Bet Both Ways??

[strawb]

I RECENTLY HAD A LETTER THROUGH THE POST CLAIMING TO HAVE INFO ON A SYSTEM ,MAKE CASH WHICH EVER WAY IT GOE`S, ANYONE GOT ANY VEIWS ???

 

[damianoakley]

Hi Strawb,

Could be some sort of arbitrage system.....

Out of curiousity, who was the letter from? The company might already be well known to T2W members and then you might be able to get some insight into whether they are good or bad.

I have to say, though, that if it's an unsolicited mailshot then it's probably one for the bin.....


Thanks

Damian

 

[strawb]

Fanx For Reply,
I Bought A System Last Year Called Pentatrade,i Am Glad I Did,i Paid Over £2k For It!and Its Got Me Into Trading Which I Never New Exsisted Before,its A Step By Spep Idiots Guide. The Last Little Idea Via Streetwise Marketing,is A System Which Sounds The Same But Claims To Bet Both Ways?? Called "illuminati"

 

[Trader333]

I seem to remember that this approach is based on swings in price in both directions and taking a trade at a point on each of the swing limits. I am sure it is great when markets are volatile or are trading within a range which (as a rule of thumb) is around 70% of the time. However, if the market starts trending you will lose money.


Paul

 

[strawb]

Hi Paul.

Iwas Thinking That You Would Bet With Two Spread Co`s With A Tight Stop Each Way? On Announcement When The Dow Moves You Would Be Covered Either Way?

 

[Trader333]

Can you give an example at I cannot see how you make your actual profit if that is the case ?


Paul

 

[trader_dante]

Iwas Thinking That You Would Bet With Two Spread Co`s With A Tight Stop Each Way? On Announcement When The Dow Moves You Would Be Covered Either Way?

I'm afraid this is flawed thinking. You are not the first person to consider this and you won't be the last.

All that will happen is that if there is a sharp reaction, one stop will suffer serious slippage, the time the other order is entered on the right side of the market, most pros will probably have faded the news and it will turn into a loss before you can close out.

One of the many mistakes a new trader makes is trying to trade the news.

 

[BSD]

Err, agreed, Dante.

Or am I missing sthg...

Being simultaneously long and short the same instrument...

in this Universe at least...

is the same...

as being flat...

minus the cost of doing business...

ie, altruistic renumeration from you, for your friendly broker always happy to oblige whatsoever whims may need satisfying, and at whatever time, come to that.

The perpetuum mobile may have it's home base somewhere, unfortunately just not here.

 

[strawb]

on the principle that the dow will react sharply on an announcment.,up or down.probably 90 points.with a stop of 15/20 points either way you gain more than lose???

 

[Trader333]

Well I suggest you try it then come back and let us know how you did because in my view you will lose money trying to do this.


Paul

 

[trader_dante]

on the principle that the dow will react sharply on an announcment.,up or down.probably 90 points.with a stop of 15/20 points either way you gain more than lose???

Strawb,

Consider this.

You buy the Dow at 13,000 (lets use that number for simplicity)

You instantly sell it at 12,995 (assuming a 5pt spread)

Its now one minute before the news but the Dow is fairly volatile so you still have to give your stop some room. Lets assume you can get it as tight as 15 points either way.

So your long position at 13,000 has a stop of 12,985.

Your short position at 12,995 has a stop of 13,010.

You sit back and wait for the news.

The news comes out and the market jumps 60 points immediately. It's now bid 13,055 and offered 13,060.

Your short position is filled at 13,060. This is down to slippage. If the market gaps through your stop you get the next price. So your short position is out with a net loss of 65 points.

At this point your winning position is up 55. You have a net loss of 10 full points.

At this point you would have been better off getting in AFTER you saw which way it is going.

Then take in to account that most companies don't fill your orders instantly. I have many SB brokers and some are faster than others. Still, you should allow at least 10 - 15 seconds for it to appear before you can close it out. In that time it could have gone up the 90 and already be reversing or stall at the 60 and be falling, increasing your already losing position.

Lets put this aside and assume it appears in your account INSTANTLY. So you are now in the market long (with your net loss of 10 points remember). Lets say it goes up the full 90 which is rare and won't happen every time.

So the spread now becomes 13,085 - 13,090. You close and you make 85 points!

Excellent. Now minus your loss of 65 and you have come out with only 20 points and to make this small return, conditions still have to be exactly right.

