that not every market or style suits someone, and hence there will always be some wrong turns in the journey.
There are always too many preconceived notions that first need to be eliminated as has been pointed out. There are plenty of trained lawyers out there who are not practicing law and I reckon a few of them found out that its largely a pencil pushing job rather than the high flying court room dramas they initially believe.
(Electronic local - I have loosely followed your blog, and one great point you make is about consistent profitability for day trading....lots of people miss this in many teachings. I also think that stops should not really be called "stop losses" but 'stop account crippling drawdowns" or "stop blowups".)
I always wondered about the 95% statistic....where does it come from?
At a guess I think that if its based on closed accounts, then there must be a lot of traders in there who either;
1, are undercapitalised, and hence close an account
2, get bored, loose interest, become too frustrated to continue
3, close a few accounts, and yet ultimately become profitable with one account
4, dont like their broker and hence close an account.
5, change their trading styles over time and either it does not work or they disappear through boredom.
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Some would argue the "reply to all" button on email should also be eliminated from email. I know a couple of people who have lost jobs over that one.
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Quantifying a trend......
Always an interesting topic as then you are introducing more parameters and hence more permutations in terms of tests and possibilities.
However, there appears to be a few guidelines and ideas that ideally will help avoid over optimizing and keep the focus
1) Use common sense and keep it simple,
match the entries, exits (entering on a breakout, v entering a pulback, does that change the % winners)
2) match the time frames (if you are holding only for 14 days then the long term trends are not such an issue to you)
3) How robust is it; does it work on a portfolio basis or are you only looking at a few instruments and working to optimise those? eg; shorts in equity indeices dont necessarily work that well over the long run.
4) what are the other parameters that are important to look at in such a back test, eg; the size of the drawdowns. length of time of a drawdown
5) do many of the filters for a trend achieve similar results - if so, then maybe it does not matter so much what the filter is. Maybe a completely different type of filter is needed to radically improve a system.
(As a simple and interesting exercise - take a data set of prices. work out the percentages of up days v down days, Then add a filter eg; MA50 day. then work out the percentages of up days v down days, above the MA (uptrend), below the MA (downtrend). the results might surprise you - magnitude of moves is often and important element to look at)
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put the chart to the maximum setting so you have as many bars as possible on the page. step back and squint your eyes.....does it look like its going up, down, sideways.
I kid you not - its as good as any method to determine your frame of mind.
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Dude - are you looking for a continuous contract made up of back months, or just each months data from the date it trades.
Esignal used to be able to just show the data for each contract.
I dont know of any system that allows you to build a continuous contract from back months, unless you can specifiy the roll dates. The best I have seen is one where you can download all the data and then form a continuous contract yourself..... CSI data - unfair advantage.
I am sure there are others out there.
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Always be careful here - as much like a bank account, a debit or a credit depends on who's account its for - is it your debit or credit or the banks. I have seen both methods, and so it can get confusing.
Usually when it comes to options (AND I ASSUME YOU ARE PLACING ORDERS IN THE EXAMPLE YOU ARE ASKING ABOUT) the general rule should be....
If you have to pay for some thing in terms of an outlay from you for the premium then its a debit.
If you are a net receiver of premium, and your cash account goes up, then its a credit.
Now with the market option it seems that you set the longs and shorts for the option series and strikes you require and then hit the market button and it will cross all the spreads for you automatically giving you the market price. (it may be a debit or a credit)
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where are you, where are they based?
What are they offering? They should be making the offer, not you.
Are you having to provide capital? Who wears the losses?
Are you in a profit sharing environment? Or as an employee?
Who pays for the equipment, data, seat etc.
Are you part of a team/pool of traders, or running your own account?
Do you cover costs before profit splits? What are the costs?
Depending on these and other questions, then percentage rates and salary will vary.
I have seen many varying models of this.....
eg; trader gets a salary of $100,000. At years end they have to pay back the salary and allocated costs of approximately $50,000 (Data, IT, seat) and after that they get 30% of the profits. For this they may get access to $1mil in equity capital.
