AHG - Profitable Strategy for Struggling Traders
- Thread starter Anekdoten
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Not to sound like Mortimer Duke or anything...I believe that with a little time...and a bunch of mentors, as you have here on this thread, you could do 10k a year pretty easy. IMHO of course. Lets break it down:
10,000 year
200 trading days =
$50 per day avg.
Even if you started with $20 avg...by years end you would be trading $50+ per day avg. With those numbers in mind, I think you need no more than $5k in start up capital to achieve this. Further, I think you would need to trade equities to start...again IMHO. If you would be willing to give it a chance...and try to learn a new method...I know a few guys who may capitalize you to start.
Not trying to be Randolph and Mortimer...but I think this is doable.
RED
10,000 year
200 trading days =
$50 per day avg.
Even if you started with $20 avg...by years end you would be trading $50+ per day avg. With those numbers in mind, I think you need no more than $5k in start up capital to achieve this. Further, I think you would need to trade equities to start...again IMHO. If you would be willing to give it a chance...and try to learn a new method...I know a few guys who may capitalize you to start.
Not trying to be Randolph and Mortimer...but I think this is doable.
RED
Quote from 99%loser:
I like golf. suck ass at that to!
My message has more to do with being under capitalized. I truly believe you need a lot of money. 50 to 100 grand of expendable capital. That is if you have anything to lose (house, family, nice life, ect.). Maybe I am just to risk averse. That could be as well. Think about having your margined position going against you why being locked out of your computer, broker, or the market as a whole. The possibilities for catastrophic loss are there. Your losses can be just as great as any gains you can dream of.
The general make up of my strategies were trend following using Volume charts, MA's and multiple time frames to gain a bias. Using an oscillator to gain an extreme, take signals of extremes at BB or price action break towards trend. Of couse the BB entry most advantageous. Before my brain just gave out was looking at using confluence zones based on price action needles on longer term charts to give possible reaction zones of 1 pointish to integrate into the above.
Money management was tough because as stated above I am under capitalized. The 2% rule on a small account puts you smack dab into noise. That's why I was trying to use the BB gave early entry's and tight stops that hardly were moved against.
I would have been happy to make as much as I could at wal-mart or the library. Figured $6000-10000 a year would cover what I could gain by working at one of them. Also in the mix is trying to work at home so I can be accessible for children. It all comes down having a nice life and not much money.
If there are others thinking about this, before you get started.
What are you willing to lose. You've heard from a guy who moves around every six months the footloose fancy Italian (by the way love visiting your country, been there twice in my life, feels like a second home), and someone willing to borrow $25,000 he had no idea if he could pay it back. If things had gone slightly different what would happen, bankrupt, working the next decade to pay it off. I'm sure he would say something like I new I had a strategy, I had a plan, yada yada yada. Trading makes money from Probabilities and inconsistencies in the market. The only certainty in the market is that when you pull the trigger and release a couple thousand dollars that may not come back you will be anything but certain.
I actually haven't really lost money. Unlike some blow ups, I have all my capital intact. I spent some money along the way on trading related things that make me a net loser, but when I welcomed my money home it wasn't to much worse for wear.
These postings are to give people like me a chance. Not really to criticize anyone else. You have your lives and are welcome to them. I am happy that people can attain there dreams. I think if my circumstances were different I would pursue this to the end, but there are probably a lot of people thinking this is possible that similar to me. It's not impossible but it is terribly improbable. Question how much of your life you are willing to lose not just money.
Just for clearification, could someone be so kind and go over the general logic behind tape reading again.
Is this true - from the viewpoint of the general logic (no quantities):
Traders hit the bid = price should go up
Traders hit the ask = price should go down
Orders below the bid = urgent selling, stops get hit, price should go down
Orders above the ask = urgent buying, stops, price should go up
If one would indicate red for selling and green for buying, would my attached configuration of the T&S make sense?
Thanks...
Is this true - from the viewpoint of the general logic (no quantities):
Traders hit the bid = price should go up
Traders hit the ask = price should go down
Orders below the bid = urgent selling, stops get hit, price should go down
Orders above the ask = urgent buying, stops, price should go up
If one would indicate red for selling and green for buying, would my attached configuration of the T&S make sense?
Thanks...
Here is an article on tape reading I found interesting - of course this is just theory, nothing beats screentime and experience.
Most beginners in trading heard about the concept of tape reading. Unluckily, there is not much materials available that explains it in details. I hope I can provide some guidance here for our readers to learn the basics of tape reading.
What is Tape Reading?
Tape Reading is the study of raw price actions down to the finest resolution - where each trade occurs and where all possible bid/ask updates are monitored.
The term tape comes from ticker tape, print out by the ticker tape machines available since 1870s which reports the latest trade/bid/ask update information.
Nowadays, if you think about it, such information is very hard to interpret due to the fact that the amount of data to process is huge. This concern alone makes tape reading something mystical and sometimes even regarded as born with talents because many well known professional traders are famous for their tape reading skills.
By reading the tape properly, a trader is supposed to be able to tell if the market is weak or strong. This extra information is critical for trading, especially useful when you are daytrading. Just think, if you can identify the strength of the market you trade correctly 90% of the time, you will be able to take advantage of that to wait and buy at bid (when the market is weak), or sell at the ask (when the market is strong). That along will improve your trading performance drastically.
