Risk:Reward question

[new_trader]

Also curious, when you say people are scalping successfully who are you referring to? Unless it is multi billion dollar HF with awesome algos and servers 10 yards from the exchange I haven't seen any evidence of a single person making money through scalping. I'd love to be see it if it exists.

It amazes me how the mainstream media can create a myth and trade2win members (The public) pick it up and run with it. Are people really this gullible and naïve? HF algos...?

Oh my God...not the HF algos...:-0

I scalp the ES and eat HF algos for breakfast! :smart:

 

[random12345]

It amazes me how the mainstream media can create a myth and trade2win members (The public) pick it up and run with it. Are people really this gullible and naïve? HF algos...?

Oh my God...not the HF algos...:-0

I scalp the ES and eat HF algos for breakfast! :smart:

Not to rain on your parade, but there's a certain hypocrisy here. Mock the naivety of the forums re their knowledge of a very specific industry of which they could possibly know next to nothing... and then make a very silly statement of your own regarding your unquantified/unquantifiable abilities.

What is your knowledge of institutional algos based on? Why don't you enlighten the T2W members with facts based on present day ROAs etc for cross market trading systems vs your own rather than sweeping statements? Then you won't have to suffer their ignorance any more....

 

[new_trader]

Not to rain on your parade, but there's a certain hypocrisy here. Mock the naivety of the forums re their knowledge of a very specific industry of which they could possibly know next to nothing... and then make a very silly statement of your own regarding your unquantified/unquantifiable abilities.

"Unless it is multi billion dollar HF with awesome algos and servers 10 yards from the exchange "

This statement implies that the poster has a great deal of knowledge of a very specific industry and scalping.

What is your knowledge of institutional algos based on? Why don't you enlighten the T2W members with facts based on present day ROAs etc for cross market trading systems vs your own rather than sweeping statements? Then you won't have to suffer their ignorance any more....

I am market participant agnostic (for lack of a better phrase). I only care about what appears on the tape and not where it came from, the effect on the market is the same. Painting the tape is as old as the hills, so these algos must be doing something new, if so, what?

I've been trading the ES for about 12 months longer than I've been a member here and I can't recall any posts back then which mentioned HF algos. This seems to be a relatively new phenomena that has cropped up here over the last 2 years or so...around about the same time the mainstream media started talking about it. As far as the ES is concerned, I don't see anything different. So perhaps you can enlighten me, what am I missing?


N.B: I just realised that I took HF to mean HIGH FREQUENCY...not Hedge Fund, but my point remains the same.

 

[BeginnerJoe]

Well I was involved with a multi-million £ (no not billion, but it could have if it worked) HFT algo hosted at the exchange server centre. It did sod all of good. The algo was a looser because it came about from a trader attending one of these idiotic training courses. In the end the trader resorted to manual gambling.

 

[I'vereadthemall]

I was in no way trying to imply a vast knowledge of such matters. All I know about is what I read in Dark Pools by Scott Patterson and other mainstream media you refer to.

Not only that but you can see for yourself the qualifications required to gain employment at the hedge funds who imply their profits come from scalping style strategies. Maths/physics PHD etc.

You can also see how much money they are willing to spend on servers closer to the exchange.

I understand it is predominantly to do with speed of execution but it still indicates to me that a retail trader would really be up against it when trading scalping strategies.

I was just curious if there was evidence available for me to see that scalping is a valid strategy for the retail trader. I'm not asking to see strategies or anything like that, just results of someone who says they scalp successfully.

This is the 3rd time on this forum that as soon as I ask if evidence of something exists I get immediately compared to a fool. Yet the evidence I seek is never forthcoming. What gives?

If I was in the forum for members of the 'Latter Day Saints' and asked where the proof for god was I'd understand it. On a forum about trading, I do not.

 

[BeginnerJoe]

Not only that but you can see for yourself the qualifications required to gain employment at the hedge funds who imply their profits come from scalping style strategies.

If you don't have connections. If you do, then even a chimp can get in. Qualifications help but overrated.

 

[I'vereadthemall]

As ever Beginner, a wonderfully insightful and thought provoking response.

 

[new_trader]

I was in no way trying to imply a vast knowledge of such matters. All I know about is what I read in Dark Pools by Scott Patterson and other mainstream media you refer to.

Not only that but you can see for yourself the qualifications required to gain employment at the hedge funds who imply their profits come from scalping style strategies. Maths/physics PHD etc.

You can also see how much money they are willing to spend on servers closer to the exchange.

I understand it is predominantly to do with speed of execution but it still indicates to me that a retail trader would really be up against it when trading scalping strategies.

