steve46

Your point is valid..I think very few people really think about what it takes to profitably scalp any market much less the S&P Futures...unless you have a way to cut costs (all costs including commission) down significantly, it isn't economically feasible...In my opinion, retail traders are drawn to scalping because they cannot tolerate the physical tension associated with holding a position...they think that because they can ring the register a couple of times quickly that THAT constitutes a viable strategy...it doesn't....to overcome expenses one has to make sure that they manage risk very carefully and on top of that you have to find a way to be bigger when you win (bet sizing) than when you lose.....there is a way to do it but most retail traders don't take the time to learn....so they are doomed from the start...its part of the reason so many fail or quit....and if I may...that is why trade rooms and the poor folks who participate in them....usually end up the same way....with a net loss...there's more to this business than setups....and once a person figures it out they have only a few choices...either learn to manage risk and to bet properly or, go find another hobby...

The "$TICK" is a data element that comes with Esignal charting...I would imagine that just about every professional level charting program has some version of the NYSE tick...Check with your data provider...this has nothing to do with the CME (NYSE stands for New York Stock Exchange)

Interesting isn't it Tams Apparently the gentleman (Hoffman I think his name is) is enjoying astounding success and yet he is interested in marketing himself to Trade The Markets....lol....why do you think that is....? Could it be that (assuming that there are 1000 living breathing humans in the room) that TTM would like nothing more than to have that captive audience in one place to market their products and services.....hahahaha and as was pointed out...I have to wonder how a person can obtain anything in the way of an education there...for instance how does one have the time to trade, and respond to questions and comments from a crowd of 1000 observers? How many days or weeks does it take to get a response to a question about a strategy or a trade? I am going to be working with 20 people in my class and I imagine I will still have trouble keeping up with all the questions (especially at the beginning).....lol....oh I forget...in order to get into Hoffman's room, one has to purchase a bunch of "educational" DVDs........hahahahahahaha. Talk about marketing genius.. As a final comment, I would say this....every skilled professional has a couple of high probability "layup" kind of opportunities that they hold in reserve...offhand I can think of oh, 3 or 4 that occur every week...and I imagine that if I wanted to restrict my trades to only those entries I could have a very (unrealistically) high success rate on trades...the problem is that students wouldn't learn much from these kinds of trades...and because they happen infrequently a trader would have to put on significant size to make money with them...(I am guessing that is what the gentleman in question is doing)....I can see where it would be attractive to a large population of folks who want to be told when to buy and sell in a greenlightbuy/redlightsell fashion...but as far as actually teaching a person to act independently in the markets I would say its probably not effective...I would be more interested to hear from someone who is no longer in the room and is trading on their own...to me THAT is a better indicator of long term success. Well I have to take my hat off to that person...in terms of marketing this person is a natural. All I can say is "good luck kids"

Well to return your "serve"...lets be clear...I certainly do not claim to have exclusive access to "the way" to trade...its a big world and there are numerous ways to participate in the markets. Also I hope never to be too proud to learn something new...one reason I stay with this is that I can often learn new things or find new concepts that serve as a point of departure for my own research. With respect to high frequency execution..those programs largely exist to obtain what the industry calls a "peekaboo" look at order flow just prior to execution. Those who participate in these activities may deny that, but in reality that is just what they are doing...It requires special data feeds, high speed equipment as you have suggested and co-location. Also it requires a special type of software program to evaluate the data stream and put in place a logic driven basket execution to take advantage of the information obtained. The reason I suggest that these actions have little effect on retail traders is that they are completed in milliseconds and the effect is similar to either a "Liquidnet" pool transaction or "program A" reportable block transaction..The primary difference is that these participants are looking for incremental profits (often taking profit on fractions of a point) not a significant move in price.....and for the most part these activities are buffered amongst the vast volume of both pit executions and automated off site programs...in essence it all blends together...and frankly these transactions have very little effect on intraday market movement. Finally, one can get a quick look at some of the automated executions by simply putting $TICKI chart in place on your screen (assuming you have Esignal as your data provider)...tomorrow for example you will probably see executions go off at 6:40am and again at 7am. These transactions can be seen whent the reading on the chart goes to 25 or more.. Well I don't want to bore people with too many details...so please do carry on as you were. Good luck to all in the markets

