SIUYA

its been shown before and its worth showing again. https://www.youtube.com/watch?v=8SdHlfsA0P4&feature=r-vrec

Prepare for RANT..... You know why those cliches get old - its when you keep hearing the same stuff and yet dont listen to it dont follow it or try and change it too much or try and make it an exact science......chasing the holy grail. There is another option to add..... 3) they do have a winning system, but cant be defined by hard and fast rules that people seem to want to prove it can be tested if you take every single trade. I am envious of the computer traders who can fully automate their systems - (I cannot -whether its for lack of skills, or not feeling i could get satisfactory results, or I just dont want to let go of the control) for this is as close as exact as you can get. The completely STUPID things some traders want is an EXACT method for everything. (you can hear them whining now - where is my stop, where is my target price, oh I got stopped out twice and missed the next trade), if you want that get a computer to do it for you, work out the numbers, optimise it and then get on with it. IMHO - its f...n numbskulls who get on posts and keep saying but this rule did not work here, and there and say the basics of ride a trend, cut your losses etc is babble.....because the fact is they dont do the basics. They chip away being profitable and then rip it all in two or three hits, they trade trends poorly because they dont run things, and they try and pick tops and bottoms when clearly the market bias is against them, and they fail to anticipate when the trend is changing and when to avoid chasing it. (they usually pick tops and then decide to go long only after the market has clearly changed direction and try to go long). you dont need to be a genius to open you eyes and see that a market is trending up or down - no matter how you want to define it - and trying to get to an exact method is half the problem - If you dont do the basics right who cares about any other exact methods. EXACT - that's another word that should be banned in trading. End of RANT...... I agree with you for those who have a SECRET, but please please please dont mix the basics up with so called secret scammers. Its like asking a sports person/musician/artist - how do you do it, give an exact method, (I had a drink last night with my partners colleague - he runs two funds investing in Asia, one is a long short fund, the other long only total AUM approx $200m, and he is a fundamental investor - he said a very topical thing last night - one you often hear from technical traders - and I asked him to repeat it as I wanted to get his exact words as I could not have agreed with him more - "There is no point basing your trades on other people opinions and ideas (methods), you have to base it on your own and sticking to the basics is what its all about" - in other words not much is different in any style)

one of these completely off world topics open to anything..... I agree - science has not necessarily made people live longer - its increased the average life expectancy - ie; it has not slowed the aging process, all it has done is keep older people old and healthier for longer, otherwise you would choose to stop aging somewhere between 18-36 (my choice age would be 28-32)...the wonderful world of averages where half of us will always be below average! If you are talking about happiness - well it could be argued that the pursuit of happiness is fruitless in off itself, and again a lot just boils down to the desire to find peace with ones self (in what ever form that might take) and I dont know if extra intellegence will help there....maybe it might hinder as we will constantly be questioning and researching why. Regardless of the time, age and country there are generally accepted things that make people happy - these are friends, family, goals and an acceptance of the small things in life (to paraphrase and others are better qualified to comment on this) - non of these require more intelligence than what he have already. and who says humans have a problem - maybe the highs and lows, the turmoils and troubles are what make us human.......too many sci fi scenarios here. Maybe the world just needs a chill pill.

1...why insure, why not actually make it safer by segregating it - all of it. Crooks love insurance - it means it still ok to steal it as someone else will cover it. 2....fraud will still occur - again making it safer, and not just the pretense of being checked. 2a....just have a level playing field, and dont allow quotes that would have been hit to be cancelled. If I understand it some HFT have the ability to pull out when they know they might get hit - I think a lot of this has to do with multiple exchanges etc - but requotes and speed to flush out buyers and sellers has occured before computers - no one has really explained adequately why this is new, or such an issue. Different order types for selected clients - a different story. 3....The dark pools were designed to get around the front runners and insiders - get rid of multiple exchanges, allow more transparency and make the exchanges non profit - that might throw something into the mix. 4...no comment - not US 5....see 2a - sub penny quoting is fine - if everyone can do it and the order types are fair for everyone. - To restore confidence you need to ensure that the markets work in a fair and orderly manner for all participants (speed and location dont play a part here) and that criminals are prosecuted. To many firms (banks) are prosecuted and settle time and time again for what would be considered fraud, price rigging and corruption in any other industry......and yet why would we expect them to do anything else given they are encouraged to do so and then have no downside.

