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lastninja2

Quit Job to Watch DOM.

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I think you (and plenty of others on here) are confusing 'eliminating risk' with 'eliminating the opportunity for profit'. No risk means no reward guys, there's no two ways about it. If you start jamming your stop in at break even all the time then you're not doing yourself any favours, however good it feels.

 

If you're trading systematically, then there's no need to worry about 'viewing the market objectively'. Your views of the market will become irrelevant.

 

Depends.

 

Firstly, if skilled enough, it is possible to trade moves with very minimal adverse excursion. Timing and experience are vital.

Secondly, although the fact we must take risk to assume a gain (it is so obvious it needs no mention) is true, the first priority ALWAYS has to be capital preservation*. The key is to risk as little as possible to gain as much as possible. Until you realise this, you are unlikely to get to the point where you realise the truth I mention in my first point.

 

I'd kind of agree that if most start 'jamming a stop in at break even' they wont be doing them selves any favours in the short term as their frustration at missing moves will be difficult. However, there's no reason they cant re-enter and eventually learning my first point, and also learning the core skill - WHEN to take the stop to break even in terms of whats happening in terms of order flow and price movement.

 

* I'm not talking about risking a tiny fraction of the account here. I'm talking about understanding structure that allows you to only take highly probable trades. When you're at this place, you're happy to risk 10% or more on a trade if the figure add up. This 2% rule we read so much about is useful to 2 types of traders: newbies who dont understand the markets yet and portfolio managers who are often forced to be trading a vast array of products due to regulatory reasons

Edited by TheDude

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blue, I can easily write a strategy in which scaling out beats exiting the entire position, via an inappropriate choice of the levels at which the exits occur.

 

That sounds like an excellent suggestion - please can you post your findings, along with some general information about how you tested the strategy (timeframes etc)? I look forward to seeing your results.

 

Thanks.

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Initially I visualized an absurd strategy which anyone who writes lots of strategies should be able to visualize without me saying anything more than what I said about selecting inappropriate exit levels. So I hadn't planned to actually write the strategy because I could visualize it and I believed the existence of a single model of scaling out would NOT nullify your generalization because the synergy of scaling, if that's the appropriate descriptive term, requires pairing the scaling logic with realistic rather than laughable rules.

 

I have not attempted to write a scale out strategy before so what I envisioned as a prank strategy to prove ...that a proof wouldn't necessarily prove anything, ... became something I chose to give more thought to, like maybe this could be a worthwhile area to explore. After an hour of resolving the named entry nuances I had the logic working where I could test scaling out. It took another hour to write realistic rules where scaling out beats exiting flat.

 

That sounds like an excellent suggestion - please can you post your findings, along with some general information about how you tested the strategy (timeframes etc)? I look forward to seeing your results.

 

Thanks.

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You start out by saying "I made over 60% last year....(hypothetical)..."I have subscribers". What, you talk like you know something but all you know is hypothetical?:haha::haha::haha::haha:

 

I have never used the DOM. I made over 60% last year with a minimal DD (hypothetical) trading the futures. I have subscribers who take my signals with real contracts and are profitable. I do think the DOM might provide some edge. However it will likely require programming skills and possible co-location. I watched a webinar from CQG and the tools that the little guys like us are up against will make it very hard. Take a look at my Price Driver vs Liquidity Provider article here for some good ideas. Basically, all trades can be broken down into drives or liquidity provisions.

 

I've read tape for 5-6 years. It is very hard to learn to read tape and your chance of success is very low.. without knowing what to look for. It is unlikely you will learn by just watching tape. In fact, I watch it for 3-4 years but my skills were still rudimentary compared to what they are today.

 

I'm undecided how much of an edge order flow is, however. I'm not convinced its enough an "edge" by itself for the futures market. The futures game tends to reward in proportion to skillful risk taken. I do offer some tape reading/order flow materials at my website. I'm not sure why you are looking at a DOM if you have foot print/market delta information(?) I use a completely unique method which enabled me to take my tape reading skills to a completely new level.

