Predictor

Using 1 tick range OrderFlow Bars for reading the tape.. comparison with 1000 volume OrderFlow Bars...

Regarding my last video, I also want to share more about how I read the tape and how our clearable Invetory Tracking/Volume Accumulator can be used. What I do is I closely track the MFE and MAE in my trades and attempt to exit them with a small profit or loss BEFORE my stop is hit. It doesn't always work that way and sometimes I will exit too soon or decide to be more head strong. Tracking the MFE/MAE takes tremendous amount of effort. One of the nice things about our Volume Tracking Accumulator is that if you clear it when you enter a trade then you can track all of the following from your your trade entry very easily: 1. The max adverse and max fav excursions since entry 2. If there has been more NET buying or selling since entry. 3. The prices where most of the buying and selling is occuring. 4. The total amount of activity that has taken place. Hope it helps.. In general, I find my worst losers never FE (favorable movement). In backtesting, I've found this true in most of systems. Likewise, I've found my best trades typically have very little AE (adverse movement). Tracking this helps me to see how well the trade is actually working.

zdo: Answer in this case is simple, I didn't use precisely correct vocabulary. There is no real confusion when my words are taken in context to the surrounding. First, I claimed that TST doesn't offer formal training that will help a trader to meet their goals. This is true, as far as I know and it formal training is not a claim that Michael has made. So, this isn't under contention. What he has claimed is they offer an ENVIRONMENT where a trader can become successful in a low risk environment and learn risk manage presumably required to become a SUCCESSFUL futures trader. In the second context, I referred to this environment as "training" when "environment" or "simulation" would have been more appropriate. For me, the tribal aspects could be be a plus... help me stay aware of things. Not terribly "wanting it" but it could be a benefit. ZDO, techncially the combine is just a try out. It is not any training -- just an evaluation. They also offer chat rooms, psychologists, etc but that's part of their monthly program... So, the question is what claims is TST making and are they reasonable. Claim #1 On their website it says you are funded with a 30k,50k,100k, or 150k account. This is critical because a larger account allows for a larger return to be made and account sizes near upper end would certainly allow for tangible returns. In reality, the 100k account only has a 3% loss limit or 3k and positions are not allowed to be held over the close. It is easy to obtain margin levels of around only 1k (for ES) if positions are not held past the close. They allow you to trade up to 10 contracts but with only a 3K max drawdown: 10 contracts is not realistic or required. If we take a more reasonable 2-3 contracts then we can see that the "100k account funding level" would be equivalent to about a 5k-6k account, only. They do post the loss limits on the account but the account sizes seem arbitrary. For example, they could just as easily claim they were funding the trader at 1 million with a 2k loss limit. Claim #2 Michael Patak has claimed they offer a LOW RISK environment that ENABLES a trader to learn discipline and presumably become consistent. If this is true then they should be able to show traders that have managed to clear a decent sum of money. We have to question if the low risk part is true/i.e low risk in relation to what and if the success part is true. He needs to show that traders were able to clear tangible returns under his program for it to make sense. Yes, I agree it is lower risk then the market but there is no return possible in the training whereas there is in the market. Trust me, I know. I racked up a lot of profits on the simulator or trading/making money for others. Didn't make much for myself. Claim #3 TST and Michael Patak have repeatedly claimed that the training doesn't pay the bills. . He would actually present it in the form of a question, "Do you think the combine pays the bills?" which made me think they could be dodging. The implication is that HE MUST have profitable traders or he was lying or running a loss making operation. He previously wasn't willing to claim that he had any traders who had cleared at least 30K (if I'm not mistaken). If true then it is difficult to see how the combines COULD NOT BE the primary source of income. Again, the question we're trying to get at is whether or not the system/environment process they claim enables a trader to learn what it takes actually works. For them to do this, they need to show traders who have produced tangible returns. Of course, a large account balance isn't required if a trader hits a good sprint. So, if they have a system that remotely works they ought to, by pure chance, have some traders that have produced a decent return.. Michael, I tell you what you give me a free shot and I'll do my best to clear 50k for you so that you can show that you have profitable traders. However, I only do this when using NinjaTrader SuperDOM (or at least not T4 -- ask and we'll see). ZDO, I grant you we are basically beating a dead horse at this time... I wish it were a good/real offer but hard to argue with my reasoning.