Okay, lets see if we can get past the urban myth about automated execution (among other things) First, automated execution is not new and is just a part of this market. It affect all markets not just the NYSE so if any of you want to become professionals you are going to have to deal with it....not just the newbies... Second...it really doesn't affect new traders much...what really causes new traders problems is their own ignorance and the fact that for the most part newbies are unwilling to take the time to get a decent education about how the markets work...and frankly reading all the misconceptions about automated trading here doesn't help.. Now I am not here to put on a seminar but what I am willing to say is this....once you understand what automated trading is about, and how it is implemented, actually you can USE that knowledge to position yourself in such a way as to benefit from it...for example in my classes we position ourselves in front of cirtical time periods when we expect automated execution to occur...when we are correct, that automated activity is the "fuel" that propels the market to our profit target...the point is that knowing when to trade...and when to stand aside is important...and newbies (and apparently newbies aren't the only ones) haven't done the homework necessary to know how to act in this regard. So Negotiator (sir or madam) here's my offer to you...if you want I will make it possible for you to observe and see how it is done...no strings, no concern on my part either way...that way you can make an informed judgement about this subject and perhaps come away with something of value for your own trading... let me know.. Best Regards Steve

Okay well I don't have a l ot of time because I am trading the Globex this evening, First it is the "NYSE" TICK and it represents the number of stocks ticking up minus the number of stocks ticking down on the New York Stock Exchange. based on the readings, a trader can quickly see the intraday direction of the broad market as represented by stocks on the New York Stock Exchange. In addition, skilled traders use the tick as a way to get favorable entry on trades (and for so many other things)... Volume is what I use to confirm my entries off of the NYSE Tick....once I am in a trade I use the $VOLD and $ADD (Esignal volume data) to show me whether institutional traders are "with me" or "against me"...I also use these data points to show me when to exit. I was trained to read the tape using these data elements years ago, and now I train other traders to do the same thing....and that technique is still as effective now as it was then...I know several ways to trade but if I had to choose...clearly this method gives me the best odds of consistent success.

Paul As with most things in life, how you approach this depends in part on what you are trying to do.. If for example you want to learn to trade equities, you will probably need to learn to read the DOM ("depth of market" display). It has become difficult to navigate and you will need to find a person willing to spend time showing you the ins and outs of that system. If you are interested in trading futures, in my opinion the best method is to "read the tape" which requires that you learn to monitor a "time & sales strip" as well as the NTSE tick and volume. The tick and volume are used to to support your trade decisions as you "read" the time & sales strip. Finally, if you have MarketDelta you can (eventually) learn to read either their "footprint" charts or their multi-line "break" charts...and again it takes time to learn and you will need to find someone knowledgeable to show you how it works. Here's what I can tell you about this...first, it is difficult but certainly not impossible, and you will need to spend considerable time getting accustomed to seeing the data displayed, learning a system that works, and then practicing until you acquire some proficiency...Second, even when you have "learned" to use these tools you still have to have a framework on which to base your trading decisions. In other words, tape reading is a tool that you use to try to obtain favorable entry, but by itself it isn't a viable system (just my opinion). I know these methods and after long years of trial and error I would suggest your best odds of success lie with learning to read the time & sales strip (also called "reading the tape")

What an interesting comment....Perhaps you could outline what you mean by "an effective strategy"? In my threads (the ones you prefer I don't "plug") I outline a method that I have used for over 10 years...I guess I have to remind myself that there is always something new to learn....by all means please continue your thought.....

Well clearly I am biased....I make a nice living in this and other markets and for me...while it requires focus and preparation, once you have a viable systematic approach it is very straightfoward.. The original comment seems appropriate in that it reflects the retail trader's inability to find a way to "make sense of" and to recognize opportunity in this market. This is very common in persons who are inexperienced or who lack skills or suitable background...as an aside...one can fill these deficits fairly quickly if they are motivated...having trained people to do this, I can say with confidence that a motivated person can find success if they apply themselves.. Personally I like the S&P, bond and currency markets about equally...and once you have a workable system, (using supply/demand as a basis) they offer nice opportunity for profit... Whether an individual person believes that or not is not of particular concern to me, but I do empathize with those who might be having trouble...it can be frustrating... Edit By the way, if the original poster wants to check out a different approach, they might want to read my thread titled "an institutional look at the S&P Futures"....If I can be of help...just PM me.. Best of luck to all

Unfortunately there is poorly worded sentence in my quote above...It should read "At some point along the supply/demand curve there is a price at which no participants are willing to buy or sell" (volume falls to zero).

