Super Accurate Intraday Indicators

[kingkongtracts 10]

Okay, I recently opened a paper trading account, q3 competition at investopedia.com. The game ranks players and allows viewing of competitors trade history. There are a few stand out winners in each quarter who post ridiculous gains. They use intraday trends and naked options and make a killing on high liquidity stocks and ETF's like SPY, GOOG, and AAPL.

 

How do they time the market so well? What are some good resources, books, websites etc. to learn about day trading indicators and such?

[Obsidian 10]

trading live and making unbelievable returns in competitions are not the same. trying to achieve realistic returns would at least give you a chance to learn how to trade

[kingkongtracts 10]

trading live and making unbelievable returns in competitions are not the same. trying to achieve realistic returns would at least give you a chance to learn how to trade

 

Okay, but what are the similarities? Yes, but can't these unbelievable returns be used as a model to learn from? Market direction is market direction right? I know there must be some pricing variables in the game which may not reflect reality, which the players may be taking advantage, but I'm still seeing great accuracy in picking short term market direction.

 

Does anyone have any suggestions for learning resources for predicting intraday market direction, reversals, etc.?

[4ow4ow 10]

It,s hard to tell,;if we didn't watch them trade from start until finish.

 

Propanda/adv always shows the best result. We didn't know how many aacount had been busted before or same time when that portfolio was being traded.

 

Sometimes I had a best clean sheet monthly. But another time it's crippled, using the ame rule and reading.

[Obsidian 10]

Okay, but what are the similarities? Yes, but can't these unbelievable returns be used as a model to learn from? Market direction is market direction right? I know there must be some pricing variables in the game which may not reflect reality, which the players may be taking advantage, but I'm still seeing great accuracy in picking short term market direction.

 

Does anyone have any suggestions for learning resources for predicting intraday market direction, reversals, etc.?

 

I think the main problem with contests is the short duration. Therefore it may not be possible to come up with a strategy that will work for many years. but of course analyzing does not hurt. I think you can check contest results on myfxbook for example. and use their strategies with lower (or no) leverage.

[kingkongtracts 10]

I think the main problem with contests is the short duration. Therefore it may not be possible to come up with a strategy that will work for many years. but of course analyzing does not hurt. I think you can check contest results on myfxbook for example. and use their strategies with lower (or no) leverage.

 

Okay, thanks, interesting site. But if you can prove a consistent stategy why not use maximum leverage? I'm still trying to figure out the strategy of these top players, not sure if they use indicators, recent news, pre market data or what.

[thearabsmith 10]

Okay, thanks, interesting site. But if you can prove a consistent stategy why not use maximum leverage? I'm still trying to figure out the strategy of these top players, not sure if they use indicators, recent news, pre market data or what.

 

A consistent strategy may also be a losing strategy. If our trading system has a 90% winning trade ratio, we might think this is a fantastic system to use. Not necessarily. If the first 10% of trades loose, we may be out of money prior to the 90% of winners kicking in. Also, think of this scenario. The 90% of trades make on average £/$/€10 each and the 10% of trades loose on average £/$/€100 each, simple maths tells us that our money will soon run out with this strategy.

 

This is why money management is so important. You never know when you're going to hit a loosing streak. You need to have a strategy that will allow you to absorb these looses, which usually means risking small amounts of capital per position, usually 2% or so. Think about this when developing your trading strategy.

 

Chapter 7 on Managing Risk at atradersnotepad should indicate why this isn't a good idea.

[MP21 10]

What's the address of the contest?

[Kappie 10]

For (day-)trading AND for most other aspects of life:

IF IT LOOKS TO GOOD TO BE TRUE,

IT USUALLY IS.....

Do not believe everything that is published.

 

And...

 

Paper trading is like being on another planet compared to live trading. It is good for building trust and experience as long as you realize that real world live trading will bring you less fortune.

[Obsidian 10]

Okay, thanks, interesting site. But if you can prove a consistent stategy why not use maximum leverage? I'm still trying to figure out the strategy of these top players, not sure if they use indicators, recent news, pre market data or what.

