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Nvesta81
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Posts posted by Nvesta81
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But I want to create my own program. Now I'm so sad.My day job is software development so I understand the inclination to want to program all things and be challenged etc. However, I must say that when it comes to pattern recognition and identifying "zones" in the market -- is something us humans are very good at and can do with very little effort as opposed to programming all the steps for a computer program to do it. (time is money)
I think your time would be better spent studying the market in general than programming something like this. You can identify these zones and draw them out on a chart in as little as 2 minutes, whereas programming something similar might take you weeks/months...
Is it really worth your time? I also wouldn't pay a dime to someone who programmed something like this when I can spot the patterns myself for free and while doing so might learn something about the chart I'm looking at... :missy:
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I have decided not to use Interactive Brokers for T & S and have signed up with Esignal, following the comments here.In my humble opinion the aggregate data that IB provides is sufficient when reading the T&S screen. With a trained eye there's no information you can get from T&S that you can't read from a chart anyway. If your success as a trader relies on this alone then I suspect you are going to struggle regardless of which broker you go with.
Bottom line,I think the difference is negligible. Just thought I'd throw it out there so you don't choose your broker on T&S alone, there are more important things to consider IMHO.
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This might be a dumb question but I'm compelled to ask anyway.
Does anyone here know how I would go about calculating the probability (percentage wise) of price reaching a certain point completely disregarding past behavior?
For example, say we ignore setups, patterns etc, and just randomly place a trade at any given time... so you buy at a stock at $10, you set a target at 15$, and a stop at $5. This would be an equal distribution so I would assume you have a 50/50 chance of your stop/target being hit, basically equal odds right?
So how would I calculate the probablity of entering at $10, target $20, and place a stop at $5... the distribution is no longer equal so things change quite a bit. I'm not very good at math so I could use some help... for some of you this is a cake walk I'm sure.
Any input is greatly appreciated, thanks.
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Hello, been awhile since I asked a question here, love this site!
I primarily trade futures indexes, ES and the Dow. My question, in order to better my trading in those contracts what other things should I be watching on the side? Let's say you only had 3 monitors to work with, what other charts would you be looking at? Would you watch individual stocks as well as the main indexes? Oil, gold? I'm sure some will say all of the above. However, I'm trying to narrow this down as much as possible. I want to know if any of you think some markets are clearly more important than others to monitor to improve your trading in any select one. I hope my question is clear. Thanks alot!
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"A fool and his money are lucky enough to get together in the first place." - Oliver Stone
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I find this fascinating. Here is why: This is a post on trading edge posted in the psychology section, but there is no discussion on trading psychology! All the discussion is about stats, expectancies, and technical indicators. Surely these are an essential part of an edge. Do you all think this is sufficient? More to the point, if you think there are psychological edges, what are they? What have you all found useful from psychological perspective that has made the difference in your trading?I have yet to become consistently profitable but I will say that some areas of psychology have definitely made a difference in not losing everything I have already.
Some areas in particular:
1)having the patience to only enter a trade at the proper moment, and having the discipline to eliminate impulse trades.
2)being able to control the urge to trade larger size -- not being greedy.
3)knowing when to stop trading and then evaluating my strategy.
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The thing is if you are trading such small lots I fear the broker fee is going to eat almost all of your gain. Also I understand there is always risk of something like this happening but how often does a stock suddenly drop 30%. This rarely happens in a single day nevermind within 15 minutes.I would consider possibly starting with 100 share lots. It seems like not many people on this site actually trade equities, is there a reason other than the higher leverage available in trading commodoties?
Futures are more simple when it comes to tax time, you don't need as much capital and the pattern day trader rule doesn't apply. Those are probably the main reasons. I also find it much easier to monitor one or two markets and study those charts rather than keep up with a dozen or more stocks all at once. The bid/ask spreads in futures are small too which is nice when it comes to managing a trade.
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While this sounds logic, I think it is based on wrong premises. There really is no mathematical formula that would predict a market, but there are some formulas that can predict the market with a certain degree of probability. There are automated systems which work. Chosing a discretionary system you can make room for your judgement. Some things are difficult to programe. Even a stupid trendline. But in most of discretionary systems some objective (i.e. which can be automated) component can be isolated. I think it is a good idea to define automated and subjective components of your system and study them separately. A filter "I won't enter if I have a feeling that something is wrong" can be IMHO a legitimate part of your strategy and you can study its performance. But these are just ideas of a newbie who hasnt found/developed his edge yet, so please take it with a grain of salt.What you said does make a lot of sense and is a subject worth expanding on in my book. It's much easier to toss words around like edge and mentality but much more valuable to be able to define these things in-depth and see how they interrelate in specific circumstances as you just did. Good post.
