BennyHey

Good points, I was gearing this more toward the average trader but you bring up some good food for thought I live in chicago and have been on the floor a few times. We actually took a field-trip to the CME when I was in grade school. Anyway I will chip in my 2 cents by sharing what I know. What you see as "price" is actually 2 numbers, a bid and an ask. There are market makers competing against each other to provide the lowest bid and highest ask in order to create a market. In a heavily traded market the spread, "difference between the bid and ask" is usually just a tick. In a lower volume period the spread will become wider as the environment is much riskier for the MM so he must widen the spread to protect himself. Watch the YM overnight and you can see 3-4 tick spreads. During regular market hours there are the MM competing against each other for your business. They buy and sell out of their inventory to sell it to someone else to make a profit. A dream scenario for the MM would be a price that does not move. They could then continually sell the bid then turn and sell that contract on the ask in order to make the .25 tick profit(on the ES). Another big component of liquidity is the big brokerage house who have huge amounts of cash to buy and sell in order to make $$$$ for themselves. They are the ones who have people on the floor buying and selling. Now in the computer age there are also ALGO's and bot programs buying and selling at incredible speeds (often owned by the big brokerage houses again) . An analogy I heard once that I like was: "Its like running back and fourth in front of a bulldozer picking up pennies" They have computers processing order flows and statical probability models that when X and XY conditions are present they can put several orders in and cancel them faster then it takes to blink an eye. A great video is this one by none other then SoulTrader. He has a time and sales window that not only shows trades but also orders placed and cancelled in a matter of seconds. Great stuff

I purchased it and he was nice enough to give me a refund within 24hours. I stayed up all night to compare the posted results with the real world trades and found that it is at best a break-even system. Unfortunately, there are several grey areas, were losing traders were posted as small winners or break-even trades based on HIS interpretation of price action. Additionally I pointed out that the SIM-account was visible on the DOM on one of his youtube videos. He removed the videos within 12hours. Notice that the daytradetowin logo covers the acct. information on his DOM in all his videos. He would say it is to protect his account information. I think he is not trading real $$ as his system doesn't make $$ in the long run. If you get lucky you can run at a profit for a short time but in the long run with slippage, commission, and the grey area fudge factor you won't make any money. I have a friend who has a seat on the CME exchange. He makes a 6 figure income and said he would not sell his trading system for 10 million dollars. If you had a profitable trading system would you just give it away for $200?? With that said he was nice enough to refund my money so at least he had a certain amount of integrity.

One thing I have noticed is more and more traders are implementing tick charts in their trading now that they are available through most charting programs. While I use tick charts myself one thing traders must be aware of is using very low number tick charts. I see 89, 110, 150 etc. tick charts being used on the es and while that may be fine during slower market conditions it will move with incredible speed during high volume times. Price will "jump" 3-4 bars in a split second not giving the trader enough time to place an order. While during backtesting/research when the data is still it may look like their is plenty of time to have your indicators trigger and enter an order but in reality it is impossible. Take a look at the time on each bar, if you see 1:30min spacing during slower times and 20-30 seconds during faster times you can say it is a reasonable amount of time to see it, recognize it, move your mouse to your trading DOM or hotkey and press the button. On the other hand trying to get in and out of trades in a matter of seconds is unrealistic. Think about what has to happen. You order have to recognize it, hit the button, the order has to travel from your computer, to the broker, and the broker then submits the order. BE WARY OF SLIPPAGE!!! This image is from a 110 tick chart on the ES. From the time the MA's crossed to the second arrow it took less then 2 seconds. Looking at it as a static chart it looks very reasonable to scalp a little short. But the reality is unless you have a co-located supercomputer this move would have been impossible to catch unless you anticipated the move and got in early. all the best to y'all

Great post I agree 100%. The fact is most people will look at their "scalping" trading system and assume if their number it touched it is filled, to add to that most paper trading programs will give the trader the fill when their number is touched. Then the trader goes live and they find 3 of 10 trades they hit their target on reverses and hits their stop. It can be very difficult to get that extra .25 movement during live conditions and what looked on paper to be a profitable trading system suddenly becomes unprofitable. Most of the "daytrading" systems I have seen are set-up that way. They have very high win rates with very small profit targets, be wary of any vendor who is claiming 85-95% win rates as these numbers are not realistic in the real world.

