Predictor

Joshdance, well the reason I was stopped out the last time with my target of 72ish. was that I moved my stop to lock in some initial profits. In the other cases, if my stop was 4-5 ticks larger I would never have been stopped out. If I had caught the entire move then I would have been profitable on-day. I agree with you that if you use a large stop that you can't let it get hit. I'm very strong at reading the tape which allows me to take smaller losses typically then a stop would. But, if I use a tight stop then I don't have that opportunity-- to read the tape and make a decision. I was only stopped out by about 4 ticks in my other attempts. But its okay because there are always more opportunities. My belief is that I win by default provided I keep my losses in check. I want to say my style is very aggressive. I know a lot of MP traders implore staying out of the middle. I will drive from the middle, from lows, and from highs. This style allows me to capture profits every single day whereas I wouldn't be able to do that with a more conservative style of trading. It also ensure that I capture those moves that don't retrace to the VAH. I think the biggest mistake that profile traders make is focus on range days and always trying to fade. I will do that too but its all based on the context. We seen how even with Steve's beautiful chart, the market took a dump shortly after it was posted.. it didn't respect that too for very long. The difficulty in fading the range days is that if you accept the market is going to go back to center then it requires using a rather large stop... you only want tight stops when you think the market is going to continue moving against you -- important to note. Let me say, you are absolutely right, if you can use a tight stop and be aggressive on re-entries then that might be more optimal then a mid-sized stop. However, I've found in most of my systems that the larger stops always do better whereas the tight stops tend to turn into break-even equity curves even on my best systems. I use that sort of research to help me make my discretionary trades. You can take it that I don't always take my own recommendations.. I experiment a lot. I also factor in context and the probability that I think the market is likely to trend against me. Likewise, the market has became more spikey which as encouraged me to try tighter stops. Josh, I want to make clear that I don't have any beliefs or agenda in these matters, I just share what I've found to work. What size stop do you consider tight? What size do you consider large? I even have a Tradestation script that allows me to import my discretionary trades and then optimize them within Tradestation. This allows me to see what "would have worked best". The computer using the same entries that I took with a larger stop had almost a straight-line equity curve. I plan to do some imports of my recent trades and evaluate. I think beginners should understand is that its okay to break even in futures. Part of my style is based on the idea of getting into the market and being able to break even and then pushing my best trades and cutting the worst ones. This style of trading is based on the idea that there aren't any very good edges anyway. So, I take whatever the market gives me. It requires a completely different mindset to what most vendors teach which I believe is absolutely wrong for achieving top level performance. What they teach is OKAY for achieving basic performance but not top level. I won't name names but most all trading coaches/vendors teach a style that is absolutely not in-line with what how I believe the top discretionary traders trade. My style is based on my experience in being right predicting the market a very high % of the time, if I were to try to wait for a better entry then I'd lose many good trades and worse I'd get a higher % of bad ones. This is not to say this is the only way I trade. I also have systems with strong edges which I enhance with my market read. Josh, I think you may have some potential. We seem to have some at least possibly similar ways of approaching the market. Perhaps, we should collaborate in the future. I'm busy now working on some important projects but maybe later. PM me your journal.. I couldn't find it. PS: I will be taking a break from trading for the next few weeks while I finish an important project. I've had a very strong performance this year, and I don't need to "try to make things happens" --which is not what the style I described above is about. I'm happy to let my account sit at near equity highs for a bit...

