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TheDude
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Everything posted by TheDude
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Personally, I think back testing is useful in validating an idea, but little more. It's a first step. The problem always arises that any trade management ideas you apply during back testing may invalidate an otherwise good idea. So, you should just get the results for the entry, record MAE & MFE, compare, then decide if its worth pursuing. I dont really trade Technical Analysis much - I try to ignore that stuff, if anything fade it. However we all have to start some where and I guess TA, indicators etc are a common entry point for the beginner so what I said above is how I would approach it. You can take any combination of indicators, parameters, chart shapes etc. If any of them worked consistently, you'd have the holy grail - which no one has found yet - even the bulge bracket firms who have millions to throw at computers churning numbers and processing every conceivable combination of settings/markets/time frames etc. There will come a point where you either throw in the towel, or ditch the TA approach and progress to the next level....
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Well with bad exit/stops, the strategy could be BS. With good exit/stops it could be truly dynamic. Who knows? I thought the thread was about divergence with an RSI or similar. Although I (or others) may personally not consider such an approach, it is irrelevant. As is how you may decide to manage the trade. Trade management is not the idea of this thread right, its divergence? so why get cluttered with it? Just post MAE and MFE (max adverse/favourible excursion from entry) . If MFE significantly > MAE then there is evidence that proper trade management may be worth investigating. As yet however we cant know this. Just a thought. Dont let 'em get you down. My guess is that this may work in swinging markets, with a swing being x * 3 or 4 bars from the setting of your RSI. When markets trend, you'll be screwed as markets always diverge as volatility and volume falls off during the trend as the number of potential new participants depletes.
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how would these results compare against the same (historical?) data where your trade entries are random and your same trade management rules dictate when you get out?
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he's clearly talking about price and its relation to the passage of time. no one likes a smart ass, especially near Christmas. with a trader iq of 99% i thought you would have known that.
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Hey DoD, Out of interest, whats the % p&L of the strategy (even if it's a theoretical/paper one). Does is disprove your detractors? Just out of interest mind you - as we all know, management can make a big difference, and can be used to explain results either way. Forget I asked. Doh! Cheers,
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i agree. context is much more important. if you have a scenario that looks like it could lead to x favourable excursion trading on say a 0.6 probability, then add context/human understanding to the element and you can make that 0.7 or 0.75+ with some ease. i agree back testing isnt all that most make it out to be, but its a good sanity check to see if an idea is worth looking at in further detail. -
Bloomberg has a good one. Type: hfnd, select option 20 (hedge fund data base - may be 28, cant remember). You will then get a list of criteria such as registered office location, managers location, style, asset class etc. Go into each one, select what you want to see, when finished, click Results, off you go! You'll be able to see who is holding what - assuming their positions are over the exchanges 'reportable position size' limits - again kinda assuming they trade on exchanges Another popular one is Eurekahedge, and BarCap also have a good one Im told.
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Interesting stuff. Thanks. If I understood you right, you only tested when the first 30min bar of the day met the conditions? If the premise was valid, it shouldn't matter when in the day the bar occurs. I dont think the results would differ in terms of %, but the number of outcomes/trades should increase. If Im trading the afternoon session, and attempt to responsively trade back through the current days value is something I look for. Yesterdays and todays VAL and VAH are good levels to watch IMO, especially if there are smaller balance areas near by. I luv trading me.
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ok, how about this...... in TITZ, one of the main lesson for the new trader is that 'the market can do anything at any time'. this is bullsh!t. why? markets work in phases. they have to in order to absorb order flow. markets trend, they reach a climax, they correct, then they balance, then they trend again. its a cycle. sometimes the balance between trends is missed as the market reaches its climax and the correction develops into a new trend. Also, volume activity will tend to lead price. or rather, price reacts to volume. it has to. there is no other way it can be. to suggest 'anything can happen at any time' implies (to me) a sense of randomness in the market. randomness is a term we use for something we dont understand. so the douglas idea is flawed. it may appear to be great for the new trader, but i believe it will in fact act as an excuse mechanism for the newbie when he gets stopped, rather than encourage him to find out why he got stopped out. its a cop out. as for douglas' other book, that too was even worse bullsh!t. i just developed a phobia about dog bites that i never had before reading that book. go figure. imo, if you want a good book on trading mindset, read brett steenbarger enhancing trader performance. this is written by a psychologist who has an interest in trading, not an author who says hes a trader to try and get kudos. the brett book is for people who want to continually progress their trading, not for a 'nice read' by the fireside as many peoples 'favourite trading books' seem to be/ it's tough work and most wont be bothered with the effort involved when they realise to get good at this gig is going to take more effort than reading a couple of cosy douglas books.