Red bull, coffee and cigarettes....is that healthy????

I agree, I think most trading systems for sale out there have an inverted Risk/Reward ratio. That said you need to have a very high winning percentage just to break even. I have spent a lot of money trying to increase my knowledge and find most of these types of courses to not hold up under real world trading conditions. Slippage, commissions, and not getting filled on limit orders chew theses systems up. I think you are better off starting with a system that has at least a 2-1 RRR and fewer traders per day. This will preserve your capital for a while while you are still learning the ropes. :missy:BennyHey

My opinion is that if you have read a few good books there is nothing revolutionary that a seminar is going to tell you that you haven't heard or read before. That said, their is nothing wrong with paying for a little education. Everyone has to start somewhere. Just keep in mind MOST education websites are out there to separate you from your money. Some of the prices for these seminars and trading courses are ridiculous, (ie. $5,000) for a 3day seminar with John Carter where he shows "His" squeeze indicator and trend indicator and bricks indicator......oh you don't have them, just go to his website and download them for $400 a piece. Still not making money? Come to our personal mentorship ($5,000 a DAY!!!!) IMO just watch the market and a Time & Sales window. Watch how the orders flow, If you wanna learn about Gap Fills type it into Google and you'll be amazed what good things come up. :missy:BennyHey

Great Post very informative. I'm sure anyone who has been in this business for any amount of time is familiar with vendors and indicators that are more concerned with taking money from your wallet rather then the market. :missy:BennyHey

LOL you really write your biggest losses on a barf bag?? :missy:BennyHey

Thank You, I did not ask to try and copy you. I have been trading futures for a while and have a system that I already use. I am just curious to learn about other traders and what they do. My "system" is just an amalgam of other peoples ideas and I am always looking to improve upon them.:missy:

In this thread I want some real life confessions on the worst hits we've taken. About 6 months into my day trading career I was into the CME currency futures. I had some ups and downs to this point but had yet to have the market really show me what it can do to a traders acct. I was trading between 2-4 cars on the Canadian Dollar and was having some good success averaging down on my losers. The CAD had been stuck in a range so any time I got caught on the wrong side I would keep throwing more cars on the fire, lowering my average cost and then when the market turned my way I would get out B/E or a small profit. One day I was trading on a 5min chart and we became oversold on my stochastics so I got long with 2 cars. The market continued lower, never attempting to come back a little, 30 pts lower I added on 2 more cars. From this point we got a little bounce(About 5 ticks) and proceeded to drop another 30 pts. Well I stayed true to my plan 4 MORE cars LONG!!!! I remember saying, they are just trying to shake out the weak longs before they rally it. In another 30-45 min we were another 40 pts lower. I am starting to chain smoke and pray. My 5 min chart looks like a red ball has just fallen off a table. I tell myself with sweaty palms that we MUST get a little bounce from here, I've never seen a chart drop like this without some kind of re-trace. I decide to go for broke.....4 more cars long...and......you guessed it down another 30-40 pts. I was done adding on as my acct leverage was maxed out and any lower would be a market liquidation by my broker. I still have NO stop and a limit order at B/E some 80 pts higher. From here the market drops another 40 pts and trades sideways for a while. I sat in my position another 2 hours watching it dance from -1400 to -1700. I curled up on the floor and prayed I would wake up from the nightmare I had gotten myself into but no. Finally I closed my position at 4:58 2min before the session closed. Its not a lot of money for most but for me and my $5000 acct it was quite a hit. This was on a Friday afternoon so it gave me all weekend to stew over my loss and what a crappy trader I am. I seriously considered giving it all up that weekend. Eventually I decided to keep grinding and to not ever let it happen again. I've had plenty of losses sense then but never that much on one trade. When you newer traders hear pros talk about "experience" this is what they are referring to. Anyway I think there are plenty of good stories out there for us to laugh, cry, and learn from. Can't wait to hear some of yours. BennyHey:missy:

Can you go into your individual methodology a little more?? I would specifically like to know: What R/R Ratio u use? If you are a strict daytrader or do u hold overnight? What indicators do u use and what patterns are you looking for? What are some things to avoid (other then what you've mentioned)?

