Grim future for day trading as a career

[wrbtrader]

There was actual follow through on the sort of surprise market reactions in the 90s and earlier you're referring to, that's the point, there's no follow-through now with HFT, except in times when it can't be predicted with any sense of probability by a discretionary day trader.

Only 25% had follow-through when the surprise announcement did not occur when there was another economic report release. Yeah, I have stats about such back then and I'm a discretionary trader. Simply, back in the day, trade the direction of the abnormal volatility spike if such occur with/near another schedule economic event or fade it when there was no other economic report being released...

Yet only do such if you had automation because the speed is too fast for manual traders. I was never able to trade them...the spike was just moving to fast for my reaction skills back then. Also, you may be mislead by the range back then. Thus, the ranges back then were much larger than today. Therefore, it seems like follow-through to you but in reality it may not be. For example, if a surprise rate announcement typically had a range of +30 points before the first retracement attempt and you see one in particular that only moved 15 points...you could in theory say it did not have follow through to its normal range duration for a surprise rate announcement.

Yet, lets pretend in today's environment a surprise rate announcement is typically about +10 points and tomorrow a surprise rate is announced and the price moves only +9 points...which one on its own merits had more follow-through instead of comparing two completely different trading environments.

Note: We have not had a surprise rate announcement under FED Chairwoman Yellen...so far.

With that said, there was no other economic report release at or near the time today's rare price action volatility spike that we saw.

verified @ http://www.forexfactory.com/calendar.php?day=dec14.2015 and http://fidweek.econoday.com/byweek.asp?day=14&month=12&year=2015&cust=mam&lid=0

Simply, you're lucky if you were Long before the spike or unlucky if you were Short before the spike. Yet, financial networks have been warning that the pending FED Rate Announcement on Wednesday is the most hyped FED event in many years. There's also Fridays Quadruple Witching along with other hot global economic events this week beginning tomorrow.

Anyways, today's volatility spike could just be a warm up for other stuff around the corner this week...other stuff that may have trade opportunities because even a newbie trader should know volatility has been increasing for several trading days now.

Lets pretend someone or institutions using a algorithm that exploits news events...we should then see more volatility spikes like such this week don't you think.

Something else, I don't know what discretionary day traders you know but the ones I know here at ET, Stocktwits and Twitter...they didn't try to trade that volatility spike mainly because they could not...it happen to fast. Instead, they talked about it after the fact mainly about what caused it and then they traded normally when the dust cleared.

In contrast, you keep making a wild assumption that discretionary day traders would have been fast enough to trade that volatility spike and then when they traded it...they would have suffered losses. I just don't believe a manual trader is fast enough to put on a position during that spike and then have enough time to manage a trade regardless if the result was a loss or profit.

My point, my experience and those I know today...you had to be in a trade PRIOR to the spike to either get nailed for a loss or profit...a trade via a decision that had nothing to do with the spike considering the trade occurred before the spike.

Yet, I did see manual traders (day traders, swing traders and position traders) open position after the retracement via whatever method they were using in reaction to the abnormal volatility spike but not during the spike itself.

P.S. I'll now cut you some slack because its possible you didn't know there are different types of discretionary traders. Therefore, I will assume you've been talking about the discretionary intuition trader.

Yeah, I agree with you...that particular sub-group do not maintain market stats nor do they have a trading plan. They usually have a life span of a few months after they begin trading with real money.

P.S.S. You should have a discussion with NoDoji if you want to learn more about different types of discretionary traders. She's a discretionary rule-base trader. That's a trader that uses objective rules in their trade method but makes a choice not to use automation because there's a discretionary element in the trading that's useful.

 

[wrbtrader]

My prior statement is confusing.

Only 25% had follow-through when the surprise announcement did not occur when there was another economic report release.

That statement should have stated...

Only 25% surprise rate announcements had follow-through if there were no other economic report release near the time of the surprise rate announcement. Thus, 75% of the surprise rate announcements had follow-through when there were other economic report releases near the time of the surprise rate announcement.

 

[Trader22]

There was a 15 point 1-minute-bar, HFT noise on the ES today at 10:17, 12K contracts traded. This is an example of range and volatility that is not trade-able and nonsensical from an old-school PA perspective, not a good omen of future PA for intraday DDT swing traders or scalpers.

I agree it was an untradable, rare event, but if you look it stopped just at the right supply level.

HFT doesn't change the laws of supply and demand.

 

[Guile]

I agree it was an untradable, rare event, but if you look it stopped just at the right supply level.

HFT doesn't change the laws of supply and demand.

But it does change how fast information is diffused through the market. And affects who uses the lit market and who doesn't.

 

[Q3D]

I don't believe wrbtrader's assertion that 15-point 1 minute spikes where a bullish candle retraces to nearly its open before it closes occurred in the 1990s until charts instead of hearsay are presented.

The whole point is that this is not as rare as you think, it wasn't based on any great news story that was just released unexpectedly, it was based on text and spoken-word interpreting algorithms reacting very quickly to exploit an imbalance in orders for what archaic PA traders would call a countertrend move, this is just a preview of the evolution of the markets awaiting traders in the years to come.