 

My recommendation would be don't get tunnel vision. I speak to a lot of traders, many of whom are tape readers but they don't understand the whole game. This puts them at a significant disadvantage. If you're not consistently profitable.. I wouldn't even bother spread betting at $1 per point.. One thing you can do that I recommend is I recommend you start with say a reasonable SIM account like 30k give yourself a max loss limit per of say 1.5k/day and "trade" 24/7. I did a similar activity and it improved my overall trading. You can't trade this way with real money unless you want to lose it all but you will learn a lot.

 

I want to be clear about one thing. I think you are headed down wrong path with focusing on the DOM. I think order book edges are one avenue to explore with programming but I don't think you will be able to read that. Even if you found an edge, you will still have to get your order into the market! It is not even possible to read all the information in time&sales. This is where I made my break through was understanding how to really read tape.

 

Good luck!

----------

 

Curtis

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My subscribers have made thousands of dollars from taking my signals. On C2, you can look and see what trades have registered fills (only for subs that autotrade). I keep in close contact with my real money traders and track their results. So, yes they've been profitable.

 

Even though someone may be taking my signals with real money, all results still must be treated as hypothetical.

 

Curtis

 

You start out by saying "I made over 60% last year....(hypothetical)..."I have subscribers". What, you talk like you know something but all you know is hypothetical?:haha::haha::haha::haha:

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My subscribers have made thousands of dollars from taking my signals. On C2, you can look and see what trades have registered fills (only for subs that autotrade). I keep in close contact with my real money traders and track their results. So, yes they've been profitable.

 

Even though someone may be taking my signals with real money, all results still must be treated as hypothetical.

 

Curtis

 

 

but you still cannot afford to quit your job and trade full time ????

 

 

 

.

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hello, does anybody know if there is a thread or a where can I find info about how to profit from large orders at key levels, I often see this happening and the market seams to go through those walls, is it possible to trade this with success? or maybe is just my mind that wants to remember only those times when the price go through the wall?

 

thanks

 

Photo%2025-01-12%2023%2058%2006.jpg

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dark.. I have some materials on reading order flow (check my site, see profile). I don't use the DOM. However, if you think about it, the largest traders are probably the guys using the limit orders and they usually intend to get filled. I kinda chuckle when traders talk about leaning against size. The closest thing possible to this idea is to take the other side of heavy market orders if you don't think they will be able to clear. You're not leaning against size so much as running profiting from their reversal.

 

hello, does anybody know if there is a thread or a where can I find info about how to profit from large orders at key levels, I often see this happening and the market seams to go through those walls, is it possible to trade this with success? or maybe is just my mind that wants to remember only those times when the price go through the wall?

 

thanks

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dark.. I have some materials on reading order flow (check my site, see profile). I don't use the DOM. However, if you think about it, the largest traders are probably the guys using the limit orders and they usually intend to get filled. I kinda chuckle when traders talk about leaning against size. The closest thing possible to this idea is to take the other side of heavy market orders if you don't think they will be able to clear. You're not leaning against size so much as running profiting from their reversal.

 

Hi predictor, thanks for your replay, I will check your site, I'm just interested in how to trade the wall, because I see this a lot of time, I would like to learn about order flow but for what I read on the various forum there is a lot of noise due to algo trading and that it is becoming harder to trade this way.

 

 

does anybody trade these walls? what is the best way to trade them?

 

 

1) as the wall start to be hit aggressivly enter just before it seams to be all filled and take profit a few tick after the break, stop a couple of tick before the wall.

 

2) enter as the price goes a little far from the wall as there is a big chance that the price will go there and maybe take profit 1 tick before the wall, but I don't have any idea on where to place stops.

 

sorry for my english...

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Although I suppose trading is trading, I wouldn't claim to know how the Italian markets move.

 

yes maybe, but I see these walls also in the US market and it seams to have the same behavior, don't understand if those orders are taking profit orders or something else, I mean if they are long and they take profit there, why the market should continue to go up, I mean why they want to take profit knowing that the market has a big chance to go up?

