smwinc

James your post made me laugh so much I had to nominate it :rofl:

I found this post on "Re: Ideas for Struggling Traders" interesting and have nominated it accordingly for "Topic Of The Month August, 2008"

Oh, come on Brownsfan, don't be unfair. I'd like this week's and next weeks please. :rofl:

No, sorry your reply wasn't there when I posted. Cheers.

bump to that question (thanks for the info so far)

With indicators, remember the overlying fact is that you DON'T need them. They are something which really are designed to service the account-cycling non-profitable trader. That being said, they have a purpose and many a trader use specific tools for a purpose. My opinion of indicators is that you use them to perform a calculation you understand and could do yourself, but it would be difficult and time-consuming. I.e. In my trading I use the VWAP, PVP and Value Area frequently. It didn't "drastically change my Profit/Loss" but I like them. It quantifies certain aspects of my trading. I get a little worried when I hear people recommend an indicator as being able to drastically change your trading - even if they aren't selling something. Maybe I'm a little old school - but I think you should be able to make money consistently with a) market depth & b) a static chart. If your add-on indicators to a chart were to go down, you shouldn't feel like your suddenly standing in a crowd naked. Your biggest advantage so far is your age. Just imagine if you spent 5 hours a day studying the price action of the NQ - 10 years later at the extremely old age of 30 (yes, dripping with sarcasm) after roughly 12,500 hours staring at the market depth you would be inhaling bids and exhaling offers, something like Neo out of the matrix. Do you really think you would still be needing a MACD and a Stochastic to be telling you when it's time to buy and sell? I don't think so. Really spend the time understanding how a market works and what is causing the smallest price movements, the tick by tick action. Everything else will come after that. Just focus on mastering the basics. Trading is very simple, but damn hard. Be brilliant at the simple things.

I think all markets have different characteristics, like people. I have found it surprising though - especially when you change to a new market and get completely ripped doing what you were doing previously. I had a few horrific down-days in my early trading in the DAX. Certain markets have very strong tendencies to certain patterns. Logically, some markets are more sensitive to what particular patterns imply. For example, thinner markets tend to behave well to aspects of VSA, volume-tests, certain pattern's in the market depth, because they can be bullied. Very thin markets will look strange on a chart, but very logical within the depth - a large percentage of traders are directional and respond to common and sense patterns in the depth - leaning on size, rejection at iceberg orders, spoofing, etc. Something like the ES can't be bullied and has a high percentage of non-directional traders. Directional (continuation) patterns don't tend to work as well. The depth is also almost meaningless frame by frame. Things like the QQQQ or Eurostoxx have amazing symmetry. Double tops are much more common - I know the Q's have a very high percentage of algo trading, I've always thought that might be a reason. Something like FX is interesting - look at the daily trend in Aussie, not one pullback! Have to be careful between the relationship between futures / spot, interest rate dif, synthetics, etc. I'm not a big FX trader so have to leave it to the other guys though.

FULL ARTICLE: http://www.bloomberg.com/apps/news?pid=20601109&sid=aLsfDbE1JU_E&refer=home This needs to go in the dictionary under the definition of "Insider Trading" ---------------- Aug. 11 (Bloomberg) -- On March 11, the day the Federal Reserve attempted to shore up confidence in the credit markets with a $200 billion lending program that for the first time monetized Wall Street's devalued collateral, somebody else decided Bear Stearns Cos. was going to collapse. In a gambit with such low odds of success that traders question its legitimacy, someone wagered $1.7 million that Bear Stearns shares would suffer an unprecedented decline within days. Options specialists are convinced that the buyer, or buyers, made a concerted effort to drive the fifth-biggest U.S. securities firm out of business and, in the process, reap a profit of more than $270 million. Whoever placed the bet used so-called put options that gave purchasers the right to sell 5.7 million Bear Stearns shares for $30 each and 165,000 shares for $25 apiece just nine days later, data compiled by Bloomberg show. That was less than half the $62.97 closing price in New York Stock Exchange composite trading on March 11. The buyers were confident the stock would crash. ``Even if I were the most bearish man on Earth, I can't imagine buying puts 50 percent below the price with just over a week to expiration,'' said Thomas Haugh, general partner of Chicago-based options trading firm PTI Securities & Futures LP. ``It's not even on the page of rational behavior, unless you know something.'' `Lottery Ticket' The 57,000 puts that traded March 11 at the $30 strike price and the 1,649 that traded at $25 were collectively worth about $1.7 million, Bloomberg data show. Each put is equal to 100 shares of stock. ``That trade amounted to buying a lottery ticket,'' said Michael McCarty, chief options and equity strategist at New York-based brokerage Meridian Equity Partners Inc. ``Would you buy $1.7 million worth of lottery tickets just because you could? No. Neither would a hedge fund manager.'' ----------------

Sorry to rub salt in the wound here, but this thread has proved to be a fantastic example of why you do not just try and jump on the end of a trend without specific reasoning. This thread was started 24th July. If you had entered a Short USD trade against the Aussie, you were filled long on the close at: 9520. As at 8th August, Aussie dollar is now at 8849. Trading the futures FX futures: 9520 - 8849 * $10 tick = $6710 loss, per contract. Similar story with the EUR: Short on the 24th July @ 15641 Last traded price 8 August @ 14977 = 664 tick loss ($8,300 per contract).

