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Market Wizard
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About roztom

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  1. I know many of us focus on everything else but put MM last... In reality the goal should be to lay off risk and get to risk neutral asap... Any trades specific outcome is random..now before you tell me you have 60 or 80% winners, can you tell me which one will be the next winner? Can you tell me whether you will have a sting of losers? Nobody knows...all we do know is that we have to manage the risk to stay in the game... So How? I'm going to assume you have a non-random executable setup... You must know what the probability is for that setup to hit a specific minimal MFE and what the typical MAE is.. (based on the market traded). Ex.. If you know the ES has an average 1.5 point counter rotation..wouldn't you want to scale at or just past that rotation to lay off risk... ? If you trade a 2 lot (3 is better) then your goal is to get the first scale.. If you are trading a 2 lot with 1.5 pt risk = 3 pts, then if you scale 1.5 you have no risk going forward on the second contract... With 3 lot you would then have reduced your risk to 1.5pts on 2 lot...Then you would scale #2 at the next logical target subject to your plan and then manage the last runner per your plan... Some will say the R/R ratio doesn't work..I say the probability of getting the scale is the primary initial objective...after that it is up to the market participants to either carry the trade to its objective or for it to fail... That outcome is not under our control... but execution, Risk management and trade management is... I am a discretionary trader. To me it's all about the risk...the profits take care of themselves. Get risk neutral then you've protected your equity and then you can let the trade work... Emotionally it allows you to be more detached from the outcome... Also, make sure you know when the trade fails...it should be something structural, not $ driven if possible...
  2. Greetings to all of you... I see we have some traders here... ES trend is still up...Friday sell-off imho was Responsive...Friday high 66.00 is a weak high..it will be revisited... Market tested 53.00 area (key dividing area). and also 1 ticked Thursdays Opening Swing High before the extended range bar from Thursday...showing OTF buying interest in the 51.00 - 53.00 area. It appears to me that OTF values prices and depending on GLobex Sunday night and relation to previous RTH I will be primarily looking to position long... Of course it is possible to test to 1445.50 area but I am currently favoring long... You guys look like you have been having fun here... I wish you all happy trading.. :missy:
  3. A set-up should be well defined.. Typically homework is done, areas of interest identified and then depending on the open, range, rotations, etc...execute your plan. (Many) Most successful traders do their thinking outside of market hours... homework. During the market typically it is a matter of executing based on several potential scenarios that have already been planned out and then unfold. The plan should not, imho, be hatched during the heat of battle. When the markets open then it is waiting for the market to approach your area to do business and then execute based on your pre-defined set-ups. After your entry, then risk control, scaling to lay off risk and then target/exit management. One thing that is important is to have a non-random entry/trade mgmt, exit process... Example: One of the hardest things to do is to trade a 1 - lot... It is really important to trade at least 2.. The idea is to have a consistent/high probability scale out to reduce/eliminate risk (depending on your stop). Typically the average rotation in the ES is 1.5 - 3.00 pts... Therefore it would make sense to enter potentially after a rotation greater than 3 pts (or more) if your setup shows and then assuming apx 1.5pts rotation you can get a scale to give your trade room but also take the pressure off.. Just a thought.. There are many ways to do it... Assuming you are not trading randomly then you either have a fixed $ exit or a descretionary target for exit... Just 2 cts here ... there are many here who may help... Trading is a very individualistic endeavor...it must become yours and fit your psycology. The mental game is the true obstacle... Good luck..
  4. Emini are free...but I don't really know what is included I think it is only minis'...
  5. As far as FCM's... you really need to find a stable platform and an interface you are comfotrable with... If you read reviews here you can find one. also , some of the data feeds are compatible with IRT. Infinity / TransAct is free ES Data, as well as some others... If you plan to trade other markets you will need a feed like DTN IQ, etc...expensive ..if only e-mini's than a good broker feed will work... but the feed must not aggregate the volume otherwise the VP gets messed up. Infinity has a good free feed... some other free feeds are bad from a volume point of view so you need to do your homework.. Let me know if I can help..