Futures is a very specialized sort of game. I like to think of myself as a "local" -- even though I'm just a small trader. I feel that I'm similar to a local because I trade same market every single day. I believe that overall futures traders who trade only 1 or 2 instruments are likely to do the best. Some futures traders are in every market and this isn't advisable unless you have a systematic strategy. If you are a technical trader then you'll find that most stocks trade almost 1-1 to the futures anyway. The leverage in the futures requires a much higher degree of skill to use then I imagine most stock traders have the skills to utilize. The leverage is something that should be monitored closely. The costs to making mistakes can be very high. I try to cap my risk around 5% per day (and rarely hit that). For a skilled trader, a risk cap of 3% up to around 7% is do-able... The 24 hours markets provides more opportunities but also provides more opportunity for taking bad trades. In general, I recommend to set trading hours and trade those hours... although the futures market is often "sneaky" in that the best moves.. i.e moves the day traders expect often don't come round until the regular session is closed -- or until no one is watching. For this reason, I think that having enough leverage to hold overnight is a benefit but that in general trades should be closed at cash close due to the increased risks of holding over the maintenance window. One of the strongest advantages a futures trader has is the ability to "push" our best trades with larger size. This requires a lot of skill to make use of and may not be appropriate if you don't have enough capital to enter at a lower leverage level. I actually feel pretty good when I break even, as long as I'm not losing, because I know that I can push a good a trade and make plenty. Breaking even in futures is not trivial and is a very good skill to develop. As a futures trader, I don't get to pick but have to adapt to what the market is doing.. my opinion is that traders who are very rule-based (but lack complete systems) will have more trouble because you can't just go and pick a market that is going to move like you want -- like might be possible in stocks. You need to be willing to re-enter in same direction as a stop in futures and be aggressive on re-entries or use larger stops. This is likely to be difficult for many.. also because the distribution of wins/losses I find it better to think of my trades as sequences or in longer stretches -- the futures markets are very random. If you look at each trade you may start to question why you lost that money or what sense it makes-- but if you are profitable overall then over time you'll see the difference. Some of the best trades in futures can be difficult to execute because the risks. There is a tendency for the small trader to try to push the trades too far or take them off too quickly -- even experienced traders. -- Blog - The Market Predictor

FB is essentially a busted momentum stock... this is not the type of stock that value buyers like. I'd be careful on this one. I see another 22% decline very possible with decline up to around 45% possible. However, I do think FB will eventually rebound and could do well long term -- although some competition from Google is already being demonstrated. The problem with trying to time a turn around in something like this is that its likely to be very quick and catch most off guard... I don't trade options but they look to be a candidate. Buying deep OTM puts might be one way to play this...

I thought I'd expand on my interpretation of the late day activity. The sell off was an indication of pre-positioning for FOMC announcement tomorrow by hedge funds. Many institutional traders only run trades at or near close of days --without any regards to price. Several funds were likely buying while some were selling. The sellers detected the increased liquidity and executed as much as they could, depressing prices. I was there today.. I had the right trade from the very morning. I was aggressive on my re-entries. It should have been enough to secure a nice day's profits but somehow I ended up missing slightly. I almost never lose outright. I'm almost always reading the direction correctly which is why I tend to use a larger stop historically. We also seen some other dynamics.. funds selling poor stocks and buying strong stocks. I think the market may be transitioning to a "stock pickers" market. If QE is on table then all stocks/weak stocks are bought.. but if QE is not on table then I expect to see some flight to quality.. overall this may mean for more rangebound index action.

Second short target hit. I captured a small part of it but not nearly enough to make me profitable on the day. I should have held longer. Many funds will only execute near the close because they think it is a fairer price. Apparently, many funds were thinking like me.. I don't like to be in the market near close though because market can be erratic and higher risk.

Steve.. I've placed you on ignore. Others, I am weighing a reshort somewhere around the 80ish level. I still think they could take this higher. One thing to note is that the oil markets closes at 2:30.. given that oil has been weak, when the oil market closes it might give the bulls another chance.

Blue, >Predictor, your whole post is clearly motivated by a sellfish desire to attract customers to >pay for your bunkum vendor services. Your thoughts in this thread are rabid, pig-ignorant, >and stultifyingly ill-informed. Lol, I got hot headed when I read that one until I realized your point. It's interesting just how much words can influence people. Well, one interesting or strange dynamic is that we see competition/aggression flair up when we have opposing groups with similar but not identical beliefs. Examples gangs Bloods vs Crips, religions with similar ideas i.e Abraham faiths, i.e shia vs sunni, etc. These interesting aspect is that each group is that the opposing forces typically have quite a bit in common. But, instead of the commonality bringing collaboration it actually brings conflict which seems ironic. I might also add a new response type, the simple answer. The simple answer is an answer that is meant to solve a trivial problem but doesn't meet the higher standards of synthesis thinking. Simple answers could be Type 5 and Synthesis would be Type 6, with Synthesis the most-valued/highest form of reply possible.

And we finally break lower... My tape reading put me on the right side of market. However I was too aggressive, didn't use a big enough stop, or didn't take profits quick enough. I'd like to say I caught it but was stopped out again. The 80.50 was the key level today. I think we may trend lower. There are huge expectations for the Fed and I think the risk is higher they disappoint. One of the things we seen today is just how long the LQ providers can support the market. There were other dynamics today.. as there were some strong stocks holding up/masking overall weakness. They did an excellent job of running the stops today before unloading. Steve, appreciate your informational posts. I think it is better if you call your entries before posting the charts. As an aside, I find that I rarely get anything useful out of other's charts. Also, are those arrows that you personally marked? I don't 'get' why a red arrow should be used for "buying". How do you indicate short entries?

