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Pointers about high frequency trading strategies?
- Thread starter mizhael
- Start date
Check out Van Tharp's trading simulation game
http://www.iitm.com/products/Trading-game.htm
You will see that a 'high-probability (frequent) small wins/low-probability (rare) large losses' type of strategy has to be carefully balanced - and, quite frankly, I don't know how - to be profitable IN THE LONG RUN.
Otherwise your risk starting the year with 10K, and ending the year with 10K, at best. So you're not going anywhere, or losing money.
This doesn't mean you can't successfully do fast, scalping trades for a while (say, for a 1-2 point profit target on the e-mini S&P, or a 5-15 profit target on the Dow e-mini). But the odds are stacked against you, over the long run.
It's probably better to trade less frequently, in the direction of the trend, with maybe a 5-day horizon, at least. I'm saying 'probably' because a lot of folks think the risk of holding a position overnight is too high, because stocks can open with a huge gap, and they may be right.
For full disclosure: I don't do either day-trading, or swing-trading regularly (day-trading: the risk of "going nowhere", in the long run, is prohibitively high, although I may be wrong; swing-trading: don't have the patience to hold the positions for so long, again overnight risks are high).
The more often you do it, the stronger the changes against you, although swing-trading with a 3-5 day holding period maybe an optimal tradeoff between speed of profits and giving the position time to hit your profit target.
Again, that doesn't mean you can't have long successful runs, ad hoc, per se. Plus it's fun, and your broker may take you to dinner.
RandomZen
http://www.iitm.com/products/Trading-game.htm
You will see that a 'high-probability (frequent) small wins/low-probability (rare) large losses' type of strategy has to be carefully balanced - and, quite frankly, I don't know how - to be profitable IN THE LONG RUN.
Otherwise your risk starting the year with 10K, and ending the year with 10K, at best. So you're not going anywhere, or losing money.
This doesn't mean you can't successfully do fast, scalping trades for a while (say, for a 1-2 point profit target on the e-mini S&P, or a 5-15 profit target on the Dow e-mini). But the odds are stacked against you, over the long run.
It's probably better to trade less frequently, in the direction of the trend, with maybe a 5-day horizon, at least. I'm saying 'probably' because a lot of folks think the risk of holding a position overnight is too high, because stocks can open with a huge gap, and they may be right.
For full disclosure: I don't do either day-trading, or swing-trading regularly (day-trading: the risk of "going nowhere", in the long run, is prohibitively high, although I may be wrong; swing-trading: don't have the patience to hold the positions for so long, again overnight risks are high).
The more often you do it, the stronger the changes against you, although swing-trading with a 3-5 day holding period maybe an optimal tradeoff between speed of profits and giving the position time to hit your profit target.
Again, that doesn't mean you can't have long successful runs, ad hoc, per se. Plus it's fun, and your broker may take you to dinner.
RandomZen
You may also want to check out INO TV, a large collection of videos by well-known traders. Most of the videos are from the 1990ies I think, but still a good resource.
http://tv.ino.com/premium/
It's not free, quarterly membership is $49.95. I am using it, and I think it's a cost-effecitve way to learn about the markets.
You may want to check out videos by Linda Raschke, Larry Williams for day-trading/swing-trading.
There's a good overview of day-trading by Linda Raschke, posted somewhere on the CME site, it's free but you you have to register with their site.
I am not affiliated with INO TV.
RadnomZen
http://tv.ino.com/premium/
It's not free, quarterly membership is $49.95. I am using it, and I think it's a cost-effecitve way to learn about the markets.
You may want to check out videos by Linda Raschke, Larry Williams for day-trading/swing-trading.
There's a good overview of day-trading by Linda Raschke, posted somewhere on the CME site, it's free but you you have to register with their site.
I am not affiliated with INO TV.
RadnomZen
If everyone had equal access to information, there would be no trading opportunities left.
I find AbleMarkets to be a great source of the latest and very profitable high-frequency trading ideas. They are very thorough in explaining the concepts. And if you can't spend $29 for two-week trial, you should not get involved in high-frequency trading, trust me!
Check it out: http://www.ablemarkets.com
I find AbleMarkets to be a great source of the latest and very profitable high-frequency trading ideas. They are very thorough in explaining the concepts. And if you can't spend $29 for two-week trial, you should not get involved in high-frequency trading, trust me!
Check it out: http://www.ablemarkets.com
High Frequency automated trading? What are you, making a market? Yeah, I have some pointers. Don't do it. How are you going to have an edge when you're making moves all the time? Obviously, the "edge" isn't too special if it happens all the time. Learn why stocks move, (news and fundamentals), and then study their charts until a pattern emerges. Then you will have technical analysis with a real "edge" (greater understanding) that will stand the test of time. Money managers don't buy stocks because this MA crossed that MA, they point to it as helpful ancillary information for how prices MIGHT move in order to help them with their expectations after they've made their decision. I don't see how you'll be right any more than your wrong if you trade all the time and your profits will probably be tiny. Maybe I'm wrong. Show me if so. I agree with RandomZen.
Wilt
Wilt