 

I've never seen a successful strategy without risk/money management. The simplest reason why we should not use maximum leverage is because we can never be %100 sure.

Lets say you have a strategy which has 70% accuracy with reasonable risk/reward ratio (say 100pips/ticks profit and 50pip/ticks stop loss)...statistically speaking, 30 out 100 trades hit stop-loss...can you guarantee you wont have 10 bad trades is a row? or can you stop gaps or instant movements which will wipe your account from happening?

or another approach...lets say intrument XXX is trading at $10 and you know price will hit $20 somehow...if it drops to $5 (and wipes your account) before hitting $20, then your prediction would be useless...duration (and how prices during that time) of our trades is important of course...

you may try to switch very short time frames but that would decrease your success rate eventually...

or maybe I am wrong

[Everest29 10]

Also, kingkongtracts, you'd need to consider the psychological toll of maximum leverage. You would have drawdowns, even with good systems. And they will be larger than you've planned for several reasons - future is different than the past, unexpected slippage, errors in execution (missed entries/exits, power outages, connectivity, etc.).

 

These drawdowns, even when you're aggresive and not at "maximum leverage" can be tough to sit through (I use a percentage of Kelly for each system with dynamic stops based on an approximation of recent volatility). I've been trading fully automated stategies since 2008 and have made a great returns. But drawdowns are sometimes very challenging psychologically. So much so that you begin to question your systems and your approach. But if your system development was sound, and your approach was built to be robust, then these times are usually the worst to jump ship.

 

This is also a good reason to have developed your system and approach by working though it yourself, as opposed to using one someone else developed - you know the strengths of your systems and know what to expect in terms of performance and drawdowns, allowing you to ride out those drawdowns.

 

Also, Obsidians, comment on duration is correct. Many systems can work over 3 months. But I like to see mine work consistently in testing for 10+ years back. Then, when a system struggles, you can easily see if it's just par for the course, or something more serious that may need to be addressed.

 

Good luck!

[bakrob99 11]

How do they time the market so well?

 

1. You open multiple accounts.

2. You go LONG in one, SHORT in the other.

3. You're a winner.

 

Not too tough

[Roger Felton 10]

Want to show massive gains and no losers? Open 16 accounts. On 8 of them, go long and the other 8 go short. Do not use stops... just exit when 8 of your accounts have made so much money you don't know what to do with it all. In actuality, you broke even minus the commissions but, on paper, you look pretty good.

 

Now take your winning accounts and go long 4 and short 4. Exit when your winners have made obscene profit. Toss the 4 losing accounts. Now go long with 2 and short with 2 and exit when the phone rings and it's the IRS. Finally, after tossing the 2 losing accounts, go long 1 and short 1. After taking your final profit, you will still be essentially at break even in real P&L, but you will hold in your hand a statement that looks like you are a trader who hauls in money like a drug lord and never loses.

 

With that valid legal account statement, that cost you almost nothing to produce, you can now become a Trading Guru and make millions. It's the oldest trick in the book but naive traders still fall for it. It's all they want to see and they'll rip their pockets off getting their wallets out.

 

Have fun in the next contest....

[bakrob99 11]

Con artists (also known as boiler room salesmen, or investment advisors .. take your pick) used this tactic to mail out recommendations. They would start with a mail list and split it in half. Then they would recommend BUY something to one half .... well you know the drill.

 

Finally they'd call and after 6 or 8 winners in a row collect some cash and that would be it.

 

Here's the lesson.

 

IF IT AIN'T REAL .... IT AIN'T REAL. GET IT?

[ForexTraderX 10]

Okay, but what are the similarities? Yes, but can't these unbelievable returns be used as a model to learn from? Market direction is market direction right? I know there must be some pricing variables in the game which may not reflect reality, which the players may be taking advantage, but I'm still seeing great accuracy in picking short term market direction.

 

Does anyone have any suggestions for learning resources for predicting intraday market direction, reversals, etc.?

 

King, not sure.... ahh... lol. actually. it was already mentioned. Ya. swing for the fences.

