steve46

Again I appreciate the idea of using MP concepts to find potential "target" prices that the market may want to take out (I assume this is the point of the previous post) What traders may find difficult however is the execution, especially when markets get volatile And so I suggest that you may want to consider a method that accomodates intraday volatility. When we see the Vix come into the 30+ range I prefer Bollinger Bands set to 2 SD with a 20 period EMA midpoint.... To obtain volatility based intraday targets I simply review my time based pivots to find the nearest local extreme (today it was 1184) and then I read the tape and looking for price to test the upper band (or close above). On the next close below a band, I look for a favorable short entry...reverse the process for longs. The virtue of this method is that it adapts immediately to local vol... Using that method today we got filled at 1139.75 (right at my target) in what would normally be a very difficult open to trade Good luck traders Steve

I trade professionally and am training a small class right now (we have just begun our third month of classes) I screened folks carefully in order to obtain candidates who were "adults" and could in fact "focus" and show me some discipline....To me this was the most important starting point. We all trade approximately the same size accounts (I made sure that my account was about the same size as my students), we enter trades together and scale out together...and when we are done with the day's work I publish a "recap" that goes over the trades and shows the student how to improve, or if they did well I simply congratulate them (as I have done for the last several weeks)...As of now all but one student are profitable... We have worked hard, and we have been lucky, and that combination is hard to beat..We begin prior to the open and we plan our first two trades. We have a proven risk management protocol and we stick to it....and most importantly we know when to stand aside...Because the first few months of training are important, we are only taking high probability entries... As we move forward and people continue to demonstrate that they have what it takes to be consistent, we will change our focus from simply building a track record to running a sustainable business....in other words, we will look at subjects other than trading including recordkeeping, taxes, equipement and vendor choices, lifestyle choices and other things that relate to the trader's success. At the end of the course (a little over a year from now) each student will be asked to leave the class and trade on their own, however they will be expected to produce a record of their trading activity for analysis. If they need help at this point, I will provide it....whatever it takes to make sure these folks (who I have come to consider my friends) make it in this business... The class is closed (unless someone drops out or takes a leave due to illness) so there is no solicitation here...Just wanted to show what it takes to really do this job right.... I have authored some threads that may help newbies...just look in the Emini Futures Laboratory Forum....or send me a pm and I will respond when I have time... Good luck everyone. Steve

Thanks for your comment. I will report what I find with respect to the continuing interruptions of service...I doubt that it is connected to a systemwide problem With respect to the confirmation popup I am using the software default settings and suggesting my students do the same...to me it doesn't matter either way... As regards the connection issues so far we have no cause & effect to report.... Best Regards Steve

Another problem today unfortunately, as I got into a profitable trade and tried to scale out (manually) my DOM would not accept input....(when trying to confirm an order to scale out, the confirmation box did not respond to input)....I had to close the program and bring it up again...at this point I simply exited the entire position and called the brokerage and (surprise) they did not have any record of interruption of connection.... So not a big deal (this time the position was going in my favor when the problem occurred), but as you can imagine I am a little concerned when it comes to using this software on a regular basis. I have an IT guy coming over this evening to check my system out so that if there are any program conflicts we can sort it out....I will report back when I know more.

I am testing OEC for a retail account (for use in my class)....and it has gone out once this week, two days ago The interruption was momentary...had my connection back in about 10 seconds. Unfortunately those seconds cost me about $1,000.... Calling OEC they suggested that they had a record of usage to refer to and it disclosed no (zero, none, null) outages (in other words they denied that it happened at all)....My account says otherwise.....and it is mildly disappointing to run into this problem....(I can easily find another broker although it is a pain in the butt to fill out additional paperwork)... Continuing with my testing for the next 90 days and then I will make a decision whether to keep this account or move to another broker.

Just to put things in perspective.. I make a living picking tops and bottoms...I do it every day....and my point is that professionals are able to do what amateurs can't....its always been that way, and probably always will be... and by the way I do it in front of my students, who by and large feel the same way as most of the people here....at first they don't believe it...and they simply ask "how did you do that" and by the 2nd week, they understand that it takes hard work, preparation and the ability to manage risk...in other words, there's no magic to it.... Since I have no intention of getting into a seminar on how this is done. I will short cut the questions and say the following....There are two ways to learn how to do this....one is to simply watch and eventually if you have the aptitude for it, you can see clues as to where a market is likely to stop and reverse....the second way (most skilled professionals combine these two methods) is to learn to read the tape....again it takes time and patience but once you learn it, then it is like a walk in the park...you can see where the momentum of the market slows, you can see when the bid holds and when it doesn't hold and price is going to move through a key reference area....if you do it long enough and you have the proper resources it is no different than any other profession....there are people who do it well and those who do it badly (and they don't last long).... Good trading to all Steve