When a UBS banker friend of mine told me the same thing - "the only thing wrong with LTCM was that they ran out of money - if they could have kept going they would have been ok" - he probably ended up being head trader somewhere with that great insight....... The problem with most mean reverting strategies is precisely that - not saying that there is not value in them - insurance companies do it - but the problem is you might run out of money. Svobfix - No I dont know of any mean reverting systems that work - i am sure they exist - but like everything many work until they stop. Plus just asking such a question is unlikely to ellicit many positive responses except those trying to sell you something..... why do you like the idea behind mean reversion?

yep - but who helped push decimalization, and then by their nature really pushed the spreads in, and helped open access to the markets for most people - chicken and egg really, but even with the regulations/incentives in place you still need people to push it. HFT in a simple form is just a super fast way of doing what humans would do naturally. The HFT before computers where the pit scalpers and market makers - nothing here has changed. Its a bit like saying that the first computer, hell the first abacus was really the cause.......It was always going to be a natural progression - diming and speed - once you are allowed to. (by the way Australia has had decimalization and very close spreads in liquid stocks well before the floors closed) ....not sure how volumes have increased but liquidity has not.......unless of course volatility has massively increased, in which case vwaps and other such measures are designed to minimise this. Mind you volumes have increased in the previously high volume instruments - again by their very nature this makes sense, as they are looking for volume and liquidity. One issue the exchanges have is how do they increase the liquidity and decrease the spreads in the less traded instruments - personally I dont think the exchanges care - and one of the big issues is the mismatch of incentives driving the exchanges and their buddying up with the HFT. ---- previously they could enforce markets, but the spreads were wide and when the s..t hits the fan every one ducks for cover.....its the nature of markets. plus when it comes to meltups/downs - they may exacerbate them some what but it is no news flash that these occurred with zero liquidity before HFTs, before computers - they are often called gaps, crashes and manias. I think people are so worried about the HFT clipping them they are missing the advantages they have brought (along with regulatory changes) and more importantly they have missed the problems that may occur as a result......now the issues involved with it being an uneven playing field with hidden orders and different order types - now that is criminal.

have a look at this thread as a recommendation - http://www.traderslaboratory.com/forums/e-mini-futures-trading-laboratory/9773-day-trading-e-mini-futures-646.html and dont add any more indicators.

long bow here Predictor - have you noticed the growth in the pharma industry lately- the fact that the world is getting older on average, and that obesity is more a result of diet and exercise - and you want a pill for those without the intelligence to understand that??? Plus while models might take enhancements lets not forget they probably have two other factors that make more of a difference - genes, and hard work. (even drug enhanced sports people work hard at it - there is no substitute for that) If you take the view that humans have been actively using tools for the past 100,000 years, and modernising rapidly in the last 2000 yrs, exponentially in the last 100 years, i think you will get what you want - and my guess is we will either have many of the same problems we have now, and a whole new set of problems.....I dont follow your rationale for a super pill if you are after productivity gains...

some environmentalists would argue that it has been the use of our intellegence that has caused a lot of the problems in the world today.... I think the world already has plenty of examples of where we are trying to improve our intelligence - the use of computers, scientific methods, university, political and legal reforms - I mean what is the point you are really trying to get at - plus dont forget you always need someone to build the roads - unfortunately if everyone is in touch with their top capacity do you think we could find folks who want to do this? Hey Joe - why you leaning on that shovel? - because I am at one with the universe, but I only got two phds, I need at least 4 to get off this road crew and into driving the tar truck

a friend of mine who is a deep value investor does just this - he has resting buys and sells at levels he wishes to purchase and sell and figures he might just get lucky on a few occasions more than previously.

