Anyone scalping the FTSE Futures??

[darkcider]

I have been considering how to, successfully, do the exact opposite of what the majority is doing.

It is very difficult to be one of the minority. Logic is what most of us use and ,therefore,the majority, it seems to me, is the most logical.


Most retailers try to choose pivot points and tops and bottoms:whistling They also don't like using limit orders They sit and stare, they wait (i need a pee) Meanwhile blood pressure:arrowu::arrowu::arrowu:

Edit: What are the chances of making money at something that frustrates you:?::idea:

 

[Cornix]

Discussion deviates a little bit away from FTSE scalping, but as there are no strict boundaries for threads, I'll put my 2 cents.

The majority of volume in the most liquid markets is institutional (aka professional) money. Retail traders constitute truly negligible amount of total volume in markets like currencies, fixed income, stock index futures etc.

So the majority volume wise does not consist of retail losers. Thus, following the volume majority is basically the ONLY way for an individual trader to make money (well, aside from shorting options, but that's different story).

Majority of retail traders, from the other side, loses money not because they do something too obvious, but rather because they DON'T do it.

Heard about one good analogy, don't recall the author, but nevertheless: everyone knows how to lose weight, yet over 90% of those who try, fail miserably.

Is it because they do something too obvious? No, it is because they don't.

Applied to trading these "don't"s are: poor analysis, poor money management and often blatant laziness.

Many treat trading as a get rich quick scheme, not as a serious profession, which requires a lot of research, experience and discipline.

No different from professional sports, music, arts, whatever.

 

[darkcider]

Discussion deviates a little bit away from FTSE scalping, but as there are no strict boundaries for threads, I'll put my 2 cents.

So the majority volume wise does not consist of retail losers. Thus, following the volume majority is basically the ONLY way for an individual trader to make money (well, aside from shorting options, but that's different story).


Maybe not that much of a different story There are great opponents of the naked short options game, especially on boards like T2W. I myself am a proponent of the naked short options game. Why? Because probability says that i will get hit at some point (if i could trade my account forever), but it can't tell me when:smart: So i take my chances I understand my risk, i don't go out of my way to compensate for it though Over-compensating for risk and being overly cautious puts a trader at breakeven for years and years and years.....:cheesy:

 

[Splitlink]

Split

Does it matter if you're siding with the minority or the majority? After all you're just making an assumption at some point in time about where price will go next - if it doesn't you kill it, if it does you ride it until you have to make another assumption about when "enough is enough". Easy peasy (I wish )

jon

No, it does not matter, at all, Jon, because one does not know whether what one is doing is right, anyway, until afterwards. That is why risk tolerance is so important.

Hey! why do I have a sensation of dejà vu about what I m writing?

 

[Cornix]

Maybe not that much of a different story There are great opponents of the naked short options game, especially on boards like T2W. I myself am a proponent of the naked short options game. Why? Because probability says that i will get hit at some point (if i could trade my account forever), but it can't tell me when:smart: So i take my chances I understand my risk, i don't go out of my way to compensate for it though Over-compensating for risk and being overly cautious puts a trader at breakeven for years and years and years.....:cheesy:

I don't trade naked short options myself, except some rare cases, when I play them "Buffet style" to either get the premium or get the stock I want at the price I want plus get paid for it, not pay myself.

General point of my post was: the majority of market participants and the majority of retail losers are two different matters. Whenever we trade in any way except net short option plays (those can be not necessarily naked, also all kinds of spreads and synthetics), we must be sure the major volume goes the same way.

Directional or long volatility trading is just capturing market inertia after all, nothing more. All the rest is tactics, which everyone develops according to his/her own views, stereotypes etc.

 

[darkcider]

General point of my post was: the majority of market participants and the majority of retail losers are two different matters. Whenever we trade in any way except net short option plays (those can be not necessarily naked, also all kinds of spreads and synthetics), we must be sure the major volume goes the same way.


Of course. In terms of numbers, would you say that the majority of volume is created by the minority of players:?:

 

[Cornix]

Of course. In terms of numbers, would you say that the majority of volume is created by the minority of players:?:

Yes, definitely so.

But even then, the majority of those who lose, loses not because they do the same thing. Rather because they don't do the same simple things correctly.

