Minggu, 30 Mei 2010

Another round

The House has passed another jobless benefits extension. The bill now awaits Senate approval.

Regardless, I don't see how I could possibly accept it.

I've lived the "American dream" long enough. It's time to make my own name regardless of what happens with my labor situation. I have received benefits for 26 + 20 weeks (not counting the Census gig) but why would I accept any more time? The government allowed me 11 months to find a new job, but that plan has clearly failed. I recently had an interview with a local company for a public relations position and still await to hear if I have been hired. But if not, I know that McDonalds and The Home Depot are hiring.

This, in my opinion, is the fallacy with the employment situation. We can suck off the government teet for a while, but we never have any real sustainable options. Want to start a new business? Too bad you can't get a bank loan because you don't have a steady income. Want to relocate to an area that has jobs? Too bad you're stuck with your mortgage you just bought a year ago.

This jobless spell has been one of the most difficult situations of my life. Although I have tried to make extra money working odd jobs for the past 11 months -- newspaper freelancer, Sestak campaigner, NRFU census enumerator -- I don't see how any employer would want to hire me with that gap in my resume.

And so this vicious cycle continues. I can keep accepting government benefits, or I can make a name for myself. Unfortunately, that name might be written on my apron at your nearest home improvement store.

Jumat, 28 Mei 2010

Trading Too Often

Not all trades are created equal. Some trades are "surer" than others. Some trades have a higher profit potential than others. If this is the case and it is, why isn't it better to in the beginning, or always, only trade these types of trades?

Well, it is better. In fact, it's probably the only way to get to CP from minus. Until and unless you can qualify a trade into these classifications, CP will probably be elusive.

This attempt at classification brings it's own problems. More uncertainty. The more uncertainty the more probable it is that you will take large losses and small profits which, even with a more than 50% win rate will make it hard to be CP.

Now getting back to my trading plan, I have said that my main requirement in putting on a trade is that it will hit it's first logical scale out point, which of course, being logical, will be large enough. Now if that first logical scale out point is right against, say a resistance, then I will not only scale out but exit the whole position. Again, to trader like this and have my drop dead stop well out of the way, I need a high win rate. How do I get a high win rate? By taking "surer" trades, trades that I have defined in my trading plan, not by rigid mechanical requirements but in terms of order flow.

These are the things we will spend time on in the training. The most valuable part of the training will be what comes after the end of July. The 90 days when I will help the attendees to nail down their road map and initial trading plan that, if followed exactly, will lead to CP. I am sure that each attendee's trading plan will be different. There will be a basic commonality but the aim of the whole training is to help each trader find his way along the road to the goal. Putting square pegs into round holes has been proven not to work.

Great volatility today in the ES. I was expecting a sell off due to the long week-end but the downgrading of Spanish debt just added to the fun. Strange that I'll be in Spain for the week-end.


BTW, I have four 24 inch monitors and trade a number of markets. Just because I didn't take a trade you saw doesn't mean it was not valid. I may have been on something else and missed it.

Kamis, 27 Mei 2010

Over, Under, Sideways, Down

The Yardbirds said it years ago.

It's all very well to have a view of what is happening but there is really only one trend and that is the trend of the chart you are trading.

In Market Profile terminology, the short term time frame trader usually trades with the long term time frame trader. And they both can make money. Although we are in a zero sum game, traders with opposite views can both make profits if their time frames are different. This is a critical thing to understand as a trader. We have to know our business. What are we? What is our time frame? It does not really matter as long as we know what it is and consistently work at it.

One of the things that some people try and track is what the big guys are doing. Well, I only really want to know what the big guys are doing who are involved in my time frame. Yes, there are areas where we will overlap but the very short term and the very long term will overlap rarely. While a 2000 lot trade may have an instant impact, it will need a lot of them to impact a market that trades over 2 million contracts a day.

I have striven  to make it more simple as I have evolved as a trader. Simple setups, simple ideas. Making it complicated means I can miss something and I can make a lot of mistakes. Looking at a few simple things inside the structure I have created for myself, I see the order flow I need to see. With the speed of markets, I just don't have time to do anything complicated.

However this current crisis unfolds, from a moment to moment trading scene, it doesn't interest me except in that it has brought back a lot of volatility which is opportunity.

Bread and butter day today trading the ES. At the time of writing, we were getting higher value, but the day is not over yet. The extra bit at the bottom of the chart is the Delta Momentum I'm testing. Not too different to VB but maybe a little more info sometimes. I'll see.

