Focus or Money Management?

[robster970]

Now, now, Rob . You can pin any price action on the action, or inaction, of these strong hands if you are so minded. Do you think, though, that these big, strong hitters are that interested in a few intraday points here and there, or are they playing a wider game?

Yes I do and because you and many others all trade the same way, they harvest your cheap/discounted liquidity so they can buy more Bentley Continentals to drive into their swimming pools.........

 

[counter_violent]

Yes I do and because you and many others all trade the same way, they harvest your cheap/discounted liquidity so they can buy more Bentley Continentals to drive into their swimming pools.........

That's going on my bucket list !

 

[lexcorp]

....

 

[barjon]

Yes I do and because you and many others all trade the same way, they harvest your cheap/discounted liquidity so they can buy more Bentley Continentals to drive into their swimming pools.........

Aye, so the theory goes

 

[robster970]

Aye, so the theory goes

The denial is strong in you Jon.......

 

[barjon]

The denial is strong in you Jon.......

Not really. I suppose ES is much more a speculative contest between participants than in shares (say) but, even then, there will be a pretty fair range of aims and objectives of those participants. It would be interesting to know how many fly weights (retail traders/weak hands) there are in the ring or whether it's just heavyweights slugging it out all the time. I doubt that my occasional spread bet finds its way to the real market, so there ain't much to harvest there .

 

[12WBT]

Got no food or beer in the fridge for the weekend.
Guess my Friday trades will be weak hands.:whistling

 

[darktone]

Not really. I suppose ES is much more a speculative contest between participants than in shares (say) but, even then, there will be a pretty fair range of aims and objectives of those participants. It would be interesting to know how many fly weights (retail traders/weak hands) there are in the ring or whether it's just heavyweights slugging it out all the time. I doubt that my occasional spread bet finds its way to the real market, so there ain't much to harvest there .

Imo, 'strong or weak hands' hasnt got much to do with size. Its more about the players ability to handle themselves in the market.
You can be a mino and be a strong hand. Could say that the smaller you trade relative to acc, the more 'unshakable' you become, assuming the psych is in place.

 

[Forexmospherian]

Many happy returns of the day Darktone ;-)

Agree with a lot you and Robster and many of the other guys say on these matters - although with regards to thread matter - I think so much more than just Focus or Money Management - just 2 components out of so many

Also what I reckon so many traders miss is the fact that retail trading and commercial / Institutional large money trading is so different - chalk and cheese.

For example on the chart example you used - buying whilst price dropping in a accumulation buy area for the larger players - we dont have to do that - we can still sell to the bottom - and any good trader can get catch interim tops and bottoms within 5 pips on most pairs - all down to timing and levels

So for me a 20 pip fall at say 5 lots is nice money - ie $1000 - but for a player its like 2 pence - not worth the hassle on their capital

Retail traders have so many advantages over the trade - we just follow - we don't have to accumulate or distrubute or mislead - we can follow and capitalise on every move when we are experienced and even cherry pick on what "bits" we take.

I am very much into "efficient trading" - not investment inefficient trading - I want my RR's of 3 + in 15 mins not 15 hrs or 15 days - so I can make more money

I am not going to be able to do this with a capital of $500 million - but on say $50k - I can ;-)

Enjoy you cake ;-)

Regards


F

 

[darktone]

Many happy returns of the day Darktone ;-)

Agree with a lot you and Robster and many of the other guys say on these matters - although with regards to thread matter - I think so much more than just Focus or Money Management - just 2 components out of so many

Also what I reckon so many traders miss is the fact that retail trading and commercial / Institutional large money trading is so different - chalk and cheese.

For example on the chart example you used - buying whilst price dropping in a accumulation buy area for the larger players - we dont have to do that - we can still sell to the bottom - and any good trader can get catch interim tops and bottoms within 5 pips on most pairs - all down to timing and levels

So for me a 20 pip fall at say 5 lots is nice money - ie $1000 - but for a player its like 2 pence - not worth the hassle on their capital

Retail traders have so many advantages over the trade - we just follow - we don't have to accumulate or distrubute or mislead - we can follow and capitalise on every move when we are experienced and even cherry pick on what "bits" we take.

I am very much into "efficient trading" - not investment inefficient trading - I want my RR's of 3 + in 15 mins not 15 hrs or 15 days - so I can make more money

I am not going to be able to do this with a capital of $500 million - but on say $50k - I can ;-)

Enjoy you cake ;-)

Regards


F

Cheers FX

Im one of those traders who hasnt as yet the skill to predict interim tops / bottoms. Lord knows ive given it some effort in my 14yrs.

As for RR, i think thats comfort blanket we like to use. The best Ive got is:-
risk = size x anything can happen

My job as currently see it is to follow the big picture/big money/strong hands or whatever other name you give the top tier.
Accumulate from those who panic / are ill sized / use stops etc, the vast majority.
Distribute back to those same traders when they think they know something.
When and where and how often I choose.

Its all good tho innit.

Cheers
D

 

[robster970]

For example on the chart example you used - buying whilst price dropping in a accumulation buy area for the larger players - we dont have to do that - we can still sell to the bottom - and any good trader can get catch interim tops and bottoms within 5 pips on most pairs - all down to timing and levels

One of the best perspectives I came across and still use is "What service are you providing as a market participant?"