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If what you're saying is true than no one would ever make money consistently from trading or investing. That's obviously not the case, and is not what I'm arguing for or against here.The mere 5% making money might be speculating from fundamental information rather than a technical trading strategy. I'm not arguing that it's impossible to make money, clearly it's not, but I am arguing that having an edge is much more important than being the Yoda of trading. I am also questioning whether or not it is possible to define a 'technical' edge if you leave any sort of room for discretion. The 'force' doesn't work in the stock market.
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I posted a reply to this thread a few days ago and it must of got deleted, sorry if I offended anyone.
I'll try again. I think it's safe to assume that there's no mathematical formula that works consistently enough to predict stocks or futures, is this a reasonable statement to make? Now, being that no human on this earth can be more disciplined than a computer operating on strict rules before entering trades then one can only assume that there must be room for discretion in trading. To me, that is the contradiction I see often among traders. If you leave room for discretion that means you leave room to falt your own signals. At this point you can be the most calm and collected trader on earth, there's really no logical explanation one can give me other than "gut feeling" that would allow a trader to by-pass a trade that signals an entry that his backtesting and notes have classified as an edge. It just seems like you're all arguing in circles with this 'psychology vs edge' business. If a trader has specifically designed a system of trading by following strict rules that prove to give him an edge, then he must follow those rules each and every time with no exception otherwise the edge would be lost. It's simple logic really.
It seems clear to me, you either have an edge or you do not. Lets be honest here, if you know that your 'edge' has the potential to falter now and again, then it has the potential to falter a x number of consecutive times just enough to make you question if it's a valid method or not, at which point it's no longer a question of discipline but a question of hope.
I also find it kind of strange that it is rare that you see traders come out and say it plainly that they are making good money on a consistent basis by day trading, unless they are trying to sell something.
I hope this post doesn't offend anyone and gets deleted once more. I don't see how my skepticism can't be of some value to this thread. I don't see anything wrong with questioning the validity of the profession.
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I have my own theory that the reason most people fail in this business is because they are under-capitalized. Finding an edge is one thing, but can your account handle the draw-downs? No system is %100. Having the patience to trade through draw-downs is devastating to the psyche and perhaps that is where most mistakes are made (doubling up on contracts to make up for losses etc... )
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If every trader you've met is trying "only" to refine his edge, then none of those traders has one, and it is the lack thereof that prevents them from being profitable.And, yes, it would seem that more than 5% would "have something consistent figured out". But they don't. Most likely they have no idea how to go about putting a strategy together. Yes, there are a great many people "out there" trying to trade. But few of them have any idea what they're doing.
I have yet to meet a losing trader who has a winning strategy.
I completely agree with this guy. Most jobs are repetitive in nature, and almost everyone endures them just for the paycheque. Show me a method that works and I'll grind it out if it means I can sit at home and have the freedom that day trading brings. I'm almost convinced that most people would be able to do this easily. Here's why it's not common, because it is my opinion that finding an edge is near impossible. I know that I'm still struggling to find one after countless hours of research, but maybe I'm just dumb. :crap:
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Fair enough. If a person is fortunate enough to carry on and still pay for everything they need to live, more power to them!
I for one have been reading and posting on a few day trading forums for awhile and I see a lot of optimism and hope among traders and I use to share that hope, but lately I'm starting to question a lot of these claims I see from traders. I thought I'd bring a little bit of skepticism to the table, or at least the perspective from a trader who has not yet seen the light at the end of the tunnel. I am currently that trader. I've been at this for over a year now. I have countless hours of screen time under my belt. I have programmed many different 'systems' and back-tested them to the last tick. My conclusion so far is that the market is very hard to conquer, if not impossible. Maybe I'm just burnt out, or desperate for a solution, but I see no light at the end of the tunnel.... and it sucks to be there. Discretionary trading just seems more like luck than anything to me... but if some traders out there actually have that magical 'intuition' that allows them to ride waves of money consistently time and time again, I applaud you, but I really don't think it can last... maybe I say that only because I can't do it...and honestly, I really hope that some of you can, because that means I might some day be able to as well.
Right now I just can't wrap my head around it that people actually make a living doing this year after year without hitting any walls, unless they are wealthy to begin with.
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The losers are those who wanted to 'get rich quick' but approached the market and within 6 months put on a pair of blinkers so they couldn’t see the obvious - a kind of "this is the way i see it and that’s that" scenario - refusing to assimilate new information that changes that perception.
I’m happy to tell you that the reason I started trading was because of the 'get rich quick' mindset. Just that now I see it as 'get rich slow'
If you’re thinking about giving up I have one piece of advice for you ....
