No B.S. Day Trading

"So the market stopped here last week. So what. Who says it's going to do it again? Are you better off stepping up and blindly buying it to see if the support holds or are you better off trying to get a feel for the short-term momentum by watching the current bids and offers? By watching how much is trading right now? Because right now is what matters."

watchings good, cheaper to sit the right side

TA works because size makes it work for them....... its time ......its opportunity

how long it works for at the level is of more interest imho
 
I am probably out of my depth, but what the hell. I don't think any technical trader assumes that the market is influenced by TA (to any great extent). I don't think TA is supposed to influence markets. It FOLLOWS markets - closely - that's what it's designed to do. There are those that Make Markets, those that influence markets and those that follow the markets. But none of it is hidden - it's all reflected in the price and the charts and TA is just one way of assimilating it. The difference is a scalper has a clear idea of where the short term price is headed and tries to trade almost ahead of the action (sometimes influencing it) whereas that is often the worst folly of the technical trader i.e. trying to guess/predict ahead of time. If a scalper waits to see where the price is going he is already too late but that is exactly what a technical trader must do. A scalper can still get burned. All in all, I think it's just a different way to trade, not a 'better' way. It's individual preference dictated only by personality and of course, size of wallet. And then there's Warren Buffet... We're all traders of the 'apples' but Warren Buffet... well he owns the farm! (or a big part of it and probably a peice of the marketplace ... and the town... and...) :D

p.s. The only sure way? Manipulation. I'm sure if all the members at T2W donated a few quid to a kitty we could go out and manipulate a few stocks at a nice profit - especially on the AIM or Fledgling... easy money? Even manipulation is not an absolute, but it's as close as. Should I start the collection at £10,000 a head? You'd make it back within a week + profit, guaranteed... :LOL: T2W as an institution could be quite a force to reckon with on any exchange... :LOL:
 
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SFL Trader, why don't you upgrade your guide to a full book and then publish it in Amazon? Excluding Christopher Farrell's book "Day Trade Online", there is little info about scalping with the order book, and Chris' book seems somewhat basic (yet interesting!) to me.
 
70%-80% of the daily volume on the NYSE consists of algo computers that trade in milliseconds. How is it possible to read that tape? IMHO tape reading is useless in today's computer dominated world unless you are a floor trader in the pit. Instead of trying to read a computer painted tape, IMHO it is probably better to listen to a sqauwk box and you can hear exactly what the momentum is like in the pit.
 
Agreed Bullish, its worthless to read the Tape, there are false orders put in all the time and it will become mental game and you WILL lose money trading this way.
 
Originally Posted by alphamaster22
What about John Arnold of Centaurus Energy, Youngest self-made billionaire in the world, trades technicals. How about James Simons of RenTech, net worth $6Billion, trades technicals. How about D.E.Shaw they trade technicals. Oh wait what about Steven Cohen of SAC Capital, net worth $8 Billion, trades technicals. John Henry trades technicals and plenty of other Forbes 500 members do.
FLIP SIDE George Soros, Warren Buffet, etc... trade fundamentals. PROOF IS THEY BOTH CAN WORK VERY WELL!
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Actually, James Simons of RenTech does not use technicals. He uses algo computers to trade. RenTech is a perfect example of what I was referring to in my last post. RenTech trades 10s of thousands of futures contracts daily with automated algo computers. If I remember correctly, RenTech has one guy from Wallstreet and the rest of the employees are primarily PHD math grads. RenTech doesn't care about tape reading or technicals. If you are trading futures, these are the type of institutional players you are trading with. Futhermore, DE Shaw is very similar to RenTech. They also use automated algo computers.

Again, todays market is primarily dominated by automated algo computers.

In other words, IMHO tape reading was useful years ago before the computer took over all of the volume.

Oh, just found the below quote on Wikipedia.

For over two decades, Simons' Renaissance Technologies hedge fund, which trades in markets around the world, has employed complex mathematical models to analyze and execute trades--many of them automated. Renaissance uses computer-based models to predict price changes in easily-traded financial instruments. These models are based on analyzing as much data as can be gathered, then looking for non-random movements to make predictions.[4]

Renaissance employs many specialists with non-financial backgrounds, including mathematicians, physicists, astrophysicists and statisticians. About a third of the more than 200 employees at the East Setauket office have Ph.D's.[4]
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In other words, IMHO tape reading was useful years ago before the computer took over all of the volume.
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Are all of these computers trading in the same direction at the same time ? Could they be trading against each other and if so how would this impact the market ?


Paul
 
The SEC just yesterday has taken a step to stop what is referred to as HFT flash orders. We will see if they will actually enforce anything. I am not holding my breath though.

The problem is that the new liquidity providers are computers not people. The NYSE rebates the computer liquidity providers 1/4 of a cent per share (I think that I remember this rebate number correctly.) There are automated algo computers that are simply getting in and out of the market in milliseconds just to capture this rebate. In other words, this specific type of algo doesn't care about making any money on the trade they just want the rebate. Hence, this algo is happy to get into XYZ stock at $20 and get out at $20. They pay $0 commissions and get paid a rebate for a round trip. This is my understanding of this type of algo.
 
-- Darth Trader -- said:
SFL Trader, why don't you upgrade your guide to a full book and then publish it in Amazon? Excluding Christopher Farrell's book "Day Trade Online", there is little info about scalping with the order book, and Chris' book seems somewhat basic (yet interesting!) to me.
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Because Amazon keeps 60%.