I noticed this thread and I have to say something so that those of you who think reading the dom is the same as reading the tape, don't waste your time Reading the DOM is NOT reading the tape.....the DOM (Depth of Market) consists of bids and offers at the various price levels. Those bids and offers can be pulled, they can be changed and they can be disguised in a number of ways...As a result, the DOM display is of little use because it can be misleading.... Reading the tape is when you read the Time & Sales strip....that display shows orders to buy and sell that are actually executed.....once again I repeat you only see the order that actually execute...so it is accurate... Unfortunately it is difficult to learn to read the tape (the time & sales strip) because it is dynamic and so it is hard to describe what to look for...I think the best way is to have someone with you looking at the same screen you are trading from, pointing out the various aspects of the data....for example you would want to take note of how fast the strip "rolls" (how fast it moves) also you want to make note of the size, and whether the buys and/or sales are at the bid or the offer...finally most professionals use additional data including market internals (breadth and issues traded) and so it requires patience to learn how to direct your attention and how to interprete what you see... I hope this helps a little bit, and keeps some of you from wasting time looking at the DOM Best Regards Steve

I'd like to offer a quick suggestion especially with regard to the use of volume When we look at charts posted for educational purposes, I think people get the impression that one can base a trade on similar data (a specific type of chart with volume displayed)... It seems to me that what matters is not the static volume level as seen in those charts, rather the way that volume comes in, or fails to come in, as price tests a particular level. Also I think one needs to be able to indentify automated execution as it comes into the market, and again it is difficult if not impossible to do that using a standard chart display....in contrast, I noticed a real improvement in my accuracy after I learned to read the tape. The dynamic aspect of volume became easier to read, and you could see not only when volume came in, but more importantly whether the market was able to sustain a bid (whether the market could "hold a bid" at a specific price). To each his own preference of course, but I find that I can more accurately and easily determine whether price would hold and reverse or take out a price by reading the tape. Good luck Steve

Yes of course and without your intelligent comments how would any of us go on?

I'd like to put some balance into the discussion I have a small class of students learning to trade the S&P futures. We have just begin the third month of class and all but one are profitable. I believe this is because we practice excellent risk management.....and we select trades carefully.... For what its worth I am not making the kind of money that I normally do and I attribute this to the fact that I have my attention divided between my own screen and issues relating to my students (answering questions, fielding comments, looking at other markets, etc)...I expected this...the reason I bring it up is that I am pretty sure that this is one reason why is it difficult to find skilled traders willing to give up some income in order to teach.....(perhaps more accurately expressed as "skilled traders willing to do a good job of teaching".) Good luck and better days to those who may be struggling Steve

Again we have a lot of urban myth being posted as good advice. The problem if there is one, is that there is some truth to the commentary...as with most similar comments...it is a matter of perspective....perhaps I can help those who have the ability to think critically about this subject... First, learning to anticipate and prepare of opportunities is critical to my success, and in my class I teach students to anticipate (in fact we anticipate a very nice opportunity Sunday evening). Without the ability to properly characterize market activity and anticipate the likely result from one day to the next, you are at a disadvantage with respect to other properly prepared professionals..(how much of a disadvantage is subject to debate of course). With regard to prediction, of course no has a crystal ball, however at some point, if one survives long enough, it is possible to not only evaluate events in terms of probabilities, but on occasion to in effect "predict" future events with good accuracy...I am sure my students would say that they see me do this almost every day.... Finally, it occurs to me that to an observer with little or no natural talent or limited experience, it may look as if a trader is anticipating and predicting events....(I hope not to insult since one can be successful either way), however from that perspective almost everything a really talented person does may seem improbable or even impossible (for those who play golf, look at what Tiger Woods was capable of at times).... Good luck folks Steve

Well it has to be difficult to spin it this don't you think? Based on what we hear, every time the guy got into a losing trade he simply switched to another time frame and doubled down.....so instead of getting stopped out, he used his account size to buy some time "betting" that the market would turn around before he ran out of money.......(again thats what we understand from what has been posted)... Now from my point of view if you suggest to the public that you haven't had a losing trade in several years (again that is what was posted previously) and the truth is you have been in many losing trades but simply used your account size to keep from having to "realize" (take) that loss, then (in my opinion) this is nothing more than pure deception. From my point of view (if the information is true) it doesn't matter whether you have a shill like NoProblem go around to trading sites trying to spin in as some kind of misunderstanding, or whether he simply got caught....my conclusion is the same. At minimum its irresponsible and if I am correct its a bit more than that, isn't it..... By the way folks, now we hear from NoProblem that Mr. Hoffman never had 1000 people in the room, apparently it was more like 40.......quite a discrepancy don't you think....and why didn't the guy state this much earlier in the thread? Hmmmm.

