suckassjuice

For those who trade the ES, be advised, I have a considerable number of S&P contracts that I will be marking up tonight while people in the US are asleep.

I'm a dick? Have you read the whole thread? This is about dickish people making preposterous claims, and when called on it, their only response is to call the inquisitor names (like you just did) because they lack any substantive reply (Steve resorted immediately to calling me an ass simply for asking a politely worded question). In turn, this helps other readers realize just exactly what kind of caliber the person is behind the post (as well as certain supporters)...just in case it isn't obvious enough. Moderated Message: Removed this last line, please try and keep it civil - thanks.

Come on, Steve. At least let every one know that you have the capacity to figure out when the Dax opens for trading.

Like I said, just keep futzing around with your paper account until you have 5 days of losses. After you have another 10 straight days of profit, and then another 10 straight days and you can't seem to have a down day to save your life, you might begin to understand (but I doubt it) the limitation of paper trading. In looking closer at your results, I think your ready. Come on in, the waters fine.

Yeah, it seems pretty obvious you're missing, not something, but a lot with respect to thinking your paper trading will emulate anything close to what you will get trading real money. Here's something simple to help you put it into perspective. I want you to keep paper trading and then report back when you have have lost money for at least five days straight. All I've seen you report is winning days. And since you can "game" your paper trading results, most end up doing this deliberately and/or unintentionally. You won't get cut that kind of slack (in fact, you won't get cut ANY slack) when trading live. Once you figure out how to lose paper money, then take another step, a real step. Set a goal of trading live for as long as you can until you have lost $1,000 in real money (consider it the first installment on your tuition because you will be paying it and probably lots more) and then have at it. You'll be humbled by how quick this drawdown happens and then you will begin to understand the gulf between paper and live trading. In the meantime, check out edabreu's post here...a thoroughly insightful post for you to chew on in the meantime.

And while the Asian markets are open, they have the most volume until the European markets open. Then the power shifts to them; all the while the S&P's typically are just following along. There's nothing magical about it. There's no one sitting around "marking up/down" S&P prices. I spread trade HK futures, Dax futures and US futures (and, yes. I've even contemplated trading the Aussie market just to round it out). I watch this dance over and over again...day after day.

Your explanation is more than simple. It's actually simplistic and sorely lacking insight given your prior post claiming "One way of accomplishing that is to move markets (S&P) north in the overnight, when a lot of folks are sleeping." It's as if you believe that mischief happens when (some) people aren't paying attention (sleeping). You seem to believe the S&P is always the leader whenever it's open for trading. Wrong. It's only a leader for all practical purposes one time during a 24-hr span (basically from 8a - 4p ET). During the open of global trading on Sunday, the S&P is nothing more than a follower of the Asian markets. Then it plays second fiddle to the European markets. Finally, it closes out the global trading day and the whole process starts over again. So, when the European markets are open, it's those markets that will determine if the S&P moves up or down. It has nothing to do with anybody being asleep. There isn't some cabal conspiring in the wee US hours "accomplishing" desired movements of the S&P. And actually, no, the Dax market doesn't open at 11p PST. I thought you said you're a trader with a European desk? I find it quite remarkable that you don't even know when the German market really opens.

Yes, I quickly moved on from your initial concern, but the answer was implied. It sounds like your relying on one data source. You need another source (i.e., you need at a minimum 2 sources from different providers and preferably 3-4 total different sources if you're serious about the ultimate results) so as to do the comparison and flag the differences. Missing data is easy to isolate. Then just cut and paste until you build your own "reliable" data set. But it won't be quite that simple. You'll likely see many other differences when you start your comparisons (and it's then that you'll realize you need more than 2 sources). From there you'll begin to better understand my initial post.

Ah, data verification, the bane of any attempt to back test. Not only are you probably missing data, how exactly do you know that the data you do have is correct. You don't. So, now your faced with the nasty task of cross-referencing your data against a different data source. And then that leads to having to further cross-reference to yet another source since you'll inevitably find differences. And then you realize, there's enough differences in all the data such that it's going to materially impact the results of any back test. Now whatcha gonna do? Probably what most do, ignore it...pretend it doesn't matter or that your data is the "real" data.

