What Happens Next

[Triggerfish]

Its impossible to know every single thing that will affect price.
You would basically need to know the intent and timing of every individual or collective that is capable of moving price.

As they rely on taking other peoples money off the table,
they aren't going to tell you are they. No more than anyone would show you their hand in poker.
Certainty is impossible in any game.

PB wrote something very important on this thread earlier.....the word "perspectives".
Perspective depends on one's views which depends on one's understanding.....one persons view against another are different because they are viewing at it from a different angle / opposite way.

I don't think it's important to know every single thing that will affect price as it is not a requirement, in addition, it would be missing the point. That would be only focusing on a single element rather than the whole. Like looking at an ocean where a small fish is eaten by a slight bigger fish which is making a small splash.....yet, in due course, that slightly bigger fish will be eaten by something bigger still.....but the question one should be asking is: Is there a fish that does not get eaten?.....and how does a smart fish position himself among the great ocean so he doesn't get eaten?

In poker, a good player will "know" he has won 100% even before all the cards are played.....so there is certainty here.....I guess the point is, it is not about what cards others have but what you have that wins.

 

[new_trader]

There are many parties whom "they "relate to. What if you could just concern yourself with the "they" who are really most likely to move the market/control price. Would this then make the mission less complex? Can this even be done?

I prefer the Wyckoff concept of the composite operator:
."Wyckoff felt that an experienced judge of the market should regard the whole story that appears on the tape as though it were the expression of a single mind. He felt that it was an important psychological and tactical advantage to stay in harmony with this omnipotent player. By striving to follow his footsteps, Wyckoff felt we are better prepared to grow our portfolios and net-worth."

 

[Liquid validity]

Thanks for the reply LV.

Your last paragraph is interesting, I don't know about you, but the problem (if you see it as one) tends to occur if the result is taken in isolation, rather than in comparison to a group of trades.

So certainty in isolation is impossible (to my level), and if i ever met anyone who can prove otherwise I would say well done that man/woman.

Completely agree, certainty of result is impossible at individual trade level.
As you say it has to be assessed against a decent sample size.

 

[Liquid validity]

PB wrote something very important on this thread earlier.....the word "perspectives".
Perspective depends on one's views which depends on one's understanding.....one persons view against another are different because they are viewing at it from a different angle / opposite way.

I don't think it's important to know every single thing that will affect price as it is not a requirement, in addition, it would be missing the point. That would be only focusing on a single element rather than the whole. Like looking at an ocean where a small fish is eaten by a slight bigger fish which is making a small splash.....yet, in due course, that slightly bigger fish will be eaten by something bigger still.....but the question one should be asking is: Is there a fish that does not get eaten?.....and how does a smart fish position himself among the great ocean so he doesn't get eaten?

In poker, a good player will "know" he has won 100% even before all the cards are played.....so there is certainty here.....I guess the point is, it is not about what cards others have but what you have that wins.

Yeah I would agree with that to an extent, HFT front runners,
Paul Rotter etc are examples of people winning before they even sit down
Its extremely rare and simply out of reach for most people, even at
institutional level.

I can't think of a single instance where it has ever been permanent though.
Either other players catch on, the tech loophole gets closed, or something minor
changes that is just enough to remove the advantage.

 

[new_trader]

but the question one should be asking is: Is there a fish that does not get eaten?.....

If we are sticking strictly to fishes, the answer is, the biggest fish does not get eaten.

and how does a smart fish position himself among the great ocean so he doesn't get eaten?.

By staying very close to the biggest fish, but not so close it turns and eats him or her.

 

[random12345]

Yeah I would agree with that to an extent, HFT front runners,
Paul Rotter etc are examples of people winning before they even sit down
Its extremely rare and simply out of reach for most people, even at
institutional level.

I can't think of a single instance where it has ever been permanent though.
Either other players catch on, the tech loophole gets closed, or something minor
changes that is just enough to remove the advantage.

I think Rotter is made out to be more of a phenomenon than he was - of course he was possibly the greatest manual high frequency trader of all time, but at the same time he wasn't some sprog with a hope and a dream. He was never stupid enough to sit down full time with 10k or even 100k, which was a very nice position to be in - I believe he started as a trading only going concern with just shy of 1.5m USD (with 1 partner) raised from friends and associates he made when he worked on the execution desk.

Considering his trading style requiring so much on margin, this isn't surprising, but he never went into the markets with an under-capitalised pipe dream, which already puts him in 0.0001% of retail traders to begin with. He aimed to make a few k a day averaged on 1.5m, incredibly reasonable vs some of the claims we have on the boards here from people who live in bedsits.

 

[Liquid validity]

I think Rotter is made out to be more of a phenomenon than he was - of course he was possibly the greatest manual high frequency trader of all time, but at the same time he wasn't some sprog with a hope and a dream. He was never stupid enough to sit down full time with 10k or even 100k, which was a very nice position to be in - I believe he started as a trading only going concern with just shy of 1.5m USD (with 1 partner) raised from friends and associates he made when he worked on the execution desk.

