Why Is The Obvious Not So Obvious?

[The Oracle]

Quote from macattack:

I would say what matters most when u are trading is to think before you act. If daytrading you better be able to think quickly whether or not you want to place a trade. It all depends on the plan you have. If that entails taking a tiny risk for a tiny reward, or a big risk for a big reward, or a tiny risk for a big reward, or even sometimes a large risk for a small reward.

This should all be well thought out before the day even begins.
Plan & execute.

B22..this is MK..not ML

we can still have a bit of fun and be serious

so..let us try and not be big headed from now on..as..when socrates said..the only thing i know is that i really know nothing..he was of course correct

sometimes..it is best to just forget about all u know..and say to urself..what the fuk am i doing..what am i actually doing?

here i am//sitting in my little chair..with my multiple screens..thinking i am some big shot trader..when..all i am is a simple person with a small bit of knowledge about a a very complicated financial market..that is run by cowboys..and we don't mean the wild west type

so..what am i actually doing..that is my big question to answer for myself!

i know what i want to do..and that is make money..but i also know that i can lose money very quickly..so..i must limit my risk..that much i now know if i want to stay in this game to learn and be profitable

now..what do i have to do next to learn and become profitable

well..a starting point for me is to know my chances of winning..and how much i can expect to win..on average..over a set number of trades..this i can understand..but..how do i know what market to pick to work out my chances of winning..in other words..what do i actually have to do in order to be able to place trades in the market..when the market opens and i am sitting there looking at all my fancy flat screens

bit confusing above..so..how the fuk do i find out what market i should trade to give me the best chances of winning?

notice the greatly reduced use of smileys

TO

 

[macattack]

Quote from The Oracle:


bit confusing above..so..how the fuk do i find out what market i should trade to give me the best chances of winning?

notice the greatly reduced use of smileys

TO

Depends what your objective is. The guy from Scion Capital ran a hedge fund & bought illiquid stocks which is the opposite of what everyone says to do, but he made a lot of money doing it.

Right now I prefer to trade oil futures (CL) mostly because I've observed it so much now & feel like I know it better than anything else. But besides that it's liquid enough, has plenty of swings each day to make you a fortune, and I see situations each day where I can risk a little to make a lot, not that I've perfected that process yet. I also like the hours in which it trades.

If I was looking for something new in the futures area for daytrading I'd first use the CME website to look at the contract specs & then I'd look at some charts & then I'd sim trade to get a first-hand account of it's action during the day.

Things I would look at if picking something new:
-what I can afford
-is it liquid enough for active trading
-is the spread reasonable compared to the price movement
-does the chart look tradeable
-does price move enough each day to make some good money
-do the trading hours work for me
-is the commission rate decent

 

[Mysteron]

Stay in Control

 

[bogan22]

Quote from The Oracle:

B22..this is MK..not ML

well..a starting point for me is to know my chances of winning..and how much i can expect to win..on average..over a set number of trades..this i can understand..but..how do i know what market to pick to work out my chances of winning..in other words..what do i actually have to do in order to be able to place trades in the market..when the market opens and i am sitting there looking at all my fancy flat screens

bit confusing above..so..how the fuk do i find out what market i should trade to give me the best chances of winning?

notice the greatly reduced use of smileys

TO

Mk, good to see you back again
ML, to many M's I'm old and get confused

1. Find suitable trading candidates. TE indicated a method he/she used for reducing the amount of stocks to a manageable amount based on the amount the stock moved. This group of stocks moved a enough points a day to enable TE to set up reasonable risk/reward trades.
2. Identify suitable candidates from list based on methodology. TFF grooves, BOX, MTFA etc.

Cheers
Bogan22

 

[mekanikal]

Thanks TO for clearing up who the other MC is! I have been pulling my teeth to get that answer

In an effort to limit my posts and reduce the noise I thus cause, I will try to address all points in one post.

1. What I have noticed about the other site is that the people who made sense are banned now!! But their contribution is still there and I find myself caught up in the journey from the basement

2. The question from The Oracle. I will have to think about it, I already have some thoughts which I will put forth in few days after mulling it over.

