smwinc

I don't quite understand why you trade multiple accounts . . just curious . . ? I don't really post regularly enough to post results every day, but I think is a great idea for a thread. Accountability is a must in trading.

Give this guy a gold star. Exactly. An interesting assumption often made is that for a trader's ideas to be taken seriously, he needs to be a profitable trader or we shouldn't listen to him. I don't tend to agree with that. Taken a step further, what does this imply? That if you earn more than someone, you shouldn't listen to their ideas? When someone is selling something, or providing one of those general "this is what trading is really about etc etc" speeches, then trading statements are in my opinion required. When someone, like Steve, is sitting here providing detailed explanations for various trade setups - what difference does it matter how much, if any, profit he is making from them? Anyone who DOES trade knows that entry is only a small part of the plan. Taking your setups, having the balls to hold on, managing your risk, using appropriate position sizing, etc. is what makes a living from this business - not your entries.

Nice post Shaun. As we have just gone through Chinese New Year, Hong Kong has been closed for 3 days - China (Shanghai) has been closed for 5 days. Taiwan & Kospi also taking holidays. 23rd January was the last trading day where all the Asian markets were open. 29th January was the first trading day where all the Asian markets (excl. Taiwan) re-opened. On the 23rd January S&P 500 closed at 823.5 and rallied to it's swing high on the 29th January to open at 871.5 What fuels these large moves? Large institutions took large LONG positions in the Asian markets on the 23rd. They continue their buying in the European & US markets the following days. As the European & US markets rally, there will be plenty of partipants in the Kospi / Hang Seng / China H-Shares / Taiwan who are SHORT and are going to be BUYING the correlated European & US markets as a hedge to cover the expected loss they will incur once the market re-opens. The combination of Asian - Longs with vested interests buying the Euro / US indexes & Asian- Shorts attempting to hedge their exposure tends to compound and exagerated moves are created as other neutral partipants (traders, etc.) join the move. As we can see the S&P 500 managed to rally roughly 50 points over this period. Knowing this, expecting a reversal on the 29th (re-open of Asian markets) is fairly simple. Two of the largest order-flow partipants STOP contributing to the rally - Asian-shorts UNWIND their hedges (i.e. Selling pressure), and Asian-longs previously with vested interest stop buying, and are likely to unwind their longs (more selling-pressure). Understanding this simple process can be the fundemental structure which gives that extra weight to any technical bias for taking these two highly profitable swing trades.

You too chief, let's pray for an '09 that's somewhat similar to '08 Cheers

Hlm how you doing . . I'm not in the business of being right or wrong, or to be a mentor to new traders, etc etc. Exactly as I just said, I'm just saying my experiences. Aside from the mental aspect of using size, and working out the psychological reasons of when and why you should use large size, there are practical reasons to think about. When you trade large size, you have an impact on the market you are trading. It is that simple. It has become worse since the markets have thinned out a lot lately. The other main reason traders don't scale their size up in a linear fashion is because of the problems you face. In the eurostoxx, stacks of traders used to sit there with 100 - 200 lots on every few prices - the second they were hit they would place an opposing order 1 tick up/down to take a tick, just making money on the 'two way' price action. Over time the market started to REACT to this trading style. Rather than bounce off the prices and flick back and forth bid/offer/bid/offer, traders clip the entire 200+ bid and send it 200 offer, knowing that someone out there is now probably 200 long offside. They end up covering, pushing the market down another price, often into the take profit order of the guy who clipped the bid and sent it offered in the first place. The market changes & reacts to large size orders. Liquidity is becoming more and more of a valuable commodity. For a large trader, you need "something" to clip into. In plenty of markets, the traders are well aware of that. Traders get greedy and see a 300 lot offer at the high. Someone out there is thinking "If I clip that the market will surely bust the high and go a few ticks, letting me take a few ticks profit on 300 lots". Sounds great. What happens most of the time these days is algorythms are in place that basically program two scenario's, one being: "if greater than or equal to 50% of my offer order of 300 lots is taken, sell 10 x 30 lots at market as fast as possible." So me the trader clips 200 out of the 300 lot, and the moment I clip it, someone furiously sells the market down a few ticks. Now every man and his dog knows I'm 200 long at the high and 2 ticks offside - the market will then push down and try and squeeze me out. Again - your action has CAUSED the market movement. Everyone looking at the chart goes "oh, double top, easy sell". Yes, it is an easy sell now, because your selling it down to get me who is 200 long out. The second scenario often writen into the algo is "OR if greater than or equal to 50% of my offer order is placed in front of me (i.e. traders leaning on the size to sell in front of it) buy at market and simultaneously pull my offer." Me the trader, rather than thinking of buying it through the high, decides to put a 200 lot offer right infront of the 300 lot, thinking I'm only risking one tick, because I can get out on it if I need to. I lean on him, and the second I do he clips me putting me 200 short , pulls his 300 and sends it bid at the high. Unless I have balls of steel, I end up clipping out at market, taking a loss. The key point I'm trying to make in all of these situations is in your 'every day' trading the market REACTS to your large size orders. Often, the patterns and setups on the chart are caused from trigger-happy traders trying to get their size off and getting ripped. So what's the big difference with fundmental news? Same scenario, 300 lot offer at the high - me the trader eyeing it offer contemplating clipping it. Now (imagine) Goldman comes out saying its got 10 times more exposure to Maldoff than anyone thought. Now I sell 200 at market, leaning on the 300 lot. Yes, the bot might try and rip me through the high, but the guy is WRONG this time - I know there will be thousands of other traders looking to sell the Index, smash the goldman stock, probably smash a few other banks on the anticipation they have exposure, etc. I have the conviction to hold the short now. Plenty of people out there will think I am making this way too complicated, over analysing, that it still comes down to S&R levels and taking your trades, etc. When you are trading off a chart, you are generally trading a formation, let's call it formation "A". The problem tends to be when you clip in with size, it can change the formation from being formation "A" to being formation "B" - all of a sudden you don't want your trade anymore. This is just what I see, and my experiences. Perhaps it truely is something that you probably wouldn't believe until you try it.

