Predictor

We may run to new highs shortly... be careful the short

Take profit... I don't like to push my short trades when market is bullish.. I tend to lose money late day.. make money morning. market may run lower

Right now..sorry can't share. I'm offering at 73.75.. not enough evidence to go market short. Adjust to 73.50. Filled.. will monitor.. probably take scalp

See some indications the market may be topping...

I've hit my profit target today and done for the day.. actually at the garage getting car checked out. The weak jobs is driving the market now but the housing is expected to be good. I closely track not just the MAE/MFE for my trades but for other traders too...

Forget the 1%/2% risk.. it doesn't mean anything without probabilities.. Futures are probably better for small accounts.. you need leverage..

First, we need to define what you mean by scalping because it means different things to different folks. Scalping for 1 tick = $12.50 - $5 COST= $7.50 profit per trade - Lose a tick and lose $12.50+$5 = $17.50... Second we can define scalping based on whether we hit or take liquidity on entry. Next we need to know frequency... someone might come in and take 1-2 trades per day with large size to capture a few ticks.. another might take 15 trades per day IMO, scalping huge size for a few ticks isn't all that desirable... However, if one can take more trades per day with EDGE then the sharpe ratio will go up.. this is one reason why HFT firms almost never have losing days I wrote about this on my blog.. ( I believe) under small bet vs big bet trading. It makes sense everyone would like to make small bets because such a method would be highly scaleable.. not much risk. The concept is at odd with EMH... EMH implies only rare opportunities will exist... scalping requires MANY opportunities I do take some scalp but only 3-4 ticks minimum... I am typically looking for a bigger opportunity though. I take many 1 tick profits but I dont enter to take 1 tick --

Just exited scalp long.. was hairy that for a moment... very heavy limit order resistance.. when that limit order resistance lifts (if price is able) then market moves... often on low volume. I closely watch the MAE and MFE in my trades...

I'm out... really heavy selling came in. This could run more but again just a scalp. I noticed really heavy buying burst come in just before the market tanked. They weren't able to drive higher.

Currently short for a scalp... seeing what develops here not going to push this one

Looks like we're headed up... my platform is down today. So I'll make a call.. was bearish coming in today. We might get a small rally this morning and then sell off late evening.. I don't think we can hold new highs but I think we will at least try.

This TL user may have been me -- as I thought of this idea a bit. Tactics define how you carry out a strategy. For example, your strategy is your overall intention "you think the market will go down". The tactic is how you carry out that intention. Do you just run out and short the entire market? Do you short a specific sector? Do you go long the market and short a basket of stocks? Do you wait for a pullback? Once in the trade, what size stop do you use or how do you know to get out? These are tactical questions. Tactics in my opinion are all about increasing your reward when right and/or minimizing losses when wrong. Good tactics can't make up for bad strategy but a good strategy can fail due to bad tactics. Another similar concept to tactics is "execution". Execution embodies the idea of how well you can actually implement your concept. Its how well you actually trade. A lot of what I train to do is execute at a high level via my tape reading skills. In this style of trading, I take a much different view of the market then most others. A lot of traders are all about waiting on the "setup" or a great opportunity but execution trading is all about taking every single opportunity and recognizing which ones are working to push them while taking small losses or break evens on the ideas that don't pan out.This style of trading requires a high level of performance. For that reason and others, I always have a daily loss limit and other "checklists" such that I cut back when I'm not trading at my best. Curtis Blog - The Market Predictor

There were 2 reasons they had a high motivation for success. First, they did pay for training. Regardless of the quality of training received, they made an investment of both time and money which shows a relatively high level of motivation. Second, they were guaranteed to get a payout if they were profitable and they had charts (and belief) that showed how much they could make. Obviously, many probably just copied the leader but I'm pretty darn sure that at least some of them tried to make their own thing work. Not a single one succeeded. I disagree that any of these traders were profitable. I don't call $200 profitable. I call that break even. I'm not surprised at the % of the traders who lost.. just that not a single one made any money. I'd like to see what rules they were trading under (and avoid them). I.e their risk limit per day.. did they have to use ultra tight stops.. that sort of thing would be very interesting to see.

Did you read the report? 130 some traders tried to make money in the futures and forex, and not a single one made money. I think that is important. I don't see why you would call these students, dedicated enough to pay for training, and highly motivated to achieve payouts as not being traders. They obviously weren't successful traders but they had a huge motivation to succeed. Doesn't anyone find it odd that not one, even by chance, made any money? I bet if we were allowed to open up 130 random futures accounts at a retail brokerage firm that we'd see a similar story. I'd like to see what the rules they had to follow were. If anyone knows the payout charts or the rules then I'd like to see that. Full Disclaimer: I'm a trader and trading education vendor.

