How can you prove this assumption? Or is this just your own personal bias.
Last i checked CNBC still talks about p/e ratio's earnings, and fda approvals... fundementals still matter.
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Trading bubble
- Thread starter Hydroblunt
- Start date
How can you prove this assumption? Or is this just your own personal bias.
Last i checked CNBC still talks about p/e ratio's earnings, and fda approvals... fundementals still matter.
Hydro,
Interesting question...
If we were to build a model of how many day traders there are in the world vs. some other time in history, shouldn't it somehow be correlated to the number of "prop shop traders?" Since most "newbie traders" start with less than 25k, wouldn't the PDT rule make the "prop shop proxy" even more true today? The only info I know about prop shops I picked up here at ET, but it sounds like there is a steady decline in the total number of "prop shop traders" in the world (ever since 2000), so my thesis would be less daytraders today rather than more.
I agree with your observation about all the FX and e-mini traders, but is there really (guessing 5k-10k accounts) enough capital between all of them to matter, especially given how fast they probably blow out their accounts? I trade stocks only so thankfully I may not be familiar with a situation were 1000 jackasses, all with 2k accounts all try to pile in after a support/resistance level has been violated in some semi-thin futures market some of you may trade.....
Interesting question...
If we were to build a model of how many day traders there are in the world vs. some other time in history, shouldn't it somehow be correlated to the number of "prop shop traders?" Since most "newbie traders" start with less than 25k, wouldn't the PDT rule make the "prop shop proxy" even more true today? The only info I know about prop shops I picked up here at ET, but it sounds like there is a steady decline in the total number of "prop shop traders" in the world (ever since 2000), so my thesis would be less daytraders today rather than more.
I agree with your observation about all the FX and e-mini traders, but is there really (guessing 5k-10k accounts) enough capital between all of them to matter, especially given how fast they probably blow out their accounts? I trade stocks only so thankfully I may not be familiar with a situation were 1000 jackasses, all with 2k accounts all try to pile in after a support/resistance level has been violated in some semi-thin futures market some of you may trade.....
Quote from Hydroblunt:
The market is just not there to focus 100%, too much risk not enough reward.
What about traders who talk about all the 'opportunities' in the current market?
I would argue that with advances in technology and lowered comissions, you can actually can make coin in a low volatility / trendless enviornment
On the other hand, will you be able to adjust your strategy in time so that when vol & trend finally return, you won't get wiped out trying to fade every move?
For what it's worth: Soros said he was never able to play the ripples, and Livermore advised staying out of sideways markets.
But seems like at least for now, traders are proving them wrong
Quote from Trend Fader:
How can you prove this assumption? Or is this just your own personal bias.
Last i checked CNBC still talks about p/e ratio's earnings, and fda approvals... fundementals still matter.
Ok now you're showing ignorance and shallow mind. Fundamentals does not necessarily mean Financials and News Events. I mean it in the general definition not the financial industry one. Why are all these people trying to trade and day trade? Look at the "I wanna be a trader" threads started every day and the commericals on TV (you know ppl are buying if they keep playing them that much). There is no buy mania in this market, it's chopping and losing volatility & volume by the day. Yet all these newbies are rushing to trade as if they are gonna miss smth. It's definitely pushed by the brokerage industry and I'm just trying to make an observationof the effect on the market mechanics.
Quote from Epiphany:
What about traders who talk about all the 'opportunities' in the current market?
I would argue that with advances in technology and lowered comissions, you can actually can make coin in a low volatility / trendless enviornment
On the other hand, will you be able to adjust your strategy in time so that when vol & trend finally return, you won't get wiped out trying to fade every move?
For what it's worth: Soros said he was never able to play the ripples, and Livermore advised staying out of sideways markets.
But seems like at least for now, traders are proving them wrong
I didn't say you cannot make coin in this market but is the risk/reward anywhere near what it was a year or two ago? Of course not. The war over lower rates does not do anything except create deadlier battles over pennies and advanced technology cannot force dumb money back in. Most have to lose in order for the fewer to make but this market is almost all traders who cut losses, hence everyone is fighting over smaller and smaller pieces of the pie. Put it like this, as a poker player what do you think is more lucrative, a 10/20 table with 7 pro players or a 5/10 table with 5 suckers? I hope the answer is obvious.
