http://www.trade2win.com/boards/ Community website for active traders (short-term and daytraders) with live trading rooms, trading discussion boards, trading book store, infomation about trading/brokers/software/technial analysis en Fri, 20 Nov 2009 21:17:03 GMT vBulletin 60 http://www.trade2win.com/boards/images/misc/rss.jpg http://www.trade2win.com/boards/ http://www.trade2win.com/boards/podcasts/79918-week-barrons-november-23-2009-a.html Fri, 20 Nov 2009 21:10:05 GMT This Week in Barron's: There's a handful of companies to consider adding to your retirement portfolio; why AT&T is underrated; there's a way to avoid high credit card costs; and further gains are likely for Discovery Communications.

Download this Podcast (Duration: 00:05:17, Format: *.MP3)

Highlights of top articles in the current edition of Barron's magazine. ]]> Podcasts http://www.trade2win.com/boards/podcasts/79918-week-barrons-november-23-2009-a.html http://www.trade2win.com/boards/forex-discussion/79914-leverage-double-edged-sword.html Fri, 20 Nov 2009 18:08:58 GMT The foundation of the forex industry is leverage. A few years ago we saw how LTCM used $4 billion to leverage over $1 trillion dollars in assets. George Soros used forex leverage to earn $1 billion dollars against the British pound. On the other hand, this same forex leverage drove LTCM to the... The foundation of the forex industry is leverage. A few years ago we saw how LTCM used $4 billion to leverage over $1 trillion dollars in assets. George Soros used forex leverage to earn $1 billion dollars against the British pound.

On the other hand, this same forex leverage drove LTCM to the brink of bankruptcy and nearly caused worldwide financial meltdown. We also saw George Soros hit with a $2 billion dollar loss in the Russian ruble. When trading forex, leverage is not to be taken lightly.

Leverage is defined as "the use of investment capital in such a way that a relatively small amount of money enables a trader to control a relatively large value". In forex trading there are many instances when you can have leverage as high as 100:1, sometimes even higher. Putting up a few hundred dollars to have a position worth hundreds of thousands can definitely be worthwhile.

An important fact to remember is that, in forex, the money used to leverage a position does not have any intrinsic value. The margin is not a deposit on the actual position. Instead, it is considered "earnest" money, or a "good-faith" deposit .

In forex, the margin is a flat rate that helps put you in the game. This type of leverage can be terrifying for speculators.

Typical Over the Counter (OTC) leverage rules might look like this: You must put up a minimum margin of $1,000 per unit for accounts less than $25,000. Traders must maintain a balance $1,000 or 1% for each open unit.

Such an FX policy permits you to trade foreign currencies on a highly leveraged basis—up to 100 times your investment. An investment of $1,000 would enable you to trade up to $100,000 of a particular currency. A 50% loss in the value of the account, also known as a "draw down" in usable margin, will generate a margin call.

Typically, a speculator new to forex trading will initiate his first trade by getting as many contracts as possible, thereby over-leveraging his account. The greed demon has set in. It is no longer acceptable to get just $7 for every one pip move, it's better to get $70 or more for every one pip move.

Unfortunately, this behavior is not discouraged by the majority of brokerages. Instead, they fuel this greedy behavior. A broker or dealer is paid either on a commission basis or a pip spread, according to the number of contracts his client margins. So it's more profitable for the broker or dealer, at least in the short run, for the client to get as many positions as he can afford to take on margin.

This over-leveraging does a disservice to both the client and the broker. It exposes the client to too much risk at one time, and it forces brokerage to continually get new clients to trade. As a matter of fact, it is not unusual for the first trade a new speculator makes to go against him.

Disciplined speculators know to expect that every trade they take may work against them. That being the case, the disciplined speculator paces himself by investing a little at a time until he hits upon a successful trade.

