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Khaosphere

From Poker to Daytrading

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This discussion on ES vs. YM and other markets is really interesting and I never thought of it from this point of view. I tried YM one day and I put my stop a few ticks below a swing low and it got taken out 3 times that day. I looked at ES and every time the swing L was not taken out. there was equal L but not LL. So I thought YM was a bit looser and my stops were safer with ES and I've been trading ES since.

 

I'll take another look at YM outside market hours with a new point of view.

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I'll take another look at YM outside market hours with a new point of view.

 

You can take this a step further and simply look at SPY/DIA on a margin account.

To me the problem with futures is to put on any kind of sophisticated position sizing/risk management strategy you need an extremely well funded account otherwise you quickly run into having to put on .3 contracts and then have to fudge up or down so why bother with the sophisticated strategy. The limits on leverage also act as a hard risk manager..not being able to "go for the jugular" when "you know you are right" with 10X leverage is a good thing.

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And on poker side in 2005 I won a World Series Of Poker Series Golden Ring which was depicted in this blog:

 

PokerPages.com Poker News - Harrah's Showboat, Atlantic City WSOP Circuit Event 1

!

 

That is really cool. I think one analogy to think about is to narrow down the instruments you are trading and trade the same instruments every day. Figure if you are trying to learn to play poker it doesn't make a lot of sense to try to get good at raz, stud, omaha, and holdem while studying euchre for fun in your spare time, all at the same time. You will probably just end up not being very good at any of them.

I actually think a good live player probably has a better skillset than a hardcore internet multitabler. Did you learn to play live or online starting out?

I would think a good live player skills as far as patience would overcome anything learned as far as quick decisions by multitablers just because of how bored a 16 tabler would be with trading since they aren't "doing" anything most the time.

I also think you have to come at trading the same way you would come at learning 2/5 no limit live as a newb, as if online poker didn't exist. Guys on 2+2 that try to learn to trade IMO don't get that they can't take 10,000 samples at "low stakes" like they did with online poker in order to figure out the game without going busto.

Most important though, if you are a winning poker player, don't forget that tactically poker and the markets have <b>absolutely</b> nothing to do with each other. The best skill you learn from poker is losing money when everything in your decision process said you should have won is what drives newb traders with no poker skill off the cliff IMO.

I've heard of some high stakes NYC game that Jim Simons plays in for fun...I would bet on you to beat Simon's heads up all the way. If someone made a double auction market heads up tick data game though, Rentech would be orders of magnitude harder to beat than Dwan or Ivey heads up. why? Don't confuse the rules of the game, they practically have nothing to do with each other.

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Hey guys, I would love to join the discussion as well if it is ok. I was an equity Specialist on NYSE and AMEX for 16 years, recently went out on my own to day trade mainly as the first poster here stated, small - mid cap equity, large volume, very liquid.

 

I am trading in mostly 30-50K lots. I am using Schwab Street Smart Pro, and I feel after a few months that the system just isn't up to par with what I need. I am making 300-500 trades a month, and at 8.95 a pop it is definitely eating up some P. Although I don't believe I will do much better on the commission side, I am definitely looking for some feedback as far as what systems, brokerage, clearing, and front ends you are all using for equities.

 

I thank you in advance and will keep you a breast of my progress as well. Thanks for your time.

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Hey guys, I would love to join the discussion as well if it is ok. I was an equity Specialist on NYSE and AMEX for 16 years, recently went out on my own to day trade mainly as the first poster here stated, small - mid cap equity, large volume, very liquid.

 

I am trading in mostly 30-50K lots. I am using Schwab Street Smart Pro, and I feel after a few months that the system just isn't up to par with what I need. I am making 300-500 trades a month, and at 8.95 a pop it is definitely eating up some P. Although I don't believe I will do much better on the commission side, I am definitely looking for some feedback as far as what systems, brokerage, clearing, and front ends you are all using for equities.