Mighty... I understand what you're saying but many discretionary traders don't really have an edge. Some successful discretionary traders don't believe in a generalized edge, even. They make their profits by identifying how the market is working "right now". There is no statistical basis for it, like with a quantitative system. Many of these types of methods will work really well in some markets and not at all in others. Let's think about it hypothetically too, let's imagine a hypothetical "good" trader who on most days if that he trades if he's down a loss limit will be able to "recover" and do better if he kept trading. In other words, if our hypothetical trader is down $500 then on most days he'll recover that and might turn a small profit. But on some days.. a rare day if he keeps trading then he'll dig himself into a very deep pit. It might be more optimal trade that way but some traders will not want to take the swings. They'd rather make a bit less and know that they'll never lose more then $500 per day. I know personally that knowing I can't lose more then x% is a tremendous safety net for me. For example, I'll move my stops. I'll adjust them. I'll do things that people say you shouldn't do. Sometimes it works. Sometimes it doesn't. But, what I do know is that at the end of the day.. I won't lose more then $x. In futures, where the losses can multiply easily by a factor of 10, this is a good safety net in exchange for not trading at 100% optimal. The futures game is about survival -- not optimal. If you're an automated trader, trading 1000 stocks per day with a highly refined money making system then I agree. I really think that most discretionary traders, even great traders don't have a very explicit edge and that's why they're able to do so much better because they're not relying on a very specific set of rules but rather able to consider a lot of information that a simple system can't use. The cost for this advantage is higher uncertainty. If you explicit rules, for example, you can't enter a trade without a certain condition then I classify that under systematic trading. It is not fully discretionary. I trade both highly discretionary where I don't have explicit rules and also I trade systems that have strong historical performance and use my discretion.. which is again what I classify as systematic trading. It is certainly easier to make money with systematic trading. The psychology factors aren't as involved and generally the performance factors are lower. I agree that a "stop and go" approach isn't the right way but rather gradual risk reduction. This is the model that other prop firms use and one I recommended Michael to think about.

Here you can see our how using 1k volume bars provides with our net/summary information gives us a different view into the order flow...

Blue: Just my opinion but this is a side issue and not central to the CLAIMS we are trying to evaluate here. It is not really at all difficult to come up with an estimate. They use the T4 simulator. They also have some rules against trying to "game the software". I don't think it is terribly important really. NinjaTrader also has a method for simulating fills, also. If you're average profit is greater then 2 ticks then it shouldn't be a deal breaker. Again, there are many ways to simulate a fill that will be good enough for most trading discretionary trading styles.. i.e must trade through, time wait, or volume estimation. Michael: The problem is you charge about what $200 per month for the training. If it takes a student 12 months to get consistent then they've spent $2400 which is greater then your lowest 2 funding levels. Your basic claim is that you provide a low risk way to learn futures and then fund those traders who succeed. Your basic claim is that you're providing an avenue for funding that will allow a trader to make a tangible return in a low risk environment. And, this is what I'm having trouble and is open to some debate. I suspect you won't be able to release those top trader stats ? If you can't produce a trader who can net at least 50k then maybe your program is flawed or needs to be adjusted, at least. Also, your assertion that greater risk doesn't correlate with greater reward is fundamentally false on multiple levels. First, if we take a net return of 50% on 10k = 5k while 50% on 20k = 10k return. We see if we keep the return constant that risking more money produces a greater return. Now, let's look at the second equation which is the probability of ending a loser or the probability of ending a winner i.e account loss vs profitable. Likewise, a greater account cushion allows one to RISK LESS as PERCENT and still MAKE MORE. A good example, take an identical method that produces about 1:1 return, i.e make 50% and hvave 50% DD. If your total account is 100k and you ratio it to produce a 30% return then you'll make 30k and only experience a 30% DD. This means your estimates can be off by a factor of 2x and still provide the ability to continue trading and recover. Now, if your account is 10k and you you should for 60% return then you return only 6k while experiencing a 60% DD -- not providing much room for unexpected error. I have counter claimed that your assertion that greater risk doesn't equal greater reward is therefore false. What you may have meant to express is the sentiment that if a strategy is a losing strategy then no finite amount of capital will save it: to that, I agree.