I agree that for many traders they may not take into account their leverage, but if you dont understand it then I will gurantee you one thing - your back tested, or historical worst case DD will be broken. Of course depending on what you are trying to achieve is important here, and when introducing institutions into the mix.....well, most are unleveraged, either due to mandates or regulatory or internal risk controls. but without digressing into the insto world.... if a trader tells you he made XXX% or dollars, I would always ask on what leverage - because from that you can guess his other parameters.... which would you rather back trader A.....2% risk, max historical draw down 30%, returns 50% pa, leverage 2X trader B.....2% risk, max historical draw down 30%, returns 50% pa, leverage 10X it another measure that many miss use, or neglect or think irrelevant.... Look at what happened when many leveraged themselves up circa 2007......

sticking with my theme - for all those that complain about the bots scalping you/loading up orders/market making with ultra tight spreads and clipping you...... think about what it was like before the HFT. (no offense Blue as its an interesting subject, but 'enemy' is a bit harsh.) HFT have reduced spreads and increased liquidity - whether they have produced other problems as a result of this might be another discussion, but I dont think its fair to call them the enemy of the retail trader. I mean ....previously when you had to phone your order to the broker, he phone his clerk, they went across the floor, the market maker gave you a spread....blah blah blah.....I find it funny that people complain about the service they get now days as a retail trader. Even with all the latency trading, and rebate fluff - these guys are market making and arbitraging - its only us poor schmoes who actually try and make money out of speculation, and that IMHO will never change. Find value entry, cut if wrong, run if right, rinse repeat. the one thing we all have in our favour is that we dont need to trade......until it suits us. anyways... i still enjoy the threads and ideas, and do think there are other issues as a result of HFT (they may have more to do with multitudes of exchanges, poor incentives, non level playing field, lack of real control, correlation of markets and other issues). thanks

Re Knight - I am sure their system worked most of the time, it just seems surprising that they had no big red get me out button for when it was not working. It seems they took too much of the trader out of it. To blow your company up that quickly is pretty scary. they did not get bailed out, they have been diluted Washington post -- "But the rescue, which came down to the wire, had a steep price: control of the firm. Knight’s new investors will gain a 73 percent stake in the company and three board seats. ......The value of current shareholders’ stake will also be heavily diluted. And Knight, which has removed the problem software and is still completing its own investigation of what went wrong, faces a difficult task of rebuilding trust with clients and persuading regulators that Wednesday’s disaster was an anomaly. Its stock has plunged 70 percent since last Tuesday, before the glitch happened." The cheapest part of any strategy is waiting. While it does have its high times and is great when you get it wrong speed still kills.....maybe that's a road sign Knight might ironically adopt.

yes - puts will become expensive.....however a couple of things to keep in mind re this strategy. 1...make sure your puts are held at another brokerage firm. 2...you only really need to cover the amount of your margin/account at the the broker you are worried about, if that broker goes to zero. So for most it might not be very much.....but it is still expensive. I hope my math is right for US options....and no I dont think IB are in trouble..... eg; Interactive Brokers is at $14.00, OTM option strike $10 Jan 2014 costs (guesstimate) 0.50, broker goes to zero puts worth $9.50 -- cost of insurance/options for 18 months $500 ($1 per day) assuming each option covers 100 shares, PL = 100*9.50=$9500. - that might be enough cover for each $10,000 in the account. At $1 per day its not too expensive if you just add it to any brokerage. ...................... Only real option is diversification really.

ask Knight financial?

I agree with both of you.... Accounting irregularities and fraud will not be stopped just because a...accounts are published quarterly b....top ten accounting firms are used. thanks Charles, While it is a start, all it really becomes is a subsidy by the customers to support the bigger brokerages and the accounting firms. Fees will go up, less competition will occur as a result of smaller honest brokerages not being able to compete due to regulatory costs and extra accounting that larger firms can minimise the impact due to economies of scale.....and yet, none of this will eliminate the same effect should either the accounting requirements not be adequate or fraud occurs......in other words - not exactly worth it, as the customers and firms get little benefit from the extra costs. I do agree with bakrob99 - the only way is to really segregate the accounts. While fees may go up if FCMs cannot use our money for their own funding etc; at least if the fees go up, we know we are getting some security for that cost. (I dont know about Canada, but most of the rest of the world is still waiting for court cases and allocation disputes to be finalised before MFG holders outside the US get any money back - even though the 'crime' of vaporised client cash happened in the US, by an American, and under US laws - its the wild west that is the UK with unlimited re-hypothecation that is scariest. That is why client money needs to be secured by authorities who have little incentive to use it to make money - much like the exchanges .)

lucky its only a post number otherwise I would loose friends over it..... must make penance just in case - throw salt, lick a leprechaun, spin round three times, get tattoo, and wear lucky underwear ------ oh dammit --- that was a Saturday night flashback I had. Or maybe I will just stick with 'my version' #38- the tripple whammy with an eight. tilt you head on the side it looks like a fat chicks mid drift.