As is to be expected, even the best trading systems that exist rarely have better than a fifty-percent success rate. Therefore, you must let leverage work for you, and not allow the demon of greed convince you to abuse it. ]]> Forex Discussion Joe Ross http://www.trade2win.com/boards/forex-discussion/79914-leverage-double-edged-sword.html http://www.trade2win.com/boards/trading-software/79912-coding-your-own-trading-platform-adding-database.html Fri, 20 Nov 2009 17:46:33 GMT Not sure if this is the right forum, but for you guys who code your own platform, did you implement a database for your historical stuff (quotedata, trades, executions, etc, etc) or just store things off as a textfile, .csv, etc? What are the tradeoffs/advantages of having the database? And, if... Not sure if this is the right forum, but for you guys who code your own platform, did you implement a database for your historical stuff (quotedata, trades, executions, etc, etc) or just store things off as a textfile, .csv, etc?
What are the tradeoffs/advantages of having the database?

And, if you do, since I'm not too familiar with databases, any suggestions? (free is good).

I code in c#, if that matters and I've been investigating WPF. Although I don't have a ton of experience with it, data-binding to a database appears that it would get rid of quite a bit of drudgework.

Thanks for any input. ]]> Trading Software goonior1 http://www.trade2win.com/boards/trading-software/79912-coding-your-own-trading-platform-adding-database.html http://www.trade2win.com/boards/trading-journals/79910-pro-swing-trading.html Fri, 20 Nov 2009 17:16:09 GMT Hi all, Already i have a thread on ForexFactory and one of my friends asked me to open the same thread here for share some of my ideas about how i trade on market, and hope this thread help and provide good pips for you. Hi all,

Already i have a thread on ForexFactory and one of my friends asked me to open the same thread here for share some of my ideas about how i trade on market, and hope this thread help and provide good pips for you. ]]> Trading Journals FXAdvice http://www.trade2win.com/boards/trading-journals/79910-pro-swing-trading.html http://www.trade2win.com/boards/general-trading-chat/79908-call-random-trade.html Fri, 20 Nov 2009 16:44:56 GMT I need to blow up my free spreadbetting account; but i'm so god damn talented its impossible for me to do it on my own.

Just call a random trade, with a stop loss and a target and i'll place it.

Go! Yeahhh Yeahhh Yeahhhh

I'll go first
'Long @ Market, Sell instantly @ market'
Now that losing the spread is out the way... Lets continue. ]]> General Trading Chat GladiatorX http://www.trade2win.com/boards/general-trading-chat/79908-call-random-trade.html http://www.trade2win.com/boards/podcasts/79906-morning-stock-talk-market-i-get-knocked-down-but-i-get-up-again.html Fri, 20 Nov 2009 16:40:03 GMT Acknowledging that Thanksgiving week already has begun for Wall Street with light volatility and trading volume expected today, Loren Danielson nevertheless finds it encouraging that losses are muted. The senior vice president of RBC Wealth Management tells Andrew O'Day "I view it as encouraging that when the market gets knocked down, that investors are looking for an opportunity to get in. So it seems as though every selloff has some pretty good support underneath it." Looking to next week and a full slate of reports on home sales, consumer confidence and personal spending, Danielson says "it does concern me that all of that news is coming in what will probably be very light trading volume. A lot of traders won't be around."

Download this Podcast (Duration: 00:07:59, Format: *.MP3)

Dow Jones' MarketWatch Morning Stock Talk discusses the big stock movers, economic data and investment trends with Wall Street's top analysts, strategists and traders. Hear about what's driving the stock market from those in the know.. ]]> Podcasts MarketWatch.com http://www.trade2win.com/boards/podcasts/79906-morning-stock-talk-market-i-get-knocked-down-but-i-get-up-again.html http://www.trade2win.com/boards/first-steps/79904-combining-trading-forex-normal-full-time-job.html Fri, 20 Nov 2009 15:25:01 GMT Do people have suggestions on how a beginner can learn and practice trading FX whilst holding down a normal 9-5 job? I gather the market can be traded at all times of the day based on the pairs you choose, but is it realistic to sit down in front of the computer for 3 hours every night after work -... Do people have suggestions on how a beginner can learn and practice trading FX whilst holding down a normal 9-5 job? I gather the market can be traded at all times of the day based on the pairs you choose, but is it realistic to sit down in front of the computer for 3 hours every night after work - think not.

