steve46

Reversals happen because the market is dominated by professional interests and when price drops significantly, they take out their shopping lists...practically speaking, they look to lower their average cost for the inventory they currently own...If for example an institution or fund owns IBM at $140, when the market drops they check the price for IBM....if it looks like they can buy it at a signficant discount, they start to buy....on the institutional and fund side of the market this is done with basket execution (buying a group of stocks). As you can imagine, if a group of professionals all think the same way (and they do) and they act to buy at specific points the effect is a reversal....these "specific points" are what we call "nodes" and they exist on the charts (you can see examples on my thread if you look it up)....Those nodes are examples of supply and demand....places where institutions and funds have decided to "go shopping" when prices are attractive (no differrent than when you go shopping because something you want is selling at a good price)... One more item of interest....when basket executions (also known as automated executions) take place.. there are other professionals who maintain systems that have access to the order flow milliseconds BEFORE the rest of us...those systems "see" those orders as they come into the market and they also activate additional buying as they try to front run those basket orders...the net effect is a strong move of at least 3 points on the S&P futures... Steve

Tradewinds Respectfully I disagree... There are many things a trader should know if they are going to work in this profession (I am not talking about hobbyists or other amateurs) I would like to post the following attachement so you can see the broad strokes...we can talk about what it means to the retail trader if you wish or you can ignore it, or ask to remove it if you feel it is not suitable...My purpose is to educate and to do that, at some point you have to outline what that means.... Example Syllabus General information for the student considering trading as a profession Reviewing available literature, we see that the majority of retail traders lose money participating in the markets, and the shorter the time frame of the transaction, the more likely it is that a retail participant will be on the losing end. Looking below the surface, we see the obvious. The majority of retail participants are unqualified to work in the industry, possessing neither applicable education nor experience to call on when making decisions related to financial markets. Based on experience it seems that most retail traders do not possess a strategy with a mathematical advantage, nor do they have a specific risk management protocol in place and just as importantly, they generally do not keep accurate records nor do they review or evaluate past trades with any regularity. As a result, if the strategy they have chosen does not work, they are usually unable to recognize it in time to avoid significant financial loss or “ruin”. What is less obvious, is the requirement for psychological “fitness” in order to survive in what many would characterize as the most lucrative and competitive profession in the world. Based on our recent research of the subject we have learned that the trader’s sense of “self esteem” and personal expectation for success are critical elements. Within the room, we will model adult self-esteem so that clients can see for themselves the effect of positive expectation on their results. While the evaluation of a person’s psychological “fitness” is best left to professionals, the impact of unresolved psychological issues can be seen all around us. The old saying is “Insanity is doing the same thing you’ve always done, but expecting different results”. How often do we see struggling traders in this very position, frustrated, losing money, uncertain about how to proceed, repeating the same mistakes over and over again, hoping for a more favorable outcome? Education We intend to provide 15 modules of education for the market participant as follows; 1. Basic Specifications for the S&P, Bond and Currency Markets 2. Risk Management 3. The Significance of Lifestyle and Psychological Issues 4. Basic Evaluation of Strategies 5. Reading the “Time & Sales Strip” 6. Interpretation of Price Action 7. Understanding and Using Wholesale & Retail Value (Market Profile) 8. Incorporating “Time-Based Pivots” into a systematic approach 9. Interpreting Volume and Market Breadth 10. Understanding the NYSE TICK 11. Understanding the Interdependence of World Markets 12. Trading the Globex Market 13. The Importance of Record Keeping 14. Developing a business plan 15. Evaluation and Analysis of Outcomes (Adapting to Changing Markets) Group Environment (“GoToMeeting”) Opening one hour prior to the open of the US market, we will review and analyze market conditions. We will provide our opinion as to the open and general direction of the market and publish our “action plan” (worksheet) for the day. Initially we intend to cover the S&P Futures market only. Depending on the client’s abilities and interests we will offer commentary and analysis for the US Treasury Bond, as well as exchange traded currencies including the Yen, Euro, Pound and Franc. Nightly Review of Markets A review of Asian and European markets will be provided each evening at a time to be decided.

