Best Thread 55000 % in ONE month !

[BSD]

À propos of nothing much I think I'll put some reads about some scalpers up in the interim:

"Don Sliter: pit bull with discipline

Don Sliter, a "local" trader in the Chicago Mercantile Exchange's S&P 500 stock index pit, has fulfilled a standard dream of many of the traders who ventured to the futures pits in the gold rush days of the late 1970s and early 1980s: He's a successful trader, one of the largest locals in the S&P pit, has his own clearing firm, D&G Futures, works about four hours a day, and, at 39, is planning to retire (at least from the floor) in five or six years.

He chalks up his success to a couple of simple facts: He loved the business from the start, and he is disciplined. The love part was easy; the discipline came the hard way.

Starting in 1978, Sliter worked up to 70 hours a week as a runner, phone clerk and outtrade clerk until he saved enough money to try trading in the Chicago Board of Trade (CBOT) soybean pit in 1984 - just in time to see the market dry up after its big bull run a year earlier. He quickly shifted over to the Major Market Index (MMI), the CBOT's fledgling stock index contract.

Sliter was anything but an instant success.

"My whole problem was that I wanted to be a big trader right away," he says. "In my second week in beans, I traded three million a side. I had no discipline."

Because of losses, Sliter was twice "benched" by his clearing firm. He figured he had one chance left.

He turned things around when he entered the S&P pit in late 1986. He found trading a primary market with plenty of liquidity easier than the thin MMI market. He used stops and didn't overtrade, putting on only 10 contracts at a time when he started.

"You hit rock bottom," he explains. "You think you're on your last leg, so you better get it right this time or you'll be working at McDonalds. I felt a lot of pressure. But the whole game is discipline. If you have that, you can make it. You never want to risk more in a day then you can make. Just get the hell out of your losers, because the next trade is always there."

These days, as one of the biggest locals in the pit, Sliter says he's a consistent 50- to 100-contract trader. The largest trade he ever put on was 450 contracts - nominally worth $149 million (at late June 1996 index levels) with a tick value of $11,250. Sliter rarely trades off floor, in other markets or holds positions overnight, characterizing himself as a scalper.

"If I get a runner, I stay with it," he says. "I consider myself probably the most disciplined big trader in there. If I'm wrong, I'm out - immediately. If I'm right, I scale out of my position."

Sliter's approach to trading would probably be alien to most off-floor traders. About five years ago he abandoned all analysis, preferring to simply react to what was happening in the pit.

"I used to look at charts," he says. "I used to wake up at 5:30 a.m. and watch CNBC. Now, I don't listen to a damn thing. One guy's saying one thing, one guy's saying another. I don't want to influenced by anybody else."

He picked up one interesting technique, ironically, from an off-floor trader.

"Like most people, I trade strengths and weakness, but I approach it differently," he says. "If the S&Ps are trading strong to the Dow, I'm a buyer; if they're trading weak to the Dow, I'm a seller. There's a relationship of approximately eight Dow points to 100 S&P [basis] points. If the Dow is up 14 and the S&Ps are steady on the day, I'll initiate my trades from the sell side because we're weak. If you're an off-the-floor trader, you have a better shot trading that way, because you can use tighter stops, and there's always an offer above when we' re trading weak."

 

[porph]

When I see too much chop at the 1hr/30min tf i move to 5min/1min.

 

[johnlvs2run]

He said if I remember right that he has a hard emergency stop 20 pips away that he has automated, but normally like you say he exits manually.

Being a hard stop, this sounds like 20 pips below purchase, or would it be a 20 pips trailing stop.

And 20 pips could be a 98.20 stop for 98.40, or a 98.0225 stop for 98.0245, only 1/100th the distance.

For me it would be more clear to use either 10ths or 100ths for describing a stop.

 

[BSD]

Being a hard stop, this sounds like 20 pips below purchase, or would it be a 20 pips trailing stop.

The way he described it is that he always exits manually, both where stop losses and take profits are concerned.

But, probably to insure himself or rather his account against something like his internet connection going down or whatever he has an automated hard stop in place with his broker that is 20 pips away from his initial entrance, and that doesn't trail.