Rabu, 26 Mei 2010

Going with the Flow

It's important to keep your mind open to what is going on. Before the RTH open I was, of course, thinking about the Gap trade.

I looked at my support and resistance areas and put together a vision of what could happen. I thought that the open would be strong but there were a number of areas that could hold things, My first attempt got stopped out with e reversal to long as it became clear that we would probably test the 24th's VAH or extreme. There was a double top of the 21st and 24th May and that is where I decided that I would try and short again but with a tight stop.

This worked out well and I started scaling out of half very quickly as I was not sure that the buyers would not come back again. The volume DVA started shaping up and I paid attention to it.

Finally, the market decided to try and fill the gap and range extended to the downside, making a neutral day. This brought one of the things I learned from Pete Steidlmayer into play: once you have the range extension that makes a neutral day, price will usually go back to the middle of the day's range. This happened and was the end of my trading day.

Going with the flow was important as my original vision was wrong and I had to adjust my thinking as the market unfolded.

Selasa, 25 Mei 2010

More Gaps

I just love that Gap trade. But it wears many different contexts. Today's was different again with a huge gap to close a smaller one to the bottom of the single prints of the tail on the 21st.

The most important part of the picture today was the Fib number I love. If you don't know what I'm talking about, use the Google search on this blog for a post or two.

My vision was to trade the Gap which was a buy in this case. But I need a reason to do so otherwise my trade location could be intolerable and my risk uncalculable.

Today, I found the solution in the Fib number and the 45CCI. It gave me a low risk entry with a target to the top of the VA of the pre RTH session or the DVAH of the current session. Secondary target was the bottom of the single prints and the third was yesterday's close (which I didn't anticipate to use for this trade).

It unfolded as per the chart. I exited at the VAH, then the bottom of the single prints and the final piece with the 45CCI and volume divergence and low volume of the pre RTH session.

Trading is a multi-dimensional occupation. There is a continual challenge to understand what is happening so you can anticipate or deduce what the outcome of the current action should/could be. But remember, it doesn't matter how right your vision is, one or more large traders can come with the opposite view and change the outcome.

This is the type of stuff I want to teach in the training. As I said many times over, setups are everywhere. It is the putting together of the picture that is important and the ability to do it in real time in a timely manner that makes a trader. This thought process can be learned with the right approach and that is what I intend to share in the training.

Senin, 24 Mei 2010

Was the Gap Trade On?

The Gap Trade today shows the importance of considering the context and finding a vision that fits.

Friday's ES RTH Profile shows a close of 1084.25 with the TPO POC at 1082.75 and the Volume POC at 1085.00. RTH was due to open around 1080.00.

The quandary is that there is a POC between the open and Friday's close. Which POC is the POC?

This is one of the types of things we will talk about during the Training in July. It has a huge impact on CP and making money at all from a trade.

So we have our context. Our vision can be a two handed one. In my case today, I saw a bullish undertone during the hour before the open. CCIs showed upward momentum so in the jostling leading up to the RTH open, I was expecting the Gap to try and close but was also expecting the POC to hold as there was the VAH quite close to it.

I handled the long trade in my usual way, scaling out of the trade at the TPO POC and exiting the balance at the VPOC less a tick. I then looked for a short trade, looking for a test of the VAL.

That test didn't happen although a short worked. We then had range extension to the upside which setup a nice DVAL buy later in the U.S. morning. This is all context stuff that matched setups on our range bar chart.

The key to trading this stuff profitably is to look at the picture and what traders are doing. Looking at what you see means rather than indicators crossing. This is true order flow. Order flow is not just volume delta. Getting to this point is the key to CP. If you look at great sportsmen, businessmen or anyone else who is good at something, it is this automatic reaction to their context that help make them successful. Being "in the zone" is this reading of what traders are doing.

Today's chart has some colour changes. Kiki thought it was prettier than my other charts ;-P.

A time to tax

I've broached quite a few touchy subjects on this blog over the past 11 months, but I suspect this entry will strike a nerve... It's time for the Pennsylvania state legislature to raise the gas tax by 10 cents. There, I said it. Now feel free to scroll down to the comment sections and start ranting.

