John Carter from Trade the Markets

His book is pretty good. I like the trading plan theme, the pivot point discussion and found his nutrition section hysterical from a far. How you eat definitely effects how your brain works, it's funny he actually mentions it. Most trading books don't. Being fat with a big gut and unhealthy with lots of money isn't successfull. Being in good shape with lots of money is success. No point making lots of money completely unhealthy. Once you grow that gut, pretty tough to get back on track I think. You want to be around healthy for your kids and wife when your older.

In terms of risking 20 points on YM to make 10 points. It does violate general rule of thumb 3 to 1 risk reward, but I have to be honest, when markets are as volatile as today, it does work most of the time on 3 minute candles with the YM. Otherwise count on getting stopped out, or shooting for big trend reversals intraday which is almost worse.
 
Funny question - *if* Carter is a "so so" trader I wonder why CME Group, CBOT and others sponsor him to speak at their events, CME/CBOT would invite just anyone...would they?
 
Most new/amateur traders prefer good accuracy and not so good risk vs reward because it is psychologically easy to execute. However, the outcome of the long term expectancy is nothing short of a disaster unless you were blessed by an early edge, usually not the case.

On the other hand lesser accuracy and good risk vs reward is really where the money is at but much harder to execute from a psychological standpoint which is why most traders choose not to part with this route. Perhaps a case of instant gratification, society's number one enemy at this point.

Needless to say, good accuracy and good risk vs reward is nothing short of the holy grail or as close as it gets but one should assume this to be the winning ticket of the lottery, which is possible, but chances are you will never come across one.

Take a wild guess as to which route pay rooms choose :D

Anek
 
Quote from smilingsynic:

I would never take that bet, and few prudent traders would. There are enough bets that have 2/1, and not 1/2, risk-reward out there, if one is patient to wait. 1/2 bets are a dime a dozen.

Actually, a 10 reward/ 20 stop works out more like an 8 reward/22 stop, once commissions and the spread are taken into account (rather, taken OUT of the account!).
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I've always been confused by the risk-reward nomenclature, and would love to get this cleared up once and for all...

When we talk about a strategy that, say, risks 2 points to make 1 point, do we say this strategy has a 2:1 risk:reward ratio or a 1:2 risk:reward ratio. In other words, are the numbers in sequence of risk:reward or are they (as in the quoted post above) reversed? Thanks...
 
Am not familiar with John Carter, but took a look at his website after reading this thread.
All those indicators are available on the TradeStation forum for free under different names.

I guess because they're not copyright indicators, he could pick them up and sell them as his own.

I think that says everything you need to know about Mr. Carter. Very unethical indeed.
 
Quote from allenhobbs:


If I had one complaint about his book, it would be he cherrypicked the best examples of those setups and made it look as though making money was a walk in the park. A bit misleading to say the least, but what do you expect from a marketing guy who published the book as a feeder to his other services. It's called cross/up-selling.
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Very true. Makes you wonder if he learned the trick from Bob Allen....
 
<i>"Most new/amateur traders prefer good accuracy and not so good risk vs reward because it is psychologically easy to execute. However, the outcome of the long term expectancy is nothing short of a disaster unless you were blessed by an early edge, usually not the case.

On the other hand lesser accuracy and good risk vs reward is really where the money is at but much harder to execute from a psychological standpoint which is why most traders choose not to part with this route. Perhaps a case of instant gratification, society's number one enemy at this point."</i>

When volatility is low to moderate, traders can apply a risk -$2 to make +$1 (hope that covers prior question on ratios) scale and do fine for awhile. Play multiple contracts, take off part of the trade when it moves a little bit in favor, trail stop tighter on remaining portion and manage from there.

Put $x,xxx in an account, take the trades and enough strings of winners will accumulate profits.

Take that a couple steps further, and apply a -$4 to make +$1 bet size. If the trade entries are crisp near key turning points on a chart, strings of winners can be compiled over time.

That overall trade entry - management approach works ok during quiet times in a market. When volatility ramps up, the whole thing falls apart. Now the constant v-reversals are wide enough to whack those distant stops on the entire position before it ever has a chance to work in favor.

Look at Friday's 2/29 counter-trend swings between the opening bell drop and closing bell of stock index markets. Price action was overall down for the day... but trying to short in many of the usual places were well within chop range of stops.

Using a risk -$2 to make +$1 approach in wide rolling markets cannot execute a high enough win percentage to work effectively. Take two losses intraday on that scale, and you need five wins just to breakeven after costs.