Trading is very simple technically, but is extremely hard psychologically. That's where most fail. They simply cannot follow their own or someone else's logical rules, even when those rules are based on solid market research, which clearly shows an edge existing in some given strategy.

 

[darkcider]

Yes, definitely so.

But even then, the majority of those who lose, loses not because they do the same thing. Rather because they don't do the same simple things correctly.

Trading is very simple technically, but is extremely hard psychologically. That's where most fail. They simply cannot follow their own or someone else's logical rules, even when those rules are based on solid market research, which clearly shows an edge existing in some given strategy.

:smart:We are used to learning and then applying what we have learned to create a 'positive' outcome:smart: We do this all our lives, or at least most of the time. Professional traders tend to do a lot more round-trips than retailers, do you think this repetitive approach can help eleviate some of the 'psychology' involved in trading:?:

 

[orangetrader]

No different from professional sports, music, arts, whatever.

Liked the post. The other saying I like is most people can’t recognise opportunity because it’s often disguised as hard work. I think that this principle applies to trading and many other pursuits such as starting a business, work, etc….
The taking trades and allure of profits etc… is the fun easy bit that draws most retail traders in. The difficult part is having a plan with sound money management and rigidly working to that plan day in day out in a truly consistent manner over a long period. That means working hard to identify all trades which fit your criteria, actually taking them and then managing each one effectively. Simple but not easy.

 

[darkcider]

Liked the post. The other saying I like is most people can’t recognise opportunity because it’s often disguised as hard work. I think that this principle applies to trading and many other pursuits such as starting a business, work, etc….
The taking trades and allure of profits etc… is the fun easy bit that draws most retail traders in. The difficult part is having a plan with sound money management and rigidly working to that plan day in day out in a truly consistent manner over a long period. That means working hard to identify all trades which fit your criteria, actually taking them and then managing each one effectively. Simple but not easy.

:|I don't think that most retailers have the time to trade and actually make it worth it:-0 Most retailers, as opposed to professional traders, think of trading as a hobby or an interest

:smart:Some retailers even make it to the consistently profitable stage:clap:

:smart:An enjoyable hobby that creates capital and wealth with minimum effort:smart: True genius if you can get there:clover:

 

[Dick Lexic]

think you should just give it up mate.......you don't make sense

Not very helpful comments....sorry, the usual me

this has been a great thread thanks to martin .... what has happened to all the regulars?

hope you ditch the demo martin... also hope you keep a hold of the reins on here

 

[Cornix]

:smart:We are used to learning and then applying what we have learned to create a 'positive' outcome:smart: We do this all our lives, or at least most of the time. Professional traders tend to do a lot more round-trips than retailers, do you think this repetitive approach can help eleviate some of the 'psychology' involved in trading:?:

It depends. Some of high level professionals trade much less frequently than average retail trader does. Frankly, I believe there is no difference between trading and value investing also, other than time scale (unless the goal of investment is cash flow, rather than asset price appreciation).

But no doubt that more experience leads to better dealing with all professional nuances, including mental/emotional nuances. The more a trader sees something repeats in the markets over and over again, the more he/she is confident to commit trading decisions based on those observations.

 

[Cornix]

Liked the post. The other saying I like is most people can’t recognise opportunity because it’s often disguised as hard work. I think that this principle applies to trading and many other pursuits such as starting a business, work, etc….
The taking trades and allure of profits etc… is the fun easy bit that draws most retail traders in. The difficult part is having a plan with sound money management and rigidly working to that plan day in day out in a truly consistent manner over a long period. That means working hard to identify all trades which fit your criteria, actually taking them and then managing each one effectively. Simple but not easy.

Yes, absolutely. Most newbies who start are under opinion of mass media showing financial professionals as enjoying obscene profits they make. Same with rock stars or champion athletes.

Few people realize what amount of work is behind that and if most of those who start knew what is required, they would probably not even try.