I propose that we start a "Shameless Shill of the Month" award I nominate "No Problem" with 3 posts all of them right here on behalf of the honorable Mr. Hoffman and his business partners at TTM Second nominee is Mr. Carter of TTM for his interesting interpretation of Hoffman's actions.

Here is another comment by someone interested in defending Mr. Hoffman "While I agree with you about it being proven wrong etc, he became a multi millionaire using that system before he ever went public, add to that fact that using that "wrong" method, he went 18 months without one losing trade. Say whatever you want, but he made an everloving killing trading using that method - true, he lost +$300k in one idiot trade using that method - but he also could have retired comfortably a very long time ago - using that method" So after I demolish this stupid comment I am in fact done.. Item #1... the argument that he "became a multimillionaire using that system" (martingale betting) Well the problem with that is that when you use the martingale system you never know HOW LONG YOU CAN GO BEFORE YOU GET KNOCKED OUT...IN OTHER WORDS YOU COULD BECOME A MILLIONAIRE, OR YOU COULD QUICKLY BECOME A PAUPER....a skilled, educated professional (Mr. Hoffman claims to be one) is expected to know this.... Item #2..."He made a killing using this method" I am thinking that with 1000 members in his room paying what $200 per month, a significant amount of his "profit" came from naive, ignorant, TRUSTING, subscribers who thought they were learning a how to trade profitably, not how to gamble with someone else's money (after all, at least part of that money had to be use for trading right?) in other words the guy was using other people's money to take a hell of a lot of risk...so why worry!!! So there you go "Einstein"....and by the way, why a person would defend that kind of activity in the market is beyond understanding....to my way of thinking if you have the trust of 1000 people (the number claimed for his trading room) WHY WOULD YOU WANT TO BLOW IT BY GAMBLING ON A STRATEGY THAT WAS PROVEN TO BE A LOSER YEARS AGO? IS THAT PROFESSIONAL BEHAVIOR? I DON'T THINK SO... So as they say in a recent commercial....I hope you brought your umbrella champ, because it is raining cold hard facts in here..... thats it .

Mr. Carter needs to get his head straight about what is and isn't "mathematically proven to be impossible"... Anybody with a big account could have equaled Hoffman's "streak"...all they had to do was double down every time they were wrong....on the other hand not everybody with a bat could have equaled Dimaggio's hitting streak against professional pitching... The guy used his account size to in effect "buy" his record streak....any of you could have done the same as long as you were willing to ignore the risks... Finally I wonder if his bank thinks that this is all a dream....if so, I am sure his next statement will "wake him up"..... This is just a bit of damage control (or "spin") from Mr. Carter. I am done with the subject Steve

This is typical of the ridiculous crap that people try to pull when someone simply cannot make their program work...."a great guy"......"his T/A abilities are phenomenal"...."high probability setups".....yeah right! Look the goal is to help traders transistion from losing to winning...not from losing to blowing out their accounts!....and how does someone with a big a account show people with only a few thousand dollars how to win.......I can assure folks that it is NOT by scaling in on a martingale betting scheme that was proven wrong years ago.....and it well known in popular literature.. I do this every day folks and the way I do it is to trade an account that is at the same level (on average) as my students......this way they are comfortable with my entry and my scale outs..no solicitation...the current class is closed, but I do want to suggest to people who are looking, that you ask about the method...what is the suggested minimum account size to trade in the class, what account size does the teacher trade....what is the average risk on a trade, do they use profit targets, how do they take profit, do they provide a periodic accounting of results (we do this on a weekly and quarterly basis)...and does the teacher provide ANY education as to how the student can run a sustainable trading business? I think you will find that it is rare to see someone doing more than providing signals on a green light buy/red light sell basis...and ultimately that teaches the student very little.....just my opinion. Good luck in the markets Steve

Okay well thats a sad story and I tend to think of the dental procedure as a bit cosmic karma What I would be interested in is how his business partners and his students view this event? Finally, it seems that the problem(s) associated with the Martingale concept have been part of the popular literature for a while....one assumes that anyone with access to the Internet (including Hoffman and his partners at TTM) would have had knowledge of this and presumably they understood what the risks were. I wonder why they let it go on to this point? Oh well its a "bar story" now........