But seriously, our roads are crumbling and bridges becoming impassable. The state legislature tried to correct the problem in 2007 with passage of Act 44 that would allow the state to either lease the Pennsylvania Turnpike or toll Interstate 80. Either plan would have raised about a billion dollars each year to fund transportation costs. But both plans were rejected. Now the state is facing a $500 million budget gap in road funding that will have to be made up elsewhere.

So rather than raising the rates for people using the Turnpike or I-80, let's spread the costs around to the entire motoring public. It's the fairest "user fee" that could ever be devised. And it wouldn't be as costly at the pump as you might think.

Think back 10 years ago when gas was $1.29 per gallon. The state gas tax was roughly 30 cents per gallon, which meant it was about a 23 percent tax on fuel. Flash forward to today when gasoline is hovering around $3.00, and that same tax percentage drops to just 10 percent. So while gasoline prices have more than doubled, the state (31.1 cpg) and federal (18.4 cpg) gas taxes have remained stagnant.

Why not implement a 15 percentage tax based on the wholesale price of gas? If the wholesale cost is $2.00, then the tax would be 30 cents and the price at he pump would be $2.30 before the federal tax is applied. If gas rices to $3.00, then the cost would be $3.45.

I'm not suggesting that the public would not be infuriated by an gas tax increase. But would it really be that burdensome to tie the tax to inflation rates or raise it a measly dime to ensure better roads and bridges? Now, I don't expect the state legislature to enact an increase because, after all, this is an election year. But I do think they should stop paying lip-service to the need for better roads while not having the political spine to find a solution to the problem.

UPDATE: Transportation experts agree that a gas tax increase is needed to fund road improvements. One expert estimates a 25-cent increase would provide $1.5 billion in additional revenue, so my measly dime suggestion would bring $600 million. Isn't that just about the same number we need to fill the budget gap? What say you, Harrisburg?

Jumat, 21 Mei 2010

Focus

Trading futures has become a global event. When I first started trading we only had daily data which we downloaded every day, from CSI in Boca Raton in my case. We then did our analysis and traded off that day's charts using a telephone to ring our broker. I had about 6 Apple II computers chugging all night printing charts so I could be ready to trade the next day. The U.S. markets were the only real futures exchanges.

We now have exchanges all over the world offering futures on all types of financial and commodity instruments. This allows trading in a relatively active market 24 hours a day. Traders just beginning can trade before and after their day jobs, getting to CP before giving up the relative security of their regulated lives while they look forward to the freedom this life gives you.

Traders in every region can find a market to trade in the timezone they want.

But how many hours a day should you really trade?  It depends on what your trading philosophy is. You can grind it out hour after hour during a 6, 8 or 10 hour day, making lots of small profits. You can look to take just one good trade a day with enough size to meet your financial objectives. You can do what a lot of locals on the floor did which was to trade the open and the close only.

This is a fundamental decision that needs to be made. Not necessarily at the beginning but somewhere along the way the trading plan needs to be completed.

How do you make this decision? By trial and error and knowing yourself. Discover what works best for you. How do you focus best? Following the whole thread of the day or do you work best in shorter stints? Do you like to make a quick target amount and have the rest of the day to play your violin? Go to the beach?

A market has different phases during the day. My method of teaching a single market on a single time frame chart is designed to give as much information to make this decision as well as many more. Once you have achieved your basic CP, you have a basis to build your business on. It is very important to focus heavily on only this narrow perspective. Putting all your eggs in this small basket for a while will pay more dividends than you can see as a newbie but which can be appreciated looking down from the heights of CP.

Kamis, 20 Mei 2010

Holy Cow Batman

Chaos reigns! These markets are giving great opportunities but traders need to evaluate their risk management plans. As recently as 40 years ago, the French were known to put their francs into gold coins called Napoleons (big rooster on the back if I remember rightly) and bury them in their back yards. I'm thinking whether it's time to buy a shovel.

I have always said that I let the market decide when to exit a trade, both in profit taking and loss taking mode. I also said that I run a drop dead stop that I rarely use as I exit on market context.

As volatility increases, I evaluate whether to take profits more quickly or more slowly, depending on what is happening. It makes life more complicated because if there is a quick fast move of, say, 15 ES handles like there was this morning, it would be a shame to just take 2 points out of it. On the other hand, when the market is chopping around, even in a volatile fashion, taking 2 points out of all the up and down chops can give a nice green end of day.