What end-of-day strategies are there for FX, and how successful are these, I would be interested to hear people's experiences. I think I could managed an hour a day of analysis, setting up trades for the next day, etc., but not much more than that.

How do people make the transition to day trading? Obviously giving up the fulltime job takes a bit of time, faith and of course, making consistent profits.

Thanks all ]]> First Steps hfu1 http://www.trade2win.com/boards/first-steps/79904-combining-trading-forex-normal-full-time-job.html http://www.trade2win.com/boards/forex-discussion/79898-spike-usd-index-around-12-00-friday-20th.html Fri, 20 Nov 2009 14:31:34 GMT Spike in USD Index around 12:00 Friday 20th?

Both Interactive Investor and Tradefair charts show a massive spike in the USD Index for around 12:00 on the 1H chart for today, Friday 20th November 2009.

Doesn't seem to be reflected in the major pairs, except perhaps in the AUD/USD, although not to the same extent.

Thoughts anyone?

Thanks, ]]> Forex Discussion montmorencyt2w http://www.trade2win.com/boards/forex-discussion/79898-spike-usd-index-around-12-00-friday-20th.html http://www.trade2win.com/boards/forex-discussion/79896-annabel-meade-forex-trader.html Fri, 20 Nov 2009 12:50:26 GMT Has anybody come accross Annabel Meade, who apparently is a forex trader who has written a book, Trading from Home, her web site is Forex Trading Info.org Good Trading. Has anybody come accross Annabel Meade, who apparently is a forex trader who has written a book, Trading from Home, her web site is Forex Trading Info.org

Good Trading. ]]> Forex Discussion scoptions http://www.trade2win.com/boards/forex-discussion/79896-annabel-meade-forex-trader.html http://www.trade2win.com/boards/general-trading-chat/79894-tradestation-vs-esignal.html Fri, 20 Nov 2009 11:34:28 GMT Hi peeps... Soon i will need to get rid of mine Sierra charts and choose between Tradestation and Esignal as charting solutions. Is there anyone who has used both charting packages and can tell me is there any significant difference between those two softwares? Thanx! Best, VTK Hi peeps...

Soon i will need to get rid of mine Sierra charts and choose between Tradestation and Esignal as charting solutions.
Is there anyone who has used both charting packages and can tell me is there any significant difference between those two softwares?
Thanx!
Best,
VTK ]]> General Trading Chat VingTsunKuen http://www.trade2win.com/boards/general-trading-chat/79894-tradestation-vs-esignal.html http://www.trade2win.com/boards/general-trading-chat/79892-hate.html Fri, 20 Nov 2009 11:33:44 GMT Guys im about to open an account with IB brokers but HATE their platform...apart from tradestation what front end could I use to route my trades through IB which has ok charts, is free and I can automate my trades? J Guys im about to open an account with IB brokers but HATE their platform...apart from tradestation what front end could I use to route my trades through IB which has ok charts, is free and I can automate my trades?

