Interviews With Legendary NQ Traders

Quote from Arthur Deco:


If I may ask, how do you manage to monitor so many markets simultaneously? I will never probe for hard information, but if you could answer generally I think our readers would find it interesting. Also, my belief is that to trade one instrument well you must tune your charts to it and know its behavior intimately. Could you comment in the context of trading so many different instruments?
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Why do we feel the need to compulsively "follow" a market. I don't know about you but I get very little useful information out of random prices within value. It's all noise.

There's no way to master a market. I traded in the Bond pit for over a decade. Traded a couple of million bond contracts. My "ability" as a bond trader i.e. a short term trader, is no better or worse than any guy I could select off a street corner.

Like Livermore said, "you can beat a certain market but you can never beat the market."

The money is in finding outlier moves. By limiting yourself to a single product (particularly low volatility financial instruments) you're grooving yourself into a rut.

NO ONE can "grind it out" successfully for a multi year period....
 
Quote from Pa(b)st Prime:

Position sizing is a bitch. NQ is a VERY small contract.
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Agreed. The CME needs to hurry up and allow the big contracts (SP & NDX) to trade on Globex during RTH, if that's even in the cards anymore.. (my guess is it's not)
 
Quote from OldTrader:

10 CL's will do wonders for your blood pressure.:D

OldTrader
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I don't trade oil much OT. But I dabbled a few times in the mid 50's on the break losing about 10k in the process before I took out 3 dollars on some longs in the 51 area. If I'm long oil though I'm probably short Gold or something else correlated at the same time.

Also I may be semi-hedged. For example in Corn I've been long by rolling up vertical call spreads against short puts. I then compute my deltas (I try to always be gamma neutral since I'm not an expert on Greeks) and use futures primarily as a hedge.

My appetite for risk FAR outweighs my trading capital.......:p
 
Quote from Trader KGB:

Agreed. The CME needs to hurry up and allow the big contracts (SP & NDX) to trade on Globex during RTH, if that's even in the cards anymore.. (my guess is it's not)
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even if they do both contracts will trade like the big dow [dd]...no liquidity, large spread and non-existent volume.

$5 tick [nq/ym] is a pain because price needs to move 3ticks in your favor from entry just to make 5 bucks per contract. er2 is much better, with just 2 ticks...u bank $5 per c. 1tick diff. may seem nothing but it makes a substantial difference especially if u scalp and trade size.
 
I treat each index future like women. When the time is right to be traded, (bedded?) they will let me know.
I find that too much exclusivity is too much like marriage. One needs to be an opportunist in this game to get what he needs, but not so much as to smothered.

I found that these message boards are of little or no value when it comes to working on, or discussing trading methods and tactics. At some point, if we ever solve the "Tower of Babel"syndrome that plagues the message board environment, I might rethink my views.

I'm not an inventive person, so I follow a strict script with my trading. Sometimes nq will fit the script, and sometimes ym will fit.

I must admit though, I've been sitting out much of the last week and a half. I've got no game plan for those daily range gaps that present themselves on the open of RTH.
 
Well, this conversation has certainly taken an unexpected turn which I am ill-equiped to facilitate. I am one of those little guys who thinks NQ is a big contract, haha! So if I am following, you are looking for price extremes which you take positions contrary to?

At the risk of further embarrassing myself, and in the guise of representing the little guy constituency, I will defend studying one market. If I understood NQ as well as I think I eventually will, I would only need to escalate to ten contracts to make what I consider a princely living. Perhaps, Jacobean style, I delude myself that I see things that aren't really there, but with NQ I think I understand how the limit order traders think and how they move the market. I think I know S/R, persistence, timing, etc., the way you really know how pussy responds if you play with the same one every day.

Thanks to all for adding your insights.
 
Quote from Bitstream:

even if they do both contracts will trade like the big dow [dd]...no liquidity, large spread and non-existent volume.
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That's not a fair comparison, as the DD was an entirely new product (that the market wasn't exactly calling out for). Had the CBOT brought the DJ pit contract on-screen, it would be more heavily traded (rather than splitting it into the bastard ZD, which is equally dead). I'm not sure what the CBOT was thinking with either move..

The big CME contracts allow for tighter spreads (SP & RUT) and of course, less commissions. The latter is my guess why the CME is dragging their feet with having them on Globex during RTH.

They should follow NYMEX's lead, which was wisest imo. Same contract for screen and floor, volume surged..
 
I agree with you but a couple of thoughts here. The Dow as a product isn't well received because a. it's too narrow (30 stocks and price weighted to boot) as a "bogie" for funds and b. it trades at too high of a beta to SPX for it to be an alternative asset like tech or mid/small caps. I agree that placing the 10x Dow contract on the screen would have been a proper move.

As far as ES/SP you must keep in mind that at ES's inception it was hard to fathom how complete the migration to the screen would be. ES started trading just months after the CBOT opened a 180mil new Bond floor. No one in Chicago saw electronic trading being embraced so quickly. Also volatility was very high. A 50x contract seemed acceptable. IMO the Solomonesque move would be to make ES 100x and trade in dimes with NQ 50x trading in quarters.

Quote from Trader KGB:

That's not a fair comparison, as the DD was an entirely new product (that the market wasn't exactly calling out for). Had the CBOT brought the DJ pit contract on-screen, it would be more heavily traded (rather than splitting it into the bastard ZD, which is equally dead). I'm not sure what the CBOT was thinking with either move..

The big CME contracts allow for tighter spreads (SP & RUT) and of course, less commissions. The latter is my guess why the CME is dragging their feet on having them on Globex.

They should follow NYMEX's lead, which was wisest imo. Same contract for screen and floor, volume surged..
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I'ts amazing how so many things click at once.

Why do outsiders read wizards? virgin

Why do outsiders do interviews? lol...

Why was it just noticed that Nobel guys don't do conventional orthodoxy? tums


There is the box. Outsiders are in the box.

It is anyone's choice to step out of the box.

People outside the box for sure know what the limits of being inside the box are. Insiders know something. They are money makers. they are wizards and they get the Nobels.

Who, inside the box today, gave the SOP statement on the limitations of being inside the box. It was a zinger by a guy the door has closed upon.

When I wrote up the way a person gets seasoned using the conventional orthodoxy and when I wrote the contrasting piece on making money, what became most clear was two things:

1. When a person makes the choice not to choose.

2. When a person cannot choose any longer.

That bracket is a limbo that is so cruel. The mind continually fills with conventional orthodoxy. The door closes so slowly and then its finally over for a lifetime.

Why do wizards choose? Why did each one of them step out of the box?

Why do Nobel guys choose? Why did each one of them step out of the box?

The smart money that trades from inside the box can't beat the indiexes; all they do is lead the indexes in timing trading with each other.

What do people who trade outside the box know and do that people inside the box can't do?

I'm going to polish my personal in the box and out of the box writeups a few more times.
 
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