I was just curious if there was evidence available for me to see that scalping is a valid strategy for the retail trader. I'm not asking to see strategies or anything like that, just results of someone who says they scalp successfully.

This is the 3rd time on this forum that as soon as I ask if evidence of something exists I get immediately compared to a fool. Yet the evidence I seek is never forthcoming. What gives?

If I was in the forum for members of the 'Latter Day Saints' and asked where the proof for god was I'd understand it. On a forum about trading, I do not.

It wasn't my intention to make you look like a fool. I also fully appreciate that your concerns are real, even if they are (IMHO) unjustified. I assumed (correctly it seems), that your concerns came about from what you've read and heard and not what you have experienced directly through trading.

To ask for evidence that scalping is a valid strategy for the retail trader is no different to asking for evidence that swing trading is a valid strategy, or any other style of trading.

What evidence would you need? A statement? That is what everyone asks for whenever someone claims to be profitable regardless of their strategy.

 

[I'vereadthemall]

For example, trend following analytics by Covel gives a detailed account of the returns from many funds where the general idea, if you are to believe what the managers say, is to make money from medium to long term trends.

The returns of those funds can then easily be reverse engineered by a retail trader as illustrated by Andreas Clenow in following the trend.

I was basically wondering if the same type of documents existed for scalping.

 

[random12345]

"Unless it is multi billion dollar HF with awesome algos and servers 10 yards from the exchange "

This statement implies that the poster has a great deal of knowledge of a very specific industry and scalping.



I am market participant agnostic (for lack of a better phrase). I only care about what appears on the tape and not where it came from, the effect on the market is the same. Painting the tape is as old as the hills, so these algos must be doing something new, if so, what?

I've been trading the ES for about 12 months longer than I've been a member here and I can't recall any posts back then which mentioned HF algos. This seems to be a relatively new phenomena that has cropped up here over the last 2 years or so...around about the same time the mainstream media started talking about it. As far as the ES is concerned, I don't see anything different. So perhaps you can enlighten me, what am I missing?


N.B: I just realised that I took HF to mean HIGH FREQUENCY...not Hedge Fund, but my point remains the same.

I agree, there is little difference in price behaviour - the only point I took umbrage with was that I thought you were implying you were outpacing the return of HFTs without having direct experience of them. Looking at it again, it was probably meant to be a throwaway comment on your behalf.

 

[random12345]

Well I was involved with a multi-million £ (no not billion, but it could have if it worked) HFT algo hosted at the exchange server centre. It did sod all of good. The algo was a looser because it came about from a trader attending one of these idiotic training courses. In the end the trader resorted to manual gambling.

Hang on - a trader attending a training course with a cutting edge quant slant and just slapped some code together off the back of it? Just like that?

I call bs on that - the technology is extremely proprietary.

Which exchange was this Joe? You crazy old fart you.

 

[new_trader]

I was basically wondering if the same type of documents existed for scalping.

To be honest, I don't know. My trading style evolved from my own experience, trial and error, study and practice of the market, not reverse engineering a published document of performance.

 

[BeginnerJoe]

Hang on - a trader attending a training course with a cutting edge quant slant and just slapped some code together off the back of it? Just like that?

What else could he do ? The clients money was in.

Can't tell you the exchange. My looser chum could be reading.

I call bs on that - the technology is extremely proprietary.

True, I conjured it out of my imagination. No one else had it. Is that proprietary enough for you ? It was so good the institutional broker involved wanted to give me a job afterwards. By that time I was so pissed, I thought f* the lot of them. I don't like it if my efforts don't pay. Yes I was paid money, but I expected more.

 

[random12345]

What else can he do ? The clients money is in.

Can't tell you the exchange. My looser friend could be reading.




True, I conjured it out of my imagination. No one else has it. Is that proprietary enough for you ?

Was this FX?

 

[BeginnerJoe]

Was this FX?

No.

 

[random12345]

No.

Wait so it was a major centralised exchange and you can't give me the name in case you get identified....?

 

[BeginnerJoe]

Wait so it was a major centralised exchange and you can't give me the name in case you get identified....?

lulz, you are a clever boy.

 

[random12345]

lulz, you are a clever boy.

Clever enough to spell loser, even.

What was the FIX capacity connection you used in respect to peak orders per second during your spec? You should be able to give me a number for both. Thanks xxx

 

[random12345]

lulz, you are a clever boy.

You also realise I was being sarcastic - if you coloed in the CME to Globex, you're an absolute joker for thinking you can be id'ed.

 

[BeginnerJoe]

Clever enough to spell loser, even.

What was the FIX capacity connection you used in respect to peak orders per second during your spec? You should be able to give me a number for both. Thanks xxx

No idea. The capacity handled 700 odd simultaneous markets with no problem.