Surf's Special Situation Journal

[cornix]

Quote from marketsurfer:
This lays out one of the fatal misunderstandings--- Not only are "footprints" ipso defacto the past, the map isn't the territory. HFT, which is your competition doesn't trade large blocks that you think you can "see" flowing in on your charts. In fact, HFT trades very very few shares at a time-- For you to believe you can see this is delusional and if you actually could, the nature of it, designed to be undetectable, would do you no good. What you do is Tea Leaf reading, just admit it. surf

Oh, now I see where we misunderstand each other and that probably causes even more argument. HFT is not my competition. HFT deals with the shortest price excursions, while I look for intra-day swings, which last from minutes to hours.

What I look for is an example you told me before and now, after reading Gallacher's book I see where is taken from: what if some rich man decides to buy huge amount of some equity or commodity... Let's drop the fact that any single person is unlikely to dominate any of the world's top liquidity markets during their most active sessions for the sake of experiment and just imagine it happened. He decided to buy a few billion dollars worth of say NQ (which I trade).

What will he do? Unlikely just log into his retail IB account and just hit buy 100,000 contracts NQ. I think you would agree with me here.

So he will most likely instruct his personal broker to buy that instrument and the trade is going to be executed by an institutional trader... in pieces (because obviously single order of a size like that would just cause insane price movement and result in much worse fill than desired)... so, in pieces, which means buying in a way, which possibly gives the best fill price (many institutional traders benefit from executing @ better than desired prices, you are close to the market, you probably confirm that). So his goal is disguise that he is buying such a huge amount of the instrument as much as possible. But can he disguise it completely, assuming price inevitably shows every transaction occurred? Ha ha... OK, enough said for the smart people to guess... for now.

 

[marketsurfer]

Quote from cornix:

Oh, now I see where we misunderstand each other and that probably causes even more argument. HFT is not my competition. HFT deals with the shortest price excursions, while I look for intra-day swings, which last from minutes to hours.

What I look for is an example you told me before and now, after reading Gallacher's book I see where is taken from: what if some rich man decides to buy huge amount of some equity or commodity... Let's drop the fact that any single person is unlikely to dominate any of the world's top liquidity markets during their most active sessions for the sake of experiment and just imagine it happened. He decided to buy a few billion dollars worth of say NQ (which I trade).

What will he do? Unlikely just log into his retail IB account and just hit buy 100,000 contracts NQ. I think you would agree with me here.

So he will most likely instruct his personal broker to buy that instrument and the trade is going to be executed by an institutional trader... in pieces (because obviously single order of a size like that would just cause insane price movement and result in much worse fill than desired)... so, in pieces, which means buying in a way, which possibly gives the best fill price (many institutional traders benefit from executing @ better than desired prices, you are close to the market, you probably confirm that). So his goal is disguise that he is buying such a huge amount of the instrument as much as possible. But can he disguise it completely, assuming price inevitably shows every transaction occurred? Ha ha... OK, enough said for the smart people to guess... for now.

You are woefully stuck in the past in dramatic ways. You'll get it one day, I am confident, just keep on thinking about it. Stop switching from instrument to instrument also, learn one at a time-- why switch if what you have is working anyway? surf:

 

[cornix]

Quote from marketsurfer:

You are woefully stuck in the past in dramatic ways. You'll get it one day, I am confident, just keep on thinking about it. Stop switching from instrument to instrument also, learn one at a time-- why switch if what you have is working anyway? surf:

Get what? Traders are judged by performance, not by any other measures.

I traded Euro for 5 years, they say in science you better slightly change the vector of research not to get your mind "stuck".

In addition to that, different markets have different volatility and some other factors. I found that I can trade shorter hours and make better profits, so why not?

See no problem playing the ground which offers the best conditions at the moment. It's business, not marriage.

 

[Cote Rotie]

Quote from marketsurfer:

You are woefully stuck in the past in dramatic ways. You'll get it one day, I am confident, just keep on thinking about it. Stop switching from instrument to instrument also, learn one at a time-- why switch if what you have is working anyway? surf:

Corn is already a profitable trader, from what I gather after reading his posts. It sounds like he already knows what he is doing.

Thank you Corn for your well thought out answers. You make reading ET a pleasure amongst all the negativity and sourness. Please keep up the good work.

 

[HurricaneUS]

Quote from cornix:

....Future is not independent from the past, humans have memory and they consciously or not, always act with significant consideration of their past experience, pain, pleasure etc...

I used to believe that market behavior and price activity was the result of the psychology of human beings.....however there appears to be something else going on that is a major cause of price movement and not related to human behavior...I actually think it's more related to the natural laws of physics than human psychology because behavorial explanations do not seem to be the most likely cause of and fully account for the repeatable price movement and outcomes related to certain patterns that I see on a daily basis..

 

[cornix]

Quote from Cote Rotie:

Corn is already a profitable trader, from what I gather after reading his posts. It sounds like he already knows what he is doing.

Thank you Corn for your well thought out answers. You make reading ET a pleasure amongst all the negativity and sourness. Please keep up the good work.

My pleasure, CR. Just share bits of experience so that other maybe not fall in the traps I did and keep the courage to achieve the noble goal of trading success.

 

[cornix]

Quote from HurricaneUS:

I used to believe that market behavior and price activity was the result of the psychology of human beings.....however there appears to be something else going on that is a major cause of price movement and not related to human behavior...I actually think it's more related to the natural laws of physics than human psychology because behavorial explanations do not seem to be the most likely cause of and fully account for the repeatable price movement and outcomes related to certain patterns that I see on a daily basis..

This is an interesting matter indeed. From psychological standpoint, behavior of the crowd is quite different from the behavior of the individual, much more primitive. Crowd often acts as one macro-organism and there's a good saying that "crowd of academics acts almost the same as crowd of janitors".

When trading we likely deal with this "crowd organism" rather than individual traders, hence individuals are unlikely to seriously affect top markets nowadays. Which is good news for the reasons stated above: crowd is much more primitive and easier to interpret.

 

[marketsurfer]

Quote from Cote Rotie:

Corn is already a profitable trader, from what I gather after reading his posts. It sounds like he already knows what he is doing.

Thank you Corn for your well thought out answers. You make reading ET a pleasure amongst all the negativity and sourness. Please keep up the good work.

Do you really know this? I would say the opposite based on the content in the posts--- regurgitated book info, classic but flawed wisdom.
Corn is an articulate writer but very naive when it comes to market reality. Don't be fooled

The flock is being gathered, how many times have I seen this in the past? wake up, man!

surf

 

[marketsurfer]

Quote from cornix:

This is an interesting matter indeed. From psychological standpoint, behavior of the crowd is quite different from the behavior of the individual, much more primitive. Crowd often acts as one macro-organism and there's a good saying that "crowd of academics acts almost the same as crowd of janitors".

When trading we likely deal with this "crowd organism" rather than individual traders, hence individuals are unlikely to seriously affect top markets nowadays. Which is good news for the reasons stated above: crowd is much more primitive and easier to interpret.

Wrong, you deal with the mass of capital not the mass of crowds. One fund manager controls the same money volume as thousands of the crowd. How can you remain so naive? surf

 

[cornix]

Quote from marketsurfer:

Wrong, you deal with the mass of capital not the mass of crowds. One fund manager controls the same money volume as thousands of the crowd. How can you remain so naive? surf

When I say "crowd" I say crowd of institutions too. Of course retail traders constitute microscopic percentage of total volume. But neither a single fund manager controls the whole market. And even if does for some time, as I said in previous posts, large orders leave large footprints....