 

and if they want to be filled because they are opening a short position, why the market should go in the opposite direction, so it seam more taking profit.

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yes maybe, but I see these walls also in the US market and it seams to have the same behavior,........
Well in the markets I follow here price goes to size, not all the time obviously - but as a rule.

 

Think about it. If a large buy order it below buy point of yourself and other small traders why would sellers sell to you at that moment. They are encouraged to hold.

 

But what the large size buyers do is first sell to drive price down to their buy zone.

 

Trouble is when watching large size orders is knowing when they are truly there or not because they can drive price down and pull their large orders encouraging the market to drop further before covering short and turning around and going long. Or never even having any intention of going long but just give the impression of it.

 

Naturally they do the same on the sell side give the impression of selling when they want to buy.

 

So size is not something I bother with.

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Well in the markets I follow here price goes to size, not all the time obviously - but as a rule.

 

Think about it. If a large buy order it below buy point of yourself and other small traders why would sellers sell to you at that moment. They are encouraged to hold.

 

But what the large size buyers do is first sell to drive price down to their buy zone.

 

Trouble is when watching large size orders is knowing when they are truly there or not because they can drive price down and pull their large orders encouraging the market to drop further before covering short and turning around and going long. Or never even having any intention of going long but just give the impression of it.

 

Naturally they do the same on the sell side give the impression of selling when they want to buy.

 

So size is not something I bother with.

 

So main reason that cause price to go to size is large size traders pushing the price in a certain direction, for various reason:

 

these are a couple of thoughts about when the price breaks the wall, these are questions, just to know if I understood.

 

1) They want to short big size for a few ticks and they need small traders to buy from them, so they put large buy limit orders to encourage small traders to buy, the small traders buy from them, when they accumulated all the position they need they start to push price down to their big order where they cover and make money.

So why the market then go down further? maybe because once they covered, there is no more size to support the price? so here the large traders are not interested in what will happen once they covered, they just want to cover, or maybe they covered just the first lot and maybe they will cover further down for a bigger profit?

 

 

2) they want the market to go further down so they show large buy limit orders, the small traders buys but suddenly the large traders pull the large buy limit order, small traders begin to short and other start to cover their long and the price goes down further.

 

 

often I see those walls in the book, but they are never reached, what they want to do in this case?

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So main reason that cause price to go to size is large size traders pushing the price in a certain direction..........

In trading there are all kinds of scenarios in using the bid / offer size. But unless you are privy to much of what goes on in a big trading firm it is hard to use it profitably. Even then you won't know too much about what is "true" about what another big trading firm is doing or not doing.

 

If you have ever bought or sold a used car (less so a new car) it is a game of truth or dare. Private owner or dealer says they have many people interested in car and you better make a deal quick. Maybe they do, maybe they don't You want a lower price so you negotiate a little further with them to get to what you are willing to pay.In the end you might get it "cheap" or might lose out to one of the .... many people interested. Do they exist or are they a smokescreen?

 

Sometimes you can tell while it is happening but mostly you find out after the fact - when it is meaningless.

 

So again that is why I don't bother and believe there are much better ways to understand price action than watching size.

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[ame=http://www.youtube.com/watch?v=Frc6kzeZWnE]2011 November 25th Morning Phase 2. OFFERING, TO BUY action at the day-low. - YouTube[/ame]

 

[ame=http://www.youtube.com/watch?v=Kr9JkVtr3qQ]2011 November 25th. Instances of OFFERING, TO BUY. FESX Morning Phase 1. - YouTube[/ame]

 

made these ages ago. i think they describe quite well what you two are discussing:

i.e. size orders being there to spook retail traders to doing the "wrong thing".

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made these ages ago. i think they describe quite well what you two are discussing:

i.e. size orders being there to spook retail traders to doing the "wrong thing".

 

Hi this is my first post and thanks for sharing your experinces.

 

I take it that you are based in the Uk like me. I just wondered what broker do you use as the American brokers seem to offer lower commissons and there are far more of them. I like the idea of trading US futures as I can combine this with my Career when I get home and have a day off in the week. I would demo trade for about 3-6 month before going live.