3. RSC. Will have to think more again. Size is T&S volume and I noticed on the chart the price would turn anytime there is high transaction size. Color could be (my guess) which side of b/a was dominating in conjunction with the color of bar. That would signal continuation or reversal. R is the rapid rate of moving bars from big to small i.e. WRB -> NRB.

4. Good tip about the quotetracker screen. I think I also saw this in one of TE's pdfs. I will download it and play with it.

Now some of my ramblings

I can see why there is lot of stress on thinking for yourself and exercising the brain in all of TFFs posts.
So here's an exercise/experiment:
Turn on your TV to your favorite rubbish channel it can be 24/7 news channel, CNBC or anything else you like to watch. Put the volume on mute and just watch the picture for half hour. I guarantee you that what you thought by just watching the picture and reading the text on the tv you will have a dramatically different opinion than what would have been listening to all the talking heads and wizzbang sound effects.
This is because your brain is forced to think in absence of any sound as opposed to being force fed the opinion of those creating the programs.

This is what TFF refers to when looking at the chart. If you put all the junk indicators on it then in essence you have shut your brain off and the indicators are doing the talking. Without them you are forced to think why the price is moving and what is causing it to move.

Similarly trading on simulator is like learning to drive. First you have to learn the mechanics of the cars (gear, clutch, brakes, gas pedal, steering, lights, blinkers, mirrors etc.) which is best done in a desolate parking lot. Sim is to learn the platform. Consciously first, and subconscious later.
However, when you drive on a real road with traffic, it's a complete different ballgame. Each day the traffic is same - following the same rules (or not), similar pattern etc. but still each day is different. And you have to use your brain to navigate the traffic. No amount of technical indicator (like proximity sensors, lane assist, intelligent braking or whatever is the flavor of the year) will supplement the driver's brain. In fact it might hamper a good driver's ability.

On a chart your brain is the only 'leading' indicator. Everything else is lagging

 

[Mysteron]

Quote from The Oracle:

... As for orders being split, I noticed that with CLF any attempt to trade more than 100 shares would often result in a requote even though the daily volume was over 4 million. So it would be more reliable to trade in lots of 100 shares. That always seemed strange as I could trade other stocks for larger amounts without requotes....

I use CMC Markets and I've noticed some other odd things with their quotes and spreads. I think they inflate the spreads but I'm not sure as I don't use any other broker. However I use TC2000 platinum for charting which shows realtime prices and bid/ask and the spreads seem smaller than quoted by CMC. A few weeks ago I was looking to trade SHLD but the spread was 30 cents for a long time during the afternoon, so I didn't bother. Today around 2pm US time the spread for SHLD was 10 c. With CMC the price for QEP is quoted in increments of 10 c with a spread of 10c whereas on TC2000 the prices are displayed in increments of 1 c and the spread was 1 or 2 c. So I'm suspicious of CMC markets but I'll stay with them for now.

 

[Mysteron]

Quote from mekanikal:

...Turn on your TV to your favorite rubbish channel ...

Unfortunately 99.99% of TV is rubbish in the UK but one programme got my interest yesterday. It was about bush pilots in Botswana, they fly light aircraft ferrying tourists around. One particular pilot was trying to get a job and had been invited by the boss of one company to go on a test flight. The boss tested the flying skills of the pilot during take off and distracted him by asking him to close the side window. The pilot did as was asked but in closing the window he caused the plane to zig zag slightely during takeoff and the boss reprimanded him for not concentrating on the more important task of first taking off and then closing the window afterwards. Later during the flight the boss distracted the pilot again and then turned the engine off to see how the pilot coped with an engine failure. Well the pilot immediately tried to figure out what was wrong and to start the engine which was not the correct thing to do. The boss explained that following engine failure the top prority is to locate a safe landing spot and to keep it in view while gliding the plane down, and only then if there is time available to try to correct the engine failure. Suprisingly the pilot did get the job.

To me the moral of that is: have a plan of action, don't be distracted by superfluous details and keep control.