That way he has insured that whatever happens his account won't blow up, which is always priority number one right.

For me it would be more clear to use either 10ths or 100ths for describing a stop.

Well don't forget he is trading FX here, and in FX I have never heard anybody think in 10ths etc, I think only stock traders use that.

In FX it's always only points, or for whatever obscure reason pips as they're called here.

But I mean thats good enough, say a currency has a daily range of 100 pips, then you say your emergency stop is at 20, so that gives everybody a clear idea.

 

[BSD]

And another scalping read.

"S&P Trader William Greenspan

By Mark Etzkom

TradingMarkets.com

Like many S&P 500 futures traders, Bill Greenspan was a "day trader" long before day trading was a household term.

To him, trading is truly a nine-to-five (well, actually, 8:30 to 3:15) job. He's got it down to a science, he knows how to handle its ups and inevitable downs, and he sticks to a simple trading approach that he applies patiently, day in and day out.

It's an approach that has worked well for him. At age 47, after 22 years in the pits of the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange (CME), Greenspan (trading badge: "WIG") has established himself as one of the more successful "locals," or pit traders--a fixture in the S&P pit where he trades almost all day, every day, playing his trading cards close to his vest and practicing his philosophy of making "a million dollars on a million trades, not a million dollars on one trade."

Spreading the risk

Greenspan got his start in the embryonic days of the financial futures markets in the late 1970s, when grains were still king and the veteran traders didn't know what to make of the new contracts on bonds, stock indexes and other financial instruments. He had a moving and delivery business at the time, but in 1978, when a friend who had made quite a bit of money trading soybeans suggested Greenspan try his luck in the fledgling T-bond market at the CBOT, Greenspan made a career change.

"I was an original T-bond permit holder," Greenspan recalls. "The exchange couldn't get the grain guys--the full members of the exchange--to trade the new financial instruments because they had made so much money in the soybeans. So the exchange was offering these permits to the public: 50 for T-bonds, 50 for commercial paper and 50 for gold. I got the last T-bond permit.

"The deal was, you'd pay $10,000 a year for three years. If you traded 125 trading day per year, you could, at the end of that period, pay another $10,000, and they would give you a seat. It was the greatest deal. They've never had anything like it since." (Such seats are currently worth more than $400,000.)

Greenspan started out as a "spreader," taking simultaneous long and short positions in different contract months in the T-bond market (inter-month spreads) or between the T-bond and a related market like the Ginnie Mae (inter-market spreads). The spreader profits as the differential between the two "legs" of his spread widens and contracts, depending on whether he is long or short the spread. Greenspan thought there was more opportunity in spreading than scalping--and that it was less risky (because spreaders are both long and short in the same or similar markets).

Greenspan started to make money regularly after three or four months, and although he admits to some leaner times "during the Reagan years," he has been a profitable trader since. (He discusses some of the down periods, and how he dealt with them, a little later.) He describes himself as an "enthusiastic trader, not a big trader," meaning he puts on a large number of trades per day but keeps his position size relatively small.

Scalping and beyond

Greenspan's approach is the essence of simplicity, honed over roughly a two-year period of daily trading in the S&Ps.

"In the beginning, I didn't really know what I was doing," he says. "I was scalping, just trying to get in and out. And then I began making trades off the opening range, making directional trades off the previous day's high low and close, or trades that went off the current day's high or low."

The kind of trade Greenspan is referring to is to go long or short on a breakout of the S&P's opening range, the trading band defined in the first 90 seconds of the session. These are usually his first trades of the day. After that, he typically trades breakouts (in either direction) through the previous day's close, high and low, as well as intra-day highs and lows. (See Figure 1 for an illustration of these kinds of trades.) Also, like a true scalper, he reverses position when stopped out--that is, if long one contract, he will sell two contracts at his stop level, establishing a short position.

He freely admits to being something of a risk hawk, favoring stops that may be too tight rather than too loose. His basic approach may seem straightforward, but the fact that he has prospered for such a long period is a testament to its effectiveness.

