@longandshort, I am curious what you think about order flow concepts like volume at price, absorption/distribution, auction/Market profile, etc? Not asking if it “works”, but rather if the concepts make sense. My understanding is that Brooks is more of a scalper (taking small profits often) which is, imho, taking advantage of the “price noise” throughout the day. Personally, I think he overcomplicates things, maybe even on purpose.
I have yet to have a situation where a stop loss didn't work. There are gap downs where I didn't get filled where I planned but I have always been able to get out of a position that was moving against me. I use SPY as a benchmark. I guess it's comparing apples to oranges but it seems to me that if I can't outperform the index I shouldn't be trading. I try and keep it real simple. The only reason for me to take a position in any stock is because it is increasing in price. What the company does isn't a big concern. I'm more concerned with liquidity, can I get out in a hurry if I decide to. I look mainly at volatility and liquidity. I just look at the stock price. If it's increasing there must be a reason why. Do I really have to know the reason? I take a position, if it keeps increasing in price I make money. If it stops increasing in price I get out.
You should look at the stocks you own and compare the returns of the basket if you bought & held vs. your portfolio performance. But if you are confident in your approach, what's stopping you from using leverage?
One of the best thread in 2022 so far. Thank you for taking the time to write it. I wish I understood that few years ago. Best!
You are contradicting yourself. 1) Hft’s aren’t an exchange’s matching engine 2) hft’s match orders 3) orders pass through an hft We’ll just have to disagree. Bottom line - a tick is a signal to some and noise to most. If you don’t value it, nbd.
Hard to compare. Last year I made 55 trades, so which companies would you compare to my portfolio that holds at a maximum of 10 stocks. Usually not that many. Some of the stocks I sold and then rebought, some higher some lower. Some just kept falling. Some recovered but the stock that replaced it did better. I do use leverage from time to time when things are really running hard.
you don't get it dude. As I mentioned, HFTs act as market makers on an exchange OR as internalizers. The former races to fill orders as they arrive -- concepts like ticks don't even matter at these timeframes, as it is all a game of latency arbitrage. Quantifying the high-frequency trading "arms race" (bis.org). Are you saying that latency arbitrage is "bulls" and "bears" on a candle or tick lol? The latter makes money like this: Breaking Down the Payment for Order Flow Debate (a16z.com)
I’d just compare your total portfolio quarter by quarter and see how well you did vs buy and hold through the period. Or get one of those trading journals.
Lol, yeah I understand latency arbitrage as well as English. A tick can be the difference between an order triggering or one filling. If you want to continue to think of a tick as noise, nbd.