86834

I'm here posting because i'm not trading, i take december and the first half of january off. How often do i spend time posting on these forums?

As for time for posting live trades, in danger of sounding like a snob, but i'm gonna say it anyway, i stand by that no professional trader (maybe a couple) are posting on the forums during market hours if they're trading, and by professional i'm classing people who have made a career in the financial markets by rising through various paths in the city. I stand by my statement that sitting at home trading for yourself and trading in the city are completely different worlds (i'm not for one moment knocking people trading on their own at home, more power to you), but you have to accept that it's like comparing sunday league football to the premier league. Active city traders and fund managers in the city work together, go to meetings together, play football together, get wasted together and go to each others weddings. During market hours if i've got a debate of an observation, am i gonna mess around on the internet, or sit and talk to the other 7 traders in my office that work for me? At the end of the day if people on these forums were that good 90% of them would go to a firm in the city and go 'hey look this is my trading record and pnl, i'm hot stuff' and you would get hired if you can prove you can do it, then you wouldn't be risking any of your own money, and you would have massive rapid potential to the upside in terms of earnings. When i started in the city with three other grads, it took us about a year to be a clip size that was earning us 1m a year. Plus once you're in the city you're learning for the best of the best, have the best tools on the planet at your finger tips, and have massive networking opportunities. Put all these factors together and you have two different class of traders that are worlds apart, and like i say i stand by my statement that 'professional' traders in the form that i described above are not gonna be posting on forums for the reasons above. If i caught one of my traders messing around on a forum during market hours i would fire him. Like i say, i repeat i'm not knocking anyone, or putting the forum down because i think it is a great place for people wishing to know more about trading to come together. However when i read posts like these they are full judgmental heuristics The heuristics are all over the place because 99.9% of traders trade their beliefs about the market, and once they've made up their minds about them beliefs, they're highly unlikely to change them. So when you go and trade whatever market, you think that you're considering all the available information (all i need is a bar chart, price actions tells me everything), but instead you've just eliminated most of the useful information thats available by your selective perception. For example when you're looking at a 5min candle stick chart thinking thats all you need, then that a heuristic called law of representation, meaning that you are assuming that something is assigned to represent something. So you look at you candle charts and think to yourself that it's the market trading, when in reality it's just a line on a chart, no more, no less. However you accept this as being meaningful because... you were told it was meaningful when you first started studying the markets, everybody else uses candle stick chart to represent the markets when you think about the market trading you typically visualize a daily bar A candle chart doesn't tell you anything about how much activity occurred, and it doesn't show you how much activity occurred at what price. There is a lot of information that is extremely useful to a trader that isn't shown in any form on a candle chart. For example did the transaction involve opening up new contracts or closing out old ones? What kind of people were doing the trading? Did a had full of floor traders trade with each other all day long, trying to outguess and outmaneuver each other? How much of the activity was in a single unit, how much activity was in large units. How much was traded by a single trader, how much was traded by large funds or institutions? Also a candle chart doesn't show who's in the market, like how many people are long and short in the market and what their position size is. All this information IS available. I can go on and go, like how chart gives you no psychological information such as how many people are sitting outside of the market with the belief it will go up or that it will go down, and are they likely to convert them beliefs into trades. However it doesn't really matter that much because you wouldn't be able to trade using any of it because of your judgmental heuristics and biases. The information will be eliminated by your selective perception There are so many biases that non professional traders (even some profession traders) have. For example the lotto bias... which is about the increased confidence people have when they, in some way manipulate data, as if manipulating that data is somehow meaningful and gives them control over the market. Because you think the candle chart is the best method for trading toy manipulate the chart in some way until you feel confident enough to trade it. People think they can make money by buying/selling at the right time and they simply want to know when to buy or sell. The average person here wants to know what to buy/sell right now to make a boat load of money. Most people would rather have someone tell them what to do.... Non professional traders who try and make it on their own become fascinated by entry signals that they perceive to be synonymous with a complete trading system, thats because you get a sense of control. Unfortunately the market is far more complex than that. Like i say, look at what happened to the dotcom day traders. I'd like to see how many people here will still be trading in 7-10yrs, but only a couple.... When i look around on the internet from time to time and see what systems people are trading etc, i'm shocked that a lot of people think that they're 'systems' For example for all the tech guys, who think thats all they need, how many of you have considered probability rate information in developing your TA trading system? Probably not, i've never met a non professional that has. The majority of people haven't even tested their system properly, they think they have, but they haven't, i would say the majority couldn't post accurate data on the expectancy of their system You need to overcome the biases that are affecting you or you will never be a good trader. Like i've said, making a couple of million off a candle chart doesn't make you a good trader. You need to consider biases such as representation bias - people assuming that when something is supposed to represent something, that it really is what it's supposed to represent reliability bias - people assuming that something is accurate when it may not be lotto bias - people wanting to control the market so they get all hung up on indicators and entry signals and all that rubbish Conservatism bias - once you believe you have found such a pattern and become convinced that it works, you will do anything you can to avoid evidence that it doesn't work (i think of you w in particular here....) randomness bias - people like to assume that the market is random and has many tops and bottoms that they can trade. The markets are not random at all. Distribution of prices who that markets over time have infinite variance, or what statisticians call long tails at the end of the bell curve. People fail to understand that the even random markets can have long streaks, and as a result, trying to trade tops and bottoms is the most difficult type of trading there is Then even once you accept these, then you need to integrate stuff such as degrees of freedom and postictive errors I'll say it again, look at what happened to all the dotcom day traders, making millions a year from their bedrooms. They boxed themselves in and failed to truly understand the fundamentals of what they were doing in every aspect. They had something that worked... yeah it worked then for a few years tops and gave them a false sense of security that they actually knew what they were doing. Where are they know? I read an article about a dotcom day trader working in mc donalds.... Market conditions are reflected by the people trading them, now days the day traders from their bedrooms are gone and the massive majority of the financial markets are professional city traders. There's few places at the top and if you really want to make it in this game you need to pull out all of the stops and fight to stay. Yeah you might have something thats working now for you, but it won't last, and how many of you will make enough money in a 2/3 years to never have to work again? Like i say, look at the dotcom traders.... Boost!

