ok, i may have bought top tick on usd/cad. bummer but it happens. i got straight into long cad/jpy when i got stopped.

Long @ 98.39 stp 97.97 T1: 99.23 T2: 99.73

chart: http://www.screencast.com/t/pVPlW8bLf7

as i have no idea what the market will do after i enter a trade, which is ALWAYS against the prevailing trend, I tend to just take setups as they occur and let the small edge in the setup work in my favor.

I have tried in the past to parse volume, momentum, order flow, etc. to filter out trades that are going to blow through my stop and take ones that will reverse, but to date, i have not found a good filter. I never stop searching though.

if your knowledge of volume could allow me to filter out probable bad trades while not also filtering out too many good trades, I would have the Holy Grail.

The problem, of course, is that false positives cost me more money in lost opportunity (because the reward is greater than risk) than i gain by filtering out losers unless the filter works better than 2 times out of 3.

I don't trust my instincts as a filter because i'm wrong just as often as i'm right - i'm essentially a random filter - so i just take the trades even when i think they look horrible.

moved stop on remaining 1/4 of eur/cad short to 1.3678 as a balance has appeared on the 10 min chart. stop was at 1.3703

http://www.screencast.com/t/I9yKB9tOLNK

Important Point

Yes this is retail trader reality basically look for "patterns" use money management and "hope" your trade works.

It's not totally horrible because eventually you get really good at looking a patterns and you can filter them better and better but it still is placing you at the mercy of the market because your not dealing with FACTS.

Volume is a fact same as price is a fact but learning to read volume is just as hard as learning to read the patterns on the chart and price BUT once your able to read volume then you have double the trading prowess that you had with just the chart and price pattern.

When you get trained at the hedge funds you are taught to read Price, Volume, Order flow/Delta, Fundamentals and Derivatives.

So you have several FACT based tools to make better decisions.

It take about 1 year of solid mentoring with a Senior trader day in and day out to understand all these things.

hmmm, you say retail trader as though it were a pejorative. It simply means I trade my own money, rather than someone else's.

I think you underestimate me to some degree. My strategy is not based on hope. I believe I have a real, though admittedly small edge, which comes entirely from finding good trade location where a reversal might occur. If it doesn't, i lose a small amount. if it does, i win a multiple of my risk.

I have been trading for 12 years, losing to start then progressing through breakeven to consistent winner with the occasional depressing drawdown. I have a library of about 100 trading books, mostly ****e but some are good.

That said, I don't think i am a good trader. I don't have the ability to read the subtle nuances of market action, so i rely on mechanical trade management and good position sizing, accepting that i have no clue what's going to happen after i take a trade. I just let it play out.

I believe that your experience at a hedge fund gives you advantages that i have not had - which is why i started posting in this thread. i'm not conceited enough to think i know it all and am always looking for ways to improve my edge, but i'm not a totally ignorant fish.

What this guy says has little edge or insight. Some of it is howling nonsense in my opinion. That may well be why he's out of a job and posting on the Internet rather than making bucks on Wall Street as was his (claimed) career. He claims he left because of a difference of opinion about the direction of the hedge fund. Hmm. Perhaps, you can judge for yourself from the quality of his contributions. Anyway, don't take his pejorative comments personally. From his posts it's clear to professional traders here that he's off the reservation on a lot of what he says. Multiple actual professional traders have gone "wtf" at a lot of what he's said in this thread - go back and have a read. Your post is why this thread shouldn't exist.

So what's the point of this thread apart from you showboating?

possible short here in usd/jpy. short above 120.64 stp 121.16. i'm not taking it as i'm already in a jpy trade, but it's worth watching.

http://www.screencast.com/t/51156dSk6BM

moved stop on cad/jpy to 98.25 - balance on 10 min chart.

O please forgive me I meant absolutely no offense to you personally at all and I agree you definitely know what your doing and you can improve dramatically your results if you keep watching and posting your trades. Remeber it takes a year with a Senior trader day in and day out for even a very smart person to start to put it all together. Obviously this thread limits me and why Im still considering a Twitch channel but im pretty tech stupid so maybe someone can help me out with that.

When you work at a hedge fund we are usually all hyped up personalities and we think of the general retail trader like poker players think of FISH. I know its bad but its just the culture to sound demeaning but I did not mean to sound like I thought you were one.

