steve46

Okay then....back to the subject at hand and for those who are interested in learning something of value. Systemic risk is associated with breakdowns in the "system", and that means the connection, the systematic execution of transactions and everything short of each person's computer. If you trade, periodically you want to make sure that you know WHERE those breakdowns might occur....because (as with the CBOE options problem) its the risks that you don't anticipate (because you don't know they exist) that can hurt you...its that simple.... I think that's a good farewell post.. Good luck folks

CBOE controls ALL OPTIONS ON THE S&P500 AND THE VIX....here are the citations folks; ----------------------------------------------------------------- CBOE shutdown: Options exchange opens again - CBS News CBOE Says 'Fully Confident' Software Bug Resolved “Last Thursday's software problems forced CBOE to delay opening its markets for more than three hours Thursday, leaving investors unable to trade in contracts linked to market benchmarks like the Standard & Poor's 500 stock index and the CBOE's own Volatility Index, or VIX.” CBOE dark for much of day due to software glitch | Reuters Option Block 240: Questions Linger After CBOE Shutdown - THE OPTIONS INSIDER - News with Social Confidence - PASSFAIL.com ----------------------------------------------------------------------------- For options to be "fungible"....they have to have several things going...first they have to have identical contract terms, and second they have to have (at a minimum) dual listing approval....If you happen to be trading SPX or VIX options, because they are exclusive to the CBOE, during the outage, you couldn't buy or sell those options....period... Apparently every journalist "got it wrong".... As for you Dude, if at some point you decide to take a break from rolling joints, you might find yourself able to think more clearly....no worries man, I understand how important it is for kid your age to look cool....

Real time posts.....for years? really? You must be very proud of your record to go to that trouble.....Where can we see that record of your trades......do you have an Internet link...? Wouldn't it be helpful to show people the kind of long term success they might see if they chose to try this method..? Thanks

Ho Hum? http://online.wsj.com/article/SB10001424127887323789704578446612972516412.html Quote from the article "The breakdown left banks, asset managers and other investors unable to deal in heavily traded options on major stock indexes and CBOE's own Volatility Index, or VIX. Those contracts are available solely on CBOE." For future reference, if you have something pertinent (and accurate) to say on a subject, feel free, otherwise please don't waste my time....are we clear? Ho hum

I think the idea that you can't predict price direction is correct.....you can however anticipate the likelihood that price will trend (one way or the other) and the value of that.....arrives in your neighborhood when you understand that volume leads price....from that point its a short hop to finding a way to read volume patterns and understanding what triggers interest (the first step in a trend) and then momentum (the persistent increase in volume over time that sustains trend)....Its about that simple, except that most folks stand around looking for others to show them how it works....or sell them something that bypasses the process....if there was some indicator or system that did that, believe me when I say it wouldn't be a secret for very long... by the way for those who need a map 1)You find someone who says they can do it 2)You watch them do it 3)You either go your own way and try to figure it our yourself, or you try to get them to show you.... Every time a guru or vendor has shown up to claim that they have a really great system or software I have asked that they demonstrate for prospective students....so far zero.. and yes I demonstrate my skills for every class. If you can't/won't do that why should people pay you? Seeya

Actually, my post initially asks "how's that strategy looking now?" I then offer my opinion on Onesmith (which hasn't changed) Therefore (as Onesmith has so clearly shown in his post) my comment does in fact contain TWO (2) kinds of statements...one a question about a strategy, the other my opinion of the person's mental status... As is usual for a narcissist, he simply ignores the part that doesn't fit his needs. Clearly by the site standards, its not a violation of rules...and its clearly not libel Once again, we are done here...

For professionals worldwide, in banking, and adjunct business, the 10 year is the benchmark Other industries (mortgage and other types of lenders for example) dovetail into that interest rate for their purposes..do some (of your own) research and you will be able to confirm that... Ditto the US market....

Thanks Rob, see you soon and for folks who might be interested, here is today's long time frame chart showing the upside breakout....this is pattern that so many of you would like to catch but never do.....and its actually pretty straightforward......the KEY is you have to have a way of seeing (recognizing) institutional volume entering into the market... The process is part of my class curriculum, so I can't post here but I can say that there are two reasonably accurate ways of anticipating breakouts...one involves analysis of longer time frame volume and open interest....the other involves monitoring the overnight volume at specific times of the early morning (prior to the US open). The preparation process I teach folks starts with evaluation of the longer time frame patterns (both volume & open interest) then moves on to the evaluation of overnight volume patterns and finally students learn how to identify (and confirm) the intraday volume patterns that create "continuation" (also known as momentum)...you see volume precedes price...price is actually a lagging indicator... For those of you looking around and evaluating mentors, classes and rooms....I would suggest simply....if the person teaching you doesn't have a way of doing this....odds are you are going to lose money... Good luck folks