I thought I would take a moment to post on this very important topic My class has been open for about two months. Prior to opening the class I backtested for two account sizes. One trading conservatively, under 10K. The other trading aggresively at 20K The expected drawdown for the conservative account was less than $1,000 per month with a 16% "probability of ruin". The expected drawdown for the aggressive account was just under $1,800 per month with a 11% "probability of ruin". At first glance this seems counterintuitive until I went back through the data and really looked at the distributions. As it turns out, if you are very conservative (trading the ES market for example) and you pass on many of the trades because they are considered "aggressive" entries, you also miss many significantly profitable opportunities. Even over a short period of time this can make a big difference in your profit and loss numbers. For me this became a lesson in risk management more than it was about profitability...Because stop size and therefore risk management on a individual trade basis is determined by "the trade"...each student has to ask themselves "can I afford to take this trade" The students with bigger accounts are able to take most of the trades while those with smaller accounts (and those who are more risk averse) have to pass on some of them Long story short, profitability depends...not only on the system and the trader's ability to execute with discipline, but on each traders risk tolerance and ability to manage risk on a per trade basis (meaning the ability to maximize profit/minimize risk when they are wrong)... Wherever you are on that curve, what you have to do is to look carefully at several factors Do you take all the trades that your system provides or do you "cherry pick" because you think you know which setups are likely to be winners....be aware that if don't take all the trades, your system is not going to perform as well as it should Do you manage your risk properly....meaning...not only do you keep your stops in place, but when you are fillled....do you stay in the trade long enough for your edge to kick in...or do you get flushed out when the market starts to go against you... and finally, does your system continue to provide an edge....do you know how many consecutive winners you are likely to have, and how many consecutive losers...at what point do you decide that your system is "within parameters" or in need of evaluation? Just a couple of thoughts. Best to all Steve

I'd like to thank you for coming forward...I offered a couple of comments about this early in the thread and the shills came out of the woodwork to try to defend the guy....I think this reflects badly on TTM. Just one man's opinion. Steve

Folks Very shortly in the next day or two I am going to stop posting. I have a class in session and I find that I have very little time to answer questions. Also the folks I am trying to help deserve a little respect. So I will be stopping for about 18 months (the duration of the class)... I hope this thread provide some help to those who are not succeeding with more traditional approaches. Best of luck to all Steve

Sir or Madam Well I don't really have all the time necessary in this venue to respond properly...Here are a few ideas that might help you since you seem to want to do this "on your own" First, your idea of how to find an entry does not correspond to mine....I would not be using your method....I look at many other details that are part of my pre-market analysis. Unfortunately since I am teaching a class I cannot go into the details in a public venue. One thing I CAN say that may help is this....if you do as I do, and put all your supply and demand nodes in place, as you progress in time you will see that your charts become cluttered I remove nodes wherever price shows that it has "taken them out" (crossed them without hesitation, closing above or below on the upside or on the downside)...those are removed If you take a moment to remove those additional nodes, I think you will see that your chart is easier to read and cleaner..... Finally I remove all nodes on Friday and re-place them over the weekend. I hold additional classes on the weekend so that I can teach my student how it is done. I hope this has been of some help to you Best Regards Steve

