You say your logic and reasoning for a trade is simple. When you are looking at the screen before you decide to enter, do you base upon: 1. Taking advantage of other traders who are on the wrong size, trapped and have to cover? 2. Seeing where âsmart moneyâ big players want it to go? 3. Convergence/divergence of stock vs. overall market, hence inefficiency? If so, can these be coded? Thank you in advance.
Nice thread. Can I ask, what is your method of scanning for setups, as well as what filters you use for your watch-list (assuming you have one)? As a mostly futures trader I've always wondered how someone most efficiently whittles down 10-20,000 stocks in real-time to find trading opportunities. You also say you are often in many stocks at once - do you hedge your net market exposure or do you just take the risk that a market move will swamp your individual stock P&L?
I was just curious about this. I understand Don Bright is a "stocks" person. Am i correct in understanding his brother is a futures trader and trades the ES? Yes i know he also is a great fan of poker. Not really interested anymore in claiming futures are better trading instruments compared to stocks but have yet to throw in the towel on the argument. I believe we all will agree that futures can get wild and if a trader needs action all he/she needs to do is up the ante in even the corn mkt and all of a sudden a penny move will get your attention real fast. If i was not trading the ES exclusively i would be trading maybe about 5 to 10 different futs contracts. ES last couple years when the bankers stole all the money and imploded was great stuff. We will mellow for awhile in intraday ranges but indeed still tradable. We simply adjust the trading strats with always an eye for more. Adjust or wither on the vine. Smaller ranges = trade more cars and always expect some hairy moves out of the blue. Bottom line, we are here because we are traders and crave the action, the money is also nice. As traders we never need to retire. In youth i was always a one-women man, a couple women traded me off for safer more secure waters but trading is in my blood and love the challenge. Without a fight or a challenge, life could be boring.
not sure where lescor is going to take this thread, but maybe we should back off on all the questions and let him start posting.
I'm not going to debate futures vs. stocks, that's been done to death on this site. I am happy for all the people making a lot of money trading futures. You got your scalability, your efficient and fair markets, 24 hour access. That's great for you guys, have at 'er. It's just not my thing, ok? The world's financial markets provide plenty of opportunity for everyone and I found what works for me and I'm happy with that. More questions about my trade setups, stratgies, etc. I'm not going to address specifics, but I will say I take a statistical bent to things. I see X and I figure that Y% of the time, the outcome is Z and I bet accordingly. I might find those opportunities in a spreadsheet calculation or some squiggly lines on a chart. I trade multiple strategies, most are mean reversion based, but not all. Sometimes I have a portfolio of dozens of stocks that I hedge with etfs or something similar. Sometimes I have 15 longs and I don't hedge, I just trade them by hand. Different strats, different approaches. Since I started, my goal has always been to view my trading as a one man hedge fund. I want to take an idea, delve into it, trade it live to test, refine it and hopefully put it into production and let it run and generate income. Then I work on the next one and get it running, etc. I view it like a drug company. They have their big name drugs making cash, some smaller stuff making a little and a whole bunch of stuff in the pipeline under development. They also know their big drugs will eventually come off patent and stop making money for them, kind of like how I know my strategies will probably stop working at some point, so I should always have new ones 'in the pipeline'. The result is I have a bunch of different things on the go at once and that approach really helps smooth out the equity curve. I strive for consistency above home runs. It's also why I can't really answer, "what do you look for in a trade?" aside from saying "a positive expectancy".
that has been said several times, but some of the newbies are intent on pumping the OP for info. Let the man do his journal. As others said, he at least has a clue.
I'm curious about the nature of your larger drawdowns. When you incurred the larger than usual losses, was it typically just the result of market action occasionally being what it is, or did you have a hand in it by either holding on longer than you should have or perhaps even adding to trades going against you? Also, in your recent experience, when you incurred these larger monthly losses, were they generally isolated to a few really unprofitable trades, or were they more evenly spread out?
It happens when there is an across the board rapid change in market sentiment. Usually sparked by some economic or political event. These events also create the best win days, but you don't know which way it's going to go until it's too late. Gotta take the bad with the good.