I know the point about billionaires had nothing to do with industry, i was just using the example you gave for the 'putting you're eggs in basket' I think on the macro scale fundementals are most important. I'll start another thread on it when i get up because it will stray off the original topic. It's 6:50am here and i haven't been to sleep yet and i've already broken my new year resolution by smoking a 20 deck...

Feels kinda good to be nominated

very true, and all the traders in the city know this. This is why many prop firms are packing up shop and calling it a day, because they can't compete with the computers, and it's getting harder and harder for new guys to get into a firm. This is evident in the majority of markets as a lot of the volume has dropped off. Like i said in my above post, when i was prop trading european fixed income markets, on the bund alone i had a clip size of 1300 contracts and got to keep a 65% cut, and it was easy to fire that size off - everyone was making mega bucks. Now days the volume isn't there anymore because people are being squeezed out, max clip sizes knocking around for bund traders is around 500 lots, with 100 - 150 being traded technically and the full lot being unloaded when playing figures. I remember the days when if the schatz went bid 5ticks, you went bid 1000lots on the bund and took 20ticks as easy as that, but them days are long gone now There are still people making a heck of a lot of money, but not as many as before. A lot of the prop trading will move to over the counter markets such as metals.

So do i.... for example by bringing fundementals into my trading alongside technicals i'm maximizing profits per time invested because i'm taking advantage of more opporunites available in the market by using both techs and fundamentals.... rather than saying all i needs is techs

i think you completely missed the point of my post i'm not saying i'm coming from a fundamental approach, rather than technical approach as i use both in equal amounts. In your example of oil and property if both work why not combine the two to make more money and have a more balanced portfolio, rather banging all your eggs in one basket (what i interperated fw as saying), so when the property market goes pop and you loose the property game (all them dotcom day traders who thought they were masters of the universe with their candle hooks) you still have your oil billions.... The way i took this thread was someone saying fundementals are basically a load of crap, prove me wrong if you think otherwise. That's the bit where i put my 2 cents in. Like i say, i'm not one to limit myself, anything that i can use to give me an edge i will, and everything has a place in this game. For example if there's no market moving figures out on a certain day in the fixed income market then i'm trading from a very technical point of view. If there are market moving figures that are out of line i'm gonna hit the market on the bid/offer if i feel it is right to do so and profit from them large quick spikes. If the fundamentals are pointing the market in an overall direction then i will take this into considersion when spreading bonds

