Winning ways in trading that become losing ways

[777]

Winning ways can become losing ways:

Years ago using limit orders resting in the NYSE market often was a good thing, especially with the price improvement when a specialist traded through the order as he had to include you in his fill.

Some traders, like pair traders, actually spent the day sending (and cancelling orders if the price drifted too close rather than gapping through) limit orders that rested in the market. They would especially do this looking to short.

Now.. most of the time placing limit orders resting in the market is usually bad

A. No price improvement as when stocks traded in fractions

B. More importantly, algos let you get filled when the price is likely to go against you and stop your fill by fraction-of-a- penny jumping in front of you if you fill figures to immediately be a good one

-most of the time if you are filled the price quickly moves against you.
_____

What other good trading ideas from the past now are actually mostly bad?

... like maybe scalping.

 

[cdcaveman]

i think the biggest one is selling vol... standing on a short vol position as a continuous strategy...

 

[tommcginnis]

What other good trading ideas from the past now are actually mostly bad?

... like maybe scalping.

..."ErrrrmahGERD!"
I used to love trading against the ES trend -- on an extended rise, I'd enter short on a pop, have a linked exit a tick or two below, and just mill money as the market washed through 3 or 4 strikes, since I only needed 1 or 2 to profit and exit. And if the market turned right then? (Which I was always watching, with a pretty short-term Stochastic and MFI running...), then I might grab the exit trade and tug it down a tick or two, or exit less-than-full-position, and ride things in the other direction.

Then the short-term ATR went to crap, and I put a bar on my ATR and promised myself to never trade below a 0.50 ATR. That's just death. 1-second trades turn to 10 minutes and an hour and an eternity. And NO income comes in. In 2017? The short-term ATR is almost never ≥0.50 except for the open and the close. ("No, thank you!")


I have not scalped equities in a million years, and need to -- it's great to keep the market-reading chops in shape. (An embouchure to wet a big wet Market Kiss....)

 

[speedo]

..."ErrrrmahGERD!"
I used to love trading against the ES trend -- on an extended rise, I'd enter short on a pop, have a linked exit a tick or two below, and just mill money as the market washed through 3 or 4 strikes, since I only needed 1 or 2 to profit and exit. And if the market turned right then? (Which I was always watching, with a pretty short-term Stochastic and MFI running...), then I might grab the exit trade and tug it down a tick or two, or exit less-than-full-position, and ride things in the other direction.

Then the short-term ATR went to crap, and I put a bar on my ATR and promised myself to never trade below a 0.50 ATR. That's just death. 1-second trades turn to 10 minutes and an hour and an eternity. And NO income comes in. In 2017? The short-term ATR is almost never ≥0.50 except for the open and the close. ("No, thanks!")


I have not scalped equities in a million years, and need to -- it's great to keep the market-reading chops in shape. (An embouchure to wet a big wet Market Kiss....)