I thought I'd share this.. some sobering stats on success in the futures industry. http://www.cftc.gov/ucm/groups/public/@lrenforcementactions/documents/legalpleading/enfprotradingcomplaint120711.pdf My approximate summary -- read the report for particulars. Pro Trading/Regan brought in nearly a million dollars Regan traded on a simulator -- never placing real traders. None of his nearly 130 traders advanced above level 1 None of PTC's commodity traders a net profit of at least 2k (required to advance to level 2) Between 2009 and 2010 the 36 commodity futures sub accounts traded lost 78,557 and no sub account earned a net profit Cumulative net profits of the best traders were only between $13 and $200

I've been always exclusive futures traders but there are good reasons to trade stocks. Reasons given There are thousands of stocks. Makes it more possible to find a market that suits style. Stocks that show trend action and have underlying fundamental reason for trending are called "in play" and may be more predictable Some traders believe there is an edge in spreading/hedging by trading multiple stocks long and short. Such hedging makes it possible to exclude certain types of risk. This is possible in futures but not typically used by retail traders. Again as to the above, in futures you have to trade the bad with the good whereas a stock trader can pick the strongest or weakest stocks to trade. Stocks are more granular. Its possible to hold many small positions in many individual issues. Futures requires holding one large position (but is an aggregate of many individual issues). This aspect makes it cheaper to experiment and try new things with stocks whereas that isn't as much a possibility in futures for small account holders (most traders). As a long term futures trader, I for sure believe there could be more edge to be found in trading stocks.. I don't trade stocks for the reasons you cited but if I had a larger account then I'd probably trade ETF's/baskets more so.. maybe not individual stocks but sectors/etfs. In essence, stocks give one more room to find creative plays.

Some traders have did just that.. opened multiple accounts after MFGlobal so they wouldn't be locked out. I would guess that opening multiple accounts and withdrawing any excess capital should be sufficient. Most futures brokerages don't require that much margin for intraday positions. Overnight is a different story. As you note, stock accounts are OK because they are protected. The futures accounts are the ones at risk. I believe that either all futures accounts need to be held in a pool (oversee-able by the regulators) or that we need insurance extended to futures accounts. I like the idea of 100% insurance of first 25k, 95% insurance second 25k, and 85% up to 50k more. This sort of scheme would still encourage individual accountability but protect the bulk of funds in futures accounts. Another option would be for SIPC to just be extended to futures accounts 50k. We don't need much insurance in futures because of the leverage, and so we shouldn't have to pay for high insurance levels.

This is not really true. I find that setting a risk limit per day works better then setting risk limit per trade... A good trader can risk up to 5% per day.. if you think the limit is 2% then you're probably just basing on what people have said. I've run monte carlo simulations and your risk-of-ruin (if you have an edge) doesn't change dramatically from 2% to 5%... you can even risk more with a big edge.. I think 5% is high though. A great trader could do 7%... I risk that much for some of my big edges. A 5% risk is $250 or 5 points... let's say you go 7% (sometimes you have to risk more with tiny account) then you have $350 or 7 points of risk. That's enough to take either several "scalp" trades or try for some larger runs. At 5k, you won't be able to trade overnight though.... which may/may not be a limitation The better way to manage risk is your account to instrument leverage... an ES is worth approximately 67k... so if you have 5k you're at 13.4x leverage. 8x leverage is about all most can take.. unless you are scalping as author suggests.

It can be done with futures. However, you have to be a highly skilled trader to do this in futures because the leverage is so high. You will likely lose 100% without training. You know I started at investopedia, paper trading.. I had a knack early on swing trading on the sim. It was just really easy. But, I didn't have the skills required to trade leveraged or to day trade until many years later. Let me give you an analogy to what you're asking. I've read some books, maybe several books, on racing. I'm tired of reading books, and I want to find a race car that I can jump in and push it over the red line where even most professionals drive. And, oh I don't care to get any training. Do you see any problem with that idea? Starting in the futures market with less then about 7k puts one at a higher probability of blow out. Although, it can be done. The standard recommendation is 15k for futures. 15k is about 4x leverage. 5k is about 13x leverage. There aren't many people who can trade with that much leverage, if any, without extensive training. You can't trade stocks with 5k due to PDT. Your best bet may be Forex where you can trade very small and work your way up. I would recommend starting with Forex with a $500 account and seeing how it goes. You could also try your hand at NADEX. NADEX has a wide range of products that can be highly leveraged. Many professionals believe that it is harder to make a profit in those markets. So, your best bet may just to be to trade on the simulator until you are 100% sure that you have it what it takes. Keep saving.. get an extra job. - Curtis The Market Predictor

For those who don't know.. PFGBEST was the sponsor of the free SFO magazine -- which I felt was rather nice -- now closed They were the sponsor of Robbins World Cup. I believe they owned the World Cup, as well -- but not sure. They were also one of the only -- if not only -- broker carrying NADEX products. I know from speaking with the NADEX officials that they were very big on trying to make their exchange transparent and a big effort was to bring on independent FCMs like PFGBest. So, this is surely a blow for them. I believe they were the largest FCM, as well. All of these things are bound to have negative consequences.