I agree that there are people on this forum that know what they're doing and are making money, and thats why i like having a browse in my spare time and reading what these people have to say. All you have to do is compare the premium forum to t2w to see that I didn't mean to come across like i was knocking spread betting or retail trading etc, but i do think people at times do need to take a step back and remember what they're playing with here... the global financial markets. If you're making money then money is money at the end of the day, but to say something along the lines that fundamentals is useless or you don't need to bother with it, in my eyes just makes you look like a plank who really doesn't have a clue (not aimed at you fw, you're the only one on my friend list ) Here's my take on things... When i browse the forums on the internet you have a small handfull of people from these places who are making money, and more power to them, however... 99.9999% of people on these forums, including some of those who are making money don't really have a clue whats going on behind closed doors in the city eg prop firms, investments banks etc I'm not implying i know everything, far from it, but as someone who is a professional trader, and has traded in the city, and now runs their own private fund, i must admit it does irritate me when i see someone saying 'bah all you need is a chart, fundementals is a load of bollox' because the only thing that's a load of bollox is that statement. In the global financial markets there are all sorts and every sorts going down, from basic t/a to mind bogling algorithms and financial models that will blow yours and my mind into the next decade. Investment banks spend millions upon millions upon millions researching fundamentals and incorporating them into their trading strats, then invest billions upon billions based on them. That's fact wether you like it or not. People need to realise that we're in their backyard, and sitting there saying fundamentals have no place or whatever, is just plain ignorant. Yeah you can make money using just a chart, but to me good solid trading is being able to adapt quickly and being able to adjust to anything the market throws at you and, understanding the underlying forces that are pulling the levers will help you with this goal. Fundamentals play a massive role. Look at all them daytraders in the dotcom boom using candlestick patterns and thought that's all they needed to know, then the pop came and they all went flat on their face. Most of them are working crappy average jobs now in retail.... says it all.....