J ]]> General Trading Chat jamespp83 http://www.trade2win.com/boards/general-trading-chat/79892-hate.html http://www.trade2win.com/boards/brokerages/79888-demo-account-fix-trading.html Fri, 20 Nov 2009 11:01:19 GMT hello. i am launching a custom app that will use fix (quickfix engine). looking to find out what experience others have had in getting a brokerage account where they could connect to fix as part of a demo account. it's going to take me a number of months to build it. IB charges $100/month, and fxcm requires a $25k account minimum. was hoping to work on my account without moving that much cash around.

anyone know of a brokerage to consider?

thanks,
gt ]]> Brokerages glok_twen http://www.trade2win.com/boards/brokerages/79888-demo-account-fix-trading.html http://www.trade2win.com/boards/planning-risk-money-management/79870-drawdown-simulation-trading-systems-selection.html Fri, 20 Nov 2009 08:02:08 GMT Method
Suppose i have a trading system A which has historical 100 trades data. I ran simulation 10,000 trials and look at the worst drawdown that this system A could have produced by chance alone. Let's say that

System A has max simulated Drawdown (DD) at -40%. Now if I set my maximum drawdown of my portfolio at -20%, i will be trading system A by only half of my portfolio to ensure that when the worst comes, i

won't be down more than -20%. By the same token, if system B has max simulated DD of -10%, i will be trading 200% of my portfolio on system B.

Questions:
Currently I set every system that i have equally at -20% max portfolio DD. Here's what i mean

System/ Max Simulated DD/ Portfolio Max allowable DD/ Market exposure adjustment % / Annual Expected Returns (100% market exposure)
A -30% -20% 70% 36%
B -63% -20% 33% 24%

For example, if i have $100,000 portfolio, i will trade system A at 70,000 market exposue in a given trade. And i will trade only $33,000 worth of market exposure on system B. This also mean that my expected

returns will be geared down accordingly. So system A will now have expected returns to my portfolio of (36%*70%) = 25.2%. And system B will give me 7.9% returns to my portfolio.

Now here's my question, by setting each system max DD to -20% of the total portfolio, i am willingly allow each system an equal chance of damaging my portfolio. You would ask, why should i allow system B

which can generate only 7.9% returns to my total portfolio to have the same damaging effect on my portfolio. In other words, should i set B at -15% instead of -20%? How about setting A at -25%? What should

be my method in setting this Portfolio Maximum Allowable DD when i take into consideration the expected returns of each system?

Any comment is welcome.

Thank you ]]> palm http://www.trade2win.com/boards/planning-risk-money-management/79870-drawdown-simulation-trading-systems-selection.html http://www.trade2win.com/boards/general-trading-chat/79868-paper-trading-vs-reality.html Fri, 20 Nov 2009 06:36:46 GMT Well, this is my first post, and most likely my last. My Question is: Am I ready for the real deal? I have been considering becoming a full-timer. I have been paper trading now for about 50 market sessions(w 50,000 monopoly dollars). I have been a fairly consistent winner. I use a fairly... Well, this is my first post, and most likely my last.

My Question is: Am I ready for the real deal?

I have been considering becoming a full-timer. I have been paper trading now for about 50 market sessions(w 50,000 monopoly dollars). I have been a fairly consistent winner. I use a fairly simple system relying on an oscillating indicator and support and resistance levels. Typically, I make between 1-10 trades per day with an avg hold time of about an 1.5 hrs. I trade only extremely liquid equities on the NYSE, so slippage should be minimal (I try to account for this anyways).

Academically, I have a fairly strong statistics background, and I know exactly where I stand theoretically. What I am concerned about is the psychological aspect of trading. I consider myself a fairly cold-blooded or even-tempered person, but still this aspect of trading concerns me.

In your opinion, do you think my paper trading has adequately prepared me for the real deal, or should I continue to paper trade to refine my system/gain more confidence?

Please, serious responses only.

Thanks in advance. ]]> General Trading Chat gmosey http://www.trade2win.com/boards/general-trading-chat/79868-paper-trading-vs-reality.html http://www.trade2win.com/boards/general-trading-chat/79866-greatest-traders.html Fri, 20 Nov 2009 05:18:19 GMT The Greatest Traders What separates the 10% that make money from the 90% that don’t? 10,000 hours. In his recent book ‘Outliers’ Malcolm Gladwell describes the 10,000-Hour Rule, claiming that the key to success in any cognitively complex field is, to a large extent, a matter of practicing... The Greatest Traders

What separates the 10% that make money from the 90% that don’t?