Considering his trading style requiring so much on margin, this isn't surprising, but he never went into the markets with an under-capitalised pipe dream, which already puts him in 0.0001% of retail traders to begin with. He aimed to make a few k a day averaged on 1.5m, incredibly reasonable vs some of the claims we have on the boards here from people who live in bedsits.

Yeah agree, I spose what I was driving at was he had enough sense to
get that kind of funding, or once he realised he could get that kind of backing,
he knew he could use that advantage to much better effect in the
bund, boble and schatz than he could have elsewhere.
He couldn't have done that in ES or treasuries.
So I think he still stands out if only for that.

I know you've read this, for anyone else its an interesting read:
http://www.trading-naked.com/library/paul-rotter-trader-monthly.pdf

 

[Triggerfish]

Paul Rotter etc are examples of people winning before they even sit down Its extremely rare and simply out of reach for most people, even at institutional level.

I can't think of a single instance where it has ever been permanent though. Either other players catch on, the tech loophole gets closed, or something minor changes that is just enough to remove the advantage.

But remember, before Paul Rotter sat down, he had all this figured out because he knew how to exploit the system. My understanding of it is he created a system within an existing system which he sees a weakness so to benefit himself.....until discovered. In addition, I don't think this is comparable to what we have been discussing about because we are discussing about the system itself and nothing within it.....hence, when his system were discovered, it had to be removed.

So the comparison isn't ideal here because his system is temporary and what we had been discussing is permanent.

I don't think something permanent can be reached by casual thinking alone, understanding and comprehension are pre-requisites.....don't you think?

There is a weakness in everything!.....you do know that don't you?

 

[bustech]

 

[Shakone]

What is the LV scam (in your signature)?

Surprised you find this thread so boring, seems like one of the most interesting threads in a while. Each to his own.

 

[Liquid validity]

Yeah what exactly are you driving at?

At a guess its something to do with this:
http://www.trade2win.com/boards/trading-systems/178306-do-i-need-regulated-fca-8.html#post2216126

I posted this link above the post of his linked above:
http://www.investopedia.com/articles/younginvestors/06/investingforfriends.asp
Screen attached

For some bizarre reason, he seems to think an investopedia ad banner is
an affiliate link that I am re-directing people to.
He clearly doesn't understand how affiliate links work:
http://www.techopedia.com/definition/1397/affiliate-link

What he fails to grasp is its a revolving ad banner (advertiser constantly changes)
and yes it is an affiliate link - one that was placed by, and belongs to investopedia.com

*****************************
edit - the above confusion has been sorted now
http://www.trade2win.com/boards/foyer/180858-bustech-you-got-something-say-lets-hear.html

 

[Liquid validity]

But remember, before Paul Rotter sat down, he had all this figured out because he knew how to exploit the system. My understanding of it is he created a system within an existing system which he sees a weakness so to benefit himself.....until discovered.

Remember what?
Thats pretty much what I said anyway...

So the comparison isn't ideal here because his system is temporary and what we had been discussing is permanent.

There is a weakness in everything!.....you do know that don't you?

Nothing is permanent, how can it be if everything has a weakness.....you do know that don't you?
To use your words, that is a contradiction in terms.
A weakness can lead to failure, so how can anything ever be permanent.
By nothing is permanent I mean trade record, approach or advantage.

This is the discussion point you were referring to yes?
http://www.trade2win.com/boards/technical-analysis/180828-what-happens-next-11.html#post2219570

If you mean the pecking order of traders based on size and information,
then yes that is permanent, but not at an individual level.

 

[Triggerfish]

Remember what? That's pretty much what I said anyway...

Nothing is permanent, how can it be if everything has a weakness.....you do know that don't you?
To use your words, that is a contradiction in terms.
A weakness can lead to failure, so how can anything ever be permanent.
By nothing is permanent I mean trade record, approach or advantage.

This is the discussion point you were referring to yes? http://www.trade2win.com/boards/technical-analysis/180828-what-happens-next-11.html#post2219570

If you mean the pecking order of traders based on size and information, then yes that is permanent, but not at an individual level.

yes!.....again, its about perspective here. The point is a system within a system is a fabricated unit within the "whole" therefore it has to be temporary. The "whole" system itself is a natural process.....therefore permanent......I guess, perspective comes from how one defines what permanent is in the first place.

"Weakness" is that it can be known.....opposite to this would be ignorance.
It sounds contradiction because it is like the inverse of it.....again perspective is in play here, it depends on where one stands and looking at it.

Interesting last paragraph.....but why not at an individual level?.....again, its about perspective here. I thought you "liked" the post on new_trader made on the largest fish and the smart fish?

 

[Shakone]

Remember what?
Thats pretty much what I said anyway...



Nothing is permanent, how can it be if everything has a weakness.....you do know that don't you?
To use your words, that is a contradiction in terms.
A weakness can lead to failure, so how can anything ever be permanent.
By nothing is permanent I mean trade record, approach or advantage.

