making a mint off news on trading desk

[mp6140]

MP --- its really smoke and mirrors

and i repeatedly laugh at how many people buy it.

Ive repeatedly gone over and proven that one can tell from market action on days and hours before the news, WHERE it will go, so i wont bother with yet another post on what an experienced trader should be able to see, BUT one must always remember that what goes up --- comes back down, and most often than not, right to the very tick it diverged from when the news was announced.

being a daytrader with a VERY good idea of trend and movement, getting caught offsides is of no bother (and the very reason why hedges DO work when news is released, because the price is gonna go UP and then its gonna come down, if not in the same day at least in one or two) I once had a thought that institutional traders were the BEST traders, but after this post ive read, I have to change my mind --- i dont see strategy here, but simply a gang of people following a bouncing ball !

So while being a daytrader and flipper is what i do, i am never be bothered by a trade that has been skipped for a while, as long as i can ascertain that it will come back into profit soon --- everyone on this board knows i dont sell trades that suddenly reverse and i dont use sl's that would do the same thing (THIS IS NOT A NEWBIE WAY OF TRADING -- my disclaimer !)

trading at a desk, the way you describe is obviously a few seconds advantage, but watching the financial channels here in the states, the announcements (the US ones) are given live and in real time, Forex *******s gives a VERY detailed trigger points pre-release of information concerning where to pull the trigger at what percentages for the news as do many others. Dont you people KNOW that ?

what you describe, while being a few seconds quicker may work for you sharks that simply follow the smell of blood, but can be handled by simply watching the price movement prior to the news, seeing what direction the price has gone over the past few days on a 10 or 5 day chart and where its heading minutes before the news, taking a gander at where RESISTANCE is on the H1 chart and paying SOME attention to that !

While certainly not "newb simple", its a technique that is a proven and solid one, produces significant gains and is awfully simple to impliment.

also, as just an aside, holding short positions when news is coming out that is most likely going to be downside AND THEN DUMPING THEM before the price comes back down from its initial runup is kinda SILLY in my eyes !

IF YOURE A PRO, working in england, we yanks got nothing to worry about !

enjoy and trade well

mp

 

[gooseman]

Just to stick my oar in on this one:

I don't think the argument applies to retail clients due to the ehaviour of SB's prior to announcements. As SB's are effectively market makers just prior to any economic release, be it GE results, NFP or MPC, they blow their spreads out to cover their own backsides (and rightly so). So if any retail client wanted to trade a release they would have to pay the spread anyway. I can see the advantage of people with DMA (locals etc)paying up for BBG etc but not those who sit at home and trade.

The first few ticks of any movement are all hoovered up by locals with very quick fingers so it is indeed very tricky to benefit from the sharp movement just after data. Especially so in current market conditions.

I also have had my fingers burned by hitting 'at market' button. Never use in a fast market.

 

[trader_dante]

Slightly off topic but don't assume that trading on a floor will make you perform better. I made more money and traded far better working from home using a basic spreadbet platform, charts with limited and sometimes unreliable data, very wide spreads (as much as 4 X the underlying) and NO news than I do at work where I have Bloomberg, Reuters, Ransquawk, CQG charting and professional execution with 1 tick between the bid and offer.

FACT.

 

[timsk]

Imho there are two main factors that mean most are doomed to at best a slow death;
i) Trading stupidly short timeframe charts and expecting technical factors to be respected by the rest of the market. . .

Hi GJ,
Two questions if I may:
1. How short is a 'stupidly short timeframe'?
2. Is the comment quoted aimed specifically at (home based retail) traders who attempt to trade the news in the way that police described in his opening post, or are you referring to all (home based retail) day traders regardless of their strategies and choice of instrument(s)?
Cheers,
Tim.

 

[TheBramble]

Slightly off topic but don't assume that trading on a floor will make you perform better. I made more money and traded far better working from home using a basic spreadbet platform, charts with limited and sometimes unreliable data, very wide spreads (as much as 4 X the underlying) and NO news than I do at work where I have Bloomberg, Reuters, Ransquawk, CQG charting and professional execution with 1 tick between the bid and offer.

FACT.

Interesting and unexpected development. Which do (did) you personally prefer - trading from home or from a corporate setup?