Personally, the best decision I made in the last 2 months was to start leaving early and trading less. Afternoons are just dead 80% of the time. For the time put in, I think I made some good money. I caught up on sleep, hung out more, took advantage of NYC Summer restaurant week. As the saying goes, it is better to not make money than lose money.
To focus 100%, I would stay every trading day to the close because the opportunities would be there everyday worth the possible losses you make take in the bad trades. It's not like that right now.
Like you mentioned Soros & Livermore, many top traders stay away from these types of markets for very good reasons. And it's funny because I have noticed more and more experienced/semi experienced traders leave this market or take an "extended" break, yet there is a nonstop rush of newbies and hedge to this market as if they are about to miss a roaring bull market.
i dont agree...
Talkin strictly equities and futures and SCALPING (very short term low risk / low reward trading)
i think most day traders from the 2000's have been wiped out or dont make enough and went on to other ventures. the stress of this job doesnt pay if you makin 3k a month...especially if you did make 10-100k
even a lot of rebate guys are out of commission now and that was not rocket sceince
guys that still scalp are trading mornings news plays or shorting NYSE's in front of size (conversions traders) ..that game is done soon also as of April 2006
the market doesnt move moreso cause of the boxes then the "trader bubble"..but i guess they are a part of the trader bubble
i saw the cybertrader now has backtesting and autotrading...great..just what we need..grandma and grandpa wriring programs..def not good for the everyday "trader"
i have been in a trading room for 7 years now and most of my friends are traders/run desks around the country and their desks are stuggling lately also .
i dont think its traders as NYSE and NAZ volume is way down..its the combonation of lack of volatility and programs (which now make up 75% of total volume)
watch any stock and look how many cancels vs executions take place....the reversion to the mean/ VWAP boxes defeinatly have a control of the market in this ultra low volatility market
on hte nyse ..lot of 1 x 1 postings so specialist can stick it in you for one last year (not worried bout fines anymore..they are basically done in April)
also there has not been a stimlulus for an explosion...not tech boom, financial boom..if anything ..high commodity and oil can only slow down growth..not stimulate it
gettin back to the original question though...bring back 5c increments...trust me ...everyone on this side of the biz will be a happy camper (and will help rid of killer 1c boxes) and volatility for traders will be back
also...ask anyone in chicago how happy they are since the SP's become basically electronic.....$1,000,000 traders now cant buy a winning trade..i just got back from the traders expo and met with many a former futures trader that is complaining bout the lack of oppt in futures currently
Hedge fund bubble (maybe)...Trader Bubble (individual people) .no way
Program bubble.....100%...and that side of the biz will only get bigger once the specialist is gone...now there will be another 2000+ new programmable stocks
smart money is on INET and AX...count on HUGE VOLUME SPIKES on both exchanges and watch NYSE volume baloon to over 2.5-3 billion a day after April 2006
d
Talkin strictly equities and futures and SCALPING (very short term low risk / low reward trading)
i think most day traders from the 2000's have been wiped out or dont make enough and went on to other ventures. the stress of this job doesnt pay if you makin 3k a month...especially if you did make 10-100k
even a lot of rebate guys are out of commission now and that was not rocket sceince
guys that still scalp are trading mornings news plays or shorting NYSE's in front of size (conversions traders) ..that game is done soon also as of April 2006
the market doesnt move moreso cause of the boxes then the "trader bubble"..but i guess they are a part of the trader bubble
i saw the cybertrader now has backtesting and autotrading...great..just what we need..grandma and grandpa wriring programs..def not good for the everyday "trader"
i have been in a trading room for 7 years now and most of my friends are traders/run desks around the country and their desks are stuggling lately also .
