a number of 'general' questions

Bowball

Junior member
Messages
33
Likes
0
Hi - i'm an ex-OTC Derivatives structurer who has found himself in a bit of a rut! as you've guessed, i'm 'ex' because of the current market problems. but i've been thinking about getting into trading my own account, or maybe at some point looking into trading at an arcade (but thats some way off). so here i go -

1 - what is 'scalping'?
2 - what is 'swing trading'?
3 - i wrote my MSc dissertation on Exploiting Seasonal Anomalies in FTSE 350 Sector Indices. basically i did some time series analysis on whether, for example, FTSE 350 Mining Sector rose in a particular month of the year. i got the idea for the strategy from The Journal of Finance (which is all a bit high-brow and 'quanty' but very well regarded). so my question here is two part - a) where do you guys get your trading ideas from, and b) do any of you use time series analysis software for back testing strategies (and if so, which one)?
4 - if you are succesfully trading from home, why would you move to an arcade? do they offer greater ability to leverage?

i'm sure there wil be more to follow, but thanks for your help in advance!
 
Hi - i'm an ex-OTC Derivatives structurer who has found himself in a bit of a rut! as you've guessed, i'm 'ex' because of the current market problems. but i've been thinking about getting into trading my own account, or maybe at some point looking into trading at an arcade (but thats some way off). so here i go -

1 - what is 'scalping'?
2 - what is 'swing trading'?
3 - i wrote my MSc dissertation on Exploiting Seasonal Anomalies in FTSE 350 Sector Indices. basically i did some time series analysis on whether, for example, FTSE 350 Mining Sector rose in a particular month of the year. i got the idea for the strategy from The Journal of Finance (which is all a bit high-brow and 'quanty' but very well regarded). so my question here is two part - a) where do you guys get your trading ideas from, and b) do any of you use time series analysis software for back testing strategies (and if so, which one)?
4 - if you are succesfully trading from home, why would you move to an arcade? do they offer greater ability to leverage?

i'm sure there wil be more to follow, but thanks for your help in advance!

Plenty of info on this site. Do a bit of searching and try these links.
Main Page - Traderpedia

First Steps - T2W Day Trading & Forex Forums
 
Swing trading I can talk about, but its most clearly summed up and organised into a trading system in Rivalland on Swing Trading. This is the main methodology used by various traders in Barjon's thread 'swingin' the FTSE: 2008' and you'll find he has set it out very well there while you wait for the book itsef to be delivered.

I know little about scalping, except its long hours and damn hard work.

However, I have to say, and I do intend respect whilst saying it, as an ex-professional with knowledge of market sectors and market analysis experience, you might find it hard to trade off a chart without letting your pre-conceptions and knowledge interfere with your decisions. I confess to being happy to swing trade off an index chart knowing zero about its' make-up, constituents, calculation, component sectors etc. but this unpolluted state of ignorance might not be acceptable for yourself.
 
thanks tomorton. infact i'm with you 100%. i read new market wizards a few years back and it is quite apparent that psychology plays a big part in a traders success. while i'd like to think i'm better than most, i'm probably not, so how do i get around the problem of being a human being?

well, what i'd like to build is build a mechanical (or semi-mechanical) swing trading system which i'll back test on a range of markets, regardless what that market is. provided the system works then i'll execute the system within pre-set parameters......and hopefully get around the problem of human emotion
 
Quite right - bad psychology can beat a good system. My way round it is to only trade a small range of 6 possible signals on one / two markets at a time. Money management is the main aim, the only way to lose the game is to get knocked out. I then try my best to follow my personal rule book -
The Rules of Trading
The Trade
1. Trade with the trend – no trend, no trade
2. Plan the trade, trade the plan
The Entry
3. Wait for the signal
4. When the signal comes, don’t wait
5. A weak signal is still a signal
6. Trade what you see, not what you think
The Exit
7. Never let the profit go back into the market
The Stop-Loss
8. Set a stop-loss on entry
9. Always obey the stop-loss
10. Don’t wait for the stop to be hit, close or cut losers early
The Sins of Trading
1. Trading against the trend
2. Trading without a stop-loss
Books by Mark Douglas helped with insight too.
 
Hi - i'm an ex-OTC Derivatives structurer who has found himself in a bit of a rut! as you've guessed, i'm 'ex' because of the current market problems. but i've been thinking about getting into trading my own account, or maybe at some point looking into trading at an arcade (but thats some way off). so here i go -

1 - what is 'scalping'?
2 - what is 'swing trading'?
3 - i wrote my MSc dissertation on Exploiting Seasonal Anomalies in FTSE 350 Sector Indices. basically i did some time series analysis on whether, for example, FTSE 350 Mining Sector rose in a particular month of the year. i got the idea for the strategy from The Journal of Finance (which is all a bit high-brow and 'quanty' but very well regarded). so my question here is two part - a) where do you guys get your trading ideas from, and b) do any of you use time series analysis software for back testing strategies (and if so, which one)?
4 - if you are succesfully trading from home, why would you move to an arcade? do they offer greater ability to leverage?

i'm sure there wil be more to follow, but thanks for your help in advance!

the best of luck to you, but if you haven't done any trading before, it will be a looooong while until/if you can consistently take money out of the markets.

if you dont have any experience, you may be in a position to successfully trade your own account in about 2-3 years, and thats being conservative.
 
not sure i follow you, Jiggly. are you saying 2-3 years is the time it will take to develop my trading models succesfully, or 2-3 years to make money at an arcade?

if the former then i hope this isnt the case. models i built as part of my MSC dissertation worked quite nicely, and they used unrealistically wide bid-offer spreads and quite conservative transaction costs. but you're right, i havent used them in the real world so it is a complete unknown
 
Hi,

You could always use tradestation to backtest strategies and run them on a simulated account for a while. Wouldn't work for UK equities, though.

S
 
well i'm planning to backtest everything, the question then becomes how far back do i go? could use GARCH i guess
 
not sure i follow you, Jiggly. are you saying 2-3 years is the time it will take to develop my trading models succesfully, or 2-3 years to make money at an arcade?

if the former then i hope this isnt the case. models i built as part of my MSC dissertation worked quite nicely, and they used unrealistically wide bid-offer spreads and quite conservative transaction costs. but you're right, i havent used them in the real world so it is a complete unknown

I see, if you have done a lot of ground work already then that is another story, just put the models to work and see,

there are many elements to trading successfully outside of the model/strategy. that in my opinion only makes up about 10% of the whole, if it is fully mechanical and you can automate it and it is profitable based on your models, then you should theoretically make money as soon as you imlpement it, drawdowns aside.

anything outside of this, in my opinion, will take 2-3 years, to master and fine tune your trading strategy, psychology and everything else when your money is on the line.

if you already know what you are doing, just dont buck your system and let your emotions get in the way.

good luck.
 
well i'm planning to backtest everything, the question then becomes how far back do i go? could use GARCH i guess

ideally, go as far back as you have data for. I know this is long, but it you have automatic measures to do that then it will only benefit you.

however if you have developed a strategy/model already then you should have done sufficient backtesting to have obtained the necessary realisations in order to have begun developing the strategy in the first place.

from here its,

forward test, forward test, forward test, refer to my previous post, if you are not automating your strategy you may buck it, as the market playing out in real time plays devious tricks on you as a trader..........it is different to historical static data.

regards
 
Top