TheDude

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Heres my on a few of the points: making $200 a day can be done easilly, and i'd suggest the OP shouldnt think of going live/starting the business until he can do this most days as for capitilisation, most guys who day trade futures for a living seldom keep more than 50k in their account and swinging 100-200 lots is no prob. the fact is that although retail brokers may ask for say $500 per contracts, the exchange dont ask for anything intraday - so the fcm typically justs wants to make sure youve got some coin should the worst happen - maybe OP should consider futures? it's a lot more efficient on capital than stocks. after a year or 2 ditch the retail broker. they are leeching scum bags. as for the op's chances of success, id say whether he truly thinks he can do it or not, he's right. listening to all this negativity here makes it no wonder so many dont make it. having said that, if the worst does happen, my money will be on the stress of having to make it happen. if he has to pay the bills, support a dame, and 3 kids then thats stress. however if the wife can really support all of this on her own then i say do it. just remember trading is much about the lifestyle choice than the money. if $200 a day makes you happy and gives you that time to be with your kids, then power to you. theres more to life than ferraris and champagne.

Here's one for tagging too. At least he's honest enough to pay for his forthcoming ad/post.... (only kidding Bob )

broker has an order to pay 6 for 20 lots. local is offered at 6. broker gets his attention and shouts filled at him (or local to broker). both scribble trade details on a card with the others mnemonic and/or clearing firm, each slip gets passed to their clerk who scurries off and enters it in a trs system (exchange software). meanwhile pit official reports the trade upstairs. (note - if it was a big busy pit, there may even be 2 markets/quotes at different ends and some folk would arb the difference in the same pit. ) clerk scuttles back to the pit to collect more trade slips. the clerks of respective firms reconcile trades with the other firms they've traded with every hour or so no idea about the s&p sorry. wasnt there. i know that there were only ever 9-11 traders in the nasdaq pit which kinda spooks some people - closed market and a license to print money.

extended rallies will often show both low volume and low volatility. declines are usually on high volatility. this can be seen through history - way before the first computer was used to trade. this is partly due to the long only nature of a lot of participants. talking about the long term time frames, not intraday

1. Brokers come with customers orders. locals who trade their own/firm account or other brokers trade against those orders. or a local if he needs to trade will request a market from the others. orders are requested in this oder - month, price at qty (if selling) qty for price (if buying) 2. depends on product. most trades now are block trades, where the local will typically trade out of the position on a terminal as and when he can. 3. in my day the tools were a wad of trade slips, a pen, a few spare pens, and a sharp pencil (to jab people with). pricing sheets when i traded options, a clerk, and a bad attitude, and a caffeine overdose in the morning, and a jacket with various badges/labels to show your clearing firm, trading privileges/rights, photo with mnemonic (unique trader id). now days i believe they use the above and a tablet pc's to arb the pit v screen where they can. 4. too many to go in to. dont bother trying to pursue it as a career. its a dead end now. fun while it lasted. move on.

True, but as I understand it, the thesis is that although gross expectancy is 0 in a 'random' market, your edge will slant the odds in your favour, or to put it another way, add a skew to the random outcomes. Although I think Tams was correct in what he said about stop placement, but Predictor is on the right track I think in terms of a starting point - especially for someone going down the algo/mechanical route

Read The Futures Game by Teweles. There are several studies in there of brokerage accounts that confirmed 80% fail. Most of these studies were done in the 1960's-80's. ie before day trading. Given the huge rise in day trading, false education and FX bucket shops, I can well believe the number has increased from 80% to 90%. BTW, the 80% failure rate was usually within the first 6 months.

Awwwwwwwwwwwesome! Ive never tried the herb butter thing but it sounds great. when im in the usa, i like going to '5 Guys' Not the best burgers in the world, but pretty good - i like the concept and the peanuts. BBQ sauce is a must for the Dude on a burger. Bacon is a treat if Ive been eating too much salad. Onions - well of course. grilled though - or even better onion rings deep fried in bread crumbs/batter.hmmmmmmm hamburgers......

i think therefore i am.

counter trend trading is a dumb concept. it implies there is a trend. therefore, why would anyone want to fade it? (unless your business is scalping - in which case one wouldnt be asking the question as such a trend would be almost irrelevant) lets go back to hamburgers and steak - its more intellectual.