If I may make a point here, because I do this every day, and most of my decision making is related to a very specialized analysis of supply & demand as well as what some call "reading the tape"... First, supply & demand always works...I have never seen a time when that principle failed Second, reading the tape is the way I confirm that my analysis of the location of overhead supply and underlying demand is correct..(after all, we are all still human beings and subject to error in terms of our analysis) Finally, what most call "tape reading" is actually trying to read order flow via the DOM or through a secondary indicator (volume or "cumulative" volume indicators) and while that does provide a type of information, generally speaking it is not particularly useful when push comes to shove... What I mean is simply this....in addition to the resting orders already in the market, there are participants who are motivated to act from the sidelines when price touches a "Key Reference Area"....Using cumulative indicators, or even reading the DOM you cannot know whether they will come in or stand aside....reading the time & sales strip I CAN see this action as it happens and determine if the action is sufficient to take me where I want to go. I bring this up because it is the synergy between supply/demand analysis (which creates the background picture) and tape reading (which confirms that my analysis is correct) that allows me to "get it right" with a high degree of accuracy. If there were automated software that could do this, I believe that information would be difficult if not impossible to keep secret for long.. Good Luck Steve

This is one of the more perceptive posts that I have read on this site...To go a bit further let me say this....I am in the beginning stages of teaching a small group of traders...during the screening process I had to refuse some folks because in my opinion, they did not have the ability to control their emotional state while trading. I know from experience that no matter what system they used, no matter how much personal time you spent trying to educate them, they would at some point experience trading as so stressful that they would not be able to focus, and this would show itself as an inability to enter a position (they would consider it too risky) or the inability to hold a position once they were filled (too much physical tension) and finally over the longer term, they would not be able to tolerate a drawdown. Psychologically they would be beaten before they started.... I agree Bonchi, the market could be an excellent teacher IF the student had the ability to see what their problem was...can a person learn that way? One hopes so....otherwise some folks will never make it in this business. Thanks for the excellent post. Steve

Yes, an interesting idea....did you know that the original Thales thought that everything in the universe was made of water....in this respect you both share some of the same beliefs... I think one can make a case that it is all about me, me, me the trader...until you get filled...and then unfortunately that theory is difficult to defend. For those who trade the ES regularly, this may ring a bell. How many of you have been filled, seen the market go in your direction and then retrace to take you out, before resuming a previous trend move, while you watch from the sidelines. Is that all about you the trader? I think not, but it does tell us that there are other participants out there who have the ability to shake us out of a position if they want to.. And for those who trade currencies or bonds...do you know that there are players in that market who don't care if they make money or no? In fact, some of them (and they are big players indeed, are there to move the market in a specifc direction and they couldn't care less how much money it takes because they are acting on behalf of a government agency...So once you get filled, if in fact you are in the market at the wrong time, you are going for a ride, unless you bail.....and I can assure you it has nothing to do with you (and only you).....again no sale.... The fact is when you enter a market, the quality of your fill often tells you that someone else (on the other side of your position), thinks that the market is going in the opposite direction...otherwise they would not buy from you or sell to you....in fact, THEY may be the kind of participant who is ready (and able) to really move a market in the direction they want it to go...at that point (once again) it isn't about YOU and what you want....in fact its about many others and their ability to mobilize capital. Now I am not going to close my post with the word "period" because that gives the impression that I am "the last word" on a subject. I'm not...on the other hand I do think its wise to remember that no matter how romantic or tightly held our ideas are, there is always a chance that our understanding is incomplete (or simply wrong). Best to all Steve

The breakthrough for me was when I went to work for a very kind old gentleman at Gelderman in Chicago. This old guy took me aside and told me simply....look son, there are a couple of ways you can do this...you can simply do what the next guy is doing, or you can strike out on your own and try to find something that no one has done before....its your choice. You can see what all the others are doing, its either technical or fundamental analysis...and here we are...If you want to make something of yourself, take a look at this idea...he proceeded to tell me about the concept of "time based pivots" and how to find areas of supply & demand in the market. It took me a while to understand that once you combine the two concepts you have a very powerful idea that works without fail in every liquid market in the world....and I did not look back from that point in time... Eventually I added the idea of "value" taken from Market Profile and Auction Market Theory, but I have never had to change or modify any of the original concept. Hope this helps Steve