Greenspan left the CBOT for its cross-town rival, the CME, in April 1987, roughly six months before the infamous stock market crash. It was there that he developed the trading style he uses today. He explained the move and the process of becoming a consistently profitable trader.

Mark Etzkorn: Why did you make the move to the S&P pit?

Bill Greenspan: I heard the Merc (the Chicago Mercantile Exchange) was the same ball game, but a different ball park. I initially wanted to trade cattle because I liked the hours (9:05 AM to 1:00 PM, Central Time) and I thought I could do well.

But it was a very 'cliquey' pit, very hard to break into, so in the morning I would trade eurodollars from 7:20 AM to 9:00 AM, then cattle from 9:05 AM to 1:00 PM, back to eurodollars from 1:00 PM to 2:00 PM, and then trade S&Ps from 2:00 PM to 3:15 PM (the close).

It was the only time in my career that I didn't make money. I was in too many markets and I couldn't get into a rhythm with any particular one . . . and I had a long dry spell.

The owner of my clearing house suggested I stick to the S&P pit, because that was the pit 'the Cadillacs were coming out of' at the time. There was plenty of action, but it took a little while to learn to be a scalper rather than a spreader.

Figure 1. Dec. 99 S&P futures (Oct. 22), five-minute bar. The potential rewards and very real risks of the volatile S&P futures market are illustrated by the intra-day action on Friday, Oct. 22, 1999. The light-blue lines mark typical entry points per Bill Greenspan's trading approach: playing the breakout of the opening range (far left), followed by successive breakouts to new highs, which proved to be a fruitful strategy until the last half hour of the session, when a dramatic drop took back much of the day's gains. Source: Quote.com.

Mark Etzkorn: Can you describe how much you typically risk on a trade and how you take profits?

Bill Greenspan: Initially, I'll typically risk 50 points. That's enough heat. So, you have to go for at least a 250- to 350-point profit. As far as getting out, nobody ever went broke taking profits. But as a scalper, I try to facilitate the market. I've been standing in the same spot in the pit for 12 years, working with the same brokers. You have to be good to the deck (work with the brokers, rather than fight them). I'll move in and out because I want to satisfy some of these customers.

If you only make 100 points (one S&P point) on a trade, it's basically a scratch, because you're going to lose 100 points very often on trades as well--just on your timing. Your direction may be right, but you'll lose money just getting in and getting out. So if you just trade for 100 points, you're going to be a scratch trader--if you've broken even by the end of the day, you're lucky.

Mark Etzkorn: How tight will you keep your stop after a position goes your way and you have a profit cushion?

Bill Greenspan: Around 150 points (1.5 S&P points). That's really not wide enough, but I place them that close because I'm a nervous trader.

Mark Etzkorn: Do you trade the entire session?

Bill Greenspan: I'm there from 8:30 AM (central time) to 11:30 AM, and 1:00 PM to 3:15 PM.

Mark Etzkorn: How much do you trade on a given day?

Bill Greenspan: Probably in the neighborhood of 60 to 80 trades per day. I try to trade about 180 contract per side (long and short), and I trade in increments of anywhere from 1 to 10 contracts, with my most frequent trades being 3 and 5 contracts.

Mark Etzkorn: Do you do any other kind of analysis to prepare you for the trading day?

Bill Greenspan: I don't really need it now. What I do now is check the Globex high and low, and the previous day's high, low and close. I make my first trade off the breakout of the opening range--I take the directional trade--then I just try to scalp and see if I can make $1500 to $4000.

I just try to trade the breakouts. With the market the way it is, you can make five, six, seven points on the momentum trades off these breakouts.

Mark Etzkorn: What about losing days?

Bill Greenspan: They're infrequent, but I usually lose double than what I make on my winning days because of the volatility and the vacuums that form in the market. The volatility makes the money less steady.

Mark Etzkorn: Are you flat at the end of each day?

Bill Greenspan: Most of the time. If I'm not flat, I'm short one contract.

Mark Etzkorn: Given your experience as a short-term trader, what advice would you give those who might want to day trade the S&Ps, or stocks for that matter?