 

What data, Chart package, dom do you use and how much do they cost per month?. I think that you are using x trader which is expensive

 

How do you hedge your currency risk as you are tading the euro stoxx which is in euros.

Is your account now totally in Euros?

 

I am tired of spread betting as the spread and platform is only ideal for longer term trading. I enjoy normal share trading for the longer term aswell.

 

Kind regards

 

John

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made these ages ago. i think they describe quite well what you two are discussing:

i.e. size orders being there to spook retail traders to doing the "wrong thing".

 

Do you still trade this setup? and if so do you manage to trade it for consistent profits? I would like to understand if it is a waste of time or not to study this. I am just interested in trading this large orders not in other dom/order flow setups.

 

Today i noticed the same on a couple of italian stocks i follow, I would like to make some videos and post them in a new thread, will maybe start tomorrow.

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This 2% rule we read so much about is useful to 2 types of traders: newbies who dont understand the markets yet...

 

I initially planned on trading 1% because "that's what you do". However once I started risking real capital I found I only wanted to only risk 0.66% at most, and would often risk less, especially after a loss. It wasn't until noticing I was plus pips but not £ that I went back and throughly started playing around with position sizes on my test data to work out what I was most happy risking, assuming the worst possible outcomes over a large number of trades for drawdowns and finding a happy medium between possible drawdown and possible account growth. While my strategy call for a constant position size, I can also see that, as with scaling, position size is system dependent

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Hi this is my first post and thanks for sharing your experinces.

Hi, no probs.

------------------

I take it that you are based in the Uk like me.

I'm based in london

----------------

I just wondered what broker do you use as the American brokers seem to offer lower commissons and there are far more of them.

I do not actively trade yet because I am quite sure I would lose money. However, a few months ago I did open a 10,000GBP account with Velocity Futures.

My thoughts?

 

*Their capital reserves are less than 2million USD, and I therefore keep an eye on Velocity Futures on google news to make sure they don't look likely to blow up and take half my net worth with them.

 

*I have had some issues with their Trading Technologies data feed (the data feed, where eurex is concerned at least, is not trustworthy in my opinion). Some trading buddies of mine have also reported issues with their data.

 

*They only require 5000USD to open an account, and then they offer X-Trader platform for FREE (although transaction fees are around 1EUR more than otherwise would be, per round turn). However, since I do not actively trade (I only observe), I do not care so much about that.

 

I also recently opened an account with AMP Futures.

Why? Because they only require 500USD to open an account, and they provide access to Ninja Trader platform, and also a CQG live data feed. I have not had ANY trouble so far with this data feed, and I am very happy with it.

 

I would demo trade for about 3-6 month before going live.

 

For what my opinion is worth - and it is contrary to the opinions of some others - you should not trade with real money until you are absolutely confident the battle has already been won, so to speak.

----------------

What data, Chart package, dom do you use and how much do they cost per month? I think that you are using x trader which is expensive

*As I mentioned above, I do have X-trader on my machine, and I have access to it for FREE via Velocity Futures. But I do not actually use X-trader any longer.

I believe most of the pro's use X-trader, but there are benefits to using NinjaTrader (superior charting, for example, and it is more flexible in terms of what add-ons you can bolt on to it).

*The data feed I actively use is CQG from AMP Futures (also free, just 500USD to open account).

*The DOM I use is actually a specialized piece of software created by Jigsaw Trading (the creator posts periodically on this forum). You can google it if you like, you will see there are some advantages to it, in the way it presents the market information. It is not expensive and since I started watching this DOM, I do not envisage myself returning to the old ones. It was not built to actually execute trades on, however, so where taking the actual trades is concerned you would have to use X-trader, or Ninjatrader dom, whatever.

----------------

 

How do you hedge your currency risk as you are tading the euro stoxx which is in euros.

Is your account now totally in Euros?

 

My account is a mix of GBP, USD and EUR. The total value is around 15,300USD. I do not hedge. It fluctuates up and down, and there's not a great deal I can do about it. I just accept it.