Ask yourself the question "how many years would you go to college if you knew for a fact that there was a million dollars a year job at the end of it?
Flojomojo
I don't want to be "that guy" that sh**s on everyone's parade, but I will be anyway. If success in day trading is only acquired very slowly yet almost everyone who's drawn to the profession wants fast money then it begs the question of "why bleeping bother?"
If it's going to take 5 years of watching your equity stay flat or fluctuate above and below your starting point, and then another 5 years before you can make any consistent gains at all ,then you're wasting a lot of time and money on something that's highly risky and painstakingly tough to do while trying to make a living. A million dollar a year job? I'd say that's unlikely given that the way you've just described trading makes it sound like a hit-and-miss operation. A person would be better invested getting a high paying job with benefits and pension plan while accumulate blue chip stock rather than gamble their life on a pipe dream in which the duration it will take to succeed may last as long as it would to get a nice retirement package. Just my 2 cents.
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Thanks for the input guys. It's making more sense little by little.
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What I find most confusing about any of these principles is applying them in a trade system. Today would be a good example. We clearly have support between 1367-68 in the mini-S&P, but the challenge is trying to figure out if it's going to hold and take off higher, or break-down. I'm sure there are clues but I'm not yet able to quantify them. It almost seems as though at some point you just have to take a gamble and hope your stop doesn't get nailed.
edit - I know the news pending (FOMC minutes) will be a big factor.
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Quoted straight from the book:
"It is important to understand that the market-makers do not control the market. They are responding to
market conditions and taking advantage of opportunities presented to them. Where there is a window of
opportunity provided by market conditions – panic selling or thin trading – they may see the potential to
increase profits through price manipulation, but they can only do so if the market allows them to. You
must not therefore assume that market-makers control the markets. No individual trader or organisation
can control any but the most thinly traded of markets for any substantial period of time.
Market-makers are fully aware of the activities of trading syndicates and other professional operators that
place substantial orders. It therefore makes sense that they will take whatever opportunity is available to
better their own accounts accordingly."
A little information about what the book refers to as the 'herd' :
We have all heard of the term ‘resistance’, but what exactly is meant by this loosely used term? Well, in
the context of market mechanics, resistance to any up-move is caused by somebody selling the stock as
soon as a rally starts. In this case, the floating supply has not yet been removed. The act of selling into a
rally is bad news for higher prices. This is why the supply (resistance) has to be removed before a stock
can rally (rise in price).
Once an up-move does take place, then like sheep, all other traders will be inclined to follow. This concept
is normally referred to as ‘herd instinct’ (or crowd behaviour). As human beings, we are free to act
however we see fit, but when presented with danger or opportunity, most people act with surprising
predictability. It is this knowledge of crowd behaviour that helps the professional syndicate traders to
choose their moment to make a large profit. Make no mistake – professional traders are predatory beasts
and uninformed traders represent the symbolic ‘lamb to the slaughter’.
We shall return to the concept of ‘herd instinct’ again, but for now, consider the importance of this
phenomenon, and what it means to you as a trader. Unless the laws of human behaviour change, this
process will always be present in the financial markets. You must always try to be aware of ‘Herd
Instinct’.
There are only two main principles at work in the stock market, which will cause a market to turn. Both of
these principles will arrive in varying intensities producing larger or smaller moves:
1. The ‘herd’ will panic after observing substantial falls in a market (usually on bad news) and will
usually follow its instinct to sell. As a trader who is aware of crowd psychology, you must ask
yourself, “Are the trading syndicates and market-makers prepared to absorb the panic selling at these
price levels?” If they are, then this is a good sign that indicates market strength.
2. After substantial rises, the ‘herd’ will become annoyed at missing the up-move, and will rush in and
buy, usually on good news. This includes traders who already have long positions, and want more. At
this stage, you need to ask yourself, “Are the trading syndicates selling into the buying?” If so, then
this is a severe sign of weakness.
Does this mean that the dice is always loaded against you when you enter the market? Are you destined
always to be manipulated? Well, yes and no.
A professional trader isolates himself from the ‘herd’ and becomes a predator rather than a victim. He
understands and recognises the principles that drive the markets and refuses to be misled by good or bad
news, tips, advice, brokers, or well-meaning friends. When the market is being shaken-out on bad news, he
is in there buying. When the ‘herd’ is buying and the news is good, he is looking to sell.."
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I think the reasoning behind MTM if I recall correctly is that syndicate groups and "big" players are the professional money, and the market-makers and specialists are able to see where these players are buying/selling from their books. Therefor, they are able to manipulate prices to facilitate their inventory requirements, and in the process turn a profit for themselves in their private accounts. It's been awhile since I read the book so I might be totally off here... it's an interesting concept anyway, but I still remain somewhat skeptical.