Good question CandleWhisperer as this is a question a lot of people might have. I wish I had one answer to your question but I don't. I have have a good run of 1-2 weeks I will take x-amount out and put it in my checking acct. I am similar to brownsfan in that when I have the money I like to pay off bills. That's the thing with trading, money does not come in a set amount every 2 weeks like a job, it is very erratic. I currently need $500 per contract on es with my broker. So If I want to trade 4 cars I need at least $2500-$3000 in my acct. (to also give myself a little cushion.) When I am profitable I like to take it out as when it sits in my acct I am more likely to let it get away from me. In this regard I keep my acct. margin low as a money mgt. tool. I would also like to add that TradeStation raised their Minimum margin requirement to $6,200 per contract when we were super volatile in October. This made me close my acct. with them as $24,800 + daily drawback to trade at my level seemed like overkill. I also know IB raised their minimum as well. Has this effected anyone trading with these guys?

I used to use real tick but their prices got way to high. What is the monthly fee now? When I left I was paying over $300 for the feeds I wanted.

You are correct again, What I said was wrong for every buyer there is a seller.

Great post otto, right on. Could not have hit the nail more on the head. Lets look at the tape from the run-up in oil futures. I'll bet there were more people buying then selling

I used to use PATS when I first started, it was the most unreliable platform I've ever seen. It took forever to load, sometimes fills would take several seconds(even limit orders would not fill on the number) and at least once a day it would wig out on me. Are you experiencing any problems? Maybe it is better now then it used to be. I would advise you to try a different platform to see if u like it. I pay $50 a month but it well worth it to have a reliable platform that I know will respond quickly to what I want done. -BennyHey

My methodology is largely based on Linda Raschke. I use Keltner Channel and Stochastics. I especially watch the tape around support/resistance levels. Once a group of traders are trapped either long or short that is the time to hop on the the opposite direction then sell back to them as their stops are being hit. When I first started trading I tried Tape Reading without really knowing what to look for, and I could not see the value in it. Now I find it is the most valuable tool I have in giving me an edge over the other market participants. -BennyHey

We've all heard this one: Let profits run, cut losses short" When you have a daily Profit Target you are in effect not letting your profits run. I also think it adversely effects your trading psychology. How will you ever know what you are capable of making in a day if you are automatically quitting at a set number?? Have a great week ya'll

So true BrownsFan, Now I am trading multiple cars it makes life a little easier that I can slide stop to B/E and let it ride. But ultimately you don't know if the mkt is going to go 30 more pts in your favor of if its run its course and your best move is to get out. Thats a good idea for another thread. One thing that has helped me is looking at a LARGER time frame during the day to judge if my trade has potential to turn into a runner or not. If its Counter Trend I'll take my scalp and get out but with the trend I'm more likely to trail stop and try to get a nice runner out of it. BennyHey

Hey Eric, I too watch the TTM videos and find a lot of the stuff informative and useful. Have you been a member of the TTM chatroom? If so tell me/us what you thought of it. One thing I DON'T care for is how much emphasis Hubert and John put on buying their indicators and seminars. And the prices they charge are unscrupulous IMO. If a nubie were to take every squeeze that fired off using John's Money Management they would without a doubt LOSE money. There's nothing wrong with selling trading education materials but there is a LOT more to making money trading then following one indicator regardless of other factors. I would get into this more but I don't wanna have a 4 page long post. Hope u all have a great week, cheers :missy:

Thanks for the post philloo, You are correct I must have been making an error copy & pasting it. Yours worked fine and it was nice that I could just plug it into my formula library. BennyHey