 

[The Oracle]

Quote from Mysteron:

Unfortunately 99.99% of TV is rubbish in the UK but one programme got my interest yesterday. It was about bush pilots in Botswana, they fly light aircraft ferrying tourists around. One particular pilot was trying to get a job and had been invited by the boss of one company to go on a test flight. The boss tested the flying skills of the pilot during take off and distracted him by asking him to close the side window. The pilot did as was asked but in closing the window he caused the plane to zig zag slightely during takeoff and the boss reprimanded him for not concentrating on the more important task of first taking off and then closing the window afterwards. Later during the flight the boss distracted the pilot again and then turned the engine off to see how the pilot coped with an engine failure. Well the pilot immediately tried to figure out what was wrong and to start the engine which was not the correct thing to do. The boss explained that following engine failure the top prority is to locate a safe landing spot and to keep it in view while gliding the plane down, and only then if there is time available to try to correct the engine failure. Suprisingly the pilot did get the job.

To me the moral of that is: have a plan of action, don't be distracted by superfluous details and keep control.

yes MN..keeping control is a lot easier said than done..and that is why experience with live trading is the only way to learn..for..no matter what any other person shows..or explains to you..it is only by doing that u learn..no other way

some people are very fast to pick things up from others..some are slower..and some will never in a million years..so each must know their abilities and work accordingly..it is no good thinking u can make money in 3-6 months..if u really know due to your capabilities..that is going to take u much longer..even a few years!

this is why TO keeps saying it is very important to be able to quickly distinguish between those who make sense when they say something..and those who do not..and by now it should be obvious to all how easy it is to quickly see the difference

as for cmc..and cfd/spread bet..they have their own advantages..but..not for full time daytrading of stocks..the spreads are way too wide..and u are not directly into the market..which u want to be..the last thing u want in a fast moving market is the quotes to be pulled/freezed..which is a regular occurrence with cfd/sb companies that act as market makers

it really is hard to beat IB..and all u have to do is have another good broker for 5K share lot trades..which is not the bread and butter size..and is why u need IB for trading 200 - 1000 lot sizes

anyway..as we all know by now..each person has to work out what is best for them..and just go for it

once the no.1 rule is obeyed at all times..then it is just a matter of time..if u are willing to think and learn

only 1 smiley ..or is that 2 now

TO

 

[The Oracle]

Quote from mekanikal:

Thanks TO for clearing up who the other MC is! I have been pulling my teeth to get that answer

In an effort to limit my posts and reduce the noise I thus cause, I will try to address all points in one post.

1. What I have noticed about the other site is that the people who made sense are banned now!! But their contribution is still there and I find myself caught up in the journey from the basement

2. The question from The Oracle. I will have to think about it, I already have some thoughts which I will put forth in few days after mulling it over.

3. RSC. Will have to think more again. Size is T&S volume and I noticed on the chart the price would turn anytime there is high transaction size. Color could be (my guess) which side of b/a was dominating in conjunction with the color of bar. That would signal continuation or reversal. R is the rapid rate of moving bars from big to small i.e. WRB -> NRB.

4. Good tip about the quotetracker screen. I think I also saw this in one of TE's pdfs. I will download it and play with it.

Now some of my ramblings

I can see why there is lot of stress on thinking for yourself and exercising the brain in all of TFFs posts.
So here's an exercise/experiment:
Turn on your TV to your favorite rubbish channel it can be 24/7 news channel, CNBC or anything else you like to watch. Put the volume on mute and just watch the picture for half hour. I guarantee you that what you thought by just watching the picture and reading the text on the tv you will have a dramatically different opinion than what would have been listening to all the talking heads and wizzbang sound effects.
This is because your brain is forced to think in absence of any sound as opposed to being force fed the opinion of those creating the programs.

This is what TFF refers to when looking at the chart. If you put all the junk indicators on it then in essence you have shut your brain off and the indicators are doing the talking. Without them you are forced to think why the price is moving and what is causing it to move.

