Proprietary Trading Firms - A Different Business Model

[expiated]

Position Trading Bull and Bear Markets:
Based on anecdotal observations of the major U.S. indices between 2004 to present, Numerical Price Prediction defines a (tentative) bull market as one during which the eight-week baseline is rising, and a (tentative) bear market as one during which the eight-week baseline is falling. (Such signs as a 20% increase or decrease from the previous high or low [over a two-month or more time span], etc., are not given any regard whatsoever.) Tentative bias/sentiment is confirmed first by the twelve-week baseline, and then finally validated by the 16-week measure.

 

[DeaMaco]

I'm happy for you and that you've managed to start making money on your own.

 

[expiated]

Numerical Price Prediction (NPP) seeks to mirror the methodology used by meteorologist to predict the weather (i.e., numerical weather prediction). As such, it is based as much as possible on statistical analysis and mathematical probability.

The general idea is to gather and evaluate precise, up-to-date, quantitative data and use it to calculate the odds of price reaching designated values within a given time period by patterning the system's elements after the equations, wave functions, and computer generated images used in weather forecasting. This data is represented in the form of graphical charts which constitute forecast models of current market conditions that traders can then use to help make precise, well-timed trades.

It is hoped that the following explanations regarding the language and terms used when I make my own forecasts will help clarify the appropriate methodology for interpreting the corresponding graphics produced by NPP charts:

The Immediate Actionable Short-Term Trend

The immediate actionable short-term trend is represented by the 20-minute "mason wasp" or "Battenburg" baseline. ALL INTRADAY TRADES SHOULD MATCH THE DIRECTION IN WHICH THIS MEASURE IS SLOPING!!!

Any moving averages that are faster than the 20-minute baseline appear on charts merely to help clarify in which direction the "mason wasp moving average" is ultimately headed based on their positional relationship with the measure, or for assisting in the timing of entries and exits.

The "Gist" of Intraday Price Flow

The "gist" of intraday price flow is conveyed by the 60-minute standard and proprietary measures. Given that these measures are too lagging to rely on in terms of dictating the direction of one's trades, their primary value is in defining price ranges that, along with the "fastest" moving averages (primarily the five- and ten-minute measures), can also assist in pinpointing optimal entry and exit levels.

The Overall General Intraday Price Flow

Unlike the 60-minute measures (which fluctuate too frequently and are too sensitive to less significant and somewhat momentary price movements to suggest the "ultimate" direction in which rates are headed at the intraday level) the two-hour and four-hour price range envelopes offer smoother, more stable pictures of where prices are likely to end up in the long run, relatively speaking.

So again, similar to the 60-minute measures, their primary value is in defining intraday price ranges which, along with the 20-minute baseline, help to pinpoint reversals in the actionable short-term trend. They also reveal whether the trades that have the greatest odds or highest statistical probability of leading to profitable outcomes are those that involve buying a given asset or selling it.

 

[expiated]

Saturday | December 24, 2022 | (Christmas Eve)
Buy-and-Hold Swing Trading...

I've yet to concoct a "send in your order and walk away" Nadex Knock-Outs version of NPP with a nearly 100% success rate. I hope this one (which I'm electing not to describe) is the first. It recommends the following:

1. Be looking for the trigger signal to buy GBPJPY somewhere around its present level at 159.95.
2. At 0.9331, USDCHF is ready for a short position as soon as you get the trigger signal to sell.
3. Sell AUDJPY between its current location at 89.12 up to 92.07. (Wait for it to climb north and then turn south again.)
4. Buy EURUSD near 1.0570.
5. Buy EURGBP in the 0.8689...0.8710 neighborhood. (Wait for trigger signal, of course.)
   
6. Sell USDJPY between its current location at 132.79 up to 137.50. (Wait for it to climb north and then turn south again.)

 

[expiated]

Using the table of contents as a course syllabus...

