Nick1984

brownsfat019 when it comes to savings etc the income generated is negligible. If your earning 6% on your savings your not making very much so your going to need a lot of capital to generate a meaningfull income. CD's are wholesale instruments that require wholesale investments as well and they dont generate income per se cause they're just sold at a discount to receive face value upon maturity. When it comes to mutual funds this is a great way of generating passive income. We call them managed funds here in Aus btw. Most funds have income distributions twice a year which can either be banked or reinvested. If you set up an installment gearing plan where you put up some of your own equity and keep on borrowing bit by bit against it to accumulate more and more then over the years the funds value has the potential to return a nice bit of income. Don't forget also that by regularly investing in mutual funds you will be dollar cost averageing so that over time you will end up buying more units as prices are low and less when prices are high! You can even use the income from your distributions to help pay off interest payments on your loans. Property is another great investment. Sure it is capital intensive but thats what neutral or positive gearing is there for! If you want regular income then dont even think about negative gearing cause you dont want to take a loss (unless you want to offset some really really big capital gains tax from your trading!). If you can positively gear a property then the income from rent should just be enough to cover interest expenses etc with a lil bit left over. You can then borrow against the property's equity and invest in another home. I don't know about the tax laws where you live but here in Australia the interest payments used to fund investments are tax deductible so thats another bonus. Edit: Talk to a tax specialist from your home country to get an indication of how to minimise your tax situation and also remember to invest your funds according to your own personal risk preferences. Seeing as you want to trade futures then it seems that your most likely an aggressive investor anyway Good luck mate.

Man, I saw the topic for this post and I thought we would be talking about rims!:p In terms of PC: Get the 19-20 inch wide screen. In terms of cool stuff i.e cars: Get 19"+ rims, you get more women that way!

On any one market what would be the minimum number of contracts traded per day (on average) that you would prefer to see to create enough: a) liquidity b) normality of price distributions for statistical purposes such as MP theory etc. Here in Aus our markets are comparatively low in volume compared to Asian or US markets with around 6-10 thousand contracts on average being traded per day. Cheers guys

yay!

and how does one become a premium member? Sorry for hijacking this lol.

clicked on the link, can't watch the video!?!

I think that the huge volume on the market downtrend after last week was most likely due to a lot of stops being hit and it snowballed. With the large decline in price we saw plenty of buyers coming into the market to snap up bargains. A lot of these traders were longer term traders I think who saw these new lows as a great opportunity to top up their positions. I'd expect that the lower volume on the rally is due to a bit of trepidation amongst buyers. Newer traders especially who might not have had the confidence to buy into a falling market would of waited until the rally was well underway before committing therefore volume on the rally is effected. Specifically, i think that you need to take the daily volumes as being relative to eacother. Lower volume on the rally relative to the higher volume on the decline shows weaker support for the buyers! I would say that you can make a more informed decision as to the normality of this new volume within the next few days for it could just be an abberation. Im speaking of my own local markets of course but I'd assume the same applies to all you traders who trade the US markets! Not sure if that answered your question lol.

G'day mate nice write up. After the events of last week I have been watching our local markets here closely to see what would happen as our major stocks took a tumble. I tried to anticipate when the short coverings would come. I have to use end of day data at the moment and basic market depth data which is not only confusing to me but also misleading. Once I have enough money and knowledge to open up a futures trading account I'll be able to use more up to date data! Soul, do you think you could explain the working of the Volume Delta a little more? So far the only indicators I've tried to get to know are the P/C ratio, Tick, Trin, Volume, Price, and im trying to read about tape reading. Fib's are also a little alien to me atm but one step at a time i guess! Cheers and good luck with your trading.

does anyone know of the legalities of such an action? In Australia there are laws against market manipulation and price manipulation but I'm not 100% sure on how they work. I've thought about doing something similar myself just to see if i can get a few ppl thinking there is a large move happening in a particular stock but stopped myself short because I faced a moral dilema!

amen brother

Another pertinent question that could be asked would be: Is automated trading likely to overtake discretionary trading in the future or make it obsolete? Personally I can't see that hapenning. Very "terminator" to me.

really? Where did u see that? I must not be able to understand how these automated systems work to well, cause I can only conceptualise them as bein 100% reactionary to what the prices are doing. In a market with low volume and price basically flat how would an automated system get the ball rolling? If these systems are profitable in the long run, it's pretty interesting and I'd like to learn more about how one would go about setting one up especially if one is coding illiterate!