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Allow me to ask a related question.When I look at the depth of all the bid/ask levels on a Dom/Matrix, there are huge sums (especially in futures) which are way out of current bid/ask, however they float with the price action - they seem intent to maintain their relative position away from the current bid/ask. As the bid/ask ebbs and drops, they also move.
What do those offers hope to gain, so far from the action? It would make sense if they were fixed, anticipating the market would come to them, however they seem to purposely remain equidistant from the bid/ask.
Possible reasons - They may be one of the firms looking to take advantage of sudden spikes that allow them to hedge with other products, arbitrage firms relying on speed - these guys usually have servers in the same buildings as the exchanges as speed is vital. They also may be continually having positions in the market moving up and down with options, waiting for an option spread to be crossed, before they have to move the hedge in the underlying. Sometimes, they are just spreads that are continually moving in the market at certain levels, waiting for one leg to be hit.
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Just read today the Guardian 30th May...
more oil is spilled in the Nigerian delta every year than has been lost in the BP spill.
(assuming anyone really knows how much actually spills)
However it does some what support the idea that government influence and regulations over business activities is not such a bad idea, even in the land of free enterprise.
Topical and interesting for me after just getting back from a brief holiday in the USA and reading "too big to Fail" - highly recommended read - more of a page turner than any Dan Brown novel.
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only crazy thing I have done is decide I am bearish at a certain level and wishing to exit a long to then go and buy more at that level. Nothing too costly.
The two best stories I know of that are true.
1) guy declares himself bullish and starts to buy some calls, also sells some puts as well, after a while its going his way, he buys stock as well. After a while he is getting seriously excited and decides to hedge his position a little....yells into his two way (old days of the floor) to buy some of the index futures. (rather than sell as a hedge)
His massive long position looked good for a few days, and then spectacularly blew up.
2) One guy misread Royal bank of Scotland as opposed to Bank of Scotland (I think they were the two names) and proceeded to buy as many of the calls he could as he was bullish and they 'seemed' cheap. After lifting the market a couple of vol points that day, the next day he came in scratching his head.... wrong stock code v wrong stock. This is the crazy part..... he bought more thinking in for a penny in for a pound trying to squeeze the market..... It did not end too badly but it was still a loss.
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Tams, you can get rid of your wife by trading? Is there a indicator for that?when the account goes to zero and the wife goes with it then it indicates you may have had more than just a trading problem
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^^I've had much better success with a general concept mildly defined for entry and trying to let the trades work without my interaction. Thats not to say that you don't use money management, or don't have rules in place to allow for par stops and taking profit, but like most things in life there is a delicate balance that needs to be reached for optimum effectiveness IMHO.
I tend to think this works well and also agrees with Kiwi and blowfish from the point of view of dont think too much about it initially.
Look for a general series of setups without too much extra thought that will get you looking for the holy grail etc; BUT then execute and manage the trade mechanically.
eg; have a predefined stop, position size off this, either take profits at a pre determined level, or let run until another general setup.
Its a bit along the lines of saying dont focus too much on the entry but rather focus on the trade management.
As you improve you can then improve the entry.
Its the very simple approach of looking at a chart and squinting the eyes and saying "up trend or downtrend", then saying buy or sell, and then mechanically managing. You may loose, you may win but the focus is not so much on trying to get the perfect entry.
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atradersuniverse....
interesting take, but I have to disagree entirely as I feel you are trying to substitute excuses.
To say discipline is not the skill of a trader and does not require money management skills and to say you did not understand the different effects of a bull and bear market on EOD systems means you have not done the research as a trader. The approach of treating it like a business may be good advice but there are plenty of successful business people who also fail at trading.
Yes there are traits that are useful in both endeavors, however there are also some that are fundamentally different.
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at a guess....
The option is exercised at the STRIKE PRICE of 12.43
The only options that will be exercised are those that are in the money.
that is - for calls where the strike price is below the current trading price
for puts where the strike price is above the current trading price. So in this case it is a call that is being exercised at 12.43 in order to now own the instrument below the current trading price.