Many ES day traders leave buy-stop orders, as Al Brooks teaches, resting to take advantage of a change in trend, so it's not a wild assumption that the only traders who traded that and lost were intuitives who jumped in at the market after the 15-point bull spike occured in a few seconds.

This sort of PA is actually quite common now unlike in the 1990s, contrary to wrbtrader's propagandistic assertions. It usually happens now on the ES with a smaller range but happens just as fast as it did yesterday, making the market much less tradable for intraday swing and scalpers, "intuitive" or arbitrary "rule-based" traders.

 

[wrbtrader]

I agree it was an untradable, rare event, but if you look it stopped just at the right supply level.

HFT doesn't change the laws of supply and demand.

Yeah, it moved too fast but I'm sure some traders out there "tried" to trade it...maybe they got no fills.

Simply, seems kind'uv weird Q3D picks a price action that's a rare type of volatility spike to announce it as if its some typical price action that discretionary traders or any other type of trader is trying to compete with algorithms.

Note: Sometimes you can see those types of price actions in FOMC Rate Announcements but as of this year....the rate announcement price actions have been slow as in you're able to think (analyze while its still active) and blink a few times...make trade decisions before it completely retraces. That "thing" we saw yesterday in comparison was like fighter jet speed that made me say "WTF".

Anywasys, why would Q3D pick that price action when he could have selected a price action that appears every day like a normal volatility spike to make his argument about traders competing with algorithms ?

Heck, he could have even selected the notorious typical algorithm snapback volatility spike that appears multiple times per day. In fact, he's never discussed any of such and then one day he sees a rare volatility spike and make his announcement about discretionary traders competing with algorithms...

Its almost as if he doesn't even know.

 

[wrbtrader]

I don't believe wrbtrader's assertion that 15-point 1 minute spikes where a bullish candle retraces to nearly its open before it closes occurred in the 1990s until charts instead of hearsay are presented.

The whole point is that this is not as rare as you think, it wasn't based on any great news story that was just released unexpectedly, it was based on text and spoken-word interpreting algorithms reacting very quickly to exploit an imbalance in orders for what archaic PA traders would call a countertrend move, this is just a preview of the evolution of the markets awaiting traders in the years to come.

Many ES day traders leave buy-stop orders, as Al Brooks teaches, resting to take advantage of a change in trend, so it's not a wild assumption that the only traders who traded that and lost were intuitives who jumped in at the market after the 15-point bull spike occured in a few seconds.

This sort of PA is actually quite common now unlike in the 1990s, contrary to wrbtrader's propagandistic assertions. It usually happens now on the ES with a smaller range but happens just as fast as it did yesterday, making the market much less tradable for intraday swing and scalpers, "intuitive" or arbitrary "rule-based" traders.

You're completely lost.

1) Al Brooks has nothing to do with that rare volatility spike. In fact, the market (wall street) doesn't know him and could care less about him. He's only known in the retail trading world.

I haven't met a lot of Al Brooks users but the ones I know here...they're only trading a few contracts and they don't trade volatility spikes like that nor are they able to trade rare volatility spikes like that.

Seriously, I've seen you have conversations with Visaria, NoDoji and others that are familiar with Al Brooks stuff...go ask them if that rare volatility spike is something he teaches how to trade.

I can be wrong because I don't know his method. Thus, maybe he does teach people how to trade those types of rare volatility spikes.

2) I don't care what you believe. I do know you're very confused person about what you see in the price action.

3) Its rare. To prove it...please tell me the last time you've seen a volatility spike like that with in this year alone (2015) with the similar like behavior...news event or none news. That should be an easy task because I know you use CQG and they have history for 2015 for you.

4) I think your confusing stocks and Emini ES futures in the late 90s.

5) Yes, I agree that when it happens now...its range is much smaller. I stated such in my reply when I gave that pretend example.

6) Yes, that's what we're trying to get you to understand...that price action is less tradable for any type of trader...its just too fast to trade. Simply, traders would have most likely NOT been competing with algorithms. Thanks for admitting such instead of pretending its a problematic price action that discretionary traders would have been in competition with algorithms when the fact is that discretionary traders most likely would not have been involved.

Actually, the only ones able to trade that price action are lucky entries or other automated traders or retail traders using algos themselves (reminder: there is a growing list of retail traders using algorithms as a propose solution to you being able to compete with professional firms using algorithms...you keep pretending nobody has given you any solutions which is a lie).

I do understand you may not be interested in the solutions about how to compete with algorithms or you don't have the resources or you're not experience enough but ignore members suggestions and write things like "your still waiting for propose solutions"...that's antagonistic and truth bending.

All the solutions given to you do not involve "chart patterns". They involve real solutions that others are currently implementing. Yet, you're so stuck on TA that you can't see any other ways to trade or understand the price action. That's why I keep saying you're lost and refuse to adapt.

P.S. The few quants I know (3 very well). They say volatility spikes like that are most likely algorithms competing with other algorithms. Another possibility are those "fat finger" trading mistakes by some institutional trader making an execution mistake that triggers algorithms from the competion. Simply, not discretionary traders making macro-second trading decisions in competition with algorithms as you initially implied.

