Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.
steve46
-
Content Count
1617 -
Joined
-
Last visited
-
Days Won
1
Posts posted by steve46
-
-
One last comment and then I am going to close this down for a while
I want to start another class (a small class) in an effort to try to help struggling traders
I say this because after the last class opened I had requests and complaints from folks who wanted to know why they couldn't get into the class....so this is "for the record"
1.) I don't do this for the money, yes I charge a fee, no I don't take anyone with a checkbook..instead I try to find people who I think I can help, and to that end I interview folks prior to the start of class, to determine whether they are A) responsible adults and B) have some background that might help them to get to their goals.
2.)I'm not the right person for everyone....I know this and I try to make sure the folks who get into the class are the right fit for this environment...If I see that we are not "working out" I tell them right away that I have doubts, and I try to provide alternative resources....its the least I can do...
3) Over the recent past I have learned that life is short, so the people I work with have to matter to me, and that means that I have to have a sense that the folks I invest my precious time with are going to put forth an honest effort...I'm not willing to tell people when to buy and sell, instead I want to (as DBphoenix has referenced) show folks "how to fish"...
I hope people who did not apply or can't get into the class find some value in the thread.
Best of luck
Steve
-
Today's chart (s)....as usual very low turnout for the open house prep session....which is hilarious since it is the meat of the method I use....but hey it confirms what I have known for a while about human behavior...
I'll go over the price action as follows. Asia and Europe both having problems, so they look to the US markets as a safe haven. They have to put money to work and find a decent returns, and they can't do it domestically so they look for opportunity in bonds, the few undervalued stocks that remain, and in the futures markets. Because these are professional markets, the participants know that it is best to wait until specific economic reports (and other events) take place. That is why this overnight market was relatively quiet, establishing a small trading range
What is important is A) the position of that trading range (near the top of the previous range) as well as B) the price action just prior to the each release. If one is patient and knows what to look for, you can obtain what poker players call a "tell" which simply put is an action that tips us off to future price movement.
As mentioned in my previous post, we envisioned two scenarios, one for a long move up to test the alltime highs at or near 1576, the other to visit the 1550 area....
We use a simple setup consisting of two charts...the DAX and the ES both using 30 minute candles....We also evaluate additional data to provide what is called a "lookback"...and that is important because it allows us to 1) obtain additional favorable entry opportunities and 2) to make the most of what could be a volatile day. In other words it permits us to trade over a larger range of prices with very little increase in risk...
The primary entries for this system are always in the overnight session, and they are marked as follows, the first green arrow shows the London open and the probe up to find buyers. That probe tested the top of the previous range and failed. The second entry was (for us) based on the failure to take out that previous range extreme....depending on skill level on could simply take that entry or wait for the break down entry that follows. As can be seen the rest is very straightforward.....the market opens weak and sells of right away. Those who had pre-existing positions simply hold and scale out. As can be seen it is simply a matter of watching and taking profit when your targets get hit....Our general practice is to stop at the close of Euro cash around 8:30
Good luck
-
Just a bit of time before we start our Globex open house.....
Seasonal influences remain the same (refer to the daily and weekly ES chart to see what happened last year at this time)
Intraday, the tendency has been to trade within a relatively condensed range during the Asian and German opens. Then at the London open we expect to see a probe down to test value, a move in response to two (2) scheduled reports (Construction PMI & flash CPI)...then if the reports are only mildly negative (as is expected) we may see a thrust move up to test the previous day's range boundary at 1568....if we get through that price point, expect price to clear briefly then fail bringing price back into the previous range in time for the US open....
On the long side, entry opportunities should present themselves at or near 63.50 with enough momentum to bring us back to the 68 area (about 5 points positive excursion)
On the short side, if we see a negative report, or negative news surfaces regarding Cypriot banks, we could see price take out previous value low and then proceed to retest 1550.....long inventory has been equalized a bit but remains vulnerable to a squeeze on negative news.
