Predictor

I've been monitoring this software for some time (was actually able to get in on the beta). But, I've been very busy and haven't actually spent much time with the software. First, I must say that I've been extremely pleased with Tradestation's product, support, and data feed. However, I've demoed the MultiCharts platform and they look pretty good. I'd like to hear all the great things about MultiCharts .NET and how it compares to Tradestation. Anyone using it? I'm a C# programmer and while EasyLanguage is simple enough: some of it does come off as backwards or overly verbose.

A good point was raised, greatness is not seeking perfection. Seeking perfection or the "grass is always greener on the other side" phenomena isn't the way to greatness. Let me expound, I'm very strong at discretionary trading-- reading the market -- and I'm very good at predicting the market. But sometimes I lose. But let's say I couldn't accept the losses... I go out and seek a completely new trading method or try to buy an automated system. That's not greatness for me. That's seeking perfection. Greatness is working on existing strengths. Its a working from existing strengths. Of course, it doesn't mean that I can't trade a system -- just because I'm good at discretion. I've been trading my own system for a couple years and it has worked extremely well. But greatness is part of a feeling. It is a working from strengths. Its a working on the process. It is based on empiricism and feedback loops. I like to say success is a process not a destination. Every trade I can choose whether to be 'great' or just average. Greatness is about a desire to trade at one's best. Let's say you're in a trade and you get a phone call or need to run to town or a distraction... giving that trade up.. not trying to win... that's moving one away from the greatness. Maybe you're up on the day or at a new all time high... maybe you don't want to take that trade so you can savoir your victory... victory is worth savoring but again if you're making decisions based on anything beyond achieving your best then that's moving one from greatness. Other things that move one away from greatness, are things like boredom or the need for excitement. I took 1 impulse trade several weeks ago. I had never did that before. I "banned' myself from trading for about 3 days and it hasn't happened since. Every trader needs to be their own best manager and coach. ZDO very true.... >Beware associating“perfection” drives with greatness. For one, the ‘greats’ are MUCH >MUCH better at shaking off, even ignoring mistakes, losses, and imperfections than are >the ‘goods’ … ZDO... good vs great Well part of the difference can be understood that a "great" trader has a strong advantage -- not necessarily a defined edge. Its partially explained by math size*volume=potential profits/losses. Gamblers tend to take many negative expectation bets and bet too large and they have large outsize losses. It took me a long time to understand where the similarity arose. Most of the associations of good traders is based on the idea of selectivity -- this is profit factor optimizing. If we seek to optimize the net profit then there is going to be less selectivity... Much of the difference though is in the mental aspects... the good traders hold false beliefs, self limited ideas, false perceptions, false ideas, etc. Good traders are often conflicted. The great traders have worked through that.. in essence they've crushed the doubts, the rational arguments, and everything that else that holds others back. Plus, they are willing to do the work to find the truth.

I am seeking/scouting for a potential collaborator. This role is primarily going to be quantitative in nature and will involve researching various ideas/concepts that I don't have time enough to research on my own. The rewards for the partner will be: a steady source of trading ideas, potential for training and gaining insight into my methods (that would normally require expensive lessons), and the ability to trade/use/learn about the edges that we discover. I am typically producing 5-15 ideas per day which is far too many for me to test. The basic flow will be that you are given a concept/idea to test and then you will precede to test the ideas and generate reports. The reports should be structured such as to provide insight/understanding over just simple answers. Ideal candidate... * Enthusiastic about testing trading ideas and about the market * A willingness to go beyond what is given to delve deeper * Experience in producing statistical and quantitative reports (ability to produce reports quickly and that look nice is a bonus) * Optimistic and upbeat attitude but detail oriented and critical * Basic statistical knowledge, advanced is even better * The ability to program and test trading concepts on ones own * The ability to produce reports that go beyond the basic reports. For example, I want to understand how profit expectations change with variable changes. It is more about understanding then simple results. * Must be capable of working with intraday data series. * Must have Tradestation and should be capable in using either Excel, R, Matlab.. C# is a strong plus. PM me if interested with details about your programming, stats, and quantitative background.

Short stops being run. Institutions reloading the offer here. Likely go higher but a scalp/pull back is not unlikely. Done for day.

Several layers of offers just pulled... longs seem to be re positioning here.

