SIUYA

you need to understand the difference between a European and an American option. Then to see if the stock (assuming its a stock) has any dividends between now and the expiry date which may cause the option to be exercised early. Otherwise YES - the option will likely be exercised on expiry day if it is in the money. Many exchanges and systems allow for automatic execution of options that are in the money, this is a result of making the systems easier to work, and also as it helps eliminate the ""öpps I forgot error"" It is only likely to occur on expiry day (or possibly on the day before ex dividend day ) if that is the case.....its highly unlikely before hand. But if it does it will be a win in your favour as you will pick up the option premium straight away and can do it again.

there is also a lot of debate about SIM trading and its benefits and detrimental effect it can have on traders mindsets.....which you clearly are aware of... as a suggestion....dont think in terms of one trade per day.....think in terms of trading only when the trade idea you are using shows itself....it might be three times in a day - the first attempt might fail, but the other two work.....or it might not occur at all in which case you dont want to fall into the trap of looking for your one trade for the day...when there is nothing there to do. There is nothing wrong with sparing as it beats getting into the ring and getting floored in the first round. you have a job, you have patience and time on your side.....they are advantages, dont get sucked into the get rich quick crap if you dont have to. If your personality suits that style of trading, then you will get rich quickly a few years after you might have....no big loss, but if it does not then you may find you are out of the game before you have a chance

i agree ingot, that normal everyday living cost inflation is definitely more than the 3-4%..... however, its the big ticket items that skew the numbers.... I recently restocked my kitchen whitegoods - new fridge, washing machine, microwave, dish washer, kettle, toaster.....the prices for these were similar if not cheaper than the last time I did it 15 years ago. So these have definitely been deflationary.... Back on the inflation v debt slavery..... you know that if you can find the right inflation flattening investments, that the best defense against inflation is to have a lot of debt - ask the governments.....

see......http://www.traderslaboratory.com/forums/stock-trading-laboratory/9945-i-think-i-made-rookie-mistake.html for a similar take on Greece

actually Steve I dont feel like an idiot, but you seem intent on proving yourself to be one....you clearly dont understand my point as your experience closes off every other viable alternative outside of your world, and while your input was appreciated from your experience, there are others, and I think they were mentioned - Randes examples, and the turtles that have different experiences. and yet you continue to try and belittle people if they dont comply with your narrow little world. My credentials are not exaggerated in any sense of the word, and I am not the one trying to sell my services to others.

Also when it comes to learning - for the time being put away what the daily papers tell you....they will only serve to confuse more. Once you have formed enough of your own ideas, then the headlines might be worth reading again.

as would most people given any system regardless of their wealth and power. '''''''''''''''''''''''' I thought debt and interest was what enslaved us....and then its us who borrows money to enslave ourselves. There is nothing like a good conspiracy..thanks

steve once again you cant but help imply that everyone else is clearly an idiot. Its such a shame. You always seem to be defending and defining yourself by putting others down. . While in trying to ask some questions about your experiences as a teacher - I did not ask what your opinions of other teaches were, or what they are doing, so not sure where this came from..... The written commentary on testing was read thankyou. - I have read it previously along with many other articles on testing. I with someone I paid wrote a portfolio backtesting system in Excel, and have also purchased off the shelf systems for portfolio back testing - not the single instrument or pretend portfolio systems often sold.....so your rather condescending and unnecessary comments about apparently being too much work make me wonder and laugh. Plus if thats the best article you can come up with.....sheesh. The suggestion that I have 17 years experience as opposed to you in one post where you say you have X years (does that mean you have not hit a round number yet??)......well actually it is a fact, and I unlike you am completely able to understand that there are many things I dont know, and would like to learn. I also loose money some times, get ill disciplined and lazy, itchy, hungry and gassy. I know there are many ways to do things that can be successful and I dont really feed the same need you do to build yourself up by putting others down....but certainly can if its required. I understand over those 17 human years - not dog years - that the way I do things suits me, is not for everyone and yet at the same time I realise that others can benefit from a free and open discussion of various methods with out condescension, name calling and the like ...... Most teachers have no problems with any question and actually encourage even dumb questions, and encourage discussion....the question I ask may seem simple to some, but may help others (like that gay Iranian fellow) So I have no problems in believing you Steve and I can accept that you are a guru trader and I have no real clear evidence other than that - so thats fine, but you do offer clear evidence that you need to do some preparation and learning in your teaching style and social skills At present I have plenty of spare time, all my back testing, preparation and experience occasionally allows me that. and Steve you still miss the point of the whole thread it seems - all the preparation in the world, all the backtests, all the monte carlo simulations, all the magic fairy dust in the world may not prevent issues regarding being gun shy.........but thanks for the input.