I believe the quants any day than you especially since its directly what they do.

Bloomberg and other algo magazines states (depending on the article and trading instrument)...that algos primary competition ARE other algos. Secondary competition are private traders using algos and third level competition are folks like you and me (retail traders that are discretionary or automation).

P.S.S. Successful trading involves more that TA and chart patterns. Wake up and get your head organize or find another hobby.

P.S.S.S. I use the term tradeable in general. What is meant is that the rare volatility spike we saw yesterday in the Emini ES futures, stocks and many other markets...this is not price action that the typical discretionary trader or the typical manual trader can participate in. Its just too fast and does not merit worrying about any type of competition with algorithms nor merit any comparison because its not the typical price action retail traders are actually trading.

Q3D, you spend too much time worrying about algorithms and ways to compete with them. If you were truly that concern...become a retail algorithm trader so that you can trade those types of crazy volatility spikes. Its that simple.

 

[wrbtrader]

There was a 15 point 1-minute-bar, HFT noise on the ES today at 10:17, 12K contracts traded. This is an example of range and volatility that is not trade-able and nonsensical from an old-school PA perspective, not a good omen of future PA for intraday DDT swing traders or scalpers.

Once again, the part you got correct is that its not trade-able.

The part you got wrong is your statement that its "not a good omen of future PA for intraday DDT traders".

The below message is what I was trying to say in comparison with my prior messages that got lost instead of concentrating on your specific statement its "not a good omen".

--------------------

Future price action in the market will not involve volatility spikes like yesterday as "commonplace". Its rare and has always been rare...macro speed fast moving price one direction and then suddenly reverse (retrace) just as fast into the opposite direction. Thus, volatility movements like that have never been and never will become commonplace in the markets mainly because of the context of the spike.

Simply, its a good omen for future PA because we are not going to see such as commonplace.

Sure, you may see such in Gold one day, Oil another day, Hang Seng another day, EurUsd another day, Eminis another day and then another day you'll see it in a specific stock but not common in the same trading instrument on most trading days...its never happen except maybe in Bitcoin early price age...now Bitcoin have stable price action and I predict that stabilization will allow even Bitcoin to become a new currency accepted by governments.

As to your consistent forecast (predictions) of the death of the discretionary trader...they have been here since the 17th century and have survived all technological advances that the world has seen which includes advancement in mechanical computer technology of Babbage 1820s and then Zuse programmable computers of 1930s. They've survived market crashes, war, new laws, new regulations, diseases and new presidents, new prime ministers, new dictators, new kings/queens and new currencies...they've survived although there numbers rise and decline with key changes in the markets (currently there's a decline).

Why do discretionary traders continue to exist ?

They are able to adapt and the few will adapt while most can not or refuse to adapt...those that can not or or refuse...they will be the losing traders. I also can careless about your silly definition of a profitable trader. If someone consistently makes 1k per year, 10k per year, 50k per year or 100k per year...its still a profitable trader and the IRS will stick their hand out for many regardless to how much profits you make.

By the way, every new technological advance also gives discretionary traders a new technological tool when the new technology reaches the consumer level.

It has always been that way since the 17th century and will continue being that way until there's no longer a market and the exchange buildings are then converted into convention halls or museums. I say the latter because there was a funny cartoon in a Chicago newspaper in the 1990s implying the doom of the exchanges and traders after all the new technology of the 1990s...it showed the CME converted to a convention hall and floor traders working as security guards at the new convention hall.

Don't hold your breadth because there will always be traders on all levels as long as there exist something called currency (money) because currency has no value if its not exchange (traded)...do you understand that connection ?

I predict that year 2050 there will still be a market, still be discretionary traders and still be traders like you...doom/gloom and blaming everyone else (e.g. Al Brooks, BigMike, Baron, Algorithms, HFT, New Techonolgoy, TA, PA, Fundamentals, President, Family, Up bringing and so many other things) for their inability to profit from the markets.

One day you'll realize...its you that's the problem...not them because you failed to adapt...failed to change.

P.S. My prediction is also valid for year 2100.

P.S.S. Sad thing about you is that you're this doom/gloom guy that subscribes to CQG every month (paying a few hundred bucks each month) and you're a discretionary retail trader (you implied such in your conversation with others at this forum) while at the same time making illogical statements about discretionary traders. You can't be both because its too much of a contradiction and it'll have negative psychological impact on you. Also, trying to do both...you must be in pain.

 

[Q3D]

wrbtrader you have clearly internalized a lot of fear and self-doubt about your abilities as a day trader and the future direction of PA at < daily chart timeframes. You can't and haven't for decades been able to support yourself with an income as a day trader so you come on here defending day traders and preaching feel-good and verbose justifications for the unjustifiable.

Perhaps I am mistaken, if discretionary day trading is a sustainable career I think it would be a great step in trading ethics if NoDoji switched from a pay to a free trading room, you could run one as well, calling trades at the intraday level on multiple futures markets and exchanging advice freely. It will be the wikipedia for day traders and I look forward to donating to keep it running and learn from you two and eventually teaching others as well.

 

[onemoreshot]

Give up wrb, your not gonna get anywhere with this clown.