Dunno what sort of size you are or were shifting at home Tom, but if you were making more absolute wonga there than you now are with a pro sized wadge, something is very wrong somewhere.

Heard a lot of stories of floor traders coming off onto screens and doing badly purely due to the change in context, dymanics and information flow format. There's no reason to suppose exactly the same thing can't occur in the other direction too.

 

[gooseman]

Slightly off topic but don't assume that trading on a floor will make you perform better. I made more money and traded far better working from home using a basic spreadbet platform, charts with limited and sometimes unreliable data, very wide spreads (as much as 4 X the underlying) and NO news than I do at work where I have Bloomberg, Reuters, Ransquawk, CQG charting and professional execution with 1 tick between the bid and offer.

FACT.

dante-why not take in some earmuffs and blinkers and employ your strategy from work and then you'll mop up on the spread differential alone?

I don't mean to be sarcastic-I'm genuinely interested as to why you'd run a money making strategy on 'inefficient' markets and not when you have DMA and better equipment to run your spreadsheets from (i.e. exchange or bbg linked)

 

[nine]

gooseman,

Think about the distraction that all that professional information provides. I doubt that the ear-muffs would help Dante fit in with his new colleagues -- there go the social benefits of trading with others

I trade two futures markets with NO news from either. I simply respond to what price does and afterwards occasionally wonder why it did X - causing me to investigate. I have had more information in the past but ended up switching it off. I enjoy finding out later but am very happy to simply trade what is happening without any inputs about why in real time.

I don't have significant spread disadvantages although I could be milliseconds faster if I was collocated with the exchanges.

 

[trader_dante]

Interesting and unexpected development. Which do (did) you personally prefer - trading from home or from a corporate setup?

Dunno what sort of size you are or were shifting at home Tom, but if you were making more absolute wonga there than you now are with a pro sized wadge, something is very wrong somewhere.

I personally preferred trading my own account from home.

The main disadvantages that I have found with trading at a prop firm are the shorter TF mentality that you get. It has taken me a very long time - in fact many years - to build the patience and discipline to wait for the moments when I have a high probability of winning before I trade.

At a prop firm you are surrounded by the buzz and activity of shorter TF trading. I am not saying that everyone here trades short term but it is certainly true that the MAJORITY too.

I am personally not a scalper. I don't trade off the bid-offer, I don't care about what is happening on the 1m, 3m, 5m charts but that's what I have found myself thrown into: "Cut risk - keep stops tight. It's better to take 5 ticks 10 times than 50 ticks once etc."

At the same time I am encouraged to concentrate on one market rather than a group which is what I used to do. This has affected my bottom line severely because it could be days and sometimes weeks before I get a setup on one market and then the pressure to TRADE for the sake of TRADING occurs. The traders around me appear dumbfounded if I say that I've done 1 round trip in a day and even that feels way too much for me.

Then you've got the news. I always made money by IGNORING the news. But here, 1 minute before the figure its heart hammering in your chest time, fully loaded, ready to go - there's the figure - REACT, QUICK...the news is good, the markets going up...hit the bid with a 5 lot...now it's turned and I'm offside...People shouting and cursing. Sometimes I wonder why they do it. I know it's not for me...

So, on the whole, joining a firm has been detrimental to my trading so far.

So why do I stay? Because I don't have the capitalisation to MAKE A LIVING trading from home. Not yet. To do that without any pressure that affects your trading requires a huge deal of capital. It would take tens of thousands of pounds to be able to trade once or twice a week and still make enough to put you on an even keel with most 30 year olds...

The other main advantage of an office for me is that it has the social environment - I found trading from home very lonely and would go so far as to say it made me depressed. Sitting at home all day with no one to talk to when you are a naturally social person is something I found very, very hard.

 

[black bear]

Really good post Tom

I personally preferred trading my own account from home.

The main disadvantages that I have found with trading at a prop firm are the shorter TF mentality that you get. It has taken me a very long time - in fact many years - to build the patience and discipline to wait for the moments when I have a high probability of winning before I trade.

At a prop firm you are surrounded by the buzz and activity of shorter TF trading. I am not saying that everyone here trades short term but it is certainly true that the MAJORITY too.

I am personally not a scalper. I don't trade off the bid-offer, I don't care about what is happening on the 1m, 3m, 5m charts but that's what I have found myself thrown into: "Cut risk - keep stops tight. It's better to take 5 ticks 10 times than 50 ticks once etc."