Currency Trading For Dummies, 3rd Edition
by Kathleen Brooks, Brian Dolan
Released February 2015
Publisher(s): For Dummies
ISBN: 9781118989807

Part I: Getting Started with Currency Trading

Chapter 1:
What is Currency Trading?
Speculating as an enterprise
Currencies as the trading vehicle
What Affects Currency Rates?
Fundamentals drive the currency market
Unless it’s the technicals that are driving the currency market
Or it may be something else
Developing a Trading Plan
Finding your trading style
Planning the trade
Executing the Trading Plan from Start to Finish

Chapter 2:
What Is the Forex Market?
Getting Inside the Numbers
Trading for spot
Speculating in the currency market
Getting liquid without getting soaked
Around the World in a Trading Day
The opening of the trading week
Trading in the Asia-Pacific session
Trading in the European/London session
Trading in the North American session
Key daily times and events
The U.S. dollar index
Currencies and Other Financial Markets
Gold
Oil
Stocks
Bonds
Getting Started with a Practice Account

Chapter 3:
Who Trades Currencies? Meet the Players
The Interbank Market Is "The Market"
Getting inside the interbank market
Bank to bank and beyond
Hedgers and Financial Investors
Hedging your bets
Global investment flows
Speculators
Hedge funds
Day traders, big and small
Governments and Central Banks
Currency reserve management
The Bank for International Settlements
The Group of Twenty

Chapter 4:
The Mechanics of Currency Trading
Buying and Selling Simultaneously
Currencies come in pairs
The long and the short of it
Profit and Loss
Margin balances and liquidations
Unrealized and realized profit and loss
Calculating profit and loss with pips
Factoring profit and loss into margin calculations
Understanding Rollovers and Interest Rates
Currency is money, after all
Value dates and trade settlement
Market holidays and value dates
Applying rollovers
Understanding Currency Prices
Bids and offers
Spreads
Executing a Trade
Trading online
Orders


Part II: Driving Forces behind Currencies

Chapter 5:

Looking at the Big Picture
Currencies and Interest Rates
The future is now: Interest rate expectations
Relative interest rates
Monetary Policy 101
Looking at benchmark interest rates
Easy money, tight money
Unconventional easing
Watching the central bankers
Interpreting monetary policy communications
Official Currency Policies and Rhetoric
Currency policy or currency stance?
Calling the shots on currencies
Taking a closer look at currency market intervention
Financial stability
Debts, deficits, and growth
Gauging credit risk
Geopolitical Risks and Events
Gauging risk sentiment
Risk on or risk off?

Chapter 6:

Understanding and Applying Market News and Information
Sourcing Market Information
The art of boarding a moving train
Taking the pulse of the market
Rumors: Where there’s smoke, there’s fire
Putting Market Information into Perspective: Focusing on Themes
Driving fundamental themes
Analyzing technical themes
Reality Check: Expectations versus Actual
The role of consensus expectations
Pricing in and pricing out forecasts
When good expectations go bad
Anticipating alternative outcome scenarios

Chapter 7:

Getting Down and Dirty with Fundamental Data
Finding the Data
Economics 101 for Currency Traders: Making Sense of Economic Data
The labor market
The consumer
The business sector
The structural
Assessing Economic Data Reports from a Trading Perspective
Understanding and revising data history
Getting to the core
Market-Moving Economic Data Reports from the United States
Labor-market reports
Consumer-level data reports
Business-level data reports
Structural data reports
Major International Data Reports
Eurozone
Japan
United Kingdom
Canada
Australia
New Zealand
China

Chapter 8:

Getting to Know the Major Currency Pairs
The Big Dollar: EUR/USD
Trading fundamentals of EUR/USD
Trading behavior of EUR/USD
Tactical trading considerations in EUR/USD
East Meets West: USD/JPY
Trading fundamentals of USD/JPY
Price action behavior of USD/JPY
Tactical trading considerations in USD/JPY
The Other Majors: Sterling and Aussie
The British pound: GBP/USD
The new kid in town: Trading the Aussie
Understanding Forex Positioning Data
How to interpret the data
The FX fix
Forex and regulation

Chapter 9:

Minor Currency Pairs and Cross-Currency Trading
Trading the Minor Pairs
Trading fundamentals of USD/CAD
Trading fundamentals of NZD/USD
Tactical trading considerations in USD/CAD, AUD/USD, and NZD/USD
Trading the Scandies: SEK, NOK, and DKK
Swedish krona — “Stocky”
Norwegian krone — “Nokkie”
Danish krone — “Copey”
Cross-Currency Pairs
Why trade the crosses?
Stretching the legs
Trading the JPY crosses
Trading the EUR crosses


Part III: Developing a Trading Plan

Chapter 10:

Training and Preparing for Battle
Finding the Right Trading Style for You
Real-world and lifestyle considerations
Making time for market analysis
Technical versus fundamental analysis
Different Strokes for Different Folks
Short-term, high-frequency day trading
Medium-term directional trading
Long-term macroeconomic trading
Trading on Auto-Pilot
Potential inputs to drive an EA system
Caveat emptor on models
Using social media for trading: The power of the crowd
Developing Trading Discipline
Taking the emotion out of trading
Managing your expectations
Keeping your ammunition dry