  6. I have used most platforms over the years.. currently I use Linnsoft: IRT, Pro Ver.. Costs about $90./mo plus depending on your data feed it might be more but it is inconsequential today. Also for historical data you need DTMA backfill, excellent about $20./mo. GO to Linnsoft.com and look around.. Personally I believe it is the best or at least one of the best MP/VP packages out there... It is probably one of the best if you are in to Volume Profiles which is one of the tools I lean on...
  7. I'm not familiar with her... I think I was in his first class.. materials were very crude. I can't remember but he rented space maybe a block from CBOT..might have been west of Wells on W. Jackson...can't remember anymore... It was early 80's... As N: will attest, statistics is not my thing so it was more difficult for me since Pete S. came at it from that side but I had figured out myself about market rotations (auction theory). Initially it was those guys running the stops but my thinking changed that the market would need to go there to do business..not to pick off the stops (unless it was mine getting taken :rofl:). Early on I started with AG's and then went to AG spreads - Old Crop/New Crop Bean spreads... there's an easy way to get carried out in a bag... Once I understood spreads I moved to currencies... Early on I really enjoyed T-Bills then T-Bonds and then S&P when they were introduced. A lot has changed since then... I bet we know some of the same guys. I spent time at CBOT and CME... but I was always an upstairs screen trader... I couldn't deal with getting stabbed with a pencil in the pit... :helloooo:
  8. I watched the GLobex open and trade last night off the news and "expected" this thing to flush... Now I see short covering and a good buying tail so it "appears" we over shot and are rejecting the balance area 41 - 54.00 so this should be interesting... are we going to balance up here? I would have rather seen good selling on the open then a short squeeze but heck I don't lead... SO we gap lower on RTH - then what? We have several distributions up in Globex, 54.50, 51.00 ish - midpoint... etc... Always a conundrum.. :missy: Good trading everyone..
  9. If I believe in a random distribution of outcomes, which I do might just be my therapy, it allows me not to "invest" an expectation beyond my desire to have properly executed my plan. While my results are substantially better than 50/50 I certianly do not know what the next trade will bring. I always believe the next trade will win until it fails but I expect 50/50 for that trade. If I have 4 trades for the day and 3 are winners or all are winners then why would the next day bring 3 losers ? Same criteria and same set ups and same execution..putting aside the markets variables from a distribution point of view I see it as 50/50. It is the way I allow myself to let go of the need to be right and embrace the need to execute and not change things or bring random behavior into my process. This may be semantic and it does not deserve any more discussion IMHO. It is a way at least for me to keep my mental state where it needs to be - detached from any specific trades outcome..
  10. The 50/50 is specifically related to the next trade. Otherwise we wouldn't have days with multiple sequential loses... if you have a 60% expectancy then does that mean 6 in 10 will win? When will that 6 show up? Is it possible to have 6 losers and then 4 winners and then 4 losers and then 8 winners or some "random" distribution of data? The 50/50 is to my way of thinking 1. letting go of the need to be right and 2. acknowledging that the same trade with the same setup will have different outcomes at different times depending on what the participants in the market do at any given time. There are many things we can tell but we can't tell when an OTF will drop a 500 lot on the market or a HFT will diddle around and negate our edge.. Hence 50/50 for the unseen variables that can bust a trade.