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exactly.Thats where trade management comes in - using whatever timing method like a bounce off support/resistance following such a correction to enter.
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Josh, Well done for the research done earlier. I'm not suggesting you go and test this, but it may interest some here to know that the ORIGINAL idea as suggested by Cisco futures did differ slightly to Larry's rehashed version. The ORIGINAL version stated that the 'trade alert' signal was triggered when a bar opened outside the value, and closed inside the value. That was it. No other second bar was needed. No entry point was specified, and no stop. The idea was simply that price was being rejected from outside the value area, and was now 80% likely to rotate back through value. In MP terms, the market is transitioning from a previous state of imbalance, back to a state of balance, where the value is unchanged. It was up to the individual to decide how to enter and exit. This was a concept, or an idea, not a hard system; A bit like MP itself. Given trading is about managing probabilities, the 80% is a probability that price will at some point rotate fully in the value area. It never stated our trades will win 80% of the time as that would depend on the individual. Cisco do 'suggest that if stops are to be used at all in their ideas, then the trader may want to consider a stop of 1 octant (which I believe is 1/8th of the days range, but Im not 100%). More info can be found with a google on cisco futures. they have a lot of info on mp - if a little 'outdated' if i remember - havent used them in a long while. I too did some testing on ES - but not quite as extensive as yours I admit (about 50 days I think). On a mechanical basis, I found using the cisco version, price was 78% likely to reach the POC, but only 50% likely to traverse the value. this would make sense if we remember trade is likely to slow and maybe reverse due to the higher liquidity that will probably exist at the POC. A bounce of the virgin POC is another trade concept some like to use...
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eeer yes I can actually. I never traded the S&P pit, but I have experience as a local in other pits. Besides, it's no secret that many (not all) former pit traders (even the good ones) couldnt adjust to the screen so resulted to shill instead. Anyway, seeing as you seem to imply that just because someone traded in a pit makes them a trading god, feel free to follow the rubbish that the shills spit out. With such short sightedness, youre going to lose your money to either a shill or to the market anyhow. See you in the market! Dude.
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Hey folks, Larry here, I just wanted to share another amazing tip that i normally only give the bozos who i can sucker in to my course - errr i mean top traders. here we go..... most traders think they have to buy low, sell high. Well, this is why they LOOOZE. youve probably been an experienced trader if youve come to my site, and are looking for that little edge to make even more cash right? well, here it is..... dont buy low, sell high, instead, buy high and sell low! sound daft? well, you may have heard that all the best traders are contrarian by nature. that means they do the opposite of everyone else right? well then they must be buying high and selling low. you see. keep it to your self though - we cant have everyone trading my secrets or the edge will disappear! Yours, Larry 'the shill' Levin
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Where's Larry gone? I wanna hear secret tip #14. I hear that his uncle who is the head of trading at goldman sucks, (Utah branch) whispered this one in his ear - and he swore not to tell anyone until now....... Secret tips #1 -12 are to be found in Christmas Crackers all round wall street this festive season.
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The Secret (or Not) to Day Trading Futures
TheDude replied to AgeKay's topic in Day Trading and Scalping
LOL. Nice clue! I have to put some more words in my reply as otherwise it's too short -
Firstly, when the first 'bar' comes around, there may be little edge left in this trade. Secondly, context is paramount. Suggesting that it works regardless of direction is deeply misleading - as is your reference to floor traders, as they are now extinct - those who are left are only really there to execute blocks. The comment however does suggest how old the original material was (this was originally a set-up from Cisco futures if Im not mistaken). You also suggest a fixed stop of 2 points. This too is silly. The original 80% idea suggested that price will reach the other side of value 80% of the time. You will only get that figure if you apply the rule with common sense and not trade the set up mechanically as you suggest. In other words, it is quite possible the market could make another daily high/low (thus taking the 2 point stop out) before rotating to the other value extreme. People should be very, very cautious of vendors.