-
on my way out the "digital door" so to speak I saw this, and have to offer a comment
First I am pretty sure I qualify as a skilled person, certainly have plenty of experience with this market. I would find it very difficult to make a living trading one, unless I had a significant amount of capital behind it...say a minimum of 5K
I do however think a disciplined person using a decent system would have a chance if they had a min 2 contracts and (again) at least 5k discretionary capital behind them...in fact I am in the process of proving that to myself right now using a simplified system. The problem is that you have to be willing to wait for the high probability opportunities and in THIS market (S&P Futures) they tend to occur late at night when most of you are asleep...
Seeya
-
This isn't particularly difficult to understand...markets cycle from random to non-random continuously, AND patterns both random and non-random replicate all the time, what matters is the significance of the pattern in terms of time (timing) not that it exists.....
"Mathematics of Technical Analysis"....Cliff Sherry
Its been a while but this was one of the texts that seemed to get it right
-
Okay so some of this will depend on whether you (the reader) can connect the dots. First here is a quote (not good form to quote oneself but time is at a premium for me so...)
"Germany opened up and London followed suit...several reports (pertaining to the Euro) and the results were mixed. From a value standpoint, during the Globex price stayed above previous value area low, suggesting that participants continue see value higher up the ladder. This makes sense because the particpants we are talking about during the overnight session are Asia and Europe and because their own markets are doing poorly they are motivated to look to the US market for opportunity....as long as the news is not significantly negative, clearly they (European institutional participants) will want to mark the market up...."
The way to handle events (if you have limited experience) is to know that A) in a market dominated by professionals, there are going to be others who have a good idea of how a pending report will play out.....and B) because they have a good idea of what is going to transpire they are likely to get on board prior to the event.....and by prior I mean hours in advance of the report or event.....So what do you do, well one thing that you can do is to look back to the European open to see how they factor in the impact of reports (like today's Factory Orders report released at 7am PST)....
and finally, we have to understand "context"....and that is the main point of my quote....in an environment where everyone is looking for a way to make money, and Europe is in a recession, unless the "news" is very bad....participants are likely (as has been pointed out) to ignore even mildly unfavorable news and buy the market....and once again today, that is what happened...
From my point of view it is about putting the pieces together and getting your thought process aligned with those who have the horsepower to move the market...if you understand how those folks think about events, then, when they decide to put money to work, you can recognize the opportunity and "go with" it.
Hope that helps
-
Here's today's chart.....another very nice day...
I have a small group of folks watching me today (small so that I can answer as many questions as possible) and as usual, none of them showed up for the prep process the night before, which always makes me smile since that's where the real value lies...but hey, no problem....I have already provided one example of how I prepare....
Starting with the Globex open, notice that I place an up and down arrow to show the hi - lo range that occurred just prior to the London open. That range and its position relative to the previous day tells me whether an imbalance exists and on which side. it also tells me whether we are going to have a gap open, which is significant.
Germany opened up and London followed suit...several reports (pertaining to the Euro) and the results were mixed. From a value standpoint, during the Globex price stayed above previous value area low, suggesting that participants continue see value higher up the ladder. This makes sense because the particpants we are talking about during the overnight session are Asia and Europe and because their own markets are doing poorly they are motivated to look to the US market for opportunity....as long as the news is not significantly negative, clearly they (European institutional participants) will want to mark the market up....
At the London open, seeing the opportunity to get favorable position, I am long at the bell. Happily that results in a position that I can hold into the US open, taking profit as price probes up and fails (from 8 to 10am PST).....this is what we call the "primary" or high probability position. It is also the safest position that we can take because whatever happens we are guaranteed profit and we are out of the way of any volatility that may occur just prior (the hour preceding) the US open.
After that, all entries are discretionary meaning we either play defense or we stand aside.