Bill Greenspan: I can't believe how many people are interested in day trading, because it is such a hard way to make a living. Everybody has heard the glorious stories. I've seen thousands of guys come and go over the course of 22 years between the CBOT and the CME.

Speaking in terms of someone who would want to trade the S&Ps, you have to develop the mentality of a trader--not just that you're going to be a 'day trader' and be flat at the end of the day. You have to be willing to make a lot of trades. You're going to be a better trader by making more trades. So, guys that want to make one, two, three trades per day, are going to get chewed up and burned out because they can't be that right about the market.

Mark Etzkorn: Do you still go through periods when things aren't working? What do you do to try to turns things around?

Bill Greenspan: That does happen. Particularly with a longtime trader like me, you get burned out, and you suddenly notice you're a step off, you're late hitting orders, or you're day dreaming in the pit--you just need to take some time off.

The market calls back to me eventually, but I don't have a problem walking away from time to time. My wife makes sure we take at least a long weekend every other month. It's like she tells me: Vacations seem to end up paying for themselves."

 

[Sylvain]

Nice one hehe UK

Btw, just to clarify, returns like this are possible, but an ultra short term scalping style like his is obviously NOT compoundable for eventual liquidity reasons.

He is actually a student at Uni still, but because he's spening the whole day trading and not doing enough for his studies any longer they've cut his study grants.

;-)

Not that he's too bothered by that.

Does this man have a name and website?
Cheers !

 

[BSD]

Ola Sylvain,

Maggi doesn't have a website, at least not as far as I'm aware.

He took part in this trading challenge under the same name he has been posting under on some German boards for quite some time before the challenge, Magellan.

He had excellent result prior to the challenge also or rather particularly in his real money accounts as well, then he won the challenge which gave him some additional credibility, I posted about that here, then thought I'd pop over to the one board he still frequents and send him a PM there asking him to come pop over here for a visit which he did.

 

[Sylvain]

Hi Guys

BSD asked me to visit this Forum.
My english isnt very well but i try to answer some Questions you have.
Anyway i like ur Comments. I was on other forums where people just started to hate me in a way and i stopped posting there.
I will take a hour now to read some threads you have here

Thanks for the nice thread BSD

greetz
Maggi

Hi Maggie,

I heard you had some very good returns.

What platform you work with and what stocks or indices you trade.
Are you only on the german market..

My return is 123% but falling back to 60% again..
So what your secret can you interact with me on : [email protected]

Very curious ! :smart:

 

[Sylvain]

I think there are three issues that make things a bit harder...

;-)

At some point people start seeing real money as opposed to more neutral percentages, as in that amount I'm up or down or whatever right now is worth a good meal, good watch, good holiday, good car, etc, etc, and then they start breaking their rules, holding a losing trade longer than they should, hoping it will turn around, while pocketing a winner too quickly...

then there will always be the odd chop-chop days where you will be giving back to other peoples pockets...

and finally liquidity will start making things harder at some point for the scalper, and actually make continued compounding impossible eventually.

Although to be honest thats at a level that to all intents and purposes can satisfy pretty much every demand under the sun already I'd say.

EG see some of trader dantes prop trading colleagues who started with zero and now have tens of millions.

Yes absolutely right,

Your patience is gone and it s really dangerious to trade at that point.
I want to learn more about scalping trading and how to compound...

can you send me some links or details to my private mail : [email protected]
Thank you BSD !

 

[BSD]

Well Sylvain I can quite honestly say I couldn't tell you anything much more about scalping than is in this thread already, I mean look at the two exchange members in recent posts and how very, very simple their scalping is, I think it's exactly like all other trading styles as well at the end of the day but just on a far shorter time frame, ie you can be a contrarian buying at support and selling resistance, or do the opposite by being someone who likes a bit of confirmation and buying intraday swing high / low breakouts, you can have high win rates by just going for tiny moves, or you can be a comparatively shorter term momentum or longer term trend trader off of a 1 min chart which has the exact same trends like say hourly or daily charts but just with fewer points on offer per trade on the one hand, but far more frequent albeit not endlessly compoundable opportunities on the other hand.