**************

 

 

Do you still trade this setup? and if so do you manage to trade it for consistent profits?

As I mentioned above, I do not actively trade any setup. I just sit and watch the market and very very rarely will I make a bet on my spread betting platform. Why? Because I am confident at this moment in time I would lose what little money I have. One bad trade is equivalent to a days pay at my local bar - to hell with that.

----------------

 

I would like to understand if it is a waste of time or not to study this. I am just interested in trading this large orders not in other dom/order flow setups.

All I can tell you is my own experience:

I have witnessed this 'setup', as you call it, occur right before a big market reversal. Sometimes probably it was coincidental... but it happened often enough that there is DEFINITELY a link between the two. I no longer watch for this 'setup' however... I am pursuing other avenues - still a total noob though, don't get me wrong.

Why did I give up on this 'setup'?

Well, I recall some time ago there was a 1 or 2 week period when I saw this setup occur many times, but the market did not reverse. It just kept powering through the orders.

What I failed to grasp - and that is still the case today - is when the setup is valid as a signal and when it is not. I think you need to understand the context of the market to determine when it really does signal a reversal, and when it means nothing.

One potential investigative method, which I tried but gave up on due to laziness, is watching the market all day, marking the specific times that you see the setup, and then perhaps painting those occurences on a chart to see if there is some relationship between when the setup worked, and when it did not. Just a thought - maybe a bul#£hit one?

----------------

 

Today i noticed the same on a couple of italian stocks i follow, I would like to make some videos and post them in a new thread, will maybe start tomorrow.

Good luck. I cannot say whether you will succeed if you focus on this setup, or another setup like it. But I'll tell you what I firmly believe (I believed it firmly enough to throw away my old career and become a barman).

If you watch the DOM for long enough, and make notes - typed or mental notes, whatever - it will begin to make sense.

 

That's all I've got to say this evening.

 

Good luck, I'll keep my eye on this thread and periodically update.

Edited by lastninja2

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Referring to the first post in this thread:

http://www.traderslaboratory.com/forums/futures-trading-laboratory/11717-quit-job-watch-dom.html#post136636

 

Getting profitable with one lot is proving difficult, as I expected it to be. Nevertheless I'll keep staring at the DOM until it starts to make sense to me.

 

May I ask what the outcome of this endeavour is so far?

 

Does it pay out?

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hi

dont have a great deal of time to write an essay but will do what i can:

 

*I believe it is possible to become consistently profitable from your own bedroom. But difficult.

 

*Retailers generally have 2nd rate technology, slower news wires, and higher transaction costs. It makes trading an uphill struggle but I dont think you can use these as an excuse for failure - perhaps you could adapt your approach somewhat to offset the transaction costs as best you can, and reduce the reliance on split second entry? Also, talking forex / com is a decent squawk, in my opinion. You could probably get a couple of big "gimmie" trades each month. e.g. natural disaster/unexpected central banker spiel.

 

*I think special attention to developing long-term edge, rather than fixation on any individual outcome is important.

 

*I also think it is crucial to get a decent trade simulator - the only acceptable one I know of is via TT.

 

*Develop some basis for entering a trade. Trade it every time you see it on sim. Note down everything you can about what happened. Record the screen with camtasia if you need to and watch replay later.

 

Just some of my thoughts.

 

In the end I gave up on bartending/bedroom trading - just not sustainable, too exhausting.

I joined a prop firm instead; better place to figure it out, and also potential for backing a larger account than i could ever fund myself.

