101 ways to kill a cat

Arabian,

Like most pro traders I know - not a chart in sight. So, for us lesser mortals, do you think it was possible to identify this action from the chart?

Cheers

Jon




arabianights said:
Here is a very easy trade I did yesterday:

Someone sold 11 000 lots of March 12 Short Sterling at 14. That's a very large trade for a sterling outright. Because I know the evil algos that run that market teh majority of the time "think", I knew they'd dump a little bit at 13 (they did) and then manipulate it up to 14 to see if they can a) get the market moving up and if not b) at least dump a bit of their inventory to idiots, before then assuming the big trader is right and trading in his direction.

Now a) isn't going to happen because the market is coming off for a host of reasons (ECB tomorrow (i.e. today) being a major part of it so no one wants to be long fixed income (for what we can now see is very good reason) as well as sterling PMI plus a general downward trend) so I instead take the opportunity to sell 14s... in my role as an individual liquidity denier*

Of course very shortly afterwards we're trading 12 and I'm out there, as algo (and others who are longer than they want to be) gets out.

Now a slight digression... you may wonder why if people have a problem being long there, why on earth were they on the bid? Well there's two major reasons. Firstly that level caused a lot of calendar spreads to trade as well, as I believe it was actually 15 before hand and someone just went to market with a load of size, so they bought in other months two. Secondly, many traders and almost all algorithms put more on the bid than they actually "want", as the market are usually pretty slow and 15s would trade again before the 14s would trade out... so by bidding for too much (the fill algorithm is not quite pro rata but for simplicity let's call it that) they can buy what they want if 14s partially trade, then pull the order.

Is that my only, or even my main strategy? No. I trade order flow and news. But that's an example of how to trade using order flow, backed up with a knowledge born of experience about how the market behaves.

*My little joke... officially locals on liffe are "individual liquidity providers"
Click to expand...
 
A tick chart possibly, but otherwise no

But then you wouldn't be trading like that unless you were plugged in to the market anyway... it's not something where you could call up a broker or whatever.
 
Current method involves entering on Hrly pull-backs to Dly trend on EUR-USD only. Dly trend established using FTI's 3 Kingdoms method (Technical Analysis Falacy thread on FF).
Then trailing price until stopped out.

It's one of the simplest methods I've used and also the best. The edge lies in :

A - Follow the trend.
B - Cut losses short and let profits run.

I think B is the real important one. Heard it repeated for years before the penny finally dropped as to how powerful it really is. Wasted a lot of time trying to find better entry triggers (bet I'm not the only one) before realising that they are all much of a muchness. If an appropriate SL is used and some method of trailing once you're in, gains should out-weigh losses. Peter Crowns explains it best over on FF.
 
Due to my financial constraints and inability/unwillingness to pay for fancy data subscriptions, I'm only able to trade charts so...
Currently I'm half heartedly trying to catch bolly/deviation pull backs when price moves contra to what I see as thematic or sentiment trends and trying long/short correlation break downs to mean reversions. These are based on news or my own amateur theories on where money/strength/demand/supply will flow to/from after a given event. My assumption is that the former approach is better from a R:R perspective than basic directional TA punting and the latter detracts the need for directional bias which I'm still trying to get to grips with. As this is all discretionary and half baked atm results have been very mixed mainly due to my sillyness. A bit convoluted, possibly misguided, and definitely above my weight given the time I put in (lol) but I've always been a bit of a n0b that way.
 
In fact here's a tick chart of that afternoon in that particular short sterling month.

You can see the big trade but you would have to watching an awful lot of contracts... I use a different approach I will try to illustrate next week (I suppose I watch about 40 contracts) once I'm working at home and won't have people wondering wtf I'm doing when doing screenshots etc :LOL:
 

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barjon said:
..... It's always intrigued me the different ways people find to trade and I thought it would be interesting to talk about the different strategies we use.
Click to expand...

Intersting to see what others are doing.

I analyse price across 3 t/f's and look for with next t/f (+) entries/re-entries to that trend after a pullback, and contra trend pullbacks/reversals from potential support/resistance factors. Confluence is the principle that lies at the heart of my Trading Edge. The Edge is comprised of pre-identifying certain hi-probability repeating potential supp/res factors combos, pre-identifying the overall price action trend on my middle (intermediate) and longest (trend) t/f's -then- looking for hi-probability repeating set-ups comprised of certain bol patterns with certain osc div/extreme patterns with certain repeating price action patterns...all validated by individual price action candles/candle combo's as the trigger for a market entry.

In the afternoons I like to eat bourbon creams whilst watching repeats of crossroads and spotting the continuity errors !

G/L
 
bbmac said:
Intersting to see what others are doing.

I analyse price across 3 t/f's and look for with next t/f (+) entries/re-entries to that trend after a pullback, and contra trend pullbacks/reversals from potential support/resistance factors. Confluence is the principle that lies at the heart of my Trading Edge. The Edge is comprised of pre-identifying certain hi-probability repeating potential supp/res factors combos, pre-identifying the overall price action trend on my middle (intermediate) and longest (trend) t/f's -then- looking for hi-probability repeating set-ups comprised of certain bol patterns with certain osc div/extreme patterns with certain repeating price action patterns...all validated by individual price action candles/candle combo's as the trigger for a market entry.

In the afternoons I like to eat bourbon creams whilst watching repeats of crossroads and spotting the continuity errors !
G/L
Click to expand...

A likely tale, you're pining over Miss Diane aren't you?
 
arabianights said:
In fact here's a tick chart of that afternoon in that particular short sterling month.

You can see the big trade but you would have to watching an awful lot of contracts... I use a different approach I will try to illustrate next week (I suppose I watch about 40 contracts) once I'm working at home and won't have people wondering wtf I'm doing when doing screenshots etc :LOL:
Click to expand...


Good post my man. Dave, what's the tick size on SS.
 
1 lot is £500k notional and a tick is £12.50. So the eleven thousand lot guy was doing £137 500 per tick.

(those who complain, "but there's ten thousand ticks from 100 to 0 and that's only £125k!" are invited to learn how STIRs work :LOL:)
 
kimo'sabby said:
Good post my man. Dave, what's the tick size on SS.
Click to expand...

Here in Nelson Mandela Towers, the guy in no 469b's wife looked just like Miss Diane, but she ran off with the postman a year ago...even after all this time I still miss him.
 
Depends to both questions! I will rarely pay a spread... depends how urgently I want in or out.

Spins depends. Most I've done in a day is about 10k... least is.. er... 0. Or if we ignore 0, 1 :D
 
arabianights said:
Depends to both questions! I will rarely pay a spread... depends how urgently I want in or out.

Spins depends. Most I've done in a day is about 10k... least is.. er... 0. Or if we ignore 0, 1 :D
Click to expand...


You f*ckin rinse that market, dontcha? Very nice matey!
 
No not really. I know some people who do though :)

10k cars a huge amount for me. The person who trained me averaged that a day last month.
 
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