Need Advice
- Thread starter trader99
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100 contracts, nominal value is around $13.5 million...why would you need $25 million to execute the purchase of 100 contracts?
100 contracts, nominal value is around $13.5 million...why would you need $25 million to execute the purchase of 100 contracts?
Someone had implied a member outside the U.S. was buying the NQ at 100 contracts per trade.
CME Rule 256
2.
Participation in Block Trades
Each party to a block trade must be an Eligible Contract Participant as that term is defined in Section
1a (18)
of the Commodity Exchange Act. Eligible Contract Participants generally include exchange members and member firms, broker/dealers, government entities, pension funds, commodity pools,corporations, investment companies, insurance companies, depository in stitutions and high net - worth individuals. Commodity trading advisors and investment advisors who are registered or exempt from registration, and foreign persons performing a similar role and subject as such to foreign regulation, may participate in block transactions provided they have total assets under management exceeding $25million and the block trade is suitable for their customers.
http://www.cmegroup.com/rulebook/files/cme-group-Rule-526.pdf
Someone had implied a member outside the U.S. was buying the NQ at 100 contracts per trade.
CME Rule 256
2.
Participation in Block Trades
Each party to a block trade must be an Eligible Contract Participant as that term is defined in Section
1a (18)
of the Commodity Exchange Act. Eligible Contract Participants generally include exchange members and member firms, broker/dealers, government entities, pension funds, commodity pools,corporations, investment companies, insurance companies, depository in stitutions and high net - worth individuals. Commodity trading advisors and investment advisors who are registered or exempt from registration, and foreign persons performing a similar role and subject as such to foreign regulation, may participate in block transactions provided they have total assets under management exceeding $25million and the block trade is suitable for their customers.
http://www.cmegroup.com/rulebook/files/cme-group-Rule-526.pdf
You are reading correctly. Thanks for your feedback. I'm not trading with the trend correctly when I lose a lot. When I win I trade correctly with the trend. And the bias is tied to instruments. I have a short bias with index futures(YM, NQ). I have a long bias with commodities(GC, NG, ZW) etc. That's stupid and wrong. 2015-2017 were amazing years for index futures and individual equities. That biases cost me a lot of loss and missed opportunities on one of the greatest bull runs in market history!
Feel like a loser. But then I saw this article on LinkedIn:
https://www.linkedin.com/pulse/how-tell-someone-truly-smart-just-average-michael-simmons/?lipi=urn:li
age:d_flagship3_profile_view_base;jZouUQBlQNGPnXANJKjc4A==The guy has very good and interesting points about mental models. I think my mental models about trends and trading were COMPLETELY wrong or false! The few times I made a lot of money on NKD and LFIN, I didn't keep those gains. So stupid! It's because when I'm wrong the losses are so huge. If I had cut the losses fast then I would have had an amazing track record.
Why didn't I cut the losses faster? Because of my stupid biases! Thinking the original conviction was right and I only exit at the worst and most painful uncle point. That's not good trading.
I realize trading is a probabilistic game. Each trade is a hypothesis. And the market will prove you right or wrong. If you are wrong then get out at a small losses. If the market proves right then ride it. Obviously there are more subtle points of when and how. But I'm talking about first principles.
My years of looking at technical charts have given a lot of pattern library.
So I need to build risk management models into my trading and detecting and going with trend mental models. Once I have that down, I think the turnaround will be amazing!
Right now, I need to practice to get rid of my bad habits on a paper account. No need to burn precious capital on bad habits. Fix the bad habits and replaced them with good habits. The money will come and come faster and furious when these issues are addressed.
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Boy, you sure have no qualms about showing your underwear!! But that's a good sign that you're ready to reorganize yourself and get on the right track. However it sounds as though you plan on doing a major overhaul of yourself. Wouldn't it be easier to start from scratch correctly rather that patching up all your wounds one by one? If you agree with that, may I suggest, based on what you've said, that you first of all focus 120% on learning to read the trend correctly. I think you'll then find that 90% of the problems you're having will disappear on the spot, and the rest can be solved quite easily.You are reading correctly. Thanks for your feedback. I'm not trading with the trend correctly when I lose a lot. When I win I trade correctly with the trend. And the bias is tied to instruments. I have a short bias with index futures(YM, NQ). I have a long bias with commodities(GC, NG, ZW) etc. That's stupid and wrong. 2015-2017 were amazing years for index futures and individual equities. That biases cost me a lot of loss and missed opportunities on one of the greatest bull runs in market history!
Feel like a loser. But then I saw this article on LinkedIn:
https://www.linkedin.com/pulse/how-tell-someone-truly-smart-just-average-michael-simmons/?lipi=urn:li
The guy has very good and interesting points about mental models. I think my mental models about trends and trading were COMPLETELY wrong or false! The few times I made a lot of money on NKD and LFIN, I didn't keep those gains. So stupid! It's because when I'm wrong the losses are so huge. If I had cut the losses fast then I would have had an amazing track record.
Why didn't I cut the losses faster? Because of my stupid biases! Thinking the original conviction was right and I only exit at the worst and most painful uncle point. That's not good trading.
