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pbylina

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Posts posted by pbylina

  1. Posted

    FWIW the best two pieces of advice I can give to any aspiring Futures Trader would be to

    a) Enable trade sounds (bleeps) on MD_Trader if you use it [really get immersed in the action]

     

    :anyone:

    Thanks for the advice.

    Do you hear the beeps even when your computer is off?:)

  2. Posted

    I would reckon start out by learning to swing trade. That way, you keep your income and you can learn over time. Longer timeframe trading has parallels with day trading and when you are ready, if that's still what you want to do, move to day trading.

     

    A little off topic but, what is swing trading and how do you do it?

  3. Posted

    I want to share a technique that can help you to choose your desired winning frequency before you enter into a trade. I would guess a larger number of retail traders don't lose because they are wrong but because they use stops improperly and lose money even when they're right.

     

    Assume for these purposes that the market is mostly random, if true then that means that an X point move up or down has little value in determining what the market will do next because, of course, if it did have value then we could use that predict it. Now, it is true that I predict the market but I will agree that the market is mostly random to most people most of the time. This implies we can determine our win frequency before entering a trade simply by choosing a stop and target of the appropriate size. The expected profit must be zero.

    The formula is:

     

    WIN AMOUNT * WIN FREQUENCY – LOSS AMOUNT * LOSS FREQUENCY = 0

     

    Examples:

    +5 and -5 point target and stop will win 50% by random chance

    +5 and -15 point target and stop will win 75% by random chance

    +5 and -20 point target and stop will win 80% by random chance

     

    Formula examples:

    5*W-5*(1-W) = 0

    5W – 5 + 5W = 0

    10W = 5, W = ½, W = .5

     

    5*W-20(1-W) =0

    5W -20 + 20W =0

    25W = 20

    W = 20/25 = .8

    If these are challenging, you can use the equation solver at

    Equation Calculator & Solver -- Algebra.help

     

    You can choose any winning ratio that you desire using this method. I personally would feel quite comfortable with 65% to 80% win ratio. Of course, your profit expectation is still going to be zero unless you have an edge. My point is that many people may have a slight 2% to 5% edge but ruin it with poor stops. It is very easy to erode such a small edge with a poor stop. The goal is to use the mathematics of randomness to prevent that. While the expectation is the true measure of a system, if one chooses a system with a very low win rate then by random chance they could experience a very long streak of losers. Psychologically this will be difficult for many to work through. I have, also found that when win rates drop below around 55% that the resultant equity curves become rather unstable.

     

    It is worth to consider the assumptions in which choosing a higher win rate would work better then not. If our model is such that we can predict that the market will move in a given direction more times then not then choosing a higher win rate should be beneficial. However, if our ability is more about predicting the larger movements then we may want to choose a lower risk and a higher reward payoff.

     

    This is an updated authorized partial excerpt from My Favorite Edges Bonus. Chapter "Choose Your Win Rate".

    ----

    Curtis

     

    WOW!!! This sounds exactly like my idea! What a coincidence.... NOT!

    Probability in Trading

    http://www.traderslaboratory.com/forums/trading-psychology/11560-probability-trading.html

  4. Posted

    I agree.

     

    Its worth considering that with skills in reading the order book, placing exits before entry to get a better place in the queue etc (more relevant in a 2-3 scenario than the 200-300 scenario), there will be times in real life when you will get the 2 tick target without that level getting taken out and the 3rd printing.

     

    For the purposes of real-life testing and viability I'd go with your wisdom.

     

    For the purpose of exploring price distribution though and the 3 scenarios for a bit of holiday fun if anyone has the time or inclination, maybe it could be educational?....

     

    I tried to attach a few hours of T&S data from my X Trader but the file is 3.34 MB - too much for the websites limit :(

     

    If anyone can tell me how to do such a test in excel, (other than RTFM) and I'll see if I can come up with something useful - 1 days T&S is probably only useful for the first test, but I can down load 30min and daily data for the 2nd & 3rd.

    The only reason I got into this probability thing is because I heard professional poker players use it somehow. They dont have Tape or Dom but somehow they make money by using probabilty. I wanted to see if It could help me in trading.

     

    It would be interesting to see your T&S data. I'm into the order flow stuff myself. You can try to upload it to a free file hosting site like filefactory.com or you can record a video with camtasia. Or if you want me to record a video I can too. I actually have some videos with T&S, just tell me what kind you want.

  5. Posted

    If I where playing a game where someone flips a coin and I have to guess which side it lands on, what are my odds of me being right? 50% right?

     

    If I use the coin flip to make a trade(heads go long, tails go short) it is still 50% chance of being right. But I believe this is true if the TP and SL are equal distance from the entry.(TP=2 and SL=2)

     

    The question is, If I now increase stop to 3 and keep TP and 2, is there a higher probability of it hitting my TP since it is closer?

