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Here's my thoughts on this genre of tools. Trainer wheels. Something that highlights activity while you are still getting used to the DOM. I'm a DOM man personally. I have a low attention span and need the activity.
That was the intent anyway - hence the way the cirles work - just showing up in specific spots just like the same action does on the DOM.
Not that anyone has to follow the vendors approach to using tools. People always find ways to use tools that the creators never thought of.
If you have any questions about the products or services provided, please send me a Private Message or use the futures.io " Ask Me Anything" thread
I've been working on using the Auction Vista to identify price action (my settings are 15 seconds with a 4 circle tuner setting) near zones/levels of interest.
For example: If I saw a big blue buy circle occur at or above the high of yesterday but it immediately gets taken out to the downside, my first thought is it is a false breakout and I look to position myself short.
Good post & interesting insights. Not sure what you do but I am sure you will agree that the title "professional trader" covers a hell of a lot of different skills. I know a trader that ran a team for RBS running barrier options for FX. Massive things. Another that ran an open outcry desk for an obscure currency pair and could write a billion dollars on a busy day. Another that made markets in options. Another that traded spreads so complex that to this day, thinking about it gives me a headache. All traders, all different skills. Ask any of them about MACD and they would have no idea that you were talking about trading and probably tell you that Burger King was superior.
Some skills did indeed expire. Aussie interest rate spreading is a good example. I know people that made money there for years but couldn't adjust when it died.
I've heard of a firm using MP - but never seen it myself, nor asked specifically what was done with it. I've seen long term charts used but sparsly. It's not as if you can walk up to people and say "what's that there for?".
I don't know of any prop traders that did any backtesting. It has always been 'get trained, earn your live account' or cases of people getting in based on their performance. I've seen a lot of introspection and reviewing trades though.
NoBS is thicker markets. Wasn't really Jigsaws thing, nor was scalping if you mean trading the spread. Icebergs have become an issue for sure. It's not hard to see reloading & retailers always seem to want to revert to a one rule trading system. Like "see an iceberg on the bid, go long". Considering all the training and time and effort and reviews and introspection and pain a prop trader goes through to become consistent - it's a bit of a kick in the teeth for people to still think this is realistic.
Markets were thicker when we started out - but we moved with the times. There was never a point where we said "iceberg = entry". It was always about order flow being a story that played out with more confirmation being paid for in fill price and trying to get into a position at a choke point.
This has been the case since electronic trading started. You can never presume that any execution means that
- a position has been opened
- the participant will react to short term moves (might be those Kellogs people again)
- that the trade is directional and not part of a spread
On the other hand, you can see momentum and you can learn what drives it.
Good stuff, but it's all based on there being little urgency to trade right? I know a trader that trades stocks on earnings, because at that point the urgency to do business goes up and you have people willing to give up the spread (and more) to get filled.
As for the OTC stuff - it's like the old pits. Illiquid venues where there's not always someone to take the other side - so your trade will get layed off against the electronic. Clearport does just over 300k contracts a day, it's a drop in the ocean compared to the electronic markets. Once the urgency comes in - any trades will be reflected in the electronic because the only way you'll get filled is against a counterparty that's laying off the bet on the electronic markets. Much like the pits did with S&P.
The spread/arb - is really what keeps it all in line. It's like phsyics. Volume comes in - you'll see it.
Never heard of leaning on stale orders but have heard of MMs looking to trade the other side of a large order - see it get taken out & then market reverts back. A strategy for very specific conditions.
100% agree - because it's all about cause & effect. Some things bring volume into the market and some things bring volume urgently. The days with a lot of people needing to trade are the biggest days for prop traders trading outrights.
As for needing all related markets - I know outright traders that don't. I know plenty that trade Crude - along with 30 or so other markets they have on their horizon and they don't watch all the iol breakdown products because they are only trading news driven momentum - which hits different markets at different times. They do know what's happening in energies, interest rates, metals, indices etc. They have more screens of news than charts or order flow. They look for the drivers first.
Lots of different ways to do this. But you have to actually chose one of them and that seems the biggest problem for retailers - hopping about too much.
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To me, it just means I get paid to trade as opposed to using my own capital. And that the size I trade requires a significantly large risk appetite.
I have a lot of respect for NoBS, L2ST and Jigsaw. I was your customer years ago. Actually, you guys started me off in this path. What you all had to offer made a lot of sense to me but being a programmer and coming from a binary world I just couldnt build my belief system without solid rules and some proof that whatever I am trading actually has worked in the past. Backtesting is far from perfect, but it helps me execute without hesitation. Even if it means I have to manage terabytes of data. I got lucky to have found the required support to be able to do this but there was no way I would have been able to do this sitting at home trading my 50k account.
Scalping to me means intra-day trading. Trade durations less than a few hours. I couldn't do that consistently and scale up my portfolio at the same time - in terms of adding size and markets. I cannot imagine consistently trading 5-10 markets with an intra-day bias looking at changes in order flow. Maybe when I was younger, I could have but I am old now and my brain just isnt that capable.
Actually, I can relate to this. On one of my long term momentum strategies, I am constantly being filled by an MM on the block and whenever this happens, I know its going to go against me for a bit. Its OK, they get to make a few ticks but I have statistics on my side .
Being with something you believe in is one of the most important aspects IMO. In a prop firm, the traders believe what they are taught because usually - there's people there making bank....
But then I've seen prop firms pop up and only care about commissions. That aside - the man at home will always be conerned his approach isn't working 'cause the guy who sold it to him ripped him off - so he bounces to something else.
A few years ago - after knowing Gary Norden for a while - he offered to teach me for free. It wasn't a long-term agreement - more that he'd show me and we'd see where it went. After 2 days I pulled the plug. Not that I was afraid to learn new things - but I didn't want to completely change and become novice. I got what he did - and that was golden - I just saw no need to become someone else's trader.
You move forward - but you build on where you are.
I get this. I bailed on equities because I was trying to do the Briefing.com "chase earnings stocks" style. Then a friend got a job as an analyst for a trader doing the same thing - but with 4 full time analysts. The switch to futures was because I felt chasing that stuff was too much for a solo trader, ok for a firm or someone with researchers.
Everything is a method that suits some. Look at options pits - still open - because no-one has any idea how they do what they do. Guys are savants.
You have a style - you move with the times - but a refresh or something that doesn't suit you? Never gonna fly.
Same with order flow - it's a set of data. Trying to boil it down to magic one rule systems will never fly.
If you have any questions about the products or services provided, please send me a Private Message or use the futures.io " Ask Me Anything" thread
I completely agree. Concepts such as Absorption do work! BUT...... It is all based on context. It is based on an ability to judge a "signal" on its merits. It is based on knowledge of price action and market behaviour. At least for me that's true.
In fact, I traded MNQ earlier today by identifying what I believe was a very clear example of absorption. I did this with just the standard Order Flow tools in Ninja Trader 8. I use VWAP, a 5 and 15 minute Footprint chart, (Volumetric chart) and Trade Detector indicators. I wait for the opportunity and I constantly look at the context of price and price action. I am generally profitable most days. This is because I have spent a lot of years (1000's of hours), in front of screens studying price action with a great deal of determination.
There is no turnkey solution! Your success as a trader will come from experience and hard work AND maintaining your confidence through the inevitable losses you will make. Its the price you will need to pay. Good Luck!