Guys: General Motors GM gave you four 4 points last week!!!!! Two to the short side and then 2 on the long side. Get your head out of your ass and pay attention to the market. DHI, AAPL, MW and several others had more than 1 point moves during the day. Quit back testing silly technical programs and watch the news. The changing earnings is what moves the stocks. Everyone wants to trade some fancy derivative or be a big swinging dick in the Forex market???? And do this with $5,000 leveraged??? Professional Trading is a real business. If you don't have AT LEAST $50,000 in a 2-1 margin account or $25/30K in a PDT account you will not make it. You are under capitalized. No different if you open a shoe store with just enough money to pay first month rent. You are under capitalized. There is nothing unique about trading. It is a simple business. Quit whinning. SteveD
Friday was a great example of why the morning trade isn't worth it anymore. Dax drops I think 20-30 pts in a minute. A dream trade. I sell a big s&p contract. S&P attempts to sell off. Some jackass just continues to try and push the mkt up, he just buys and buys and buys and lets all the longs out and all the shorts in. So instead of a panic you have everyone right where they want to be and the spoos go down a point or so. What could have been a great move turns into an ok move.
Why is any of this an issue ? One trade doesn't work out - you should have several signals and markets that you are looking at .... If you are trading only a single issue or market then maybe that is the problem ....
That's part of the problem yes. If you had the same situation and it was 2000-2002 the index would have gotten slammed. There are so many variables now and so many black boxes and stupid people or people with their own agenda the risk reward in trading this mkt is out of whack.
Well, it has changed and is changing. one point: the black boxes are largly stupid. Once you figure this out and realize that they have little inteligence then you will do OK. Here is a key tip: watch a few markets where you know there is a large black-box component and try a few experiments to see how they react to it - build some statistics. You might be very surprised at what you find out. Rather than fear all the black box approaches I look forward to their participation ......
Problem is that the black box will always beat you on speed and execution. They will also trade for lower increments than you and have no real minimum cost of living income requirement. The key to beating is to expand your time frame away from them. On NYSE, you can mess with the penny mook black boxes, that's always fun. Overall, a black box is a trader, and a trader heavy market is an undesirable environment. This market is due for a long grind to get rid of most traders. The less capitalized, less experienced and less dedicated will end up being the weaker game as the B/Ds, MMs and specialists will pick up the spoils. Survival of the fittest. The easier days of equity trading are over, now everyone and their mother is trying to trade direct access while institutions & big investors are looking overseas for more fruitful investments.
I find this type of "reasoning" of why the market moves odd. How do you find this type of reasoning? Theres no one player controlling the S&P's If 20 hedgies all feel happy today and start buying but 2 really big funds decides to sell, the market is going to go down. Theres no manipulation in the S&Ps the only time when the market goes all up or all down is when everybody is in sync The choppiness you see there is when some are selling, some are buying, others are selling. Mainly because the market is not prepared to go up or down yet , when it is, everybody will be buying and you will see the market rocket or go down. Less with the reasoninings , more with the flow if you want to stay in the game. REasonings are for CNBC news anchors
Well yes. That was my point . You can gather statistics over various time frames and it becomes clear where you need to be concentrating your efforts. In some markets - not those you mention - the behaviour of the black box traders is so predictable that you can use it to your advantage.
What is a black box anyway? A program somebody wrote. Human effort with the potential for human error. Plus it is a stretch to think it can adapt for changing market conditions because nobody can predict how a market will behave in every situation. Bottom line is that the traders that are flexible and willing to put in the work will survive and make tons of money. Traders who plunk down $2K for a system and think it will lead them down the road to Millionairville will become a statistic.