     

    Thanks.

  8. Posted

    how much is it? no prices are posted there for the webinar??? i just know he deals with the issues this thread raises. might be a decent site. might want to google his name and see what you find out????

     

    The guy has his email on his site. I've been emailing him back and forth and he seems like a very cool, nice and honest guy. No BS.:)

     

    Email him for price. I wont put it hear because its not on his site so maybe he wanted it not seen for a reason. I'll respect that. I will tell you thou it seems like a really good deal. month long webinar, real trades and ask questions to a guy with experience. We will see.:)

  12. Posted

    This is awsome pic that i see in this collection what a pic dear thanks for sharing this really awsome pic.

    Lol. I cant tell if your joking or telling me its stupid. Anyway, reason I posted it is because I think this is the Bull in New York on Wall Street. Yes?

  15. Posted

    Have you noticed, tho, that when there is a huge amount of offer-side pressure in the dom that often times it's taken out and then price ramps up? That just happened....must've been 15k cars sitting in the top 4 slots on the offer and then they vanished. Price was at 51.25 and right when those all vanished price jumped to 52.50 within 2 minutes. Now, it's not a HUUUUGE jump in price, but still, 5 ticks can make ya some ka-ching.

     

    Thats what I mean exactly. Pulled.

  16. Posted

    Can somebody explain with clarity why does price gravitate towards size and does this unfold on a consistent basis, if so than surely it is the making of a holy grail;)

    It does not gravitate towards a big BID/ASK. Ive seen just as many times it run away from a big BID/ASK. Its not that easy.

  17. Posted

    In my experience, most depth of market products are designed so poorly that they offer very little use to me as a trader other than order entry. I have hassled companies in the past such as Ninja to see if they might implement some changes, but to no avail.
    Yep, Ninja doesn't listen. They're probaly happy with the money they are making already and dont care to improve anything. But also TT might have a patent for some of the features like the little box next to the BID/ASK that shows how many orders printed at that price...Not sure.

     

    In my opinion currently the only product which allows you to properly 'read' the DOM is Trading Technologies X-Trader Btw you will need a pretty decent connection if you wish to trade in this way.
    Do you mean someone needs to have a fast internet connection. How fast specifically?

     

    I don't really use the market order book depth much in the sizes queuing, although it can be useful if you watch it a lot to see when the 'game playing' is about to begin.
    Can you explain what this size queuing is?

  20. Posted

    Whats so good about TT MD Trader? I see so many Pros using it. Why not just use NinjaTrader SuperDom with Time and Sales? Thanks.

     

    Through some experience with Tape reading using NT SuperDome/Time and sales and then comparing it to TT MD Trader, I think I now know the answer.(to my own question.:) )

     

    In tape reading, when looking at the time and sales, we are looking at the flow of orders. Fast flow means a lot of orders got filled and slow flow means less orders got filled.

     

    The problem is this:

    What if 200 orders print at once? Whats it going to look like on the time and sales?

    Answer: Its going to be fast flowing tape.

     

    What if 400 orders print at once? Whats it going to look like on the time and sales?

    Answer: Its going to be fast flowing tape.

     

    You see what the problem is? You dont really know how much orders printed. It could be 200 or it could be 400 orders. .All you see is the speed. Were basically just GUESSING how much orders printed. But this is very important information that the time and sales/ Dom setup is missing.

     

    TT MD Trader has this information. Its a box next to the bid/ask that shows EXACTLY how much printed at the bid or ask. No guessing! But also the location of this box is very helpful. All the information is in one spot. You dont have to look at the tape then the dom, then the tape then the dom, back and forth.

     

    Basically, TT combined the Time and Sales and DOM together in a very efficient manner. So efficiently that they can charge $650/month.

     

    5aa710a097a3c_MDtrader.thumb.png.d51560c9d9af9d06a850adf21cd13dc7.png

  21. Posted

    if you have ever used a DOM for trading,

    you might have wondered why nobody could make the DOM automatically centering the current price in the middle of the ladder --- that's because TT holds the patent to the "technology". They made everybody pay up a royalty fee, or remove the auto-centering feature from their DOM. I don't believe the auto-centering feature is such a ground breaking invention that deserves a patent, but the US patent office thinks differently and awarded them the patent.

    Doesnt Ninja have this option? I have been using the Static mode of the DOM, where the Bid/asks go up and down the price ladder. But they also have a Dynamic mode where the price goes up and down but the bid/ask stays in place. TT and Ninja made the deal in 2005.

     

    NinjaTrader Trading Technologies Agreement Announcement - NinjaTrader Support Forum

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