And there's no point in adding 100 pages of fluff or war stories. You can get that anywhere.
 
greenweech101 said:
Agreed Bullish, its worthless to read the Tape, there are false orders put in all the time and it will become mental game and you WILL lose money trading this way.
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If it was worthless to read the tape, scalpers wouldn't do it. It's worthless to someone who doesn't know what they are seeing.

In regards to the Rentech/algorithm thing...

Yes. Algorithms exist. Yes. A lot of money is put into play with computers. Do they dominate the market? Personally, I don't think so. If the only thing going was algorithms which played for one point profits (or breakeven to get the rebates), the market would never get out of a 5 tick range. And it obviously does.

500 point runs in the Dow aren't caused by algorithms trying to net a point. What's more, those algorithms lose money in those moves. Everyone seems to forget this. You can play for rebates or ticks all you want but at some point everyone and everything (programs included) gives back dollars while chasing nickels. It's inevitable. A big fund might be able to ride this out if it picks up a LOT of nickels.

Can you? Do you even have an algorithm? Would you know where to begin?

Momentum trades will always be there. Panic will always be there. Short-term chain reactions will always be there. Institutional players who don't trade algorithms will always be there. It's a matter of sitting back and waiting for the right setup. If you understand the game...and can adapt to changes...there are profits to be made by watching the order flow.

And maybe there are profits to be made by throwing darts if you exercise the right risk parameters. I would much prefer it over reading volume but I just haven't figured out how to do it yet.
 
"Do they dominate the market? Personally, I don't think so."

You can believe whatever you want the numbers do not lie.

You said in your first post, "Don't waste any more money or time on technical analysis crap. It doesn't work."

In response to this I will quote you. - "It's worthless to someone who doesn't know what they are seeing."

"Momentum trades will always be there. Panic will always be there. Short-term chain reactions will always be there."

Agreed. It is demonstrated in the charts. I believe floor traders can successfully use and do use methods similar to yours, however, I do not think it is anywhere close to the same thing sitting behind computer at home reading the tape.
 
scalpers bread and butter

scalping is all about the rr ratio which you dont et in othe types of trading i think.

if a scalper looks at a chart he misses out his game.

yuo can find my youtube page to see a scalp trade based on two ticks stop loss.
BTW i could know i am at the daily loow on TT.

YouTube - eliaun's Channel


Agreed. It is demonstrated in the charts. I believe floor traders can successfully use and do use methods similar to yours, however, I do not think it is anywhere close to the same thing sitting behind computer at home reading the tape.[/QUOTE]
 
SFL Trader said:
If the only thing going was algorithms which played for one point profits (or breakeven to get the rebates), the market would never get out of a 5 tick range.
.
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I don't see how that could be true unless there was only one computer and no humans involved.
 
Bullishbear said:
"Do they dominate the market? Personally, I don't think so."

You can believe whatever you want the numbers do not lie.

You said in your first post, "Don't waste any more money or time on technical analysis crap. It doesn't work."

In response to this I will quote you. - "It's worthless to someone who doesn't know what they are seeing."

"Momentum trades will always be there. Panic will always be there. Short-term chain reactions will always be there."

Agreed. It is demonstrated in the charts. I believe floor traders can successfully use and do use methods similar to yours, however, I do not think it is anywhere close to the same thing sitting behind computer at home reading the tape.
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Numbers lie all the time. That's someone's estimate and estimates are usually wrong but for argument's sake, I'll go with it. The numbers on the DOM lie. The time and sales does not. This is one of the keys. Orders flashing do not mean as much as size trading. So if 5000 is trading here, 5000 is trading here regardless of whether it's a human or computer trading. Either one is trying to make a profit. So what's the most likely scenario to follow based on this information?

I've said before that if TA works for you, more power to you. But I've never met a single professional trader who's consistently made money over the course of years who's primary method of trading involves TA. And you can talk about these huge funds and their PhDs and how much money they make on algos and technicals all you want but unless you're going to work for one of them, how do you use that information? A guy sitting at home with a small account who actually has to pay retail commission rates cannot apply the same strategies. Should he be aware that algos exist? Yes. But he should also be aware that the flippers of the world exist and at times they have a very big impact on market direction.

And while we're on the topic, I'm going to point out something else. In all these conversations about algorithms, I've not heard anyone suggest a way to take advantage of that knowledge by using TA. I mean, if a computer is playing for break-even to capture the rebate, how in the hell do you determine direction by looking at a chart or a stochastic or moving averages?

"It's demonstrat-ed in the charts". Exactly. Past tense. By the time you see it, it's already happened. And every floor trader has a computer in front of him now.

I checked out that article you linked to on "toxic trading". Interesting that at the end of the article, the authors "urge institutional investors to not walk away from the screen after they have entered an algo order" and they suggest that "institutions need to re-learn how to watch the tape and take advantage of, or work around, high-frequency traders".

:eek:
 
I'd chime in and say TA means nothing for day trading. I know what works for me and only 2 things I look for in the market. (make it 3 if you add news)The simplier you keep it the more successful you trade. The problem is most people overtrade thanks to TA. I hit my 3 - 4 days trades a week each averaging 30 - 50 points.

Good luck to the algo geeks and TA slaves:LOL:
 
teewoods said:
I'd chime in and say TA means nothing for day trading. I know what works for me and only 2 things I look for in the market. (make it 3 if you add news)The simplier you keep it the more successful you trade. The problem is most people overtrade thanks to TA. I hit my 3 - 4 days trades a week each averaging 30 - 50 points.

Good luck to the algo geeks and TA slaves:LOL:
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Could you explain what do you look at? Open positions in options maybe?
 
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