Similarly trading on simulator is like learning to drive. First you have to learn the mechanics of the cars (gear, clutch, brakes, gas pedal, steering, lights, blinkers, mirrors etc.) which is best done in a desolate parking lot. Sim is to learn the platform. Consciously first, and subconscious later.
However, when you drive on a real road with traffic, it's a complete different ballgame. Each day the traffic is same - following the same rules (or not), similar pattern etc. but still each day is different. And you have to use your brain to navigate the traffic. No amount of technical indicator (like proximity sensors, lane assist, intelligent braking or whatever is the flavor of the year) will supplement the driver's brain. In fact it might hamper a good driver's ability.

On a chart your brain is the only 'leading' indicator. Everything else is lagging

well done ML..u got it

RSC...what do i see

R=Rate
S=Size
C=Color

Rate.... ...... .. ..... .... ....... .... ..... ....... .... ........ .. ......

size is simple..u can see the volume prints as the trades are executed

color..if u just go on the last price..green for up tick..and red for down tick..then u will miss some important information

what is handy to see..without thinking about it..is..whether the volume prints are at the bid..or the ask..u can go oustide the bid/ask as well with diff colors..but might not be of any real benefit

if u look at the ninjatrader layout i posted..u will see that there are 2 t&s screens for ES & NQ together..so..when the price is nearing a major S&R level..u will see the difference clearly in the T&S screens..hell..u will even see divergence without looking at a chart


this is common stuff..no big deal..it just needs many hours of looking..AND TRADING..to get a feel for it..no need to pay 950 quid to anyone..really

rate..the speed at which the prints go off..is important..and that should be obvious..momentum is building and something is going to give fairly soon..BUT..u need the chart AS WELL..u must use all together to reduce ur risk..which means entering at a level that will not go too far against u when filled..

it really is very exciting..just don't get carried away and think u are going to make a fortune by using it..for it is but one component of a trading process that u must understand and master..which takes time..which means a lot of practice..and..u can sim trade if u like..but it is far better to do it with small size..even 50 shares if u have too..or use the ES options instead of the ES futures contract..that way u will not lose as much for each tick on the ES..and u will also have the added benefit of knowing ur risk is limited to what u have paid for the option..and u might even have some time left for it to recover if it goes against u..just be careful not to buy too highly priced options..keep to the next expiry and nearest to the futures as possible with a reasonable delta..maybe .2 to .4..but look and see..no good picking something that is not going to move at all..actually..did TO not already show u how to SEE an option strike candidate for possible trade


RSC..what do i see

R=Rate..the rhythm
S=Size..the opinion
C=Color..the direction

not sure if this means anything to anyone..but it really does not matter what TO says..remember the famous quote

damn..smiley count increasing again..hard to kick old habits

TO

 

[The Oracle]

Quote from macattack:

Depends what your objective is. The guy from Scion Capital ran a hedge fund & bought illiquid stocks which is the opposite of what everyone says to do, but he made a lot of money doing it.

Right now I prefer to trade oil futures (CL) mostly because I've observed it so much now & feel like I know it better than anything else. But besides that it's liquid enough, has plenty of swings each day to make you a fortune, and I see situations each day where I can risk a little to make a lot, not that I've perfected that process yet. I also like the hours in which it trades.

If I was looking for something new in the futures area for daytrading I'd first use the CME website to look at the contract specs & then I'd look at some charts & then I'd sim trade to get a first-hand account of it's action during the day.

Things I would look at if picking something new:
-what I can afford
-is it liquid enough for active trading
-is the spread reasonable compared to the price movement
-does the chart look tradeable
-does price move enough each day to make some good money
-do the trading hours work for me
-is the commission rate decent

very well put MK

let's see if we can reduce it to a few words

what market is the least risky for me to trade and how much can i afford to lose?

once i work this out..i then need to see if i can get time to daytrade..or start by swingtrading?

shyte..it really is up to each person to work out their own way forward..but i think stocks are the least risky to learn with..as u can swingtrade just 50 shares if u like..so even if there is a gap of say $5 in a stock..which is not the norm..u are still only down $250..which is really nothing in the context of trading..and when u get a chance to daytrade..u will be using much tighter stops than swingtrading..so u can go up to 100-200 shares once u have a bit of experience

TO