One can see supply/demand analysis in "an institutional look at the S&P futures" and "trading adverse events".... The operational basis of supply/demand analysis is simple...at some point along every supply/demand curve there is a point where price goes to zero. When you look at charts....IF you take the time to simply step back and THINK, you can see every point where this happens.....as participants define and re-define the boundaries of "value". Market Profile attempts to do this, sometimes successfully, sometimes not so much. The problem for most students, retail and part time participants is that this looks a bit different on different time frames....so it you are a longer time frame trader...you would look for different "signals" than a person trading 5 minute candles...Here are a few basic concepts First, use candles not bars...supply and demand are easier to see that way Second...start with longer time frame charts..If you are a intraday participant, start with multi hour charts and work towards your chosen time frame. If you swing trade start with monthly and weekly charts. Third...begin by identifying trending moves...and by that I mean sustained directional movement. This is subject to each person's definition but for our purposes the longer price can sustain a trend the easier it is to see the "effects" of supply/demand on price action, and the easier to see the eventual reversals Fourth, Identify the origins of trend...these are often candles with long wicks pointing up or down depending on the direction of the trend. Look for displays of momentum including...gap moves, wide range bars and parabolic movement. The best trade opportunities occur when price moves from a significant imbalance through a point of equilibrium (balance) to either a resumption of trend or a reversal....at the boundaries of value, as participants define and redefine what constitutues fair (retail) and unfair (wholesale) you can see volume come in as institutions make the decision to commit capital to specific positions...This happens seasonally (as in my first charts in the thread "an institutional look at S&P futures)...and even on smaller time frames...as participants come in to defend the weekly open for example... The problem for most folks is that to obtain a significant working understanding takes time..and most retail traders don't want to commit to the process....thats really too bad...I would say obtaining a good understanding of what supply/demand looks like on a chart is really a cornerstone to whatever success I have had... So its Easter weekend...best wishes to all

Well, Ms. Roosevelt's commentary is nice as far as it goes...and I like to look for positive things to take away from any person's comment... I think however that folks should take a moment to THINK about the substance of her words, and then LOOK carefully at what is right in front of you on her page....in addition to the very important comments she makes, here is what I notice The first thing you see on Ms Roosevelt's page (about the importance of separating ego from trading) is that she has her full name including her middle name in bold print right at the top, AND even though it has no application to trading....she wants readers to know that she has a "JD" degree (Juris Doctorate), simply put she's graduated from a law school...does this have anything to do with trading, or the psychology of trading?.....seeing this my interest is piqued...in my opinion this is a person whose ego is fully engaged.... Reading through the pages I come to the statements on page 2 "ego-tizing" a trade......where failure to put in stops, hesitating to enter and other amateur practices are attributed to the influence of ego....Ah well, no sale here...sorry and the reason why ladies/gentlemen is that we are (all of us) complex beings....each with our own baggage and for some of us, failure to act professionally is simple ignorance...for others "fear" for others "laziness" pure and simple...and yes for some "ego"....so if the shoe fits....so be it......but trying to paint all traders with the same brush doesn't work for me To make a long story shorter, if the young lady wants to get some attention....create some buzz and in the process promote her business... (nothing wrong with that)....for me at least, she is going to have to ht the nail at little more squarely on the head.