I think it's really important to keep it simple, the only way you can make money trading outrights are buying low and selling high, or buying high and selling higher, and vice versa for shorts, that is really all there is to it.

I'll see if I can come up with some more reads the next days from people who do this for a living or at least are proven net profitable traders, but the above is essentially all it's about.

Also, one of the best things to do is just look at the charts that Maggi was nice enough to put up that I posted on the first few pages of this thread, that to me looks like essentially also yet again extremely KISSy, ie simple, momentum trading, buy when it goes up, and exit at first sign of weakness, again vice versa for shorts.

Don't make trading more complicated than it is, find a method to ride the waves that markets make endlessly, then cut your losses short with discipline, and let your winners run, those may all be old clichés, BUT THEY ARE STILL ALL TRADING IS ABOUT.



Good trading

 

[BSD]

Probably most of you know or have heard of Dan Zanger, guy who turned 10K into 42 million in three years...

Two good reads about him here:

My Stocks Are Up 10,000%!

Tired of listening to neighbors brag about stratospheric returns? Convinced their figures are nothing more than hot air? Turns out some are telling the truth--and they're willing to prove it.

Dan Zanger
Every few weeks last fall, a shifting array of Dan Zanger's friends would gather in the basement of his Los Angeles home. They weren't there for chitchat, however, or to watch the game. They were there to witness a performance--and to learn.

For a few hours at a time, anywhere from three to five buddies would sit rapt in the darkened room, with windows shuttered to keep out the light, trying to glean the secrets of an artist at work. His blond hair as rumpled as his casual clothes, Zanger sat in front of five computer screens like a rock keyboardist surrounded by synthesizers. His body would tense as his eyes darted over the scrolling list of 800 stocks that he follows. Every so often, with the flick of a finger, he'd enter a buy or sell order.

Zanger would concentrate so hard that he didn't notice when spectators came and went. He wouldn't hear the questions they called to him. "I'm like a surgeon going in to do an operation," says Zanger. "I'm totally focused."

It's no wonder his friends and neighbors were curious. Just three years ago, Zanger, 47, was paying his bills by working in Beverly Hills as a swimming pool contractor, building Hefner-worthy tropical fantasy pools for rich and famous clients. In a good year he could make $50,000. Since then his investing, Zanger says, has turned $11,000 in savings into $18 million. That's a gain of 164,000%. "As far as I know," he exults, "it's the world record."

Talk about any recent investing trend, and Zanger will tell you he was one step ahead of the market. "I foretold the biotech move two or three months ahead of time," he says. And those other investors who got whipsawed by the rapid turnaround in Internet stocks? Not Zanger. He says he was short-selling those stocks. Referring to a prediction he made in an investing newsletter that he began publishing last year, Zanger adds, "I showed everybody the market top of March 10."

Yeah, yeah, yeah. We've all met a Dan Zanger--or 20. You know whom we're talking about: the guy at work who won't shut up about how he's whipping every fund manager on the planet with his tech portfolio. The golf buddy who can't stop droning on about the excruciatingly obscure--but incredibly lucrative--options scenarios he picked up from a $25 book. Or your neighbor's 21-year-old kid who, to hear his parents tell it, has made enough in the market to pay for their retirement.

The only difference? Zanger appears to be telling the truth. His 1999 tax return and trading records, which he shared with FORTUNE, show capital gains of $14,232,878.

Zanger is rare, but he's not alone. We undertook to locate members of a very unusual breed: individual investors who chalked up out-of-the-ballpark returns--and were willing to prove it with tax or trading records. Though no one was able to equal Zanger's universe-beating numbers, we did find a tiny, scattered tribe of investors with the kind of results that entitle them to all the cocktail-party bragging they want to indulge in. Our not-so-motley selection includes everyone from a stay-at-home dad to a personal trainer. Their investing styles couldn't be more different, though they usually combine an Olympian tolerance for risk with a penchant for unorthodox strategies that involve charts, options, margin, and the like--not to mention insane luck. They all have one thing in common: They are hands-down, no two ways about it, making mincemeat out of all those highly paid pros.