*

I've been trading stock indexes in some form or fashion since late 1999. I cut my teeth thru the wild times of 2000, 2001 and 2002. None of those periods compare to the whipsaw v-turns we commonly see right now. The ER made a 3pt spike & drop yesterday within a couple of second's flat. The ES commonly spikes and retraces 4pts to 6pts in a one-minute span.

Computer driven chop is unprecendented at the speed of which it unfolds. Trying to deliberately manage a scaled position of several contracts at entry and scaling out of a few here, a few there is very tough. Avoiding those rouge spikes and drops while price action moves from lows to highs or highs to lows is tougher yet. Applying a -$2 to make +$1 ratio in current market conditions will not work for those reasons... the win rate cannot be averaged high enough to overcome losses.

Like <b>anek</b> said, waiting for key entry points to arise and confirm along with favorable profit / loss ratio works in any market. The only adjustments there have to do with current market behavior, i.e. dull, wild or anything in between.

Using a -$1 risked / +$2 (or greater) reward means the trader can win 33% and survive, with +40% or better win rate is net profit.

Less trader knowledge & skill is required to play the other games. Risking any type of inverted (backward, upside down) profit to loss ratio means the trader must win a vast majority of trades. That includes counter-trend fade trading, averaging down games and everything similar.
 
i know that for me personally, i'd rather have a 60% trade with a potential gain of $1 than a 20% gain with a potential gain of $5.

and, yes, i know that's not 'correct'...my years back of statistics and game theory, etc. i just know how i feel most comfortable, which isn't necessarily correct. however, it keeps me mentally able to trade tomorrow, and the next day, etc.

someone asked why the cme would hire him if he wasn't a good trader. <b>i have no knowledge if he is a good trader outside of what people have posted on these and other boards</B>. however, there are examples of professional firms, trading operations, etc. hiring people who have never succeeded at trading because they are decent speakers, cover the basics, and sound like they know what they are talking about.

re-emphasis on the bold part.
 
Quote from austinp:

Take that a couple steps further, and apply a -$4 to make +$1 bet size. If the trade entries are crisp near key turning points on a chart, strings of winners can be compiled over time.

That overall trade entry - management approach works ok during quiet times in a market. When volatility ramps up, the whole thing falls apart. Now the constant v-reversals are wide enough to whack those distant stops on the entire position before it ever has a chance to work in favor.

Look at Friday's 2/29 counter-trend swings between the opening bell drop and closing bell of stock index markets. Price action was overall down for the day... but trying to short in many of the usual places were well within chop range of stops.

Using a risk -$2 to make +$1 approach in wide rolling markets cannot execute a high enough win percentage to work effectively. Take two losses intraday on that scale, and you need five wins just to breakeven after costs.

*

I've been trading stock indexes in some form or fashion since late 1999. I cut my teeth thru the wild times of 2000, 2001 and 2002. None of those periods compare to the whipsaw v-turns we commonly see right now. The ER made a 3pt spike & drop yesterday within a couple of second's flat. The ES commonly spikes and retraces 4pts to 6pts in a one-minute span.

Computer driven chop is unprecendented at the speed of which it unfolds. Trying to deliberately manage a scaled position of several contracts at entry and scaling out of a few here, a few there is very tough. Avoiding those rouge spikes and drops while price action moves from lows to highs or highs to lows is tougher yet. Applying a -$2 to make +$1 ratio in current market conditions will not work for those reasons... the win rate cannot be averaged high enough to overcome losses.

Like <b>anek</b> said, waiting for key entry points to arise and confirm along with favorable profit / loss ratio works in any market. The only adjustments there have to do with current market behavior, i.e. dull, wild or anything in between.

Using a -$1 risked / +$2 (or greater) reward means the trader can win 33% and survive, with +40% or better win rate is net profit.

Less trader knowledge & skill is required to play the other games. Risking any type of inverted (backward, upside down) profit to loss ratio means the trader must win a vast majority of trades. That includes counter-trend fade trading, averaging down games and everything similar.
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Seems like the risk:reward parameters need to be adjusted on both sides of the equation during the V swings as you rightfully observed. So -$4:+$4 should be the goal whereby you raise the stop to entry after a 2 point move in your favor. It takes discipline and new traders are all to prone to quickly exit a trade for a small profit. Too many traders do in fact go broke taking small profits and large losses.

And speaking of the "V," it is one of the strongest setups I know of and works beautifully in today's volatile market. It will also get you in a trend if you happen to miss it early.
 
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