 

GL

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One such effect is that it boosts the Stock-To-Flow ratio of Bitcoin. A commodity’s STF ratio is calculated by dividing the quantity of the asset held in reserves, by the quantity manufactured in a year. The greater the STF ratio, the lesser the annual inflation on that asset. Commodities like gold possess a very impressive STF ratio as its available quantity is limited. Presently, Bitcoin has a significantly lesser STF ratio, unlike gold. Regardless, more halving occasions will boost the Bitcoin’s STF ratio. It is even believed that someday, Bitcoin will surpass gold in the STF ratio rating and will be an even better store of value. This is probably why Bitcoin is dubbed “digital gold”. After-Effects of Previous Halvenings 2012’s Halving The first Bitcoin halving happened on the 28th of November. On that day, the cryptocurrency recorded a 6.5% trade range. Regardless, to the surprise of many, the price remained at a consolidated state months after the occasion. This was partly because Bitcoin was still in its infancy and so, not many people were engaged with it. Also, media coverage at the time was not what it is today, which means many people were not informed of what was going on. Based on the information on Bitcoin’s BNC Liquid Index, the price of BTC attained a high of about $32 on the 8th of June 2011. The price of BTC never broke above the $32 mark until the 28th of February 2013 (4 months later), where price witnessed a climb to $260 after which a drop was experienced and the price stayed below that level for several months. Fast forward to the 30th of November 2013 (close to a year after the 2012 halving), Bitcoin rallied dramatically and peaked at $1,167, which was a whopping 9,686% increase from the initial price of $11 on halving. 2016’s Halving On the 9th of July 2016, the second halving, the price peaked at $664 but did not maintain that uptrend instead fell to $626 on the same day. Subsequently, the price continued on that downward trajectory for about three months. However, things started looking up for Bitcoin from the 27th of October 2016 when price closed above the previous halving’s high of $664. Bitcoin later proceeded to smash its last all-time high of $1,167 on the 23rd of February 2017. This spike started the famous bull rally of 2017 through 2018, which witnessed a peak at $20,000 sometime in December 2017. 2016’s halving shot Bitcoin’s price from $664 to $20,000 which was a growth of 2,912%. Possible Outcomes of this Year’s Halving? In the crypto sector, the Bitcoin halving is undoubtedly among the most talked-about and anticipated occasions of the year. Presently, there are mixed expectations as to what the outcome of the 2020 halving may be. Many in the crypto sector are very optimistic and believe that, just as in the past, the price will soar dramatically either before or after the occasion. Creator of Kraken, Jesse Powell expects the price of Bitcoin to rise close to $100k or 1 million after the halving. The CTO of Morgan Creek Digital Assets also shares the belief of Jesse and expects Bitcoin to reach the $100,000 mark by 2021. He says that scarcity is a driving force for the demand of any commodity. He explains that the 2020 halving will cause Bitcoin to be more scarce. Other crypto players believe that this year’s occasion will not have a similar trajectory with past occasions and would, instead, mar the price of Bitcoin. Another possible scenario that has been observed over time is the “buy and dump” case. This scenario usually plays out when there is a highly anticipated occurrence. It works exceptionally well when the upcoming occasion is sure to have a quantifiable effect on supply and demand dynamics. The price of the asset in question experiences a huge spike just days or a few weeks to the main event. This transpires because investors stock up on the asset towards the event. After the event, however, the price of the said asset drops significantly. This kind of activity has transpired frequently in the cryptocurrency space. One such occasion was the Bitcoin futures trading releases for the CBOE and CME. Just a few days to the CME’s release, the price of Bitcoin rallied from $6,400 and peaked close to its all-time high of $20,000 in a day. Not surprisingly, the price dropped considerably in the period that followed those releases. Furthermore, some cryptocurrency experts believe that the aftermath of the halving has already been priced in. It has been observed that demand is “missing” in the Bitcoin market, this could be a clear indication that the halving has been priced in. Usually, months before a halving, a boost in demand and price of Bitcoin is always noticeable. This time, however, no increase can be observed in neither of the stated areas. In this case, it could lead to a lateral trading period which might be a good thing for traders. At the moment, Bitcoin is still struggling to break above the $7,200 mark and there are no signs of a reversal happening soon. Whatever the result may be one thing is for sure, the price of Bitcoin is set to experience drastic changes this year.   Source: https://learn2.trade 