Going to try once more on short side... no more updates though. seems like a bad stop out

Currently short... reading tape. a bit difficult today. Strong Chicago PMI seems to be interpreted as bearish for market... may decrease probability of qe3. Movements may be subdued with FOMC tomorrow. Still short.. Looks like failed break out to upside... still market isn't driving to new lows... yet No longer like short side.. stop out.. had some profits but pushed too far. Market seems likely rangebound but may go higher. Done for day.

I thought I'd share the latest research on money and its relationship to happiness. I'm sorry but I don't have the references to these studies but I'm sure that anyone who cares deeply enough can find them... The research says.. * There is some evidence that money does equate to happiness. Researchers found that up to about 75k/year money does raise the level of happiness but having more money isn't associated with greater levels of happiness. * While having a ton of money doesn't always equate to greater happiness, there is stronger evidence that having a lack of money, that is being poor, does make one unhappy. * There is some evidence that those with larger amounts of money are better able deal with hardship. I say... I think the research makes sense overall. I believe that having good relationships, play/fun, a sense of purpose, health, and a sense of belonging to a community probably have a greater effect on overall happiness. My observation is that many people live in the "must get next paycheck" stage where a certain level of pain is the driving force -- avoiding hunger, avoiding losing shelter, etc. This enforces a certain reality on people. Most people aren't at least initially prepared to go from that state to having relatively plenty because most of these people haven't really thought about the purpose of life, meaning, etc because they haven't had the ability. Likewise, most people are conditioned, trained, and ingrained to work for others versus themselves. Another question worth asking, is all happiness equal? Some people aren't as good looking as others and some may not be as socially skilled. Part of the reason that I love to predict the market and trade is because I'm great at it. For me, I can derive more happiness out of trading then maybe someone who isn't as skilled or doesn't have the same associations. A few months back, I went to an MMA gym to practice some jui-jitsu. I found that I couldn't even maintain awareness of where I was on the mat. It wasn't very enjoyable, and I soon left to try some other activities. The point is that we don't all have the capability for happiness in every aspect of our lives. Likewise, some of the trials we endure that we don't really enjoy give us the greatest long term happiness, such as caring for a sick relative, caring for a pet, or meeting an obligation. A final thought I am left with is that most people aren't happy because they are healthy. Even though, we should be. We all know that being sick can lead to unhappiness but most of us don't appreciate the happiness of health. Being relatively healthy however does give us the capability to derive additional happiness when we embrace it by being active -- i.e by swimming, running, biking, strength training, sports. I think that having a lot of money could be analogous. Those with more money have a relatively greater potential to pursue their dreams but like anything, the effort is required. -- http://themarketpredictor.com

Tomorrow is a day full of market moving information... we might not see much sustained movement until those reports come out.

Not feeling well today and so I'm not trading. I'm seeing some indications that indicate the market may reverse. I think today will setup a range day. Short term direction down ... Some things I'm looking at are sectors, intermarkets, etc. Banking looks troubled today.

A related problem is that people have the wrong goals. I mean that I will read comments on random news paper articles where people clearly have a goal to appear smart, to win at arguments, to make others look bad, even though such behavior could only have an effect on their ego. We've seen that behavior in this very thread. I'm reminded by Barry Greenstein's message that it's not important to win every argument. It is not important to appear the smartest. It is not always beneficial to prove oneself right. I've had a few conversations where I've been exposed to harsh sales tactics or a variation of the dyad attack. Sometimes it is better to let another win or even to appear stupid then to appear smart and give away potentially valuable information. Sometimes it is best to let someone insult you versus to respond. This is wisdom. Sometimes I've made a point when training other traders to say "Hey, if you're busy picking out my spelling and grammar errors then you are wrong focused. You're not focused on winning. You're not focused on the message." I try to keep bring the important matters back into focus.. winning. I believe I've solved this problem as best as possible, and now will move on to other topics. But look forward to any other contributions.