By definition, most of us can't beat the market averages. But since investing became America's most popular participatory sport in the '90s, outperforming Wall Street wisemen has become a national obsession. It's the quintessential American myth--Anybody can make it big--reincarnated for the new millennium. And like any compelling myth, it requires a handful of unlikely individuals to keep us convinced that, yes, a muscle-bound personal trainer can outinvest a hedge-fund manager with billions of dollars in his portfolio. It's a tale Horatio Alger might have penned--if he had known a world with discount brokers and online investing.

So what's Zanger's secret? The former pool contractor, who resembles a poor man's--er, a rich man's--Richard Branson, was always more than happy to explain his secrets to his friends once the market closed. He would become animated, describing to his awed flock why he bought, say, 1,000 shares of AskJeeves.com at the precise moment he did. The stock, he'd tell them, was clearly headed into a "pennant" formation--it had risen and then tapered off quickly--and thus seemed primed for another quick, steep increase.

His friends would look on in glassy-eyed bewilderment as he explained his "technical" investing philosophy. It's not exactly a strategy that would make Warren Buffett proud. Zanger completely ignores yardsticks such as price-earnings ratios and revenue growth. The only thing he cares about is how a stock is behaving. "I trade whatever the market is going to push up the most," Zanger says. "It doesn't matter what the company does, or what their earnings are." Devotees of technical analysis believe that stock prices move in easily recognizable visual patterns that an experienced investor can capitalize on. So when CMGI is gearing up to a "cup and handle," or Amazon is perilously close to a "descending triangle," or--egad--"channel formation," Zanger moves. He internalizes those curves, those spikes, like a doctor scrutinizing a heart patient's monitor in an intensive-care unit. "Stocks are my buddies," Zanger says. "I know when they feel good or when they feel bad."

At the beginning of November last year, Zanger noticed that Qualcomm's stock was acting "a little frisky." So he dove in, buying 5,000 shares on the way up from a split-adjusted $57.50 to $62.50. In a matter of weeks the stock was trading as high as $93 but was incredibly volatile. Zanger hung on, buying and selling parts of his position on dips and spikes. By Dec. 30 the price had leaped past $161. On the first day of the New Year the stock jumped a bit more, and Zanger unloaded his remaining positions at $196 and $194 for a profit of $2.7 million. How did he know to sell near the very peak? "It was clearly in a massive parabolic blowoff top," says Zanger. Obviously.

This spring, Zanger says, he moved most of his assets into cash, shielding him from the tech meltdown. There the money will remain until his charts tell him the worst is over. While he waits for that to happen, Zanger is busy preparing to raze the home he recently bought in Kirkland, Wash. He plans to replace it with a dwelling modeled on Frank Lloyd Wright's Falling Water. "You should see the pool it's going to have," he swoons. As for the building of his mini-empire, Zanger is unequivocal: "It's the greatest story ever told."
Fortune: 12.18.2000 Investor's Guide: My Stocks Are Up 10,000%! Dan Zanger

 

[BSD]

And article # 2:


"Why Dan Zanger is richer than most traders

I have been studying up a bit on Dan Zanger, probably one of the most successful momentum traders of all time. Last year alone he made $22 million largely on big trades in Google and Apple.

His strategy involves buying stocks breaking out of chart patterns including flat bases, flags and pennants, on big volume. Zanger puts a lot of emphasis on volume.

What strikes me about Zanger is that he has become immensely wealthy using tools and chart patterns at everyone’s disposal and available in most technical analysis books.

Why? I think one of the reasons is that he puts his balls on the line all the time. He uses margin on all his trades, so if he’s got $50,000 he’ll borrow another $50,000 to increase his position to $100,000.

One of the few who’s addressed this is British publisher Felix Dennis in his book How to Get Rich. “Tunnel vision helps. Being a bit of a **** helps,” he said about what’s needed to get rich. “A thick skin helps. Stamina is crucial, so that your best friends mock you, your lovers despair and the rest of your acquaintances watch furtively from the sidelines, half in awe and half in contempt.”

