steve46

Another superb post Patuca, demonstrating your extensive knowledge of the subject.... Here is an example of how we trade events using our current system. Bias is determined early on, and we input our knowledge of the mechanics and our expectation for Chairman Bernanke to comment in a specific fashion. Up to this point in time everything is going as planned as Bernanke talks about Feds plan for maintenance of future easing, expectations for inflation and unemployment. These are the three subjects that have the potential to move the market. Bias was down initially, and the left most arrow shows the initial move confirmed by volume. As volume continues to trend, the second arrow displays our entry and because volume supports our decision, we had no reason to capitulate. So basically there are two issues to consider, the first is having a systematic approach that allows you to obtain an edge, the second is a way of confirming bias, finding entry and managing (holding a position) until it move one way or the other.... Most of our process is planning, and it is done the night before....unlike those folks who tell you when to buy and sell, we TRY to provide useful context so that a person has the opportunity to learn something that they can take and run with....in the morning as events unwind in front of us, it is all about execution and adjustments as needed.... If the reader follows their own charts you will see that this paid off for us today.

Yes, I did not reset the data counter prior to the open....so it is incorrect.....so that you understand what I am doing. I am more concerned with the visual display of trending aggregate volume. I place markers at specific times (I call them entry frames) and I watch as participants act.....their actions provide two (2) data points, the first is acceleration of orders (which is impossible to show in this venue but can be seen in real time), and the second is volume in relation to my markers....I call this a volume trigger...as volume moves past my "marker" if I think the odds favor continuation (on a test of one of my key reference points for example) I enter the trade....from that point forward the only reason I look at price is to scale out....if volume never comes back to test my entry frame, I stay in the trade....no more worrying about whether I am leaving money on the table.... By the way, I did not think you accused me of anything in particular...but wanted to put my opinion in context....I agree with your post. PS....here is an example of my display...as can be seen here the volume on this 10 min chart (which I set up correctly prior to the open) is probably closer to reality.....I say probably because I am experimenting with Ninja and don't have confidence in it just yet....typically I cycle through the 90,30,10 and 3 min time frames...

Here is another nice example that just happens to occur at this time of day Its called a "position offset" and it reflects the fact that a group of institutional and commercial participants HAVE to reduce or flatten existing positions at a specific time of day in order to comply with their internal rules....does it happen all the time....no, but it does happen enough that I (and many others) look for it at this time of day...and on specific days of the week depending upon the release or pending release of economic data (context). Good luck folks PS and I have attached another chart showing the close of the "offset"....I "suggest" to students that they don't trade past 1pm PST....because of the possibility of automated execution causing distortions in the tape. Also this trade resulted in an approx. 5 point win and this is one of the places where I will either scale out or exit depending on the aggregate volume...looking at the lower pane, you can see that volume starts to ramp up....that tells me that this is an appropriate time to exit...I post these charts to my blog for those who may have an interest in it...PM me for the information, I won't publish it on this site.

Yes if only it were that simple.....the markets (all of them) move if & when big players decide to move them....nothing anecdotal about that....its simply a fact of life...and the way one gets a hold of that information is to find someone who knows when that is...and is willing to show you or tell you how to find out.... One example...a while back there was an opportunity to trade oil profitably and many did including quite a few retail traders....at some point, predictably that opportunity dried up and many of those same retail traders were caught on the wrong side, having to respond to "calls" for additional capital into their accounts.....each day approximately at lunch hour, the compliance offices of several brokerages had to liquidate positions....if you KNEW when this was going to happen, you could (and I can assure you many skilled persons did) enter trades AT THAT TIME knowing that odds greatly favored one side of the market.....again its a matter of experience and knowing where the opportunities lie. "Simple" statistical analysis lacking context is often misleading and it only goes so far...and this comes from someone who taught the subject...by all means incorporate statistical analysis into your approach. It is a valuable tool.....however, NOTHING beats experience and knowledge of the day to day mechanics of the markets...this is true of every profession. Good luck

The "best" time of the day depends on the skill level of the participant. For skilled participants, the preferred times to trade are at the open, close and prior to events. For non-skilled participants, there is no "best" time. Due to their inexperience or lack of skill, non-skilled participants will generally lose money no matter what time they trade because they do not 1) have strategies tailored to the opportunity and 2) do not have the skills necessary to recognize opportunities as they develop and finally 3) do not have the necessary experience or confidence to enter trades promptly when opportunities present themselves.... The "best" time of the day then, is any time you can find a skilled participant who will let you watch him/her execute trades....learning the profession that way, you minimize risk and can observe how other (presumably profitable) participants operate... To illustrate these points, I have attached my charts for today's opening (morning trades). The left most chart shows the initial entry, the update shows the progress as we hold the position and the right most chart shows how important it is to continue to hold through the opening time frame as participants determine value.....without this volatility the market goes nowhere....with it, you make money....but you have to have the skills in place to handle it. Oh and for the "critics" who will say it isn't in "real time"....you're right....you see I ACTUALLY TRADE and therefore I don't have the time (and I couldn't care less) to post and execute trades....figure it out...use it to your advantage. Best of luck Steve