 

Interesting background, I look forward to hearing about your progress. I'm curious how you're trading. Trading off the DOM, using indicators, scalping or swinging, etc. Would you mind sharing your approach?

 

I use IB but I don't trade that size. MB has a flat rate for $4.95.

 

I'm curious, trading that big of size, why don't you trade futures? Do you find the edge is greater in stocks?

 

Thanks for sharing.

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Interesting background, I look forward to hearing about your progress. I'm curious how you're trading. Trading off the DOM, using indicators, scalping or swinging, etc. Would you mind sharing your approach?

 

I use IB but I don't trade that size. MB has a flat rate for $4.95.

 

I'm curious, trading that big of size, why don't you trade futures? Do you find the edge is greater in stocks?

 

Thanks for sharing.

 

I looked at RealTick by MasterTrader, seems most reasonable for my volume needs. I am really more concerned with who they clear through and where my orders are going to be routed, because when you are using someone who is not "in-housing" (which is a bulls*&t practice which the SEC totally dropped the ball on) then you are traded around all day by institutional volume which is being paired off. I hate the fact that an institution has access to my liquidity anytime they want but I am not privy to the orderflow they possess. But it is a fact of life in the retail world.

 

The reason I don't trade futures is a simple matter of "stick to what you know". I am self-teaching as we speak, but there is no guarantee I will ever get comfortable enough to trade them. I have an equity trading background and that is where I am most comfortable. With the right product, the proper DD and research, your risk is mainly headline risk, which is fine with me. In the event that some jackass from thestreet.com makes a video with his grandmothers camcorder in her living room and screams sell ETRADE, then I wait for the sheep to exit, wait for the street to cover their short and I resume. The world we love in.

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I am really more concerned with who they clear through and where my orders are going to be routed, because when you are using someone who is not "in-housing" (which is a bulls*&t practice which the SEC totally dropped the ball on).

 

By "in-housing" you mean brokers who legally, and with your consent (in the docs you signed when you opened an account with them), take the other side of your trade?

 

Nothing wrong with that, in so long as you are getting the best price possible for your retail trade. Otherwise, it is akin to the bucketshop wirehouses of Dow/Gann/Livermore days.

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I read 4 interesting books about trading (reminiscences of a stock operator, the visual investor,trading for a living, secrets for profiting in a bull and a bear market), opened an account on a discount broker website, etc...

 

Everything I really have to say to your IMHO, hazardous attempt to make money in the markets is: that it is absolutely haphazard. This is exactly the reason why I and brokers like you. Just the foundation of a well growing business...

 

Please don't be met in person. This is the mildest way you can get an well-meant advise.

 

Markets are not all guns and roses and by far not fearing poker players!

 

"Ten thousand hours of practice is required to achieve the level of mastery associated with being a world-class expert — in anything. In study after study, of composers, basketball players, fiction writers, ice skaters, concert pianists, chess players, master criminals, and what have you, this number comes up again and again. Ten thousand hours is the equivalent to roughly three hours per day, or twenty hours per week, of practice over ten years. Of course, this doesn’t address why some people don’t seem to get anywhere when they practice, and why some people get more out of their practice sessions than others. But no one has yet found a case in which true world-class expertise was accomplished in less time. It seems that it takes the brain this long to assimilate all that it needs to know to achieve true mastery.”

[source: Daniel Levitin : “This is Your Brain on Music”]

 

PS: When you get hurt really bad by the markets, you can come back and read this thread again, and then be honest by asking yourself: "....mmhh, which of the post had the most potential to open my eyes?"

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By "in-housing" you mean brokers who legally, and with your consent (in the docs you signed when you opened an account with them), take the other side of your trade?

 

Nothing wrong with that, in so long as you are getting the best price possible for your retail trade. Otherwise, it is akin to the bucketshop wirehouses of Dow/Gann/Livermore days.

 

Actually no, that is not what I mean, so please don't assume what I do mean, because you know what that does. But thanks anyway

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