Thought I'd jump back on the forum, been a while . . this thread caught my eye. Irespective of what people think about 86834's way of explaining things, I agree with him. The realities I see across insto's and prop firms is that the big, juicy spikes in your income come from the news-related trades. I've mentioned this before around the forum - one of the greatest misconceptions in trading is people believe they will build a strategy, and slowly scale up their size until they are doing 1,5,10,20,50,100,500, etc lots in their chosen market. In reality, it just doesn't happen. I have not met one person who trades like that - builds their size to say 100 S&P and trades one-dimensionally with their full-size. What tends to happen is as a trader grows, his access to larger size grows. Average trade is 10 - 50 S&P, max size could be 1000. The default size in the market slowly increases, but the big money trades come from specific events where the trader has massive conviction and they smack it with full-size and make their month. 95% of the time, those "massive conviction" moments are fundemental news announcements. You will be trading, you're market is relatively too high compared to it's peers, you can see a great technical short coming up, and you have interest rate announcement in a few seconds. 75 bps is expected, but money market has priced in 100 bps. 100 bps comes out, market pops higher as the suckers buy the better-than expected news, and the MOMENT it stalls you smash the sell-side with full-size for all it's worth. It's those times when everything lines up, when you use you're 50 / 100 / 1000 / whatever max size amount. Edit: A lot of people hear about the guys who just come into work to trade the figures, looking to smack their size down and go home. Plenty of people do that, but they are generally the one who don't last. It can become too much like gambling. The more successful traders will be in there all day - every day, maintaining the feel for their market so they have the confidence that they are understanding the vibe of the market coming into a particular news announcement - not just looking at the figures & a chart and coming up with an opinion.

Very true, couldn't agree more. At the firm I trade for, we have a Risk Screen which monitors the positions of literally thousands of traders (it's a big firm). A Risk Screen basically has every traders name, and a live view of their current positions & profit / loss. I've spent (a brief) amount of time training new traders in the past & working with risk. What you often find watching the screen is that many, many traders take similar entries. For a few seconds, 70% of the firm's DAX traders are long. Some are a little late, some get the best entry. However, after that initial "entry" everything will change. Some are aggressively pyramiding, some are scaling out selling into those 'pyramiding' orders of those same traders, some have already gotten out for a scalp, etc. Over time, that is the primary difference between a "good trade" and a "great trade", which becomes the difference between a trader's day, a trader's month, year, eventually entire career. The importance of a entry will be often be greater for an independent trader vs a trader at a firm, but the reality is most of this business is about managing & exiting your trades - knowing when to hold 'em and when to fold 'em as they say.

Ok enough is enough, excuse the french, but what the f*** are you on about? You jump into a thread, bragging about your friends ability to trade "huge" size. 100 lots in FX might be 'massive' in wannabe-trading land but it's piss all in the real world. Looking over your past posts you've already told us you trade ONE lot in the NQ. Personally, I like Steve's thread. I don't give a toss about your friend, or his ability to trade. It looks like a good thread, but you don't just jump in a random thread on a different forum and advertise it like you've just discovered Angelina Jolie was born a Man. I'm sorry if you didn't get the reaction you were after from the community here. Forgive us if we don't crack a hard-on over someone else trading freakin' bollinger bands. Back to Steve's thread.