At the top of the "magic hour" (our nickname for the period from the open to close of Euro cash) we use a framing technique that allows us to visualize how European traders will handle the close. Most of the time they choose to get flat, however in some instances they (like the rest of us) will notice that the market is holding a bid, and they may then elect to A) stay with a position, or B) take partial profit and leave a piece of the trade on looking for continuation.
Most often, commercial participants will get flat and in the process provide a nice closing trade opportunity from 12:00 or 12:30 to the bell.
As with so many things in life I wish I had the time to elaborate on some of these details. Unfortunately I have to prep for tonight's "open house" so that's it for me...
Best Regards
Steve
-
Events provide one (1) data point among several that we evaluate. Accurate evaluation of the potential impact of the event is the key point....for the retail trader then, it becomes a matter of first asking yourself "do I have sufficient experience with events (reports, earnings, etc) to use this in my decision making process"? If the answer is no...you have in effect simplified your process....you simply exit trades prior to the event. If on the other hand you have sufficient experience or access to someone who DOES have that experience, you incorporate that into your decision process. I am holding a position currently so I have to stop there, but I will go a bit further as soon as I have some time...
Thanks for your question...I think its a very good one to resolve and I will try to add some value to that issue later today.
Best Regards
Steve
-
In another thread I posted a comment that might help folks looking to A) organize themselves and B) for a way to recognize opportunity in the markets
http://www.traderslaboratory.com/forums/market-analysis/15926-s-p-500-dow-jones-mar.html#post177437
The reason I bring it up is that what happened today fits that description. First, (to review) we consider three (3) data sets pre-market...the first is the seasonal, and for us the seasonal influences are taken from historical record. To obtain that data, using daily, and weekly charts go back to the previous year at this time and observe price action. Next we take into consideration intraday tendencies...and we know from experience that commercial participants will look to do two things, first they will look for liquidity, and second based on the most recent price action they will try to identify imbalances (long or short inventory) and try to "squeeze" those participants, at or near the open AND at or near (on a test of) a previous extreme. Finally we consider the news and/or pending economic reports that may have significant impact on market volatility. With this analysis completed we develop a game plan that usually consists of A) an entry price or range of prices, B) an acceptable risk amount in points) and a series of profit targets based on a scale out protocol...
Today's price action followed the basic protocol that we were taught and that we teach
Previous action was "trend up"....and the seasonal influence was neutral to positive domestically, net positive for Asia and net negative for Europe. This means that foreign investors are likely to look to the US open to try to obtain profits (usually on the long side)
Intraday, we see that the imbalance is long (long inventory) and throughout the globex session we stayed near to previous RTH session highs...based on this we expect price to retest the highs then probe lower as commercial interests try to apply pressure to the longs
Two (2) news events...both PMI....and likely to be either neutral or slightly negative....
Based on this we assume that the market will probe up to retest the prior high, then roll over as commercial interests mark it down (selling previous long inventory) and in the process moving the market to a position where they might re-acquire inventory at a discount, or at the very least take profit hold shorts into the close if they see promise of continuation to the downside.
The chart tells the rest and so that we understand each other, there are two arrows showing two opportunities in today's market. The first (short) is a high probability trade and given the data, we take it at or as close as possible to "the mark" (the boundary of previous RTH...the second is at each trader's discretion....we didn't take it....unfortunately our time is limited so we try to get in and out as quickly as possible and go on to other responsibilities. Taking the short off the opening probe up (and holding it) you would have been "done" by about 8am PST. This for us it the end of what we call the high vol time period and it offers the best opprotunity to profit...
Best Regards
Steve
-
Always interesting to read the retail opinion on the markets. What stands out is the lack of organization, and focus.
Commercial participants look at it a bit differently
There are three basic orientations, Seasonal, Intraday and Event Driven News.
Each day prior to the RTH open I go through a standardized routine evaluating these data sets.
Seasonal is based on institutional targets (I call them time based pivots). Institutional participants get paid based on whether they hit or exceed these targets AND on the profit or losses accumulated as they manage inventories.
