Fair enough - I'm taking you up on this Q1 - at the end of each month / quarter - what day do the big boys close their books Q2 - at the beginning of each month - what day / days - does institutional money come in (referring to the IRA / Roths of the world) Follow up to this - by what means do they employ to invest / buy / enter / increase - their position(s) Q3 - when the big boys (HF's of the world) want to enter into a position - How do they go about entering (me using the term big boy also infers the size of such an intended order / position.., is such - that simply entering all at once would adversely disrupt PA / move price against their intended cost basis) Do they parse such an order out - do they work price back and forth on their own - do they employ their own automation - specifics please ========================= In short - I'm inquiring into the specific mechanics of the mkt / trading - from a big boy perspective Any insight you could provide is much appreciated RN
Well, in my experience, they all look for some kind of edge before deploying any money. At Brandywine, we traded over 100 models across over 100 futures markets. These models were all tested thoroughly before implementation. Some were trend following models, some were based in fundamental analysis (usually just in an agricultural market), and one was an opening range breakout strategy for the S&P 500. There were three of us on the desk that executed trades manually in thin markets, or where the position sizes were big. Otherwise, the orders were automated. The trend following traders I am familiar with typically trade multiple strategies across multiple time frames, but will have one core strategy that gets the most weight. These are not complex strategies...just a combination of breakouts, reversals, or moving averages. Some may use Bollinger bands or other similar methods, but they all essentially do the same thing. Some of these traders will try to smooth out their equity curves with mean-reversion strategies. The shorter-term traders such as Crabel trade strategies where they will hold positions anywhere from a few hours to a few days. These are all back-tested pretty rigorously. Crabel likes to have his traders have some programming skills so they can test ideas that they derive from their market observations throughout the trading day. The strategies tend to involve quantifiable patterns that provide a directional bias. Then an entry and exit strategy is developed around the pattern. For instance, if yesterday's close is below yesterday's open, then today's bias is to the upside...simple. Then use an opening range breakout to get long, and either exit at the close or some other time. If the trade expectation exceeds anticipated costs from commissions and slippage, then it will be implemented.
Thank You - I have gleaned insight from your response With further respect to the mechanics; What am I not asking Aside I'm admittedly simple minded..., and prefer distilling things down - hence I deleted some things from your quote - please take no offense..., as none is intended RN
No offense taken. There are many things you can ask, but there are usually multiple answers. You need to basically ask yourself "what is my edge?" If you can't define it, then you probably don't have one. For example, a long term trend follower knows that they make a lot more money on their winning trades than they lose on their losing trades. Therefore, even though their win percentage is under 50%, and often below 40%, they will still be profitable in the long run. The next question is, how do you go about getting an edge for yourself? And therein lies the big ass problem.
Regarding "I just"........ Are you declaring your curiosity compelled line of thought (going nowhere)... was only coincidentally correlated ......to selling services? That you're not a professional salesman? Deploying a preplanned marketing campaign?
Having received brief but extremely powerful help from Redneck way back in the day, and having communicated with slugar in detail many, many times, I know that they (and I) have edges based on strategies that have been "back-tested pretty rigorously. The strategies tend to involve quantifiable patterns that provide a directional bias. Then an entry and exit strategy is developed around the pattern." Speaking for myself, "if the trade expectation exceeds anticipated costs from commissions and slippage" as well as the anticipated cost of a maximum acceptable loss, "then it will be implemented." Along with the thorough manual backtesting I did over many months, I now also "have some programming skills so I can test ideas that derive from [my] market observations throughout the trading day." You definitely nailed a recipe for success in your post!
You know that ole saying' be brief..., be good.., be gone ========================== A Very Merry Christmas..., and A Very Happy, and Prosperous New Year to You Ma'am RN
Edges - lets talk about edges; A true edge never cease working A true edge works in any PA environment Having said this..., IM (not so humble) O people place way too much emphasis on so called "edges" And here's why...., No matter the edge - there is..., and always will be - one constant..., and overriding component to trading Uncertainty ================ Wrap yer head around uncertainty - you'll possess the ultimate..., and never ending - edge So simple..., yet not so easy =============== Lost count of how many so called "edges" have gone the way of the dinosaur Soes bandits Floor traders Price inefficiencies arb'd into oblivian Data speeds (HFT) Yet through it all..., and since the beginning - uncertainty remains the one constant And I..., for one..., am Forever Thankful for that RN