Does the futures has any influence over the cash index ?

There is nearly free money on the table when ever there is a separation in price between two products that are supposed to track the same underlying. a profit equal to the spread can be easily captured by shorting the higher priced one and getting long of the lower priced one. The profit from one will always offset the loss from the other by the amount of the spread no matter where the price goes. The added supply to the high priced one, and added demand to the lower priced one, drives the prices together. Free money doesn’t sit on the table very long.

Long 20, short 25

Price goes to 30.

Long PL +10.

Short PL -5.

Total PL = +5
 
The squak box I was using was like and auctioneer quoting bids and asks all day with some commentary about who is buying or selling. When he yells Merrill's Buying Merrill's Buying doesn't mean the price will go up much. It became too much of a distraction.

Another thing I noticed was that if you watch the e-mini chart and he yells someone is buying or selling, the e-mini already started to move. I think most big time e-mini traders are exchange members sitting on the floor watching the pit and they react faster than squak can yell it. That was the conclusion I came to.
 
Quote from jack hershey:

surprise,

Your question certainly takes a person down memory lane. Others have explained to you how the research worked out.

Today, it is a great advantage to track the lead/lag relationship in markets and across markets.

Your advantage can range from small (20 to 30 seconds) to fairly decent (2 to 3 minutes).

The advantage is found under three categories:

1. Market premium drift

2. Volatility flow considerations, and

3. Front running smart money.

1. Gives you advantage over Bots and algos. As Connors-Hayward determined, in 2. There is a nice advantage for knowing what is going on, whats next and how fast the change is coming up. 3. is a rider on premium so it is easy to see how the imbalance is proceeding, how strong it is and when those who trade it step into the picture.

Historically, when phones were used it was easy to monitor during C&R's or incomings from the floor. Nowadays, it is all done visually on display panels that are set and reset to eliminate distortion and have calibrated go/no go levels. It is good to use a lookup which is reset according to the dynamic for level maintenance.

have a good one.

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here is where the rubber meets the road.

Ok jack.

You spit out some buzz words.
Now why don't you explain how you measure and exploit premium drift. Volitility flow and your rider on premium.

Many of us know you don't sell into the hole, but I would like to know what data feeds you are using to monitor the hole and what you are doing to exploit it. I know you could not answer this question a few years ago - I wonder if your con game has adapted.

have you produced any successful daytraders using your methodology? Anyone trading your concepts live and making money?

There were some interesting comments on this thread by people attempting to trader real money. Then you come along with Jack's fantasy trading school advertisements.
 
IMO, Susannah is right on the money - and bighog said it all too!

If the noise helps, then by all means try it - then learn to capitalize from it - - - - or get rid of it.......no room for middle ground.

I tried it many moons ago and found it to be only noise.

These days, I am most happy with classic rock playing in the back ground.

http://www.youtube.com/watch?v=Hh3_SSZElXg . . . . great stuff :-)

Things that can help one trader can hurt another - time and P/L will tell the truth for you.

Happy trades!!

Steve
 
Quote from dve250:

The squak box I was using was like and auctioneer quoting bids and asks all day with some commentary about who is buying or selling. When he yells Merrill's Buying Merrill's Buying doesn't mean the price will go up much. It became too much of a distraction.

Another thing I noticed was that if you watch the e-mini chart and he yells someone is buying or selling, the e-mini already started to move. I think most big time e-mini traders are exchange members sitting on the floor watching the pit and they react faster than squak can yell it. That was the conclusion I came to.
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What r u using is the same what i am talking about http://www.youtube.com/profile?user=tradersaudio&view=videos

U say big traders at the ES is watching the floor and reacting that means the floor is important , but ofcourse if JP bought big we shouldnt jump and follow them blindly , cuz they r brokers and sometimes they buy or sell for their clients not for the bank . But i noticed something at Friday 15/05 , when the ES was heading lower nobody sold big , infact Jp and GS and others bought thousands cars around the area 880 at the cash close , ofcourse the price at monday headed few handles lower than 880 overnight then we had a nice rally above 920 . I noticed that we can use the service to tell us what not to do , for example at Friday 15th when the ES heading lower than 880 maybe if i dont have the service i will sell , but now cuz i hear nobody big is selling infact they r buying big maybe i will stop and i will not go short , but this doesnt mean if they buy i buy or if they sell i sell ...
 
I personally find that the futures will do a lot of "head fakes", but by monitoring the cash index I am able to determine the "real trend" (whatever that means to people) more often than not and trade the futures index correctly.

So that's my take on it.

Honestly hope that helps.
 
Quote from NoProblem:

IMO, Susannah is right on the money - and bighog said it all too!

If the noise helps, then by all means try it - then learn to capitalize from it - - - - or get rid of it.......no room for middle ground.

I tried it many moons ago and found it to be only noise.

These days, I am most happy with classic rock playing in the back ground.

http://www.youtube.com/watch?v=Hh3_SSZElXg . . . . great stuff :-)

Things that can help one trader can hurt another - time and P/L will tell the truth for you.

Happy trades!!

Steve
More...

http://www.youtube.com/watch?v=pQ6r80lfIsw
 
Quote from jem:

here is where the rubber meets the road.

Ok jack.

You spit out some buzz words.

snip

There were some interesting comments on this thread by people attempting to trader real money. Then you come along with Jack's fantasy trading school advertisements.
More...

Your last comment, just above, tells me I am wrecking the thread by making three points (buzz words) and including an illustration.

The above comment was following the questions you asked at the beginning of your post. The questions you ask are listed below in black:

Now why don't you explain how you measure and exploit premium drift.

The easy way is to annotate it using boundaries. MLR works fine too.

I measure drift in points. Adjusting for it is done one point at a time and running a counter for the number of adjustments. 4 is a BIG value to keep an accurate count on.

Exploiting drift is not something I do as a trading schema for making money. I really need to know the drift to get status and signals for trading, however. My focus is front running smart money, in my trading strategy

Volitility flow and your rider on premium.

Volatility changes over time. For me, it is a timing indicator. The signals most important to me are smart money getting ready to come off the sidelines and smart money telegraphing the market sentiment smart money is stating and acting upon.

I do not trade what you refer to as "rider on premium".

Many of us know you don't sell into the hole, but I would like to know what data feeds you are using to monitor the hole and what you are doing to exploit it.

YMXX, $INDU, DJXX all relative to what I trade: ESXX. "Hole" is your term, not mine. I use the information for timing and the information provides me with a "leading" indicator of price where I trade in the ESXX.

When I first traded there were no "mini's and I only traded the DJXX by telephone.

I know you could not answer this question a few years ago - I wonder if your con game has adapted.

You may be trading to "exploit"; that may make what I say foreign to your way of thinking.

have you produced any successful daytraders using your methodology?

Yes


Anyone trading your concepts live and making money?

Yes

Thank you for the questions. The questions may be helpful to others.
 
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