10,000 hours.

In his recent book ‘Outliers’ Malcolm Gladwell describes the 10,000-Hour Rule, claiming that the key to success in any cognitively complex field is, to a large extent, a matter of practicing a specific task for a total of around 10,000 hours. 10,000 hours equates to around 4hrs a day for 10 years. For some reason most people that ‘try their hand’ at trading view it as a get rich quick scheme. That in a very short space of time, they will be able to turn $500 into $1 million! It is precisely this mindset that has resulted in the current economic mess, a bunch of 20-somethings being handed the red phone for financial weapons of mass destruction. The greatest traders understand that trading much like being a doctor, engineer or any other focused and technical endeavor requires time to develop and hone the skill set. Now you wouldn’t see a doctor performing open heart surgery after 3 months on a surgery simulator. Why would trading as a technical undertaking require less time?

Trading success, comes from screen time and experience, you have to put the hours in!

Education, education, education.

The old cliché touted by politicians when they can’t think of anything clever to say to their audience. The importance of education to success in trading cannot be placed on a high enough pedestal. You have to learn to earn, the best traders work obsessively to refine their edge further to stay ahead of the curve.

Think for yourself.

"NO! NO! NO!"... "Bear Stearns is not in trouble"..."Don't move your money from Bear! That's just silly! Don't be silly!"

A quote from well known stock guru Jim Cramer aired on CNBC days before Bear Stearns lost 90% of its value. Many followed this call and felt the obvious pain as a result. As the old saying goes, “too many cooks spoil the broth” it is very much the same in trading. Successful traders blinker themselves from the opinions of others; they focus on their own analysis of fundamental and technical information.

Adapt or Die.

Market conditions change and technology advances, thus the conditions for trading are always evolving, the rise in mechanical trading is testament to that. The very best traders through a process of education and adaptation are constantly staying ahead of the curve and creating ever new and ingenious methods to profit from the markets evolution.




Fail to plan, you plan to fail.

The best traders have a well documented plan; they know exactly what they are looking for and follow that plan to the letter. Their preparation for a trade starts long before the market open, it is this meticulous planning and importantly adherence to that plan that helps them avoid the biggest demons for any trader, over trading and revenge trading.

“Be like Machine”

As human beings emotions pay a key role in our existence, for a trader emotions can be a source of great pain. Trading psychology and the management of your emotions in a trade play a key role in overall success. Fear and greed can cut your winners short and let your losers run. Dealing with emotions follows on from your plan; the more robust your plan the less likely you are to fall into the emotional mine field.

Know your tools

Every trader has a set of tools they use, DOM, Charts, News feeds etc. These tools are a traders bread and butter; they are the most vital part of a traders arsenal, without which it would be impossible to trade. The best traders have mastered their order entry methodology, they know all about the features they need from their charts. This mastery of their tools, allows the trader to get the very best out of the resources they have available to them and ensures perfect execution of their trading ideas.

Know Thyself

Behind all the egos and excess, the best traders know their limitations; they focus on what can go wrong in a trade, and expend a lot of energy in limiting and controlling their risk before thinking about profits. They have a heightened sense of self-awareness and focus on incremental self improvement.

Profit & Loss

The best traders focus on the trade itself rather than the P&L; they view each trade as a technical exercise and focus on getting the most out of the market in accordance with their plan. They do not think in terms of the grocery payment, the electric bill and the desire to make X amount to cover a mortgage payment. Focusing on the money behind a trade can cloud technical objectivity.

In Conclusion

The greatest traders work hard to get ahead and even harder to stay ahead. Through increased and niche knowledge they constantly adapt with the market and remain profitable in every environment. Drive, tenacity and the will to succeed is the greatest edge of every successful trader. ]]> General Trading Chat aamarx http://www.trade2win.com/boards/general-trading-chat/79866-greatest-traders.html