Rogue trader moved DOW & S&P lower...

seriously if you thinka 1000 point PLUNGE is any way technical you need to get another profession. no offense :D
 
N Rothschild said:
seriously if you thinka 1000 point PLUNGE is any way technical you need to get another profession. no offense :D
Click to expand...

LOL no offence. I'm just a lowly forex swinger. I've no idea why the market temporarily crashed by 1,000 points, that's why I posed the question...with question marks...:rolleyes: Nice to know that the various algos used at an elite level don't use technicals, or the abilities of the...ahem...finest programmers available...they just react to the noise in the pit...:D

It's obvious that elite traders dont use w@nky stuff such as stoch, macd, rsi, etc; however they surely do *use* (or the algos in their place) S/R, trend lines, channels etc...
 
from what i've read quants who programme algos think TA is no better than reading tea leaves or believing in fairies.

in one documentary we learn [as wacky as it may sound] there are algos that work off google search terms?

simon at cs reckons its algos looking for a bid and whoever turned them on lost billions.
 
Why do people have to see it in technical or fundamental or sentiment or whatever? The move was all of those. Yes technical played a part, yes greece situation (and other countries too) played a part, yes sheer panic played a part, maybe the rogue trader too. It is all part of the same thing. And if there was a rogue trader who made a mistake, well we're in a market with other traders and Hedge funds who can affect price. Nothing new there, you should expect it. Yesterday wasn't a 'normal' day, but the idea that other traders can significantly affect price is nothing new. The fact that this rogue trader may have caused a cascade is not so different to a trader breaking it through a significant level and people jumping on the breakout, the only difference is in the extent of the effect.
 
Anyhow, just to inject a bit of humour into the proceedings on a Friday afternoon here's something I remember reading on the importance of fib levels and how they shape our universe;


Fibonacci is everywhere!

Black Man's Schlong = 1
White Man's Schlong = 0.618
Chinese Man's Schlong = 0.382

*Please use 10 (inches) as the multiplier.
 
Black Swan said:
LOL no offence. I'm just a lowly forex swinger. I've no idea why the market temporarily crashed by 1,000 points, that's why I posed the question...with question marks...:rolleyes: Nice to know that the various algos used at an elite level don't use technicals, or the abilities of the...ahem...finest programmers available...they just react to the noise in the pit...:D

It's obvious that elite traders dont use w@nky stuff such as stoch, macd, rsi, etc; however they surely do *use* (or the algos in their place) S/R, trend lines, channels etc...
Click to expand...

On the face of it, it appears you are basing your assumptions based on what you read on forums and read in popular trading books.

Just a few minutes ago I shorted AIG at 11:24:21 EST at 37.91 - I got out a few minutes later at 37.05. I did not use any MACD, Stochastics, S/R, trend lines, channels ete. etc. - this is all just wannabee trader website crap. I had an eye on what the market was doing, how this stock had acted in the past couple of days, the order book and the stock movement for today. It was not a particulary clever trade to be honest but the reasons for entering, although simple, are not in the places you look for trading info.

If you look on trading forums for information about the way things move and the relationships between various markets (e.g. stocks, and their 2 main derivatives) then you will keep coming up with the same old, tired, stale crap that makes nobody any money.

The problem is - if you limit your knowledge in the domain of trading to all this textbook TA crap, then you will never get a handle on what is actually going on. Which is not particularly complex, it is just not mechanical. Your presumptions that Algos must use channels or S/R are purely based on the limitations of your knowledge in this domain. Suffice to say that what is actually happening is not withing your domain of knowledge.

So - I put it to you that they do not "surely use" any of the things you think they do. They do not have massive Cray computers predicting what happens next.

Running in front of trades, taking advantage of price disparities, looking for the footprints of a large buyer is the meat of it. I am sure there are more exotic things out there - but with a few billion and co-location you don't need to predict the future - you just need to be able to tell what is happening now.