I realize trading is a probabilistic game. Each trade is a hypothesis. And the market will prove you right or wrong. If you are wrong then get out at a small losses. If the market proves right then ride it. Obviously there are more subtle points of when and how. But I'm talking about first principles.
My years of looking at technical charts have given a lot of pattern library.
So I need to build risk management models into my trading and detecting and going with trend mental models. Once I have that down, I think the turnaround will be amazing!
Right now, I need to practice to get rid of my bad habits on a paper account. No need to burn precious capital on bad habits. Fix the bad habits and replaced them with good habits. The money will come and come faster and furious when these issues are addressed.
The question is, of course, how do you now define and recognize a trend. Are you going to build on what you do now, or consider another approach?
I'm a believer in Radical Transparency(aka Ray Dalio of Bridgewater) when it comes to improving my trading. I wouldn't say that I don't know how to detect a trend. Obviously, my trend detection methodology can always be improved.
I think the real problem is that even when I could identify a trend, my cognitive bias was so bad and so wrong that it does NOT believe in the data. It's as though my cognitive bias overwrote my intellect. Or perhaps more correctly, my cognitive bias believes that the trend will reverse or should reverse when there's no evidence of reversal especially in the equities markets. I think this afflicts quite a number of famous hedge fund managers who are closing shops. Unlike them, I will not blame the Fed, QE unlimited printing, price distortion, lack of price discovery, bots, etc.
I will BLAME it all ON ME! I'm the ultimate decision maker in these situations. I decided to short directly or indirectly and lost when the overwhelming data showed a nice upward trend. I even know that intellectually too. But I couldn't get myself to go long.
Instead of fearing a reversal , I should learn the habit of executing each and every time. Once an upward trend is identified(using any number of methodologies), one should buy regardless of your biases.
If you are wrong then get out. Same goes for short trend(using any number of methodologies).
It's as simple as that. Until that X-Y linkage is cemented I will continue to make mistakes for the wrong reasons. That's why deliberate practice is so important.
The work of Brett Steenbarger has a great influence on me on how to think about trading training. Steenbarger said that the expert short-term trader has cemented the X-Y linkage between patterns and actions. When they see X then they act Y. That has become automatic. He recounts a story of one of the prop trader being down tens of thousands but when the trader's X pattern showed up he got in full size and ended up the day six figures. It's because the X-Y linkage has become automatic. The actual P&L numbers are not important(at least to me). The main point I got out of this is when you know what works for you then its execution should be automatic.
In many situations, I "knew" it will go certain ways(from experience) but because I was afraid of taking the perceived risk, or I'm slightly down on the day and was being defensive, etc. With hindsight, it seems silly. Because taking that one trade would have made all the difference in my daily P&L. It's all probabilities.
I want to get to that point where that X-Y linkage is automatic. That needs deliberate practice. And more importantly, the linkage for cutting losses should be automatic too! If I'm wrong then get out. No point waiting around or deer stuck in a headlight to see more unnecessary losses.
But to your question above, sure. I'm open to new methodologies. This is the rebuilding of my trading habits. I will incorporate what works, discard what didn't, and keep building on my strengths(I had quite a number of very excellent trades and results). I need to be radically transparent and fix my decision making engine in regards to trading.
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I trade options so am really not in a position to give you any suggestions. A friend who day trade equity for a living since the early 2000s does this: After he selects an entry, he always enters a bracket order (not sure about the name?), buy/sell with a stop loss and exit at the same time entering the trade. The stop loss is always there, never remove.
I got up late this morning because I was not planning to trade. And I'm not motivated if I was going to do paper account. But luck would have it, IB hasn't turned my paper account yet.
So, I decided to trade on one of my other real account. Made some profits on real account because the indices are down. My shorts work. While good to make money(29pts+ on NQ per lot). But this is very dangerous. I should be able to make money long and shorts on indices. Since most of the time indices have upward bias.
On other instruments I can do both. Not on indices..
When market goes down, I feel a strange calm and I'm totally relaxed. Strange psychology.
Improvements: 3 winners. 1 loser. Loser was 3.50. Winners were 9-10pts. Glad I used those stops!! I want to instill good habits.
Another area where I could have improved is after I exit my shorts to cover, I can go long. That would be playing both sides of the markets. Not there yet...
So, I decided to trade on one of my other real account. Made some profits on real account because the indices are down. My shorts work. While good to make money(29pts+ on NQ per lot). But this is very dangerous. I should be able to make money long and shorts on indices. Since most of the time indices have upward bias.
On other instruments I can do both. Not on indices..
When market goes down, I feel a strange calm and I'm totally relaxed. Strange psychology.
Improvements: 3 winners. 1 loser. Loser was 3.50. Winners were 9-10pts. Glad I used those stops!! I want to instill good habits.
Another area where I could have improved is after I exit my shorts to cover, I can go long. That would be playing both sides of the markets. Not there yet...
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Woohoo! On a separate real account different then the one this morning, I was able to go long. 8.25 pts on NQ. It's not much money, but the point was that I could go long on indices.
Now, I need to fix the real problem of not being able to go long on a strong rally. Fix that then I'm good.
Now, I need to fix the real problem of not being able to go long on a strong rally. Fix that then I'm good.