SIUYA

I always thought it was a speech impediment issue and it was meant to be - Sales trader :doh:

both would make sense, but if you want the equivalent exposure to buying equal amounts of $ of the underlying then then best thing to do is keep it - dollar delta neutral. Dollar delta neutral to me means that you want to keep the same equivalent amount of the underlying represented by the options delta. This way if there is a 10% move up in one, and 10% move down in the other, you will benefit the same as if its holding the underlying. so you would go for the 1:3 ratio. However, as you have convexity and time decay unless you want to rehedge you have to think of the outcome as binary - ie; at these levels I will exit and not rehedge. Simply because there are lots of different scenarios possible, and the convexity means your dollar deltas will change.

dont hold me to this Bob as its my rough interpretation - 04 (3504) is the overnight mean of trades....or basically the overnight fudged mean which is the difference between the high and the low of the overnight sessions. The 'levels where traders cant find trades' - is about the levels whereby the traders push prices away from this mean, and then revert back to it as those levels could not generate trades, above or below them. These levels will expand, and contract - and as a result the mean moves. Best read all DBPs info your self to really get a handle on it that makes sense to you.

If you have a coulis that is too sweet add a little bit of lemon juice Dont let your egg white mixture come into contact with egg yolk or oil or your meringue mixture wont develop stiff peaks. Add extra vanilla in small doses for that extra something special - real vanilla not imitation

you will get whipsawed.

It sounds like you are talking about dividend capture strategies. They work well in bull markets (go figure!) but there is a lot of literature from brokers on this, about how many days it takes for a stock to regain its dividend. A better strategy might be to look to add when a stock in an uptrend falls by x% more than its dividend.????

Hi Rande - I worked both floor and computers On the floor you had a number of advantages that simply dont translate off the floor - regardless of if a trader has their emotions in control. Things on the floor such as - - ability to read peoples faces - ability to see exactly what others are doing - ability to hear the emotion of a pit - ability to see all the orders, and remember and know where real orders lay and are not implied - for some the ability to bluster, bluff and bully. - these all gave the ability to be alert when things will get exciting as opposed to simply staring all day. There was also the ability to front run, get favours etc....like HFT This meant that a lot of traders never developed trading skills that were independent to all the advantages they had. eg; they might not have needed to develop patience, or even a trading plan....because they did not need to. They developed other skills better suited to the environment they were in at the time. I think its as simple as that. The reason I think this is that myself and another trader from the floor made the decision years before hand to study trading ideas - we thought the markets would become more efficient, computers would rule and we had best learn to trade. Many others did not and it was obvious that they did not want to develop new skills. I should have actually learnt how to program - it might have been an even better skill!

see post #3 repeat...loop circular reference warning

....and yet.................

Hi TW - there are times people do try and set off stops make no mistake. As a small guy there are not out to get you though - its just the market - and they are not necessarily any smarter than you, and they also a looking to stop out bigger players than the single retail guy. Plus there is a difference between 'front running', margin squeezes etc - even the big guys get caught in that. You are right - if one thinks that as a retail guy and can show it happens enough then allow for it. Easy....that makes you the smart one. I trade FX, and sure I have been stopped out sometimes right near a top or bottom, to me its worth it rather than getting caught in something that runs away. Its a cost. I have also been nearly stopped out by a tick or two but not, only to have something run my way. Swings and roundabouts. but the idea of smart money out to get you - baloney - smart money has better things to do. Anyways - it will be interesting if Rande was able to shed insight into if there has been a move into more institutional high end coaching, OR if this was just an untimely article, OR nothing is really new.

An interesting article..... Weather or not you like/believe in it .... http://www.bloomberg.com/news/2014-03-11/traders-beat-market-indexes-borrowing-tools-from-sports.html Has business picked up from institutions Rande? ////////////////// A side thought..... For those who think there is 'smart*' money out there looking to screw you (a crappy term IMHO).....have a think about this. If this sort of stuff has been known for years, and discussed in retail forms for years and the large guys are only just stumbling across it (I dont believe they really are simply discovering it) then it should make you question the idea of smart money - maybe its just that the easy money has gone (or moved). (* Not to confuse smart money with scammers and sharks)

Even the rumpled one does not really "say" its a 100% profitable - that is why he uses stops. Over a long series of trades it might be, but dont get caught in the words. IMHO - the catch is it requires discretion - its not 100% automated, it can be shown that the chop will get you when I looked at doing this, but its simple enough system to make sense, apply and keep you out of too much trouble. Real test becomes if you can run the trade when its going your way and work out some sort of way to avoid the times not to apply it. Like most systems.