Ummmm dude I only see you saying complaining and by reading all your other threads I see your just basically a troll on every thread and adding contrary comments to everyone so your basically on IGNORE to me.


As far as the point of this thread I have taught 3 very key concepts so far about things that 99% of the world is totally clueless about and filled with misinformation but your so hell bent on being RIGHT about things you will miss everything in this thread and that's just fine with me.

Ok right off the bat the very first leak that will help you make a lot more money is to STOP fading into levels without some kind of confirmation !!!

There are several tools that we use to confirm IF a level is going to hold or not.

1. Volume at the level and 2. previous volume at a level.

3. Delta differences (this is a whole 4 pages that I will cover soon).

4. Price reaction = Wait for at least a candle or two to REJECT the level.

You need some evidence that the market is going to respect that level again and the previous buyers/sellers will show up again.

So before I would take this trade on the USDJPY here i would a t bare minimum wait to see some rejections and then fade into the rejection as it restests.

Here is an example of what I would need to see at a level BEFORE I would ever consider fading a top or bottom and if I ever faded a level without some sort of confirmation at the Fund I would be instantly fired. Now that being said we do sometimes fade levels but with nothing but probe sizing as we build inventory but we would never be all in and all out if that makes sense to you. I see so many retail traders make this mistake at levels.

http://gyazo.com/a6f076325f62a5a0c66fddbba84687e9

In this example for the people less experienced the first arrow is the level the second arrow is were I would see the rejection evidence and my trade would come after the 2nd arrow on the next bar somewhere.

the problem is you pay a price for confirmation - usually you get a worse entry or miss the trade completely. i don't chase entries - i enter with limit orders and get filled on my buy orders while the market is moving down. i'm actually fairly comfortable doing that - my risk is small and i am used to being stopped out pretty often.

when you talk of delta, i assume you are talking about Marketdelta footprint charts? i remember trying that when it came out in about 2007. Apart from it costing $200 a month, I just basically lost money trying to make sense of it. I felt uncomfortable playing on that short a timeframe too - there were so many possible decision points you become frazzled - like playing 24 tables instead of 4. That might be a useful tool for futures (i trade ES, CL and GC mainly) but not for forex except for currency futures.

Another Important Concept


YES absolutely but you would be surprised at how much better of a price you will actually get if you wait for that confirmation. Anything else to a fund trader would a pure gamble and totally unprofessional and we would like I said be instantly fired if we tried any size other then a tiny probe.

Now before you say its ok and your happy with the tight stop lets think about that for a minute.

First off if you wait for confirmation your win rate will go up dramatically !!

Second if you wait for confirmation you will know that you have the big boys with you on a trade and you will be able to take much bigger size.


Trading is all about SIZE .... SIZE matters the most because it means the big boys are with you and you never want to be trading against the bigs ever. I spend 90% of my time trying to figure out what they are doing each day and trading with them.

Trading is like a ocean of predators all seeking volume and liquidity.

So you have the plankton thats eat by the tiny fish thats eaten by the small fish thats eaten by the medium fish that's eaten by the big fish thats eaten by the barracuda thats eaten by the shark thats can be eaten by the killer whale if it really wants too.

You must now were you are in the food chain if you want to have a long and profitable career because regardless of the retail belief that the market is huge its actually not at all and once your size increases you become dinner.

So to gain a true sustainable edge know what your competition is doing where and when and how. Thats my job as a professional trader ... so just using tight stops and hoping I'm right ain't going to cut it. I need confirmation if I'm going to grow my account exponentially.

The choice is yours and if your comfortable with this style thats fine but just remember it will be limited to SIZE and only work for awhile till your account gets too big.


Delta is the DIFFERENCE between Aggressive Buyer and Aggressive Sellers and we can find that through a few good tools that I will introduce later its just too much to explain in a single post.

well i've been up since 3:00am and need a nap. Keeping my stop on eur/cad at 1.3679. target is 1.3487.

On CAD/JPY, i have now moved my stop to b/e (98.39) with profit exits set at
98.82 (1:1)
99.23 (2:1) and
99.73 (3:1)

I have a stop on 1/4 position (the 1:1 scale) at 98.55 to give a tiny profit if it decides to come back down.

So, no risk now in either trade - the market will do whatever it's going to do.