 

Ever wonder why the contest winners or even the top 10 or leaderboard or whatever are hardly ever the same people who won the LAST competition? Reason is... they are using a strategy or trading an idea that will either take their demo account up 1000% in a week, or it will crash and burn completely.

 

They are cool knowing that they will crash and burn 15, or even 20 times in a row in order to have a single entry where they get a 1000% return in 2 months (or whatever)

 

Now... what you should be VERY VERY interested in learning about or from is if you can identify a single individual who enters the same contest (or a select few contests) time and time again.... and yet is nearly always near the top in terms of returns.

 

Show me a trader who enteres 10 demo money competitions, and finishes in the top 3 of all 10... and never blows out his competition accounts... and that's a guy who has a crystal ball to the market.

 

I actually looked for something or someone like this a long time (years) ago. For online demo money contests.... I never found a single person who ever placed in the top spots more than once... the only exceptions were 2 people i cam across who ever 3-4 trading competitions each month... so, they both had a few finishes near the top for 2 or 3 contests.... but mind you, they blew their entire accounts out in about 30 other competitions that year... so, not really a good strategy to learn for real money trading.

 

FTX

[Roger Felton 10]

King, not sure.... ahh... lol. actually. it was already mentioned. Ya. swing for the fences.

 

Ever wonder why the contest winners or even the top 10 or leaderboard or whatever are hardly ever the same people who won the LAST competition? Reason is... they are using a strategy or trading an idea that will either take their demo account up 1000% in a week, or it will crash and burn completely.

 

They are cool knowing that they will crash and burn 15, or even 20 times in a row in order to have a single entry where they get a 1000% return in 2 months (or whatever)

 

Now... what you should be VERY VERY interested in learning about or from is if you can identify a single individual who enters the same contest (or a select few contests) time and time again.... and yet is nearly always near the top in terms of returns.

 

Show me a trader who enteres 10 demo money competitions, and finishes in the top 3 of all 10... and never blows out his competition accounts... and that's a guy who has a crystal ball to the market.

 

I actually looked for something or someone like this a long time (years) ago. For online demo money contests.... I never found a single person who ever placed in the top spots more than once... the only exceptions were 2 people i cam across who ever 3-4 trading competitions each month... so, they both had a few finishes near the top for 2 or 3 contests.... but mind you, they blew their entire accounts out in about 30 other competitions that year... so, not really a good strategy to learn for real money trading.

 

FTX

 

Very good post, thanks. I moved back to my hometown about 5 years ago and looked up an old dear friend who I hadn't seen in nearly 30 years. He had become VP of a major Texas banking corp., retired, and now trades Options from a nameless, proprietary automated system he worked his buns off to acquire. His P&L for the past 4+ years is phenomenal, to say the least, and consistent month after month.

 

Guys like him don't enter contests. He'd be mobbed by traders asking about his system ... just as I did. Would he share it with me? Yes...in his words, "For about 20 million". He did spend about 3 weeks teaching me some basic stuff the stragegy uses for free and he calls to let me in on a particularly sweet trade once in a while. That's friendship but he's no dummy.

 

You know, when you have something like that, you don't give it to friends and you sure don't sell it on the Internet for $299. If you ever found anyone like my friend and they were willing to give their golden goose robot away or sell it on the cheap, they'd be idiots. It would be all over the Internet in every forum, any existing code would be cracked and it would implode virtually overnight.

 

The point is, you won't find stupidity in the (true) top 1%... but traders still dream and hand over their wallets to any guy with a "verified" trading statement that looks good.

[ForexTraderX 10]

Very good post, thanks. I moved back to my hometown about 5 years ago and looked up an old dear friend who I hadn't seen in nearly 30 years. He had become VP of a major Texas banking corp., retired, and now trades Options from a nameless, proprietary automated system he worked his buns off to acquire. His P&L for the past 4+ years is phenomenal, to say the least, and consistent month after month.

 

Guys like him don't enter contests. He'd be mobbed by traders asking about his system ... just as I did. Would he share it with me? Yes...in his words, "For about 20 million". He did spend about 3 weeks teaching me some basic stuff the stragegy uses for free and he calls to let me in on a particularly sweet trade once in a while. That's friendship but he's no dummy.