Goodoboy... I'm trying to point out that your thinking isn't very clear. So, your hypothesis was that the market needed to make a new high within a given amount of time? Its not surprising that your thinking is unclear because most of what one will study on the market is bunk -- makes no sense. It takes a long time to develop clear thought. It makes me realize if I ever offer training I should charge a boatload for it. ;0

My "read" tells me that there are higher levels of institutional selling then average. I believe that institutions are betting that the fed won't take action this week and are reducing long exposure or opening short positions at new highs. At same time, they don't appear to be very aggressive... some participants may be waiting for more information.

Goodoboy.. don't mean to sound critical but wouldn't the the high of the overnight range have to "break" for your target to be hit?

Bias is long again... stops taken out at 3.25 but held --- Anticipating arbs to step up and buy soon. --- 8s likely to get taken out

Any news today? Longs are falling all over themselves to get out of this market... lol.. gotta be fast longs. Maybe I'm reading it wrong but I swear it looks like the LQ providers pulled all the bids for 4-5 ticks off the 8's. I was looking for arbs to take out the 8ish area. No can do. I made out like a bandit.... No think. Just get out. ---- Maybe this? http://www.marketwatch.com/story/consumer-confidence-falls-to-nine-month-low-2012-08-28 Now the question is... is this good or bad? I would say bad because most institutions are not looking for the Fed to make any policy changes this week. While it will give them more ammunition.... probably take some time before they act.

Long off the 8.50... not a lot evidence.. going to see if anything develops

I still do not see range extension beyond current days lows... but I'm done for day now.. not giving back precious profits. Weighing odds that we pin around 10.75 and close near there.. Most recent drive lower was result of LQ providers pulling bids. Let's see what happens.. tested stops below the open (nice job LQ's)... -- Institutions clearing out short inventory on the last stop run....

Entered long.... small trade here.. exited for small profit... good drive from entry but no follow through... some selling evident

I think based on action.. cover 100% would be best.

I don't think we will extend range to either side much. I feel it is slightly higher probability we re-test the highs of the range but not seeing strong evidence either way.

Far exceeded target for today... looking for possible long entry at 11 but may just call it day.

goodoboy.. a bit late to party? don't you think?

Well, one could say order execution is another form of optimization. Certainly one is introducing new variables/things that can change/unknowns... You may to look at my article on Good vs Great Trading. I feel that knowing how to push winning trades is probably the best way to enhance a system. Its not easy though. I primarily apply the principle using my discretion. If one could find a variable that correlates roughly to the probability the trade will work out (or profitability of the trade) then that could be used as a confidence ranking and one could vary the position size based on the confidence (the probability the trade would work out)-- increasing size on better trades and decreasing it on the more average trades. I have been meaning to apply this concept in some of my programmed systems. A variation of this concept could be used to trade a system through a variety of parameters but with different weightings to achieve a blended performance, i.e to try to emphasize the parameters that are believed to work best while taking advantage of robustness of additional params.

All traders take risks. Great traders tend to take more risks at times but less risks at other times. A great trader and a good trader may get into the same trade idea at the same time and with the same basic plan but the great trader will tend to end up in a better position. The good traders are operating more on a single dimension whereas the great traders are able to incorporate greater amounts of information intelligently into their decision making. The great trader tends to maintain "meta cognition" of the game. In other words, the good trader identifies his plan and trades the plan whereas the great trader is able to see many plans. The great trader keeps a very "wide field" vision of the entire game. The great trader is also keenly aware of his own relationship to the "wide field". In other words, if at any time he loses that meta-awareness then he knows to cut back, get out, adjust, etc. The great trader takes more risk but doesn't realize it most of the time. Even when they do get hit: they've typically made much more when things were working. I like to think of it like the best defense is a good offense.

Blue, curve-fitting is actually a goal when designing trading systems -- i.e you want your methods to "fit" the data. What you don't want to do is to OVER FIT the data which makes it less likely to work in the future... Optimization is a goal for most system developers. I know it is for me.

Higher volatility will be associated with higher profits for most active successful traders. This may not apply to less active traders but certainly for day traders, swing traders, etc. You may want to see my thread on Two Dark Swans of Stop Losses for more as to why this is the case. Some longer term trend following methods might benefit from lower volatility. Extreme volatility is often not beneficial. Volatility changes often cause difficulty for traders...

Just as an aside, Blue the type of testing you are doing now is empirical in nature. I use this type of testing extensively when developing my trading systems. This sort of testing is much different then relying on statistical laws/properties for known distributions. Most of all, the statistical properties of price series often change dramatically in the future rendering profitable historical rules unprofitable. The point I was making earlier wasn't that standard deviation couldn't be used. Notice, I said as much that some traders might find them useful. My point was that because price series don't have a known distribution and don't have the properties that standard deviation assumes that they can't be used correctly/formally/etc. This concept applies to most statistical measures that I know of. You may want to look up descriptive vs predictive statistics.