This is the discussion point you were referring to yes?
http://www.trade2win.com/boards/technical-analysis/180828-what-happens-next-11.html#post2219570

If you mean the pecking order of traders based on size and information,
then yes that is permanent, but not at an individual level.

Are you saying that impermanence is a weakness? Why? I don't really follow your logic above.

I would think that some things are permanent. Change for example, is permanent. As weird as that sounds.

Along trading lines, bubbles will always exist, as will crashes. How they play out on a particular occasion will be different, so the behaviour is different. If you had an edge based on something like this, then you will have a permanent edge, no?

 

[Liquid validity]

Are you saying that impermanence is a weakness? Why? I don't really follow your logic above.

I would think that some things are permanent. Change for example, is permanent. As weird as that sounds.

No impermanence itself isn't a weakness.
Its just cause and effect, a weakness means something can stop, change or fail.
So weakness is the cause, lack of impermanence is the effect.

Yeah agree on change being permanent, which is just another way o saying impermanence.
EDIT - your rec. text, yeah I can see your point - change is not a weakness.
Agree it isn't automatically a weakness, if you don't adapt to to change, then it can be a cause of weakness.

TBH this tangent is starting to remind me of that 2 ronnies fork handles clip

Along trading lines, bubbles will always exist, as will crashes. How they play out on a particular occasion will be different, so the behaviour is different. If you had an edge based on something like this, then you will have a permanent edge, no?

Missed your edit first time.
I don't know, permanent edges is not something I've ever bought into.
Even if you look at the best example of what might be considered a permanent edge.
A roulette wheel is a permanent hard wired edge, but it is still at the mercy of the
operators trading capital and success in getting enough suckers through the door to cover overheads
and turn a profit.

For me, trading is the same, an edge may be permanent if a trader lived forever and had
an infinite bankroll (although I wouldn't personally bother trading then anyway).
In reality, people get greedy and over leverage (even near the top of the food chain - Lehmans).
Then you have drawdown, burnout and blowups, which bring it to an end.

In short, market phenomenon are permanent, by that I mean cycles, bubbles and so on.
Market phenomenon aren't by themselves an edge.
The reason the an edge is never permanent is simply drawdown.
Example - just buy an index, over the long term that is a permanent edge if you span decades or even centuries.
In practice no one lives long enough to weather the drawdown or has deep enough pockets either.

So that pretty much makes an edge temporary, even people like Jim Simons and William Eckhardt that have
been around a long time and use strictly defined edges, they either dump or tweak them to
keep pace with minor changes.
Simply put edges don't last because people don't last, they change, evolve and constantly learn.

 

[counter_violent]

No impermanence itself isn't a weakness.
Its just cause and effect, a weakness means something can stop, change or fail.
So weakness is the cause, lack of impermanence is the effect.

Yeah agree on change being permanent, which is just another way o saying impermanence.

TBH this tangent is starting to remind me of that 2 ronnies fork handles clip

We do tangents very well at T2W i'll have you know

 

[Liquid validity]

We do tangents very well at T2W i'll have you know

Four candles or fork handles

 

[Liquid validity]

yes!.....again, its about perspective here. The point is a system within a system is a fabricated unit within the "whole" therefore it has to be temporary. The "whole" system itself is a natural process.....therefore permanent......I guess, perspective comes from how one defines what permanent is in the first place.

"Weakness" is that it can be known.....opposite to this would be ignorance.
It sounds contradiction because it is like the inverse of it.....again perspective is in play here, it depends on where one stands and looking at it.

Interesting last paragraph.....but why not at an individual level?.....again, its about perspective here. I thought you "liked" the post on new_trader made on the largest fish and the smart fish?

I agree a system or edge is temporary, see my other post above.
The bold highlight, yes I agree with the broad concept in terms of pecking order.
I don't agree at an individual level as individuals either retire, burnout,
blowup or just move on to something else.

So the pecking order is permanent, the participants in that pecking order are not.

 

[Triggerfish]

So the pecking order is permanent, the participants in that pecking order are not.

Just perspective really....so
Tell me, is there anyone within the pecking order you would consider as having a permanent edge?.....I guess not according to the above?

 

[Liquid validity]

Just perspective really....so
Tell me, is there anyone within the pecking order you would consider as having a permanent edge?.....I guess not according to the above?

Well its only a matter of perspective if you ignore the fact that no individual
trader is a permanent fixture.
Having said that, considering they are broadly speaking replaced with like for like,
it is to be fair, largely irrelevant as far as market impact goes.

Moving on to permanent edge.
That could be down to how you define edge.
If its just a broad set of principles that adapt to market conditions,
then I spose that is about as close as you will ever get.

In that case you won't know its permanent as it is impossible to test.
It is entirely dependent on success going forwards, although obviously a
long term track record is a good pointer bearing in mind
past performance is no guarantee of future results.
To be fair the exact same thing applies to anything that can be tested as well.

As for permanent edge, correct, I just don't see how its possible.
If anyone has a permanent edge they would like to share, I'm all ears.