I was surfing around and found the squeeze indicator for eSignal.....LOL What an incredible coincidence. I was like, didn't someone JUST ask for that? Let me know if there are any errors in the code and I will take another look at it. function preMain() { setStudyTitle("FPSqueeze"); setCursorLabelName("FPSqueeze", 0); setDefaultBarFgColor(Color.blue, 0); setPlotType(PLOTTYPE_HISTOGRAM,0); setDefaultBarThickness(4,0); //addBand(0,PS_SOLID,1,Color.black,"zero"); var BBlow=null; var BBhigh=null; var KClow=null; var KChigh=null; var Mom=null; var vHigh=null; var vLow=null; var vClose=null; var fp1 = new FunctionParameter("nMA", FunctionParameter.NUMBER); fp1.setName("Squeeze Moving Average"); fp1.setLowerLimit(1); fp1.setDefault(20); var fp2 = new FunctionParameter("nSD", FunctionParameter.NUMBER); fp2.setName("Standard Deviation"); fp2.setLowerLimit (1); fp2.setDefault(2.0); var fp3 = new FunctionParameter("nColorSqueeze", FunctionParameter.COLOR); fp3.setName("Squeeze Color"); fp3.setDefault(Color.red); var fp4 = new FunctionParameter("nColorAction", FunctionParameter.COLOR); fp4.setName("Action Color"); fp4.setDefault(Color.lime); } function ATR(nInputLength) { var dSum = 0; var dH = high(0, -nInputLength); var dL = low(0, -nInputLength); var dC = close(-1, -nInputLength); if (dH == null || dL == null || dC == null) { return; } for (i = 0; i < nInputLength; ++i) { var vTrueHigh = Math.max(dH, dC); var vTrueLow = Math.min(dL, dC); var vTrueRange = (vTrueHigh - vTrueLow); dSum += vTrueRange; } dSum /= nInputLength; return dSum; } function main(nMA, nSD, nColorSqueeze, nColorAction) { //Bollinger Band Variables using 1.4 Standard Deviation var myStudy1 = upperBB (nMA,nSD); var myStudy2 = lowerBB (nMA,nSD); var momStudy1 = ema(10,mom(12)); var macdstudy = new macdHist(12,26,9); BBlow = myStudy2.getValue(0); BBhigh = myStudy1.getValue(0); Mom = momStudy1.getValue(0); macdvalue = macdstudy.getValue(0); var BarCntr; var nRangeFactor = 1.5; if (getBarState() == BARSTATE_NEWBAR) BarCntr += 1; if (BarCntr < nMA) { return; } else { var dKeltnerBasis= call("/Library/KeltnerEMA.efs", nMA); var dATR = ATR(nMA); KClow = (dKeltnerBasis - (nRangeFactor * dATR)); KChigh = (dKeltnerBasis + (nRangeFactor * dATR)); } //Logic to create red or blue squeeze signal if ((BBhigh <= KChigh) || (BBlow >= KClow)) { drawShapeRelative(0,0,Shape.CIRCLE,null,nColorSqueeze,Shape.TOP); } if ((BBhigh > KChigh) || (BBlow < KClow)) { drawShapeRelative(0,0,Shape.CIRCLE,null,nColorAction,Shape.TOP); } if (Mom > 0) { setBarFgColor(Color.blue); } else { setBarFgColor(Color.red); } drawTextPixel( 1, 93, "Squeeze ", Color.black, null, Text.RELATIVETOLEFT | Text.RELATIVETOBOTTOM | Text.BOLD, "Arial",10 ); return ((Mom+macdvalue)/2); }

One of the things I did during this time was to not trade RTH. If you watched the mkt between 6:30 and the open it was similar to the less volatile mkt I was used to trading. So that was one way I traded during that time.

For what it worth ReignMan I have tried and used the BBSqueeze both the PBF and John Carter version. In my opinion they are not very good. Hubert Senters from TTM says they are as reliable as a flip of a coin. Can't remember where I read that but its what he said. If you are using eSignal you can add on multicharts for $99 a month. (Don't expect to get any tech support) and use all the TTM indicators. Squeeze, Scalper Alert, and Trend which are under the Trading Indicators section of this website. I think eSignal is a very reliable data sever but C++ language is not as good as the easylanguage. There are a few paintbar studies for EasyLanguage that don't code well(or at all) for eSignal.