Hi MK, yes its a dilemma. I guess there are a number of options available. 1) ignore the larger trend - focus only on what you see in the day. Have some rule that helps you determine the order flow for the day. ...very hard to do and chop will likely get you as well as indecision (unless its automated) as you are likely to have no point of reference. 2) go only one way. eg; say in a simplistic manner. its an up/down trend. So I will only take longs/shorts --- you might reverse this is you feel say in an uptrend it consists of large overnight gaps ups and grinding down days. 3) work out where you are in a longer term trend and adjust focus to try and accommodate trades based on expectations of this. 4) go both ways - be a genius and make plenty (or get chopped with indecision, doubt and be proved right but actually loose money)....I suspect this happens to many folks. Ultimately as you point out MK, finding the way to stay aligned is difficult. Personally I find that the easiest solution is to either wait and wait and wait for the right days and go harder at it. You might get chopped a few times, keep the losses small gut the rewards still pay off - so long as you are not hoping to do this every day. or look for where the best opportunities across a number of instruments that are trending (and hence likely to continue that direction) and apply the same above logic. (This is all assuming you are not holding overnight) Controversy corner - I quite like TRO (rat, maze - drain the banks) and the simplicity he offers. Determine a direction to trade (based on stats), wait for a simple area of opportunity (within 20 tics of the current high/low), apply a simple entry and exit technique (red green red etc, and 10 tic stop), use discretion as to when the actual high/low is relevant (the discretionary part which still causes the problem and cant be replicated by automation). Hence the only real focus and training required is - how can i improve my discretionary element of looking for when to apply this. /////////////////////// (As you mention leverage is a positive for a day trader, but I feel frequency is more often not a positive. It raises an interesting point as a thread itself - which is more inappropriately applied by failing day traders - frequency of trades, or over leverage. As I am not a fan of the idea of an 'edge' as its commonly referred to for day traders as opposed to a real 'edge' for arbitragers, markets makers and such I probably side on the idea of less frequency is better.)

or apply a very simple idea.... if your odds of picking a top/bottom in a trend and getting the exact reversal point are very low, then the odds of not picking the top/bottom in a trend while trading with the trend are very high. No matter how you measure a trend - odds are high you will not buy at the top or sell at the bottom. So to a large extent worrying about if the trend is reversed is irrelevant. .................. One problem is always that many day traders focus on the smaller trends within a larger trend and hence never really get a chance to participate in the larger trend constantly getting chopped out which goes to the issue for most short term traders that they should be focusing on - is it ready to resume? How then can I participate, but hang on for longer than a day with little risk in order to participate in the dominant trend? Not being able to ride the main trend is always going to be an issue, and while there is nothing wrong with trading counter trend if you are good at it.....my guess is many are not and they waste focus and time trying to pick tops and bottoms intraday without thinking about where they are within the dominant trend Richard offers some good simple ideas to use to determine if a trend may have changed......but given its probably irrelevant to most short term traders you may as well keep it simple.

its another BS conspiracy article for excuses. Think about it..... Its basically saying that a few traders trying to manipulate their bonuses pushed gold down to where they want for the year. If this is the case that some individual traders can manipulate the year end price of gold for their bonuses - it does not say much for the gold market and the gold bulls should be very worried at how thin and crap the gold market actually is. In the manipulation that has been revealed the traders have been more interested in the short term daily manipulation of prices whereby they continually lock in 'risk free profits' every day in order to build up their PL. through front running.....This is where the manipulation occurs. Then to roll out some crock of linear analysis of the long term. Very handy that they apply it to the recent rally....and not 20,30,40 years. If its obvious that a few individuals manipulated the gold market in 2013, why then didnt they do it in every year from 2000-2013? Why didnt this writer make millions shorting gold last year.....cause its sooooo obvious. It also shows a complete lack of understanding of markets that they can deviate from their fundamentals for a period of time because of the market 'mood', even if over the long term the fundamentals do remain sound. You dont need this type of analysis as a gold bull You simply just buy gold and save your reading time, or you trade what you see is happening at the time.

Companies do try this using psychometric tests before hiring. they also put in place controls and managers and other such elements to ensure traders either have the support needed or risk limits required, or the mental abilities required. They also usually either hire qualified people with proven track records, or they provide training for this. This is probably as good as it gets and would be the bare minimum rather than simply blaming the trader. As for back testing humans...... If you consider back tests on automated machines to be rather 'interesting' but not much good in reality and then try to apply the same thought processes to humans ----- there is not much to say really other than rethink what you are trying to do.

