price always, stops a little bit on the highs and lows, bcuz there are the traders take profit or the loosers got stoped out, but it is no guarantee that price must change direction after reached a new high/low.... Something to think about is the "old" trading behaviour that havent changed: traders, put their stops right over High/lows and also take profit, all or partly on the high/lows. What i ve found in my analiysis is that price sometimes stop right a few points before the next high/low and turns back - dont know if earlier the price moved more often to high/lows than nowadays. High/Lows are very criticaly price levels, everybody knows that there are the stops and limit orders of the most traders..... Another old edge what is still working is stop loss hunting, based on that......retesting just made new highs and hit the stops of the idiots who went in to early....
I also believe that the nowadays markets are much much driven by technical analysis and indicator trading, then it was in th 80s. You must think about, which trading styles moves the money nowadays, its first the pro technical traders and second the automatic computer programms (especially for very short term - aka high frequency trading - aka scalping).....they still operate on the old high/low support/resistance retesting law....this law will never change....never......markets move in cycles and creates high/lows all the time, therefore it must retest it to refresh the energy or money flow, before it can continue in the strong trade/trend/move directions....thats another unchanging law...thats just how the markets work.... Another unchanging old law or edge is that markets allways move in the same behaviour / pattterns,lets say for at least for 5 years....so you have only to study this behaviour to find out, how the big money players strategies work and therefore how the current markets work........so long there is a market, there are patterns to profit from it....
thats why it will become more difficult and difficult in the future, bcuz everyone looks on technical analysis and indicators, therefore the traders must put much more work and DETAIL in the technical strategies, thats what i see....little divergencies in the technical analysis, have big results... thats the game, that keeps trading competative. Its a competition of how smart you are to understand all this shit and be always one step before the other idiots who want your money. The smarter one wins..... But after all, the old good patters / edges / strategies, who are realy outstanding in the markets, will work forever.... why? bcuz in that kind of better said rare situations, the market cant do anything else than move in the expecated direction.... thats what a pro trader should do....wait for that kind of situation and only trade that, and then put on a realy good risk to make a realy great profit.... Discipline and beeing conservative in strategies will lead to success....
Thanks. So you still had to have a long stock position at first... I knew stock traders were avoiding the uptick rule using options but I didn't know it was called "bullets".
The NYSE specialist used to control the order flow and hence the institutional order flow. If you understood how he traded the stock of the time & sales, you read the tape and aligned yourself with him. Not easy but not too hard either. Just required pattern recognition, time & practice. There were a few signals that were so obvious that you could teach a monkey to do it. You were able to do the same with Nasdaq, up to a point, by observing the Market Maker or finding an institutional buyer. You generally did not need the chart but it was not useless.
NYFIX/Millenium was essentially a dark pool catered to institutions. Somehow Swift got access to it (and subsequently ruined it). Basically they had an algo that would ping NYFIX to see where the buyer or seller was. Once they knew that, they would just wait for NYSE to get to those levels and get in front. NYFIX worked by first looking for a buyer/seller in its own pool and then sent it to the main exchange. It was basically being privy to select institutional order flow info and front running it. Great edge while it lasted, wish I got access to it when I daytraded.
What are you talking about? The win rates on the old edges was often above 50% and some, like the arbitrage types, was closer to 80+%. It was never about going all in on a situation but about exploiting it as much as possible and as often as possible. There were guys who for the most part, did nothing but trade short sale moves on one or two stocks all day with their conversion. They would trade it for 3-5 cents over and over, with occasional 1-2 cent losses. Money management was never a major requirement, in fact there were many guys who actually had crappy money management & risk management. But the edge was too good and as long as they were hitting the edge, they never had to really deal with money management issues (as long as they focused on the edge). That's why most of them blew out when the edge expired. P.S. Not sure you know much about kickboxing either.
That's why newbies were hired with no cap down, like how I started. The edges were good enough where you had a good enough expectancy of gross positive traders from every new crop.