Chapter 11:

Cutting the Fog with Technical Analysis
The Philosophy of Technical Analysis
What is technical analysis?
What technical analysis is not
Forms of technical analysis
Finding support and resistance
Waiting for confirmation
The Art of Technical Analysis
Bar charts and candlestick charts
Drawing trend lines
Recognizing chart formations
Fibonacci retracements
The Science of Technical Analysis
Momentum oscillators and studies
Trend-identifying indicators
Trading with clouds — Ichimoku charts

Chapter 12:

Identifying Trade Opportunities
Developing a Routine for Market Analysis
Performing Multiple-Time-Frame Technical Analysis
Identifying Support and Resistance Levels
Trend lines
Highs and lows
Congestion zones
Fibonacci retracements
Ichimoku levels
Looking for Symmetry with Channels
Drawing price channels
Listening to Momentum
Factoring momentum analysis into your routine
Looking at momentum in multiple time frames
Trading on divergences between price and momentum
Using momentum for timing entry and exit
Trading on Candlestick Patterns
Building a Trade Strategy from Start to Finish

Chapter 13:

Risk-Management Considerations
Managing Risk Is More Than Avoiding Losses
Leverage amplifies gains and losses — and expectations
Knowing your margin requirements
Market liquidity, volatility, and gap risk
We have a winner here! Protecting your profits
Placing your orders effectively
Applying Risk Management to the Trade
Analyzing the trade setup to determine position size
Doing the math to put the risk in cash terms
Devising the trading plan in terms of risk
Choosing Your Trading Broker
Different business models of brokers
Financial risks of brokers
Technology Issues and Contingency Planning


Part IV: Executing a Trading Plan

Chapter 14:

Pulling the Trigger
Getting into the Position
Buying and selling at the current market
Averaging into a position
Trading breakouts
Making the Trade Correctly
Buying and selling online
Placing your orders

Chapter 15:

Managing the Trade
Monitoring the Market while Your Trade Is Active
Following the market with rate alerts
Staying alert for news and data developments
Keeping an eye on other financial markets
Updating Your Trade Plan as Time Marches On
Trend lines move over time
Impending events may require trade plan adjustments
Updating Order Levels as Prices Progress
Increasing take-profit targets
Tightening stop-loss orders to protect profits

Chapter 16:

Closing the Position and Evaluating Your Results
Closing Out the Trade
Taking profit and stopping out
Setting it and forgetting it: Letting the market trigger your order
Squaring up after events have happened
Exiting at the right time
Getting out when the price is right
Assessing Your Trading Strategy
Identifying what you did right and wrong
Updating your trading record


Part V: The Part of Tens

Chapter 17:

Ten Habits of Successful Currency Traders
Trading with a Plan
Anticipating Event Outcomes
Staying Flexible
Being Prepared for Trading
Keeping Technically Alert
Going with the Flow/Trading the Range
Focusing on a Few Pairs
Protecting Profits
Trading with Stop Losses
Watching Other Markets

Chapter 18:

Ten Rules of Risk Management
Trade with Stop-Loss Orders
Leverage to a Minimum
Trade with a Plan
Stay on Top of the Market
Trade with an Edge
Step Back from the Market
Take Profit Regularly
Understand Currency-Pair Selection
Double-Check for Accuracy
Take Money out of Your Trading Account

Chapter 19:

Ten Great Resources
Technical Analysis of the Financial Markets
Japanese Candlestick Charting Techniques
Elliott Wave Principle
Technical Analysis For Dummies
The Book of Five Rings
Market Wizards: Interviews with Top Traders
Come into My Trading Room
Zero Hedge
BabyPips.com
Forex Factory


Appendix:

Trading Strategies
What’s Your Sign? Determining Your Trader Type
Looking at Trading Strategies Based on Trader Type
Strategies for the scalper
Strategies for the swing trader
Strategies for the position trader

 

[expiated]

Wednesday | January 11, 2023

Tentative Protocol for New Junior Traders:

During the last few weeks, you have been completely ignoring this tentative protocol for new junior traders, so go back now and compare how it fits in with the tentative protocol you are using presently (in blue).