It would never happen. Too many big, important people make too much money from the markets to change it drastically. A 'public solution' of some form might emerge, but it will be just that - a public solution. Behind the scenes, things will continue on business as usual. My comment might sound a little "brief" but it's the blunt truth. Market crashes & turmoil has been going on for 100 years now. The markets are still here.

I would consider taking some time off trading and getting a normal job. Trading when you are under financial pressure is extremely difficult. I don't know your circumstances, but I can tell you now, the more you feel like you NEED to make it in trading right now, the less you will. Making money is a hell of a lot easier when you don't need to be making money. Making money when you have bills to pay, friends / family that have expectations, is far harder. I would suggest doing what needs to be done so you have neutral/positive cash flow in your life, and spending all the other spare time on building a viable trading business. Like Kiwi said, there isn't "one quick solution" here.

Good chart. China's Shanghai is another example.

It's not permanent, it's only a temporary ban. No, I see this as no possibility.

Directional traders - going long or short. Looking to trade tops / bottoms, etc. What the 'standard' trader does - attempt to buy low sell high. I probably shouldn't have said "meaningless" - it's probably an over-statement. It is 'less of an edge' than in the thinner markets. The basic logic of trading off the depth comes down to perceived risk. If there is 300 lots below you, you can go long knowing you can get out on the order below you. As trading commences and the market fails to go up, Shorts know if they hit out the size you will probably be forced to cover. It's just an endless "if X happens, Y will happen, which means Z will happen". These sort of situations don't occur in the ES. There is always liquidity, always participants willing to go long or short at a given price. By non-directional, I'm referring to Spreaders. Spread trading is too big a topic to go through in a post. However, the point being is that there is a greater share of volume in the ES coming from Spreaders than from directional participants trying to buy low / sell high (or vice versa) in the ES. The big volume spreaders in the ES are trading a relationship. E.g. Long ES / Short Eurostoxx for 2008. They don't need to be watching anything specific in the ES. There are still patterns in the depth in any market, but they are different, like watching the Tape. You might find plenty of use in reading the depth in the fixed-income. I guess it just depends what you're looking for.

Yes, limit up into the open. I had so little sleep this past week. The news came out in the Asian session. Before you know it you're trading Asia, then Europe, then US, then Asia opens again . . . The move in the ES was nothing compared to other markets. Shanghai nearly hit limit, almost made 10%. Hang Seng rallied over 2,000 points. The fed isn't protecting investors, or the public. They are just throwing money hand over fist into day trader's hands. :rofl: Edit: I must admit, it never ceases to amaze me the levels to which the US Government goes to, to absolutely rip apart the US investing public. Nearly all of these announcements have been done outside the day-session of the US market. Imagine being a fund with a weekly / monthly outlook. It would be fairly difficult. Friday was a great example. Asian traders have benefited most from these moves. US day-session opened, they took profit and that was basically the end of it.

Focus on doing what you have been doing. Be aware you are going live during an extremely volatile period - don't try and be a hero. All the best.

Good job mate, nice pull. Crazy times in the market lately. I've been feeling the same way on some of these days - disappointed that I didn't pull more out. I think everyone has that feeling during these periods. Remember that many people would be losing their accounts / mortgage / family / etc . Two sides to a coin! Cheers

30 dollars? Did you mean 300 dollars? What are you trading?

I have used VNC actually, it's quite good. Maybe that's the best route, rather than trying to run the app itself. I suppose having the internet on the actual device would be enough of a backup just incase the VNC server went down. That would probably be the main concern. Any recommendations as far as the PDAs go? Thanks!

Hey everyone, Looking to purchase something to be able to trade portable - for the times when you need to do something and your not in the office or at home. I would love a small, PDA-type of hardware that could run an order book or (ideally) a price ladder. If it could run Trading Technologies software, I'd be in heaven. I'm not one for half-doing something, I wouldn't be reliant on it (I have a full setup at the office & at home), just for a) monitoring positions and b) for the times where something fundamental occurs and you need quick action. Appreciate input, especially if you are already doing something like this. Cheers.

Dead on . . for more explanation, search for other posts from GJ, he's made plenty of great explanations here. Along with EBS, Reuters D2 is the other big player. FX Marketspace . . never heard of it.

EBS data is your best bet. You can get the data feed through CQG.

Nice! I didn't realise it was that thick. Good hefty tick size as well. Thanks

Goon - I haven't traded KOSPI before, what's the order book depth like? Would someone be able to post a screenshot of the order book if it's not too much trouble. Cheers

Daily range is about 500 ticks when it's moving well. Even on the big contract, you're looking at roughly 1:1 ratio of tick/commission, however the hang seng never moves "1 tick" it's always flicking up and down 10 - 15 ticks at a time.

Do you have the link for this study? Sounds interesting.