 

You know, when you have something like that, you don't give it to friends and you sure don't sell it on the Internet for $299. If you ever found anyone like my friend and they were willing to give their golden goose robot away or sell it on the cheap, they'd be idiots. It would be all over the Internet in every forum, any existing code would be cracked and it would implode virtually overnight.

 

The point is, you won't find stupidity in the (true) top 1%... but traders still dream and hand over their wallets to any guy with a "verified" trading statement that looks good.

 

THanks, and this is about right. I've met a few people (4) who have developed profitable systems that trade daily or weekly with high returns and low drawdowns.... not a single one would even discuss selling it for less than $1 million. I know of a guy who did sell, it was to an investment bank for an undisclosed sum. He did retire after that sale though, so he too probably sold it for more than $299 on the internet.

 

I get very good returns myself considering the risk I take and the drawdowns I get... and I'm happy to teach you all day long what I do and how I do it... and I do it for free, on this website (I have a thread I post on very frequently). But, it would probably take someone quite a bit of time to go through it, and integrate the concepts into your own personal trading successfully. With me using it, I usually can get a return that is equal to what my monthly drawdown tops out at. So, if I am willing to accept an 8% drawdown in a month, then I can expect to do about 8% per month. Could I do more? yep. Could it be stable? if I wasn't me... probably.... but I am me, and even a double digit drawdown in a month stresses me out. So, I am fine averaging 4-8% per month.

 

It won't win a contest...but it will put food on the table, a roof over my head, and a view out my window. And I'd take that over blue ribbons and trophies any day.

 

FTX

[MightyMouse 12]

The point is, you won't find stupidity in the (true) top 1%... but traders still dream and hand over their wallets to any guy with a "verified" trading statement that looks good.

 

I agree. Guys with "verified" trading statements are just dumb!. They are suckas!

[ForexTraderX 10]

I agree. Guys with "verified" trading statements are just dumb!. They are suckas!

 

Real verified statements are great... as in, audited and certified by a big 4 accounting firm, or independently audited by barclay's for inclusion in their database of hedge fund rankings...that's wonderful. A guy shows me this, a good return, and a low drawdown, and i'll give him lots of money. Lots.

 

guy has a myfxbook page, trading real money, verified track record and trading privledges... I talk to him. I ask many many question. On the phone. Not email. I do a background check on him, including requesting that they authorize an income tax release via their signing IRS realease form 8821, and then I submit it to the IRS, and get the information. I would also do a public record search of property ownership in the town he says he lives in, to see what, if anything, he owns.

 

Obviously, if he lives in a home that he purchased for $1 milllion or more, and his tax statements show he made a lot of money in trading profits (which often will show differently than earned income or income from another business)... And all of what I discover adds up with the story he tells me...

 

Then I will probably invest with him as well, as long as I like what he does, and my research matches his story without any discrepancy.

 

This type of verification I describe here is real verification. And something anyone should be happy to accept as proof that "this guy is the real deal"

 

If he only has a PDF file that has an excel spreadsheet in it with some numbers, a column called "trades", and another called "win", and "losses", and "profit"... or a web page with basically the same information...

 

if this is all he has and all he is willing to provide as proof... then I give him the same... an electronic letter with some writing. Except mine says "not interested. Find another sucker"

 

If someone is real, you can always find out. if they are taking investment, they should be able and willing to help you find out.

 

There is no reason in the world why a person would not provide real, independent proof of who they are and what they can do, if they are looking outside themselves for investment capital. If they will not cooperate with what I outline here...then RUN, do not walk, away. You will lose your money.

 

FTX

[4EverMaAT 10]

^^

All that stuff is worthless. All that time trying to evaluate the person's secondary claims of large houses and large bank accounts would be better spent evaluating the strategy to see if it has any merit. The strategy and the person implementing it should be completely independent if the strategy is mechanical.

 

Besides, how do you know he doesn't keep his assets in someone else's name? (I want to control everything and own nothing)

 

Okay, thanks, interesting site. But if you can prove a consistent stategy why not use maximum leverage? I'm still trying to figure out the strategy of these top players, not sure if they use indicators, recent news, pre market data or what.