Well I would assume that most discretionary traders are such because they either a: dont know how to code and b: they love to have the "hands on" approach to their trading. If you love to trade why would you take away the enjoyment of it through using an automated system? Soultrader asked before what would become of discretinary traders as more and more ppl become reliant on automatic systems. Well I may not be a coding genius (i dont know diddly by the way) but i would assume that these systems are all reactinary in nature i.e. they react to what the market does. I wouldn't think an automated system could ever make the market move! If everything was automated 100%, where would the momentum in a market come from? I migth be wrong about my analysis of automated sytems but in the end I think that yes there are still more discretinary traders and these people are the real market makers. If you love to trade, and love the wheeling and dealings of the markets why would you contemplate giving that up in the first place? Good luck on your trading mates!

I tend to see the situation as being: a) The stock market is much more publicised in the media. The public is more familiar with them and has grown up with them. Here in Australia there's only one TV channel which features talks on futures contracts and thats primarily directed at farmers! b) People feel more comfortable trading rumours. In stocks news and company announcements play a gigantic role in how you trade stocks (this could apply to commodity futures as well but most ppl here seem to trade financial futures where the markets are quite different). Soul, i've followed your posts for a long time and I agree whole heartedly with you about price action being king and not relying too much on indicators. I think that yes you can take the strategies you have in financial futures markets and apply them to stock trading however as mentioned earlier you do need to account for the more 'human' aspect of stock trading i.e news and sentiment. Market profiling does work for stocks as well because a stock just like a future is a commodity like any other and we as consumers relate to it in terms of its "value".

I think you will also need to distinguish between a change in demand and a change in quantity demanded. A change in demand is NOT caused by price. Price effects quantity demanded. Changes in demand (i.e shift in demand curve) is effected by things such as changes to interest rates, income, etc... The same applies to supply. Price does not effect the supply curve only the quantity supplied. I.E at the end of the day price only effects where on a particular curve you are. Changes other than price effect the position of a curve itself.

I think he wants to know about the underlying theory behind supply and demand? He seems to know that if theres a reduction in supply and increase in demand prices will rise? Maybe you should read "The Wealth of Nations" by Adam Smith or any basic micro-economics book to get a detailed explaination of the theory behind S&D. Basically supply and demand can be drawn diagramatically as two curves. Supply sloping upwards and demand downwards on the same axis with price on the Y and quantity on the X. Where the two curves meet you have a market at equilibrium and that is the price of a particular commodity. If price is below the equilibrium without a change in S or D then it is a relatively cheap price and buyers will buy the commodity at the cheaper price so they can sell it off at the equilibrium price. Buying will increase and increase and therefore price will increase back to equilibrium. Vice vera for when prices are above equilibrium. If there is a change in supply i.e. the S curve shifts then we have a new equilibrium. If Supply increases then the quanitity of good available increases. Because there is an oversupply of goods, the relative benefit gained by the consumption of each additional unit of a good is less. Should demand remain unchanged then there is now a downward pressure on prices as a new equilibrium is set. This can be caused by many reasons such as changes in interest rates, changes to tariffs, governmental subsidies, changes to technology which make production easier etc... Every time supply or demand shift relative to eachother the equilibrium price in the markets is adjusted automatically. This is called the invisible hand effect. Donno if this helps! Try to read a text book if you really want. Cheers

nah not forex. I don't know why but something about it scares me :o At the moment I do stocks and am looking to move into futures. That leverage effect is calling to me hehe. Given the responses to this thread as well as reading several others, seems that lifestyle plays a HUGE part in most ppl's trading. Kudos to Soul for keeping up that gruelling schedule!

heheh sorry should of expressed that a bit better. I mean't that as in I feel comfortable with the All Ords here in Aus. Its true that the psychology of the markets is universal, but i think that most people would feel comfortable in their own domestic markets if they weren't limited by lack of depth/liquidity. I think certain wool futures contracts only have a cpl hundred contracts traded a day!

Yea its the depth that you can find in the US markets that makes them so attractive. If the SFE had the depth that the US markets had, i'd have no trouble or doubts trading it. By when you get over 100K + contracts per day on the CBE E-mini's you can't really compare. I feel like I understand our All Ordinaries index very well but unti we can get the depth in the Aussie markets, it still feels to prohibitive

First post on these forums! Long time reader first time poster hehe. Anyhow, it seems like most ppl on these forums trade the US markets. For those of you who live in the Asia/Pacific region (Australia included) how do you guys cope with the time difference? Why not trade the Asian markets instead? P.S: On a little brown nosing note, great site, heaps of usefull info, and great community here. Glad to be a part of it!