I RESOLVE TO LEAVE THE TOILET SEAT DOWN. Ms Dude done like it up

and no beer to wash it down with

Youre very close its scary! trader a did go on to trade OPM but also developed a bad coke, drink and hookers habit. no idea where he is now. trader b did continue trading his own money and i hear hes doing ok. hes quite conservative anyway. i imagine youre right in that he wishes he could take bigger risks id say trader b is a happier and more content person even if hes unlikely to be mega wealthy - hes happy just being wealthy after all these years

....and without cheese and pickles.

I agree. Its worth considering that with skills in reading the order book, placing exits before entry to get a better place in the queue etc (more relevant in a 2-3 scenario than the 200-300 scenario), there will be times in real life when you will get the 2 tick target without that level getting taken out and the 3rd printing. For the purposes of real-life testing and viability I'd go with your wisdom. For the purpose of exploring price distribution though and the 3 scenarios for a bit of holiday fun if anyone has the time or inclination, maybe it could be educational?.... I tried to attach a few hours of T&S data from my X Trader but the file is 3.34 MB - too much for the websites limit If anyone can tell me how to do such a test in excel, (other than RTFM) and I'll see if I can come up with something useful - 1 days T&S is probably only useful for the first test, but I can down load 30min and daily data for the 2nd & 3rd.

no - because market prices are not random. they just seem like they are. it would be an interesting experiment to back test your idea under 3 scenarios: 1. 2 tick TP 3 tick SL 2. 20 tick TP 30 tick SL 3. 200 tick TP 300 tick SL My guess is that scenario 1 will have a significantly different outcome to scenario 3. Just my gut feel. BTW, dont forget to include bro in your calculations. They are the hidden killer.

...but enough of edges. Lets get back to the point of the thread..... WHY DO 90% LOSE? Who thinks 90% of traders trade off chart patterns and/or indicators? Didnt Einstein say something like 'the definition of insanity is making the same mistake time and time again and expecting to see different results'? Maybe theres no edge after all in TA?

Heres my take for anyone who's interested: An edge is simply an observable scenario that repeats over time, and if exploited will yield a positive return over a large sample of outcomes. (Those are my words). A discretionary trader can still have an edge despite his/her entry decision not being strictly defined. e.g. waiting to hit bids and lift offers in an order book when most of the liquidity at that price has been removed could be defined as an edge as the trader assumes that if his/her timing is right the order book will tick up/down in their favour pretty soon afterwards (assuming the liquidity isnt refreshed), giving the trader the ability to scratch the trade at no risk if needed. Another trader may decide entering on a stop is the best idea as he assumes the market momentum is going his way and thus the next tick will also be in his favour, giving again, a risk free trade immediately (good luck on that - these are just examples) These edge examples are therefore in the trade execution point rather than the entry decision raeson. You can have lots of edges - in execution, in risk management, in money management etc. I personally wouldnt say things like discipline (yawn) are an edge because our personalities/emotions/behaviour dont tend to be consistent over the sample of trades.

1. Its the Christmas holiday if you havent noticed, so that explains why there is little activity 2. You arent seriously suggesting a bank would borrow money at 1% to invest at 0.25% are you? Perhaps you should take a break too if I have understood you correctly. Otherwise, I dont understand where you imply the 1% cost is coming from. It may interest you to know that the Europeans don't buy in to the rat race idea (sorry, I mean American Dream) as much as the Americans. Trading floors will be running a skeleton staff only until Jan 3rd. Therefore you will see little activity just like there is less activity during a lunch hour - and if there is activity it usually just to bully the market to take stops. No one would take a serious position at the moment for 1 simple reason: lack of liquidity due to the holiday. Sometimes the simpler examples are the best. Thats my Secret Trading Tip #65!!! You can have that Trading Advantage advise for free too!! Enjoy your holiday.

