25,000 Roundtrips a day?!
- Thread starter pinetboltz
- Start date
Clueless ...
So if one holds for 5 minutes then he is a gambler , but if he holds for 15 minutes he is a trader . lol .
All algos and market makers are in the markets for cents per trade they are in it to catch part of the bid/ask spread , this doesnt make them bad traders infact they are the best .
yes, this makes sense
i guess when seems for generating high total profits, there are ultimately 2 alternatives:
(a) take a directional position in smaller size, hold for larger move (Moderate volume x Larger profit / contract)
(b) use spreads in a market-making style of trading, hold for minutes (High volume x Smaller profit / contract)
i was watching a youtube video posted by tom dante, and in one of the anecdotes dante mentioned 'nav was the king of averaging' -- how 'everyone averaged everything'...and that nav would build a position of 1500+ contracts in the ES from adding to his typical clip of 69 lots
is martingaling an actual strategy??
no I dont agree imo there are a plethora of different strategies that can work and even more that dont work. Both the above could work but they are not the only 2 ways.
Yes averaging can work but only if the trader has a clear plan and is able to cut positions as per their plan. In reality most people cant, they marry the position and blow up. There are plenty of strats around where the risk reward is not 'traditional'. For example some strategies you may bank £20k per month then every 12 months lose £60-80k. Your ability to walk away from those positions is critical as is your ability not spend the £20k per month and treat it as part of your bankroll. You can have all the good intention in the world when you are down £20k in a trade but can you cut it at £50k and continue to exploit your edge. You have to know yourself really well.
in one of the futex videos, the guy was talking about how sarao had a huge long position on during one of the trading days in 2008, which had been at a loss, but he held it overnight and next day he was up massively (something like +10 million profit).
i guess part of the edge is being able to find financing to do this?
bc in some of the publicly disclosed pdfs sarao had mentioned to one of the brokers that he made majority of his total accumulated trading profits on a few select days (not sure how that works out, if he was making hundreds of k's each day) -- ie. if he was stopped out on a big down day on his long position by financing/broker constraints etc, he wouldn't have been able to use the overnight reversion in his favor.
hmm yes and no. not strictly part of his edge just more firepower. Trading leverage is freely available in futures markets, margins are very very low. To carry a position of 1000 ES futures overnight in a retail account you would need to deposit $4.2m, for day trading I think you could comfortably find a broker to hold 1000 contracts by depositing $1m as long as you were flat by the cme close. I know a large US broker that would let you trade from their office in London for that size, that's when you know you are trading size, the broker will loan you their office. A prop firm that knows a trader would likely let you have 1000 ES futures overnights if you held $1m on account, risk would be monitoring closely though. Maybe they would stretch to 2000. Depends on the firm, depends on the trader and how much capital they put up. Yeah there are guys who go in with 200 lot clips and build a position up to 1000/2000 lots with no actual stop in the market.
The bottom line is someone like Nav will have money on account at the firm at first loss.
There are dozens of videos by Tom Dante..
can you provide a YouTube link to the one you mentioned above ?
Averaging isn't a strategy in itself, as in, you can't flip a coin and average until your position turns positive.
But 90% of the traders I work with average. It's very rare you find a price that's an exact turning point. If I think the market will turn up at a support level of 50 then I'll be scaling in around that area. Not waiting for price to touch 50. It might never get there.
Or if I have a fundamental idea I will scale in over a wider period.
It's about managing the position, if I average I will load and unload the position or parts of it improving my price. That's the element you can't really teach and the difference between the good traders and the average ones.
But...nobody that wants a long term career should break basic risk management rules. Averaging doesn't mean unplanned risk. I will have a hard stop and when it hits that I'm out.
But 90% of the traders I work with average. It's very rare you find a price that's an exact turning point. If I think the market will turn up at a support level of 50 then I'll be scaling in around that area. Not waiting for price to touch 50. It might never get there.
Or if I have a fundamental idea I will scale in over a wider period.
It's about managing the position, if I average I will load and unload the position or parts of it improving my price. That's the element you can't really teach and the difference between the good traders and the average ones.
But...nobody that wants a long term career should break basic risk management rules. Averaging doesn't mean unplanned risk. I will have a hard stop and when it hits that I'm out.
There are dozens of videos by Tom Dante..
can you provide a YouTube link to the one you mentioned above ?
I found it:
He said Nav never did NOT average his trades....i.e. he always averaged his trades.
And I think I heard him say that Nav NEVER used stops !!