I’d like to answer some questions.

[garachen]

Still happening, though not as it used to back in the golden days. March - April period was glorious.

Greetings from the dark side

Nice to hear from you again! Been a long time.
Yeah I bet those were good times. I don’t trade vix anymore and was distracted by trying not to blow out in early March and then taking good advantage in April. Oh. Bet the Ronin thing was pretty good for tossing Vix around like a used dog toy.

 

[rallymode]

Nice to hear from you again! Been a long time.
Yeah I bet those were good times. I don’t trade vix anymore and was distracted by trying not to blow out in early March and then taking good advantage in April.

Yes, certainly. The story of my life. Trying to manage big drawdowns during vix spikes and then come back and make a killing in the subsequent higher vol regime. A lot of shenanigans still going on in vix land. Frankly, they have never really stopped. Just changed forms.

Perhaps not worthy for a big fish like you but a piker like me can still have a good lunch.

 

[InAllHonesty]

1) extremely product specific. PA feels uncomfortable with more than 1 lot. It will move things. Other products I’ve done max order of 49,999. (Talking futures). If you are placing passively and you have an order by order feed then I’d just pick something in the middle. A lot of times it’s just better to cross for entry and exit. I could discuss why for a very long time. If algos detect you crossing they will probably help move stuff in your direction anyways.

2). I’m not sure of what the question is. But your edge should match your capitalization.
3). Don’t know why that would be. Or how to undo it. I do have a trigger finger on the ignore button. But you aren’t on it.

Apols, my question about edge probably wasn't clear. I managed to read a few of your posts and can conclude what your answer would be now with regards to your preferences..

I trade std dev and the ladder. Relatively new to the ladder as prior to covid I wasn't home working and couldn't use it.

Today was a prime example. I took a 2x ES long position on std dev prior to market open, knowing it's risky with OPEX and call gamma expiration. 30 minutes after the open significant offers came into the book. I put in 20 contracts short to ride the volatility (also hedging my long) and managed to close out near the bottom with bids accelerating, adding 2 contracts long to go with it.

Both works. Hopefully remote working remains for a while and I can escape the office. The dream for many which the few achieve (not saying that I will!).

Would you (or anyone else) know of any good materials for improving ladder reading ability please? I've reviewed the usual materials on YouTube and find them to offer little to no value.

 

[garachen]

I can’t possibly imagine anything useful being posted to YouTube. It’s not that someone wouldn’t want to for fun but there are so many regulations around solicitation that it’s in no way advisable to risk your profitable business with a public demonstration.

 

[InAllHonesty]

Mmm, indeed. The naked eye will probably learn more anyway.

I just want to accelerate my learning somehow.

 

[Laissez Faire]

garachen,

Your comments are appreciated, so please don't interpret me as argumentative. I understand that many of your comments probably relate to new traders/graduates within a corporate environment or professional trading firm and that you have a relatively short amount of time to prove yourself worthwhile and able to carry your own weight.

Still, there's ample evidence of people who've persisted for far longer than 6 months before they became (really) successful. One famous person which comes to mind is Jim Simons.

In the end, I do agree with what you're saying with regards to opportunity cost and I'm sure that for every Jim Simons there are thousands of failures who put in the hours, too. And that's why I personally wouldn't recommend anyone to pursue (day) trading as a solo retail trader. If you can enter the industry professionally, it's an entirely different matter.

Never think of trading in term if return. I’ve never asked anyone for their return because it’s a nonsensical number in trading. Traders should know best day. Worst day. Best and worst month. Worst day / average month. Max margin, average margin. Dollars per year. Trades per day. Those are questions that are important. Underlying capital used can be measured many ways and in futures can change enormously day by day. And can also be massively different day verses night. And if you are at a trading firm, often you’d really have little idea what your capital consumption might be.

Yes. That makes sense for a futures trader. However, among those metrics you mentioned you did not once mention risk or drawdown. Actually, you did mention worst day / worst month, but still it brings up some questions. Do you have any comments with regards to that?

I'll ask a few more questions if you don't mind.

1) How do you know you have an edge other than your trading account growing (which still could happen thanks to luck)?

2) Is it possible to have an edge, but still mess up due to operational failures, i.e., overtrading, lack of patience/discipline, or maybe also not pressing hard enough when you're right?

3) The strategies you use or have used in the past. What's the typical trading frequency? Are they exploitable on a daily basis? Or are they less frequent, i.e., once per week or once per month?

Thanks in advance.

PS: I seem to be questioning everything I do, lately. I actually do make money 8/10 days, so I do believe I have a small edge. The problem is that I give back a lot of profits on my losing days. I need to find out why and if I can stop that from happening. Additionally, I need to press more on my winning days. But I'm also open to the fact that maybe my results are random and I'm just lucky on my winning days.

 

[InAllHonesty]

garachen,

Your comments are appreciated, so please don't interpret me as argumentative. I understand that many of your comments probably relate to new traders/graduates within a corporate environment or professional trading firm and that you have a relatively short amount of time to prove yourself worthwhile and able to carry your own weight.

Still, there's ample evidence of people who've persisted for far longer than 6 months before they became (really) successful. One famous person which comes to mind is Jim Simons.

In the end, I do agree with what you're saying with regards to opportunity cost and I'm sure that for every Jim Simons there are thousands of failures who put in the hours, too. And that's why I personally wouldn't recommend anyone to pursue (day) trading as a solo retail trader. If you can enter the industry professionally, it's an entirely different matter.



