Just some reflections here on a quiet Thursday afternoon, nothing more than that...
One of the more experienced posters here, Garachen, posted a long time ago about Why Strategies Make Money.
He cited the following as a viable way to take money out of the markets:
"News dissemination. Complex news comes in many formats. Not everything is coded up to be machine readable. Standard news needs people to interpret and act. Usually you have about 2 seconds for standard products and maybe up to 10 seconds for less obvious products."
I traded unsuccessfully at a UK based prop a few years back. Subsequently traded solo with marginally more success (semi automated strategy in futures), but not nearly enough to set myself on the path to financial freedom.
For the last 3 years I've been gainfully employed, but the sense of having 'unfinished business' with point and click trading has never left me.
Furthermore, as many readers will sympathise with, it is very difficult to accumulate tangible wealth when you live in an expensive part of the world and it leaves you wondering if 'survival' is adequate compensation for giving up your time, Monday to Friday.
If I could wind back the clock and trade again, I would live by the following assumptions:
- all other participants in the market are smarter than I am.
- they are better capitalised.
- they have the ability to disguise their actions from me.
- they have a keen awareness of where I am likely to trade and where I am likely to puke.
Furthermore, going back to Garachen's News Dissemination point, I also assume the other participants are getting better at automatically reading and trading even complex news. On that basis I sadly expect squawk services to become progressively less useful.
If the assumptions above are accurate, I feel the only sensible time for me to execute trades should have been on those rare occasions when other participants were trading with such urgency that they did not bother to disguise their actions - the result being a sudden and obvious rush of orders hitting the market - most likely in response to breaking news (i.e. not scheduled economic data!).
If I could send a message back to my younger self it would therefore be something along the lines of;
"disregard candles, trend lines, dalton's market auction theory and the rest of it - even if your Prop mentors say otherwise. Just sit there patiently watching only the price ladders, and be ready to hit market at the drop of a hat... if and only if all of those price ladders start suddenly moving in unison on the back of floods of orders. If you hear RanSquawk suddenly begin to say something, all the better (but don't bother waiting to listen to what they actually have to say, by which time you are already too late to safely enter the market!)."
As far as closing positions, I would adhere to the simplest possible rule: if the position is onside, keep it. If that means you are sitting on your hands for the next year as a good position gets better... so be it. If that means you endure fifty trades that go onside and come right back in your face, a minute later, a day later, a week later, so be it.
Maybe the above wouldn't work, who knows (does anyone know from experience?). I'm not sure that I've ever encountered anyone who takes such a simple, boring approach to trading, but saying that, I do feel the consensus view is not the view that leads to financial freedom.
One of the more experienced posters here, Garachen, posted a long time ago about Why Strategies Make Money.
He cited the following as a viable way to take money out of the markets:
"News dissemination. Complex news comes in many formats. Not everything is coded up to be machine readable. Standard news needs people to interpret and act. Usually you have about 2 seconds for standard products and maybe up to 10 seconds for less obvious products."
I traded unsuccessfully at a UK based prop a few years back. Subsequently traded solo with marginally more success (semi automated strategy in futures), but not nearly enough to set myself on the path to financial freedom.
For the last 3 years I've been gainfully employed, but the sense of having 'unfinished business' with point and click trading has never left me.
Furthermore, as many readers will sympathise with, it is very difficult to accumulate tangible wealth when you live in an expensive part of the world and it leaves you wondering if 'survival' is adequate compensation for giving up your time, Monday to Friday.
If I could wind back the clock and trade again, I would live by the following assumptions:
- all other participants in the market are smarter than I am.
- they are better capitalised.
- they have the ability to disguise their actions from me.
- they have a keen awareness of where I am likely to trade and where I am likely to puke.
Furthermore, going back to Garachen's News Dissemination point, I also assume the other participants are getting better at automatically reading and trading even complex news. On that basis I sadly expect squawk services to become progressively less useful.
If the assumptions above are accurate, I feel the only sensible time for me to execute trades should have been on those rare occasions when other participants were trading with such urgency that they did not bother to disguise their actions - the result being a sudden and obvious rush of orders hitting the market - most likely in response to breaking news (i.e. not scheduled economic data!).
If I could send a message back to my younger self it would therefore be something along the lines of;
"disregard candles, trend lines, dalton's market auction theory and the rest of it - even if your Prop mentors say otherwise. Just sit there patiently watching only the price ladders, and be ready to hit market at the drop of a hat... if and only if all of those price ladders start suddenly moving in unison on the back of floods of orders. If you hear RanSquawk suddenly begin to say something, all the better (but don't bother waiting to listen to what they actually have to say, by which time you are already too late to safely enter the market!)."
As far as closing positions, I would adhere to the simplest possible rule: if the position is onside, keep it. If that means you are sitting on your hands for the next year as a good position gets better... so be it. If that means you endure fifty trades that go onside and come right back in your face, a minute later, a day later, a week later, so be it.
Maybe the above wouldn't work, who knows (does anyone know from experience?). I'm not sure that I've ever encountered anyone who takes such a simple, boring approach to trading, but saying that, I do feel the consensus view is not the view that leads to financial freedom.