Good traders are able to identify opportunities in the market, plan trades, execute trades, and manage trades at a reasonable level. A good trader identifies the opportunity, plans the trade, and executes the trade. He takes his losses with discipline. One might think that great traders are similar to good traders but just better. The reality is that great traders are distinctly different from good traders. The difference is not merely a difference in measure but a difference in kind. Great trading is actually much closer to gambling. One of the key differences between great trading and good trading is that great traders don’t just play the odds: great traders play the unknown. The market simply isn’t predictable enough – enough of the time -- to allow for the type of returns that great traders seek. So, great traders are much more likely to be going out into that unknown space. This seeking out the unknown always involves a cost. The cost for greatness is the potential for loss, even significant loss. A great trader will typically take more risks. The risks could involve taking trades with higher uncertainties (less confirmation), higher risk per trade (giving a trade more room), and in general just a higher level of risk. This increased level of risk taking is balanced by increased trading skill. The problem with trading just trading well is that the game, the trading game, is really close to a zero sum game, even when played perfectly. The focus on limiting risk tends to ignore the reality that every business has to make a profit to survive. The problem with trying to avoid risks is that it tends to push the game to such a competitive level such that the trader must trade at a near perfect level just to break even and nobody can trade perfectly forever. Eventually mistakes are made and losses occur. Great traders are more creative. They move laterally and find creative solutions. Great traders don’t really compete against others. It is more of a dance. Instead of playing the games against others, they make up their own game. Great traders are much more aggressive then good traders. A good trader may set a stop loss at a predetermined level and take the stop out mechanically – only to watch in frustration as the trade instant reverses and works out to their original plan. Great traders monitor the market with the knowledge that the stop out may be a bad stop out. They watch the market and try to determine whether they should get re-enter or take the loss. Often, the correct action is an aggressive re-entry and that can mean the difference between winning and losing. Great traders have really mastered a core set of skills: 1. They recognize when they are wrong. 2. They incorporate new information into their existing plans. 3. They execute at a high level. They perform. 4. They recognize when they are right, and they push their winners. Below, I review each core competency in greater detail: 1. They recognize when they are wrong. The ability to recognize when one is wrong is very powerful skill because it allows the trader to take small losses when appropriate. The ability to manage risk well allows the trader to experiment at a low cost, gain experience, and adapt to changing market conditions. 2. They incorporate new information into their existing plans. Great traders incorporate new information into their pre-existing decisions and they use that new information to better their existing plan of action. A good analogy can be found in the game of No Limit Poker where a player is dealt “hole cards” and these hole cards have different values. For example, a pocket pair is going to be worth a lot more than any two random cards. But, when the flop comes and depending on the board the odds can change dramatically. The analogy is that most good traders and most systems actually play the “hole cards”, and they don’t play the flop. They don’t incorporate new information. Most traders aren’t able to make intelligent sense of brand new market generated information. Even most experts struggle to incorporate new information after they’ve made a decision. One example of incorporating new information is the trader who is stopped out, processes newly generated market information, and intelligently and aggressively re-enters the trades that are more likely to work out. 3. They execute at a high level. They perform. Most traders have experienced watching a trade that is stopped out and then starts to reverse and go in their favor but they don’t execute. Many traders have limiting beliefs about discipline and about how they should trade that prohibits them from capitalizing on what they identify. Of course, great traders aren’t inhibited. They don’t delay. They act. They are able to act because they’ve worked through the mental garbage that inhibits and limits most other traders. They’ve approached the game with meta-awareness and have adapted to focus on their key trading strengths and eliminated aspects in their trading that was limiting and distracting. As a personal example, I found my performance improved dramatically when I quit worrying about where to place my stop and just entered with a fixed stop. Contrary to traditional wisdom, I found that when trading in “real-time” that my performance improved significantly when I didn’t plan the trade or measure my stop loss. Utilizing the fixed stop loss allows me to enter trades more rapidly which often proves a significant advantage. And, without having to spend precious brain power trying to determine the best stop loss, I am able to focus more on what the market is actually doing , what it is likely to do next, and adjust in real-time. These adjustments introduce new risks and required generating new structures for managing those new risks. In essence, great traders have incorporated a series of better designs into their trading. 4. They recognize when they are right and they push their winners. The novice often entertains the incorrect idea that it is possible to cut out the losing trades, and that successful traders simply don’t lose. The reality is that avoiding bad trades is nearly impossible. Instead of focusing on avoiding losses, great traders focus on maximizing their best opportunities. Of all the skills of great trading, the ability to push the best trades is one of the most important which is why I’ve saved it for last. Every trade has a different pay off. Most trades have probably about as much chance of making the trader money as losing the trader money. But, a smaller percentage of the trades are good trades and have a marginally higher probability of making the trader money and an even smaller percentage of the trades have a very high probability of working out. For hypothetical purposes, imagine 3 trades. The first trade has a 50/50 pay off, the second a 60/40 pay off, and the final one has an 80/20 pay off. Ask yourself, does it really make sense to bet as much on a 50/50 pay off as an 80/20 pay off? Of course it doesn’t make sense to bet the same amount when the odds are different. Yet, many traders insist on betting the same amount each time. A reasonable reason to bet the same amount each time is that varying the position size introduces difficult to quantify risk. A wholly different reason among small futures traders is that the contract sizes are so large in relation to the account that essentially they are always forced to bet the max -- which isn’t desirable. Of course, there is one more than one way to push a great trade. The simplest and often effective method is to simply add more contracts. A variation is to allow the open profits to increase to a greater degree without increasing the contracts. One can also increase the stop, target, or in general give the trade more room. All of these methods increase the risk and the potential for reward. It is notable that the ability to take more risk when one has a greater confidence is one of the greatest distinctions between liquid markets – like the S&P 500 - and most gambling games. The market simply doesn’t care how much you desire to bet and the cost for betting more is marginal – unless you’re a huge whale. While it may technically true that you can bet as much as you’d like in a no limit poker game, you can be sure that equally skilled players will respond by simply folding or only calling when the probability of your winning is only marginal. It makes sense that great traders capitalize on one of the defining distinctions between markets and gambling games. As mentioned earlier, great trading is in many ways dangerously close to gambling. The higher levels of aggressiveness, risk taking, and uncertainty that characterize great trading must be paired with equally rigorous risk management and performance monitoring. -- http://themarketpredictor.com