Yes, sorry I couldn't remember how much the deposit was. I never had any major problems with volume when trading US futures. Never really traded stocks through them. At the end of the day, you get what you pay for. Bang for your buck, you can't beat I.B.

Interesting discussion this. I have seen and spent time with a very diverse group of traders. From very successful independent & prop traders, traders at firms, traders at banks, average traders, losing traders, losing traders who think they are good traders, etc. The three things that really stand out separating the traders comes down to: 1) Discipline 2) Conviction 3) Guts. In my experience, having an edge to pull an income from the markets is actually not that hard at all. I would go so far as to say it is easy. Some of the most consistent traders I know have particular setups, and they just don't really question it. They don't make a killing, they just grind it out, working their small edge. Mentality is too general a word. The more specific problem: The majority of people have no discipline. It takes a huge amount of discipline to know what your specific edge is, sit infront of a screen and only take those setups. To only trade your edge, entires & exits. I do NOT think the problem is exactly about having a profitable strategy. It's about having a profitable strategy, and trading that and only that. The average person simply can't sit infront of a screen all day, every day, to only take one very specific setup. Even if it were to make them more than their current income. If you can't follow an exercise plan, can't follow a diet, can't follow a study plan, etc - It is unlikely you will succeed at trading until you can address those issues. This is one of the key reasons why there is a correlation between successful athletes following on to become successful traders - it is the discipline aspect. Subsequently, it is also a key factor in why there is very little correlation between being successful in a white-collar job, to becoming a successful trader. Most 'real jobs' (as I call them :-) ) do not require and test your discipline on a daily basis.

Ensign, Tradestation, Esignal, CQG (in ascending order of cost)

No problem, I understand. I was only asking with the thought of the number of round-turns you do per month, to suggest considering switching to a volume-based commission rate. If you are doing more than 300 round-turns a month, it's worth having a look (through a broker like I.B). I know broker's like Infinity are negotiable as well. The first day I had my account open with them, after trading the DAX they literally halved my commission rate. Always worth checking. Good luck

Mini DAX? I don't believe there is such a thing. I would recommend Eurostoxx or Bund. Low margin (most broker's will offer margin similar to the Emini's), low tick value, highly liquid, lower risk. Nearly all the London prop firms start the new guys on the Bund or Eurostoxx for that reason.

Nice Jason. Working on the win % is easier than working on the av. winner vs av. loser, and you are doing well in that department. Commission really is a bitch. Long term though you can do things about that, depending on the size you trade & your own situation - become a member at the exchange, volume-based commission pricing, etc. The S&P is really one of the most versatile markets out there as far as commission. I would really recommend recording your trading. I heard from a friend a long time ago who used to do it, and started doing it. I would also talk out-loud to myself (yes, weird) why I was taking the trade. It made it MUCH easier to see after a losing day what I was missing. Having the verbal reasoning at the time really helped. Few questions: What period is the above analysis done over? I.e. A month? How many total round-turns do you average per month? I.e. If you traded 100 lots per trade, that's 100 round-turns per trade. If you traded 1 lot per trade, that's 1 round-turn per trade. Your figures for Av Winner / Av Loser - is that including or not including Commission?

Yes, unless this is some strange broker, it is per contract. Buy 1 contract = 2.15 Sell 1 contract = 2.15 = $4.30 Buy 10 contracts = 21.50 Sell 10 contracts = 21.50 = $43.00 However, in the long run, once you do larger volume, trader's switch to a volume-based commission model based on the volume they do. Take some time to read through Interactive Brokers commission structure for futures - Bundled & Unbundled to get a feel for it. http://individuals.interactivebrokers.com/en/accounts/fees/commission.php?ib_entity=llc Futures Commissions Bundled vs Unbundled http://individuals.interactivebrokers.com/en/p.php?f=futuresComparison&ib_entity=llc Other brokers, such as Infinity Futures, will happily negotiate a "reasonable" commission based on the volume you do as well.

Yes, true. Risk to take I guess. The times it has happened, just call the broker to pull all working orders. It's not for everyone, you need to know what you are doing. You can't have heaps of orders resting close to market and then get caught unaware from an earnings announcement and suddenly you're sent max long after the market sweeps down. Each to their own, just something I do. Not for everyone.