Intraday is based on the tendency of commercial participants to A) look for liquidity and B) to try to squeeze one side or the other when there is an obvious imbalance.
News driven events occur regularly and are used as the rationale for marking markets up or down in order to buy (at a discount to value) or to sell (at a premium). That cycle is replayed over various time periods (related to the time based pivots) from intraday to weekly, and from weekly to quarterly, and finally from quarterly to yearly (close) and on to the start of the new year. The current cycle is based on the quarterly time period and focuses on the Euro/Cypriot bank situation and domestically on the effects of sequestration and (soon) tax season.
Based on this orientation there are three types of opportunities, each with its own time frame and each with differing profit (and loss) possibilities.
Constrained by time (I have to get ready for the Globex open) I have to stop here
Good luck folks
-
Remarkable how ignorant, naive and/or just plain stupid (choose one or more) people can be
First, money management information is freely available to everyone courtesy of the Internet. Anyone with an interest can do the research. There is no such things as "best".....what matters is whether the money management is a good match with the trading system to be used. When a profitable trading system is integrated with good money management, the odds of success are increased and that brings me to the last point. The idea that some individual has in their possession a magically effective money management program is simply an attempt to get a more skilled trader to provide them with a way to make money without having to do the hard work of learning how to do it themselves...
There is no (legal) way to "guarantee" no more than X number of consecutive wins or losses. All that a person can do is to show that a particular system "tends" (and then you estimate based on statistical testing) to exhibit (enter a range of numbers here)....approximately X consecutive winning or losing trades.....
It seems that if one sticks around long enough every form of bullshit immaginable shows up on this site.....and I hope DB, that you don't think any of my comment is direct toward you....its not, it is directed to the original author.
-
Exceptional day, very simple trade
I stayed with a 30 min chart....using a process that I've have refined over the last few months
I start by establishing a general context for the day....that tends to be news associated with Europe
With that in mind we know that traders are referencing the Cypriot bank problem and looking at bond spreads to determine where to trade (what product) and and whether to be long or short. Our primary or key reference point is the European open (London)...we watch the DAX and Eurstoxx to determine how they are going to play (mark it up, stand aside or mark it down)
Look at the attached DAX chart....as can be seen the market opened and tested up briefly during the discovery process, then trended down throughout the morning session (primarily on news)....there were three (3) economic reports and they were generally weak, providing a negative influence on the markets. At the bottom of the chart you see the US open and the probe down to determine whether we (the US investor, banks, commercial interests) would continue the selloff, move sideways (stand aside) or buy the market....the "buying wick" shows where buyers (primarily the institutions) came in to mark it up.
This is what I do each evening during my prep process (evaluate the overnight market) and in the morning I am at my desk by 5am and from that vantage point I make the decision to either A) get an early entry in place or B) watch until I see a possible trend develop and get on board.
When I teach this process, what I try to convey is that today's financial markets consist primarily of educated commercial interests....they tend to move markets back and forth through pre-established ranges based on several basic criteria (one of which is relative value)
once you have a way of knowing how they think (how commercial interests evaluate opprotunity), it is relatively simple to see where (and when) to put money to work.
By the way, this is why there is no need for indicators, footprint charts, etc....its about getting aligned with the folks who have the money (and the motivation) to move markets. Sorry to have to say it this way, but most of that is about folks trying to make money off your (newbies and retail traders in general) ignorance....
Good luck folks
-
Couple of thoughts for those of you who decided to comment
Knowing what I know now, I have two suggestions....First, try to get ahead of the process...find a insurance professional (that you can trust) and start to evaluate long term care policies as early as possible (if your parents are relatively young, ask them to start the process for themselves)....keep in mind that the longer you/they wait, the more expensive this option becomes....Second, prepare YOURSELF emotionally....understanding that your parents are (at some point) going to require you or someone in your family to take the reins...if you have a trusted family attorney, spend some money to get things taken care of (get a power of attorney in place or at the very least get the paperwork in order) and think about getting a trust document so as to avoid the problems (probate) associated with execution of a will upon their passing....believe me if you wait and events overtake you, it can be overwhelming....remember that everyone goes through this at least once in their lives, so your not alone...and it really helps to have other family members or good friends to talk to.....