  11. Yes he did. I took a class from him right at the beginning at his Market Logic School.. The handouts were crudely drawn Zerox TPO's. His assistant was a Brit named Peter Moon..was that the guy you met? It was the first seminar I paid for and it wasn't inexpensive back then either... I could not trade with it at the time and I spent a year trying. Also when the CBOT LDB came along I thought that would help but it didn't help me. I was trading T-Bonds with it back then - or trying... :crap: He clarified for me the concept of auction theory..which I had mostly put together from my own observations watching extremes get tested and stops get cleaned but not in a organized manner... the description of a Dutch auction was new to me. That was the eye opener - the auction ..and how the market would go to each side to attract buyers and sellers, etc. BTW back at that time I had started trading the book for a FCM and then became a CTA in the mid 80's... from there a crash test dummy.. :rofl:
  12. I understand that "meaning of statements written" can lose a lot in translation or be shaded by the preconceptions of an individual. I would like to comment on your statements. Just so you understand I am not taking exception to them but rather am observing the context and your interpretation of my meaning - obviously a deficiency on my part or the medium.. I do not have a rigid plan at all but I do have hypothesis that is laid out beforehand. This is part of my pre-trade preparation. I trade context so I want to know where we are, where are we trying to go and how well are we doing it... Currently we are moving to new level lower in the market. The underlying product (ES) is being revalued based on new information... no big deal.. I am prepared for opportunities from both sides. I also know where important areas of the market are and how trade into those levels can present opportunity for substantial moves.. I would suspect that when RTH opens Monday morning we will potentially see heavy selling... While there may be opportunity on the short side initially with the late sellers, I will be watching for an extreme for at least rotation (retracement) to squeeze the late sellers and potentially for the market to rebalance... The news, however, may beperceived as extreme ... that is where ACH comes from... my plan allows for ACH. As far as 50/50. The next trade is 50/50.. it doesn't matter what your expectancy is...over a sample size hopefully there is a distribution or edge for a trader but the next trade is 50/50.. In any sample of trades the distribution is random..you will not know where the positive skew will show up. Hope this clarifies a bit..
  13. If someone has 90% winning trades I'd like to meet them.. I will write a check..this is assuming that there is a true positive expectancy net of costs, slippage, etc. I have found that winning percentage is not very important..anything over 50% helps... In fact setups aren't that important relative to everything else. I will always come back to risk management since most traders focus on surgical entries, the setup, the magic indicator, seeking the special sauce..it doesn't exist... The issue is what do you do with a trade once it is on... Do you wait to get stopped out if you are wrong? Does one use a fixed money stop? Why? If it moves your way then retraces then what? When do you get out? dump the trade, scale out, exit a winner? These are the answers required to make it in this business. Is the traders execution random? Discretion creates randomness.. does the trader keep changing things, a tweak here, a tweak there - more randomness - exponentially. Most want high percentage of winning trades but that does not lead to profitability..it does however fulfill the need to be right... something that is contrary to success in this business. High probabilities come from short targets.. profitability comes from longer targets with more uncertainty... Again, trade management, one of the last things traders ever think of working on, is what will separate the winners from the losers in most cases. I'm sure there are exceptions. It depends on time-frames, etc. I am referring to daytrading. Trading is multi-dimensional with various components that must align. Many never get to understand that profit comes from risk and trade management potentially more than it does from entry...
  14. I tend to agree with some of Rande's implications: The need to predict what will happen (Need To be Right) Holding on to a belief that the market doesn't agree with. Not letting go and adjusting to the market. Not seeing trading as a execution of an edge with a random distribution of outcomes. This is not a counterpoint to other posts here but with few exceptions we bring learned behaviors to trading that are contrary to success in an uncertain world. Even the basic "fight or flight" will cause traders to impulse and dump a trade when there is nothing structurally wrong with it. We run from danger in the real world but stand in front of danger in the trading world. In fact, typically the best trades are entered when there is the most uncertainty If someone has a viable method and cannot execute it then either it is not aligned with their psychology or they have an attachment to money that is interfering. I think it takes quite an effort for we mere mortals to change our relationship with the need to avoid loss, be right and have our self-worth validated by the next random trading outcome... logically we should understand this but emotionally we still experience the other.
  15. I know, I know..you keep a punching bag next to the desk... I keep a few extra keyboards in the closet... :helloooo:
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