What will happen if it goes up 60 and then turns and falls 20 before it appears in your account and you can close. You lose 30 full points.

What if it only moves 30 points and then stalls? You are 10 points out as explained above.

Have you ever watched the Dow during news time?

Like all things, if you have an idea try it on demo. But don't expect much. I can tell you with a huge degree of certainty it will not work.

 

[fibonelli]

One of the IG employees told us at a seminar that trading the news eg NFP is like flipping a coin.

 

[strawb]

hi mark, i dont really uderstand all your answer(slippage)??.but its obviously credible that you know ya stuff!! as i said earlier, i got a letter asking for 2k offering a system which gave a secret of betting both ways. but.
A. i aint got £2k
B. if i had it ,I aint gonna gamble it on that.
c. if its true there must be someone that knows the secret"
hence the fishing around for responses. appreciate your advice cheers TERRY

 

[trader_dante]

hi mark, i dont really uderstand all your answer(slippage)??

Terry,

Slippage is simply a difference between the ESTIMATED price you get in at and the ACTUAL amount you get in at.

Take a commodity like Wheat which is now closed. Lets say it closed at 900. If I put in an order to buy it at 901 when it next opens and it actually opens at 908 then I get the open price which is the first available price to trade at.

So I have suffered 7 points slippage.

Tom

 

[guyko21]

Hi there.

This is Guy Cohen, the author of Illuminati Trader. I posted a message on another thread, which I'll copy onto this one too as the posts here seem to have missed the point of how you can trade the news with safety and in an opportunistic fashion.

I see that everyone here is talking about spread betting both ways with a stop on each side in the even that one side loses. The winning side is then permitted to ride, presumably.

That's not what Illuminati Trader is about. It's about highlighted individual stocks that look primed for a move either way and finding low priced options to enable us to take advantage of that situation.

The software is pretty sophisticated and I'm implementing major additions piece by piece. By trading well priced, good value options, even if volatilities level off or decline you're pretty well protected. The worst that can happen is if the stock doesn't move at all, but doing it my way means you still don't lose too much.

Here's the other post I put up a few days ago - this gives the background of why I created the application (for me) and what makes it unique.

=======

Hi there

This is Guy. I don't make a habit of going on message boards but your post was somehow on Google and I was intrigued!

The answer to your question is that I created Illuminati Trader at the beginning of 2006 in anticipation of great uncertainty and volatility in the markets.

The method is based upon trading volatility, not direction. I'm an options specialist and have traded volatility successfully for many years. My methods originate from my academic studies, my software applications, and my hard won battles in trading!

What I'm looking for are stocks that (a) have a news announcement coming but where the outcome is not known, (b) are displaying consolidating chart patterns, (c) have reasonably priced options premiums which I calculate in a number of ways with varying levels of sophistication. Now that sounds straightforward, but without the right set of tools, just finding one candidate stock could literally take days.

I created the brand new software so I could take advantage of the increasing volatility that I was anticipating. All this forms the basis of Illuminati Trader. With this tool I can find candidate opportunities with ease and within minutes.

Part of the product features a filter for flag/consolidation patterns, which is excellent and even if my traders want to take it slow with the options strategies, they can simply trade the flag patterns which has been particularly well received.

You'll see that my publisher is the FT and clients licensing software from me include NYSE Euronext. The trading figures in the marketing pieces are my own audited figures which were required particularly in the US.

An obvious question is "why license such a valuable tool?" A number of reasons. First, two different traders will find different opportunities appealing, therefore there are no liquidity issues with the application of the method. Ultimately I use the software application and it continues to be improved for both mine and my students benefit.

I hope this addresses your questions adequately. Unlike some out there I don't put myself on a pedestal and I'm pretty approachable within reason. I also place a lot of value on support and have a full time team based in the US.

You can never underestimate the feeling of reading an unsolicited email from someone writing in to thank you for a great trade they've made or how you've improved their life in some way. Because of this I'll certainly release more training products in the near future, especially now I know how to use the presentation software!

If you want to contact me directly I'll be happy to answer your questions. Email me on [email protected].

All the best


Guy

 

[Rhody Trader]

That's not what Illuminati Trader is about. It's about highlighted individual stocks that look primed for a move either way and finding low priced options to enable us to take advantage of that situation.

In other words, you look for probable break-out stocks with low priced options to put on straddle type positions.