Note that there are book out there that explain this stuff - you could start with "Electronic and Algorithmic Trading Technology' by Kendall Kim - a flimsy 200 page paperbook that cost about $60. It's a bit dull but it's one in a series of books that lays out what is actually going on.
 
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DionysusToast said:
On the face of it, it appears you are basing your assumptions based on what you read on forums and read in popular trading books.

Just a few minutes ago I shorted AIG at 11:24:21 EST at 37.91 - I got out a few minutes later at 37.05. I did not use any MACD, Stochastics, S/R, trend lines, channels ete. etc. - this is all just wannabee trader website crap. I had an eye on what the market was doing, how this stock had acted in the past couple of days, the order book and the stock movement for today. It was not a particulary clever trade to be honest but the reasons for entering, although simple, are not in the places you look for trading info,

If you look on trading forums for information about the way things move and the relationships between various markets (e.g. stocks, and their 2 main derivatives) then you will keep coming up with the same old, tired, stale crap that makes nobody any money.

The problem is - if you limit your knowledge in the domain of trading to all this textbook TA crap, then you will never get a handle on what is actually going on. Which is not particularly complex, it is just not mechanical. Your presumptions that Algos must use channels or S/R are purely based on the limitations of your knowledge in this domain. Suffice to say that what is actually happening is not withing your domain of knowledge.

So - I put it to you that they do not "surely use" any of the things you think they do. They do not have massive Cray computers predicting what happens next.

Running in front of trades, taking advantage of price disparities, looking for the footprints of a large buyer is the meat of it. I am sure there are more exotic things out there - but with a few billion and co-location you don't need to predict the future - you just need to be able to tell what is happening now.
Click to expand...

This response is littered with contradictions, dissembling and attempts at petty point scoring, so I'll leave you to bask in your pre-conceptions. Me, I'm fairly nuetral on any info. that comes my way (from whatever source). Does T/A work...for me... trading oil and forex? Hell yeah...:) Could I use my edge/skill set on indices and or equities? Havn't got the time to waste trying...good luck with that...
 
The debate about TA is already tired. TA is using any PAST movement of price to make your trade decisions. If you don't use TA, then you don't use a chart, and you aren't caring what this years high or low was, or yesterdays high or low, the trend direction, whether it is up or down since open, or any significant levels. If you do care, then you are using TA. Algos use TA.

It isn't relevant what "textbook TA crap says" just as it isn't relevant what Bloomberg has to say about the fundamentals. If you don't believe that algos use any past price data (and that could be 1 year ago, or 1 minute ago) to act upon, what do you believe they DO act upon?
 
Shakone said:
The debate about TA is already tired. TA is using any PAST movement of price to make your trade decisions. If you don't use TA, then you don't use a chart, and you aren't caring what this years high or low was, or yesterdays high or low, the trend direction, whether it is up or down since open, or any significant levels. If you do care, then you are using TA. Algos use TA.

It isn't relevant what "textbook TA crap says" just as it isn't relevant what Bloomberg has to say about the fundamentals. If you don't believe that algos use any past price data (and that could be 1 year ago, or 1 minute ago) to act upon, what do you believe they DO act upon?
Click to expand...

It is a very tired subject but comes up so often. It never fails to amaze me how easily threads become de-railed on this suite of forums and always deteriorate so quickly. The wild assumptions posters make re. others; beliefs, background, knowledge, qualifications, contacts etc.. is quite bizarre...
 
i dont think anyone is debating wether TA works for you or not.

but the notion that the market actually imploded a 1000 points on some technical basis is nothing short of moronic.
 
N Rothschild said:
i dont think anyone is debating wether TA works for you or not.

but the notion that the market actually imploded a 1000 points on some technical basis is nothing short of moronic.
Click to expand...

I can't see anyone or anywhere on this thread the belief being put forward that the DOW fell by 1,000 yesterday points based on technical issues alone, however, with equal conviction I'd suggest that price crossing a 200MA, support and resistance (arguably basic supply and demand), chaannels, trend lines and fibs influence enough decision making/makers, be it mechanical or programmed, to contribute towards market moves...
 
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