just wanted to get post # 38 (thats thirty eight)(three score and eight), must be the tripple whammy of good luck.

so Q: why put yourself through the moronic diatribe here, why punish yourself here when you have so much contempt for us..... A: the silent few. Fair enough. it all makes sense now -thanks Steve - and sorry for me being a little short on memory.... Despite your contempt for the rest of us it is done for the silent few..... not sure why but it kinda reminds me of Dr.Charles Montague [ame=http://www.youtube.com/watch?v=-u1jtxkgEdQ]Division of correction - YouTube[/ame]

Steve46 - I think most of us got the "clumsy sales pitch", your style of trading, (thanks by the way), and the lessons in being adults, we get your humour and that you have a grumpy personality ...... the part I dont get and maybe its just me - As a teacher and a trader with the skills you have - why participate in something and with others that you clearly hold such contempt with, when you say you dont with your other students? We could speculate but that might be a whole other thread in itself, and before we head down the slippery slope that is that........ I mean if you just don't like folks here, or they are a little slow, or maybe they just don't understand your sensitive side then fine, ......but why punish yourself? It seems like a trader who repeats his mistakes when he is learning to trade.

yes but why are you here if this is what you really think? Why not just post in a thread such as the ES where you contribute positively...... because with comments such as "A decent question (for a change)" you are clearly only contributing to the level of discourse you seem against....... To me it does not make sense for you to be here unless you enjoy it, enjoy reading it, enjoy participating in it. You are not getting paid, you think people here are morons and seem happy to be open about it (I mean that is just your personality which is fine). (I for one enjoy it all immensely and find most people pleasant even if we dont agree) I am just fascinated as why you would bother Steve - you can clearly trade and teach people - so why as such would you put yourself through the diatribe you think you find here.

Obvious question Steve and I think this is actually not off topic as we are talking about learning to trade and hence the link with teaching, and this is not meant to question your or anyones ability to trade, or teach or their knowledge..... If folks here are such poor students, and you treat them with disrespect compared to your paying clients, and your clients actually pay (or some representative from them does)....why do you continue to stay and disrespect people here at TL who might not have the experience of your 'professional' clients. Surely as a free internet discussion site for many new day traders you would understand the level of knowledge here might be less than elsewhere. (For others it is rather higher) I dont think I need to further any other suggestions of what this might mean, but it does beg the question Steve of - Why are you here if this is what you really think?

my time frame is vastly different and so it is largely irrelevant. As I understand it - what they are largely doing is market making (clipping) more than position taking (definitions dependent maybe) and reacting to other changes in other markets, information and order flows as well. They have as much predictive power as the stars - they do however have the ability to make judgement calls in very short term time frames based on the information available and know that they have a back stop if they are wrong (speed and the ability to interpret and read order flow) (Simplistically - To a large extent it is no different to what floor traders always did - only it is super fast, in super size, with less margin and more interconnectedness between markets and instruments (scary contagion effects) More worrying is the fragmented nature of the various market places, lack of obligations to keep fair and orderly markets and the 'fact' that certain firms have different market order types and different access to information (front running and manipulative abilities- ie;; its mot a level playing field even for the HFT.) My concern is still what do i do once I have my trade on.....so the enemy is still me

from MFG experience.... thank my lucky stars I had learnt from others mistakes and had diversified my accounts, so all I could do was shrug shoulders, open a new account elsewhere and get on with it. Diversify accounts even more, become less trusting and work out how to minimise this occurring again, leaving even less money with the brokers. (Even though the MFG account could have been worse it was not good - and FYI - for those of you in the US who may have received money back the rest of the world has not yet - still caught up in UK court cases.) In the meantime, curse swear and plot to exact revenge, join others in consolation and wait for the court cases and inevitable blame game. The upside is that it makes you realise that money is only money, and it does not hurt that much when its gone - the loss of trust hurts more. (My blaming the accountants has not been diminished either )

sort of reminds you of the star quarterback, CEO, fitness fanatic, healthy dont eat cream buns person who cross the road and forgets to look both ways - it only takes one time for the bus to be at the wrong place at the right time, no matter what precautions, rules, principles we have in place.