Any good service provider is rewarded for providing a service in a supply chain that is efficient. So in the example you gave above, you are acting as a counter-party to the big guns who are buying into this area (therefore providing liquidity at their perception of a discounted price) and then unloading your position into a futile trader who is selling into a bottom where there is institutional demand (a very stupid thing to do).

You helped the institution in it's aim as a liquidity provider in this area and profited from a poorly prepared trader. You provided both with a service.

 

[darktone]

One of the best perspectives I came across and still use is "What service are you providing as a market participant?"

Ive only recently become seriously aware of that. Almost good enough to have tattooed somewhere. Get a bunch of tshirts printed up as a sideline!

 

[Forexmospherian]

One of the best perspectives I came across and still use is "What service are you providing as a market participant?"

Any good service provider is rewarded for providing a service in a supply chain that is efficient. So in the example you gave above, you are acting as a counter-party to the big guns who are buying into this area (therefore providing liquidity at their perception of a discounted price) and then unloading your position into a futile trader who is selling into a bottom where there is institutional demand (a very stupid thing to do).

You helped the institution in it's aim as a liquidity provider in this area and profited from a poorly prepared trader. You provided both with a service.

I suppose I judge myself like a good Lawyer - a total parasite or leech on the "game" - but if I am helping the market makers in the service they provide in the markets - so be it - as they are certainly helping me - well at least say 70% of the time

And then when I do get it wrong - hopefully i am helping other retail traders who have different parameters and target objectives to my own.

Regards


F

 

[SpreadDoctor]

some good posts from Robster. You may have heard this phrase often said about trading 'everyone gets what they want from the market'. It's superbly woolly and could mean anything to anyone. If you subconsciously want to lose money the market will gladly take it from you. If being chopped up in a range cures your boredom the market can give you that too. If you widen your original stop out when a trade is underwater, the market will attempt to take your new stop. If you trade goes 200 points into profit and then retraces 150 pips to make you feel disgusted you didn't close the majority of the position at 200 points - you guessed it, the market can give you that too.

 

[darktone]

some good posts from Robster. You may have heard this phrase often said about trading 'everyone gets what they want from the market'. It's superbly woolly and could mean anything to anyone. If you subconsciously want to lose money the market will gladly take it from you. If being chopped up in a range cures your boredom the market can give you that too. If you widen your original stop out when a trade is underwater, the market will attempt to take your new stop. If you trade goes 200 points into profit and then retraces 150 pips to make you feel disgusted you didn't close the majority of the position at 200 points - you guessed it, the market can give you that too.

The market cant make you feel disgusted. Thats the traders job . Market dont give s**t either way

 

[counter_violent]

some good posts from Robster. You may have heard this phrase often said about trading 'everyone gets what they want from the market'. It's superbly woolly and could mean anything to anyone. If you subconsciously want to lose money the market will gladly take it from you. If being chopped up in a range cures your boredom the market can give you that too. If you widen your original stop out when a trade is underwater, the market will attempt to take your new stop. If you trade goes 200 points into profit and then retraces 150 pips to make you feel disgusted you didn't close the majority of the position at 200 points - you guessed it, the market can give you that too.

Yes Victor, all true.

 

[counter_violent]

I hope you're not suggesting that trade selection might play a part in a successful trading strategy CV.....

Ref Post 72.

Yes it absolutely does when referenced to the price chart framework posted previously.
In that example we would be the dumb money if we traded short, cos price action and levels have spoken to us about the overall market condition.
So until some price action comes along that changes our bias, we just have to keep on keeping on.

Having said that, today I was short Dow and picked up a net 55 point move.
I've ignored the re-trace back up...and am short again.
Todays trades are counter trend, but they are supported in the sense that correlation is present across related instruments.

 

[counter_violent]

Dow still the weakest of my related instruments.

Ok so stops are @ B E and we are in the dead zone. So now we have 1hr 15m for the price of the Dow to make a southerly move....if it doesn't happen in this sort of timescale, then i'll just take what I can get. So she looked at me with her big brown eyes n said, you ain't seen nothing yet !

 

[Pat Riley]

This is an interesting topic. But only if you're into irony.

 

[enigmatics]

Id rather be positioned before and liquidate into the momentum.

I used to want to be able to do that, alas every trader's "time opportunity costs" are different for the capital they're using. I happen to be a swing trader and I love to identify those spots where the accumulation is taking place "under the creek" as Richard Wykoff would say. I let the market confirm for me that supply is removed and market makers are ready to initiate the mark up phase. I don't have the time to park my money for prolonged periods of time as the accumulation is taking place so that's why I do that.

Now, I focus on setups over longer time frames (daily chart or weekly chart) to make sure I have the strongest market participants behind the move. They will obviously take profit on the way up, but if a new cycle is correctly identified then dips will continue to be bought until targets are reached.

Large interests with large positions can't operate that way without it working against them. Hence buying in waves and selling into waves. My position is insignificant and the order flow of the new mark up phase is perfect for me take advantage. Like one of those fish hovering near a shark's mouth eating the leftovers.