Monitoring order flow and relative volume can give a lot of information. Do you look at the volume at set times throughout the day (say every 2 hours) to check whether it was a high, low or regular volume day? If not, you are missing a valuable piece of information. Generally, very high or very low volume can create volatility. Low volume volatility is not pleasant to trade and I pack my bags when I see that. On the other hand, high volume volatility is a real pleasure to trade, but adjustments need to be made to meet your risk management rules. Sometimes, adjusting size does it in conjunction with moving your drop dead stop out of the way.

The large range days can be a challenge for context although if there are single prints around they can give you stakes in the ground on the Profile to help. This mornings 15 point drop in the ES was helped by a single print zipper which clued me in to the possibility of the pot hole with just air below. Envisioning the possibilities is a key part of my daily strategy.

Tying this all up to the title of this post, it looks like the 360 million strong Euro zone and China, along with the unsettled U.S. environment, will pull and push markets around vigorously and we should try and take advantage of it while it's here. The usual summer doldrums may have a few tsunamis thrown in.

Rabu, 19 Mei 2010

Hyde Park Corner

In London there is a large park called Hyde Park. On one of it's corners, every Sunday, you can see people standing on wooden boxes espousing their opinion on various things from religion to politics. It's called Speakers Corner. The blog is my Speakers Corner today.

Another bad decision by the financial regulators who seem to have either a huge lack of knowledge of the way the financial systems work or they are just trying to promote so called solutions to appease the masses.

I don't know who the hedgers think takes the other side of their trade. It was about 30 years ago that Pete Steidlayer showed me how long time frame traders don't trade with long time frame traders.

We have a quite a simple solution to most of the ills that the regulators should be trying to protect the public against - force all derivative transactions onto regulated exchanges that require margining. I don't think that this will happen because there are too many people with influence making too much money maintaining the lack of transparency of pricing. Once you have transactions on an exchange, the market prices fairly. The only non regulated non exchange market that seems efficient is the Forex market but the lack of an exchange allows some dealers, as distinct from pure brokers, to price unfairly at specific moments when they have taken the other side of your captive trade.

The higher the volume traded, the fairer the price. On May 6, it now seems that part of the problem was that many of the HFT trading firms went dark - the 'bots were switched off. This created a vacuum in liquidity and one of the main reasons why the markets became disorderly.

Short sellers are risk takers. At some point they have to cover at a profit or a loss. Enforcing margining just makes them more accountable which is a good thing. A marker participant is a market participant and as long as we are all as financially accountable as each other, the position created by our trade is irrelevant as far as the market fairness is concerned.

Gap Trade Today: The Gap trade worked like a charm today. I had the single prints of the 17th to lean on. An early entry was a buy at 1113.00, 1114.75 was certain but less profitable. There was no reason to totally get out at yesterday's close and the overshoot gave extra profits. I think Dalton called it an Open Drive. This strong buying tail (I'm writing this in the first half hour of RTH) will be useful for the rest of the session.

That was an understatement. The volatility continues. I find myself doing what I haven't for a long time: listening to CNBC instead of my usual Classic FM, as the different rumours swing the markets around. The turn was not difficult to spot as the change in momentum was clearly signaled by the market and visible using our usual charts. Having said that, it did take my breath away for a moment. It's moves like this that you can be thankful for all the hundreds of hours of really boring SIM trading and a lifetime of screen time. I had a mental image of Sumo wrestling, countering the moves of the market with my own. Weird huh?

Note: Anyone using MarketDelta: The new beta has a re-written routine for the Volume Breakdown that stops a lot of superfluous calculation when you re-use it in the CVD and other derivatives. Good news for those running lots of charts and who noticed the latency before. Looks OK now.

A busy election night

Fellow breadliner Amanda Gillooly and I rushed around Western Pennsylvania as we covered a couple races for www.pa2010.com. Below, I have included clips of our stories about the Democratic gubernatorial race and Republican primary in the 4th District. Also, PA2010 editor Dan Hirschhorn filed a story about the Senate primary that pitted Arlen Specter against Joe Sestak. Click on the headlines to read the full stories.

Onorato cruises to Dem gubernatorial victory
PITTSBURGH—Dan Onorato, the Allegheny County Executive who started plotting a path to the Governor’s Mansion years ago, took a big step toward getting there Tuesday, easily winning the Democratic gubernatorial primary in a race he was favored to win from the start.


Rothfus beats Buchanan by a wide margin
WEXFORD—Keith Rothfus said he just might be able to sleep Tuesday night. “Relieved is how I feel right now,” he said about an hour after he was declared the winner of the 4th District Republican primary. “But now we have even more work to do.”