    • Your All-Round Guide To Security Token Offerings Security token offerings (STOs) are one of the most revered investment options in the crypto space at the moment. It has even been termed the “future of fundraising”. But what exactly are STOs and what is the rave all about? This article aims to break down STOs, what it is all about, and how it can be beneficial to you. What Exactly is a Security Token Offering? STOs, simply put, provide a means of tokenizing fungible financial assets such as stocks, bonds, and REITs, and introduces the tokens to the public through regulated channels. STOs are a lot like ICOs as they generally involve the same processes. However, the differentiating factor between STOs and ICOs is in the tokens being sold. With ICOs, the tokens are usually non-descriptive and could range from anything digital currencies to utility tokens. With STOs however, the token is a “security”, meaning that it is exchangeable and possesses a set monetary value. Breakdown of Security Tokens Security tokens function as digital versions of the assets they represent. Here’s a list of some popular security token representations: 1- Capital markets: Firms can convert their shares into tokens, allowing investors to own parts of the firm. In some cases, owners of tokens receive dividends and can execute votes on the affairs of the firm. 2- Equity funds: Equity funds can also tokenize their shares for sale. 3- Commodities: Commodities like gold, natural gas, coffee can be tokenized. 4- Real estate: The equity of this asset class can be tokenized, much like how REITs function. STOs do not change the underlying securities, instead, it makes these assets more readily accessible on a digital platform. Unlike other digital assets, security tokens can only be traded on certain regulated exchanges. Some exchanges require interested investors to meet some set qualifications. Advantages of STOs STOs are formulated with regulatory-compliance in mind, unlike ordinary token sales. Security tokens provide its owners with several legally binding rights. Some security tokens even bestow its owners with rights to dividends or other defined streams of income. Security tokens are also beneficial to their issuers. From the onset, the entities issuing the tokens are aware that their tokens are being purchased by accredited and verified investors and so, they don’t have to worry about the credibility of their investors. Other advantages of STOs include: 1- It is adequately regulated: Entities issuing security tokens must operate under the guidance of designated regulatory agencies in the region like SECs and FTCs. 2- You can rest assured that STOs won’t falter in the future: Unlike ICOs that cannot be guaranteed, STOs are sure to always deliver because it is properly regulated. 3- STOs offer great convenience: Procuring security tokens is easy, straightforward, and stress-free. All you need to do is to adhere to the STO requirement in your jurisdiction and you’re good to go. 4- It can be programmed: Security tokens are programmable and can be facilitated by smart contracts. 5- Automated dividend disbursement and voting: Some security tokens are structured to send dividends automatically through smart contracts. Also, some security tokens provide the bearer with exclusive voting rights in the affairs of the entity offering the tokens. 6- It is a globally accessible investment vehicle: Investors across the globe can procure security tokens regardless of their location. 7- It is not susceptible to manipulation: Considering the mode of operation STOs are run by, big players cannot manipulate its movements. 8- STOs are very liquid: It is a very promising investment option as it has an impressive liquidity quality and can be traded easily. With benefits like these, STOs are for sure transforming the fundamentals of the financial sphere. Disadvantages of STOs As with every other form of investment, security tokens has its limitations and shortcomings. Some of these limits are: 1- It is considerably more costly than utility tokens: STOs, unlike ICOs, hosts many organizations in their fundraising campaigns. Also, regulatory fees are not cheap which makes it more capital-intensive to host STOs. 2- Investor Qualifications: Countries like the US have certain qualifications an investor has to scale before becoming eligible to engage STOs. According to the SEC to be an “Accredited investor”, you must have an annual income rate of $200k and above or a minimum of $1 million in the bank. 3- Specific trading conditions: STOs can only be traded on certain designated exchanges. Also, these tokens are time-bound meaning that you are allowed to trade these tokens between investors for a set period after the STO. The Howey Test Usually, tokens are said to be securities, by law, when they pass certain thresholds. One such way to identify a security instrument is by applying the “Howey Test”. But first, let’s look at a piece of quick background information on how the Howey test came to be. In 1944, a citrus plantation called the Howey company of Florida leased out a large portion of its land to several investors in a bid to raise funds for much-needed developments. The buyers of the land