As the ill-advised starter of the ill-fated thread, I believe I can provide the definite answer to this thread's perhaps rhetorical question. (Profanity alert for any sensitive pussies tempted to read further.) It was closed because NOT ONE FUCKING OBJECTION WAS RATIONALLY ADDRESSED BY ANY POSTER, PRO, CON, OR AM. It deserved to be closed. ET is congenitally and genitally incapable of having a reasoned discussion about the theoretical underpinnings of SCT.
Geez... I told you why in the very same post that you quoted and you still can't get it right! You're only proving my point AGAIN, BTW. Maybe I need to type it more slowly? "Sorry but I have no desire to continue an exchange with someone who can't keep details straight and then calls his mistake my "first limitation." Please go play with someone else.
OK fair enough. I've always taken his statements to say that %4-%7 is possible to achieve on a semi regular basis. To me, that is not unreasonable. Even considering liquidity issues (which Jack says is at about 50 contracts) it wouldn't take long to amass a fortune. So at about $30-$40 million, you have to start to wonder how much interest someone would have to sit in front of a computer everyday. Especially when you consider that he may not have figured this stuff out until later in his life, maybe he'd rather spend his time differently then amassing the world's greatest fortune, even if he were able to. So, is it so crazy to think maybe he's amassed enough of a fortune to want to do something else with his time? TNG
Why only 50? Based on what? ES typically trades over 1 million contracts each day, and Jack says the limit is only 50 contracts using a 5-minute chart?! Keep in mind that there is supposedly a growing number of people trading Jack's method and trying to get it just right. Is the limit 50 contracts for each of them, too? If he says 50 contracts to one pupil, does he say 25 each to two pupils? If the number of people trading Jack's method doubles in size, does that mean that you will have to reduce your trade size to 25 contracts to accommodate overall liquidity? And if you want to up the size, will you have to arrange for some "unfortunate accidents" among the existing pool of Jack's followers? How does one arrive at "50" per person when so many people are supposedly doing, or trying to do, exactly the same thing? Where is the underlying logic? Can you see how arbitrary Jack's comments are? And that's just the tip of the iceberg.
Not sure where 50 contracts is coming from... Jack posted this 2 weeks ago: "Here is and example. I am holding 750 contracts of ES. I see T&S is running at 400 to 500 contract blocks and below. So I act in three moments about 15 to 20 seconds apart. 500, 500 and 500. I take 250 contracts of profits three times and I reverse in three partial moves and all of this is done at the same value of the market. At other times I would do things differently if T&S was telling me something else. This was a 40 second event overall." http://www.elitetrader.com/vb/showthread.php?s=&postid=1399838&highlight=750#post1399838
These are valid questions, for sure. I have also assumed (you'll notice when reading Jack's stuff there are different ways of interpreting it sometimes) that he feels 50 is the prudent level to max out at. I would guess that slippage and money management are two of the biggest concerns. At times, there would be no slippage on 50 contracts, but at other times it could get pretty ugly I'm sure. I don't believe that the majority of the volume in the ES comes from SCT traders. Not even close. I believe it's upwards of %99 traders using another style of trading. There are MASSIVE spreads going on and other styles that woudn't interfere with trading at all. I believe also that if a signifigant portion of the volume on the ES started coming from SCT traders, then yes you would see the profile of the ES change and possibly SCT would need to change itself. However, I don't think that's likely to happen. Also, the principles work in any liquid market, so I don't really see that happening for a long time, if ever. Also, I don't believe that SCT traders are doing EXACTLY the same thing. As I understand it (and I am a beginner, for sure) it's a method of quantifying and understanding the market. It is NOT a series of signals. No one goes long at a certain price because of a signal. They monitor the market for sentiment changes, and when they percieve those, they reverse their position (depending on their stage of development of SCT). I think given my beliefs listed above, you can see that I don't think Jack's comments are arbitrary at all. TNG
Exactly. So, then, why only 50? Is Jack the OPEC of SCT and allocating the appropriate size to keep things in balance? Well over 99% of volume is non-Hershey-related. You guys don't make a dent in ES. But look at the faulty logic of Jack's argument. In any event, it seems that Jack is trading at a 750-lot clip these days, as evidenced by T6's above post. I don't know what's going on anymore. Good luck.
Now I'm really confused, am I supposed to address this or not? You've told me twice now and chastized me for not being able to read correctly, but you respond to my post and imply that I'm supposed to show you where he talks about maxing out at 50 contracts. At any rate, in the post above I believe he is citing an example, not nescessarily something he's done. If you would like, I will look up the post where he cites 50 as a good size to max out at. TNG
He's just a guy suggesting a trading method, and along with that comes what he believes are prudent rules to follow. 50 is what he believes is a prudent number to stop at. If I find it to be different, then I'm going to trade differently. For I know he could have decided that number at a time when the ES wasn't so deep. I don't see how that's an argument for fault in his logic. He has a system, he says it works best with no more than 50 contracts. Even if he has traded or still trades 750 contracts at a time, who cares? Maybe it's not SCT he's trading there, maybe it is. If you believe he's trading 750 contracts at a clip doesn't that at least lend some credibility to him? I mean, obviously he has access to a decent sized account if he's doing that. Maybe he's taken into account that once this stuff catches on there will be a ton of people trading it, and if everyone limits themselves to 50 contracts at a time, it will impact the market less. Maybe at 50 contracts there is always enough liquidity to get out of positions and reverse, and he doesn't want people to get into trouble. Also, we could always just ask him. TNG
The place of the children's last retreat, They called it, the Pied Piper's Street -- Where any one playing on pipe or tabor, Was sure for the future to lose his labour. Nor suffered they hostelry or tavern To shock with mirth a street so solemn; But opposite the place of the cavern They wrote the story on a column, And on the great church-window painted The same, to make the world acquainted How their children were stolen away, And there it stands to this very day. -- Robert Browning