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I like your title, & your comments are obviously very personal & deep (to you), which is cool. There are many angles which folks use to work the markets & each angle is, & should be, unique to the individual.But to me, this game is all about one thing & one thing only…..turning a profit.
I’m not here to get a fluffy feeling in my belly, learn to love myself or get all deep & meaningful….I’m here to bury the stiff who gets the wrong side of my next long-short pitch.
If I crack off a 2mill Cable clip Wednesday a.m, & book the ride on the back of a 2 figure move into Friday p.m, then someone is $40k lighter to my account as I confirm the ticket with back-office admin.
If I’m going to engineer those tickets on a consistent basis, I’m sure as hell going to ensure my minimum requirements (research…geography…set ups…triggers…contingencies etc) are drilled & water tight, & I mean water-tight.
That’s what I call positive psychology
I know exactly where my price is now
I know exactly where I want to go
I know what it will take for me to crack a trade off (set ups)
I know what will lever me in (triggers)
I know (more importantly) what will lever me out again if events turn sour
I know what it will take for me to add to my position & when to fold my hand
If you don’t got that type of game plan, then you’ve got yourself a potential psychology problem. Because someplace down the route, you’re going to hesitate & maybe 2nd guess. You do that, & you’re dead in the water.
You think the successful hotshots out there are going to 2nd guess their game plans?
These hustlers know the psychology of the masses inside & out, back to front. They know where on the ladder you’ll likely hesitate….they’ll know the likely hot spots on a move (the probable stop, profit & limit camps)….they’ll know who is likely stepping up to play a level & why….they’ll know who is likely to front run a b/o step & where they’ll get greased if the b/o gets faked…..they’ll run a level & if the level fades, they won’t think twice to stop & reverse the move on the spin of a dime if the flows are out of whack….
will you & do you know this stuff?
They play a very uncomplicated game of psychology. They don’t really need to play it any other way to be honest, coz the majority of the pack out there make life hellishly complicated for themselves enough of the time. And these guy's (pro's) don't require second invitations to hustle your $$'s.
Most of the real (negative psychology) issues out there have more to do with traders financial capitalization dockets, which in turn trigger the first stages of the fear cycle than anything else.
Scared money wins nothing in this game…..& there’s a whole mountain of scared money churning these markets each & every day.
And the old timers, savvy pro’s & hotshot gunslingers know it all too well.
Strangely enough, this post was probably my most enlightening experience as a trader, lol. Wow. That really puts everything in perspective. It is so true.
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Well ehm, no. To be honest I'm not. I'm not as paranoid to believe that some have access to more information than others. Besides, there are definite regulations concerning the release of news figures. Perhaps we ought to do a poll on this topic
Ever watch how the market reacts prior to a scheduled news event? It always seems to go slightly in the direction of the post-news reaction. Maybe I'm just paranoid but I always figured some people are in the know and are affecting the market prior to the release, the evidence can be found on the chart. I didn't back-test this so I have nothing concrete. I usually stay out of the market before news anyway...but perhaps it's something worth exploring.
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Thrunner, I'm looking for YM data. I'll check out some of these sources.
thanks for the replies people.
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Hi,
I'm looking to find intra-day data for at least a year or two to back-test a trading system I have in mind. Does anyone have any recommendations on where I could find a data provider and chart package that can accommodate my needs? I'm looking for something fair priced. My broker only allows me to backfill up to 30 days of intra-day data...
The charting doesn't have to be all that great as the trading system is fairly simple in nature. I'm more interested in getting the intra-day chart patterns, even if I have to do all the testing manually with a pen and paper.
thanks.
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I'm just a newbie compared to you guys but from my observations I'd say candle formations and VSA compliment eachother very nicely. They sort of go hand-in-hand, no use comparing one against the other. Use both and things become much clearer. I'm sure there are plenty of trades that can be taken just by using candles alone, but VSA can give you a greater understanding of the potential of certain moves. Just my humble opinion...
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I'd be willing to pay 5% of my trading account. The way I see it, I'll lose that 5% if I don't get the proper education anyway, so might as well hand it over to a professional who can point me in the right direction. However, I would 'shop around' before I select a mentor.
Finally! A Way to Verify Trader Performance
in General Trading
Posted
I don't see this idea taking off for the simple reason that transparency in a zero sum game that involves money just doesn't make any sense whatsoever to me.
Or maybe I'm too paranoid, but there are so many sharks out there I feel justified in my reasoning.