At the same time I am encouraged to concentrate on one market rather than a group which is what I used to do. This has affected my bottom line severely because it could be days and sometimes weeks before I get a setup on one market and then the pressure to TRADE for the sake of TRADING occurs. The traders around me appear dumbfounded if I say that I've done 1 round trip in a day and even that feels way too much for me.

Then you've got the news. I always made money by IGNORING the news. But here, 1 minute before the figure its heart hammering in your chest time, fully loaded, ready to go - there's the figure - REACT, QUICK...the news is good, the markets going up...hit the bid with a 5 lot...now it's turned and I'm offside...People shouting and cursing. Sometimes I wonder why they do it. I know it's not for me...

So, on the whole, joining a firm has been detrimental to my trading so far.

So why do I stay? Because I don't have the capitalisation to MAKE A LIVING trading from home. Not yet. To do that without any pressure that affects your trading requires a huge deal of capital. It would take tens of thousands of pounds to be able to trade once or twice a week and still make enough to put you on an even keel with most 30 year olds...

The other main advantage of an office for me is that it has the social environment - I found trading from home very lonely and would go so far as to say it made me depressed. Sitting at home all day with no one to talk to when you are a naturally social person is something I found very, very hard.

Hi Tom

really great post

Find a way

do anything thats required you have time on your side

use it imho don"t burn it wasting your time doing something thats not you

empty the heads of the best traders in your prop shop and ................


Gone

Find a way

All the very best Tom, and enjoy the search :clover:

 

[timsk]

1) Anything sub 1 hr imho
2) Anyone - point Im making is that the shorter the timeframe you trade, the more timely you need your info to be, so trading a short timeframe than someone at a bank, but with less info available to you seems silly to me. . .

Cheers GJ, I rather suspected you'd say that!
So, in your view, is all day trading a mugs game and, if so, do you not have any time for the idea as expressed by nine in his post above that it's possible to trade without any news flow at all and rely exclusively on price action to make your decisions?
Tim.

 

[timsk]

And, as always, this is only my opinion Nor more nor less valid than any other.

I totally disagree with you on this point, GJ.
The art of benefiting from a forum like T2W is working out precisely whose opinions are valid and worth paying attention to and whose aren't. Sadly, in my book, 95% of members opinions belong in the latter category - mine included no doubt. Your opinions, on the other hand, are most definitely in the former category, which is why I solicited them in the first place!

Tim.

 

[Trader333]

The art of benefiting from a forum like T2W is working out precisely whose opinions are valid and worth paying attention to and whose aren't. Sadly, in my book, 95% of members opinions belong in the latter category - mine included no doubt.

So based on this then your opinion on GJ isn't worth considering ?


Paul

 

[black bear]

Very good few posts

I don't think for a moment that all day trading is a mugs game. far from it. I just don't see how anyone can trade technically based on ultra short timeframes and view it as anything other than throwing darts at a dartboard myself.


And, as always, this is only my opinion Nor more nor less valid than any other.

GJ

Oh stop!

And incidentally Nine's point is of course well made. Information overload can equal 'analysis paralysis' (scores highly on bullsh*/t bingo this post eh?) if one isn't careful. But for me personally, I have spent almost the whole of my working life in an information rich environment and would therefore feel a bit lost now if I just had to trade on price alone, knowing what I know about what moves markets in all but the long term.

If however someone feels comfortable doing that then good luck to em. I just feel that when it gets down to these people punting cable with a 10 pip stop on a 5/10/15 min chart, then there's just no point in discussing chart setups etc. Imho what moves markets is sizeable interest, and the people with that size behind them aren't looking at 5 min charts. They just aren't. Ever.

But that doesn't mean they don't day trade FX.

GJ

Hi GJ

Tim recomends you and thats good enough for me, think tims including himself in the wrong group for sure, far to modest imo

I would except the points you have made, my results indicate otherwise but would except your points are very valid and very good advice to anyone just starting out or indeed at the beginning and considering there options regards trading.

The low timeframes just donate money to the sb firms / brokers imho without them even trying, the trader is under more pressure to be right and we all no what happens then so.........................