Sorry about straying from the main topic
Good luck
-
Taking the day off tomorrow.....because I am going to interview caregivers for an elderly parent....and for those few who may be in the same boat, I recommend ResCare (nationwide company) to find decent caregivers....and for those who haven't yet had to deal with this, you are in for a real experience...it will literally grind you into the earth....emotionally and physically so be forewarned.....
Out of habit I have prepared tomorrow's charts and I have changed things around a bit to take advantage of the fact that many (if not most) of the big moves originate in the overnight market (typically starting with the London open). knowing this I have re-aligned my charts so that my I can get on board early and have a favorable position in place prior to the RTH open at 6:30 PST....
-
Today was a very easy day if you were patient. price started out near the midpoint of the longer term chart and tested previous key reference areas repeatedly...for me the rule is "3 tests establishes S/R".....after that I read the tape and try to get on board in the direction of the primary trend...
-
There are always lessons to learn from each market and each session. In this case the operative lesson is simple (literally)....about the only way to go is to A) let the market show where it has decided to go and then take a little piece out of each move or B) read the tape and learn how to get in at the extremes....otherwise most retail traders simply get chopped up or expenses bleed their accounts down to nothing.
-
DB
From my admittedly limited perspective, it seems that no matter what I say or do, over time, few (if any) will remember me one way or another....so I try to find my own personal reasons to say and do things that help people who might be struggling along. Try as I may I continue to be a bit clumsy in the way that I express myself, but thats always been my handicap....
-
You are absolutely correct in your assumption.You answered around the questions. I had no doubt that would be the case. Just another junkware selling locust preying on newbie's. Sam does that also.
Here's some advice for you holmes.. One day you are going to pick the wrong newbie to rip off and that newbie is going to send some very very ugly individuals to your house to deal with you. And trust me when I say it won't just be YOU it'll be your whole family.
Better take some of your ripoff money and build yourself a rocket ship to the moon because you won't be safe in Santa Barbara or anywhere on earth for that matter. You dig??
Good luck to you you'll need it
Generally speaking I don't have good luck, so I have to rely on skill instead...so far so good
As to the rest of your silly commentary.....I have promised the site owner that I would refrain from my "normal" style of response, which might include phrases like "screw you"...for example....
Mark I hope you will appreciate that I have exhibited some restraint in this matter....
And as for you ....I hope that makes my position clear....
-
Really.....?
Sir or madam....if the phrase "my money" is too complex for you to understand, we may not have a basis for communication....
Okay lets go at it this way....open YOUR wallet and look inside....if you see money.....its probably YOUR money....now I will look inside my wallet.....ah....I see currency inside it....that is MY MONEY.....is this clear enough for you I certainly hope so...
Good day
Steve
-
This is one of the few things I am passionate about
I think vendors should be willing to demonstrate their skills for a limited time so that prospective customers can observe and decide for themselves whether they are getting value for their money..
Every year I demonstrate how I trade for a small group of folks....for 2 weeks I trade my money (using "go to meeting") and they watch....no obligation....its pretty simple....and its impossible to disguise what you are doing....you enter, you exit....the charts are up there showing everyone where you decided to act...and a person's skill level becomes pretty clear.
I think every vendor should offer to do the same thing..... for at least one (and preferrably two) weeks so that prospective customers can decide for themselves...and make no mistake its not all about making money....sure thats important, but its also about compatibility....people should be able to decide whether the system that vendor teaches, is a reasonably good match for their circumstances.....and they should be able to do that without having to spend thousands of dollars up front...