 

I sifted through these accounts winning accounts myself to determine how the top traders were winning. I noticed that these traders were going all-in on high probability trades.

 

I broke it down in these posts:

http://www.traderslaboratory.com/forums/forex-trading-laboratory/9303-traders-laboratory-forex-trading-contest-6.html#post160692

Same thread: posts #222, #225, #229

 

I recommend the Varengold Bank approach of using Risk Adjusted ROI, not just gross ROI most contests use to determine the viability of a strategy (see the posts above)

 

But what other people said actually makes my observations more complete: they open multiple accounts and trade opposing strategies simultaneously. Whichever strategy wins will win big and will rank high, while the losing strategies sink into the abyss of 'failed traders'. I don't know how diligent MyFxBook is at vetting multiple accounts, although how many different names could someone use if they then have to fund their accounts or use real information to identify their accounts to claim the funds.

 

Actually, that's not such a bad strategy. You could play both sides with a hard stop on each one. The opposite trade that doesn't stop would have to go xx ticks/pips to make up for spread/commissions. Everything else would be profit. It would need to be placed in a structured format in order to test, but it might have merit. Certainly not the many 1000% in a week merit, but it works.

[BlueHorseshoe 10]

As this thread seems to have strayed to the topic of "crooked behaviour", can anyone tell me why the following isn't possible:

 

Write naked options in a quiet market using a corporate account, and keep banking the income. When things eventually go "niederhoffer" for you (as they surely will), declare the company insolvent and walk away, leaving the brokerage firm with the debt.

 

I once asked this question on here before, but nobody gave a clear answer. Is the problem the margin that has to be put up in order to write the options?

 

BlueHorseshoe

[MightyMouse 12]

As this thread seems to have strayed to the topic of "crooked behaviour", can anyone tell me why the following isn't possible:

 

Write naked options in a quiet market using a corporate account, and keep banking the income. When things eventually go "niederhoffer" for you (as they surely will), declare the company insolvent and walk away, leaving the brokerage firm with the debt.

 

I once asked this question on here before, but nobody gave a clear answer. Is the problem the margin that has to be put up in order to write the options?

 

BlueHorseshoe

 

The broker will close out your trades long before you put them at risk of taking a loss with your account.

[MightyMouse 12]

 

There is no reason in the world why a person would not provide real, independent proof of who they are and what they can do, if they are looking outside themselves for investment capital. If they will not cooperate with what I outline here...then RUN, do not walk, away. You will lose your money.

 

FTX

 

Well, there are reasons because there are plenty people who won't provide proof. I suppose that, categorically, they do not want to be exposed.

[BlueHorseshoe 10]

The broker will close out your trades long before you put them at risk of taking a loss with your account.

 

Just my very poor understanding of options trading then!

 

I didn't realise it was possible to close out the sell side of an options trade - pressumably this is only possible if the broker can match you with someone long an identical option who wants to exercise at that time?

 

BlueHorseshoe

[MightyMouse 12]

Just my very poor understanding of options trading then!

 

I didn't realise it was possible to close out the sell side of an options trade - pressumably this is only possible if the broker can match you with someone long an identical option who wants to exercise at that time?

 

BlueHorseshoe

 

They close you out with market orders. Matching your order with someone long sonds more like love.

 

Between reading your last post and now invoked memories of trading a delta neutral short straddle on ISRG in 2006. It's a great way to get paid when you properly estimate a drop in volatility. It gets ugly if it starts trending because you can run out of margin if you start too large or simply run out of margin if it moves too far. My issue was starting too large and I almost ran out of margin. The best case scenario is when you put the position on and it does almost nothing. If price meanders, then there is little to do to maintain a delta neutral position and you benefit from time decay When it is moving you have to keep adding shorts since the in the money options are gaining negative delta and you have to offset it to maintain position delta. If it had gotten worse, i would have had to liquidate other positions to free up the margin for the this trade that was consuming more and more of my account. The goal is to get to options expiration and time slows when you are battling delta.

 

Needless to say, I suspect the memory broke free a piece of plaque from my arterial wall.