Puffygums - can you afford to lose $1? How about $100 million? If the answer is not "yes" or "no" to both questions, then you have money you can afford to lose, and money you can't afford to lose.
Super post. I was hoping the thread originator would have a laugh in reflection. He certainly is gong to succeed and it is just a matter of getting on the right page, What you are doing is right on and I will comment in color below to add a couple of notes to clarify.. What you have posted is extremely significant. you have engaged in a process for a year to iteratively refine how you do what you do. the most important thing you do in this post is to logically and completely post how you do what I have suggested. It is clear to every reader of your post by now, that you have really excelled in refining the opportunity that exists. It is not just that by learning to do this you would have far exceeded 20 points/contract today; it is that you are well balnced, snsitive to furthering your performance and your well being. Repeated failure is an unneccesary and irreversable process as we all see day by day at ET. Your post points out the available alternative as applied to any of the many successful trading methods.
Super post. I was hoping the thread originator would have a laugh in reflection. He certainly is gong to succeed and it is just a matter of getting on the right page, What you are doing is right on and I will comment in color below to add a couple of notes to clarify.. What you have posted is extremely significant. you have engaged in a process for a year to iteratively refine how you do what you do. the most important thing you do in this post is to logically and completely post how you do what I have suggested. It is clear to every reader of your post by now, that you have really excelled in refining the opportunity that exists. It is not just that by learning to do this you would have far exceeded 20 points/contract today; it is that you are well balnced, snsitive to furthering your performance and your well being. Repeated failure is an unneccesary and irreversable process as we all see day by day at ET. Your post points out the available alternative as applied to any of the many successful trading methods.
Hi Jz, I can empathize with your situation. I was a Financial Consultant (glamorous title for stockbroker) for 6 years, and then made markets for about 6 months (most of that time mentored by a guys who retired as head of GSCO OTC & market making ops). When I left my retail book behind for SOES trading in late '94 and saw people with NO experience in the industry making $4K per day, I was sure to outperform them three-fold. My book allowed me to do a fair amount of business...but I saw trading as way for me to continue with a boundless income potential. I got my *ss handed to me in the first month. To recoup the losses I started doubling up, and someone turned me over. After a talk with someone, I recouped all of my losses over the following 4 months. My situation was a little different than yours, I only had a financee (now ex-wife) who loved to spend money. You're supporting a family. If your spouse doesn't really understand what you're doing now it makes it all the more difficult. Perhaps like you, I made the difficult transition from riskless transactions to risk transactions. I'm willing to bet that you were downsized by your firm, because the spread and payment for ordeflow activity was downsized (some of the OTC firm's biggest profit centers). Now you've moved over to daytrading. If it became tough for riskless transactions, it became even tougher for those without Autex, Level III, etc, etc, etc. My market making mentor, Smokey also tried his hand at daytrading back in...ohh...I think '97, right in the middle of that blastoff. He knew exactly what MSCO, GSCO, DBKS and the others were doing in Level II because he taught them all. He struggled initially, but he got the hang of it, and his previous market making experience served him well. For example, I made $5-12 stocks during my brief MM career. The first that I was taught was how to "piece in and out", "scale" and "roll". I now use that philosophy for intra-day swing trades. Yesterday on JNPR short, and today CDWC short as examples. My advice: 1) Get a Trading Plan together...as a MM you didn't need one, buyers and sellers were thrown into your lap. 2) Remember that you're "calls", Street connections, and other tools can do nothing for you now. 3) Take inventory of all the positives from your MM career, and determine which of them can still be used today. 4) Keep a trading diary. 5) Remain positive....most MM's don't make the cut....you did...you became one. That's a tough feat. I put a ton of posts on here regarding Fear, Greed, etc, etc. Use the search function on Elite and type in "ramoutar" you'll find them all, I think they can help you. Best of discipline to you!!
Attached is a one pager that will allow you to back test with a computer and, if you wish to write a software for mechanical trading. If you are a radio ham, you can add a "squelch" control for background noise. Two common apporaches are PRV limiting and "noise" recycling frequency gating. The feedback looping of DG, A, D, A can also be a control mechanism for mechanical operation. The "executive function" (brain) of doing it manually reps at at 18 times/sec. The 0.7 sec rep rate of IB makes this 12 reps per snapshot. For repeated failure folks the executive function is N/A (peptides blocking receptors eliminates the loop). It is extremely important to not get to a rep rate that is very fast because you "kill" making money by reverting the software to "pseudo" macro programming. If you want to be thorough (read redundant), simply overlay this with Laz's P,V, A/D scoring stuff and then add the indicator (properly defaulted) overlay. These two overlays beautify everything by limiting the rep rate of this to the "market pace". Once you have a market pace control rep rate you get to the minimum effort reqired to then optimize the trade off of maxing profits and minimizing time required. This is the elusive "money velocity problem. When you get there you, you spend effort to do application of capital by leaving a given market to always go to the market with highest money velocity. Making money is NOT rocket science and the post doc stuff leads to macro which in turns leads to performance asymptotic to generalized market levels of performance simulating "buy and hold" of very large baskets (all large capital constaints). The basic dilemma of big players in the market all shows up on the one pager. It is the mathematical nature of channels and how "NOW" data is used. To make money efficiently, you do not use the most recent information only. You use the important information with respect to your goal. I am the inventor of the "Modified Delphi" process which in several ways ranks with "Alexander's Method" (Berkeley) of least connectedness. What anyone wants to do is use as liitle as possible to acheive the greatest efficiency. Cray's, statistics and theoretical physics success do not achieve this as we see at all large investment operations. What they get is thesmaller and smaller edges as they focus on random walk and neural that. Not connecting things is very important in making money. So is sequencing through independant subsets of data. Vast arrays and small arrays have one common characteristic. There are only a finite number of adjacent cells to the operant cell. This coupled with the fact that the market, because of it size, can only migrate and never jump around invariably (humor) leads to smallness and decoupling from unessential considerations. Have a good weekend.
Very kewl, Jack. I think it's been about half a year since I first saw you mention SCT, and now I see the whole picture coming into focus. Great job. And thank you for sharing.