So here is a nice example of the advantage that the overnight participant enjoys trading the S&P index First of all depending on your time zone and the time of year (in the US) you have the possibility of coming home after work and having plenty of time to review data (including news) before you have to take a position. Here on the West Coast USA, we have Asian markets starting shortly after close of RTH, followed by DAX later in the evening and London representing the Euro Markets open at 1:00am PST. I did this for many years and aside from the issues of sleep (and other lifestyle issues) it worked out excellently. This last evening, as usual I reviewed pending reports, charts and talked to associates overseas to get an idea of where we stood in terms of the ECB committee's pending action. Based on my analysis I took a position prior to the London open and waited for the reports to clear and the committee to announce their decision. As can be seen on the attached chart, the market generates a high to low spread as participants express their views. Based on what I saw, I simply held my position thinking (as Rob did) that we were inevitably going higher (the result of the ECB doing what they could to ameliorate the situation in Europe)...My targets included 88 (again agreeing with Robster) and above to the test of the First Standard Deviation. For this market type, my goal is always expressed in terms of 5 or 10 point increments. For those interested, the chart shows the opening range (also known as the "IB") after the London Open... Best to all

Hello Rob Nice to hear from you....Hope we can take the elevator back up to the top floor (I am long at 81.25) but only time will tell that story... Good luck tomorrow Steve PS..Ladyluck nodding in my direction this evening, I took a small piece off in order to buy a stop.....now if the Spaniards and Italians will cooperate by putting out decent PMI reports, maybe I can make some money tonight....If not I will take it on the chin like the rest of my mates overseas....

Same result as the last dozen or so charts The overnight market opens and cannot make headway above the previous high If one understands how to determine where the failure point is, its only a matter of putting a position on and being able to stay awake, checking periodically on the trade's progress... I can tell you that it is a LOT easier to do it this way than to trade the RTH open and get tossed around As I've said (many times now) its ironic that more folks haven't figured it out...What I think happens is that people see this, try it and fail (because you still need to generate an entry signal) and so many traders are undercapitalized or simply cannot tolerate the tension generated by having to hold to a reasonable stoploss... end of my day and time to get some sleep

I think the question of whether a person's efforts matter is largely personal. I would hope to think so....but for me it is a matter of "faith". It is after all the only part of my life where concepts like "hope" and "faith" can be implemented without impacting my livelihood, and because recently I am dealing with the mortality of people who mean a lot to me, I seem to want to hold on to those ideas as long as possible. I don't expect readers to monitor my every word, but I do make it clear that much of what I post is meant for a small crowd of adults....in my opinion that is the only audience that has a chance of making it in this business. Generally when folks post comments like those above ("go or stay it doesn't matter") it reflects indifference....given the short duration of our lives, I think I will choose to avoid that kind of emotional emptiness as much as possible.

This note for DB and other (presumably some of whom are adults) readers What you see here is something that I have alluded to quite often.....it is (in my opinion) the primary reason why so many people fail....not only to make it in this profession, but in MANY other professions and endeavors.....what you have in the previous posts is a classic example of narcissistic personality disorder Narcissistic personality disorder - Wikipedia, the free encyclopedia Take the time to go to the Internet link and read it....then check back and compare what you have read with the posts... I realize this is a public site, and anybody can post, so what you have here is one example of how a person with a very real disability can unilaterally decide "l am going to post my agenda no matter what the rules....no matter what anyone else says....just because I can.....and everybody else can go screw themselves".....that's the underlying message this person is posting here......in a passive aggressive infantile fashion... Perhaps at some point, MMS or one of the admin persons will figure this out and remove this poor person from the site....If not, I really don't see the point of continuing... Good luck folks

so to get back to the subject of trading using a simplified system As of this date, my class consisting of 4 students has done surprisingly well.....they all seem to "get it" right away.....they understand the basic concept (probably because they all have a math or science background), they understand the necessity to wait (at the open) long enough for the market to display a "volume trigger", and apparently they understand that trading "continuation" of previously displayed momentum generally results in a favorable entry. I am surprised.....usually I have to go over (and over) the same material from a number of angles until I find "the key" they all understand.... We are done for the day but tomorrow the assignment is to take the pre-open prep sequence we generate together, and trade it on their own from the open to lunchtime....At that point we will rejoin and critique the results...

