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alwaysastudent
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Posts posted by alwaysastudent
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What is a good place to get historical data of small caps?1 sec ticks are good enough for now and I just want to have a couple of hundred shares with a time span of 2-6 years I guess.
i'm doubtful you would find *free* 1 sec ticks. if you do please update the thread
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"It is not expensive if you can sell it with a profit"
Not sure if its a dirty secret or a open one. Most retail traders make money by a combination of these methods:
- Trade own money
- Trade other people's money
- Sell / mentor their system
- Sell indicators
- Sell subscriptions to their newsletters
The last 3 smooth out their income flow even if 1-2 is the bulk of their monthly revenue.
Think of it this way, if their system nets 20% a month profit 20% of 0 capital is still 0 profit.
I'm not knocking the guys who sell their system. There is a place for everything. No one knocks McDonald's or KFC for selling their system and there is no reason to do so in the trading arena. That said: caveat emptor.
- Trade own money
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I have a fairly good idea what I want to do. At this moment I play small stocks on the momentum(swings) and I do rather well, so I want to do something with that. There are approximately 500 stocks listed on NASDAQ Capital Market, so it is hard to keep on track with all of them and especially when I like to play some OTC too.
Then your first step might be to fund a scanner instead of a full-blown auto trader. You can run the scanner once a day/week and manually trade the top few.
If you are interested in pursuing this (scanner or auto trader) PM me and we can take this discussion off-line.
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Neither lol...?So then what?
Both have their pros/cons.
Personally I think Forex is the best instrument for a beginner if only because you can risk an extremely small amount, $0.10/pip on nano, and scale up as you become proficient and have the capital for it.
Everything else, the chart reading, money management, managing emotions etc are the same regardless of the instrument you trade.
However between E-mini and ETF I would suggest ETF although there is the $25,000 day trading requirement. Not an issue if you swing trade.
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Hi all,I have been trading for some time now (15 years) and I have been always fascinated by blackbox trading. All the secrets surrounding this way of trading is just great, it is no wonder that they call it blackbox trading, because it is very hard to find a good algoritm.
Anyhow I started this post, because I want you to shine light on me
and make me more (wall) street wise on this topic. In an ideal world I would want to have self learning algoritm, but if you could give that to me you wouldn't be posting on this forum I guess (please tell me I am wrong :rofl:).
So what I am after what is more doable, is an algoritm to play small stocks on exchanges like NASDAQ and OTC. I have been fascinating by these small plays, because they are too small for big companies. I make some profit with a combination of indicators, but because there are so many small stocks to play, I can't play them all at once. That is why I want a computer to help me do the trading or even take over the whole trading :missy:.
If you are familiar with this kind of an algoritm based trading or you know which way to go with this, please get in contact with me. I am willing to learn badly and do business.
Cheers,
Pieter
Are you looking to purchase ? or you have an idea which you want to develop ?
If you currently have a working system then converting it into a blackbox (or graybox) is plausible. Plausible if the system it non-discretionary.
As any trading system you have to be clear about trade identification, entry, adjustments, exits and money management.
Once that is coded, debug and tested the next step is integration with your broker. Here you are looking at redundant computer systems and getting as close as the broker's backend servers as possible.
Then comes another round of testing to ensure the redundant coding works.
Too many stocks to scan ? We can solve that by making the code distributed... and add another round of testing.
Self-learning algo adds another dimension of complexity. While the machine is 'learning' be ready to accept drawdowns.
Couple of issues that tend to arise include order entry limitations, error codes (especially from the broker), slippage, and the usual redundant distributed application issues.
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How do you "know" how to take advantage of Leverage...What about time decay on ETFS....
Have you ever swing traded etfs?
Leverage magnifies wins ..... and loses. If your system has a decent win rate and proper risk reward then any leverage instrument would give you better 'bang' for your dollar.
Only ETF I trade is Spy and even then only its options.
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--------What do you use to run scans? Thx in advance------
MachTrader in the beginning and now MetaStock.
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Autotrade Fx
Options on 1 ETF and 5 stocks. However this is due to laziness running scans, when actively scanning no restrictions.
