3 thoughts about behavior
- Thread starter TradeWrecker
- Start date
I meant to say when trading is competely automated the role of emotions is negligible.
Given what is now customarily called "flash crash" can happen very quickly, you need a detailed plan regarding how to deal with it. For example, if the daily price range expanads unusually, you may want to shut down all trading. Once "balck swan" is quantified, responding to it can be automated.
However, it is unwise to run automated trading completely unattended in any significant size. There are lots of unplanned things that may happen: you may loose connection to the broker or the data provider, datafeed may have unplanned outage, the autotrading computer may break down, the exchange may stop all trading etc etc
I guess you look at the charts A. Lo creates and instead use your earlier suggestion to replace those types of bars.
A. Lo is sitting there in one world and you are front running him in the correct world.
His leaves are not moving and yours have long since moved. I'm in your boat.
By having H1 and H2 and having your bar types, this gives the gerunds of price and volume a chance to work. The volume leads price (the leaf). The volume 'tell guaranttees you know HOW and WHEN the leaf will move BEFORE the leaf moves.
Market capacity is measured by the volume corresponding to your type price bar. Think if A. Lo could have done that which you do.
this means during a turn a trader uses partial fills surrounding the turn. Exacting more than five times the capacty on a turn puts your performance at a very good multiple of the ATR. Well above 3 and close to 6 when you are watching the wind that will make the leaves rustle.
I am headed out for a few days.
the scenario will be to use the BF and its events orientation and fill in the pieces of how to round the extremes (see RN's post that has the five parts quoted. and, secondly, to use the pieces all the way down to the granularity to take any trip from one node to another node by monitoring and analysis of a link's progression. On the way I will systematically contrast this reality to the tax funded work where A. Lo buried reality.
You have the market display down cold since you complie the market's granularity using the fundamental accumulation strategy.
I agree with the weight analogy. I also like the integration of fractal parallelograms done by Gucci. In those charts you notice the market PACE and how PACE affects the envelope of of price. That was a nice before and after and it shows the value of having three integrated containers.
I don't really expect anyone to deal effectively with their weight using science. It is no longer in the cards that the educational system for children could instill looking at personal health scientifically.
It follows that no traders or learners would use science to examine taking the market's offer. Look at the incongruety og the OP in relation to BF and then look at the commentary of Leedin reponse to the OP. there is little possibility that critical thinking is any longer part of anyone's thinking as if they were on the way to expert.
May 6th was a demo of resonsible parties not meeting their regularitory obligations when they faced not knowing what was going on. On that fractal the market followed the "short" pattern part by part precisely. You can see it printed in a leading financial magazine including the timing of BF's "events". I probably should put up a screen shot to make the point more sensually.
jack ,i ve got an irish friend from mayo.the may have the toughest irish brogue to understand,his own from different counties ridicule his accent, he ,when i first met him, left it on the barely understandable while he was sizing me up,now he speaks the worst brogue to strangers, and dumbs it down so i can undersatnd,could you do the same without all the abbreviated 3 letter explanations, been reading your stuff for 3 years and still only understand about 20%,fck all they naysayers, they will never vanish ,so who cares what they think,please dumb it down
just for the record, i heard from an inside source,(trader)that the flash crash started out from a large firm that is automated, in the hft of many arenas, had a meltdown(programming glitch) on an asian desk, and shit down there system,there worry over there programming setup, caused an artificial black swan
I had engaged in nearly three years of really rigorous research but was also active on a number of forums, oddly though not this one. So I had made some contacts.
When the research was done and the model was ready I launched myself with all of $3k... My R&D had gone over the target by a year and a half, my hardware and software costs had been much higher than planned and I knew I had to continue to pay my bills out of my personal funds for another two years or so. I was so embarrassed to even pull the trigger on an account that size but I had worked too hard and long not to.
Once the corp was formed and the Series 3 and the CTA registration was in place I got myself set-up and started trading nothing but "the CTA model"... I screen shot the account every day and posted it up on the company website.
After about a month or so I had my first customer show up with all of $1200 dollars... and then I had a $30k account come in on its heels, followed by a $100k account... in the first 6 months of trading nearly $1 million was in the pipeline with a quarter of that actually in the market.
I suck at sales, I have the personality of a bear caught in a leg trap... how I ever raised a dime is beyond me. Mostly I tried to be really transparent and kept my clients and perspective clients in the loop to whatever degree they wanted (daily, weekly, monthly). I provided a lot of documentation about the trade style, provided extensive due-diligence etc.
Having said all that... it was a flawed business plan. I completely underestimated the operational bottlenecks. Small accounts never cover the cost of administrating them. Compliance takes longer than you think (and it's worse now). You have to stay up on your research and be thinking down the road... And God forbid the markets move, your phone lites up like it's Christmas and everyone wants their hands held and their feet rubbed, while you're trying to manage the volatility...
I think one of the take-aways from this was the $3000 account and the decisions I made to use that amount. Nobody typically would publish that size portfolio ... but my thinking was different.
I told my clients we were going to have bad months and bad years and the difference between being a trader who can walk away and get a job versus a money manager who is responsible for peoples money is huge. As a CTA I have to stay the course and let the model do its thing good or bad. That meant being able to do all the trading and handle all the admin for however long it took and still eat and pay the bills. I had to find the balance between trading capital and operational/personal capital. Leaving myself in a position where the balance of my personal finances were tied up didn't make good sense. That decision I got right... I missed the mark on some others though.
My personal bias on this is; if you're going to trade for a living, whether it's your money or OPM - frugality is a really good trait to have. It helps you survive the business. Live well below your means if possible, pay cash, stay out of debt etc. If you're going to be a smart trader you need to be smart with your own finances first and foremost.
He is like this guy? ....
In a hospital, a gentleman had made several attempts to get into the men's restroom, but it had always been occupied. A nurse noticed his predicament. Sir, she said, "You may use the ladies room if you promise not to touch any of the buttons on the wall."
He did what he needed to, and as he sat there he noticed the buttons he had promised not to touch. Each button was identified by letters: WW, WA, PP, and a red one labeled ATR. Who would know if he touched them? He couldn't resist.
He pushed WW. Warm water was sprayed gently upon his bottom. What a nice feeling, he thought. Men's restrooms don't have nice things like this. Anticipating greater pleasure, he pushed the WA button. Warm air replaced the warm water, gently drying his underside. When this stopped, he pushed the PP button. A large powder puff caressed his bottom adding a fragile scent of spring flowers to this unbelievable pleasure. The ladies restroom was more than a restroom, it is tender loving.
When the powder puff completed, he couldn't wait to push the ATR button which he knew would be supreme ecstasy. Next thing he knew he opened his eyes, he was in a hospital bed, and a nurse was staring down at him.
"What happened?" he exclaimed. The last thing I remember was pushing the ATR button. The nurse replied, "The button marked ATR is an Automatic Tampon Remover. Your penis is under your pillow."