I hope you are a better trader than teacher because so far you haven't taught anyone anything. You don't explain things well at all and your examples are not explained at all. Learn how to post a chart in the actual post rather than a link if your goal is actually to teach and explain. Then explain entries, exits, stops etc. Break down the trade if your goal is to "teach" and explain it.

A lot of people on this board have been trading professionally and successfully for a very long time. Like I said before I love trading and intelligently discussing trading and I am not seeing any of that in this thread. There are a zillion ways to skin the trading cat with infinite methods and approaches. There are many successful approaches and a whole lot of wrong ones. Your vague generalizations are just more noise.

I'm enjoying the thread, and I doubt if I'm alone.

So you want me to take what takes literally a year of sitting beside a senior trader day in and day out for 9 hours a day and make it clear in a single post? Im only at 130 posts so far its going to take at least a thousand posts before we start to get really comfortable with things.

Sorry man yes I might suck at writing and if you show me how to post a chart picture directly in the post I will be happy to do that I agree that would be better.

As far as your comments about many ways to skin the trading cat well I'm sorry your actually very wrong about that once an account gets over 5 million there are very very few edges that exist and its all about liquidity.

Sure there are lots of guys that make some money from trading but if you want to have a 20 or 30 year career you will basically never do it unless you learn what we do at funds and banks.

So please feel free to write me a post on how to post a chart directly and I will try and mark up charts better.

Cheers

28 years and counting! I came up through the trading floor rather than banks or funds. Banks and funds have no monopoly on knowing how to trade and many of them suck at it.

I will admit I think my main problem with this thread is that your writing style is poor. Your explanations are vague.

You upload a chart just like a picture. It first has to be uploaded to a third party like photobucket and then use the insert photo tool from the 2+2 message reply box.

Here is a chart I posted about 8 years ago concerning a call calendar spread in Pepsi and the reasons I put on the trade.

Ha I was 1.5 years on the floor and I use to think back then that we were the bomb but many of the institutions I worked at would crush the floor traders these days just because as you know so much has changed.

I agree with you I do suck at teaching I will try my best to do a little better. In my defense I just finished a mega dose of antibiotics for a root canal so my heads was a mess




Volume Example #3

Ok cool thats much better

Floor market making is absolutely nothing like screen trading. Many really good floor traders didn't/couldn't make the transition. I made it a point to constantly evolve as the marketplace did. But funds are not the be all end all of trading. Funds typically underperform the averages and funds blow up all of the time, often in spectacular fashion (ie LTCM). Bear Sterns, Lehman, AIG were all real big players once. You know before they went busto.

Important Point

Yes I agree with you about those types of hedge funds but I have never worked at a large 10 billion dollar fund like that. There are a number of private equity funds in London and Chicago that you will never hear about that crush the markets day in and day out some perform 400% to 500% returns yearly but they never grow to big because running a single strategy at one fund is never a good idea. They branch into separate funds and use separate strategies. Also the banks I worked at were not the order fulfillment standard customer trading funds. At some of the major banks like Goldman Sachs as an example they have private predatory trading departments and as you know Goldman had 1 losing trading day in 2014 and Im sure they are running just as good now.

Most people really don't get to see the underbelly of the private equity hedge fund world nor do they see the predatory back rooms of the big banks trading departments. These guys are the ones that control the market on a daily basis. The big big big funds control the weeks and months. As I said earlier most people in the retail space have no clue about how the market really works and who the various players are. It's sort of like a fish that thinks if he can beat 100nl and he has a big enough bank roll because hes rich he can just go and beat 1000/2000 it aint going to happen because the game is totally different. I said it in an earlier post SIZE matters and you have to know where you are in the food chain and when you know WHO is in a market and what they are attempting to do then you have a true edge. (this post wasn't specifically meant for you mr baseball just for everyone because its super important)

These are the funds I'm talking about not the retail barely beat the SnP nonsense

http://hf-implode.com/

Smaller and individual traders advantage is that they are NOT hedge funds. They can move quicker and don't have to worry about turning a battleship. They can trade the thinner niche markets with ease. I have been trading a lot of coffee the last few weeks and it has been insanely profitable to me but it is so thin most funds can't play. Last year I caught a huge trend in Feeder Cattle which is once again too tiny for funds to dick around with.

The individual trader who tries to play the hedge fund game will get killed most likely. The key is to play to the inherent advantages of being an individual trader.

New Trade 6B pound short




As per last nights trade analysis.