Thanks
-
Wish I had more time to say something about this. Arrows show entries at 1st standard deviation and again at a test of previous open
-
I am done for the day and wanted to make a correction to my previous post
I used the wrong volatility number to calc the distribution. As seen above....that distribution is calculated using 11.2.....unfortunately the correct number was 9.49....Attached please find the same chart using correct information...Sorry about the mixup....in my haste to get this done I made a mistake....
Today was an excellent example of how using the right tools can provide the edge a trader needs to make money. As with all things in this business, in order to make it work, you have to (step 1) recognize that the opportunity exists...that happens when the market reacts to the news about Cyprus banks and then (step 2) you have to know what it means when price tests down to the third standard deviation....(which should contain almost all price action within a time period)...the last step isn't easy, particularly for those trying to learn this on their own, but once you have step 1 and step 2, then its a matter of pulling the trigger, and having the confidence to hold on long enough to make a profit...how much profit depends on experience, education and each trader's ability to control their emotions while the market wiggles around.
-
Again no time for discussion, but this might help some folks Today's globex open...2nd standard distribution hits it right on the money. Using vol of 11.2
-
I see that folks continue to review this thread....I have a few minutes and wanted to post this example.
As mentioned a while back I am still using this calculated distribution, but with longer time frame charts. This has several advantages. First, I know that my odds of success are better when I wait for price to test one of the boundaries of the distribution. This is especially true of the S&P futures. Secondly, I know from experience that if I put on fewer trades, but the trades I do take are higher quality entries, my expectancy is probably going to improve...and thats what has happened.
So the bottom line is I am taking higher quality entries, with about the same (slightly bigger stoploss), and I am able to hold longer, thus obtaining a significantly bigger win when I am on the right side of the market.
The attached chart shows todays market with 1st & 2nd standard deviation lines in place (I chose not to put the 3rd SD in today....As can be seen price tested to the upside providing a nice short entry last night just prior to the London (Europe) open, then came back down to test the previous session lines..what I like about this is that you can trade it with as few as two (2) contracts, taking one off early. You can hold the other one, (and be sleep deprived like me) or you can cash it in and get some sleep.
Good luck folks
Steve
Is It Time to Give Up and Join 90% of “losers”?
in General Trading
Posted
Ed Seykota said some very interesting things about trading, and many think him eccentric (and they are being kind)....I like the guy. If you really consider what he is saying and then ask yourself whether you are ready to LEAVE BEHIND HASN'T WORKED AND START NEW then you MIGHT have a chance...not a great chance, not a good chance but what we used to call a "fighting chance"
I was doing some research for my next class and found the following data from the US Small Business Administration; Here is just a small part of what I learned;
(Assuming you agree that trading is a business)
About 10% of all new business fail within the first year
Approximately 50% are still in business after 5 years
2/3rds of all small businesses fail within 10 years
and real question is why
Here are my answers
1.) Low barriers to entry....all you need to start a trading business is computer, an account, and a couple thousand dollars...that's all...and because the barriers are so low, there's a lot of competition
2) Lack of competitive advantage.....most new traders don't have an edge. Generally they misunderstand what an "edge" (a competitive advantage) is...they learn "by hard experience" that what they believe will work......doesn't....
3.)Lack of experience/or education....both are necessary and most new traders start without a basic understanding of the profession...
4)No business plan/no risk management plan....the basis of every business requires that the owner find a way to overcome expenses and make a profit...most folks either don't start with a viable plan OR they abandon it at crucial times, and that sinks their ship....
5)Unrealistic expectations......This profession, like any other requires skill, discipline and commitment to a common goal....it can take years just to acquire the experience and education necessary to compete successfully. It also takes sufficient capital and access to the right tools....lacking just one of these elements can mean failure...the most common failure is the belief "I'm the exception...I can make it without covering all the bases" OR (just as commonly)...."I'll take care of it later"....
If some of these things correspond to your situation, I suggest you take stock of your inner resources and ask yourself whether you have the energy to fix it, or start over and learn a new game....many of us go through the same process and it comes down to answering that same question....fix it, start over new or find a different game to play.......
Good luck
Steve