Sestak crushes Specter in primary

WAYNE—Joseph A. Sestak, the former Navy Admiral and second-term congressman who challenged his party’s political establishment, won the Democratic Senate primary Tuesday, riding a wave of anti-incumbency and a brilliantly-run TV campaign to a victory that ended the 45-year political career of Senator Arlen Specter.

Wagner: 'Some things don't work out the way you want'
PITTSBURGH – As rain fell across Pennsylvania for most of Tuesday, Jack Wagner's gubernatorial campaign held on to a glimmer of hope that a lower state turnout coupled with the intense 12th District special election just might be enough for an upset victory in the Democratic primary. But as results came in from Allegheny County—a critical base shared by both Wagner and eventual winner Dan Onorato—it became increasingly clear there would be no surprise endings.

Rothfus: 'I'm not worthy'
WEXFORD—Before the polls closed Tuesday night, Republican Keith Rothfus said that win or lose, he was feeling one thing: Not worthy. "I am humbled by the support I’ve received,” the Edgeworth lawyer and 4th District candidate said with a smile here. “I know it sounds cliché, but—I’m not worthy. The people I have met on this campaign—they are just people who believe in this country and believe in what this country can be. And I struck a chord with these people.”

Arlen Specter's perfect storm
The political world watched almost stupefied as the national melodrama played itself out. The pre-primary polls told the startling story while the astonished pols read the increasingly clear tea leaves: Arlen Specter, Pennsylvania’s longest serving U.S. Senator, arguably the state’s most skilled and luckiest politician, was losing. And he was losing to an opponent few had heard of just about a month earlier, losing despite substantial advantages in money and party endorsements, losing despite support from the president, the vice president, and the state’s governor. Specter was losing despite anything he or anyone else could do to stop it.

(Photos by Michael Jones/PA2010.com)

Selasa, 18 Mei 2010

The Importance of Context

Context is of prime importance when looking at putting on a trade. The same so-called setup will behave totally differently in different contexts and accordingly, you would take it in one context but not in another. This is why the same setup works sometimes and doesn't at others.

Today was a prime example and I couldn't resist writing my post on the subject and illustrating my point with today's chart.

Lots of traders, including me, love the Gap Trade. The Gap Trade for the uninitiated is an ES trade where the RTH open is away from the previous day's RTH close by more than a couple/few points and a trade is entered with a view to the gap being closed - price going to the previous RTH close. Why this happens? I'm not sure but it has become a "self fulfilling prophecy", most of the time. At least you can be sure that on most of the occasions there will be enough people going for it that the first swing should be in the direction of the gap.

Today the market in RTH opened at about 1144.00 with yesterday's RTH close being about 1134.50. The market for the 3 hours before the RTH open was trending upwards making the gap.

Today I didn't sell the gap but bought the market at 1142.50 as there were single prints left over from the 14th directly to the left of where today's RTH open was. I had a buy setup according to my trading plan. My buy price was against the bottom of those single prints. I scaled at 1144.50, 1146.50 and out of the balance at 1144.50 on the way down.

Next trade was towards the gap, a short at 1142.75. I traded this down 2 points to the top of the single prints of yesterday. I sold it again at 1142.50 hoping for a trip to fill the gap. I scaled at 1139.50 to keep my discipline, looking for value to be accepted there. Market kept on bouncing out of there and I was watching the day's DVA and the day's still single prints above. This is the stuff that needs to be recognised when trading within context.

It took about 1 hour and 20 minutes for the gap to be closed. Of course by then we were into the VA of the previous day and a whole new context was in play.

And so it goes ........


VOTE or DON'T

It's 7 a.m. and the polls have officially opened in Pennsylvania.

So go out and vote in your respective primary elections... or don't complain about the results. And if you're a registered independent, well then I'm sorry Pennsylvania's convoluted closed primary system won't allow you to have your say.

Regardless of party affiliation, today's elections offer a number of interesting races, including two that are garnering national attention.

The one that has the most immediate impact will be the 12th District race between Democrat Mark Critz and Republican Tim Burns. The district, which looks like a kangaroo jumping into the mouth of a pit bull, was vacated earlier this year when longtime congressman John Murtha died due to complications from gallbladder surgery. The special election is a dead heat and could predict what will happen with the rest of the congress in the fall. Although I don't live in the district, I've seen plenty of the commercials from both the campaigns and their party affiliates. Most have ranged from stupid to bizarre: The 50-foot Nancy Pelosi monster and Critz telling voters he opposed the Democratic health care law and is pro-gun/pro-life are the first that come to mind.

