Discussion in 'Trading' started by Dustin, Oct 30, 2009.
Please save yourself and go read my posts.
Thank You , ES Master
I have longs, shorts, and my longs are hedged with puts. I really have never mastered stops. I probably should see how much they save me VS. how much I lost being stopped out.
Anyway, my longs are volatile, down today, but they always seem to bounce back. The profit from puts take away some of that pain.
Anyone new to the markets should not be trading ES or futures at all, period. You should stick to equities for at least a couple of years, minimum. The futures markets are to fast and ruthless for someone just getting started, they do not forgive mistakes at all.
You should start with Macro Economics first, before you even start trading. If you cannot understand the gigantic levers that swing the pendulum back and forth, then you are already at a disadvantage.
You must understand that the game is rigged, who rigs it, how they rig it and what they are going to do next. CNBC and the other pathetic schills are propaganda ministers, listen to them are you will be left holding the bag. I do not listen to CNBC when I trade at all, talk about clouding the picture!
We are in a unprecendented time to where the forces that control the market are loosing more control over it by the day. The rope is unraveling and becoming a very thin thread indeed.
At the beginning of the crisis, Bernanke whispered to a fellow fed crony, "I have lost control of the dollar". The typical market pundits and wall street firms(along with the gov.) cannot prop the market up any further. Their greed is going to be their undoing(of course the most ruthless, are already short and will make another fortune on the second collaspe).
Start studying the big picture and then look at sector rotation/ vol/price, etc.
Vol/Price is the most important thing you will learn. If you can understand it, then you would see that the smart money is distributing their postions to the dumbbell newbie herd traders before the bottom falls out. Stay on the right side of the market. Cut your losses short and let your winners run.
yes this shows you are a real trader. many algorithms/bots are missing, liquidity has been withdrawn in massive quantities from the markets, thus profitable and good r/r setups simply no longer exist. your risk is so much greater this eyar and to those who ahve not pared down their size are either on the verge or no longer in the game. those idiots who say oh u can play both sides of market, oh there is volatility, are merely paper traders. hey paper traders, volume does not equate liquidity. damn morons.
As a fairly new trader, I actually consider this market to be the perfect learning environment for myself, because it quickly shows you the folly of being lax and un-disciplined. If you don't have a stop: Boom, you're toast. If you over-leverage: Boom, you're toast. If you're throwing out trades blindly with no plan: Boom!, you're doomed. Mother market is a dominatrix with a cat-o-nine-tails and every mistake results in nine-lashes to the newbie.
It's also kind of like having the drill instructor from Full Metal Jacket sitting right next to you, ripping in to you every time you make a stupid mistake (and repeating old ones).
I'm learning a lot now and keeping my positions small (risk <0.25%/trade, most times less).
I'd rather learn now and realize how much I don't know and be ready for '99, '01, '03-06 than to start with the bull and get run over by this market.
I started in the middle of the high volatility at the end of last year, I thought 'this is easy' and then it all turned to shit on a dime about April this year, can't seem to make anything work, paper trade city.
Thanks for the heads up Dustin!
I'll prepare for the chop in the coming months.
You know, right now would be a great time for a vacation-like how Livermore would during a slow market. You can comfortably enjoy the profit you made in 2008.
What? Are you telling me that this is a slow market? VIX is back above 30, we drooled over readings like that back in the mid 2000s. This has turned back into a very good trading environment, 2008 was a fluke, a one in 50 year flood. If you are basing your trading strategies based on what happened in 2008, you will go broke.
If you are not trading the indices what Dustin said is 100% correct, volatility was higher prior to 2008 in terms of stocks, and volume was there to back it up, this is a much tougher environment than pre-2008. Lets all pray for a meltdown.
Because they are trend traders: they miss the beginning, and the end (1/3 each). So they make at best 4 points. That is for the win days.
If you remove the losing days, and assuming 50% rate and remove cost of stops, then they make at best 2 points on average each day. Do you understand a littler better now? Large range is the main way they can survive.
That is why RFT spends time thinking about the end of previous trend, beginning of new, and end of new . That is 3 times the part of trend to be exploited, and you factor in the cost of stops and the win rate, well it is actually X times better, where X>3.
Now that you are done reading, take this post and read it 10 times. Then repeat for a number of days until it sinks it. Finish each reading by asking for blessing from the Mighty God for yoursel, for RFT and for his ET friends including those who do not follow the trends.
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