I've did pretty. But, I think it is more useful to ask what it really means to be consistently profitable? I spoke with the trading manager at a major prop firm and he told me that most of his traders made most of their profits during just a few months out of the year. The other months were marginal. It is well-known that most active traders benefit from higher levels of volatility. Trend following strategies are notorious for having rocky periods and some strategies such as writing naked options are consistently profitable for long periods of time but suffer from black swan risk. As a day trader, I like to see myself "breaking even" vs suffering steep losses. I think the ability to break even is important in trading.. a trader who can break even during the lean times and do well during the good times can build up an account. I like to look at my largest dd as it relates to monthly % gains.

MMS, I've often believed that some types of futures trades would do better taken with trading vertical spreads. I traded these at NADEX. But, the time expiry and higher relative costs (for small positions) were difficult obstacles to overcome. As a directional futures trader, I've found the "standard" options market complex to understand. Even so, I think there could indeed be value in trading an options position when one thinks there could be a bigger move and doesn't want to get stopped out for a loss such as could happen in futures. If I could find a spread that traded like a futures position but with limited risk and had an expiry of about 2-3 days then this would be ideal for me. The NADEX spreads are only good for 1 day which is serious limitation.. as it doesn't give much time for the position to recover. I'd like to find a platform that allowed me to trade options like a futures position -- basically something to similar to what NADEX offers but more liquid and something where I could take out a 2-3 day movement. It needs to move as close as 1:1 with the futures market. Another idea I've had would be to convert a futures loss position into a limited loss spread but I don't have any experience in that. -Curtis http://themarketpredictor.com

If this turns out to be true/serious then this could be very bad for futures industry. I know PFGBest is sponsoring Robbin's World Cup. If not resolved quickly or if the issues are serious then this could have a very bad effect on many traders.... " One broker at the firm said that Wasendorf's son, Russ Wasendorf, Jr, told employees about the events earlier in the day, saying that a suicide note had been found alluding to some kind of financial troubles with the company. "Everybody here is obviously in shock," said the broker, adding that some employees had begun packing up their desks shortly after the announcements. "Pretty much everybody around here said we're doomed." http://www.reuters.com/article/2012/07/09/broker-pfgbest-idUSL2E8I9E5620120709 http://www.zerohedge.com/news/futures-brokerage-pfg-best-freezes-accounts-following-discovery-accounting-irregularity

I thought I'd share my risk management plan and let me know what risk management principles everyone else uses here, as well. I am day trading the futures only. I was long during the recent "flash meltup" (for a scalp) and while I was right positioned: those sort of events remind me the importance of a risk management. Risk Managment Principles 1. Always set a stop WITH each position -- i.e using brackets (not manually unless something goes wrong). The stop could be a huge stop. It could be a small stop. But, I always want to have a stop set to avoid the rare event where I can't get out fast enough. I've spoken a lot about the problems of stops but I still always use them. 2. Always check reports for breaking news before the trading day and be flat during those reports unless I have a strong reason not to be. 3. Set a max daily loss limit for my discretionary trades. I find this more relevant to me then stop size. I believe keeping risk below 5% per day is prudent but I could push it to 7%. The main thing is that I have a daily loss limit so that I can pull back on those days when I'm trading poorly. Also, this tends to give one a bigger stop which often works better then smaller stops. 4. Do not hold positions across the maintenance period. I do trade 24/7 but the maintenance window may be a more risky time to trade. 5. Do not hold positions over the weekend. 6. Always close the platform when finished. Closing the platform will inform me of any working orders or orders I may have forgot to close. 7. Be aware of order types and platform operations. For example, in OEC if the platform is down and a strategy order is sent then the stop/limit isn't set. 8. If I'm up on the day and hit my profit target and start to lose then consider taking a break for the "day". A day for me is a session 1/2 day. 9. Maintain basic awareness of market factors and sentiment. 10. Avoid trading if fatigue or other factors make it such that I'm unlikely to perform competently. I'm interested in hearing others risk management plans. Thanks, Curtis http://themarketpredictor.com

I PM you someone who might have something for you.