The other race could shakeup the D.C. political establishment. Sen. Arlen Specter is teetering on the edge of losing the Democratic primary to Joe Sesetak, a two-term congressman from eastern Pennsylvania. Sestak has hammered Specter about his party switch and whether Democrats can trust him. Specter has responded by slamming Sestak's military record. It will be a monumental upset if Sestak wins. And with recent polls showing a statistical tie, the incumbent should be very concerned.

But the election that I will be following closest is the Democratic gubernatorial race. I don't care who wins, but I will be reporting on two of the candidates, Dan Onorato and Jack Wagner, from their campaign parties tonight in Pittsburgh. The stories will appear at www.pa2010.com, a political website that will serve as a dragnet for every major competitive race in Pennsylvania. Thirteen reporters from across the state will file updates via the PA2010 blog, upload candidate videos and write stories while embedded at campaign victory (or sulking) parties.

So get out and vote today, and then follow up-to-the-minute election night coverage on www.pa2010.com.

UPDATE: BLB Guest Columnist Amanda Gillooly will be following the 4th District Republican primary race between Mary Beth Buchanan and Keith Rothfus for PA2010. She will be reporting throughout the night from both campaign parties in Wexford, Pa., so make sure to check out the District-4 race as well.

Senin, 17 Mei 2010

Trying the 3D print thing again....



Add Image

Battle of the Bots and Training Update

Market action was quite interesting today. The "battle of the bots" seemed easier to see today for some reason. Maybe it was just me because I was working on Flo over the week-end. It seems that there is more and more volume chasing smaller and smaller moves. I opened a short term volume chart on the ES to watch. The range bars get rid of more of the noise than they ever did. I guess if you are trading the noise then you want to see it but I found it very hard work following the 'bot action. As they are trading very much inside my range bars it does not look like they have much impact on me apart from providing more liquidity, although there were a couple of trades I was in that must have caught a bunch of the 'bots offside at the same time because my target was hit with a pop almost straight after the trade was put on. Interesting but it seems like we'll see more and more of this as the Goldmans of the world go more in this direction.

I'm looking forward to starting the training on July 10th. Still lots to do for me but I'm getting more eager as the date gets nearer. I'm planning on having an open microphone so the communication is more natural rather than have you all type. If it doesn't work out, we'll have to go back to the typing and only me talking.  So those of you already signed up please have a good quality head set with a microphone available.

After the first two days of theory on the Saturday and Sunday, I intend to start working with you on creating a trading plan. I expect the plan to evolve during the whole training process as you begin to get to terms with your own goals, styles and money management ideas. Somewhere along the road you will have a good idea of how you will run your business, at least in it's first incarnation. And as your experience grows and you hit milestones in your achievements, I expect you will refine your trading plans. Each attendee's trading plan will probably be different and tailored by them, with my help, to suit them in every way. This process is important as you must own your trading plan and have confidence that following it will take you to where you want to go, CP.

My goal for the training is to help each of you to have a trading plan that, if you stick to it, will make you consistently profitable (CP). The training will also be aimed at teaching you techniques to help you stick to the plan.

As the training is a very hands on and practical one due to the fact that we are working with live markets, I expect to see everyone progress day by day and I will be watching to ensure that I do my part to see that this goal is met.

In addition to me recording the training, I strongly recommend that you use some sort of software to take snapshots of the screen as we work so that you can capture the pictures of triggered trades and make notes on those pix. Windows 7 has this built in. If you are using other operating systems there are numerous other applications available that can do this, many of them free, just google, 'free screen capture'.

I have received quite a few emails from people who want to do the training without payment and we are going through those emails carefully. It's not going to be an easy choice. Our criteria is based upon a balance between need and our idea of what we think the chances are of the person succeeding, taking into account their personal circumstances. It would be an easier choice if there was a way to measure a person's ability to manage risk and fear of failure.

Minggu, 16 Mei 2010

Three days in the desert.