Basic Tape Reading
1. Do not look at the tape all the time, focus on the tape only when the market is closing in at critical price levels (previous day high, previous day low, pivot point, etc.).
2. Best is looking at a depth window with the current bid ask listed at the top, next is watching the quote window with the best bid and ask at the side. Using time and sales window to read the tape is not recommended.
3. Learn to identify 2 distinctive behaviours - a. when the market is moving in a particular direction, is there a lot of resistance. b. when the market is charging a particular price level, is it taking out that price level decisively.
4. Learn to identify a third state - the market is confused.
Some Useful Hints at Learning Tape Reading
When a price level is a strong resistance, the asking price will keep reappearing again and again even though the price got taken out a few times.
When a price level is a weak resistance, the price will be taken out decisively (sometimes after struggling for a short period of time).
A confused market will usually rally to a particular price point and then drop suddenly to a lower but close by price level. The market will then struggle between the two price levels. That implies a confused market and it is not likely you can figure out the direction of the next big move. In this case, stay at the sideline.
Having huge size in the bid does not necessarily means the bid is strong. On the other hand, when a bid got hit and trades started to fill at the bid, while the bid size keep increasing, that is a strong bid.
Tape Reading is Not Fool Proof
Tape reading is a useful technique but it is not 100% correct all the time. Thats true especially when some major players are hiding their bids and offers.
When the buy side traders are scaling into a position (i.e. buying at the bid while the price is dropping, or vice versa) it is then very hard to identify the strength of the market. That will usually results in V-shape reversal price pattern.
Most beginners in trading heard about the concept of tape reading. Unluckily, there is not much materials available that explains it in details. I hope I can provide some guidance here for our readers to learn the basics of tape reading.
What is Tape Reading?
Tape Reading is the study of raw price actions down to the finest resolution - where each trade occurs and where all possible bid/ask updates are monitored.
The term tape comes from ticker tape, print out by the ticker tape machines available since 1870s which reports the latest trade/bid/ask update information.
Nowadays, if you think about it, such information is very hard to interpret due to the fact that the amount of data to process is huge. This concern alone makes tape reading something mystical and sometimes even regarded as born with talents because many well known professional traders are famous for their tape reading skills.
By reading the tape properly, a trader is supposed to be able to tell if the market is weak or strong. This extra information is critical for trading, especially useful when you are daytrading. Just think, if you can identify the strength of the market you trade correctly 90% of the time, you will be able to take advantage of that to wait and buy at bid (when the market is weak), or sell at the ask (when the market is strong). That along will improve your trading performance drastically.
Basic Tape Reading
1. Do not look at the tape all the time, focus on the tape only when the market is closing in at critical price levels (previous day high, previous day low, pivot point, etc.).
2. Best is looking at a depth window with the current bid ask listed at the top, next is watching the quote window with the best bid and ask at the side. Using time and sales window to read the tape is not recommended.
3. Learn to identify 2 distinctive behaviours - a. when the market is moving in a particular direction, is there a lot of resistance. b. when the market is charging a particular price level, is it taking out that price level decisively.
4. Learn to identify a third state - the market is confused.
Some Useful Hints at Learning Tape Reading
When a price level is a strong resistance, the asking price will keep reappearing again and again even though the price got taken out a few times.
When a price level is a weak resistance, the price will be taken out decisively (sometimes after struggling for a short period of time).
A confused market will usually rally to a particular price point and then drop suddenly to a lower but close by price level. The market will then struggle between the two price levels. That implies a confused market and it is not likely you can figure out the direction of the next big move. In this case, stay at the sideline.
Having huge size in the bid does not necessarily means the bid is strong. On the other hand, when a bid got hit and trades started to fill at the bid, while the bid size keep increasing, that is a strong bid.
Tape Reading is Not Fool Proof
Tape reading is a useful technique but it is not 100% correct all the time. Thats true especially when some major players are hiding their bids and offers.
When the buy side traders are scaling into a position (i.e. buying at the bid while the price is dropping, or vice versa) it is then very hard to identify the strength of the market. That will usually results in V-shape reversal price pattern.
Thanks Reduman for posting the modified HA charts.
Thanks
DT
Price will not neccessarily go up if traders are buying at the ask. This is something to look for at turning points in the market. Yesterday at market open there were a lot of large orders coming in at the asking price and above, but the market did not move upwards, instead in backed off. This tells you there is a lot of resistance and it is a possible turning point.
I've noticed in my short experience that it is just as important to look at where price is relative to the big orders as it is to look at whether the order was at the bid or ask.
Someone correct me if I'm wrong but I think you have it the opposite. Hitting the ask or above means to me that there is buying pressure not selling pressure. And if they go over the ask they're even more of a hurry to get filled and is willing to pay more than the spread.
Also, does anyone know if there's a way in NinjaTrader to access the Time & Sales information when writing scripts. I'd like to process that data per bar if possible. I couldn't find a way looking through the help, but maybe I overlooked something?
Also was wondering if TradeStation also gives you access to Time and Sales info in their scripting language?
Thanks for any help!
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