The gentleman is right....the problem is that 1) he did his homework and you have not and 2) to make it work (the concept) you have to know in detail how your system acts (and most retail traders do not)..... To put it bluntly most retail traders want a formulaic system that is rule based and requires no "thinking".....and that is why they mostly fail.....ultimately one has to study the market and understand the mechanics......sorry. Finally, the gentleman's English is not "broken".....the word processing (the automated spacing function) on this site sometimes produces distortions in the sentences... Good luck folks

The problem with shills is pretty obvious to folks who have been here a while.....one post and just by coincidence he is here to help the original poster (who is probably his/her partner).... The "problem" with indicators doesn't exist....indicators are tools....no different than if one uses power tools like drills or circular saws to make furniture or cabinetry....in the hands of a skilled person, these tools produce a good result, in the hands of inexperienced persons, the result is often quite different... Yes I teach folks (4 people several times a year), and understandably some are skeptical of me as well.....frankly I couldn't care less.... Good luck

Patuca I have noticed that generally you wait until people "leave the field" then come in to deliver your insipid little "drive by" bullshit comments...("Yeah you tell'em....good for you")....but there's never anything of substance, and you never really take a stand.....sort of a mental eunuch. I wish there was something positive to say about it (or you)....but there isn't....

Welcome....I'm an retired institutional trader looking to learn something new from an expert like yourself....I have a couple of simple questions....I am sure you can help me.... 1) If we have an inverted basis (on the S&P Futures contract), how can I use the pace of the roll to obtain favorable position on rollover day? 2) Is there a quick & dirty way to know if the roll is going to be cheap or rich compared to implied financing levels? If so, how can that be used to trade the rollover? Thanks

Okay then, with regard to your comment to me My advice (take with a grain of salt) ....if at the end of the day, you can say that you are moving a little closer to your goal(s), and you have learned something, then it seems to me you are doing just fine....be patient. Good luck

Okay so this will be my last post for this thread. Sorry but I realized a long while back that the more I do this (post) the more it distracts me from my primary job (trading this market). Looking at the attached chart what interests me is the way price reacts as it tests the previous Euro Session Close of Cash.....there are many reasons why this happens and I don't have the time to go into the details....simply wanted to point it out... Also note that once price moves back into a previous range, it is often the case that it will traverse the IB and test the other extreme....this is very basic. So there are a couple of things to consider....first, once you have enough game to recognize viable entries, you still have to learn to manage the trade and to hold long enough to fully exploit the opportunity. How can you do that unless you know (or have some knowledge of) how participants move markets? The answer is you can't and THAT is why I read comments including just know in a previous post, about not knowing whether to hold or get out....and using a trend line for that purpose....Its fine by me, as long as you are willing to leave money on the table based on that ignorance... For the record, I ask students to always take profits if they hit a ten point winner....I call it my "windfall" rule....once they leave my class however, they are expected to put their knowledge (of market logic) to good use and hold as long as they see potential for profit...the general rule is "when you have a winner, be aggressive, let it run" Seeya

Thank you Here is another chart showing the previous close of Euro Cash Markets.....Notice how price reacts as it tests that price point.....The Euro market is very important to traders and a significant input to my decision making process. By the way, nothing "simpler" than using a trend line....it seems to me that is the ultimate in simplicity.....and a good starting point if you want to de-clutter your charts...I agree with Thales comments.... Best of luck to you Steve

I think this is as simple as one can make it The Bollinger bands are used by my students...I call them "training wheels".. the volume is simply an aggregate display using a square wave..... While technical analysis is important, I prefer to bet on plain old human nature....knowing what my fellow human beings are likely to do in a given circumstance...today they "squeezed" the prior short inventory. The chart shows the previous inventory placement and the lower purple rectangle shows the Euro market open and IB....THIS is the logic that seems to provide consistency to my approach...

