thanks tsk for posting thatQuote from TskTsk:
An interesting data plot on corrections since the 2008 crash:
It would be interesting to compare this with through to peak numbers...I'm willing to bet the trend is that returns to normalcy are becoming equally violent as the actual corrections themselves.
ES Journal - 2013
- Thread starter Trvlwanderer
- Start date
My definition of "normal" is price action behaving like NQ did today. That is normal market-auction price discovery thru the pit session of trading
On the other hand, today's comatose ES chop and worse, the TF's 6-point non-range is abnormal. And with that abnormality comes the fact that your job to make money in such markets is bastardized.
No trader on the face of this earth will be net-profitable in any lump sum of 6-point TF sessions averaged out. If that market remains that abnormal for extended periods of time, it would kill everyone involved.
In trading there are no excuses, just facts. The facts for today are ES and TF were comatose dead, while NQ, CL and various other symbols were wonderfully full of profit opportunity. So the reality differs depending on what you trade, and what day in particular we're speaking of.
I completely disagree that a market like this would kill everyone involved. First of all not everyone trades the same way you do, everyone has their way and I bet a very small minority of the total participants in the market trade like traders in this journal....People could be doing arbitrage, legging into or out of spreads, HFT, hedging or a vast possibility of strategies out there and still make or lose money on day like today. For instance I'm short vol and had a great day. And I bet if you study the efficiency of this market on a minute-minute basis, you'd find it's the same as every other day. My argument of normalcy was more relating to the macro-scale than the minute-scale...on the minute scale markets are remarkably similar in efficiency from day to day and this is something that won't easily change.
ammo
Registered: Feb 2007
Posts: 18389
01-17-13 08:38 AM
Quote from hafez50:
Ammo when the es runs 30-40 pts against you and you keep adding how many es do you have total?
always a max contract,max loss working,reduce.add..averaging
explained it to you before,don't know why you insist on your imagination over fact
what's the difference between a max position size and a max stop,max monthly drawdown and several smaller positions stopped out,unless you are the almighty,or know the strategy and it's percentage rate,i say your judging from the peanut gallery,why are there so many P.erpetually U.nhappy C.yber C.owboys Y.odeling S.ad songs
hypothetically speaking to the TF specifically: if it persisted in trading a 6pt range such as today, every day for the next three months without abate, it would implode into itself.
markets survive thru price discovery. remove that process of price discovery and you remove participants out of apathy, frustration or futility.
this week the ES and TF have been pinned to abnormal pit-session ranges... and if they remain abnormal long enough, they will self destruct. therefore, they must expand to normal behavior lest they cease to exist
normal versus abnormal... financial markets cannot remain abnormally dead forever. the cure for dead markets is of course, dead markets. self-correcting, they be
That's a very simplistic way of seeing it and again presupposes that every trader active in TF is dependant upon the spesific price action you consider abnormal. As explained this is not the case. I don't consider anything out of the ordinary at the time, because my strategy is not dependant upon what ranges the TF trade in. Same can be said for many other market participants. In this way, things can fundamentally change in a market without the market self destructing. I'm also not sure how you reach the conclusion that range-bound trading equals removal of price discovery. Markets can range for years and price discovery can still be intact. Besides, it's a moot point, because if something truly removed price discovery, there would be no marketplace. Elimination of a market is not change. The change I'm referring to is the idea that bond yields might remain low for 1 to 2 decades, making stocks fundamentally attractive even at these levels. There's just no upwards pressure on yields with Basel 3, Dodd Frank and banks hoovering up sov bonds for collateral. The fed wont be selling anything, they'll just let it run all off. Things have changed, maybe not permanently but at least for another decade minimum.
short scalps below 66, long builds above +1.00
watching trans and oil.
watching trans and oil.
The forced push to go higher has completed most of its objective now.
From here onward ES will have very limited upside potential.