That was a very nice read at the low...nice trade Negotiator Here is my chart for the day using a 2 minute time frame....I like the shorter time frame when it gets volatile because I helps me to see what I call "demonstrations of momentum" Long story short I like to let the market "display" momentum before entering a trade...as price moves from one blue supply/demand node to the next, I look for; wide range bars speed at which the candles are created supporting data (I read the tape) critical time periods if I see a significant display of momentum, I look to enter at the next retracement to either an upper or lower boundary of the blue supply/demand nodes. I like this way of trading because it reminds me of putting together a puzzle..

You seem awfully sensitive Mr. Hoffman....sorry to have upset you...however Its well known that martingale strategies are losers....period....we assume that you are intelligent enough to know this...therefore it is irresponsible to teach students to assume that kind of risk....clearly this isn't quality education....try to keep up...the logic is clear. Point people to a better way...in my classes I demonstrate "a better way" everyday... Sorry about your problem...but really shouldn't you go back to school to learn how its done....send me a PM and next year (if I decide to do this again) I will send you an application for admission to the class. Thanks for you comment Steve

Yes thanks, staying focused on the data is critical...I call it "keeping your head in the game" Today for instance, we took a short trade off the open getting filled at 1210.25....We have planned this trade in advance...and my students know that once you are in a winning trade it is imperative that you keep focused on the data so that you can obtain the psychological comfort of knowing that the rest of the market is "with you"....As a result they stayed in long enough to get 5 points...(they can only get 5 right now because they are trading small)... In the process of holding the position, each student learns that focusing on the data at hand not only helps them to stay in the moment but provides the tools they need to manage the physical stress of uncertainty....each time they do this successfully, I encourage them to "stay with it" just a little bit longer than the previous trade...each time they make a little bit more money and the positive feedback they obtain in the process provides a mental "track record" that they can rely on when a trade turns against them (as it will periodically).. This version of stress training works best if the teacher is able to provide the proper feedback and put the results in context of what the market is doing...the preferred scenario is to have a series of positive winning trades with few losers interspersed so that the student has a realistic experience of trading. Fortunately that is what we have had so far... Thanks for your comment. Steve

For me the message is clear (if for the moment we ignore the shill) You can't provide good quality education in a room of 1000 students....you can't provide personal attention....you can't (apparently) manage risk properly.....and you can't really do more than simply call out the trades...and hope for the best... Clearly the people in the room are not likely to learn enough to become professionals...and although in a room of 1000 there must be some who make money.....I would bet there are few (if any) who do so consistently... Excellent marketing however and probably profitable for the principals and TTM.... A good "object lesson" as to WHAT NOT TO DO if you want to learn how to trade as a professional.

Today was an excellent day in class...we all made money The reason I am posting is that this is contrast to yesterday, when we started out with a couple of losses, one of which was caused by a loss of Internet connection while trying to exit a trade. Both days we ended up on the winning side. Yesterday however we learned some very important lessons about how to handle stress, and ultimately how to pull the trigger even when you have just had a couple of losing trades... I have a very small class this week, only 4 people in the room, one of them on medical leave to recover from surgery, and one on vacation...so only 2 people to work with...and in this instance I was glad to be able to give each person the attention they needed What I noticed was the following. On the first trade, as people saw it go against them, you could feel the tension as traders watched each tick, and asked me (what do you think Steve, do we get out or wait)....and my answer was....stay calm, breath slowly, monitor your data, remember that your stop is already in place protecting you....just watch and wait, you have plenty of time..... In the time span of about 3 minutes we got stopped out on our first trade and the reaction was "OK then what do we do now?" and my reaction was, "we remember to keep our head in the game"....."when we have a losing trade, we don't get down, we don't go over and over the trade, we stay in the moment and watch how the market acts.....and we ask ourselves, what is the market telling us".....as it turned out this was an important lesson to learn.....because withing the next 5 minutes I took a long that turned against me and then lost my Internet connection.....I had to respond to students who wanted to obtain my opinion about the postion they were in, and I had to wait for my Internet connection to be restored (automatic on my system) and then close out the position.... Interestingly we made it through that small event and went on to other trades, and during the day, I heard several comments concerning my state of mind and how I managed to keep on an even keel, even though I had no way of knowing what my trade was doing, and how much I had lost...(it was about $1,0000).... As our situation stablized we took a moment (I asked both students to stop for a moment and look at the daily charts)....we located our targets for the next trade, and we went back to work in a orderly fashion....what we did was to in effect "re-set or start over again fresh" and from then on we did quite well, I ended the day up about $400 and my students about the same based on small accounts trading no more than 5 contracts. I think there are many lessons to learn from adversity and loss, among them are the need to understand the following sayings taught to me by my boss "things are never as good or as bad as they seem"....."just relax, breath slowly and take a moment to think about what you are doing" and "always keep your head in the game"..."do not allow yourself to get down, or to get too excited about your wins or losses" This advice has always served me and my students admirably. Good luck to everyone. Steve