I think a lot of us get lost in indicators, testing, risk management and often forget that you have to take risks to get big rewards. Sure, it is crucial not to get wiped out, but I’m beginning to think that being risk averse is as bad as taking too much risk.

As a business reporter I’ve interviewed dozens and dozens of self-made millionaires. They were all like Zanger and put their balls on the line and took big risks. Without exception, they all spoke of taking it to the edge and being in real discomfort to make it.

So we all have to make a choice: turn up the heat and have a shot at getting really rich. Or play it safer and settle for less. Both are valid choices."



Dennis's book "How to get rich" quoted in the article is an excellent, entertaining read.

Lots more articles about Zanger on his website:

ChartPattern.com

 

[Fortune500]

As a business reporter I’ve interviewed dozens and dozens of self-made millionaires. They were all like Zanger and put their balls on the line and took big risks. Without exception, they all spoke of taking it to the edge and being in real discomfort to make it.

I wonder how many people have "put their balls on the line" and failed? Comments like this seem to prove Taleb's survivorship bias. You never hear stories from the 10,000 people (losers for every winner) who have gambled and lost because nobody wants to hear about the losers. Therefore we're left with a distorted picture of success.

Having said that, anyone who consistely wins is obviously doing something right.

 

[BSD]

Fortune, good point, but I think once one accepts that there is a correlation between risk and reward you can increase your survivorship bias by defining reasonable and acceptable risks as per the expectancy of your system, eg as a trader you can compound as hard as you can, but still not risk more than say 3% maximum per trade.

The Turtles we were talking about elsewhere earlier had incredible returns and yet didn't exceed risks per pyramided trades of round about 3% or so if I remember correctly.

The message that you don't have to bet the ranch to achieve incredible returns was what I was trying to convey in this thread here:

How to easily make 1000 % per Year !

I think what many non-traders don't get is that leverage - as per the article above - does not equal risk per trade.

And a last read about Zanger:

Interview with Dan Zanger
who traded $10,775 into $42,000,000 -- in less than 3 years!

 

[Sylvain]

Hi BSD !

But shouldn't be there the discpline training for it...
I mean not every body is made for scalping as it comes to
putt high volume in on short trades...?

Which methods must a good scalper keep in mind?
He must have his nerves under controle...

Which methods does Maggelan use....

By the way i like your sign(yin yang).... why you have it and what is it.

Like to hear more from you ! :smart:

 

[porph]

A relative bought me Felix Dennis' book last christmas. Was certainly entertaining.

The main thing I took from it is that if you want to achieve anything significant (and by that I dont mean just making loads of money) then you have to do your own thing and take some risk. You find the niche in which you are successful and take it for everything its got.

 

[BSD]

A relative bought me Felix Dennis' book last christmas. Was certainly entertaining.

The main thing I took from it is that if you want to achieve anything significant (and by that I dont mean just making loads of money) then you have to do your own thing and take some risk. You find the niche in which you are successful and take it for everything its got.

Hi porph, totally agree !

But shouldn't be there the discpline training for it...
I mean not every body is made for scalping as it comes to
putt high volume in on short trades...?

Which methods must a good scalper keep in mind?
He must have his nerves under controle...

Which methods does Maggelan use....

By the way i like your sign(yin yang).... why you have it and what is it.

Ola Sylvain, I'd say the main difference between scalping and longer term trading is simply that you've got be quicker.

That's it.

A 1 min chart looks exactly like a 5 min, hourly, or daily chart.

And the methods that work on one timeframe work on others.

I know one guy who does nothing but trade bull / bear flags in the Dax future on 1 min charts, and makes a great living doing that.

Another guy here who is one of the most successful traders uses indicators, as did people like Market Wizard Marty Schwartz btw.

How you do it doesn't really matter, you just need a method that has an edge, meaning earns more over time than it loses, and then you apply that on your timeframe of choice.

Scalping will provide you with many more trading opportunities during the day which is a clear advantage, but the disadvantage is that it is not as compoundable as trading off of longer time frames.