Which time frame in your humble opinion is best for traders who trade from home that give them half a chance and is not like throwing darts in a dartboard, are we back to EOD trade setups :?:

Have you put forward any methods yourself to help new traders get started with a method thats reasonably up to the job and is not to be compared to throwing darts at a dartboard. :?:

Do you think any methods to be found on T2W are of any use at all in your humble opinion or are they to only any good for darts players :?:

 

[black bear]

A simple Life

To answer your three questions in order

i) I reckon the price action on an hourly chart will be significant to enough people to make a difference. Ceratainly when you move up to the four hour timeframe lots of black box / model accounts start to be involved.

ii) I wouldn't want to propose to anyone else that they trade a certain way. It's far too personal a subject, and you won't ever learn anything just by following what I tell you.

iii) As a result of this I also tend not to pay too much attention to what other people propose (leaving aside the fact that the vast majority of trading ideas / systems here are intended for use on the very timeframes I've been saying we should avoid). But if you search T2W I'm sure there are plenty of very valid observations about trading regardless of who you are and what your trading style. I just don't think there's one holy grail post which, if adhered to, would be all you ever need to be a consistently profitable trader. Life just ain't that simple.

GJ

Hi GJ

Thanks for response

good post

240 min and hours

agree and no nothing regards Black Boxs except................

Mrs Black Bear gave me just 1 Job before going out ......told me to.......

Get shut of an old TV thats blocking the garage and I have completely forgot because I am watching to small a timeframe again

Trade well all and have a good week :clover:

 

[mp6140]

I dont fully understand any dislike of the shorter timeframes as that is an area where i pitched camp a long time ago and have never been bothered by anyone or anything !

the 5 min, as an example, has a bottom, a top and a direction --- WHAT makes it different than the one or four hour except for the matter of drawdowns (which are certainly shorter lived and much less than the longer tf's)

am i missing something here in the translation, or do you guys really not like flipping reasonably quickly ?

mp

 

[mp6140]

Mp -- Noise Is Music To My Ears !

Dpends on your view as to why T.A. works in the first place. Personally I'm one of those people (I like to call them pragmatists) who think that T.A. works because many people can see the same thing and start to form a consistent opinion. And that just isn't going to happen on 5 min charts when the serious money don't even use them.

But if you're what I would call a 'pure' chartist you believe that the chart works in isolation and a head and shoulders is a head and shoulders etc. So 5 min is the same as 1 hour / 1 day etc etc.

I would just liken that to a guy in a small rowboat seeing 3 foot swell as challenging / potentially important when out on the Atlantic ocean, where the guy in a supertanker doesn't even notice it. 10 pips up and down in a few minutes to me is just noise, and I speak for a lot of people with market moving amounts to trade.

Just my opinion, but I guarantee you I'm not alone in holding it.

GJ

=====================================================

well, i have to admit i fit two of your criteria --- tech works because people expect it to work and therefore it becomes a self fullfilling prophecy --- if historically a pair retraces to the 50% point consistently, it is expected it shall continue, and it invariably does !

thinking that way, i therefore see the chart in isolation also, although i never trade patterns, just support and resistance and trend direction, keeping in mind the intraday price reversals at key times.

but allow me to say this about 10 pip noise --- i have a hedge trade i do every day --- its what we call the "beer money hedge" and it is only for 5 pips each way on GU.

PRETTY MUCH NOTHING RIGHT ???????

EXCEPT that it averages $1000 USD PER DAY, EVERYDAY --- so were not trading for 10 pips, but rather for $5 - 6 K a week, which i will take as "noise" any day of the year !

its not the individual trade, but the 650 pips one accumulates at the end of the day that counts to me and so the "noise" is music to my ears and my clients ears !

thnx for telling me the problem --- while flipping the one and 5 is not for everyone, it is very capable of making decent profits.

enjoy and trade well

mp

 

[gooseman]

how many people trade FX that size on here?

 

[mp6140]

how many people trade FX that size on here?

what size ??

 

[gooseman]

the size (notional) you need to make $1k per day on a 5pip around spread.

 

[mp6140]

the size (notional) you need to make $1k per day on a 5pip around spread.

OH --- its only a two lot hedge, each way !

Each side makes $100 USD

just that its repeated a few times during the day -- actually, its been coded into an EA but they just never seemed to get it right, so i play it manually instead !

thnx

mp