1....yes Ninja is a good start tool. There are also many others that you will find and each has their advantages and disadvantages depending on what suits you. Only your own homework and trials will work that out 2....i think looking at a few instruments at the start will help keep an open mind that instruments do trade slightly differently, but that generally all markets are the same and so your system/market theories should have have robust and generally universal success, even though they might suit certain markets. Its a trade off in terms of one instrument and knowing it really well and many that give you a broad diverse portfolio.....again only you will work out what suits you. Give the futures ago as given you are from a mathematical back ground you are more likely to go down the systemised route, however dont discount anything...there are many ways to skin a cat and those that push only their way is the right way are usually best left alone. 3....fees....when testing get as close to reality as possible....if your broker gives you one all in price then use that, otherwise it should be easy to split things up....allow for slippage as well. Plus every broker is different in terms of fees.....again avoid any broker who has hidden fees or does not reveal everything 4....massive, massive can of worms here......google such things as back adjusted futures contracts, back testing future rolls, building continuous futures contracts etc.....there are threads here dealing with this and on the net.....there are no universally accepted methods for when to roll, why, how and how to adjust, however there are general guidelines that once understood allow you to tailor your own data.....this will take up most of your time because testing with crap data will give crap results. Then there is the on going collection of data, another can of worms. 5....again a very debatable subject. Start with SIM until you do your testing, understand how the platforms work, how your tests work and how the market works....after that you might have a better idea of how much money you need....you might be disappointed to find out its often way more than you think or are told by others. welcome to the start of exhilarating frustration and highs and lows.

you are such a skeptic Steve. it was like this one time at band camp...and a friend of mine - lets say he was an Iranian...and he wanted to know if something meant he was gay. so it seems in answer to the questions.. 1) how do you know as a teacher that your students are not tweaking their preparation after a string of losses....and this maybe causing them issues? answer ......you dont - especially when they leave your course/tutelage, and if the feedback is mostly positive after this and no one actually gives feedback during the course they might be having issues then - I guess its working. 2) do you have any suggestions for people to recognize that their preparation - or their over tweaking of it and looking for the holy grail, is actually doing them more harm than good? answer....you dont - apart from stick to the preparation and if you are making money then you must be doing something right. ................. Dont get me wrong here Steve I think this makes perfect sense as the ultimate aim here is to make money and why reinvent the wheel. I was more curious as to your ideas/ results as a teacher as it seems that many traders - and it seems this is the case in Randes examples - that often traders who know what they are doing can become gun shy....its not just a new trader issue.....hence my line of questioning. thanks. Enjoy Mr B

you just need to get out of the car before Tom, Dick and Harry drive off a cliff. So what if you get out a little too early and have to walk a few miles its better than getting killed - in the market. Alternatively change your watchlist Unfortunately when it comes to stocks, Tams advice can actually be pretty much spot on.....take a simple strategy, apply it to a basket of stocks - often they will all move together and you have diversified your individual instrument risk and yet still ideally get the most out of your strategy.

MM many things are clear and obvious with hindsight, but in assuming your tongue is not in your cheek.... 1) If as a teacher - how do you know if your students are following the method and dont create issues? I think the turtle trading experiment was interesting in that the method was shown to work...it was simple, it had straightforward rules, all the prep was all carried out and the stats for the previous trading was shown to work - Dennis was successful, and the method could be backtested on a computer.... in other words there was no real reason why every student could not succeed.....and yet not all did. Curtis Faith was one of the successful ones (at least initially during the experiment and there is even conjecture about weather he was following the rules http://www.turtletrader.com/curtis-faith-performance.html) - and in a nutshell as I read it from his books one of his interpretations as to why others failed is that they basically were gun shy and did not take some of the trades. Maybe as a teacher you dont care.....which is fine in itself - maybe this boils back down to the nature v nurture debate and if trading one persons particular method can really be taught - or weather it really does need to be suited to a particular personality. Interested in feedback from those that teach and charge for this?