There is no right/wrong answer here..... but generally.... You have 100k equity and you are willing to risk 1%=$1000, that will mean that each trade you do should risk $1000. However - you should ensure that you understand that if the trades are correlated then you effectively have the same trade on and are risking 2%. So you can either drop the size of each trade down OR, take one trade at a time OR wear the risk OR hedge somehow. When to adjust the capital....see point above, but ideally you should be doing it for each and every trade. (remember you equity at the time of putting on the 2nd trade is still probably 100k) Maybe you do it at the end of the day/week/month... maybe you do it at certain % of equity levels, or when you exit a trade. It depends on what you are trying to achieve and there are plenty of sources around the wed to be able to compare various methods based on your trading history. There is no substitute for doing your own homework and proving to yourself the method you choose is likely to be the one that will achieve what you want to get.

same thing. If Zdo said nothing on this site, then the one thing he said that is worth thinking about - " its system specific." IMHO-For many they probably miss-manage their winners and so they dont 'take care of them selves.' This then leads to changing stops etc.

Is it interesting or relevant that you did not say - what the company does, how it makes its money, why its paying a large dividend, what their business future projection are. etc. It might be a single coal mine nearing the end of its life. These might be more relevant in this circumstance than simply rattling off the numbers. plus $22.50 to $3.75 and currently at $5.08 over the last six years does not sound that stable a price.

MM - I have to file in all three..... I have to pay in at least one, and then once the filing is done....maybe in the others - it all depends on marginal tax rates - eg; Oz and UK are about 35%, Netherlands higher.....but then there is an extra catch that my wife has some special tax treaty deal as she is an expat, and such and such.....nothing is simple.....and my peeve is that I am the one who has to deal with it, the paperwork, dealing with various accountants and such. So far I have managed Oz, and the UK for last year. Its probably easier just to say 0 in all and tell them to chase me up if they can be bothered. As for your peeves....well what can we say ....people do what they are incentivised to do.

they are probably busy 'liking' things on facebook.....that is another pet peeve. Its like some school yard thing.....or maybe its just me (us) getting old. (disclaimer : I am on farcebook, but wonder why people spend so much time on it. At least trading can be profitable!) I saw a telephone the other day in a house - it had the old fashioned button whereby you had to push it to get connected to the operator, and then they connected you manually and probably listened in on the call, reminded me of my childhood.......who needed gossip magazines and social networking when you had the bush telegraph. So while technology changes, I guess people stay the same....urine soaked and desperate to connect with others - even if they are imaginary, virtual or as some anonymous name on a trading site

much the same - I use a password protection system called a printed piece of paper...with a few hidden codes for certain words, no one could guess what they mean, its off line, I can take it with me to another computer on a scrap of paper and it costs zilch as an extra. I also have switched off the blackberry emails - I look at them when at the desk after that its, please text me if you want me - dont leave voice messages, and emails can wait. ......................... As for a current peeve - presently its having to do taxes in 3 places (at least for the next year) - Australia as I am a citizen and have assets there, UK as I used to live there, Netherlands a I now live here.....all with different end of financial years, different rules and such....did I mention before I hate accountants and blame them for all the worlds woes.

some would argue any line, any ratio will work and have you seeing valid points, and hence its all useless. There is a thread here somewhere talking about that..... Personally I use the non-fib number of 50%. Why? Because it seems to work pretty well for the types of retracements I look for, its simple, easy to judge, easy to measure, makes intuitive sense, and seems to work pretty well in most circumstances.

they got wyc koffed off and moved to other forums.

I would imagine the best predictor for future vol is more some reversion to the mean of something. Particularly when using options....eg in periods where there is wild volatility then while some short term options trade close to what is happening, others will trade at big discounts as when the volatility stops the implieds collapse. Alternatively when vols are below averages, people still tend to pay up for them as it only takes one good move....when traders are burning with time decay its depressing, and can kill some accounts. Plus with options there are different series and 30, 60,90 day vols differ in expectations as well as measurements. For trend followers - assuming you are not having the additional issues of rebalancing due to subscriptions an redemptions, I gather most only really care about their initial risk at entry. After that they are either stopped out, or if it moves many multiples in their favour its not such an issue...they will only wish they had larger size on. The killer is volatility at entry and if they use trailing stops then that should take into account future volatility? Thats not to say you can have a trend and not still get chopped up. They are mainly worried about portfolio concentration I would imagine. There is also the other little issue in some trends - the marginal value of each tick depends on where the entry is....usually not an issue but i could imagine it could be. (There was one little tick which seemed to work pretty well. exit a trade when Vol was 2x your vol at entry.) Does it matter that most of the volatility issues affecting these guys and their use of the ATRs generally were designed to standardize each trade, given they had the same entry triggers. in which case if thats all you want to do then current vol is a good measure. To be honest I have not given it much more thought than that.