Yes well now that you have had the chance to express yourself, what we end up with is just what I have said..that the RWI is essentially useless in markets that cycle through stationary and non-stationary movement. and in the process you got in your little barb about one-liners...good for you... and now folks you know why generally I don't have patience with this kind of post. Those who want to move a bit further down this road will need to take some advanced math. If you have that covered, the next thing to do is "Google" the following terms... "Markov" "Hidden Markov models" "Garch" "Tim Bollerslev" and "Estimators" Its a long road and I am guessing few folks here will want to go there but thats where you have to end up if you want to find something that works (instead of RWI)... Good luck people.

Well it seems that we have had a short discussion. In answer to your question. If there is a problem it is with the implementation. The market I like to trade (S&P futures) seems to cycle in and out of stationarity. When it does that, its been my experience that the basic principle of RWI doesn't seem to work well. I think (I am not sure) that markets that are more stable (do not cycle as quickly) may be better candidates for that type of approach..Those markets might include commodities for example. By the way, I believe a version of RWI is available on Investor/RT charting software. I think they call it "Random Walk Index" for those interested in pursuing the subject.

Of course you are welcome to your opinion. Mine differs....and as to the use of Random Walk, again my opinion is that it is close to useless...If at some point you start to discuss the use of hidden Markov models and GARCH I may look in again. Until then Cheers

I guess its only natural that shortly after the terminology starts being put into common use for traders, that we see it in chart systems like this one... For the record, in the chart example shown the overhead and underlying are incorrect...lets hope that someone over at Ninja can do a better job of reverse engineering from my charts.

In answer to number 1 I don't really have time to give a detailed answer. One assumes you will put some effort into this subject on your own..however as an example, it used to be that you could spot automated execution because all (or most) of the stocks in the Dow 30 would be bought or sold at the same time..using the TIKI you would see a reading of +/-26 to 30 and that would be a reliable indication of programmed execution...now (unfortunately) more contemporary programs split that exeecution into smaller baskets and so it is less detectable....a similar situation has occurred with the Trin and for #2 the edge or advantage that you gain depends on your system, I have no idea what system you are using, so you will have to do your own testing to obtain that answer. Hope this helps Steve

Trin & Tiki don't work as well as they used to due to the continued use of programmed and automated executions. On the other hand I use the NYSE Tick as the backbone of my system (I read the tape using it). For those unfamiliar with the term "reading the tape" it involves monitoring the time & sales strip, the tick and $VOLD/$ADD....We read the tape as price tests a key reference area...when this occurs you can see whether the bid will be held or the offer lifted. Makes it relatively easy to enter a trade favorably. Those who want to look slightly outside the box should look toward the put/call ratios (to the exchange websites for this information)

Its called "Optimization" it doesn't work but thats what its called.

Our fears are an expression of our native intelligence..To the extent that you "have no fear", by extension you may be lacking in intellegence and unable to learn how to trade...that is a limiting factor that no one can help you with. To find good candidates to train I used a simple test...I put students in a situation where they were likely to be fearful and gave them options that allowed them to re-define their fears (if they chose correctly) so that the fear they experienced became an asset to them and allowed them to find good entries and to stay on the right side of the market... Those that could not step back from their fears and look squarely at what they feared, did not do well and were not accepted into the class....those that took that opportunity found that eventually they were able to transform their fear into an ally, and interestingly they were able to make a profit right away. Every day.....we have the same opportunity to re-define our fears and overcome our limitations, but generally we choose to stay where we are....to the extent that you back away instead of choosing to overcome your fears, you are likely to become embittered and angry or simply complacent... If a person were simply to go back and re-read the posts, the underlying frustration, anger and/or complacency become obvious..