We are still long from the open Attached please find our morning chart showing two (2) entries off the open The second chart shows the current status of our positions. The close of Euro Cash markets (8:30am PST) is what determines whether we stay or go on with current positions......I have no problem with folks looking a price "action" but understand that the institutions that have the horsepower to move markets use an entirely different logic to dictate their actions... Hope I haven't offended anyone Best of luck folks

Couple of observations. First, one of the benefits of trying to teach others (and taking the job seriously) is that eventually even I have observed that although we are each individuals, we can make some important generalizations about how people learn.... What I have come to see, is that people rely on one of several "modalities" to learn anything....and those modalities are primarily either visual or auditory or kinesthetic. When I see someone posting a chart like the ones here, it occurs to me that the original poster is not getting what they need in order to have a "feeling" (kinesthetic) of confidence in their judgements....the downside is that most folks continue to beat their heads against the wall, believing that if they just keep at it, eventually they will figure it out or someone will point them in the right direction (price action for example)....too bad it doesn't work that way or should I say "to bad WE (humans) don't work that way"..... So what to do....? Well one way to work around this problem is to simplify charts (as much as you can) so that you only see the most important data points.....the second is to concentrate on recognizing one or two (at most) "preferred" opportunities.....practicing until you can "see them" as they develop in front of you....and that is the key....learning how to recognize the patterns before they are fully developed..... I learned from a highly skilled person years ago, who figured this out....since then I have been trying to improve on it (and I think I have)...anyway I have attached a chart that I have had success using....it puts a context around previous action and lets the viewer concentrate on the boundaries of the rectangles, looking for tests of those areas, entering based on what I call volume triggers (the lower pane in the chart).....I figure if I can do this, most other folks can if they simply look patiently at the charts and ask themselves "what about price action is most important"....(and what do I ignore)....the example comes from today's blog.

As with most things in this business, what matters is whether or not you have the skills and the experience to make use of the data. For Blocks, you want to know the VWAP at time of execution. Would also be helpful to know which block "house" did the transaction, and whether it was an "aggressive" or "passive" transaction...most block transactions are consummated at a consolidated price that takes VWAP into consideration....you also want to know if the buyer/seller holds the position (which is customary) or do they abandon it minutes later at little or no profit, just to soak up liquidity...For example an aggressive buy at or below VWAP means that someone (usually an "informed" participant) believes the market is moving up in the near future. That "informed participant" is usually not the owner of the original block, but person handling the block trade on behalf of the "house" (the block execution firm). "Just watching it" for a while will do you no good (sorry MM) unless you have some context from which you can draw conclusions.. In other words you need to do some research...fortunately the info is available...once again I don't have time to put on a seminar but you can start with ZeroHedge and move forward from there as you see fit....when doing that research be aware that articles/citations pre 2005 will be of limited use to you as they usually don't take HFT into consideration. Good luck

The gentleman is right "in a simplistic sense" they convey information. Unfortunately a simplistic understanding will generally put you in position to lose money....The following info may help; One way to understand Greeks, is in terms of risk.....most folks understand risk as the possibility of loss.....using "Greeks" you can separate risk into specific elements. The value in this is that once you (really) understand how the Greeks display the elements of risk, you can use that information.... Since there is no reward without exposure to risk, people who understand what each of the greeks represent can choose (they can structure) their positions so that they manage (limit) certain risks, while using other elements of risk to make money (selling expensive premium for example). Your best bet if you are serious about this subject is to get a book....Larry (Lawrence) McMillan's book "Options as a Strategic Investment" is the best one for amateurs....take your time and really internalize the information....it will provide you with a good starting point and from there you can move on in whatever direction you choose Most beginners start out thinking that you either buy or sell premium....then they move on to creating directional or non-directional strategies....and from there they usually go in various directions depending on how sophisticated their understanding has become....unfortunately there isn't a shortcut to experience....take your time, keep your powder dry and be a good observer... Best of luck to you Steve PS. To the original post....well as usual vendors circle like sharks on this site....so for the record, there is never a "problem" with learning the basics.....in fact learning the basics from a good text like McMillan's will stand you well for years to come....the value of practical experience on the other hand is debatable....if for example you take someone's "course" and it turns out to be crap...then you will have to UNLEARN it (and you have wasted your time)..My advice is to read a standardized text first (McMillan's has been used by aspiring professionals for years)...once you have that background under your belt, you will be better able to evaluate what vendors will inevitably try to sell you....

This really did amuse and entertain....thanks Seeker Animal suicide - Wikipedia, the free encyclopedia Out of all the "countless" experts who you claim agree with you I would have thought you would choose differently but... Take some time folks to review this..it will make you smile....I recommend the article at the bottom of the page about suicidal cows throwing themselves off cliffs..... With the exception of TV reality shows, THIS has to be one of the most comical threads I have read here..... Keep up the good work....

Agree with your comment about traders who are "closet alcoholics and drug addicts"...I have known several along my career path.....some very successful, some not so much....while psychologists sometimes classify these folks as functional, I think many would think them severely disabled and in a very real sense "self destructive". This is also an example of folks who usually resist attempts to help or put them on the road to recovery...if someone does find a way to help them (the judicial system for example) it is often against their will (initially at least).