Steve46, you are following the the instigator/competitor role perfectly that I identified. I think it is obvious to anyone reading this, as well. I spent a lot of time in my last post explaining why your accusations were completely false, and I'm not going to repeat all of those. I want to say I've no problem with being identified as a trader who provides his expert knowledge for a fee. But, the truth is that right now I'm working on a project that is far more important to me then mentoring or producing my newsletter and so I don't have time to produce those and am not seeking any clients/customers/etc! This is 100% the truth.. believe it or not. Even one of the admins here knows this.. lol You are free to stay around "tiger" because this thread is all about people like you and how we can create a better atmosphere. ---- Back to the topic, I've identified a few distinct features of the collaborative/competitive mindset for sharing information * Size of group - Smaller groups seem to encourage greater collaboration while larger groups tends to devolve into non productive competitive relationships * Individual strength of group members. I believe that traders who have the ability to provide 'strong contribution' should attract other strong contributors. - There is this idea the strong attract strong. * Classification of group members - It is clear that many vendors here classify me as a threat. While, I don't consider myself similar to any of the other vendors here, it is clear that similar 'types' may gravitate toward competition over collaboration especially those who have "scarcity mindset". Likewise, as a trader, I am more likely to see other traders as threats/competitors. We also have to think about the way that forums are structured. Anonymity has both benefits and detriments. The negative is that it can make people much more nasty then they would ever attempt to be in front of your face. A benefit is that it does offer some protection against the stalkers that are out there. Forums are structured to encourage everyone to participate. But, does this really make sense? I've already identified that only a small percentage of responses are Type 5 responses. Does everyone really need to be heard? Perhaps a thread starter should be able to downvote responses such as to make them 'invisible' instead of bothering to reply to them and likewise "upvote" the most valuable responses to make them prominent. I am thinking here. What does it take to move the discussions to the highest efficiency and the most productivity? What does it take to reprogram people who believe their job is to find problems to find solutions? What does it take to redirect instigators to productivity or at least minimize their disruptions?

Steve46, I'm not interested in attacking you. I don't have a scarcity mindset when it comes to my resources. In reflecting, I do think your reply may fall into the instigator category. Remember, the instigator category is one in which the the reply feigns an interest in the original topic but uses that feigned interest to launch a character attack. Seve46, I think you are jumping to conclusions about my motivations, as well. I don't have any educational product out where I share the information about how to use volume profile. I have only shared it in my newsletter where I offered the equivalent of almost 1-1 mentoring. I don't believe I have any links up on blog offering that newsletter at this time -- I have more important projects. I'm certainly not promoting that product because I don't want any subscribers at this time. My motivations in sharing more were brought about by requests from the members in that forum and if you read my posts closely enough, I believe I shared a great a deal. Steve46, also, I don't see why you feel compelled to mention now in multiple threads that "you don't teach retail customers, etc, etc" unless your intention in mentioning that is to generate some interest in your training. We would never know that you offered training if you didn't keep mentioning it. I am a trader and I do offer a few educational products, and I've always made that clear. I think that was important in my case because I wrote articles and have a blog where others can learn more. But, in your case, it does seem trite that you mention it because frankly I wouldn't know and nobody else would know either unless it was one of your "institutional clients" who probably doesn't read this forum. So, I think regardless of what you intended, your behavior does give a certain strong negative impression that you may actually be looking for customers (and that your behavior falls into the classical competitor mindset that we're discussing). I'd like to redirect the conversation back toward how we can make the forum more collaborative. One factor is certainly the value that the contributor is likely to receive in return and the cost to the contributor. I am more likely to share my knowledge with a smaller group of traders because I know it is unlikely to cost me whereas it is more possible that educating a larger group of traders might cost me. Likewise, I am more likely to share with a group of stronger contributors who are offering strong content and can likely introduce something new to the conversation then with weak contributors who aren't likely to introduce something new into the mix. For me, I have never claimed my primary motivation was to help others, as many other vendors have claimed. My motivation has always been about improving my own performance, and I find that sharing can help me to do that. --- Blog - The Market Predictor

What I am suggesting is that the dynamics in discussions often break down along 2 lines: 1. Competitive -> Antagonistic (extreme form of competitiveness, maladaptive) 2. Collaborative -> Synergistic (best form of collaboration, productive) A good example, I've noticed that when I've tried to engage other vendors here in discussion, the response has been primarily competitive. They see that I offer a few things for sale and immediately perceive me as a threat and someone to "one up". This type of behavior arise from a perception of scarcity, i.e. scarce resources or potential consumers. I was surprised by this because selling educational products is only a small part of what I do. However, I'm not immune to the scarcity principle either in that I'm reluctant to share my insights into the market even relatively trivial ones. Partially, I recognize that many traders haven't did the work to even discover trivial truths. This can be seen as competitive relationship among other traders. I apply the scarcity principle to some of my ideas and things I've learned about the market. The question is how can we move discussions in this forum way from competitive/antagonistic forms into collaborative/synergistic forms? What makes a community more synergistic vs scarcity driven?

