No Charts in the banks....

[charliechan]

one thing that always raises a question with me is this......

in my trading career i have been (but not necessarily worked) on some of the largest trading floors in the City.

only once or twice did i see a chart on anyones screens

so if all the (retail) traders here want to run with the big money, surely it makes good sense to apply the same or similar methods (ie non charting based ones) ?

it would also suggest the idea of ' a scientifically proven plan/method' would be a great deal more difficult to implement i think...?

does anyone here think that dumping the charts and just watching the numbers would help give a better feel for whats going on? sure it would perhaps take a longer time to develop the intuition, but thats the price.

i do use charts to a degree - im just playing devils advocate here......

 

[wasp]

In my time of trying everything possible I did try watching price alone and I never lost money so quickly.

I can appreciate your point and maybe if you can learn to trade without a chart its all good but to me, it was the hardest thing I'd tried. Maybe I was just bad at it though!

 

[dbphoenix]

one thing that always raises a question with me is this......

in my trading career i have been (but not necessarily worked) on some of the largest trading floors in the City.

only once or twice did i see a chart on anyones screens

so if all the (retail) traders here want to run with the big money, surely it makes good sense to apply the same or similar methods (ie non charting based ones) ?

it would also suggest the idea of ' a scientifically proven plan/method' would be a great deal more difficult to implement i think...?

does anyone here think that dumping the charts and just watching the numbers would help give a better feel for whats going on? sure it would perhaps take a longer time to develop the intuition, but thats the price.

i do use charts to a degree - im just playing devils advocate here......

You're talking about classic tape reading (not what is currently thought of as "tape reading"). And, yes, just watching the numbers can give you a better feel for what's going on, particularly with regard to variations in pace.

There are interim steps to take if you can't give up your charts. One is to convert to point and figure, which is pretty much how notes were taken back in the day.

 

[charliechan]

thanks for the inputs...

perhaps somethings i should mention though....

these guys dont really give a damn about the exact price they pay up. their orders were (are) pretty big, so split fills were a matter of course. if they want in, they dont muck about - they get in all they can. (they aint playing for ticks like the arcades are)

most of the positions are spreads - long one market, short a correlated market.

some of these positions are held for months maybe years in some cases.

it seems that an idea is cooked up - perhaps based on funnymentals, then the position is managed day by day - adding or easing off according to events/price levels, customer order flow and other related opportunity

perhaps i should just have asked directly!!!


still, i dont think i would have the balls to do this without my charts as a crutch.

interesting these girls & boys dont feel the need for such toys......

dbp - tape reading - i seem to recall reading jessie livermoore reading the tape despite also holding positions for some period. i guess he/they never had charts in the brokers office either (not intraday ones anyway!)

 

[charliechan]

interesting... can you elaborate charlie?

if they arent using charts to make their decisions what are they using? also... would be interesting to know what percentage of vol turnover they represent...

cheers

see above posts -a lot of these guys were brokers/trading opm in otc markets (cash bonds, fx, commodities etc), but it did vary from floor to floor. a lot of the stuff was spreads between the futures & cash, so i guess they get a feel for the levels and trade accordingly - something i found odd as i thought these arb opportunities didnt last too long.

hedging they say represents about 20% of futures volume (speculation the other 80%)

i wish i could elaborate more! thats why i started the thread to see if anyone else knew!!

 

[Trader333]

so if all the (retail) traders here want to run with the big money, surely it makes good sense to apply the same or similar methods (ie non charting based ones) ?

In my view I dont think it does make sense trying to copy the big money and in fact it is completely counter productive to do so. The big money goes for very low volatility (low risk) trades and it is not possible for an individual trader to make a living by copying this strategy. The individual trader needs to trade instruments that move and will not be traded by the big money.

does anyone here think that dumping the charts and just watching the numbers would help give a better feel for whats going on? sure it would perhaps take a longer time to develop the intuition, but thats the price.

