Al Brooks says the ES e-mini futures is harder to trade now than it was prior to 2008. Futurestrader71 says DOM scalping has been made impossible with the rise of HFT.
The trends now reverse direction and move with more velocity and without waiting for pullbacks to consolidate for continuation of a directional move. The V pattern is ubiquitous at the intraday level now, the problem is being able to gauge and predict the probabilities of when the algorithms are going to make these rapid moves.
What i am saying is I would not go long spot goldusd bc eurusd is going up...rather i would look simply at goldeur and manage the volatility on that into the portfolio...as an example. There is a fine line so let me clarify. When you are running money, as you may know already you have reporting requirements along with risk procedures you have to follow predetermined. So if you have a 5% portfolio drawdown, for example, the investor automatically pulls. Sometimes it is VaR...however. I would say the hedge fund boom in futures started around 20004'ish.... Guys were naturally long only and correlations were holding. So one day if you were swinging the bat in wheat, for example, and it started dropping...you would manage the portfolio by selling other grains which were correlated to protect the portfolio. Now this could be calculated in different ways. In the case of gold, that is why it would commonly flush people out bc when the financial crisis started, people went into cash and treasuries...and thus for were liquidating gold to protect the portfolio. So counterintuitively, gold will still go down when you think it should go up. However, when you look at the goldeur cross, it would be clear that gold outperformed in the market....that is why you see these big fund managers blow up sometimes... (So this is ntg new and no secret but i am just a answering the question. ) Running money and trading a retail account is a diff game. If you have a portfolio with 20 assets, then you start running risk matrices to understand how and where you should estabslish risk limits...based on covariance etc...fund managers usually don't day trade...so how do you know when a correlation breaks down on a strategic position...it is very difficult to risk manage... As the question was...do i look at one market such as a broader indice to make decisions on another...my answer is no...and i explained why from my pov But i do trade crosses (or customized pairs) and manage their independent vol into the portfolio to stay market neutral...i have evolved from the traditional pm's who run strategic positions by applying circuit breakers on the pairs that i trade. So yeah i would trade the goldeur cross. the fx market is efficient in this manner....again ntg new but discussions like this help newbies with their product and fundamnetal market knowledge And yes, the experience has made more cautious about trade selection and how to model pair quality. I may look at a correlation and notice something but i go much further now to understand or model a relationship...i dont use it as a trading or risk management tool anymore
so, are you in the algo /quant trading biz ? did u modeled up a discretionary approach into a mechanical one ? .. does only math/stats trigger your execution ? are they derived of markets behaviour? as markets didnt change in 100 years so has the psychology of the participants .. right ? basically a hedge fund is exposed to the markets all the time due to the nature of the funds approach in not trading directional price movements but rather try to manage his risk/portfolio sounds kinda like.. " i know what iam doing but just in case i hedge my position" and so a whole new industry was born
To succeed in trading, you need to get the answer right on this question. A sheep goes up a mountain. It goes up 3 feet and falls back 2 feet per minute. The mountain is 70.5 feet high. How many min does it take the sheep to reach the top of the mountain.
This question has whiskers, like the one about the plane crash on the border between two states and where are the survivors buried or the jar of beans that's full on the 30th day and on what day is it half full. I don't see the relevance to trading, beyond native intelligence.
It doesn't make it to the top. Only went up 3 feet and then falls 2 feet/minute afterwards? The sheep is f*cked.