"but I'm in an excellent mood right this moment and don't care about much other than sharing the joy I'm experiencing at this moment." --------------------------------------------------------------------- "In my opinion onesmith...you present yourself in a way that suggests some type of cyclical emotional disorder....and without further information, of which I assure you I have no interest, I can only respond to what you present in print......." clearly we are done now......best of luck to you also

Item #1, lets start with the obvious....every time a market bellweather reports earnings, non-random and therefore "inefficient" behavior takes place...in fact, because earnings are scheduled (they do not happen at random)....the "inefficient" behavior can be seen in advance of the report release, more clearly at the release itself, and for a period of time after the release (this effect is known as persistence) and is amplified if that company posts a surprise, beating or missing expected earnings.... Item #2....same as item #1....except that the inefficient behavior takes place in front of, during and after most high impact economic reports....once again these examples take place on a scheduled basis.... These few examples and many others are the subject of books by Peter McKenna and Ben Warwick...I believe that Warwick's book was the first to come out, and is thought to be (by myself and others) to be "the bible" when it comes to capitalizing on market inefficiencies In addition to these obvious inefficiencies, additional opportunities exist at the time of Bond Auctions, at the FOMC announcement, at the beginning of each month as institutions receive funds from retirement accounts, etc.... In addition there are inefficiencies associated with the open (particularly the NYSE open) as well as at the lunch hour and last hour of RTH. Many professional firms train their associates to spot these inefficiencies and they even have a name for them ("layups")..... I could go on for quite a while citing similar examples in the currency and bond markets, but why....at some point one should get the message...markets cycle from random and efficient to non-random and therefore inefficient, and the reason that happens is simple....HUMANS cycle back and forth from random and efficient behavior to non-random and inefficient behavior...As long as human beings are part of the scene, whether they write the programs or act with discretion, that element of non-random, inefficient behavior will be embedded in price action.. while I am on the subject, the idea that random behavior evolves "rapidly" toward extinction is simple ignorance.........professionals have been taking advantage of these (and many other) very basic inefficiencies for decades....in fact I train people to take advantage of these inefficiencies in the same way that I myself was trained to do, many years ago.... Good luck folks

Of itself, ignorance is simply unappealing....knowing that we are all ignorant at some point, and about some things in life....causes me to think twice before responding to people. In my opinion onesmith...you present yourself in a way that suggests some type of cyclical emotional disorder....and without further information, of which I assure you I have no interest, I can only respond to what you present in print...If you find that unpleasant I suggest you point and click elsewhere.... As for the thread....it stands on its own merits...apparently quite a few folks find the information presented in the posts....useful....if you do not...go someplace else I think I have stated this in a neutral fashion and very patiently...I can assure you that at some point in time my patience will run out and I may decide to express my opinions in a less restrained way.... I hope I have made myself perfectly clear.

As I have come to expect, the periodic silly senseless comments continue to appear So to correct a couple of things as follows First this is "basic" system....the concept is that in a market that is primarily cyclical in nature, it is wise to trade using a system that can measure the standard deviation of price movement from a basis point....that is what the many charts posted show....and in this case doing so "after the fact" is helpful to those who might contemplate incorporating that principle into their trading process. After 50 pages of examples, I assume one can SEE that the principle works. In addition I have mentioned (several times now) that there are opportunities for those willing to trade the overnight market, holding a position into the RTH open the next day...Ironically, in spite of the many examples posted, I had only one person interested in learning how to trade that time period....I interpret this as reflective of the human condition....clearly people want to have information and results "delivered" to them wrapped and tied with a pretty bow....and if it is inconvenient, they will not extend themselves in spite of the data (again about 50 pages) suggesting that there is money (significant money) to be made... Item #2....as mentioned previously, one needs to add tools to this process to develop a complete system....The most obvious is a method of generating an entry and an exit. Based on the intake interviews with prospective students I decided to provide a way to do so using readily available tools found within most every charting package. I no longer teach students how to read the tape, because it requires skills and time that most do not have or do not wish to devote to that end....I do not use a "footprint" software or any other proprietary product, because ultimately I determined that these products do not offer a significant advantage. I DO use a simplified method that allows students the flexibility to decide how to display data, and it offers them the ability to read and interpret volume patterns accurately within about 2 months....so far it is working very well....I am not able, nor am I willing to spend the time necessary to educate the public about this...I will however, try periodically to help small groups as before and that brings me to the last item....As some may know I don't intend to develop a commercial business educating traders....the simple reason is that I cannot afford to do that. In my opinion, doing a good job of training new or struggling traders takes a significant amount of time and effort (as opposed to simply telling people when to buy or sell)....while successfully trading (if one has that skill) provides profit potential well above what one can expect to earn educating folks...its that simple...this is the reason why I teach small groups and it is one of the reasons why I have tried to develop a simplified approach that can be learned within a few months...

