Since one does not know with any certainty what advantages others may hold, I can't see how you can determine how your own advantage might relate to others. In other words, as fearless says, better to be getting on with your own trading strategy which just requires attention to the market rather than speculating on what others might be doing.
Well put DC. Since the markets are chaotic in nature (not random) for reasons I have already explained, other traders are mostly irrelevant and indeed harmful to your trading. ET is a case in point where the vast majority of posts are irrelevant to you, but very occasionally you come across a real gem. However in order to know what is relevant, you first need to establish where you are going and then you can ask the correct questions. It is at this most basic primary point that wannabe Traders fail and are therefore doomed to waste their time and money in the future. You may explain this anyway that you want, but in the end it all comes down to "focus"
"There you go again" Jack, what is your goal? You state: "always be on the right side of the mkt" You back that up with ramblings about wars , miners and "continuations and reversing". In a nutshell you are saying to stay in the mkt all the time and either be with it or reverse> correct? You are saying it is possible to ALWAYS be in the mkt and be right on direction. That is dead wrong and poor advice, very poor advice. What you are saying is to trade "NOISE" you are saying it is ok to trade every mkts range, no matter how small. Why stress how 90% are losers but yet you profess it is fine to be in the mkt all day long and reverse all the noise movements. You stress how to make the mkt your puppet as you manipulate the strings of reversing trades but yet say entry and exits are not in your tool box. Which is it? Your ramblings sound like a total disregard of the true bogeyman of trading, and we all know that is psychology. Noise trading is a joke, color it as pretty as you want, the result is still the same. reversing in small ranges is nothing but trading NOISE. I am done. Ramble on , Ramble on. What else is there? ...Well that stuck in your head at least...
Hi BH, Interesting ..... I read JH's post carefully (with focus) and derived a totally different opinion than you. Correct me if I am wrong Jack, but I gather you are comparing the typical antagonistic approach to the softly softly thinking focused approach. Why try to defeat the markets in mighty battle when you can scrape points off the side and hardly be noticed. Now, I dont expect this style of thinking to ever become the new new thing like MP, MD, T3 or even inverting your monitor if you are having problems with the long side. Antagonistic thinking is too deeply embedded in most people's lives to be easily reversed. It would require radical and painful adjustments well beyond the realms of most. You are watching a classic example of this at the forefront of the news right now.
Jack that post was frame-able. I read several sentences multiple times to really get them. The analogy to watching a battle was very good. You are really trying to help people. Some people are not trying to learn. Thank you. I wish I could talk to you sometime.
My goal is to trade the ES to take all that is offered by price change from the pool of capital and put it in my account. Softly, and without any antagonism regarding other participants. The ES moves according to the S&P cash index and one of its valuable functions is as insurance for some participants in the financial industry. Yes I enter the market as the cash and ES come into synchronisity. The number of contracts is simply a function of how wide the contract flow valve is open as the market hums away. I find that I can participate in blocks that are the norm for the moment. The market is expressing pace, sentiment and volatility. I am all in and on the right side of the market. The market does contain several components such as noise and flaws and they matter not to me since they always there as part of the character of the pace, sentiment and volatility. The psychology of the market is what causes price movement in a given direction. I continue to hold as the market dictates to me that it is trending. Limits of movement are telegraphed as time passes and market participants acknowledge these limits. I tack with the dictates of the market and do what I am told. I see the pace (on 10 levels), the volatility to the nearest tick, and the imbalance of the sentiment. I switch sides of the market with a stroke of twice the contracts that I am holding. So, profits are taken and I am in the market on the right side as usual. Noise my help me tweak out a little more than expected. I boogy you boogey. What if the pace slackens and the volatility slackens to 1, 2, 3, or 4 ticks per 5 minute bar. This is a very low signal to noise ratio. I see the boundaries of this drifting. I am aware that I cannot keep my participation in contract blocks nearly as large as when the market pace is full blast. I continually adjust my level of participation, softly and non-antagonistically, to what the market can bear. Noise is there and affords an occassional additional unexpected boost or pause that I am able to understand and deal with. I know I have to be in the market to make money. So I am in. I know I have to be on the right side of the market. So I stay on the right side of the market. I annotate price and volume into the future. The annotations are bounds that move into the present as time passes. Volume leads price. My leading indicator of volume is sentiment, I mark the sentiment change which, then, volume responds to and then, in turn, price responds to volume. It is all soft and the capacity of the market at any given time floats my boat. The surface has ripples and waves and tides. And I have a boat and it is seaworthy and I am not on the beach at any time since I am a seaman whose has seamanship down cold for the boat I float. You do entry and exit and you maybe think you are competing to win or lose. I do seamanship and I "continue" and "reverse". The Boolean expression that links P and V is stated as a proposition that deals with continuation and change. Therefore, as a person who shares responsibilities with the market, I trade using a four part routine (monitor, analysis, decide, and act) that is repeated to continually take the pulse of the market over and over in order to stay on the right side of the market. For me, this is the "what else is there". Fearless9 is extracting ("mining") in a way that is similar to what I do. You think it is a ramble... for me it is a terrific way to continue to take money out of the market. I also have some very refined and detailed verniers to make sure my effectiveness and efficiency is optimal. Since I build on success as a knowledge, skills and experience acquisition process. The psychological orientation that I have is one of the comfort that comes from iterative refinement. Harmony abounds. Who knows I may retire someday as a sea otter.
The correct term is probably "competitive advantage"... Larry notwithstanding. Perhaps that long-winded poster can write a 2,000 word post debating this with himself. If you do not have ONE or usually MORE THAN ONE... And do not know precisely what it is... Than you are not making significant profits in the financial markets... And are not to be taken seriously. Also... why post details here for the rabble?
Comparative advantage is a term used in international economics that relates to why two countries trade with each other. While it is unusual I think to use it in this context it does highlight his point that one can't be profitable with some "edge" so that over the long run you can make excess profits. It is easiest to see in an institutional environment, where it could make or break a desk. Each party to a transaction should brings some advantage to the trade. It could be better pricing models, the ability to take on bigger size (risk control), access to market order flow, or whatever. For the small trader there may be the advantage of the lack of liquidity constraints. In the long run if there were no comparative advantage there would be no trading (not really true, it would be called gambling).