RE Below

Discussion in 'Trading' started by jbales63, Mar 25, 2011.

  1. jbales63

    jbales63 Guest

    Putting aside the "info, stats and claims" below. The message was lost with the messenger. I have 15 yrs in the Industry. first as a broker. Then on both trading floors in Chicago. Lastly as a prop trader for a large FCM. The theme or crux if there is one from the gentleman posting below. Many Large Traders, houses and Algorithmic trading systems rely on canned, static,strict rule based systems for supply . And prediction of amateur Kamikaze breakout and reversal trades. Obviously a professional trader has a methodology , rules and adheres to them perfectly. For example you follow a popular set of scripts you purchase lately it seems to be the "better" studies. You follow this static system perfectly.. stops, objectives, entry prices. Most retail traders use 1 to 2 handle stop. And there are conservatively 2000 users I would have no idea. If you were a algorithmic trader, is this of any use to you. A good algorithm could tell you approx How much supply, from what price, amateur risk tolerance and more. Just by viewing the "systems"If all these "systems " are profitable how is that the governing body that regulate the industry for years state well over 90 of all retail futures accounts open close at a loss.Just check out the Dom and T/S at and around these prices . There is your stop or entry. You are far less likely to get stopped or wrong sided then a random tolerance you may have . To blame Firms,trade desks , algorithmic trading is ignorant. I trade like a bricklayer 62.50 at a time . The same thing over and over with 63/67% W/L. You adapt to market conditions and behavior. Even exploit what you can. There is no such thing as the holy grail by design a static trading system will fail. The reason algorithmic systems can be profitable is that they are dynamic. Data used , weight of inputs and computations used are all done on the fly or "dynamic. Sorry this has become a rant. Methodologies work not systems. risk to reward ratios for stops and objectives not imposing account balances as stop. With that some of the pitfalls below can be reduced.
  2. Could you define first what static and what dynamic is?Depending on timeframes Fibonacci levels, fo e.g., could be the static and the dynamic as well and you can exploit both, discretely or in combo, successfully.
  3. the1


    You're talking my language. The markets are nothing more than a massive random number generator. If you can view the market as such there are almost endless tools to work with that data. When I entered the profession I was steadfast that the markets were not random and P/L suffered as a result. A Master's Degree later with a heavy emphasis in Stats changed my mind in a hurry. Now my P/L is humming along.

  4. d08


    Wrong. This is one of the most basic things, sigh.
    Market consists of people or if you prefer, algos designed by people. The chart is just psychology visualized.
    If markets were random, it'd be impossible to find an edge.
  5. jbales63

    jbales63 Guest

    A practical answer in that scenario, If you are using element of discretion to trade and one set of fibs lines better than the other. And for instance your discretion tells you those numbers don't mean anything today. And trade accordingly this is dynamic. Monitoring variables and decisions made on changing inputs

    Static scenario, fibs are generated .Fib numbers used despite current data. Fixed or stationary trading plan.

    By use of discretion, and calculations with variable inputs The above is dynamic Good Point

    In my discussion above I was mostly talking about the canned method "scripts". with stops and objectives predetermined. where if you are disciplined enough you get to slowly bleed out. Generating a bunch of commission and fees. And get to stand in front of a train yelling pick me pick me
  6. jbales63

    jbales63 Guest

    Yes The people or algos as you said find an edge. Then efficiency traders and Arb Traders will exploit it eventually till it dries Another reason purchased trading "systems aren't profitable over time

    This is one of the most basic things, sigh. You sound like you take a lot of seminars or workshops
  7. Do you ever know when it will dry??It will never dry, since the all profitable algos remain the same for centuries.These algos only appear like in a distorting mirror, remaining the same naturally.
  8. jbales63

    jbales63 Guest

    You could tell for example. Your system trades the trading range between poc price and vab and vat. And your objective is to trade the low volume prices between levels. For a quick 3 to 7 ticks. And a " algo" flashes volume above and below the respective levels. Goading traders to take prices. Above and below "ghost" volume only to be pulled.then getting stopped out . Or trading a range that would require an unattainable W/L ratio to be profitable over time.

    Its true algorithms have been around that long. And A completely new formula is rare in its most basic term. Its the data base used where and how data manipulated. How and when dynamic variables and attached weight of inputs . These are all changing all the time. In milliseconds. Many are "learning" as they run. Discovering new data correlation. And price behavior that can all be quantified mathematically.

    My original post was just saying that no matter the circumstances around trading losses you cant blame. The Game or the player whether traders or a box. And posing the question. If most traders lose money don't do what most traders do. And in today's markets don't stand in a herd of resting orders generated by a static canned red light , green light trading system.
  9. d08


    Like SnakeEYE says, some edges won't disappear for a really long time. Things that work for 20+ years I consider not disappearing edges.
    I haven't paid for a seminar or a workshop ever, I believe skilled traders don't waste their time teaching.
  10. Well, what do you suggest?Only reasonable.

    Trade the news only.Like in a giant queue at the Apple store for the iPad.Big big queue, but everyone have a fair whack.
    #10     Mar 26, 2011