i like it. not that many have the patience to do that, with the view that there are more 10 point opportunities than 40 point ones. just goes to show, its all down to style. on another point.... when i was a clerk before i started trading, there were 2 guys in my firm: trader a. he had regular account swings day in day out. one day up 120k, then down 300k, then up 500k, down 200 etc. trader b. most days he was up 2k, sometimes 5k. otherwise hed scratch, maybe lose 1k tops - that was rare. trader a was the boss. hed always moan at trader b for not taking enough trades, not being aggressive enough etc. guess which one survived and which one blew up.......

i think a lot of it has to do with expectations and risk. lets look at the retail trader (80-90% failure rate) vs the 'pro' managing someone elses money (i reckon about 40-50% failure rate, which is one point - less stress, the failing pro just goes back to the middle/back office as a risk manager): the trading done by a 'retail' trader is that we tend to try and make money from calling market direction and hopefully managing the probabilities accordingly. It can be done, but first the focus has to be on managing probabilities rather than 'predicting' direction. to succeed you need to have a professional attitude and incredible flexibility. trading done by 'pros' however is a different kettle of fish. they are mostly market neutral strategies, looking to exploit long or short term price anomalies between 2 component such as cash v futures, futures v otc, synthetic positions, etc. cta's are the exception to this - they are essentially trend followers, but they dont use technical analysis as their mainstay. they will use it as a factor, but mostly use market sentiment (implied vols), economic figures, open interest, CoT reports etc. the typical retail trader cant trade the size or afford the infrastructure needed to trade this way. expectation is another part of the equation. where as a retail trader is looking to earn a good living from a 50k account (eg), the pro will be happy with 25% return on the millions/billions the institutions have invested with him. so to compare a retail trader against a pro isnt really fair as its a totally different business model, and a lot, lot tougher as the returns have to be much, much higher, and the only way to get those comparatively massive returns on capital v the pro requires much, much, much more risk. with so much risk being taken, is it any wonder the retail traders life expectancy is so much lower to the pros? basically, in comparison, were playing russian roulette, or, as the pros like to say ' betting on red or black' for a directional trade. i dont really think there is much that can be done to increase the life expectancy of retail traders, except not putting a dime in the market until you can show yourself several months of consistency in sim. even then the whole game changes when real money is on the line - so feel free to disagree with me. one thing is for sure - if you cant make it in sim, you aint got a cat in hells chance in a live market. it can be done though - but most wont have the determination to make it happen. if youre doing it for the money, not the love, again you havnt got a chance.

yup. in my world thats pretty much it - except for the MD trader display The issue is with TA is that i 'think' it makes people try and create hard rules. 'Having a plan' is another one that gets misunderstood and makes the self taught trader blow is dough on hard rules (another thread surely). what could be worse in one of the most dynamic environments we interact with? it seems to encourage trading break outs imo of whatever shape or confirmation in indicators some one needs - by which time, others have already bought in anticipation and are already busy trading with the breakout trader. may be i just sucked as a TA trader? Hell, i could have even taught linda lovelace a thing or 2 i was that bad at it!

indicators and chart patterns. i admit some volume based indicators are of value, and i still take a look at bollinger bands from time to time to assess transitions. but they must be put into context. it has been proven that TA holds no significant value. im sure if we are all honest here, we all went through the phase of spotting a head and shoulders pattern, trade it, just to watch it turn into another chart pattern - like a triangle with failed breakout, a trading range/rectangle, etc. it's all BS. chart shapes have one purpose - hindsight trading. they just seem so obvious when you look at them from the past as for indicators, well they are usually some rehash of momentum based indicators - which comes with a parameter which you set to determine how far behind the rest of the crowd you want to be. dont make sense. you wanna be in on the get-go and another thing...... mp is not an indicator, nor is a bar chart, a price, or a volume reading. if anyone says so, they are just trying to be a smart ass and play with semantics. sermon over.

you type it into the bloomberg terminal - top left where you type commodity codes and everything else you need info on. i dont use bloomberg much, so cant remember the bloomberg terminology for that bit.