Soultrader

I have this discussion often. Having a profitable strategy is a must. However, without the right mindset the operator will lose even when handed a profitable strategy. A fellow trader likes to talk how if Warren Buffet started with 10k.... he would make millions no matter what based on his mindset. It is who he is. Lets say a trader has a very profitable strategy and has been consistently making money trading. However, his annual goal is $200,000. What this does to the trader is limit his mindset... in other words he is simply a $200,000 trader. On the other hand, a different trader with the same exact strategy has a $500,000 goal. In his mind, he is a $500,000 trader. Who is likely to make more money? What you can achieve is limited to what you believe. Traders tend to give back their profits when it exceeds their goals. If one has a $3,000 daily target but makes $5,000... he may make a reckless trade and end up giving back $2,000. But in his mindset... he's okay because he met his $3,000 daily goal. This to me is sign of impulsive gambling. Common on the casino's where you will see a player up big but never knowing when to walk away. As a result he ends up losing a chunk of his winnings and goes home stressed. The right mindset to be prepared daily, to maintain discpline, and to practice patience is extremely important imho. As long as one has the following traits, trading can be teached and learned. Whenever I meet a newbie who asks for trading/investing advice I tell him this... "Don't". In my opinion, this is the best advice one can give a newbie completely blind of what it takes to make money in the markets.

out full 13000

long Nikkei 12940

I found this post on "Re: VSA Official Summary Part 1" interesting and have nominated it accordingly for "Topic Of The Month August, 2008"

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out half 1266.25 stopped out rest b/e blah

Short es 1267.25 stop 1268.50

Thanks fs. Bf, I think you shouldnt have any issue turning it off. Let me know.

Article link: http://www.reuters.com/article/companyNewsAndPR/idUSWBT00949220080730?pageNumber=1&virtualBrandChannel=0

That must of hurt!

Please see attached video clip. I compressed it severly so may be lacking in quality. Not the greatest example but something I came up with for todays afternoon session. Enjoy. Nikkei Dom 2.swf

Focus on the big lot traders. If they need to sell they always hit the bid. If they need to buy they hit the offer. Waiting in line to get filled is the last thing you want to do in this market. Its lunch hours now...but Ill try to record the DOM and tape later to give you an idea.

:o Gotta love it. For Nikkei traders I am sure this touch but no fill is probably the biggest cause of stress lol. 100 + lot traders never use limits in this market. On the ES, I tend to use market orders when entering and limits when exiting. Like bf, I have fixed target levels for scaling out of positions. Adjusting these target levels usually leads to less profits as I become greedy. Thus fixed targets lower my stress level I think. Check out the Nikkei price ladder. Most of the orders are market orders. Nikkei Dom 1.avi

I found this post on "Re: Exit a Position" interesting and have nominated it accordingly for "Topic Of The Month July, 2008"

Welcome to TL 156. Looking forward to your discussions here and glad you enjoy the forums.

I found this post on "Why Screen Time Is Important" interesting and have nominated it accordingly for "Topic Of The Month July, 2008"

I found this post on "Various Indicators (Squeeze,2FastMa's,etc)" interesting and have nominated it accordingly for "Topic Of The Month July, 2008"

Iceberg allows big traders to hide the actual order size. But from my observation... even Iceberg orders can not conceal supply/demand entirely. At key turning points, the DOM leaves a clue. Lets say the bid/ask is around 300 lot each on the ES coming down to support. The bid remains at 300... the tape shows contracts being hit at the bid. The bid falls to 80 contracts, however no matter how many sellers hit the bid the level doesnt drop. In other words, though the bid looks thin enough to get taken out it is holding. The bid is refreshing everytime to lets say around 80 lot. This is showing accumulation at that level. The true order size is hidden at the bid... but the tape is showing buying. Its probably alot better showing this visually... but hope this makes sense. Also, I dont think all exchanges support Iceberg orders?

