The Surf Report--part 2

[EPrado]

Quote from logic_man:

What I find fascinating, in a pathological sort of way, is the implicit assumption that "fixed system traders" all trade the same side of the market, which just happens to be the opposite side of the market that marketsurfer happens to be trading at the time. Thus, if he's short, all "fixed system traders" must be long. If they are looking for a reversal, the market must be about to enter a continuation.

When you really break down the "logic" of his comments, they're absurd.

Yeah....he and I probably will never agree too much when it comes to trading. He seems to think every price action and system trader is on the other side of his trades. Makes no sense...and yes...is absurd.

The other thing is the contradiction in a lot of what he says. He LOVES to quote Neiderhoffer like stats which go on PAST moves in the market to determine new trades...but then trashes TA guys/Pattern recognition guys as being too late to the party..blah blah blah. He basically blasts the same things he is a huge fan of. Makes no sense.

His trading seems to be one of a very confused person. I think he is way too caught up on being on the other side of the majority...which can get you obliterated in trading. Just look at what happened in his gold call.

 

[shortie]

i don't understand the logic behind holding into last weekend without any hedge. the position was left unmanaged. Stops may or may not work over the weekend.

i understand that his system told him to go Short and he did. That's great - he follows his system (but it does not appear that the position size is part of the system). The common sense dictates that an adverse move with the market closed could not be excluded last weekend and in fact was reasonably likely. "Sure" and "absolutely sure" simply do not apply here.

On Friday the implied was through the roof. By simply selling puts against his position he would have bought himself a couple of % extra breezing room.

Did he not want to sell put for the fear of missing the possible massive down move? Ok, fine. To specifically focus on catching the moves like that, there are ratio bear put backspreads that have limited risk but still catch large moves. Basically, an erroneous type of position was used if that particular scenario was in mind.

 

[marketsurfer]

Quote from bwolinsky:

You are going to get smoked in very short order when the house passes this bill, tonight.

After you have studied the drivers of price for as long as I have, you will understand why any substantial pop has already occured. I don't want to get into the specifics, but suffice to say, markets are anticipatory mechanisms-- hence the folly in price action and other chart type tactics.

 

[marketsurfer]

Quote from Laissez Faire:

I enjoy the surf report immensely.

Keep up the good work, surf

thanks, my friend!

surf

 

[logic_man]

Quote from EPrado:



The other thing is the contradiction in a lot of what he says. He LOVES to quote Neiderhoffer like stats which go on PAST moves in the market to determine new trades...but then trashes TA guys/Pattern recognition guys as being too late to the party..blah blah blah. He basically blasts the same things he is a huge fan of. Makes no sense.

His trading seems to be one of a very confused person. I think he is way too caught up on being on the other side of the majority...which can get you obliterated in trading. Just look at what happened in his gold call.

The whole "too late to the party" thing is something I used to worry about when I first started trading. Now, I'm more patient and wait for exact confirmation of a trade entry. A trader can make a great living off just the middle portion of the trends.

I believe that all good trading has a bit of contrarianism in it, but I have found that you have to be very precise in how you define contrarian, otherwise it just becomes a synonym for "subjective".

 

[shortie]

Quote from marketsurfer:

After you have studied the drivers of price for as long as I have, you will understand why any substantial pop has already occured. I don't want to get into the specifics, but suffice to say, markets are anticipatory mechanisms-- hence the folly in price action and other chart type tactics.

here you are correct about the non-eventness of the deal at this stage.

 

[logic_man]

Quote from marketsurfer:

After you have studied the drivers of price for as long as I have, you will understand why any substantial pop has already occured. I don't want to get into the specifics, but suffice to say, markets are anticipatory mechanisms-- hence the folly in price action and other chart type tactics.

There is absolutely nothing outside of price, volatility and time (and I don't mean time of day, as opening range systems) in the markets. The interrelationship between those three things is all you need to trade.

I can get 60% winners, with winners larger than losers, with just those three things and in this thread you can't get past breakeven over 6 months. So, you're clearly doing a lot of extra work with no added value. Or, as others are pointing out, it's more likely that you're SAYING you're doing all of this background analysis, but it's all really just smoke and mirrors and your trading is completely subjective thrill and attention seeking.

 

[ElecEquity]

Quote from logic_man:

The whole "too late to the party" thing is something I used to worry about when I first started trading. Now, I'm more patient and wait for exact confirmation of a trade entry. A trader can make a great living off just the middle portion of the trends.

After focusing on being early to the party for so long, sometimes I jump the gun and forget to wait for the chart to confirm my entry. I've gotten a ton better at being disciplined and waiting, but everyday until it becomes routine is tough. Rewiring the brain is tough, but well worth it.

 

[EPrado]

Quote from logic_man:

What I find fascinating, in a pathological sort of way, is the implicit assumption that "fixed system traders" all trade the same side of the market, which just happens to be the opposite side of the market that marketsurfer happens to be trading at the time. Thus, if he's short, all "fixed system traders" must be long. If they are looking for a reversal, the market must be about to enter a continuation.

When you really break down the "logic" of his comments on "fixed system traders", they're absurd.

I agree that reading through the thread, this guy's got no edge. Any edge that goes flat for months at a time is hardly worth anything.

I read a nice paper once that said that the most informed traders tend to use limit orders because they always know exactly what price they want to pay for something. I have seen no evidence that you could turn what this guy's doing into something that would generate limit orders on a consistent basis. Any "system" where a guy is saying "Alert, Alert" is way too unstable for me to want to trade.

And the whole "drivers of price" thing is also ungrounded in anything, as far as I can see. The time lag between a professional trader's perception of value in the market and the execution of a trade against that perception is virtually instantaneous, whatever the timeframe. Between the perception of value and the execution of a trade there really is no measurable intermediate step. It's not as if a big institutional trader sees value in the market, goes and does something else that can be picked up by some measurement system, then places a trade, such that anyone attuned to that other measurement system would be able to anticipate that once that measurement system registered a change in value, it would then lead to a change in value in price. The whole reason people pay attention to price is because it IS the measurement system. There isn't anything else measurable, in real-time, that is indicative of where price will be in the future. If there were, that "something else" would become price, because that's what people would pay attention to! The whole "theory" behind this stuff is crackpottery.

Great post man.

The drivers of price thing is just Surf being Surf.

At the end of the day, he takes big winners, takes big losers. Any fund/firm/risk manager that sees a performance like that will stay away. It's a scratch at best strategy.

 

[EPrado]

Quote from marketsurfer:

After you have studied the drivers of price for as long as I have, you will understand why any substantial pop has already occured. I don't want to get into the specifics, but suffice to say, markets are anticipatory mechanisms-- hence the folly in price action and other chart type tactics.

I believe you put the word "folly" in the wrong place Surf.

Basically you are like some of the fundamental guys I have traded with over the years (I posted a great story about a guy form Salomon Bros. I worked with when I first got into the biz....is on this site somewhere). You believe that your theory/price drivers are always right and the market(price action) is wrong and will correct itself. The problem is...you will lose that battle over the long run, and eventually get wiped out with that thinking.

Without going into detail and giving out your strategy...what are some of these drivers of price? I know about the In Trade one ....let's hear some others.