Seeker Professionals status is obtained by A) taking (and passing) a professional course of studies and B) passing a licensing test. That's state law in California....it has nothing to do with getting paid or practicing...you may want to update your understanding...or if you want to insist on maintaining a childlike point of view, you may want to hold on to your current opinion...either way not my concern..... And for the rest of the crowd....my comments are my opinion...I offer it because I am entitled to do so and secondly to "activate" the adult children in the audience....I know from experience that an adult with infantile (or adolescent) self esteem will feel that the image they represent to the rest of the world is compromised, for that reason alone, they will not be able to resist commenting and attacking anyone who "pulls back the curtain".....I leave it to others to evaluate the responses that follow(ed) my post for themselves.

by the way, one of the original questions posted was "what happens in the mind" when people engage in self destructive behaviors...that one is simple Its call "rationalization"...to the extent that adult children are capable of self evaluation, they DECIDE that the behavior they involved in is perfectly acceptable, even mandated by what they have "learned" or been taught (usually in their families of origin) and later on by other similar thinking adult children (in a "support group" for example)..... Having said that, I think one has to be sympathetic to the problems that adult children face....its not easy to make a life when you are developmentally delayed....my apologies to those for whom the shoe fits, and are truly struggling to get to adulthood.... Finally my comments are not meant to be a criticism of the original poster (there is no reason to do so) but are addressed to the population at large...

First of all I am not an amateur, having obtained an education in this area... The idea that people "engage" in self destructive behaviors is (as with most things that people post here) is misleading....generally people simple LET events overtake them, OR they are unwilling to accept responsibility for behaviors that produce a negative result, because they are too lazy (pure and simple)..to do the hard work of correcting themselves... The fact is that life in general is a struggle, and those of us who have made it to adulthood figure it out at the appropriate time (late teens, early 20's) and adopt an adult appropriate view of the world. The rest fall along a continuum where they may or may not possess a realistic adult view of the world, AND as a result of that immature world view, they believe (wholeheartedly) that the world "owes them" certain things.....then "when not if" the world doesn't cooperate" its NOT their fault....ITS EVERYONE ELSE..... Although its not politically correct, I believe these folks should get a brisk kick in the ass (or perhaps join the military and have someone else apply a "brisk kick in the ass" to them) until they "get it".... The subject is near and dear to my heart because sites like this one attract adult children like magnets (all asking the same questions over and over)...."why do so many traders (fill in the space) blah blah blah... And for the person who suggests that "all animals" do this....ah no....you see in the animal kingdom, "engaging" in self destructive behavior results in their DESTRUCTION.....there is an Darwinian process that prevents that kind of behavior from continuing along a genetic line.

Yes, infantile behavior is mildly irritating in the same way that a small child having a temper tantrum in public is irritating...you suggested that my words were a "sales pitch"....THATS called a personal attack....as people before you have found out its not smart to attack me....your assumptions were incorrect as shown in the attached chart example, the result was that you took a well deserved verbal whipping for it... Next time act like an adult instead of small child...If you can't take responsibility for your words maybe you should ask your mother instead of a stranger when you have a question...I'm sure she'll be more indulgent... and at the conclusion of my comment today...I will simply turn your words back upon you If you disagree, argue the case without suggesting that my comments are a "sales pitch", but don't personally attack me again..... NOW we are done...

Clearly my patience is limited when it comes to ignorant comments like these... First, most of my generation of traders learned to "read the tape"....what we were learning to do was to read a combination of time, volume & price.... shortly after I left the business, "footprint" software became available to retail traders and now it is the latest fad....once again the focus on volume....secondarily on time (for those who really understood what they were doing) and finally "value" (price as seen through the prism of Market Profile). In the last few years, as HFT has become more intrusive in equity and index futures markets.....because human beings cannot compete (and frankly cannot see most of the execution process), once again volume becomes critical.....in other threads I have posted multiple examples of what I call algorithmic patterns that seem to indicate ramping up of volume prior to price movement...this isn't earth shaking or unusual, it used to be called volume divergence or painting the tape....for the "long" version, price moves sideways while aggregate volume turns up....for the short version, just to opposite....For the first several days of my class I did in fact show people how to A)identify and read volume "triggers" and B) to trade without reference to price....by reading a volume based display and referring only to volume and time... With regard to your insipid comment about "sales pitches", my classes are closed (as I have already stated about 10 days ago), and since I required folks to apply (and I didn't take every person who did apply), your infantile attitude doesn't seem to make sense does it? For those who prefer visual rather than verbal descriptions...the attached chart shows tonight's Globex open. On top, price, below a simplified version of my volume display As can be plainly seen, there is a divergence between volume and price...as suggested previously "volume leads price" and finally with all due respect I suggest you take your experiment and shove it. I hope my position is perfectly clear....