I agree with this, I have stopped using charts almost at all and just watch price movements across multiple instruments but I do use some signals to let me know certain things and have found this to be quite a good development activity.


Paul

 

[dbphoenix]

dbp - tape reading - i seem to recall reading jessie livermoore reading the tape despite also holding positions for some period. i guess he/they never had charts in the brokers office either (not intraday ones anyway!)

No, no charts. But they became very attuned to support, resistance, and pace. Which is where P&F came into it, albeit a primitive form (which, to me, is more useful than what P&F has become). They also had far fewer issues to look at (dozens, not thousands).

Charts have become the electronic equivalent of chicken bones, newts' eyes, and bats' wings, which is too bad, because an impression is given of vast complexity when charts really are -- or ought to be -- very simple (I still don't understand why anyone would need ADX or some similar indicator to tell them whether or not price is in a trend or not).

 

[wasp]

The image that springs to mind is the scene in 'rogue trader' where Leeson is standing with a colleague watching a huge digital screen with the Nikkei price dropping down and down and Leeson saying he was gonna add at the bottom and ride it all the way back up, the next day being the earthquake and the price falling through the floor...

In principal I can see how it'd be done but it would certainly require more skill than chart watching I'd imagine.

 

[dbphoenix]

In principal I can see how it'd be done but it would certainly require more skill than chart watching I'd imagine.

Not more; just different.

For example, if one is going to trade off indicators, why bother plotting price?

 

[wasp]

Not more; just different.

For example, if one is going to trade off indicators, why bother plotting price?

Very true!

 

[SOCRATES]

The image that springs to mind is the scene in 'rogue trader' where Leeson is standing with a colleague watching a huge digital screen with the Nikkei price dropping down and down and Leeson saying he was gonna add at the bottom and ride it all the way back up, the next day being the earthquake and the price falling through the floor...

In principal I can see how it'd be done but it would certainly require more skill than chart watching I'd imagine.

Wrong ! On the day of the earthquaque....the price actually went up ...and continued to go up for three days following it....this must have persuaded Leeson that it was the bottom....but it wasn't and on the fourth day it continued to plummet.

 

[wasp]

Wrong ! On the day of the earthquaque....the price actually went up ...and continued to go up for three days following it....this must have persuaded Leeson that it was the bottom....but it wasn't and on the fourth day it continued to plummet.

Cheers Socrates, my mistake but it was the principal of the method I was referring to, the finer details of the plot not being as important.

 

[SOCRATES]

Cheers Socrates, my mistake but it was the principal of the method I was referring to, the finer details of the plot not being as important.

Yes, I tell you from memory as I have in my archives all the newpaper reports of the case as they unfolded from day one, so what I am telling you is not related to the film, but to newpaper reports at the time.

He was purported to have gone long on a falling market in the assumption that the three day recovery signalled the absolute bottom, which tragically, it was not.

 

[rols]

one thing that always raises a question with me is this......

in my trading career i have been (but not necessarily worked) on some of the largest trading floors in the City.

only once or twice did i see a chart on anyones screens

so if all the (retail) traders here want to run with the big money, surely it makes good sense to apply the same or similar methods (ie non charting based ones) ?

it would also suggest the idea of ' a scientifically proven plan/method' would be a great deal more difficult to implement i think...?

does anyone here think that dumping the charts and just watching the numbers would help give a better feel for whats going on? sure it would perhaps take a longer time to develop the intuition, but thats the price.

i do use charts to a degree - im just playing devils advocate here......

You telling me that they don't wait for EMA5 to cross EMA12? :-0
Get out of here!

 

[sandpiper]

one thing that always raises a question with me is this......

in my trading career i have been (but not necessarily worked) on some of the largest trading floors in the City.

only once or twice did i see a chart on anyones screens

so if all the (retail) traders here want to run with the big money, surely it makes good sense to apply the same or similar methods (ie non charting based ones) ?

it would also suggest the idea of ' a scientifically proven plan/method' would be a great deal more difficult to implement i think...?

does anyone here think that dumping the charts and just watching the numbers would help give a better feel for whats going on? sure it would perhaps take a longer time to develop the intuition, but thats the price.

i do use charts to a degree - im just playing devils advocate here......

