I am convinced Citi made a good share of their money by trading in front of their customers . What's the state of proprietary trading at the money center banks?

Thanks for this Sam.

Its 12 weeks not 8. Risking less than 2% per trade with a 150 pip weekly target. This turns 8k into 250k. I dont understand why you think thats insane?

You'll soon find out.

Good luck man, I'll be following your thread.

The couple I'm watching as we wrap up the week...

I've been thinking about you seemingly finding it impossible to believe that traders can turn relatively small amounts of money into 6 figures in a short period of time.
Given that I personally know a half dozen traders who never make less than 50 pips a day (often more than 100), every day, some of which have built up their capital so much that they are trading at 100+ contracts, I cant help but wonder what it is that you find hard to believe.

Is it that you dont believe that 150+ pips per week,every week, is possible? Is it that you think that a newbie trader with only a years experience is going to have psychological difficulty approaching a real money situation for the first time? Is there something with the compounding of money that you dont agree with?

Since you dont want to provide details of your actual trading statements, could you at least tell us how many pips you making per week?

It's because no one goes from 8k to 250k in 12 weeks. You setting the bar beyond any kind of realistic mean. It's the equivalent of saying I'm going to play a lot of hands starting at 10NL and I'll be at 5000NL in twelve weeks.

I'll read your thread too, but it's not something that happens in that time frame. I'd be very impressed if you were profitable at all. also like poker, Most people have to take a few lumps firsts before they start making money. if your in the black after your first twelve weeks trading high volume that is an accomplishment.

I respectfully disagree. If you can 100% achieve a minimum of 150 pips per week it can easily be done with fairly safe money compounding as shown below.
(compounding with less than 2% risk, average stoploss 10 pips per trade.)



There is nothing unrealistic about this target so long as the trader can in fact do 150 pips per week.

I assume emphasis was on skills one posses if he has 8k account not the mm. Obviously with mm you can get close to 250k as you stated depending on the liquidity conditions.

yes agree. S+P has no issues with liquidity at 100 contacts.

My assumption therefore is that OP thinks 150 pips a week is impossible and therefore wonder how many he makes with his guide that he is promoting.

I don't know anyone that trades that consistently, where you will make 150 pips or more EVERY week. Even check signal sites that has 10,000s+ registered traders, with the top traders on those sites, and you won't find a single person that doesn't have a losing week here and there. With that in mind, I think you might find yourself in some difficult spots during some of your tougher weeks, where you are going to start to chase trades in order to meet your goals. IMO, this will be your biggest obstacle. I would ditch your goals, and your spreadsheets and whatever and just focus on trading the best that you can every single day. Be glad each week you finish up and not down because the market is obviously difficult. If you don't carry this mindset, I don't care how good you think your method is, I would bet anything that you will struggle.
Gl, will follow your thread

Appreciate you making this thread. This is not directed at you, but more of a statement about technical analysis from the point of view of someone who struggles to understand most applications of it.

The thing that bothers me about technical analysis is that there are always a lot of rules/set ups/situations people are looking for, but there is no where that explains why. I read an entire book on elliot wave theory and it was all "if you see this, it means this, if you see this it means that..." They just say "the data backs it up" or "we are interpreting human behavior" or "this is the science of randomness" or something like that.

I'm all for greater fool theory. If everyone in your market looks at technicals and trades them all day you'd be an idiot not to pay attention. Beyond this effect though, why don't people ever stop and ask the technician:

WHY?

Give me a chart. I'll show you a zillion different support and resistance points. We used to have a Morgan Stanley official technician and different technical types all over the equities floor. They'd all be looking at the same stuff and have different support and resistance levels.

Beyond that, why does some random price point in the past always matter? What if things are changing today and that point in the past has no meaning? Last hand I bricked a flush draw, who cares? Maybe I always overplay my draws, maybe I dont.

To understand stocks you need to understand history. Certain points in a stocks history are relevant today. Certain points are not relevant at all.

Sears pre-announced awful earnings at the end of last year and the stock tanked to 30. Then they came out and announced restructuring, they were going to sell off stores to capitalize on all the assets they have. Stock short squeezed all the way to 80. Sales numbers were still terrible and the spx sold off, company sold back off a little towards 50, and they announced they were spinning off Sears canada, some home/garden stuff, and potentially some of their brands. Stock squeezed up, then settled back down to 50.

You're really going to use technicals to predict the future of this mess? 50 looks like a support level for certain technicians. How can just looking at historical prices be a complete investing strategy for sears? If you knew that Eddie Lampert was in the market bidding $50 for tons of shares, fine, that makes sense to me why I would want to look at $50. But the fact that the stock settled there a few times in the past? If you plotted a bunch of random walks you'd see this type of thing all the time.

I get it, you trade fx. But there are so many different historical points that have varying degrees of significance today. Not all price point in the past were created equal.

For example, lets look at JPY during the tsunami. If there is ever another disaster in Japan, it will be very important to understand the money flows during that period. Funds were repatriated to Japan and the JPY rallied, despite common sense probably saying that you should sell a currency that is having a massive natural disaster. Growth rates and interest rates are likely heading lower (general statement) in the short term after a disaster which is bad for currencies usually. How can a technician take the same tool bag to trade the JPY when there is a tsunami vs. normal times? Don't you have to change how you look at the world?

