Correct but those that start threads like this have "tunnel vision"...they only see one way and do not have the ability to see that others are able to succeed a different way. That's the reason why you rarely see threads use the words like "some" and similar like. In fact, we rarely see (read) info about the personality, personal time schedules, stressful factors (debt, capital, family, job, economic status, etc) as variables that impact a particular trading style. The markets will exploit individuals weakness and their reaction will sometimes show up in the type of discussions they start/participate online and in their behavior in their personal life. Yet, on the flip side, these types of threads are like a warning to many that if you're not properly prepared, don't have money to burn, don't have a backup plan, not in good health (mentally or physically), don't have an edge...best stay way from the markets because it does not care about you and it will break you down until you're bankrupt or can no longer participate in the markets. wrbtrader
The skill set, time, cost, and tools required can differ drastically, all of which can be contoured and improved. The risk profile is the big issue with directional swing trading. You lose control of it, and that’s why it’s never taken seriously in the professional world.
This is quite hot topic here on ET, so I wanted to ask ... For a person who is sophisticated enough to make markets, why does it take 7 years to figure out that mentor is fake? I think I know enough about markets to call bull shit within a week.
opttions is a totally different anmimal and this guy knew a lot about the markets but was an awfull teacher .... in the last 2 years I was not paying much attention to him anymore but trying to invent my own thing. Problem is forex doens't i-lend itself very well to interday trading. So it was error discision upon eror dscission. He promoted the 1M chart very heavely and claimed to trade that way. I you ask me now that was a load of crap.
I made market by either standing of the bid or the ask of about 25 series. I did thit a bit depending of my inventory. Since this was on CBOE. I had priority over market makers when we had the same price. I send about 1000 quotes in total to the market. OF thse 1000 850 were cancellations -/chnages in price. Since IB started to ask 1.2 USD for these kind of trades my liquidity was useless. I had an option model in Visual basic where I could put in vol in for every serie so I had a skew that was pretty constant. Colours in miy spreadsheet showed undervalued of overvalued options. I had stolen this last idea from Timber Hill. I hedged delta immediately and did my best to keep theta and vega under control by adjusting my size. It was not abnormal ot try and trade 50 to 100 lots in one go. I also kept track of my total puts or calls.
Overnight risk? Is no larger versus intra-day if you are using sound risk/trade mgmt. Besides , there is a 5% limit up/down on the major US stock indexes after hours, the day session limits go to 20%. Overnight risk? What about the potential profits your leaving on the table when the conditions are right? A large portion of the U.S. index gains over the last decade has been after hours. In 1987 overnight risk was big, in 1988 circuit breakers (limits/trading curbs) were put in. Nearly all professional traders hold long/short positions overnight under the right conditions, even if they are smaller positions & they trade intra-day. If your trading stocks you could have overnight news that causes a large gap - not a concern when sizing the position(s) properly. Most of the gaps I have been in were in the direction of my trade. Stock selection has a lot to do with this & trading in the direction of the trend sure helps. As a swing trader my long term risk of capital avg is 80 basis points (0.8%). Overnight is no more riskier provided you have enough capital & use a strong $ mgmt plan. Not basing day trading, I do some myself - in the right conditions.
I don't understand, you were able to do market making using IB? Don't you need HFT type of set up for this? Did you use some professional/customized version of the software?
I used lots of keyboard strokes to change my orders. In fact my keyboard was setup like a sort of game computer. Remember this was 14 years ago and spreads were quite wide and thus forgiving. That loophole is now totally closed.
My friend. With US indexes, you aren't factoring in the liquidity risk in overnights. Much more likely to dry up. And 5% is huge if leveraged in futures.