Emini divergence journal

I've heard this quite often.
Can you elaborate as to why this is true?

Let's say a thousand people knew about this system and traded it.
When the price hit what we all thought
was the correct price to, let's say sell,
wouldn't everyone else's selling make
the price go down even more thus
helping my short? Same with breakouts. It seems like if everyone
buys the breakout when it crosses that
magic number (on the 5m chart after
a pullback with trend in your favor)
if everyone bought that bar, wouldn't
that cause the price to jump even more? Probably showing my newbieness, but I'll always wondered about this.

jd

 

Yes, it's true that if everyone using the system sells then the price will go down but the problem lies in the fact that some people are not as greedy as others. Take NPP's system for example. Say 1000 people from this board started to trade the system. 500 are fine just waiting for the regular price target, but 100 of them just want to get in and get out. They set their price target just above the exit line. And yet 100 are happy with even less profit and they set their price target even farther from the line. Still another 100 are even less greedy and are happy to just make 2 points per trade so that is their exit point. Plus another 100 are happy with just 1 point per trade and they close out the position with just one point in profit. And finally, the last 100 people are just looking for a way to make 1/2 a point and that is where they close out their trade. It's this mix of when people have hit their own profit target that starts to make the system less valid once a vast amount of people are trading it. Everyone may sell or buy at the same time but rest assured that they will all look to get out at different times. If there is enough people trading a system, their different personalities will ruin a good system.

Does this make since?

 

What kind of executions do you think you would get if you were part of a crowd of 1000 traders trying to buy or sell at the same time?

 

It absolutely does make sense.
Shows my lack of experience that I
didn't see it.
I could just keep my mouth shut
and not look as dumb, then again,
I wouldn't learn anything that way.
So, dump person in training here

thanks sharp,
jd

 

If similar people doing similar things
at similar times prevents success,
then why are we all spinning our
collective wheels here? If it's true that
no one with a successful system would
ever share said system with ET
readers, then what is this exercise
all about?

If we all gain insight and learn a new
technique or setup for our daily
trading by reading these forums,
and then by the very nature of this
knowledge, render said setup
useless, I just don't see why all of you
are here. I'm here because I'm new
and didn't know any better.

Reactions?
jd

 

your about 30 pages too late with your admonitions

WAHAHAHAHHA!

this thread is lost at sea.

 

It's not lost at all. We're all looking forward to no_pm's participation tomorrow, I'm more than certain.

Please let's follow Magna's instructions here.

Best,

Mark

 

I for one am not qualified to post here...I will lurk and try to learn something new......Nice folks here...very nice....I am starving for someone to at least read about and see their trades....this is a lonesome business....I only know 4 people that trade this stuff..they all work for the same company I did.....They should stop now as they are still losing after 2 years of flawed systems...No PM doesn't gamble as they do.......Boss has deep pockets..he is playing with a very serious business..Best Wishes to All

 

I understand and agree........


Michael B.