Traders' Most Commonly Asked Questions

[T-REX]

Quote from AskSlim:




I think it is very difficult to dance between many different methods. The problem is the markets change character so often that you have to keep guessing and second guessing which method to trade and whether your in the right one at the time.

The two easiest markets to identify for the purposes of daytrading, for me, are choppy vs trending markets. And that is the only time I switch my method.

For swing traders, you're much better off avoiding the market "noise" and staying with your original trade objective.

Thanks for the question,
Slim

Is it not better to have 3-4 systems running at all times
Swing/Day/Position etc.etc.etc.???

 

[AskSlim]

Quote from T-REX:




Is it not better to have 3-4 systems running at all times
Swing/Day/Position etc.etc.etc.???

I find that most traders struggle when trading in multiple methods. The problem is that day trading and swing/position trading use different analytical parameters and even vary in tool sets. Only very experienced traders can move between paradigms.

New traders struggle enough trying to find a method that is a good fit for their personality and financial condition. The confusion of more than one style prevents finding one that is comfortable.

Thanks,
Slim

 

[AskSlim]

Quote from DOT30K:

Slim,
Are you familiar with Spike Tading in Chicago?

A friend of mine used to trade there, some years ago. I can't say I know much about them now.

 

[AskSlim]

Quote from c_verm:

I have a question about the PDT Rule?

I am a Canadian citizen and would like to know if that rule aplies to me for trading? If so how does the Nasdaq even know if we have $25 + in our account?

I have talked to AmeritradeCanada, EtradeCanada and they both said it does not apply to canadians.

I also talked to IB and they said I can only make 3 trades every week to make sure I don break that rule. I would like to know your oppinion PLEASE!!

Question 2:

Why do they force you to trade on margin?? Its more risky to trade on margin than it is to trade with cash?

It's not the NASDAQ that inforces NASD RULE 2520. It's the brokerage houses. If you make more than 3 day trades in a week, with US broker, you will meet the requirements of a "pattern day trader". And they should inforce it no matter where you live.

No one is forcing you to trade on margin. Because it is a margin account doesnt mean you have to trade it larger than you would if it were a cash account. Use 25K in buying power instead of the 100K. Then it is NOT riskier.

Slim

 

[facultus]

What tips or ideas do you have for developing a strategy or "finding an edge"?

If a trader was just starting out, what would they first do to develop a strategy? Thanks.

 

[-ooO-(GoldTrade]

Aloha Mr. Miller,
I enjoyed your concert in Toledo.

I have found many Futures traders learn the trade and sometimes pick up substantial profits early on. Not long later, they may not be trading for market related, or personal reasons.

When many traders return to trading, they seem to have success with spreads. This may be because they will accept consistent profits with occasional windfalls, instead of looking for the brass ring on every trade. Or maybe because of some personality change that took place, trying to return to the market. I do not know. In any case returning traders seem to enjoy the success, they have, holding winning portfolios month after month.

This is a growing segment of Futures traders and these questions more or less come from that group.

Even though I have been interested in the subject of spread trading, many of the concepts were not very clear to me and the books on this subject are expensive and few in number, and their quality and utility to an aspiring spread trader largely unknown. Added to this series of "barriers" are the lack of reliable and impartial information on quality and dependability of commodities brokers and their services.

How do you anticipate slippage?

When do you average up?

Some people say you should only trade with 1% of your trading capital per contract. What I want to know is where did they get the trading capital in the first place? And if they were able to accumulate that much not in the market why would they want to risk it on commodities?

When a spread goes your way, why not just take the losing leg out and let the winning leg run?

Where does a spread have to go to show you you're wrong?

How do you use stops with spreads?

Here is the answer, what was the question?

The only thing important about a spread as far as entry and exit are concerned is the Close.

Can I trade currency spreads with IB?

I was hoping someone could give a list of recommended reading to educate myself on spread trading.

Which book helped you most in learning the practical aspects of spread trading? <

What effect does the Bell Shaped curve have on seasonal data?

Why would anyone buy an SUV?

What indicators do you use, if any, for spread charting?

Do you use Stochastics and Bollinger Bands on spreads?

What do you think of Joe Ross' book on spread trading?

What kind of charting service / software and technical analysis is required for following a spread trade? <

What does Fora Venalia have to do with futures?

What is high correlation, and what does this have to do with trading spreads?

Where can we learn how to use close only charts?

Can I trade (Seasonal) calendar spreads on the e-minis?

When you are finished trading for the day would you rather walk out side and find it is already dark, or would you prefer to have a full day of warmth and sunshine ahead of you?

Why do spreads require lower margins?

I use to have candles for spread charts with QCharts but I switched to eSignal. Now I can get only a line chart. Any suggestions, or is a line chart good enough? Or, can eSignal do candle charts for spreads?

Which broker do you use for spread trading?

I have heard of BACKWARDATION is there forwardation as well?

Can you comment on the “Conflict of Interest," between traders and brokers and what effect this has on brokers giving trading advise to new traders?

Can you comment on the conflict of interest between mutual funds management companies and their clients as compared to Exchange traded Investment Companies?

What effect should turnover have on an investors choice of a fund?

I thought Bullet was Roy Rogers’s dog!

If you were running funds, in semi-illiquid markets, would you as a fund manager prefer to be trading closed-end or open-ended funds?

Why does the street use the word safe when they really mean volatility?

What effect did Reminiscences have on your understanding of “The Game,” if any?

How can a trader be expected to react to the unknown if they are not familiar with all of the tools?

When I started out, I was not looking for a system, anymore than when I was learning to drive a car was I concerned with just a quick start. I wanted to learn and experience any and all phases of the game, so that I could see where my strengths and weakness were. In driving, I trained for the Grand Prix.