Steve, Exactly when is it that a sizable percentage of traders are in fact unconscious? I'd really like to know.

FX Girl, I think "faith" is something traders need to get away from as that typically connotes "uncritical credulity" (aka "hope"). A better term is "trust." It differs from faith in that it is based on observations and probabilities. We don't have faith that the sun will rise in the east, we trust that it will because we have X number of observations upon which to make such a call. If you have sufficiently back-tested and/or forward-tested a strategy, it should open the door for trust to follow. Even then, many can't get over the emotional desire to want certainty. With respect to your previously stated interest about gender comparisons, I'd highly recommend the following podcast: Skeptically Speaking » #81 Delusions of Gender Jack

Steve, If you do in fact “work for one of those European desks” and you meld that with your belief that the best “…time to move markets with the least amount of resistance (is) when a sizable percentage of participants are unconscious”, exactly when is it that a sizable percentage are in fact unconscious? Please provide the GMT times (duration) when you believe this happens. This undoubtedly will help us all get "...THE POINT."

When things are quiet and concerns are low about being unable to buy in or sell out (i.e., there's plenty of size on both the bid and ask and even at levels just about/below the market) this is just about as close to a balanced market that you can get. But even then, trader A knows he's stuck in a trade and by chance Trader B knows it too. Since information is money B intends to use some 'motivational' trades to put A on tilt (aka, perform a shekel shakeout smackdown like the pro he is). By representing through some strategically sized and tactically timed orders, B comes off as a real player--highly motivated and clearly aggressive. Regardless if any other traders know what's going on, they simply are now witnessing transactions wiping out all standing bookorders up to 3 price levels away from the inside market. Other traders aren't interested initially on whats the reason; they just want to protect capital. At such a time, there's no reason to be a dick for a tick, So traders continue to step all over each other hitting resting orders farther and farther away from the inside market which is causing a unidirectional move at a breathtaking pace. And that's what happens when there's big size on one side willing to chase price while everyone on the other side is making snap decisions that they can get a better price later on so they step away from the market altogether to see when another equilibrium will establish itself. It's more about the dance leading up to the making of a market. The point in time in which able and willing participants ink a deal (i.e., make the trade), is just that a singular point. It's the nature of the underlying dynamics that determine how price movement will play out. In this case, A was weak ultimately had to liquidate his entire position of which B gladly picked up a majority of A's unwinding.

Steve, When you say "One way...to move markets north in the overnight (is) when a lot of folks are sleeping", you do realize that there are European desks with just as much trading power as any US desk (and on an aggregate basis as well). That's a pretty naive statement and borderline offensive. Also, when you say "I add a horizontal line at midnight (my time) and I use that as a pivot" I'll take guess that your based in the Pacific time zone. Since that happens to be the European Open, you should have stated it that way. But who cares about a bunch of sleeping foreigners.

Well, there definitely is a worse case scenario if you're really interested in hearing about it. It involves only learning how to trade one side of the market (i.e. long) and adding to losing positions such that you get overly leveraged. Then the market moves violently against you and you lose MORE than your initial stake. That's a pretty grim scenario, but it's not quite worse case. After getting pummeled like you have never been pummeled before, you realize your personality can't cope with such a dramatic loss. The only way out is determined to be a bullet through your brain. Still not quite worse case. You happen to also be a bad shot and you fail to kill yourself. Instead, you survive as a quadrapelegic. FYI, this isn't fiction. Glad you asked.

Biggest road block for me is learning to be a pig. Like they say: Bears make (and lose) money, Bulls make (and lose) money, but Pigs are some smart fucking animals. I'm more concerned with consistently making money, much more so than any need to stroke my ego more often than not (i.e., demanding a win/loss ratio of greater than 50%). The average sized winner versus average sized loser, is the most important metric to focus on and it's the only way to truly make any real money in this endeavor. Gotta get the win size hugely disproportionate to the the loss size. To do this, cut losses quickly and let runners run and run and run (i.e., be a pig!). I have no problem with a 40% win ratio when the win size is at 5:1 or even greater. The practical approach of being "reasonable" is, as a whole, detrimental when it comes to trading. Notwithstanding, it is so hard to shift one's mindset to this when being reasonable in your other daily pursuits is a valued approached. Jason