Yes, I know of Tom and have heard him explain his approach on several occasions. He is skilled person, however you should be aware that his room and his services are really meant for experienced traders...I have heard him say that a couple of times. Now there is a lot of personal bias here and I admit it, but I suggest that before you make a decison to go with a system that is purely MP, you may want to take a step back, and take a long look at the environment...I started with MP many long years ago and it was fine...I made money, BUT the drawdowns were significant and the systematic approach (in my opinion) lost some of its validity as makets and professionals started to 1. front run the entries and 2. started to make their decisons based on balance/imbalance and on retail/wholesale value instead of just MP "value"....Today...what works is supply/demand combined with other data elements (you can learn more about these elements by reading my thread "An Institutional Look at the S&P Futures") Knowing what I know today, I would use MP value areas as ONE of my primary data elements but I would also be using other things to make my decisions. By the way, I also used Market Delta for a while...and I learned how to read the footprint charts pretty well...unfortunately once that system because widely used, particpants learned to game it, and now if you use it to time your entries, what you will often find is that you enter using the MD system, and then the market will simply die on you and oscillate until it shakes you out...Fortunately you can do other things with it, but for me the value proposition just wasn't compelling...I like CQG and Esignal...( I think Tom uses CQG) Hope some of this helps Steve

Sir or Madam Because retail traders usually operate solo, there isn't an office culture (a model of successful behavior or support) that you can turn to...If you can't find a good solution, it may help you to find a skilled person to monitor your actions...and offer a comment on a regular basis. Not easy to do but it is preferable to "bleeding" your account. The other possibility is that you may not have sufficient experience to know when to quit (on an intraday basis)...For the ES market for example, I know what to expect in terms of length of line and average true range...once I capture that range, I ask myself whether the odds favor an expansion of volatility sufficient to warrant additional exposure to risk... It may be that you need to find a solution in both areas.. You can always PM me if you need additional comments. Best Regards Edit Dont know if this helps but it is a simple example of how one can make a conscious decision to step aside...in the attached chart you see price open and retrace down to a predetermined blue bar (my entry signal)....from experience I can forecast that institutional participants are going to mark this market up 10 points...I "know" this because of several factors (day of the week, economic reports, bond market reaction, and other data items)...once I get my ten points, I am not going to putz around and take the chance of giving it back...so at around 9:20 or so this AM I was done for the day...period...

I think I understand your comment (sir or madam) To be clear I do think that at any point in time, only a small percentage of folks are going to be able (meaning that by innate temperment, by "nurture", whatever you want to call it) they will have the basics necessary to succeed in this very demanding profession)...I say this because of my experience (of many years), and of seeing many candidates come and go after trying unsuccessfully to learn how to do this.. Clearly one can overcome a lack of talent, by being motivated and working hard...I have seen that several times over my years, AND just as clearly I have seen seemingly intelligent people fail because they were unable to learn to manage stress (specifically their reactions to stress). I believe that there are people who by luck, or by design, were raised in such way by their parents that they possess a specific type of character....again to be more specific I call that character "adult"......To me the term "adult" means that these people can look at the environment and make sense of the data around them in a dispassionate way...AND if the decisions they have made are unproductive, they are able to disengage their egos and make the necessary adjustments in order to be successful... When I review applications for my classes I look for folks who display what I call "adult self esteem" first....THEN I look for education, experience and other factors...I do this because I have only 24 months to work with them, and I know that adult behavior and mindset is one of the best long term "indicators" of success in this business.

and here is the continuation chart for the open and first hour of the S&P futures As can be seen the market went into a consolidation overnight. In the premarket, we labled the overhead supply and underlying demand areas. At the open the market did what it often does, which is continue as before...In this instance we had a number of fake outs as pit locals and institutions tried to activate stops and "strand" folks on one side or the other...Ultimately what happened was the market continued down, and if you had a position in place, as we suggested in the previous post, you would now have a nice profit, which you could take and fold your tent for the day, or stay in the position looking for a further move down. We have an existing position and will stay with it through the reversal move that should happen right along here 8:15am PST. In the afternoon, when folks come back from lunch, we expect a continuation down to 1300 which would allow us to reach our profit target of 20 pts. Whenever that happens we are done for the day.

And here we have the chart of this evening's DAX open, where you can see that the market gaps down, probably in response the news. At this time the S&P was trading at about 1313.25 From this point forward I will be monitoring the DAX, the Eurostoxx, Bond and Currencies to see how the world reacts to the escalation of this continuing problem in Japan...