(If you dont understand exercising of options - google, read, and then ask questions)
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There are many things that people may or may not consider illegal in many industries that occur in the world of finance. Unfortunately its not relevant if you consider it illegal, its what the actual law allows
As an extreme example;
you are a stockbroker who has a share placement in a stock to place more shares at $3.00 when the current trading in the market is at $3.50.
You have an allocation of 100,000 shares to place. do you allocate them to all your clients on a proportional basis, do you allocate them to the clients who pay you the most business, or do you allocate them to the one client who will pay you the most brokerage on this one deal.
I have heard some describe this as being bribery if it were considered similarly in other industries, while other times its described as rewarding certain favoured clients over others for there good and repeatable business.
What about those other market participants that may have had orders sitting in the machines waiting to buy at levels near 3.00, and the market opens back at say 3.30. Even though they were actively willing to buy in a free market, they dont necessarily get any shares even though other people get shares at a price below what they were willing to pay
It does happen.... is this fair.
Lots of interesting right and wrong questions to ponder?
Personally for flash trading, I see nothing wrong with it if its only to registered market makers who then have obligations to make markets and provide liquidity.
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Just had the same login issue after another download......
FWIW - it changes the login user name.
For some reason it changes the login username to the original username I used for a demo account when I initially started using OEC. This will be different to the live account.
So if this problem occurs, check the user name is correct.
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the second option.
think of it as different questions.
How much am I willing to loose (not necessarily risk) if I buy this and then it goes down and I stop myself out?
2% of the equity or $200.
How many shares then can I buy if my stop is 49.95?
4000 shares.
What then is my total exposure?
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Generally a way to think about them
Futures trading.....
the leverage is effectively given to you by the exchange and all trades are centralised. The margins they set allow you to leverage up.
CFDs, Swaps, FX....
leverage is given by the broker whereby there is no central clearing house and you trade with/against the actual broker. These are effectively continuous betting accounts whereby the account rises and falls depending on what happens with the underlying bet.
Stocks....
as you have to pay 100% for the stock through the exchange, the broker, or your margin lender effectively lends you this money and you owe them. (different but similar to going to the bank and borrowing the extra money and then going to the broker. eg; go to the bank with 50,000 deposit and say you wish to borrow another 100,000, then go to the broker and buy 150,000. But in this case the broker effectively is the bank. For this they will charge you an interest rate.)
As BrownsFan said, really understand what the broker, margin lender, spread better is offering.
It may result in different taxation positions and exposures. This can also delve into the world of understanding the differences between segregated accounts and non-segregated accounts.
The brokers should be able to completely explain this to you. If they dont adequately do this then either they dont know themselves or they are hiding something. There is no substitute for doing your own homework.
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consistent profits, no drawdowns, no risk.
thank you Bernie Madoff
There will always be ponzi schemes ready to take the money of people.
slightly off topic..........
MMS - you just talked about not only the desires/greed of retail investors but those of many institutional investors also. I would like to meet one large money manager who privately really loves his clients. Its probably the one biggest complaint - that people dont understand or want to understand what trading entails and what turns out to be good results.
eg; 2009-2010 many funds have had good returns, but these same funds are flat to down over 2007-2010. Yet if a fund was up over the 2007-2010 period but underperformed in 2009-2010 compared to others they get criticized......go figure.
Marketing is king when it comes to OPM.
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Just as an extra - history is littered with "truths"
religious teachings, scientific techings.
Even in economics - the truth for a long while was that the markets are efficient. These truths were taught at the leading institutions of their day.
The teacher may be poor in how they express something, but it does not mean their message does not have some value.
When it comes to any education the best way to approach it is with an open mind in order to take what you can out of it by understanding both sides of the argument.
Thats why these forums can actually be so valuable.
FX Training - Let's Share the Cost
in Forex
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1) What about non disclosure and on selling clauses???
2) I would have to see their PL and risk reward profiles to make an informed decision and no one is playing that game.....:haha: Can I get the best of both of them?