"Originally Posted by thalestrader An overall excellent post - and this especially is an excellent analogy, Ingot54. I would only add that when the chef is waving and gesturing to all that he is the one who did the cooking, and he is at the same time offering you lessons in a cooking class, then one might forgive the dinner guest who insists on verifying that the chef did indeed prepare the meal before said guest forks over his tuition in the hope that he too might learn to cook as well as the chef, or at least better than said guest is currently able to cook, right? Best Wishes, Thales" Okay so lets take a closer look at this commentary First of all, this isn't cooking channel ....this is the most competitive profession in the world and it has attracted many intelligent motivated people, with backgrounds in math, physics, programming and psychology, all being paid to find some way to beat the next guy to the prize..its not cooking someone dinner, and it has nothing to do with waving of hands.. Now for the record I have offered an invitation to three members including Negotiator and MMS and I have provided details of my class to MMS so that he can judge for himself whether I am real in my attempt to help struggling traders change their lives... I have been here a while and posted several threads of substance including "Ideas for Struggling Traders" "An Institutional Look at the S&P Futures" and "Trading Adverse Events" all of which have been used extensively (if we look at the page views) by traders looking to move their understanding forward...at no point in those threads, have I posted a website, at no point in those threads have I tried to sell anything to them (no DVDs, No mentorships, no chatrooms, no subscriptions, no green light/buy/red light sell rooms) none of that...instead recently I have taken on several (there will be less than 20) students who expressed interest in working with me.Each of then had to demonstrate some basic skills, each of them had to show me that they were motivated to learn and willing to do homeowork...each of them knows that at the end of the curriculum (from 18-24 months) that they will be asked to leave and trade on their own, TO PROVE TO THEMSELVES that they have learned enough to run a sustainable trading business. So really Thales, your namesake was one of the Golden Age of Greece's finest mathematicians and philosophers...do something appropriate to his name for once. If you are going to open you mouth take the time to look into a subject first. You made no attempt to contact me and ask what I am doing here...I would have gladly provided you the syllabus for my course of study so that you could evaluate it for yourself.........perhaps you might take a moment to ask what the real Thales would do?

Presumably the truth is our best defense so for the record No name calling...simply correcting the record... and now that I have invited several members here to view my class (anyone but you Mighty Mouth)

Only 5? Well in truth most beginners are making only one (1) mistake.......trading.... If they would simply "not trade" until they had completed a reasonable educative process the lists and the endless advice from other amateurs would not be necessary. Now if you don't care about capital preservaton, or you think that YOU are beyond the beginners's category and can ignore this advice well then...please continue as you were.... Those who may want to take that advice seriously may want to start with the thread "advice for struggling traders" and move forward from there....at least you will have something to work with If I can be of help please ask...I do teach a class (it is not open to newbies)...but I will do my best to provide other resources that might help. Best Regards Steve

I think sir, that you have misaken me for someone else...I have no history, except that of intolerance of fools, and to put it bluntly if someone wants to approach me with deception (as has happened recently), in order to get what they want...I am not going to smile sweetly and hand it over...Finally I will generally respond to personal attacks "in kind"...I have made that clear to Mark. Now lets be clear about another issue. I have posted quite a lot of information here, and based on the page views I believe that I have helped quite a few traders to improve themselves. Clearly this is not the case for the other person you speak of... at some point I am going to ask myself why I need to put up with personal attacks. I can assure you it is not for personal gain..Again I refer you to Mark (as I have explained it to him completely and he has my permission to inform you)...I continue to try to help struggling traders (as is the title of one of my threads) as long as others will permit.... Good luck to you Steve