Well technically I would be swing trading with dividend stocks with covered calls/puts. I get paid in appreciation and dividend and premiums. Plus I dont mind owning these forever if I get assigned. So win win in my opinion.
Joining the CME gang
- Thread starter hilmy83
- Start date
Well technically I would be swing trading with dividend stocks with covered calls/puts. I get paid in appreciation and dividend and premiums. Plus I dont mind owning these forever if I get assigned. So win win in my opinion.
This is where having reversion component to my trading saved my ass. It was high/low false breaks all day. this would've been it if i had stuck to breakouts only
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Seriously, if you haven't done so already why don't you try spread trading before you quit trading? Professionals trade spread. I think it suits your trading style. I also already nearly have given up day trading. It's not worth spending time in my opinion....
didnt trade yesterday cause i came across a youtuber trader who trades reversion method. There's really nothing new this guy is sharing other than looking at your positions as individual trades as opposed to the average position that i'm used to (i'm sure most faders look at average position).
https://www.youtube.com/channel/UCh_s7EIUrcaijXhSPbxywiQ
So he brought up the idea of using LIFO instead of FIFO, and fortunately sierra allows for LIFO pnl calculation. You can certainly do LIFO by hand but it's tedious when you have few positions to manage. The advantage of LIFO perspective is to look at your positions as individual inventory that you offload at different prices. I think he made this great analogy that in a given day (session), you wont offload your entire inventory at a single price (old FIFO). you sometimes have old inventory (trades) that you hold while you try to move other inventory for profit. the goal is to have other inventory make up for the few acquired at less than ideal prices.
So i've been reviewing his videos and he uses keltner channel. I think any band based indicator would work. I personally prefer vwap cause that's an industry standard. But unlike him, i would probably not be a pure countertrend trader. I would look at the overall momentum and build positions around that. So I think thats another way of marrying reversion with momentum following.
Of course with this type of trading, you may hold a few positions. So I need to make sure I don't risk too much. Hence switchign over to micro will help. with about 10k left, emini is not even possible until 30-50k equity.
So will try out this "inventory management" style trading and see how it goes.
Day trading indexes is one of the hardest things to do well.
It's best to know the treasury market, options market, index spread market, and have some really good quantitative models to do smart research for you in real time.
If you ignore treasuries, you get blindsided by flows into and out of fixed income. If you ignore the options market, you get blindsided by volatility trading/hedging. Ignore the index spread market and you lose crucial awareness on strength/sustainability of moves...
Then you have to have a good idea of what the robots are looking at. That's where the quant models come in to play. Digital signal processing? Functions of price lags? Volatility filtered zero lag price differentials?
The competition is using all of it. They're manipulating the index around VWAP, the open, and the close of each exchange (NYSE, LSE, TSE, SGX, ASX, etc.)
It's a tough game.
It's best to know the treasury market, options market, index spread market, and have some really good quantitative models to do smart research for you in real time.
If you ignore treasuries, you get blindsided by flows into and out of fixed income. If you ignore the options market, you get blindsided by volatility trading/hedging. Ignore the index spread market and you lose crucial awareness on strength/sustainability of moves...
Then you have to have a good idea of what the robots are looking at. That's where the quant models come in to play. Digital signal processing? Functions of price lags? Volatility filtered zero lag price differentials?
The competition is using all of it. They're manipulating the index around VWAP, the open, and the close of each exchange (NYSE, LSE, TSE, SGX, ASX, etc.)
It's a tough game.
This is good advice for him given the way he likes to trade. He should stop trading and look into learning and understanding spreads. Interest rate spreads might be a good place for him to start.
How is this going? I was reading your thread with interest prior to joining.