Betting Patterns Whether online or at the tables, betting patterns leave tremendous clues about your opponents. A tight player with a sudden increase in the size of the bet gives of warning signals. While a loose player with a sudden small bet may indicate weakness. Of course the better the player, the more you sense a trap when this happens. A good poker player may strategize by betting weak on purpose in anticipation of a re-raise. A tight good player may bet strong a few times to bluff at the pot.... which is quite an effective strategy. However, the longer you study and play with the opponent you will start to see certain betting patterns. Every player has their own style of play similar to trading. Player A may be a tight and conservative player with a tendency to take down pots at the turn or river. Player B might be more aggressive taking down pots at pre-flop and flop. Whatever the characteristic of the player, understanding the type of player your opponent is will give you an edge. Lets start wtih a few examples. An opponent of mine (who is very good btw) has a very unique and manipulative way of playing poker. Although tight and fairly conservative, he takes advantage of weakness and pushes aggresively when the situation tells him to. However, he is not a pre-flop player. In other words, he likes to limp in with hands like AK or will raise the same amount whether he has a AQ or 10J. Which makes him a bit unpredictable in terms of betting patterns after the flop. Lets go over one particular hand. 3 people in, I am dealt KJ suited. Dealer calls big blind, I call the blind, and my opponent raises $750. The dealer folds immediately and its my turn to call, raise, or fold. My opponent who has never been the pre-flop player raises $750.... a clear violation of his pre-flop betting pattern. With $6,000 chip tourneys his usual pre-flop bet is $200-$400. Now, my opponent is very manipulative and knowing his personality it would be rare for him to expose a solid hand like QQ, KK, or AA pre-flop. He loves to slow play. A $750 raise triggered my interest. I tried to think of the possible set of hands he was holding: 1. High pockets; 10/10, JJ, QQ, KK, AA 2. solid face cards: KQ, AK, AQ, AJ 3. low pockets: 66, 77, 88, etc... 4. nothing (bluff) I was left with 4 possible scenarios. However, knowing his personality and his betting style I found option #1 to be out of the question. His betting pattern in the past with high pockets was always aiming to trap at the flop. He would never risk over betting pre-flop for others to fold with high pockets. In other words, these are his money hands and would never let it go to waste. As a result, my instinct told me high pockets was out of the question. Next, option #2. My opponent has a tendency to limp in with Aces and bet minimal with hands like AK, AQ, AJ, KQ. By raising $750 pre-flop this goes against his play style and will affect his strategy and play on the flop, turn, river. In other words, raising $750 on the flop exposes him as good face cards. This would make it extremely difficult for him to slow play any face cards that pop up on the flop. Hence, similar to trading... this is not his style. Now, I was left with option #3 and #4. Very interesting. It made perfect sense for him to bet strong with low pockets as I know he does not like them and would much rather prefer to end the hand by stealing blinds. Now my strategy was this. If I put him on option #3 or #4, a face card at the flop would allow me to take down the pot on a re-raise. (regardless of what I was holding) It was a risky decision but I called $750 certain of my instincts and put him on low pockets. Flop comes A, 10, 8. I raised $750 and put him on the test. By calling pre-flop, it automatically made him think I was holding face cards or a high pocket. He threw his pocket 3's down and folded his hand. I took it down with a King high. I have found this pattern common amongst many poker players. They have a tendency to bet differently with pockets compared to face cards. Or bet over aggressively with low pockets to muscle people around. As long as you know the personality of the player, changes in betting patterns can offer tremendous clues. One can even strategize ahead of time on how to take the pot dependant on the cards that drop at the flop. Lets take another example, this time between my opponent and another player. We shall call my opponent Player A and the other player Player B. Player A raises preflop $300. Player B re-raises $500. Player A calls. Ugly flop.. no face cards. It appeared as if the flop could not possibly help anyone. However, Player B raises $500. Player A (my opponent) sits there thinking. Whats interesting about this $500 flop raise by Player B is that he is never too aggressive on the flop. He loves re-raising turn and river. I am sure this information left Player A thinking. If Player B had face cards only, the flop could not have helped him. Which means the $500 flop raise was a bluff leaving Player A an opportunity to take this pot down. After further thinking, Player A calls $500. Turn comes a King. Player A bets $1500. At this point I am laughing my ars off inside. I knew exactly what Player A was doing. He put Player B on either mid pockets or face cards. The fact that Player B bet fast and aggressive at the flop.... Player A must of figured out that the flop could not have helped him and decided to bet extremely strong at the turn to represent the King. I knew right away Player A was probably holding to rags (absolutely nothing). I was laughing inside because he does this every single time his opponent re-raises pre-flop and shows weakness at the flop. (obviously he would never do this against me) Player B grips his jaw and folds. Classic poker. The most effective part in recognizing betting patterns is to combine it other information such as psychology, human behavior, etc... Like in trading, the player with the most information has an edge. With poker, information must be gathered up on your own and not with the help of advanced trading tools, pit noise, market delta, etc.... It is similar to how a pit trader would trade... observing big players, reading order flow, and understanding crowd psych.

Looks interesting. Anyone seen The Capitalist Conspiracy? [gvideo]449294564876413449[/gvideo]

I use 8:30am to 3:15pm Chicago time for ES. For gaps, I still use the same timeframe for futures.

Sorry to hear that bf... I lost my 15 year old cat last year from a heart problem. Losing a pet that you owned for a good chunk of your life is definitely hard. Now, I am overly spoiling my other cat who is roughly 13 years of age. RIP Patches. May the best be with her.

I was taught the same thing and though I agree to some point I disagree as well. Studying one market is good as you can learn the personality of the market. However, when there are minimal opportunities throughout the day... you will be in a situation where you will be forcing trades hoping for a move. As a result this could lead to overtrading. It would be advisable to look at a few markets that share the same personality as the one you are studying now. Preferably similar tick size so you wont make mistakes on position sizing and risk management. I learned something interesting today talking to a employee from a FCM (former currency trader) The big boys that trade the Nikkei here discuss their positions and trades over dinner. In other words buy/sell decision are made on the tables. Hence, traditional technical analysis does not work in this market. I always felt this was the case and had to adapt a different approach with this market. However, I found it very interesting to hear this.

sorry late post.. totally forgot. out half 126675 stopped half 1265

long es 126550 stop 1264050