Hey Jim As you know I appreciate your kind words and hope that you find something of value here. As for the rest of this post, as regards "event trading" this is probably the most significant thing I will put out publicly. Throughout the afternoon, in the press and worldwide news, we noticed comments about the increasing level of alarm over the condition of the reactors in Japan..The context is simple...when you have potentially volatilie news overseas, it is a good idea to stay current (on top of the news)...as you see it develop, you can evaluate the effect that it may have on world markets..If for a moment we put aside the implications of this tragedy on the poor citizens of Japan, we still have this "event" to respond to....Knowing the potential, I looked for the market to show me, how it wanted to respond. At the Globex open we saw the market move up slightly to test the pre-selected S/D boundary...and fail...once that happens I look (as I did in other posts previous) for entry...my outlook depends on the news...and in this case instead of going out to dinner as I might normally do, I stayed home and watched the chart develop...while monitoring news....as you can see the Nikkei took it down from 1530 hours to 1700 hours (HangSeng). Seeing that the situation was deteriorating, I stayed in the postion waiting for a change in the news...the news got progressively worse as Reuters reported an increase in the estimate of damage from the quake, and subsequent reports declared that the status of the problem had been changed to "level 7" (based on the International Scale) comparing it to Chernobyl...by the time you see this kind of volatile comment in world new headlines, it is generally too late to trade it, but you can see what the net effect was (a ten point move off the Globex open) For me the take away is...anticipate further developments when you see headlines that show a volatile situation deteriorating... the preferred method of entry is off of pre-determined supply or demand levels, and the best entry is the Globex open or at the first test of S/D AND if you anticipate continuing reports based on an event...it is probably a good idea to stay at your screen and monitor the world markets for response..For first timers, I would suggest Bloomberg, CNN and Reuters...all available on the Internet..I will be staying at (or near) my screen throughout the night if I have to...

You know folks, the mistake is mine. I see now that you have it under control... Please continue as you were... Best of luck

"Whether individuals who are predisposed to excel do find success is likely heavily influenced by personal effort and coaching. Michael Jordan, the basketball star, serves as a good example. Jordan certainly would not have been a superstar basketball player had he not been endowed with certain physical attributes. However, he is the greatest player in the world because his well-suited genotype was married to hard work and good coaching." I took this quote from Siuya's post, and I think it sums up what I believe....especially when it comes to "hard work" and "coaching"...these are my personal biases... I prefer to be optimistic about people, (although admittedly it is sometimes difficult to sustain that optimism), and in my own life I have proven that a person can succeed if they are motivated and have access to the right tools. I am in process of proving that to a group of retail traders now, and one of the things I hope to do...is to have them post their results and their stories (success or failure as it happens) here on this site within the next 18-24 months (my estimate of how long it will take to train folks to act competently in the markets).

Hello I have already shown how to obtain an edge...its just not that hard...what is difficult (it seems) is to communicate the information to amateurs who may not understand what an edge is...and if I can go ONE STEP FURTHER...even when one does have an edge, you still have to know what to DO WITH IT....! As I have pointed out...(or tried to) once you have a concept that has an edge, you still have to have your ducks in line in order to profit...that includes a risk management plan, a way of executing and sufficient capital to stay in the market long enough for your edge to "kick in"... The way I see it, most folk start with no clue and simply look to "buy their way in" with indicators, mentors and trade rooms....Sorry it doesn't work that way...you actually have to educate yourself (what a surprise) and do the homework necessary to build a business... If you look at the thread "An institutional look at the S&P Futures", that is ONE WAY of obtaining an edge...there are plenty of others...and as for the issue of "compatibility" well at this point with our economy in shambles and people out of work, I suggest people quite whining about whether or not a systematic approach fits their temperment....and try to focus on fitting themselves to the job at hand... One last thing...the issue of backtesting and then throwing money at a system because it tested well in any time frame is naive...most of you don't have nearly the education required to adequately evaluate a system...again its an example of trying to buy your way into the market...and clearly it doesn't work....just my opinion, but the only workable edge is understanding human behavior...it never fails...