 

[orangetrader]

Not very helpful comments....sorry, the usual me

this has been a great thread thanks to martin .... what has happened to all the regulars?

hope you ditch the demo martin... also hope you keep a hold of the reins on here

hey DL ...
that for those very, very subtle pearls of wisdom

Here are my thoughts regarding SIM trades etc…. I have been trading full-time for a little over 18mths with a live account (not a long time I know) and here’s some of what I have learnt so far.
I would say that learning the technical analysis was the first part in learning to trade. For me that part was quite time consuming as its alien and it takes time for you to train your eyes to read charts etc…. Plus I looked at and worked with quite a few methods until I found 1 or 2 that I was happy with. I went through around 65 trading books during that time. The next stage (which I am still working on) was and is developing methods which force me to consistently act in my best interest. This part was much more difficult than I had imagined and could only be appreciated once I had made real mistakes with real money. The trouble is, most people have trading demons (varying degrees and different demons depending upon the individual) but you don’t actually get to meet them until you are actually trading in the real world with real trading pressures. Some are very obvious, for example if you lose a significant % of your account in one day. If you continue to make that mistake, chances are you will not remain solvent. Others are far more subtle and require you to look at your trades and work out what’s working and what isn’t and why. Once you can see what you are dealing with, you can go about devising strategies which, with time, tenacity and practice, encourage you to institutively make better trading decisions around entry, stop location, timing and volatility factors, stop management, profit targets, position sizing, risk/reward etc…
Looking back it probably would have helped if I had done some sim trading to start with. That way I would have started the next stage with confidence in my technical skills and I would have had less to deal with at the same time. However, I just wanted to get on with it and either succeed or fail. My results have been up and down and extremely erratic during the first year (some big wins but some bigger losses). This year has seen month-end profitability through regular day trading not the odd swing-for-the-fence trade. Next goal is year-end profitability.

 

[MartinC-J]

Not very helpful comments....sorry, the usual me

this has been a great thread thanks to martin .... what has happened to all the regulars?

hope you ditch the demo martin... also hope you keep a hold of the reins on here

Dick. I have a thick skin and didn't take your comments the wrong way. Right now, I have little spare time and just haven't been able to keep up the thread. Most of my risk aversion stems from having suffered some recent catastrophic losses that were not from futures trading, and trading with money I didn't want to lose. My trading is alright and getting better. I'll ditch the sim when I am not worried about losing the money, which should happen soon. I'll keep you all posted.

 

[Dick Lexic]

hey DL ...
that for those very, very subtle pearls of wisdom

Here are my thoughts regarding SIM trades etc…. I have been trading full-time for a little over 18mths with a live account (not a long time I know) and here’s some of what I have learnt so far.
I would say that learning the technical analysis was the first part in learning to trade. For me that part was quite time consuming as its alien and it takes time for you to train your eyes to read charts etc…. Plus I looked at and worked with quite a few methods until I found 1 or 2 that I was happy with. I went through around 65 trading books during that time. The next stage (which I am still working on) was and is developing methods which force me to consistently act in my best interest. This part was much more difficult than I had imagined and could only be appreciated once I had made real mistakes with real money. The trouble is, most people have trading demons (varying degrees and different demons depending upon the individual) but you don’t actually get to meet them until you are actually trading in the real world with real trading pressures. Some are very obvious, for example if you lose a significant % of your account in one day. If you continue to make that mistake, chances are you will not remain solvent. Others are far more subtle and require you to look at your trades and work out what’s working and what isn’t and why. Once you can see what you are dealing with, you can go about devising strategies which, with time, tenacity and practice, encourage you to institutively make better trading decisions around entry, stop location, timing and volatility factors, stop management, profit targets, position sizing, risk/reward etc…
Looking back it probably would have helped if I had done some sim trading to start with. That way I would have started the next stage with confidence in my technical skills and I would have had less to deal with at the same time. However, I just wanted to get on with it and either succeed or fail. My results have been up and down and extremely erratic during the first year (some big wins but some bigger losses). This year has seen month-end profitability through regular day trading not the odd swing-for-the-fence trade. Next goal is year-end profitability.

blimey 65 trading books! which one is at the top of the list then?

 

[Dick Lexic]

looks like 860 is the key at the mo...cash

 

[Dick Lexic]

is that a hanging man at 6000?

 

[reksa]

is that a hanging man at 6000?

Very impressive drawing using a mouse.

Yes we are just hanging around at the moment. Not sure if we have put in the high or the low.

 

[Splitlink]

looks like 860 is the key at the mo...cash

It's as good an entry point as anywhere. If you enter it will, either, go up or down. Once you have a view on the probable direction your question must be "Where do I get out if I am wrong?"

This is what it is all about, Dick.