Few observations... not trying to compete but just stating the obvious. 1. What is the "specific" pattern? Steve, you mention "specific algo pattern". But you don't even describe a general pattern to any degree -- let alone a specific set of rules for identifying the pattern algorithmic-ally. 2. I barely know statistics but I think it is relevant to mention a few important facets for beginners sense you keep mentioning the importance of statistics. First, Bollinger Bands are really just standard deviation bands. I'm not really sure how John Bollinger got credited for such a trivial concept. The meaning/relevance of an X standard deviation is only relevant for normal distributions. The market is said to be both non normal (unknown distribution) and non stationary (mean moves). In essence, this means that an X standard deviation move has no statistical meaning. The 68-95-99.7 rule does not apply to the markets. This is the same reason that one can't rely on a "balanced" market profile distribution (normally distributed) in a statistical/algorithmic sense. The market can generate infinite variety of distributions. Most statistical measures can not be applied to the markets formally because most statistical measures have various underlying assumptions that will not be true in the market. For example, correlation only applies to linear relationships. Of course, I'm sure some traders can apply incorrect statistical measures to the market and make it work for them. But its important when making such errors to be generally aware of them. Steve, as you can imagine.. I don't see any system here at all. --- Wikipedia says it better http://en.wikipedia.org/wiki/Bollinger_bands#Statistical_properties Security price returns have no known statistical distribution, normal or otherwise; they are known to have fat tails, compared to a normal distribution.[8] The sample size typically used, 20, is too small for conclusions derived from statistical techniques like the central limit theorem to be reliable. Such techniques usually require the sample to be independent and identically distributed which is not the case for a time series like security prices. In point of fact, just the opposite is true; it is well recognized by practitioners that such price series are very commonly serially correlated – that is, it is the case that the next price will be closely related to its ancestor 'most of the time'. For these three principal reasons, it is incorrect to assume that the percentage of the data that will be observed in the future outside the Bollinger Bands range will always be constrained to a certain amount. Instead of finding about 95% of the data inside the bands, as would be the expectation with the default parameters if the data were normally distributed, studies have found that only about 88% of security prices remain within the bands.[9]

Futures rarely/never get halted. I believe there is a 10% circuit breaker.