Steve I agree with you - the issue is in counting and trying to fit a model to the markets......however using the principles can certainly help when used in conjunction with other things such as context, support and reisstance, fibonnacii, fundamentals even.....I think thalestrader does a great job showing this in the reading charts in real time thread. You mention the point of standardisation.....to me this is key. Each trader has to work out what works, and probably more importantly what can help determine when a certain setup does not offer a good risk reward trade based on context.......and for them to then stick to it. Too often the theory of the market and how/why it moves is missing from some plans, even before looking for the perfect setup and trigger. eg; taking longs when a guesstimate 5 wave up count is probably poor risk even if the setup looks identical to other days. Nothing works all the time.

so in other words - preparation is key. It will stop/minimise/correct a lot of mental problems. I can agree with this 100%.... But take it one step further for me, be more than than just 1dimensional "prep is essential", which is the point I am trying to get to in this discussion...... 1) how do you know as a teacher that your students are not tweaking their preparation after a string of losses....and this maybe causing them issues? 2) do you have any suggestions for people to recognize that their preparation - or their over tweaking of it and looking for the holy grail, is actually doing them more harm than good? This is on the basis of ....too much prep can stop some people from pulling the trigger - they want the perfect setup, are surprised when things dont go their way even after all their prep, they oversize their trades thinking that everything is perfect and they have a plan all perfectly mapped out, but reality has that way of biting hard. (All the monte carlo simulations in real world trading are not Vegas maths.....too many boffins forget that in their search for perfection) thanks.

by the way.....I was not asking about myself ...... I know when I am tweaking things too much, but pulling the trigger is not my problem - often being too eager to shoot is, but thats a whole other story. :crap: As part of the discussion..... I was asking how do you know when your students are and do you have plans/idea/etc to stop that? Or is the message just do the prep? All the monte carlo, preparation and back testing will not necessarily stop folks from being gun shy. thanks.

Steve - while what you teach can certainly help prepare and I agree with good preparation, in your experience what happens when you have a string of losses, or the preparation just seems to be fruitless at times. People then often forget quickly the previous track record of successful entries and some can get gun shy....Especially when there are discretionary elements. While your students might not find the experience of pulling the trigger as intimidating or compelling - do you have some way of finding out/measuring if this problem occurs even within the preparation stage. eg; traders after a string of losses start tweaking parts of the preparation in order to try and avoid any more losses. thanks.

I am sure you make money, it suits your personality and that it works for you. I have also being doing this for 17 years now in various forms and know what works for me. Its not that you are doing things that I dont agree with, it is more that I disagree with - or more the point - think that there are other explanations for the rationale behind the comments in your previous post about short term mistakes. Happy to leave it as we both know what we know and can agree to disagree.

did you notice UB and Mystic have similar tastes in old wooden desks.

A young bull and an old bull were standing on top of a hill overlooking a herd of cows. The young bull says, “Why don’t we run down there and f..k a couple of cows?” The old bull replies, “Lets walk down and f..k them all!!”

Its your post #23 Steve that seems quite insular and focused only on short term trading, and from this I was a little confused.... Maybe if I quote you it would help put my crazy ranting /questions into context. "".the fact is that longer time frame participants are using bigger stops (most of the professionals I know are using about 6 points for the S&P contract). As a result they enter differently (scaling in and starting that process earlier) than the retail crowd (who are usually late the party)"" There are also lots of players in the market that have longer time frames so as to not worry about selling the bottom over a 40minute or even for a day period in the market if they are trading over a larger period of time.....these guys dont worry about stops, and for many others a 6 point stop is way too small. which then led on to this..... "" Jurotraderslab....the reason you have people hitting the bid at the bottom is that they are making the cardinal mistake of A.)entering late hoping for continuation.and B.) not taking the time to see where in the past, the previous uptrend originated This happens all the time because there are both institutional participants (some of whom have similar training) and short term participants who have different training and beliefs....What you see is how it plays out when the short time frame players don't do their homework....plain and simple."" Lots of assumptions here - like they are making a cardinal mistake.....some people actually sell new lows, and buy breaks - sometimes they are instos and they want intso size to get set.....so its not always a mistake. Plus the assumption that everyone selling there is a short term time frame seller who has not done their homework...... on that I might agree with you, however I have made pretty good money selling breaks everyone thinks will hold, but I usually go for more that a few points if it does break, even if I might have a fairly close stop.... I guess thats what makes a market right?. I mean if you did not have people selling to you you would not get the extremes (often these are only shown to be extremes after the fact), and I know you are not saying you are right all the time, and I am sure you are not saying that its just short term players that make these extremes...right? (Or clearly I am so simple minded and unorganized I must have been drinking....name calling is probably not necessary....not everything in a discussion is an attack on you Steve, so there is no need to treat it as such.....)