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This makes me think I'll need to break some rules and just take my chances.I could:
1. Increase my risk from 1% to 2% or more.
2. Always buy no less than 100 shares, and just run tight stops.
3. Stop being so cheap and put money I can't afford to lose in the account.
Are there any strategies for small accounts? Is there a minimun practicle account size?
I suppose it's really too small for swing trading, but It's going to have to do.
I have a small account (anything below 25k is small, the first goal should be the day-trading margin requirement) and feel your pain.
1. Small account holders trading stocks will find it near impossible to risk 1% if they want to make a profit and include commissions into the calculation. You are likely looking at closer to 3-5% (possibly upto 10%) risk per trade.
2. Tight stops means lowering your win:loss ratio as your trade no longer have the proper room to 'breathe'. I would never ever recommend tight stops for the initial trade entry.
Two techniques that can help is to either:
(a) place entry/stops a a lower time frame, i.e. trade the daily set entry/stops in the 15 mins or
(b) scale into the trade. Initial half as it goes your way add half while looking for a solid trend run.
I personally use (a) with good results.
3. Only you can determine if that is psychologically sound. Would you worry so much that you start meddling ? Lose sleep ? Act rashly ?
As other posters commented you can also consider leveraging. Options is the next logical step for most stock traders however my favourite credit spreads forces me to take on 9-10% risk per trade.
Two other leverage instruments are Forex and Futures. I have a great love for Futures and do very well paper trading a large account but found it near impossible live trading with a small account. At the lowest you are risking $5/tick. It doesn't take much too blow up your account.
Instead I now trade Forex on a mini because it gives me finer control over how much risk I want to take. It allows me to scale from a couple of cents per pip to a few dollars.
However Forex and Futures are more day trades in comparison to swing trades. To continue swinging options would be the more appropriate instrument.
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Actually 5K is quite enough to trade future.Unless you opened your account with PFG like I did :crap:
Actually I agree with the other posters and feel that 5K in Futures is too small even with the e-Mini YM. Don't get me wrong I love Futures, prefer trading Futures and want to actively trade Futures. However now trading mostly Fx on a mini because it give me a better handle on risk.
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The Greeks are a derivative of the price movement of the underlying.
from Wikipedia.....and the commonly accepted definition of delta when applied to options....
Delta
Delta,[4] , measures the rate of change of option value with respect to changes in the underlying asset's price. Delta is the first derivative of the value of the option with respect to the underlying instrument's price .
Among option traders delta is also the probability the strike price would be ITM at expiration.
With this you can structure your trade and adjust it as delta changes.
You can also use option premiums to gauge sentiment. For example, puts and calls with a similar ITM distance and the puts premiums are more expensive means a bearish sentiment.
Given the square root of time calculation you can determine the range the underlying is likely to be in. Since a number of options plays short for credit you can then place your positions outside this range.
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I would be interested in a cursory explanation of what your mentor meant by this.To answer your question I have to start with the believe of what price action and technical analysis means to him (and me):
Price action is trading based on what is happening now. At this instance. Using volume and open interest to determine sentiment (bullish, bearish, neutral) and exploit that sentiment for the brief period it exists.
Technical analysis is looking at past sentiments to predict future sentiment. The trader places meaning to past events (support, resistance, trendlines, chart patterns) and exploits the statistical reoccurrence of past patterns and the predicted next pattern.
My option mentor calls this driving forwards in a car looking thru the back window.
Since the Greeks, especially delta, are future expectations of price movement it stands to reason that using option pricing is sufficient for predicting price movement.
I can't say I buy his argument 100%.....
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Price Action ? Indicators ? Whats all this sorcery ?!?
One of my options mentors laughed at me when I told him I use PA, he claims to rely solely on option pricing. How can I argue with someone who made a 30+ years living trading options in this manner ?
That is not to say I discarded PA and TA. His trading model works even if I keep my PA. *shrug*
Bottom line: I don't care what you use or if you are right or wrong. If you show consistent profits month after month year after year I am willing to learn from you.