Yes. That makes sense for a futures trader. However, among those metrics you mentioned you did not once mention risk or drawdown. Do you have any comments with regards to that?

I'll ask a few more questions if you don't mind.

1) How do you know you have an edge other than your trading account growing (which still could happen thanks to luck)?

2) Is it possible to have an edge, but still mess up due to operational failures, i.e., overtrading, lack of patience/discipline, or maybe also not pressing hard enough when you're right?

3) The strategies you use or have used in the past. What's the typical trading frequency? Are they exploitable on a daily basis? Or are they less frequent, i.e., once per week or once per month?

Thanks in advance.

PS: I seem to be questioning everything I do, lately. I actually do make money 8/10 days, so I do believe I have a small edge. The problem is that I give back a lot of profits on my losing days. I need to find out why and if I can stop that from happening. Additionally, I need to press more on my winning days. But I'm also open to the fact that maybe my results are random and I'm just lucky on my winning days.

Not answering on behalf of OP, but I think one thing to consider - is that its not just stop losses that should be thought about when the market runs away from you, but also hedging or reversing a position.

 

[garachen]

garachen,

Your comments are appreciated, so please don't interpret me as argumentative. I understand that many of your comments probably relate to new traders/graduates within a corporate environment or professional trading firm and that you have a relatively short amount of time to prove yourself worthwhile and able to carry your own weight.

Still, there's ample evidence of people who've persisted for far longer than 6 months before they became (really) successful. One famous person which comes to mind is Jim Simons.

In the end, I do agree with what you're saying with regards to opportunity cost and I'm sure that for every Jim Simons there are thousands of failures who put in the hours, too. And that's why I personally wouldn't recommend anyone to pursue (day) trading as a solo retail trader. If you can enter the industry professionally, it's an entirely different matter.



Yes. That makes sense for a futures trader. However, among those metrics you mentioned you did not once mention risk or drawdown. Actually, you did mention worst day / worst month, but still it brings up some questions. Do you have any comments with regards to that?

I'll ask a few more questions if you don't mind.

1) How do you know you have an edge other than your trading account growing (which still could happen thanks to luck)?

2) Is it possible to have an edge, but still mess up due to operational failures, i.e., overtrading, lack of patience/discipline, or maybe also not pressing hard enough when you're right?

3) The strategies you use or have used in the past. What's the typical trading frequency? Are they exploitable on a daily basis? Or are they less frequent, i.e., once per week or once per month?

Thanks in advance.

PS: I seem to be questioning everything I do, lately. I actually do make money 8/10 days, so I do believe I have a small edge. The problem is that I give back a lot of profits on my losing days. I need to find out why and if I can stop that from happening. Additionally, I need to press more on my winning days. But I'm also open to the fact that maybe my results are random and I'm just lucky on my winning days.

1) you should be able to describe in detail what value you are adding that makes you deserve to get paid.

2) very much so. Manually the most common problem is not getting out as soon as you realize you are wrong. Converting edge into ‘hope’. Automated, there’s lots of software risk.

3). Almost all are at least daily. But the very best opportunities are 1-2 times a year. For me they are optional ‘gravy’ but for retail they are a very good way to grow fast with little risk. But very rare and you have to be paying attention all the time. Used to be more common.

the feel of a mean version vs momentum strategy is very different. It’s harder to feel the edge in a reversion trade because it’s harder to feel blowouts that go against you.

 

[garachen]

I know when I say this here I get a lot of pushback but I’ve never traded with stop losses and I don’t know anyone who does and makes money.

the trader is the stop loss and trading based on $$ pain is a bad idea. I have never simulated a strategy with a stop loss that is profitable unless the stop triggers less than once a month.

I expect a trader to exit based on pain somewhere around once a year. So, that should guide your position sizing and trade frequency.

 

[Laissez Faire]

1) you should be able to describe in detail what value you are adding that makes you deserve to get paid.

Add value how so? To a firm or to the market?

Without being specific I would say my edge is market knowledge about how the market typically moves on a daily basis after years of observation, studies and research. To aid my trading, I built a custom statistical application which computes a shit load of data and is updated EOD, but also intraday. This is used for forecasting or otherwise answering questions I have that arises from the market.

I think this also should give me an edge - especially as it's built on my own research and not 'book knowledge', although this path was inspired and revealed to me by someone else.

2) very much so. Manually the most common problem is not getting out as soon as you realize you are wrong. Converting edge into ‘hope’. Automated, there’s lots of software risk.

Glad to hear that. I aim to remove as much discretion as possible from what I do, but in the end it's a discretionary system as I need to interpret the data and finally make the decision.

Thursday, if I were smart, I would have accepted I was wrong and gone flat for a small daily loss or better yet, doubled down and reversed my position. But I definitely was in hope mode and hung on to a trade which turned into a large loss.

Another thing I've noted is that my mind can become set on a specific scenario and even if my model computes a higher probability of the opposite scenario - I will ignore those (and am consciously aware of doing so) and cling on to that other scenario.

I hope (not that word again) that if I can resolve these issues I'll do fine eventually. But it's been a long journey...

3). Almost all are at least daily. But the very best opportunities are 1-2 times a year. For me they are optional ‘gravy’ but for retail they are a very good way to grow fast with little risk. But very rare and you have to be paying attention all the time. Used to be more common.

Got it. Several of the traders in Schwager's recent books specialized on particular events. News, earnings reports, etc. One trader in particular would trade only during earnings season and research the rest of the year or take time off.

Knowing when to trade and when not to certainly is important.