arabianights
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Best Thread Arabian's *serious* Thread
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DashRiprock
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i dont necessarily think any market is "easier" to trade than any other - just different.
I mean - and I'm just about on the edge of my STIR know how here - just because they move "slowly" doesn't mean you just punt a long on and wait* - the nature of the trading is different.
For example, if you say ceteris paribus the underlying value is the same (a point arabian and me have both made on different threads), the market is disturbed by short term order and liquidity imbalances.
So, if you don't need to worry about being long or short, the trick is then fade these order size / liquidity moves, and equally importantly position yourself in such a position that you can get filled at the inside prices you need to make a profit. there are alot of people fighting to be on the end of the same flow.
*or from now, short. they do tend to trend very well.
kimo'sabby
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Anyone is welcome to have a go
Wot i said probably seems a touch absurd. The price action just seems very neat, for want of a better expression.
Martinghoul
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It's not neat. In fact, it's farkin' painful.
tough crowd!
I have a question:
Arab - how does the LIFFE pro-rata matching algo work exactly, and how does it affect your trading? I'm used to looking at FIFO markets and obviously if you were clever enough to offer a price first, you get it and it is fairly easy to understand etc. Would you rather LIFFE was FIFO?
Arab - how does the LIFFE pro-rata matching algo work exactly, and how does it affect your trading? I'm used to looking at FIFO markets and obviously if you were clever enough to offer a price first, you get it and it is fairly easy to understand etc. Would you rather LIFFE was FIFO?
DashRiprock
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DashRiprock
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arabian i hope you dont mind but i had idea for some people to get a bit more of an idea about order flow trading.
at the end of today some comapnies could be dropped from the FTSE 100.
What this means is that all of the "real money" funds that have a remit for FTSE tracker funds (like pension funds, unit trusts and things) will HAVE to sell their shares in the companies that are dropped. this is what a "price insensitive" trader is like, they might know its a bad time to sell but its not their money so they don't get a say*, they just have to do what they are contracted to in the t&c's of the prospectus.
so what you get is alot of people all trying to sell the same stocks (and buy the added ones), which of course makes the price go down because there is a volume / liquidity imbalance.
BUT, just because the company has been dropped from the index doesn't mean it is not the same company as it was yesterday. A few things may change like availability of capital raising but really its not that much. So, the fundamentals haven't changed, the price only falls cos of large selling, and after a while it goes back to the same valuation as it was before.
http://www2.standardandpoors.com/spf/pdf/index/070902pricechanges.pdf
now what this is like for shorter term futures traders -
1. "front running" would be selling the shares now before everyone else has done their selling. this works when you KNOW that big orders are coming and you get in before them (and later buy from them at lower price). This is very valuable info on futures markets and hard to get reliable.
2. fading the move once all of the price insensitive selling is done, because nothing has really changed in the fundamentals and it goes back to where it was before.
anyway i thought it would be nice for some of you with jobs and things to see the same idea of trading on a longer timeframe and maybe you can watch end of day or something
* actually I think the managers have a bit of discretion now, a bit like the fixes in FX but i dont know how much. and i dont trade stocks so this could all be vanished nowadays.
at the end of today some comapnies could be dropped from the FTSE 100.
What this means is that all of the "real money" funds that have a remit for FTSE tracker funds (like pension funds, unit trusts and things) will HAVE to sell their shares in the companies that are dropped. this is what a "price insensitive" trader is like, they might know its a bad time to sell but its not their money so they don't get a say*, they just have to do what they are contracted to in the t&c's of the prospectus.
so what you get is alot of people all trying to sell the same stocks (and buy the added ones), which of course makes the price go down because there is a volume / liquidity imbalance.
BUT, just because the company has been dropped from the index doesn't mean it is not the same company as it was yesterday. A few things may change like availability of capital raising but really its not that much. So, the fundamentals haven't changed, the price only falls cos of large selling, and after a while it goes back to the same valuation as it was before.
http://www2.standardandpoors.com/spf/pdf/index/070902pricechanges.pdf
now what this is like for shorter term futures traders -
1. "front running" would be selling the shares now before everyone else has done their selling. this works when you KNOW that big orders are coming and you get in before them (and later buy from them at lower price). This is very valuable info on futures markets and hard to get reliable.
2. fading the move once all of the price insensitive selling is done, because nothing has really changed in the fundamentals and it goes back to where it was before.
anyway i thought it would be nice for some of you with jobs and things to see the same idea of trading on a longer timeframe and maybe you can watch end of day or something
* actually I think the managers have a bit of discretion now, a bit like the fixes in FX but i dont know how much. and i dont trade stocks so this could all be vanished nowadays.
arabianights
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Would you like me to elaborate on Dash's answer? I can do as it's fairly incomplete
Anyway, coming tomorrow is another trading example, again a tiny part of what I do... sitting on front month bid and offers just before expiry!
DashRiprock
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Would you like me to elaborate on Dash's answer? I can do as it's fairly incomplete
Anyway, coming tomorrow is another trading example, again a tiny part of what I do... sitting on front month bid and offers just before expiry!
i would like you to elaborate too arabian
i just posted the pdf as prep
sorry I'll be quiet now
arabianights
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Just noticed this, sorry scose
Setup I have at home is:
4 screens for trading system
2 screens for reuters (news & charts)
1 "screen" (my laptop) for brokertalk (ITCM) although it is also used simultaneously for posting on t2w, porn, vandalising wikipedia... internet stuff basically. Oh, and of course, propchat as in my sig
In theory I can switch around all the screens and use them all for anything as have teamviewer installed... in practice I'm not going to do that!
However I am considering putting the brokertalk on the reuters pc...
(To clarify, the trading pc, reuters pc, and laptop are all seperate. The reuters PC is a piece of ****. The trading PC is a ridiculously high performance box that is sadly reduced to runnin Windows XP 64 bit, but it can do better... they were all sourced through work so I know this cause it still has the OEM Windows 7 stickers on it! The Graphics Card is specialist (eventually I intend to add more pixels!) so rubbish at 3d, but I did test out a flight simulator on the weekend and it can cope with it... that is very cool)
Setup I have at home is:
4 screens for trading system
2 screens for reuters (news & charts)
1 "screen" (my laptop) for brokertalk (ITCM) although it is also used simultaneously for posting on t2w, porn, vandalising wikipedia... internet stuff basically. Oh, and of course, propchat as in my sig
Picture please
arabianights
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Picture please
I'm only providing this cause I'm hoping to drive your cab, otherwise I was awaiting the wonderful pic I have planned for this weekend!*
Screens are turned off so you'll have to take my word for it... just took that now though.
*There will be female nudity
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arabianights
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Will answer tomorrow when sober
In the meantime, feel free to recommend my chatroom as a semi-regular lurker
Will answer tomorrow when sober
In the meantime, feel free to recommend my chatroom as a semi-regular lurker
Look, if I can ask the question whilst smashed surely you can have the decency to answer it? unbelievable
I'll get a nice signature:
Roll up Roll up for arab's chat room, minimum 10 sure-to-win trade ideas a day, see how the pro's trade, get free sh1t sterling trade ideas, learn the three simple methods the pro's use to coin it day after day, magic beans for all!
although i'm afraid reality would fall short, all they'd get to see was how depraved most traders are, and that your trading style mostly involves scratching one lots.....
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