Yep - larger size for smaller target (full control required), smaller size for larger target (full control not required). In theory it all sounds fine, but if you want to try and take money off the algo guys, you need the best tools and the best setups - otherwise, you might as well be pissing against the wind! J_S
You won't believe me but simple tools are enough. Actually you know that. You said no more than basic maths were required. And I agree. I have 3 (ES,NQ,YM) DOMs with T&S + Volume at Price + 1 Excel based tool. No charts and see the patterns. Not that complicated. The hardest thing to do is to handle uncertainty.
Still Sim. Live on Oct 16'. Ok so I'll shut my mouth. No real Skin in the Game. I am of no help. I'll let you be fucked up by "real" traders. Wish you all find your Gods. Appeal to authority. I don't want to talk with suckers anymore. Cheers.
No longer term order flow/trend, or is that in excel? Volume by price is good statistics, in hindsight, but wont often contain whole future price swings. If theres a pattern how reliable is it, really? How to reduce uncertainty? Sim would never work for me, but if it does for you, sounds smart. Though trading real money is different and no do-overs except for the "market makers". Same with manual/discretional trading, too tedious so rely on good-enough automation (screen-scraping yuckie). I just call it prototyping and try some more duct-tape. Same with backtesting, logic should be self-contained and easily verified. I live by my own convictions and wont go on anothers path. Only problem it all takes so long time . Each to their own though, really. Applies more so to trading than anything.
Excel inputs the last hundred orders. It shows the flow's delta & the fills @ prices up to 1Pt away. Volume @ price just give a picture of the day. As if you looked @ charts. But I give it almost no weight in my decision process. How reliable ? It's as reliable as it is. I wouldn't bet my life on it. But it works more often than not. And when it fails. I take my small losses. Currently, I made more than I lost. You can't really reduce uncertainty. You don't know if it will work or not. But you know what you have to do. And you expect an advantage in the long run up to the day things start to turn sour. If you make everything to reduce the probability of bankruptcy. Then you'll be able to stay in the game then adapt.
Well. Uncertainty Reduction is possible. But we have to talk about specific thing. To define the uncertainty. To lay down the problem. I trade the open for the volatility. Which is a type of uncertainty reduction. Now ... There are less but still timing uncertainty and Max uncertainty about bull, bear & magnitude. I don't bracket the market. I look how the market behave. I don't forecast magnitude. I look for signals. Do I scale Up ? Do I scale Down ? So not so much Magnitude uncertainty. I still expect volatility. But I take what the market gives me. Last uncertainties -> Do I Add a position (Enter or Scale Up) ? Do I remove a position (TP, SL, Scale Down) ? It depends the signals.
Bankruptcy should ofc be avoided but in real live trading theres also commissions, accumulated losses in %, "cost" of spread, slippage, bad fills, errors, fat tail events, gaps, etc. How has this been covered in sim. Asking as this may be worse in daytrading than longer term and my own experience in manually trading during the day when inexperienced was countless troubles just getting my price. Now I usually just overpay both long & sell prices and diversify small positions, but daytraders may really require solutions to make it consistent, depending on market. Brokers dont really help either providing really dumb interfaces. Have even experienced giving me naked short positions on error despite no signed agreements for shorting. Support from brokers often polite but unhelpful. Not asking to discourage but interested to hear if such issues are being adressed. When you go live the risks become real business and should no longer be treated as a game.
It's also called spoofing. It happens everyday. But I don't know what to do with that. Don't want to compete with HTF neither.