My problem is that we all have to pay for those "non risk" activities from big banks- slippage, commission, all the tricks & traps from HFT(e.g. setup traps in bid/ask to trick&force retail traders to sell cheap buy expensive).
Secret edge , loophole .....
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My problem is that we all have to pay for those "non risk" activities from big banks- slippage, commission, all the tricks & traps from HFT(e.g. setup traps in bid/ask to trick&force retail traders to sell cheap buy expensive).
Galvin - If you trade in liquid markets and during market hours you can keep slippage to a few ticks. If you use IB/lightspeed/etc you can keep comms low. HFT/traps/whatever you could either trade on a larger time frame to not get shaken out or set larger stops and take a lower position size to keep risk the same. Hope this helps get rid of some fear of "us vs them".
This is an excellent quote. I make a point to fade moves that trigger stops. Naturally, this doesn't always work but it's a very viable strategy. I used to have my stops placed in the typical areas and I became tired of seeing my stop get hit only for the market to reverse in the desired direction. Initially, I fixed this problem by taking the same trade with an increase in size but then I switched to fading the moves with normal size and that seemed to work better.
The most important quality for this strategy is experience. There are times you know the locals are hunting stops.
<i>NT: I left Wall Street for the first time in 1991. I was obsessed with price formation. I couldn't understand from the screen how prices were determined. It took me six months to be able to read prices in the pit. Locals basically read information from the order flow and squeezed the weak party. There's always a pack of five or six dominating locals who abruptly change the prices, who bid a lot higher than the previous offer and have the guts to do it, and the rest of them follow.
DS: How did that knowledge change the way you trade when you went back to trading from a screen?
NT: It is the most enriching experience for a trader. I learned more about market dynamics in my second six months than from years on a desk. I learned that traders' income is not the bid-offer spread, but the micro-squeezes that take place. Markets move from squeezes to squeezes. Traders make money on stop losses and other free options. It made me interested with information economics.</i>
The most important quality for this strategy is experience. There are times you know the locals are hunting stops.
<i>NT: I left Wall Street for the first time in 1991. I was obsessed with price formation. I couldn't understand from the screen how prices were determined. It took me six months to be able to read prices in the pit. Locals basically read information from the order flow and squeezed the weak party. There's always a pack of five or six dominating locals who abruptly change the prices, who bid a lot higher than the previous offer and have the guts to do it, and the rest of them follow.
DS: How did that knowledge change the way you trade when you went back to trading from a screen?
NT: It is the most enriching experience for a trader. I learned more about market dynamics in my second six months than from years on a desk. I learned that traders' income is not the bid-offer spread, but the micro-squeezes that take place. Markets move from squeezes to squeezes. Traders make money on stop losses and other free options. It made me interested with information economics.</i>
Your comments on the well selected Taleb quote are on the mark.
I always woundered why Taleb had such a short trading life. Do you know when he gave it up the second time?
Did he ever catch on to looking at the other side of squeeze plays (stretches that alternate with squeezes, all relative to the Premium( measured dynamically))
It appears he only trades one side od the Premium differential.
It is like the one sided (wlsewhere) viewpointo of Big hog (with nodoji) on heding. They do mot understand cascading, apperantly. Taleb didn't either.
The solution to all of these person's continuing problems is monitoring and analysis od the market envelope which exists in three moves set of sub envelopes Two dominant with a non dominant in between.
Nice post, a few gems in there too.
IMHO it's tempting for a struggling traders to look for the answers in fading the 95% crowd (the herd). There are many other nooks an cranys to be explored. Try to go back to the begining and see things from a different perspective. You might be glad that you did.
IMHO it's tempting for a struggling traders to look for the answers in fading the 95% crowd (the herd). There are many other nooks an cranys to be explored. Try to go back to the begining and see things from a different perspective. You might be glad that you did.
if you combine volume with support and resistance and u know the s/r #s ahead of time and are looking for the volume spikes,it's all very obvious,it's a high percentage scenario which is the non secret edge, a little less obvious but even higher percentage is knowing the s/r on several like markets and watching them hit s/r at the same time