So it's all up to you and your needs.

That said in the current environment I find it much easier to scalp, as there is simply too little continuation or follow-through on longer time frames at the moment.

What Magellan is doing imo is simple (click momentum trading, one of the best strategies available which in essence is nothing else than folloiwng the path of least resistance, buying when it goes up, shorting when it goes down, but unlike longer term trend following here one exits at the first sign of weakness, you just hop onboard for the current swing.

That is what Magellans charts show imo what he is doing on 10 sec time frames, that is what Dan Zanger was doing on longer time frames, using patterns for entries, and trend lines for exits.

Doing without doing you ask ?

Ah, what would one be without a little help from the heavens...



I spent several years living in Japan where Chinese thought had played quite an influential role historically and thatÄs where I picked up the following which seemed to make a lot of sense to me:

Wu Wei: The literal meaning of Wu Wei is "without action" and is often included in the paradox wei wu wei: "action without action" or "effortless doing".

In the traditional (partly Confucian) Chinese understanding of governance, a prince has only to sit at the right place, facing south, with a prince's traditional attributes, and his country will be well governed. In Lun Yu II.1., Confucius compares a virtuous prince to the North Pole in which he finds himself: he does not move and everything turns around him. There are magical justifications behind this idea of a power obtained by "inaction." It is the Chinese "correspondence", or "synchronicity" theory, where the macrocosm is duplicated, in microcosms. According to the theory, ordering the Emperor's palace is governing the country well: the palace is a homothetic reproduction of the country.

Actually it is a rather ubiquitous principle though:

Wu-Wei, or Doing-without-Doing. This is the technique where, according to Taoist practices, one acts like water, flowing with the stream instead of fighting it, to obtain results. In Greek philosophy pantha rhei means everything is in flux. As human beings the art is to go with the flow, not to offer resistance but to move with the forces that move us. Fighting the forces, the body, and the mind to obtain results is called doing. This is the way most people spend their lives, and in this there is a lot of friction and loss of energy.

Not-doing or wu-wei is to move fluently with the forces, the body, and the mind, not fighting our way through things. For this, the mind and body have to be in a state of quiescence in order to reflect without distortion the here and now. Patanjali states that the mind should be colorless like a crystal which reflects whatever object it is put on. The Greeks said: gnoti seauton, or know yourself. This self-knowledge is the self-reflection of the mind and the body, emptied of all thought and actions. Then the mind and body are in direct contact with the here and now in which the observer, the observed and the act of observation are one (the core of both Patanjali's and Krishnamurti's teaching). Once the body and mind are made quiet through self-reflection, one can stay in this state for a while, or one can move back into acting. Projecting an act, a wish or intent in this state of mental and physical quiescence has extraordinary power to self-fulfill, as there are no thoughts, actions and emotions to interfere with it. This is called jan-zu, or the act-that-does-itself, and has been amply described in such classics as “Zen or the art of Archery” by Herrigel.

 

[Sylvain]

Wauw japan... great ! one day i go to china...
Interesting that you say that the chinese philisopy it all relates back to trading
or nature laws....resistance and go with flow.... which i am learning now.

Well i justed started to do yoga.... i thinks it's buddism.

Just to relax myself after a trading day mind and body....
I am always on fire as soon as stock markets open so i really
feel much better with these yoga exersices.... really a releave.
three times a week...

I ve looked at momentum web it's a dutch bank. I am dutch.
But live in Spain. Softer climate and nicer envirmont then Holland.
But yes i will try follow up your advice...

Thank for your outspoken answer...
Well keep in touch....!

 

[Magellan2]

Hi Guys. Sorry but i'm really busy at moment. I'll send bsd some charts of a live konto i traded yesterday. I still follow this thread
greetz
maggi

 

[Master_Sepp]

Hi

I'm new here. I first saw this thread (55000% - WOW!) Unfortunately, my English is not the best, and I don't have the time to read 20 pages. So, can anyone (or Magellan ) tell me, what the system is, that you get 55000%? I'm very interested

Thanks

Master_Sepp