Oh my....this goes past (way past) what might qualify as funny....I suggest you obtain some help ASAP.....I won't be participating in what looks like a significant emotional problem...We won't be communicating again...sorry.

In your opinion then, the fact that you appear incoherent should not prevent you from expressing yourself in the "word salad fashion" that we are seeing here? I absolutely agree....go right ahead....perhaps there are other members taking similar medication....and coming from that point of view, you are probably making good sense.... and to DB and everyone else, the answer to the question that Onesmith poses is actually quite valuable...either way the response or lack of one provides a statement of sorts.... I have said this before but I think it bears restating.......it is characteristic of adult behavior to review data and make up your own mind....and characteristic of small children or adolescents that they will often survey others before offering their own opinion. For those who find themselves developmentally delayed I apologize if I have offended. Best of luck to you...

For those just beginning to review this information. Take some time to read the posts by DBPhoenix in this thread http://www.traderslaboratory.com/forums/money-management/16235-mean-reversion.html Clearly if you want to make money, the tools you select have to match up with the market you trade.....the simplest examples are exchange traded currency markets where a simple moving average works (because those markets often produce sustained trending behavior) to indexes like the S&P, where price has (over a period of years) tended to produce cyclic behavior. Even when you get this part correct you still have to find a way to produce an entry signal that is reliable in spite of the inherent noise and the effects of HFT on liquidity. Thus far only a few people have posted anything that suggests they understand the process, and that (in my opinion) is too bad, because that's pretty much the difference between making money and "donating" it to those who have it figured out....Just read the first few pages...right away you notice two groups of people posting....those who object because I don't post a complete system (for their benefit) and those who state confidently that what IS posted won't work.. So what's the point...well first, unless you take the time to do your own research, you really can't judge whether a concept is viable (or usable)...Second....look carefully at your target market. In addition to DB's valuable comments, I wrote a thread ( about characterizing markets)..the obvious first step to take the time to review price history.....now what you DO WITH the information is another subject, but then that's why a skilled teacher/trader is so important to those who want to learn the business..

As usual, people make statements without having an adequate understanding of the subject.. Siuya is correct....I cannot know if HE has this understanding but hedging requires the operator to know how to arrive at the proper hedge ratio, to manage deltas, and finally to understand the concept of "paying rent" (jargon for time decay)....as with all things...to the extent that a person has an advanced understanding of the subject they MAY be able to hedge "adequately"......I say adequately because even if you understand all pertinent concepts, you may still be subject to systematic problems....for example just a day or so ago, the options exchange was halted....understand if you will that even if you had a properly constructed hedge in place....if you needed to make adjustments or unwind the hedge...for that (at the time unknown) period of time...YOU'RE SCREWED.....have no idea if any of you get this but that is a generally accurate representation of the critical issues.... Good luck folks

I use "GoToMeeting" conferencing software, because typically my classes are 4 or less.

Okay a couple of things quickly First, class is closed....for those who asked and did not get into the class I tried to suggest alternatives that might fit your needs, and for those who waited and didn't act ....I realize I am biased about this but opportunity DOES knock and in this case very softly...as is always the case, some few folks came to the door, most did not.... and in terms of the systematic approach posted here....couple of things for those do it yourselfers...first....I do trade using this as the general concept....and it works IF you understand that you have to wait patiently for price to over extend itself...that is where the real opportunity lies (in terms of timing, these days the best opportunities have been trading off the European open and holding into the US RTH open). Good luck with that For those who need to trade the RTH hours, I found way to show folks how to read volume patterns....The process is simple (3 steps) and it is easier than reading the "footprint" software that you folk all saw when Predictor was posting here....and much easier than reading the tape (which is the way I was originally trained)....as it turns out, price is a lagging indicator (lol) and therefore reading volume is really where you need to go now that HFT is so prevalent.... Anyway I wish everyone the best of luck in the markets PS Here's another 120 min chart. kinda illustrates what I've been saying.

so I want to amend my comments First what a wonderful thing you are doing sharing your system....good for you and from your comments it seems clear that you inherited (or possibly won) money Also seems that English may not be your native language And in an effort to understand your initial comments......it seems apparent that you were willing to risk at least $60,000 in an effort to make approximately $42,000 if that is even partly correct it clears up any questions that I might have.. I find this all very enjoyable and look forward to the next installment...