1. Before the start of each new 24-hour market cycle, view the daily charts to determine whether each currency pair on your watch list is bullish, bearish or neutral. For those pairs which evidence a bias in one direction or the other, monitor their hourly charts over the three trading sessions and note if and when candlesticks venture to the "far" side of the daily trend.
2. Whenever and wherever a maneuver to the far side of the daily trend occurs, continue to monitor the hourly charts, noting if and/or when the intraday trend reverses direction to resume a course in sync with that of the day-to-day trend. At such times, determine the advisability of entering a position in the direction recommended by the two aligned measures. (At this point, let's define the daily trend as the slope of the forty-minute price range envelope.)
3. Also, whenever volatility and liquidity are reaching peak levels, check the daily charts to ascertain whether any of the exchange rates have breached their projected daily price ranges. Whenever this situation exists, you will want to monitor the relevant pair(s) on a lower-time-frame chart for if and/or when the intraday trend (forty-minute measure) reverses direction, undertaking a mean reversion/regression toward the mean (the 24-hour baseline). If so, this is your signal to enter a position in the corresponding direction (if deemed appropriate).
4. Moreover, if volatility/liquidity is high, watch for intraday breakouts on lower-time-frame charts, as conveyed by a refusal of the the faster moving averages to drop "behind" the "Battenberg" (or "mason wasp") moving average, poised above or below the "black cloud" (the 20-minute baseline poised above or below the 60-minute price range envelope at 0.10% deviation).
5. And finally, generally speaking, you will want to look for opportunities to enter positions as rates come out of pullbacks (conveyed by the faster moving averages) during those periods or intervals where the slope of the "black cloud" and the slope of the "Battenberg" or "mason wasp" moving averages are headed in the same direction.
6. Most recently, if the two-hour and four-hour price range envelopes are both sloping in the same direction, look to enter positions when candlesticks make contact with the far side of the 40-minute price range envelope at 0.15% to 0.25% deviation. However, to increase the probability of a successful outcome, add the condition that the candlesticks must also be on the far side of the two-hour price range envelope, and must have just been rejected by the 30-minute temporal support or resistance level.

 

[expiated]

Thursday, January 12, 2023

For the longest time, NPP has regarded the 20-minute baseline as the backbone of intraday trading. That view is now being amended, at least on a trial basis, and shifted to the 13-minute baseline instead.

 

[expiated]

How much do these guys charge for their training?

 

[expiated]

What is the Series 7?
The Series 7 is an exam and license that entitles the holder to sell all types of securities products except commodities and futures.

What is the Series 63?
The Series 63 exam is the Uniform Securities State Law Examination, a North American Securities Administrators Association (NASAA) exam administered by FINRA. The exam consists of 60 scored questions. Candidates have 75 minutes to complete the exam. The license entitles the holder to solicit orders for any type of security in a particular state.

What is the 52 Munis?
The Series 52 is a licensing exam required to transact in municipal securities such as muni bonds. The exam is known as the Municipal Securities Representative Qualification Examination (MR), and was developed by the Municipal Securities Rulemaking Board (MSRB) and administered by FINRA.

What is the 55 Equities?
The Series 55 Examination is designed to assess the competency of entry-level Equity Traders. It is intended to safeguard the investing public by helping to ensure that Equity Traders are competent to perform their jobs.

What is CSC Canada?
The Canadian Securities Course (CSC™) is an entry-level program that helps an individual to become a qualified mutual fund representative.

What is Series 56?
Series 56 Exam is the Proprietary Trader's Qualification Exam, or Series 56 exam, it was created to assess a candidate's knowledge in the areas of securities markets, trading and reporting practices, applicable products, investment strategies and anti-fraud provisions. There are no prerequisites to this exam.

What is Series 57?
The Series 57 exam measures the degree to which each candidate possesses the knowledge needed to perform the critical functions of a securities trader, including executing transactions in equity, preferred or convertible debt securities effected otherwise than on a securities exchange (proprietary trading).

What is Series 65?
The Series 65 exam—the NASAA Investment Advisers Law Examination—is a North American Securities Administrators Association (NASAA) exam administered by FINRA. The exam consists of 130 scored questions. Candidates have 180 minutes to complete the exam.

 

[destriero]

expiated-I would be happy to discuss how best to structure this. Just give me a call to give me details of Asset classes and scale, and we can discuss it. My phone number and email are below.

How did I miss this thread?

The OP is opening a prop firm... he's trading Nadex and deriv.com digitals with $1-$5 payouts.