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How Do You Know the Markets Aren't Random?
TheDude replied to dangermouseb's topic in Technical Analysis
Anyone who states the markets are random is really stating that they do not understand the market, it's function, how it operates, and the very basics of markets. To state market prices are random is really, really foolish. It's verging on stupidity. Like Taleb said: Random is a word we use to describe something we don't understand I know academics like to have a model, and the random model may suit some purposes such as options pricing models. We need to remember that just because we use something as a model, we are really utilising that model as a substitute for fact. If the markets were random, I'd be indifferent as to whether I paid 3 or 30. Guess what.... So, thats it. Prices are not random as I have proved. End of thread. May as well close it. I have spoken. :applaud: -
Thanks for the reply Tams. I trade futures mostly - day and position trading. The speed and accuracy intraday with IQ seems ok still - keeps up with my X Trader feed. My bug is the errors in daily data and historical intraday - oh, and being lied to by some jerk on support.
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Anyone else having issues with the quality of IQ Feed? Their support is pretty bad too. I have noticed a terrible drop in quality, and their support staff unknowledgable about issues, and giving lame excuses. My most recent problem was reported, and I asked for the head of support as their normal staff aren't what they used to be. I was given the name of someone who doesnt exist! I dont like being lied to. A great shame as this used to be a great feed. Ive been using it for 6-7 years, maybe more. Apart from e-signal, are there any other good suppliers as Im about to throw in the towel with IQ after being lied to. Thanks
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How to Distinguish Accumulation/Distribution with VSA?
TheDude replied to r4bb1t's topic in Volume Spread Analysis
I dont even know what vsa is, but volume is falling. Never buy a dull market. -
In fairness, I did hear OEC had an outage late last month. If you're a new day trader with a smallish account, such an outage could easily put you out of the game, especially when every other user has been shut out and every one is calling the desk to cover - so you cant get through to the desk. Ouch! :crap: To answer the original question though - I'd say X Trader is the best, hands down. Of course, we're all going to say the best platform in the world is the one we personally use - if we didnt think it was the best we wouldnt use it! We have to remember that we tend to get what we pay for. Given every dime is more important to the new trader than the big trader, I'd say it's more important for a new (serious) trader to invest in good equipment - so long as that cost wont put him too far behind of course.
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Finally! A Way to Verify Trader Performance
TheDude replied to Uli Schmuli's topic in General Trading
wheres the motivation to join? wooo-hooo so some kid on the other side of the world who i will probably never meet now knows all my idle boasts are in fact - facts! most successful traders will not give a damn about 'proving' themselves to a bunch of losers on ET and T2W. they have nothing to prove to anyone but themselves. most successful traders are pretty humble people and dont get off on this ego stuff. whats more, the seriously, seriously wealthy go to great lengths to hide their wealth - not advertise it. this web site will attract only one kind of person: vendors. oh - sorry, also it will attract those who out the goodness of their hearts want to share their 'secrets' with john doe for nothing. -
What is the Realtime Data Feed Do You Use ?
TheDude replied to sharehunter's topic in Volume Spread Analysis
i use IQ Feed. Its much better value than e-signal. I found e-Signal very unreliable with bad lags. I dont know what I pay for it - I think it's around $150, may be less. If you trade stocks it will be cheaper. I trade futures and IQ feed keeps up with X Trader to the tick. I have had 1 or 2 issues with IQ feed with some bad prints, but after 5-6 years of reliable feed i'd still recommend it. -
Neat thread. Yeah - I was just getting ready to short - the high at 1190-- was on pathetic volume, so it was just a matter of waiting for the last of them to give up - which seemed high probability to me when the market came down to 1188-- Then there was the 13.30 CT (start) auction that gave the signal of a 80% chance of going to value low. The rest was gravy. I was hoping to see the gap close and cover at 58's - maybe tomorrow
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so is oec any good or not? i know browns fan should change his name to oec fan, but anyone else.....? i had a look at their web site and i must say they do offer a lot for the money. its almost too good to be true IF they data and software is reliable and fast. and we all know what they say about too good to be true.....