well then with all the institutions moving volume at specific time or pivot or price levels.....who does the buying and selling in between these points? This is the part of the argument/discussions that go on that I actually have an issue with....that people think that there is smart money/dumb money etc and that its professionals v institutions......(again I apologize if thats not at all what you are talking about) The reality is in the time frame you guys are talking about you are picking up the scraps in between - which can be profitable, but some of the explanations of knowing who is doing what and at certain levels. You are in effect trying to front run orders through tape reading etc; or look for levels that allow you figure support or resistance is likely to provide me with a short term opportunity here....? Can you tell if something is an option hedge, an arb, a real order to initiate a long or short, or one that is liquidating an existing order? The commercial databases - do they (did they) reveal exactly who the clients are or just the brokers executing on their behalf? Too often the reasons given for things are hindsight, and even then are just plain wrong.(You only need to have been present or privy to the real reasons why some volumes go through at particular times and then hear the crap guesitmates of why after to know this is true) Often reason a lot of the quant guys - the big players who sell at precisely the points you guys may be buying with another order is that it allows them to move volume.....a big insto needs other instos to take the opposite view. Its not just retail selling to them. Some of these guys use quant orders and hire multiple phds - not to write the models for buying and selling but for the models of minimising execution issues when moving size. Their times frames are larger (maybe not months ) but definitely not in 40 min licks. Also ask yourself this - if the major professionals etc are all picking these levels, and moving the markets as such - why do so many of them not even match their benchmarks. The real volume in markets - who provides it v why prices move? verses who provides the real liquidity during the day, which allows for short term liquidity and noise movements. I understand UB in that he talks about it being about replenishment at certain levels and picking it up....I also understand your view on price levels just by looking at a chart, and I think you are exploiting these ideas- which is great. But I dont think instos who are moving things over larger time periods are picking intraday price levels on their charts to make their decisions - or maybe they are and thats why your/mine/our pension fund money never really gets better than market returns. , sure beats the ideas of using fundamentals to invest money.

Ingot - depending on how much trend following is to be done, often it does not matter what your entry system is.....the key to making a trend following system work is running your profits. A momentum system is slightly different.....you are looking for continuation patterns and taking profits may be a part of taking a chunk out of the move. Depending on OTs MO then my guess is the real value might be in how he approaches and then how he runs things....regardless of the indicator. I look forward to seeing the process. (as an aside....recently I have been experimenting with a brand new indicator, no one seems to have mentioned it much, I use it as an alert more than an entry system - any day that closes above the close yesterday and also closes above the close of two days ago and yesterdays close was less than the close of two days ago....ie; c(0)>c(-1) and c(0)>c(-2) and c(-1)<c(-2)......works a treat - you are almost guranteed to get on a few winners - there maybe 60-70% loosers, but I assure you that it is a great pick of the bottoms! Set your stop 1 atr away, no problems.So long as you run the winners it will make money....and as I am such a nice guy I am giving it away for free.)

Chinese yuan priced in gold!

I'm sorry if I am missing something here - while all you guys are talking about trends and hitting bids and institutions....look at the time frames you re looking at - If I read it correctly the time frame is so short and the zone of 11.44 to 12.20 - 40 minutes is less than noise and not on the radar screen of a true institution. (correct me if I am wrong) These guys the true institutions shift volumes over days, weeks and months and hey also dont use stops as most traders view them. day trading algos, market makers and HFT traders might move around in these areas as UB points out (80% of volume is by day traders - I dont know if it is or not).....the bigger institutions do not have the impact that is implied here. The hitting of bids in an oversold market on a day trading point of view is irrelevant when you are selling over longer time frames. While as a day trader you might be trying to profit out of short term overbought extremes.....dont pretend that the institutions are necessarily always stepping in....I think this does a whole disservice to the underlying rationale of your system.

I am not 100% sure if this helps as it might be more a matter of definitions....while firms might differ on exactly what their individual risk free rate is - which makes a difference to what they might consider fair value. Stick with the overnight cash rate from the government bonds. It is naturally compounding every night if you deposit money with them and are credited the interest and you leave that interest in the account. A good book to understand options from the ground up is by Sheldon Natenberg....for some light reading.