We could be driving down to the 1409ish region.. if we do then I'll be a buyer.

Michael: Hope you do indeed bring back NinjaTrader.. I can't trade on that other platform. Okay, I hear what you're saying but as they say the proof is in the pudding. Are your graduates actually building their accounts with such small risk limits? I On another forum, you previously reported at the end of the year you'd release the stats on your top earners. Are you still planning to do this and when do you plan to do that?

CB I've had enough of you.. You're on ignore now too. For the record, I had of the top 2 ranked futures systems at C2 for about 2 years.. So that's more then any no name posters here have. I also made my subscribers thousands in real documented trades. I closed systems and trade my own account now. All of these trades are documented and recorded and hidden for my benefit. As for my software, I reviewed the existing programs that do this sort of stuff and I didn't like them. They didn't do what I needed. I developed a far better program for the trading that I do. If anyone is interested in how my tape reading software compares to the other stuff out there then I highly encourage them to read my entire thread. When my software becomes available then feel free to try it and compare it to the other software that is being mention here.. I personally wouldn't even use some of the "competitors' mentioned if they were free. Also, don't assume that you can know for sure how I'm doing based on my reports here. I had the last round I posted here 10 wining days in a row and traders thought I was losing here. Just my 2cents

New order flow drive/buying programs went off in probably in response to fiscal cliff chatter.. However, if this buying isn't able to push to new highs then that would be a negative. A turn here in the order flow to the down side could easily trigger stops below 14.25

Market has turned considerably more negative from earlier today. A retest or even break of lows is possible.

I've exited my long. Market is det.

If school shooting turns out to be terrorism... could change things. Will watch my risk here

CB.. typically I'm only shooting for 2 to 4 points though my stops can be large or small.

CB... I know that some traders see a balanced profile and expect us to hover around the 16.50 testing above and below it. I know that. I know what many traders are seeing. I'm seeing what I'm seeing.. doesn't mean it will happen...I'm just trying to weigh the odds. I'm looking for about a 6ish point drive from here to upside..but I'm constantly reading the market.. evaluating the information

Anticipating a drive away from this volume... seeing a second surge into this 18 level. Very high % buying --- What's interesting is that every time we come into an OB imbalance higher frequency traders blast in market orders to capture a few ticks.. Typically as we retest the imbalance it will be more likely to give way...

What's interesting is that at 17.50 we had very strong order flow and an order book imbalance... market is reacting to the imbalances above and below the market today. High volume at a single price level often represents a replenished offer and limit resistance... Many large speculators sit outside the market and exhaust the OF using limit orders.. .... As we made the peak we had 78% buying or nearly all buying.. Given we haven't driven higher, I'm assuming a portion of that was stop runs. ---- I'm using 1k volume bars if anyone wants to see what I'm seeing... The ability to track the OF using volume bars and the OF monitor in my software is very powerful when the book imbalances are side-by-side.

Market looks very capable of testing highs now.. strong order flow and good drive off the lows.

>>Maybe the reason you don't see any ideas is because so far I haven't seen ANYONE who >>trades like this. No one on this forum. Who else uses MP and VP along with correlated >>markets and thrown in really good order flow that you can use? Why don't you share.. you might be surprised what other traders are doing. Nice to hear you're not selling anything...that's really important to me.

Tragic school shooting.. full details unknown. Did anyone see if the drop in SP came as news of that broke?

Buy programs triggering... somewhat late in the day

Buyers responding very aggressively to the new... that's a positive. A push back back above 18 would be bullish for a run to ON highs

Sellers starting to test the 15.25. This is not the activity I want to see. We need to see buyers come in and now drive away or else this would be a negative.. So far they aren't able to drive price and so the market bounces higher but need to see strong buying come in now

I plan to roll after today... still plenty of liquidity.

My sense is that majority of sellers are short from 15.25 and longs from around 18. We've reverted to the median.. anticipate a run higher. Trading below the 15.25 would be negative.