equity, futures, or options ?

Discussion in 'Professional Trading' started by Trader588, Sep 30, 2007.

  1. Hi,

    Finally, after saving enough startup trading capital and living expenses, I thought I was ready to try full time daytrading.

    My original idea was to scalp NYSE stocks. I read the great threads about tape reading by Maverick74, Don, Steve and others. I was fascinated by how precisely you can time a market entry based on spotting big buyers and sellers. It's very disappointing that this art is going away because of the changing electronic market environment. The latest change is the removal of downtick rule. I am not sure how this affects tape reading or perhaps it is the nail in the coffin to consistant tape reading altogether.

    Daytrading and scalping futures (e-mini ES) does not seem to be a viable approach, for me at least at his point. There is a lot of noise in the price movement. There can be a 4 or 5 tick movement in a second any time out of no where. I was hoping that ES can be read like the NYSE stocks. Guess this is not going to happen.

    Options trading, which I knows very little, but seems to be the thing right now. Tape reading and scalping NYSE stocks are difficult to master, but the underlying theory and logic are straighforward and easy to grasp. Options strategies on the other hand, seems to take a much longer time to truly understand and study.

    I guess I am thinking out loud here, and am feeling disappointed that my trading career is likely to be delayed without a clear direction and that the barrier of entry into this trade is actually quite high. Trading capital is the easiest aspect to overcome. To know the right direction to start is already a hard task. sign.......

  2. Do actually have a strategy that----(1) Tells you WHAT to trade, (2) WHEN to trade, (3) WHERE to get out with a profit, (4) WHERE to get out with a loss and (5) WHAT percentage of your account to put into the trade? Probably not. If you do, you might be suffering from Perfectionism Surplus Syndrome. You're wanting everything to line-up perfectly before doing anything. The only barriers to trading you have are the ones in your head. Start trading stocks on a small-scale to "see and feel" how you react to profit and loss fluctuations in your account. Otherwise, all of your "research" is a waste of time.
  3. Naz,

    Are you a shrink? :) Perfectionism Surplus Syndrome ! I know I am a perfectionist (gotta be as a musician) and quite competitive. That's why tap reading is so attractive to me; when truly mastered, you can rarely be wrong. The glowing positive PNL and the end of the day will keep re-enforcing that sense of invincibility and infallibility.

    Financially, I KNOWN I can take small hits no problem. Emotionally and psychollogically, maybe not mature enough yet; especially after some gap down and gap up losses on my swing trades. To avoid that pain, daytrading seems to be the way out.

    Options trading is alluring because I think the risk/reward can be quantified beforehand, when hedged correctly, no price movement can hurt you unexpectedly. When price moves in you favor, you make much more, if not, your losses are limited. I still need to study, the above statement is just my gut feeling. I can be wrong on that, and I don't mind admitting at this point.

    What hurts as a perfectionist is, after all the preparation and hardwork, you are still wrong most of the time. When moving averages, MACD, stochastics, fisher transformed RSI, etc all lined up, why are the trades still wrong about 50% of the time!? That really hurts :mad:

    I enjoy hardwork, when I am 100% sure it will payoff. When music is being practiced the wrong way, it does not matter how hard and how long you have worked, you won't make it. Hardwork with uncertainty, or even worse, in the wrong direction, is nearly suicidal.


  4. Does Confidence Deficit Syndrome "sound" better?. In trading, perfectionists are miserable. You'll make your money from being consistent by making more than you lose. You're going to have to get used to grinding through winners and losers. Those indicators can work consistently well if they're gauged to the proper type of market environment where they "work" best. In music, you don't have to be better than Beethoven, the Beatles or Miles Davis. The Monkees, KISS, New Kids on the Block and Britney Spears did well enough.
  5. haha, true, I am not as confident when I trade as when I perform.

    BTW, I am not here to put down TA. I know I am not using them correctly yet, and I know there are people here on ET using TA successfully day in and day out.

    My goal at the end of this coming 6 months in hopefully a good prop firm, is to be consistently profitable on a weekly basis. Nothing ambitious. I don't want to be the greatest trader of all time. I just want to be a true successful trader.

    Music-wise, I known won't be Beethoven or as famous as the pop figures you mentioned. However, the stuff I can do, I know it's up there, although there is much more that I can't do, and might never be able to because of some pre-determined causes. But that's all fine. The stuff I have acquired and worked hard for, I know they are good and true, and are mine to keep. Same in trading, I just hope that I will be able to acquire true trading skills, through hardwork, and have them for the rest of my life.

    The lack of confidence in trading is mainly due to my insecurity about my approaches. Using music as a comparison, I don't mind sounding awful in the beginnig, because I have confidence in the way I prepare and practice, that eventually I will be alright. In trading, I don't have that sense yet. In music, I know how to teach myself. In trading, I feel I might be self-destructing at times.

    Some analysis.......:p
  6. Tap reading? A Freudian slip perhaps, eh, musician.:p

    You can be right and still lose money. It isn't easy. Hard work, yes indeed. An art to be mastered.
  7. Surdo


    Trading is not a science, it is an art.
    You just need to find a rhythm and start making music with the tape.

    el surdo sambista