trading afterhours is pretty tough, there is not enough liquidity to execute your orders at the prices that you wish. News events of course will allow you to get orders off, however, the prices may not be what the actual market price will be the next day. I would not reccomend trading after hours. If you are planning on trading currency and futures then it's all fair game.
Profitability Question and Example
- Thread starter zerfetzen
- Start date
Thanks for the heads up on relationships and arbitrage. I don't know anything about it, and I will look into it.
To me, the risk aspect of trading is quantitative like anything else, and should be modeled and optimized. I haven't done it yet, so this is fluff, but maybe something like you only invest 10% of your pool given your probability of profit is 66%, etc., etc.
To me, the risk aspect of trading is quantitative like anything else, and should be modeled and optimized. I haven't done it yet, so this is fluff, but maybe something like you only invest 10% of your pool given your probability of profit is 66%, etc., etc.
Ok, if after-hours is out, what's the next best route? Let's say I get Scottstrade (no idea good or bad), I'd be able to call with a cell phone and place an order while at work, right? Maybe that's a decent method, check the intraday (with its 10 minute lag or whatever) at Yahoo Finance, then call the broker? It's pretty obvious I'm very new, eh? 
)
)yes, risk management is very quantitative, and for success in my opinion should be varied according to probabilities. For the statistical mind like yourself arbitrage trading offers endless possibitlities.
there are pros and cons to each firm, from what i have heard from other retail traders, Interactive Brokers is very good. I traded with scottrade for several years, mostly longer term investments and it was fine for that purpose. You will pay hefty commissions when calling in orders, but if that's what you have to do, i guess you can bite the bullet.
stop orders can execute for you while you are away, and can be set GTC (good till canceled) to get you into or out of positions. If you cannot monitor positions this would be a very good option.
Sounds like you have a good background for this type of systematic trading. If you are going to select a broker I would choose one that provides a beter interface for automatic orders. So, IB may not be the best choice for you unless you plan to create your own program to use their API, which is a good one.
The link below is to a blog for a trader who does quite well. I believe he uses TD Ameritrade and their tools to enter orders while he is at work. It is not updated that much now but you might want to check it out. The archives is what you want to look at.
http://pinoytrader.blogspot.com/index.html
You touch on a very important point that people do not understand. There is a theoretical reason for doing with larger time, and indicating price (and not time) to exit and enter. Read a post I wrote about probabilities in my latest thread.
I can expand on this. It is a critical point.
Quote from zerfetzen:
I'm hoping to be a zerfetzenTOR
Sounds good, I'll stick to stocks for some time as I learn my way around.
About longer term vs. shorter term, I'm playing around with a custom method that yields the estimated probability of an increase or decrease on the following day, or as we all know, the next point in the series, of course. I've been testing it on 5 stocks, each with 5 series (Open, High, Low, Close, and Volume).
So far, the testing is going well.
Of course, it's just as important to estimate the size of an increase or decrease.
At one position in my past, I was a statistical forecaster, but not with stocks. So of course I'm trying a variety of other good ole' statistical methods as well.
At any rate, it seems I can nail the next day as an increase or decrease to my satisfaction so far (we'll see after I have a large enough sample of results).
What are different ways to approach a 1-day-ish turn-around? Assuming you work all day, come home, run your forecasts and if comfortable with a forecast, trade after hours on an expected increase in Open? Put in the trade, hope it opens higher tomorrow, put in a sell after hours on tomorrow, then hope it opens yet higher the following day? That would imply that whatever it opens at, the order sells virtually immediately?
I'm just guessing that's a possible scenario. What kinds of general strategies do swing traders use when they work all day? Thanks.
1. Do not trade stocks, trade indices.
2. Given you are a statistician, you understand how to evaluate probs, and test hypothesis.
3. What do you think are the chances for someone to determine the top price at a precise time using one minute closing price? (There are 360 minutes in a trading day (cash session).
4. Same question as 3. but now do it for 3 days in four consecutive days.
Why am I asking? Read my latest threads in which I posed (it is not the first time) the question. People who hanged in there are clueless to the nature of the question.
Also, I am also the man who nailed 3. and 4. last week.
Some backholders did not comprehend the possible significance of what I did, and insulted me for doing it even AFTER the market showed I am right.
What are my chances from a statistical sense to answer 3. and 4. correctly?
The links you asked for are:
http://www.elitetrader.com/vb/showt...37&perpage=6&highlight=935am ndx&pagenumber=1
http://www.elitetrader.com/vb/showthread.php?s=&threadid=126528&perpage=6&pagenumber=11
http://www.elitetrader.com/vb/showthread.php?s=&threadid=126528&perpage=6&pagenumber=13