I've participated in many discussions on various forums over the internet. And, I've found an interesting dynamic which is that a large group of people are programmed to find problems versus finding solutions. For example, I could post nearly anything of value or not and a certain group of people would look for problems. I believe this is because people are generally programmed/conditioned to find problems. I've also noticed other types of patterned responses and behaviors when studying (reviewing) comments posted on articles. One thing that people seem to be conditioned to do is to attempt to win at arguments or to appear smart. One reason I moved away from discussion groups was because I recognized the way that people were programmed which wasn't conducive to the creative mindset. Let's just think about how people can interact to any post or discussion 1. The Problem Finder The problem finder is programmed to find a problem. This type of person believes it is their job/duty to the find the problem. Solutions don't matter. I'd say most engineering/scientific types of people are programmed this way. The problem finder typically stays on subject and may bring up relevant points. 2. The Instigator/attacker/challenger The instigator type is rather prevalent. The instigator/challenger type is typically looking for a fight but may make some limited attempt to appear to be interested in the subject but is more interested in attacking someone else. These people typically believe it is their job to expose others or may be driven by their own internal idea (i.e traders lose money or that technical analysis doesn't work etc). 3. The Non Informational Reply This is a reply type that is not informational, off subject, etc. 4. The Interrupter The interrupter type will try to steer a conversation in any number of directions to avoid conflict. This type of is almost as bad as type #2 in terms of harming creative discussion. But, this type is very important when dealing with a type 2 person. The question is how can we drive internet discussions away from type 1-4 responses toward a better response type? Where we define better as more productive.. Type 2 and Type 4 are generally disruptive response patterns. Type 3 responses aren't really meaningful. Type 1 responses can be useful but often will lead to Type 2 responses. A Type 5 response is the best response but very rare.. 5. The Synthesizer The type 5 response is the synthesizer response which will take some elements from a post and add other elements to progress the discussion productively. -- http://themarketpredictor.com

Ah I know that book. I have mixed feelings on it. I think the first few chapters are great about quantified statements. I embraced this concept strongly in making my predictions. It is like "brutal self honesty". I also like how he talks about information vs non information containing statements. But when it comes to testing technical systems, the work he did there isn't anything that value. I think the lesson from that sort of analysis may be more along the lines that no simple rules are likely to deliver outperformance over a very long period for all instruments.Okay fine... doesn't matter if I can make a bundle before the market catches on. I'm a highly discretionary trader and do also trade my own fully defined systems (with some discretion). I find the mix useful for me. As for the systems he presented, I think his purpose was to prove they didn't work.. so not sure I'd find anything of value there but never know. - Blog - The Market Predictor

Josh, first I think you took this the wrong way. I am speaking about my personal experience, and also trying to provide some information for struggling traders --- of course, not on a platter. Based on what you're saying, we probably use similar types of methods for our day trading. Let me be clear, if you're happy with your information and your results then certainly you should continue to do that. However, let me also be clear that if I were using traditional time/sales, DOM, single market price based charts, Fibs, etc (all stuff that most try to use) that I would be at a significant disadvantage which would translate into fewer opportunities, larger risk per trade, less confidence, and lower probability trades. I am primarily a tape reader and a discretionary trader -- with a few additional systems I developed that I trade. I believe that you attended my free tape reading webinar (hosted by TradersLab) where I shared how I was able to successfully read the orderflow using a very simple technique that I invented and nothing more then a price quote. I still use similar techniques. But, today I use specialized software that gives me a greater insight into the dynamics of the market, allows me to control my risk to a greater degree, and allows me to take a much finer grained and intimate view of the market. Having said that, I still have to execute and pull the trigger. My techniques were developed over many years and intensive, intensive training, and I've never even suggested that software alone could produce success. Also, I'm sure that many traders here would be very appreciative if you share your calls in real-time, analysis, etc.