Depends on who, what, where, I would have thought....

On the equities sell-side I've never seen a trader (as in execution) without a chart/news/level II on his/her screen. Sales-traders on the other hand rarely use charts, except for comparative/spread type work. Most of their trade recommendations are based on models of some sort or another. Repo/SBL desks are really just trading spreads/margins so charts dont come into it.

The same could be probably be said of those trading structured equity products/derivatives since most of that is model based, i.e. no point in charts.

GJ has covered all this in the past... but FX is so huge that it's impossible to generalise. Group Treasury swap/mm desks are mostly working on a spread between bank/corporate and market. Corporate desks make their money on the margin between treasury and the corporate client on forward outrights/swaps/spot. Options guys are mostly trading volatility. Having said all that, I would be surprised if you found many spot desks where the traders don't have charts up.... what they do with them is a different matter.

Actually I believe IB's do very little pure 'speculation' these days compared to what they were doing in the 90's and certainly when compared with the funds... most of their income is derived from margins or spreads... high volume, high value, low risk type stuff. For the most part they are only the 'big money' by proxy.... as such, I don't believe it makes sense to apply the same or similar methods.... even if we could...

 

[daytradingUK]

Many people use indicators as instructional aids to help with confirmations - which is OK, but a large majority think watching the indicators cross over means it is a dead cert - letting the indicators dictate their trading! This is quite worrying as little things can throw most indicators.

I have used indicators (and still do to a degree) but also use candles, volume, etc... to aid in decisions.

Another important difference between retail users and the pros is the 'Chinese Walls' syndrome - they inevitably know more than we do... if you don't believe me then watch the change in a stock price before an important announcement or similar. You can never beat the big boys at their game or even hope to fully compete.

I have worked with professional traders and they all new a hell of a lot more about the stocks they were watching, got very good tips and generally were way ahead of anything joe public could hope to keep track of. They often have analysts running programs to scan the markets for high volumes and the like (I know I wrote one) so they can 'see' which way the wind is blowing!

Despite having worked said software my trading ability is a hell of a lot less.

 

[wasp]

Socrates, why did you pull your post re: 7 factors of reading price alone without a chart? I was just coming back to read that and was hoping more could progress from it on this thread.

 

[SOCRATES]

Socrates, why did you pull your post re: 7 factors of reading price alone without a chart? I was just coming back to read that and was hoping more could progress from it on this thread.

Because in order to be able to read price both currently and forward, in addition to the 7 factors, what is really needed is the abandonment of EGO and all the emotions attached to it, and this is very advanced and I pulled it because it will only serve to attract undesireable responses. It is a topic that would naturally follow on from "Journey from the Basement" that was also not continued for the same reasons. I therefore reconsidered and think it prudent just to conform to what is mainstream and no further.

 

[wasp]

Because in order to be able to read price both currently and forward, in addition to the 7 factors, what is really needed is the abandonment of EGO and all the emotions attached to it, and this is very advanced and I pulled it because it will only serve to attract undesireable responses. It is a topic that would naturally follow on from "Journey from the Basement" that was also not continued for the same reasons. I therefore reconsidered and think it prudent just to conform to what is mainstream and no further.

A shame you feel that way.

 

[Priceman]

Because in order to be able to read price both currently and forward, in addition to the 7 factors, what is really needed is the abandonment of EGO and all the emotions attached to it, and this is very advanced and I pulled it because it will only serve to attract undesireable responses. It is a topic that would naturally follow on from "Journey from the Basement" that was also not continued for the same reasons. I therefore reconsidered and think it prudent just to conform to what is mainstream and no further.

You know what though Soc, I for one love those kind of articles so could you forward it privately to wasp and myself and others that may want to strive to be better traders? I am always looking for ways to improve me and my trading.

all the best