i dont think its traders as NYSE and NAZ volume is way down..its the combonation of lack of volatility and programs (which now make up 75% of total volume)
watch any stock and look how many cancels vs executions take place....the reversion to the mean/ VWAP boxes defeinatly have a control of the market in this ultra low volatility market
on hte nyse ..lot of 1 x 1 postings so specialist can stick it in you for one last year (not worried bout fines anymore..they are basically done in April)
also there has not been a stimlulus for an explosion...not tech boom, financial boom..if anything ..high commodity and oil can only slow down growth..not stimulate it
gettin back to the original question though...bring back 5c increments...trust me ...everyone on this side of the biz will be a happy camper (and will help rid of killer 1c boxes) and volatility for traders will be back
also...ask anyone in chicago how happy they are since the SP's become basically electronic.....$1,000,000 traders now cant buy a winning trade..i just got back from the traders expo and met with many a former futures trader that is complaining bout the lack of oppt in futures currently
Hedge fund bubble (maybe)...Trader Bubble (individual people) .no way
Program bubble.....100%...and that side of the biz will only get bigger once the specialist is gone...now there will be another 2000+ new programmable stocks
smart money is on INET and AX...count on HUGE VOLUME SPIKES on both exchanges and watch NYSE volume baloon to over 2.5-3 billion a day after April 2006
d
i do agree though as per your technique of trading morning and taking breaks when market does blow
it will have cycles like anything else...and this is just "hopefully" a trough
i also remember the days of trading all day..now i recommend to my guys to lighten up after morning rush...be careful with spots as lot of traps
d
it will have cycles like anything else...and this is just "hopefully" a trough
i also remember the days of trading all day..now i recommend to my guys to lighten up after morning rush...be careful with spots as lot of traps
d
Quote from Drock409:
Hedge fund bubble (maybe)...Trader Bubble (individual people) .no way
I guess, I don't necessarily mean just hardcore scalpers, the nonstop commercials, ads and info-mercials about easy 123 trading gear toward swing traders. Even with low time frame day trading, I notice that there are too many newbies rushing into a game that may very easily be extinct soon thanks to programs.
The programs are set up by humans and it's mostly the trader mentality that seems to oversaturate this market. The most interesting is the tendency to short relentlessly. It's hilarious to watch a strong stock get shorted at every single possible level even in the face of a multi-million share buyer. Yet they fight the buyer and it does kill the move as well as the pullback as the programs and traders chop each other due to the nature to cut losses quick.
Something to be concerned about is the heavy leverage generally used. There could be smth brewing if the range contracts too much and some poor sucker programs take one side (probably short) as they keep killing the moves.
Great post, by the way, gave me some more to think about.
some observations...I was working out the other day (in the financial district), and a young guy starts talking about what he does...he mentions a firm that is clearly retail oriented and probably clears Bear Stearns or something...
Me: "what do you do there?"
Him: "trade."
Me (genuinely curious): "really? what, equities?"
Him: "everything...equities, bonds, mutual funds...."
Me: tuning out but nodding politely.
Everyone wants to call himself a trader (except investment bankers).
A while ago a Florida newspaper ran a story about some bond peddler who got screwed by his backer or something...a big Sunday feature about a ruined life...and a description about the "trading floor, now silent" when everyone knows there isn't a "trading floor" within a thousand miles of Florida....
Everyone wants to be a trader. It's like the modern version of the word "cowboy" or something.
Anyway, I'm still pushing thoughts of "the Rise and Fall of the Roman Empire" out of my head....
Me: "what do you do there?"
Him: "trade."
Me (genuinely curious): "really? what, equities?"
Him: "everything...equities, bonds, mutual funds...."
Me: tuning out but nodding politely.
Everyone wants to call himself a trader (except investment bankers).
A while ago a Florida newspaper ran a story about some bond peddler who got screwed by his backer or something...a big Sunday feature about a ruined life...and a description about the "trading floor, now silent" when everyone knows there isn't a "trading floor" within a thousand miles of Florida....
Everyone wants to be a trader. It's like the modern version of the word "cowboy" or something.
Anyway, I'm still pushing thoughts of "the Rise and Fall of the Roman Empire" out of my head....