Just lost £150 on IGIndex

A newbie up against locals running stops, squeezing technical levels and spoofing size on the ladder is going to be figuratively raped.
 
Thanks for the clarification...interesting stuff...have you found this to be an edge based on substantial empirical evidence or is it just a hunch based on anecdotal evidence/observations?

Thanks.

Templar42 said:
That was broadly what I meant, yes. It's still an edge, but it isn't particularly esoteric or dependent on breathtakingly complex analysis. I had highly traded FTSE 100 equities in mind, but doubtless it would work for prominent US stocks too. One suspects that the depth of the order book would prevent institutions from making significant profits in a short space of time in this way, since the percentage gains aimed for are small.
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rawrschach said:
A newbie up against locals running stops, squeezing technical levels and spoofing size on the ladder is going to be figuratively raped.
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Is that possible against spread betters? I wasn't aware that my orders would be visible to anyone other than the computer system at the dealer! Are you implying also that Level 2 data is necessary to day trade?
 
Now please, explain to me why it is more 'likely' for a move in an equity to continue as opposed to a future/bond/fx?


Also explain to me how you have an edge because you can get in and out quickly (just the same as every other local and retail daytrader on the planet).
 
Templar42 said:
Is that possible against spread betters? I wasn't aware that my orders would be visible to anyone other than the computer system at the dealer! Are you implying also that Level 2 data is necessary to day trade?
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Nobody has to 'see' your orders, you can't see stops (unless you're a broker). Stops tend to accumulate around particular areas, especially technical patterns. Traders know this. They figure out where there's a high probability for a cluster of stops and they try to run them.

Spreadbetting is irrelevant. You have the same psychology as all the other retailers out there, your stops will be in the same place, the market will go there and stop you out. If the bucket shop knows your stops are there all the more reason to run some stops and make some cheap money.
 
rawrschach said:
Now please, explain to me why it is more 'likely' for a move in an equity to continue as opposed to a future/bond/fx?


Also explain to me how you have an edge because you can get in and out quickly (just the same as every other local and retail daytrader on the planet).
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I've no idea about the comparative trending behaviour of these assets, although I'd be interested to read research on it. Choice of asset is probably rather personal and therefore subjective, when it comes down to it.

I didn't suggest an edge over other retail daytraders. I suggested an edge in the sense of a profit-making opportunity largely unavailable to institutions, and thus not subject to the same competition / algorithms designed by my old friends from college!
 
rawrschach said:
er then why did you tell chaseflampaster that you agreed with him?
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I think perhaps we simply used 'edge' to mean different things; I was using it rather imprecisely to mean an advantage or opportunity compared to another class of traders, namely institutions.

It does raise the zero-sum question. If the equity markets are not primarily driven by daytrading, can't most daytraders theoretically win, since they exploit liquidity / opportunities created by non-daytraders? I'm not sure of the answer to this, but it's an interesting question.
 
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No because within the subset of daytraders, just like the subset of footballers, rugby players, chess players etc etc, a tiny minority will have the disproportionate talent and/or luck to destroy everyone else.
 
rawrschach said:
No because within the subset of daytraders, just like the subset of footballers, rugby players, chess players etc etc, a tiny minority will have the disproportionate talent and/or luck to destroy everyone else.
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I still don't understand why it would be remotely in my rational self-interest to destroy other day traders!
 
It's also not reasonable to say that the markets are not drive by daytrading. Intraday the market will have its own fluctuations and trends. Driven entirely by daytraders.

If you have the ability/need to put some size on and you wait for the market to get to an area where you know a lot of retailers will be buying you 1) buy a bit to show them that there's buying. 2) take out a bar high to get them long. 3) put size on the offer and start hitting some bids, stacking your own bids below the low 4) push the market below the low and watch as retailers' stops are taken out and your buy orders are filled and the market proceeds to rally sans the retailers. You get a ****ing awesome price for yourself to boot.


RE bucket shop, 'tin foil hat'? Really? I know that if I had a bucket shop and knew (because you all so kindly tell me) that there were a bunch of stops 4 ticks away you can bet your ass I'm offering down the market to make money on the stops. If I would do it there sure as hell are other people out there that would. Or did you think they gave you a half a tick spread out of their charitable nature?
 
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rawrschach said:
hey

hey you

keep arguing with me, im bored
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Sorry I'm going out for a Thai dinner (for which Oxford is surprisingly good), or I'd continue the discussion. I really appreciate the insight into the methodology for running stops (food for thought), although I'm still not entirely sure that your points easily apply to individual equity spreadbets.
 
your spreadbets are based on charts which are based on the actual markets. your stops are in the same places - when stops are run in the real market you will get stopped out at your broker because they get their data from the actual market.

have a nice dinner!
 
chaselancaster said:
Before any of that make sure you know what an edge is and how to prove to yourself whether it is an edge or is not over a large test sample.

It sounds to me from your questions that you need to do a lot of reading/research and really shouldn't be doing any trading yet.

Best of Luck.
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Thanks for the tips. I'm a little bit wary of reading anything I find because for example I know the going rate for outsourcing a blog article is $5-$35 per post, so I can't imagine that a decent trader is going to spend time blogging. The same goes with books, and seminars. Where can I find good solid sources of information?

Templar42 said:
Have you looked at the 'boring' world of equities, or are you trading forex and indices?
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I tried a little of everything. Actually I've done relatively well in equities (almost made more than I lost) and they seem to be more predictable and stable.

rawrschach said:
your spreadbets are based on charts which are based on the actual markets. your stops are in the same places - when stops are run in the real market you will get stopped out at your broker because they get their data from the actual market.
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Sorry, would you mind explaining to a noob what you mean by this? Are you saying that other people's stops will influence the triggering of my stops?
 
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yes. other peoples' stops will affect the market price which could trigger your own stops.

read the books i told you to.
 
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