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Hi,Im new to trading. I have 15k to start trading part time. I have a full time job in customer service. Im looking to supplement my income making an extra $100-$400 extra per week. Is there anyone out there who is a part time trader doing this that can give me some pointers? I live near Toronto. Im looking to network. Thank You
- Gurvinder
You are looking to make between $400 - $1600/month. If you risk your entire 15k that is between 2.67 - 10.67% / month. Or 4-16% / month is you only risk 10k and hold 5k in reserve.
When you say part-time what do you mean ? Couple of hours every night ?
Some folks trade the overnight market, Tokyo and London open for Forex is the evening for most of us Canucks.
You could also swing trade options and there are option plays that take minimal supervision and still net you the returns you are looking for in a month.
Now, I have tactfully ignore one important issue. How much learning and trading effort would you need to get these returns.
If you have a solid model you are still looking at minimum of a year paper trading before going live on a small account. You are looking at around 2 years before you can post the returns your are looking for.
If you are starting from scratch add another year or two to develop your model.
Summary: Doable within a few years given proper effort.
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Currently the entire trading training sector is based on caveat emptor. Some teachers promote the fact that they have their Series 7 or Series 3, others open their live trades by way of trading labs. I know of one teaching institution where their instructors have to furnish proof of trading acumen by way of yearly trading account statements.
One issue with regulation is the need for a fix curriculum in the various aspects of trading. Finding a general consensus would be challenging with little benefit to the group embarking on the project.
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- Am I correct in thinking that I could have purchased a PUT option on the index at the time of my entry to benefit from a declining price?
- To most closely mimic my futures position, would I have purchased an 'in the money', 'out of the money', or 'at the money' PUT option?
- Am I correct in thinking that after my purchase, my maximum exposure on the position is limited to the cost of purchasing the option (ie the premium plus commissions)?
- Am I correct in thinking that I would be able, at any time before the option's expiration, to close out my position if the market traded to a lower price than the strike price, and profit from the difference, net of premium and commission?
- How can I know, or estimate, what the cost in premium would have been to do this?
Assuming you are long the index.
Yes, purchasing a PUT i.e. long a PUT, would benefit you when price declines. The purchase of a PUT in this manner, called a Protective Put, is to have the PUT substitute a stop loss.
Since the PUT is a sub for a stop loss it makes little sense to purchase it in the money or at the money. Typically you would purchase an out of money PUT with a strike price as close to your stop loss as possible.
How much time to purchase is related to how long you intend to be in the trade. Options lose value rapidly in the 3-4 weeks before expiration and very rapidly on the final week of expiration. Unless you are in the trade only for a few days going next month or even 2 months out would be prudent.
Yes, your maximum exposure is the purchase cost of the option.
Yes, at any time before the option's expiration you can close your position.
The easiest way to estimate premium is to use a Risk Graph. This is available in most options trading platforms including, ThinkOrSwim, OptionsXpress etc. There are freely available Excel spreadsheets that estimate premiums.
- Am I correct in thinking that I could have purchased a PUT option on the index at the time of my entry to benefit from a declining price?
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For example, you hinted that there is a correlation between Trading frequency and profitability: The higher the trading frequency, the lower the profitability or ability to keep the profits. But there is no real proof of this.And one counter example would be scalping. It is the high trading frequency which makes scalping a few pips here and there work.
A buddy of mine is a 20+ vet at Forex trading and has a successful model. He automated the model and we have been using it successfully, 2 months for me, over a year for him.
This autotrader addresses the two (Trade Frequency and Simplicity) of the three points listed above.
Sorry, autotraders don't address Discipline as much as we liked it to. We still meddle and those usually result in our largest losses........
The other side benefits of automation were easier backtesting, a better statistical understanding of the model and clarifying assumptions in the model.
IMHO automating, or at least drafting something that could be automated, should be part and parcel of backtesting.
In summary: The success of any trader is related to risk mitigation and understand what and how their trading model works.
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I'm one of those low count posters you were warned about
IMHO trading school is no different from hiring a personal trainer to show me how to lift weights safely, a speech coach for public speaking, a driving instructor etc etc.
Can I learn all those thru books, online and just-do-it ? Sure, no doubt. Personally I find having someone there who has done it show me far more helpful then trying to decode yet another book.
You know your learning style, if the shoe fits go for it. Just do your due diligence.
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