Your problem is a common one. You've probably created a detailed plan about how you will use tight stops, how you will be disciplined, and how much money you will make per day. The problem is, if you are like most new traders, you didn't check your plan with reality and your expectations aren't realistic. Trust me, I was there once. Only with experience and development did I learn that nonsense rules could cost me money. tight stops are difficult to use (and the reason for most traders losses), and that my early plans had zero basis in reality. The development from that level to the level I've reached required significant energy and the ability to "throw away" what didn't work, a strong ability to invent my own methods/go my own way, the willingness to question everything while not becoming a skeptic. Let me be blunt, many/most educational vendors don't really trade and couldn't be profitable even on a realistic simulator. Yet, I'm sure there are good traders out there who do offer education -- and I'm not just thinking of myself. At your level of experience, I think it makes sense to try things out -- have fun. I think it makes sense to try a lot of things to find what you are good at. Try various free trials.. try to get an exposure to a lot of different trading methods and "schools of thought". The point in all of that isn't to "learn their methods" but to find what clicks for you... The other thing that makes sense (for me) is to do a self-assessment. I always preach "Focus on your strengths". Focus on what you are already good at. Find where your strengths are and what makes sense for you and then you have to realistic about what aspects aren't working. The problem is and I think you are already seeing this is that the market doesn't provide a structure. On the one hand, creating artificial structures often doesn't produce the results one had hoped for while going about it without a structure doesn't seem like a recipe for success either. You have to create your own structure..a structure that is focused enough to produce results but flexible enough to allow you to adapt/re-sort/re-energize and this is not easy. The other path is to try to find a mentor who already has a lot in common with what you are trying to do but who maybe has more experience and then just try to copy their structure. That's another path but not the one I took and maybe not appropriate until you develop more experience... You might also look to see if your area has any local trader's meetup groups.. again getting a lot of exposure early to try to find where your strengths are. - Curtis Blog - The Market Predictor

I use volume profiles extensively.. I just don't use market profile theory. I only found its use when I completely detached it from what I read and thought I knew. Exactly, this is why I eluded to the interplay between the various component forces. Someone asked why I picked up using the volume profile. The reason was that I read about it, obviously many futures traders used it and it was promoted by prominent teachers in the field. I agree that specialized tools aren't required for taking longer term trades. I anticipated the market hundreds of times without ever even using volume. But, for trading/competing intraday on a regular basis, I disagree.. but it depends on the type of trading sure. One can trade from pure price action but the opportunities are fewer... btw there is nothing special about volume profile... one read everything that can be read in volume profile from price chart only. I developed a method to do this... in fact one can read more. I may write an article on some of these ideas in the future. Most probably don't understand the VP except those who really studied it.. away from books and such. Of course, market profile is no different then candlesticks or any other charting/graphing method. This was why I had a problem at first. I thought it was something more. I may use candlesticks and another trader may use candlesticks.. tells nothing about the strategy we are using.

You have to understand that the futures are made of stocks. The value of the stocks determine value of futures. If the stocks and futures get too far out of line then bots or computers will buy/sell futures. I do not use premium or anything like that but I track equities to know what will happen in futures. Everything is arbed against everything these days. Single market analysis has a use but only using price doesn't provide enough of an edge in most cases. I track order flow in futures and the action in other markets. If one observes buying at tops and selling at bottoms, the'yd be a fool to attribute this to the institions which are known to sit LIMIT. Most institutions define a range where they want to do business... i.e selling at limit and then sometimes at market if they don't execute 100%. But if one does observe buying at tops and selling at bottoms. This contra folow activity is caused by equities bots, imo, running into institutions. Sometimes they overrun institutions... sometimes they are stopped by the institutions. These institutions like to operate in the futures. They are old school.... buy low/sell high guys. Keep in mind everything is a simplificiation.... if the equities are getting hit then the LQ providers who arb against equities will have to pull bids too. Most trading is algorithmic. Another factor is that funds who hold baskets of stocks will hedge in the futures... this is another activity that will keep them in line. As a fund sees their value dropping, they go into the futures to short as hedge.

Nice call. Neg, these order flow patterns I trade off can change rapidly... perhaps the RP bill passing concerned some investors. On many days they do tend to get into a routine but that hasn't happened today... There were also sellers iniating shorts from 38.... As we seen, my initial exit was poor but was indicative of the higher risk. The LQ providers eventually got overrun. This happens quickly in bearish markets but can take forever in normal markets. Again these are just narratives.. whats important is the pattern. Maybe, there were long traders like me expecting to challenge 40 and when they didn't see it they bailed. Also remember institutions aren't the only game... there are other people playing other games. The equities bots are very important for trading index futures. I believe in this case, we had institutions short from 38.. LQ providers and some long institutions at 36.50 and then equities bots executing into the 36.50. The equities bots turned the game in this case, imo.

Renewed selling. House passes Ron Paul Bill. I support many of Pauls' ideas. Lets see if market responds. Market looks to be topping here. A break of 36.50 will create a run. Correlated marktets have turned negative. I expect new lows shorlty. No more trades for me though.. late day is more random. Short... last trade of day... looks too good to pass up