It is ALL about getting a good que position. One great feature about Trading Technologies X_Trader is the EPIQ Column - Estimated Place in Que. When trading the ES, Eurostoxx, etc. I will always have orders qued up miles up and down the ladder. You can always pull them if you don't need them. At a minimum have orders placed around common areas that you are likely to trade off if the market gets there - yesterdays close, around prior highs lows, etc etc. You will also find you can "steal ticks" just from getting a good que position. Plenty of traders make a very decent living doing just that. Often I will find the market approaching a level where I have a good que position. I wasn't even planning on fading the move, however I'm in a good spot in the que, so why not try and nick a few ticks? There will be enough time to scratch the trade. I get filled, immediately place an order on the Bid below, and more often than not I get filled, or I scratch, no harm done. If you only did it with 4 lot 10 times a day for 1 tick, that's an extra $500 gross (before comm. ) a day for a basically mindless strategy.

Brownsfan makes a good point about the importance of commissions. I too had a quick look at your chart - just be mindful of slippage you are likely to incur when trading live. Best to estimate a $5 a roundie. Hopefully you will pay less, but it's a good amount to base averages off. The notion of 20 trades a day being over-trading is not true, however it IS over-trading for your circumstances. When you are trading as an independent & small size, you basically need to trade quite low. With a cost-ratio of something around 40% of a tick being paid in commission, you need to go for those bigger moves. Once you get your size up, you can get a good commission as a percentage of tick value. When that happens, you can take advantage of the smaller moves. Goodluck, keep us posted. When are you planning to go live?

"stay short" is valid. The point being made is that taking a NEW entry short is in most trader's view a poor (at best) potential risk/reward trade. Remember you are charting the Dollar Index, which no one trades. 1) what are you going to trade, which pair. 2) what is your entry price 3) what is your stop

Do you have a plan for when your trading software goes down? I have subscriptions to CQG, Esignal & Ensign Software. What about when the exchange goes down? I have accounts with different brokers & clearing firms to be able to hedge any open positions in a correlated market on a different exchange. I.e. CME, EUREX, SGX, etc. Do you know how to hedge your trading instrument/size and do you have the excess capital available to? I know the equity / ratio requirement to hedge positions in the markets I trade. Do you have another brokerage account if you can't access your current one? I hold accounts with Infinity Futures, Interactive Brokers, MFGlobal. PC Crash? I have two desktops & a laptop. Internet Crash? I know how to access my brokers via telephone and what to say. Your local phone exchange crash? (Yes, I actually have had that happen, and yes I was in a position.) Again, I know how to access my brokers via telephone (Mobile) and what to say. Power outage? Same again, Mobile phone access. Godzilla? This one.. I'm still working on.

The problem with any of the Mini Contracts is it is never going to appeal to any of the bigger traders. I mean honestly, who REALLY wants that kind of tick size? It is appealing for the reasons Soultrader mentioned - new traders to learn on - but as far as being a trader and wanting to make a coin or two. Not really. The "E-minis" in the US I believe are the only "mass traded" mini contract around the globe, probably because they were the first electronic version of their market which attracted the liquidity in the first place (i.e. versus the Big S&P in the pit.)

I think a forum is a good source if you have: - specific, direct, questions - require feedback on charting software, broker, firm, etc. - general facts about a market - shooting the breeze Unfortunately, trading forums tend to get "diluted" from new traders wanting to learn "everything" and creating threads requesting such a thing.

Typical "What do you do for living" question at a night out: Them: "So what do you do for a living" Me: "I'm a trader" Them: "Oh Ok." [silence] Them: "So what do you trade? Like Imports/Exports?" Me: "No, I trade futures. On the markets." Them: "Ah." [More Silence] Them: " .. What are they? Like Stocks? You must be struggling in this market!" Me: "Ah.. Not Really... Futures are a specific instrument, called a Derivative, based on Stocks, Indicies, etc." Them: " . . . . . . . . . . I See. Hold on, I'll be right back, I need to go get a drink from XYZ" Them: [Walks off, Never comes back.]

At the end of the day, as an independent you have it a lot harder. We all know trading isn't easy, so I think you need to just hit the problem head on. What specifically is the problem, generally it's either a) hesitation (entries) or b) fear (exits - getting out way too early). The best solution is to just practice the activity live, with real money, over and over. If you're struggling to really 'enforce' the motion in the futures, switch to the lowest leverage, lowest size vehicle you can (e.g. 50 share minimum trade size in stocks) and practice the task. Allocate a day to focusing on just your problem. E.g. Hesitation when selling the market. Just spend all day doing that activity. As dumb as it sounds, it will have an impact. Most people just can't be bothered doing it. Ironically, you often find you even end up on the day, with such a simple, mindless strategy ("Sell every few moments, get out immediately"). Just trade the smallest share size, and take 1 tick losses / profits. Comiss. might hurt, depending. Just grind out the activity of hitting the trigger to sell. If it's holding on as a problem, then just practice getting in a trade, and holding for X minutes (e.g. 5 minutes) regardless. This is where it's obviously key to do the smallest, low leverage possible. On 50 - 100 shares, you can't do much damage. It might cost you a few hundred, but how much are you losing from missed opportunity each day? Probably more. Up to you, own circumstances, etc. Food for thought.