Without coming across like i'm putting myself on a pedestal, or knocking the fourm (because i'm not at all), when you say about people providing a valid argument or doing live trades, you have to remember where you're discussing this. The majority of people on these forums don't know what they're doing... fact... and i would say out of everyone registered to this forum, i'd put my money on less than 1% are actually professional traders, or people who make a full time living out of this. How many professional traders are gonna be posting on internet forum during market hours? Also for these types of trades that i mentioned above, it's impossible to show on a forum live, because by nature they tend to be either a massive spike that retraces just as fast, or market direction will change very rapidly leaving the trader who uses just a bar chart behind, and if you didn't know that there was a figure out, how are you gonna explain, let alone trade these moves? I never said you couldn't trade without fundamentals, i said you would only go so far. If you have two traders trading a fixed size of say 50lots, one who uses just a bar chart and one who uses a bar chart but can properly apply fundementals to their trading and play the figures, the latter would wipe the floor with the first one. There are facts that you have to accept, like when it rains people get wet... Professional traders are at the front of the information curve ... FACT, prop firms, investment banks etc all spend a vast amout of money on having the fastest most up to date information, that is far out of reach of non professional traders, unless they already know about this stuff and they happpen to already be wealthy and can afford the means before they start their trading journey.... FACT. Waiting for the figure/data to come out on bloomberg/cnbc on sky or cable TV, or internet forums doesn't put you anywhere near the front of the information curve I've attached a screen of what these typical moves look like. It's a 5min Bund chart and is highlighted in a red circle. Professional traders are in and out of trades like that while 99.9% of people are sat looking at their bar charts covered in indicators wondering what the hell just happened. FACT - this is what i do for a living Don't judge the skill of trader on just how much they make. If someone has a candle stick pattern that gives them 2 ticks a day, and thats all they know, all they have to do increase their size acording to their account size and they'll make a lot a money. Doesn't mean that they understand whats going on tho. Earning a couple of million a year doesn't mean you're anyone in this game, all of my colleagues earn more than a couple million a year but in the grand scheme of things they're nobodies... i'm nobody. Don't put yourself in a box and say all i need is a bar chart, because you need everything that is gonna give you an edge in this game. Heck, when i was prop trading they used to send us to a sport psychologists every now and then to try and help us find a mental edge (they always used to tell me that i shouldn't have black charts because they make you trade angry lol). When people get involved with trading they seem to get so hung up on the concept that there's a 'system' out there thats gonna give them exact entries, and all they need is one method. Not as simple as that i'm afriad. A professional trader could give the techinical methods they use to trade to anyone here and the majority will still lose money - i've seen it many times. You need to accept that it is what it is. Professional trading and sitting at home spread betting or trading retail are competely different worlds. Fundementals play a huge role in the financial markets. Tell me this, if you're trading the fixed income markets and want to trade a calander spread that gives you a synthetic position with lower risk and margin, how are you going to do it without fundementals? Or how are you going to do a butterfly trade? These methods are lower risk and have high profit potential compared to trading outrights. Like i say tell me how you would do this with no fundementals, i really am intreeged... As i said before, i'm not knocking anyone or the forum (i like the forum or else i wouldn't post on it when i get time). People need to accept what is and remember where they stand in the grand scheme of things. There was a time when i used to think all i needed was a chart, but when i first started prop trading my mentor said to me 'the stuff you're not interested in learning is the stuff you need to learn most of all' - it was when i fully took that on board and took the apporpiate steps, that i started really going somewhere.

IB is a very bad source of data. All depends on what ou want out of your charting and budget etc. I suggest pro realtime - it's cheap and a very good source of data. http://www.prorealtime.com

Fundamentals are extremely important, and unless you fully understand the impact of fundementals on the market that your trading will never really progess and you should stay away from trading around figures. Professional traders love their figures, when i was prop trading european fixed income markets, sometimes we used to take the whole week off ahead of ECB rate cuts, or non farm payroll figures, because on these figures is where you really make the cream. We used to come in for 11am, unload our size in the market on the release of the figures over reutures, make 250k, be out the door by 2:30/3pm latest, and go for a pie and pint. It's them days that made up for the majority of money we made in a year. Figures are not as simple as the EBC cuts rates, so bonds go up etc. You need to understand your market and it's relationships, and what is priced into the market (so what is expected). For example if you're trading fixed incomes, the schatz may be more likely to react more violently to a rate than say the bund because of the 2yr life compared to 10yr. Or for example comments concerning inflation that indicated more room for rate cuts can cause the market to go bid. But as i stated you need to be aware of what is expected and priced in, and how the market will react in ever sanario, so you know exactly what to do whatever the the outcome of the figure being realeased. To give you an example of what i mean, on the 4th of dec 2008 we had some of my fav figures out. We had riksbank rate decision, eurozone gdp q/q and y/y, bank of england rate decision, ecb rate decision, initial jobless claims and trichets press conference.... Riksbank banks previous rate was 3.75% and the market was expecting a cut to 2.75%, so a 100bp cut was priced into the market as this was what the market was expecting ECB previous was 3.25% and a cut to 2.75% was expected, so a 50bp cut was priced into the market.... Sitting there thinking a rate cut is gonna move the market isn't gonna get you anywhere because this is priced into the market, every man and his dog is expecting a rate cut, the value and opportunity comes in when the figures are out of line. So think about it... for example the ECB cuts 50bps the market is gonna do jack because everyone is expecting that.... but what happens if they cut 150bp's? Thats when you trade figures and make a heck of alot of money in a few seconds and leave work early because you know you've got an extra 250k-500k coming in at the end of the month.