From my unconsciously competent point of view, it seems clear that the most significant advantages lie with the S&P futures contract.... The futures contract offers good liquidity, substantial volatility, and tax benefits above and beyond that for Equities or Bonds... The downside for amateurs is that this is a very competitive market to trade, one that is dominated by professionals, so the odds of success are not good...and because a significant amount of activity is initiated by automated execution, amateurs usually don't fare very well. If however, one takes a disciplined approach and is willing to take the time to learn, I would think you could develop a systematic approach that offers a good mathematical edge within say 12 months....At that point, if you are a person possessed of the appropriate education, talent, and have sufficient capital, you might be able to execute and maintain adequate risk management within say another 6 months. Over the next year (hypothetically speaking) random chance would influence your result for the first several months, and then IF you can maintain discipine (take all the trades and hold long enough for your edge to kick in) you would probably see a profit. To give an example, in my own studies (using multiple monte carlo tests) for the conditions put forth, I would forecast a 23% chance of ruin for a person running a $20,000 account in that fashion. On the profit side your return would vary proportionate to your tolerance for risk, your ability to be aggressive on entries and (of course) market conditions during your "live" trading period. To me it is clear why Tams encourages others to go slowly....because the challenges are substantial and most amateurs fail, either because they are not prepared or are so poorly prepared that random chance takes them out of the game right away... Edit By the way Tams...a lot of the "quality of life" issues relative to trading have to do with stress tolerance....now that I am on the other side of the fence so to speak I can say that a person learning to trade Futures....may indeed experience trading and the trading environment as stressful, perhaps even very stressful...(it is after all stressful to lose money, and even more so if you don't know now to "stop the bleeding") however once you find a way to make this work it is another story entirely...frankly at this point in my life the primary stressor is whether I can hit my profit targets early enough to go to lunch and whether my Internet connection will be stable...I wish everyone the best of luck

Hello David I think there are a number of paradigms that can serve to organize our knowledge of this (or any) subject What I have noticed is that those who aim to do something special, find a way to go beyond categorization.... So yes I think your systematic approach works (for me anyway) In a practical terms, what I can tell you is that in terms of learning, the variables are time and talent....that is to say...if we assume that you have sufficient natural ability, intelligence, aptitude (whatever you call it) to learn how to do this, THEN what you need in addition, is access to information, proper guidance, and time to internalize the information. I suggest that the "time" needed is variable because some folks need a lot of repetition to learn a skill, while some can learn more quickly, and finally (and most importantly) there are folks who have the ability to go beyond what they are taught. They seem to have a innate ability to synthesize new information from what they observe around them What I have learned in my short existence is that those who have this last talent, usually do very well in the financial markets because they can adapt quickly to the random, chaotic environments that we see today (check out the NYSE or CME exchanges during regular trading hours if you want to see good examples of what I am speaking about)... and finally, in addition to adapting to noisy environments, this last group of folks has the ability to "make sense of"...or to find an "organizing principle" that can be used to their advantage..this arises from their ability to maintain their attention on solving a problem, even in the face of significant stress all around them....(something that we had to learn in my family early on lol). So I hope this is of some help to you

The answer sir or madam, is that retail (amateur) traders lack education, aptitude, skills, experience and are usually under capitalized....In addition, they are often guilty of simply visiting sites like this one, asking everyone around them how to trade and then throwing money down the drain on approaches that utilize lagging indicators. Clearly you can't learn to fly jets by watching "Top Gun" and then pretending to be Tom Cruise...and generally speaking you won't become a special forces soldier by watching Sylvester Stallone in Rambo....what is needed is education, guidance and time...otherwise the odds are in favor of failure and loss of capital...

Its just after 10am today and I have a doc's appt so I will stop myself out here at 27 Normally I would stay in case it continued down but I think its near enough to my target that I can call it a day.. The red arrows at the top of the screen show the short entry pricing at the top of the local distribution....As can be seen on the chart we hit that price point twice, once right at the open and then again about 5 minutes later...I tend to display volume and market breadth differently, but the "tell" for me, was that when price tested that previous high the $ADD showed me that institutions were selling it.... and a few minutes later I got confirmation that the broader market wasn't supporting a move up...(the NYSE Tick displayed successive lower readings of 854, then 574, and finally 254 and at that point you have your confirmation that the bus is headed south....Once you have confirmation of market bias, you can add size or just hold on and watch as price moves toward the next lower level at 1333 and then lower to 1330...once you get some breathing room, it is much easier to just put your stop in and take a look periodically to see how you are doing. Hope this helps some of you