Discussion in 'Strategy Development' started by Junky, Jan 17, 2018.
Welcome to the board @Junky ! One thing to consider is do you want to trade intraday vs. end of day. Trading intraday has it's advantages with more leverage and potentially more opportunities but it comes with a huge opportunity cost in that you typically need to be in front of the screen during market hours.
With your background and probable skill in execution and risk management I would look at spreading STIRs/Notes/Bonds. You might not have the same informational advantage without BB chat but you might consider putting money with a broker you are well connected to retain that info flow and try to use another app like Eikon to chat via that and see if you can still get some information feeding through.
I was trying everything, reading everything... stocks, options, futures, forex, investing, swing trading, scalping, arbitrage... trend following, reversion to mean... was also trading in a prop firm for a while. The probably only thing I never really tried was automated trading.
I invested lots of time (years !) trying everything, trading this, trading that. But it was not for nothing. I learned so much on the way, what does not work, what has worked but has stopped working, what is working for a while... and finally, how you just grind it out, day after day (greetings to lescor ). Without tricks, without a special technical equipment, without a gimmick, without a loophole that might disappear any moment.
Thats what I was always looking for: just trading by experience, by "having seen it again and again".
Through all this trial and error I also learned very much about myself, which is also very important on your way to becoming a consistent trader. If you are kind of impatient, if you like action, it is hard to be a swing trader, just like in my case, so I turned into a shortterm scalper. I am sure that you can make good money by trading in so many different ways... swing trading, scalping outrights, spreads, momentum, fade... but you should find something that fits your personality, that you enjoy. Why ? Because otherwise, you probably wont stick with it. Some kind of discipline is nice, but dont force yourself to do something you dont enjoy/ understand/ accept for a longer period of time.
So I recommend to anybody who is really serious about this (for those who are not really serious: better dont even start at all):
- Get a good, general overview of all kinds of markets, styles, tools... read a lot, get info on forums and so on. You can accomplish all this in 3-12 months.
- Now that you have a general overview, about what is possible and what not: ask yourself, what is the most interesting, most appealing and most realistic for you ? Take your time for this decision, but after you decide you should stick with it.
- After you have made your decision: now you have to put in the real work. Like a boxer, like a race driver, like a football player, like a surgeon... it is all about training, just doing it. Again and again.
Even if many say that the times of point and click scalpers are over... I must say I dont understand why. Maybe the markets were much better before I started this, and it was really easy money (Paul Rotter times). But in todays markets, you can definitely make a good, consistent income by scalping or shortterm trading futures.
Trading that way in futures has so many advantages: transaction costs, liquidity, trading hours, taxation... and with shortterm trading, you can learn so much quicker than for example with (interday) swing trading. Why ? Because instead of 2-5 trades per week you make 10-20 trades per day. You will get much faster feedback, if what you do is good, or if it is nonsense. As a investor or longterm trader, you can do plenty of nonsense and still have a good year or 2. Not so as a shortterm trader. Very soon, after a month or so you will already have some nice statistics that will give you lots of valuable information about your trading.
Ok, so you decide to get into this shortterm trading/scalping... how do you learn, how do you improve ? Again, by just being engaged in the market, by interacting with the market. Again and again, hour after hour. Day after day.
Chose 1-3 nice, liquid markets, like Bund, FESX, ES, CL, NQ and ZN. Open DOMs and/or charts of your selected market(s)... and then just focus. I could now continue and write another page(s), what to look for in the DOM, on a chart... but this would turn into a neverending story. Best you can do is: find it out for yourself. Just like a boxer will improve with every round of sparring, a F1 driver with every training lap, so will you improve with every hour that you follow the market with concentration on a DOM and/ or chart.
It is really pretty simple... but not easy. Like with most things in life. Dieting is simple, building a body is simple, studying is simple... but many/ most people just dont have the patience/ discipline to stick with these things. They become bored, they get depressed after 1 bad week or so. Thats why it is so important what I said before, that you enjoy what you do. Otherwise, you wont stick with it.
Hmm, I wrote a long text now, and I hope some of it helps at least one of you guys/ girls. And sorry if some of it is not written too good, but as many of you here know already, english is not my first language
Wish you all a good evening, have fun !
I would concur with fan27 here. Intraday in and out trading to me requires a different set of mental control qualities to be able to handle the multiple highs and lows that can occur as wins and losses occur during the day. For me setting orders at the beginning of day with automated combined stop loss and end of day exits is something I can handle better emotionally. So that is how I trade.
Painful trial and error. Bought a ton of books on the markets, then on TA, then on trading. 5 days of classroom TA education. Joined 3 or 4 shareholder/trader groups to meet with. Shareholder visits to many companies to meet directors. Investor conferences, exhibitions and seminars. Lots of candlestick charts. Increasingly rare and strange Japanese patterns. Lost more and more money buying quality shares while the market was not bullish.
Tried day-trading but too impulsive to stick to a plan. When it did work I instantly went to stupidly large positions. Did the same when it didn't work.
More books. More discussions. More money lost. More strategies out the window.
Finally I was left with trend-following. Highly asymmetrical risk/reward potential, regular opportunities to pyramid. Now regularly growing the account by double digit %.
empirical evidence + good theories = good strategy
Do you have a strategy that you developed or acquired from your market making days?
Did stocks at first long term, too expensive in 1978 for day trading, still use about same method as I started as in long term stocks am a chartist off monthly/weekly, support/resistance. Then got bright idea in mid 80s to romp into Commodities, besides not marrying little blonde when I was 21yo, this was second biggest mistake in both day trading and long term, for next seven years, I found new ways to lose money, friends(became cave dweller) and every horrible parts(and there are many) of inner self during one of the biggest bull markets ever. All the money I was making in stocks, lost it and much more in commodities, until I learned how to program, this and hypnosis was one of the first keys to stop the draining of funds and self. Recovered all losses in 8th year, trade well in very long term commodities and eventually gave up on day trading and became a scalper. I have ventured into several different areas of trading, but always back tested ideas first, no guarantee that will do well in actual trading, but if you want to end up with 3 signals, make 6. Only took 39 years for me to develop a day trading system I can be happy.
So, many might say different, but Ninja Trading offers free software and you can program it, test it etc and when you ready to go live, buy it. I believe Traders Lab is a good software as well, but I never used it, and eventually you might go on to Python.
After all my time learning and still learning, you have to understand yourself and be very honest about what you can handle, first you want to study charting, many will end right there, but you can also add to help with TA, but more in directional and speed of price, if slope is very strong,might want to test less retracement to enter market and if slope is slight angle-might want larger retracement.
There are so many durations you can try, longer means less trading normally, but whatever you do with exception of day trading/scalping, learn about options so you have say longer upsloping position and you can make little more selling options around your position.
The more study you put into the markets, little easier it gets at reading the charts and making systems, but don't for a second think it going to be easy climb, if I had to do all over again, should just stayed with long term stocks and kept a job I wanted to do on the outside. You have to watch to not become a hermit, very easy to get caught into the dance of playing the game. At some point, you wake up and think "That's all there was to it"? Let me tell you, learning this is hardest thing most will every do in their lives.
But automation the way to go, baby, don't have to sit there like a flipping clown all day long.
I appreciate all the insight and advice as well as the effort and time put into your thoughtful responses. Thx again!
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