I loved prop trading, especially when i first started out and thought i knew it all. I was assigned a trading buddy who managed my limits and what markets i could trade and he dealt me a lot of tough love in the early days. I remember the day i went from 1 contract to 2 contracts in the bund, that was the day i knew i was gonna make it, and i never looked back. I prop traded in london, and it was quite relaxing and layed back really (as long as you were making money), and the social aspect of things were great. I got set tick targets by the head of our team, i hit the targets and my clip size went up, simple as. If i lost X amount of ticks i went back down a clip size. At my peak i had a 1300 contract clip size in the bund, plus i traded the schatz and eurostoxx, and did various butterfly trades, but now days it's a different market and i don't know anyone who has a clip size bigger than 500. It's hard to unload size into the bund now because the volume isn't there anymore. Like i say 'back in the day' we were popping off 1000-1500 contracts on each trade and making about 6 trades a day. Now i'm only trading 100 lots and popping off the full 500 on figures and having 3 trades a day. For me personally, prop trading did a lot for me, and i think that if i had never had done it, then i wouldn't be where i am today with my own fund. I had a great set of experienced traders around me, TT, CQG, Reuters and had a massive laugh along the way. Personally i owe a lot to two people from my prop days.... 1. My trading buddy/mentor who was also the head of the fixed income team. Like i say he dealt a lot of tought love in the early days and wasn't afraid of being blunt with me, which helped me a lot. When i first started, and i hesitated, he used to shout 'get you're fu*king balls out and have a go, i don't give a sh't if it's a fu*king loosing trade as long as there's logic there' (used to hear that a lot from him when i first started lol) 2. Another trader in my team... When i started, i didn't exactly get off to a good start, and at one point it looked like i was gonna get the boot. This guy took me under his wing and showed me tips and tricks that really turned my trading around, and introduced me to his own strats in other markets. He really was a top guy and opened my eyes a lot. Personally i think if you really want to go all the way in this game, then you have to do the whole city boy thing. The contacts you make, and the opportunies to learn from the best really push your trading to levels you'll never achieve just sat at home on your own. Just my 2 cents...

Best advice posted.... The dax can be a bit crazy, but overall european markets are extremely technical and the cash follows in the index. As a prop trader i traded the schatz, bund and eurostoxx - best way is to keep it simple using S/R levels and have sound fundemenatal knowledge of the market you're trading. Put in the screen time and learn how prices trade and learn how to spot momentum, and thats all you'll need. The good old days are gone tho, but this won't really effect you unless you're trading size.

yeah but the oringinal point of these numbers being strong areas is because a lot of these factors come into play around these areas and it is consistent. If it wasn't consistent then i wouldn't put my own money or my client's money on the line. I like you FW but you sound to me like you've had a handful of winning trades and it's gone to your head.

very narrow minded comment that. Just going through some old charts isn't going to prove anything. A number of factors come into play; 1. Order flow in the market at the time 2. Areas where stops are clustered together 3. Cti2 positioning in the market/ overall liquidty flow 4. Are the Cti2's intiaiting or responding 5. The yield curve All these factored in together can make whole numbers extremely strong areas of S/R. The trade worked netting 14pts on half. Other half was held just incase we broke through which would of provided good conditions for a short squeeze.

you may laugh, but when approaching these levels you should keep an eye on them. 1100, 1200, 1300, 1400 etc

1200 is a psychological resistence area. Was planning on holding the whole lot through 1200 but decided to take half off to be safe. Just luck really with 1198, was just there when i decided to take it, but would of been more than happy with 1194 etc

exit at 1198 for half. Profit +14pts ES. Other half left running for a break above 1200.

i know it's not a live trade. but surely someone else must of taken it too?

half stopped out for b/e other half taken for 10ticks -

a bit late on the posting (laptop having a heart attack) DAX long 6194.50

yeah i traded through the summer, was some good scran to be had in the profile. Just taken half off at 95 for 3pts, the rest is running

ES long 1292.00

bah, stopped out for -10pts, should of gone for my sandwhich lol 80pts for the day. In a bit guys

long from 11343 for a scalp, couldn't help myself...