were not skilled or versed in citrus farming in any way and decided instead to just be “speculators” and let the experts do their jobs. The lease was made on the premise that profits would be generated for the investors by the lessor. Not long after the business transaction the Howey company was sanctioned and accused by the United States SEC of failing to register the sale with the authority. The SEC maintained that the company was dealing with unregistered security. Howey denied the claims however, assuring that what it offered wasn’t a security. After much debate, the case ended up in the Supreme Court, which later ruled in favor of the SEC that Howey’s land leasing were undoubtedly securities. It remarked that investors were purchasing land mainly because they saw an opportunity to make a profit off the deal. Howey was then ordered to register the sale. This was the story of the enactment of the Howey test. Today, per the Howey test, anything is deemed to be a security if it satisfies the following criteria: 1- The investment included money. 2- The investment was made on an enterprise. 3- Profit will be made from the efforts of the providers of the investment. The Howey test has become a stronghold name in the crypto space. In 2017 and 2018 (during the “Heydey boom”), many ICO providers were completely consumed with scaling the Howey test as it was a major determinant used in ascertaining the legality of an ICO by the SEC. Failure to pass the test meant the offering was illegal and was sanctioned by the authorities. Some ICOs even advertised their tokens as investment instruments that had no value, describing their tokens as “utilities” used only for interactions on the platform. The Inception of STOs The very first STO was released by Blockchain Capital on the 10th of April 2017. The release pooled about $10 million in one day. Several STOs have been released following the first event including tZero, Sharespost, Aspen Coin, Quadrant Biosciences, and many more. STOs have since gained widespread acceptance and relevance in today’s market. Understanding the Distinction Between Security Tokens and Tokenized Security Confusing security token for tokenized securities is a common trap that people fall into. The main distinction between the two is that the former is usually a recently issued token that functions on a distributed ledger system while the latter is just a digital manifestation of pre-existing financial instruments. Apart from similarities in appearance and nomenclature, security tokens have absolutely nothing in common with tokenized securities. What Entities are Involved in an STO Issuance? Assuming a business entity plans on issuing security tokens as an embodiment of equity in its establishment, the next necessary step for that business would be to involve certain players and follow certain directives. It has to formally contact an issuance platform to serve as a medium for issuing the tokens. Popular issuance platforms include Polymath and Harbor, which consist of service providers like custodians, broker-dealers, and legal entities to carry out secure processes. Who Can Invest in STOs? STOs are available to the general public for the taking, regardless of location. However, as mentioned previously, the US has certain rules guiding STO investments. In the US, it is mandatory to be an “accredited investor” before you can invest in this instrument. An accredited investor is an individual with an annual cash flow of $200k and above for at least 2 years or a net worth of $1 million and above. More nations are starting to adopt the United States’ classification method and have begun restricting certain classes from investing in STOs. It is advisable to always research on the STO rules and regulations of the jurisdiction you’re planning on investing with. Final Word STOs provide businesses with the prospect of raising funds in an easy and regulated setting. It gives both investors and issuers a good deal of benefits, while also ensuring insurances against fraudulent or malicious practices, unlike ICOs. Issuers are not limited to any industry, they can vary from several sectors including real estate, VC firms, and small and medium enterprises. Moving forward, we will likely witness prominent firms venture into the STOs.   Source: https://learn2.trade 
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    • Good news is my posts no longer seem to need moderator approval! Beginning tomorrow, I will be day-trading two currency pairs: EUR/JPY and GBP/USD. I'll trade during the morning and afternoon hours, New York time.  I'll be using an Oanda "core pricing + commission" account. I plan to trade a "practice account" through the end of January, then a small "live" account beginning February. I've set my charts up to closely resemble the format popular in the RCRT thread (NinjaTrader + MetaTrader). My trading style will primarily consist of what I've learned from that thread. I'll track my performance in terms of R-multiples.  The purpose of this thread is just for a little fun with some bonus accountability. I've got nothing to sell/teach, and I will probably lose money! 😁
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