To me, technical analysis is only good when the masses are all doing it. The quickest ones at figuring out obvious "trends" will profit from others who are not as good. Fine, I buy that. Beyond that, will someone start talking about why they think these points in the past should matter for today? I'll be honest, when someone tells me that a stock just passed its 200-day moving average or that its at its fibonacci retracement level, or that its MACD is positive, or that put/call ratio is x, or that its below its ichimoku cloud or that we're at wave number 4, and i ask why? The answer always sucks.

Very good question Strasser, if the readers of this thread don't understand why then they wont believe in it, and if they don't believe in it they won't practice it.

Let me preface by saying I've only been doing this for 13 months and am far from an expert and I only trade equities but I'll take a stab at the "why":

The Chart is your scoreboard. Think of fundamentals as your poker hand, and the board. Think of the charts as your position, your opponents range, and the meta game. Charts help you make the a more informed decision as they give you an idea of what your opponents might do in the future.

1) The price movement paired with volume levels tell you if the big money is getting in or out. Big institutional investors are the ones that make stock prices move. Technical analysis is
like a big game of follow the money. Strong upward price action paired with strong volume lets you know that there is accumulation going on in the stock and the probability of the stock increasing goes up. The opposite is true when you have strong downward price action paired with strong volume.

2) It's not really the specific resistance/support prices that have historic significance. It's general chart patterns that have historic significants. The best stock book I've read was How to Make Money in Stocks by William O'neil. The first hundred pages of the book show the biggest winners of the last 100 years. Time and again the biggest winners in history displayed specific chart patterns that proceeded huge price increases (like 100% and higher price runs). These patterns show up over and over and are a sign that the big money is about to get in. The why part is that within these patterns is usually a base (a period of time where a stock price has stayed within the range). Usually there is a fundamental reason that moves a price out of that base ( this is where you buy and its called a pivot). If you read charts you can spot pivots and get in pretty early as the big money moves the stock price.

3) Your absolutely right there is also a "greater fool theory" operating in technical analysis too. People draw imaginary lines on charts and believe that is where the price movement will come. Enough people buy into it and price action happens. This is more of an added benefit to TA though. Reasons 1 and 2 are more fundamental reasons why TA is important.

In your Japan example you can use fundamentals to identify which companies should be effected by the disaster and use the charts to see among those where the institutional investors agree with you and make your trade.

In the Sears example a smart technician can see that Sears is in fundamental decline and Use the charts to time a short. Another benefit of TA (sears made me think of this) is that charts illustrate for volatility. Day trader like volatility, long term guys don't. Depending where you are on this spectrum a chart can help you understand the volatility and help you manage your risk.

Hopefully this answer sucked less than the prior ones you were given.

Fundamental changes in a stock or country will have a more profound effect than support/resistance strassa. But when there isn't news out, technicals are great for showing supply and demand. That is what technicals are at its core. Now, I agree that some technicals are complete BS. I only follow that I think both the market, and I, can agree with.

Technical analysis works because money under pressure reacts in very similar ways. TA generally works best in markets with lots of liquidity because of this, it reduces the amount of randomness that small money can have (big money is always the most predictable). Charts tell you what money got in where and in what quantity, is it really that difficult to understand that gives you all the information you need to put together a method capable of framing situations in a way to make money?

The self fulfilling prophecy aspect of TA is extremely small IMO and definitely doesn't account for the wide array of things you can do. You can make money trading 15/50 MA crossover just the same as a 17/54 and 8/22... This is the way I was taught. In this instance all that happens if you create a framework for looking at an occurrence in the market, for example a 15/50 MA crossover the first time back to the slower 50 MA. A range of things can be happening in that situation, however if you study 10,000 examples of it it becomes a lot easier to create a limited array of possible situations.

Most people who don't understand TA think we're trying to predict future but really what's going on is handling risk and reward. Obviously anyone who has spent some time looking at charts can find a situation where price is more than 50% likely to move in a direction like trends. Just because something is more than 50% likely to happen doesn't mean it's easy to make money, the market is built to remove simple edges like that. But the risk to reward is really the key. The most powerful trading methodologies I have seen and traded take multiple situations and pair them together for example:

The first time back after the 15 and 50 MA cross after having broken out of a channel you would enter after price has reacted to an area of previous buying failure that was then broken. This is actually several defined occurrences happenings together. Then you might have additional edges like a good understanding of how time/volume interact with this setup. Maybe it should move quickly up and if it doesn't you can close the trade for less than a full loss. That little move now removes a % of the losses you should take if you brainlessly "trading technicals." That improves your risk:reward and might take you into profitability. Add several of those edges in a disciplined manner and you might develop something extraordinarily powerful.

The clearest example I have seen of this is that almost every technical "edge" can be traded both ways for profit. The real edge is the experience of seeing that same situation tens or hundreds of thousands of times. Some methods, frameworks and strategies are less complex to manage but anytime way you can define a real market occurrence there is the potential to create a profitable trading methodology. These situations change and evolve over time, different types of markets, different times of year but it's not that hard to stay ahead of the curve after you've been doing it for several years.

The reality is, it's very clear excellent technical traders exist if you do any kind of thorough research. Don't know how to say it better than that.