The Friends of amateur rocketry is the site where we do most of our testing and flying.
It is both a registered non-profit and a largely volunteer organization. In the last year of our LLC I felt we had become more of a user than contributor to the organization. This week FAR had a three day work party and I spent three days on site. All in all we did a bunch of trenching and in the end buried over a mile of Ethernet and power cable. It was three days of very hard physical work with as much time spent using a shovel as any other implement.

A large part of our culture probably doesn't understand why we as a group chose to spend our personal vacation time waist deep in a trench operating a shovel in the hot sun. The Majority of the people on site (self included) could afford to spend vacation time sitting on a tropical beach with a frozen drink, and choose otherwise.

On Saturday we had an active flight waiver so I took a break and did some experimenting. I'm evaluating sensors for high G use in rockets. I modified the Nose cone of the Liberty 2 I built a month or so ago.

You can see the stock nose cone on the bottom and the modified one on top. The electronics bay slides into the aluminum sleeve and screws in around the base with 10 counter sunk #4 flat head screws. The GPS antenna is on top and sticks up just above the metal/plastic transition. I am using this to evaluate IMU, GPS and telemetry components. It has an analog devices ADIS16350 6 DOF imu and a Spark fun 9DOF IMU (I know its really 9 measurements not 9 dof) A low cost 10hz GPS and a 100Mw Xbee-900 telemetry radio with non-optimum antenna. (The antenna is the white wire sticking out of the base) and 2Gb of micro SD data logger. The goal was to launch it and see how the different sensors compared. Alas the GPS worked at home and never got lock in the field so I got one flight with dual IMU data and on the second flight I pinched a wire reassembling and only got data from one IMU.
I'll review and commend on the data collected later. The flights were around 4000 ft with 8 or so G off the pad and the system seemed to have no telemetry glitches. On the ground I used a simple rubber duck antenna. At this point the IMU data is just one hour of raw numbers, but I'll locate the flight in the data stream and reduce it to something useful in the next week or so.

The CTI pro54 solid HPR motors are really easy to use, the flights themselves were pretty uneventful.

When I flew the vehicle at plaster city I bought a tracker/beeper to help find it. I did not purchase a receiver as the club had one. I put the tracker on with a fresh battery when I flew at FAR thinking that if I could not find the rocket I could go find a tracking receiver and come back in the next week to locate it. On the first flight it did not land with the rocket, the deployment was about 4 seconds late and had some speed so I guess I did not tape it on well enough.
So if someone is a real glutton for punishment there might be a tracker at 220.470 (ch 247) beeping away somewhere in the desert south of FAR.

Lastly on the 25th of this month the local San Diego AIAA chapter is having an awards dinner and Unreasonable Rocket's LLC effort is getting an award,that's kind of cool.

Jumat, 14 Mei 2010

Brückentag in Germany Today

It was a "bridge" day in Germany today - a working day between yesterday's holiday and the week-end. Lots of people made it a long week-end.

I started trading Euro futures this morning, London time, and there was an hour in the morning when someone at a large institution was either bored or found that running stops was a good way to make money on a Brückentag. Or maybe the arb between the futures and the cash had something else going on.

Looking at what the traders are doing, not trading just indicators is important. I had to move my stops out of the way and still traded my targets. Happily things went back to normal after an hour with a series of down moves and pullbacks.

I switched to the ES and enjoyed the ride down. My longer term positions are really paying off. I use the same methodology as I use for day trading and sell premium, usually for 10 day swings. If we can trade down to the support (1123.00 ish) today and flick through it even for just a blip. I'll have hit my targets in 2 days.

Kamis, 13 Mei 2010

Another Post About Exits

I have written about exits a few times and will do so again as I get lots of questions about what is probably the most critical part of trading.

A trader has control of only two things: when he enters and when he exits. Again repeating Pete Steidlemayer's words:" Just get the trade on and manage it", we need to have a comprehensive exit strategy as part of our trading plan.

When I put on a trade I have a vision of what the market is doing but I cannot know where it will go. All it needs is one or more large traders with an opposite view and my vision is history. I can probably see that the market will get to my first logical scale out point and after that, "I dunno" as they say in Oz.

I have accepted my limitations and have built my own workaround. I scale out. I take some profits all along the road. I know that it means that when i am wrong I will take a 100% hit and if it only gets to my first scale out point then I will have a 33% profit. But I have a high win rate. That is my protection and that is why the maths work for me.

A perfect example is trade #4 today. It was a buy because I was trading the Gap trade and the picture came together right at yesterday's VAL. wasn't difficult to trade. But then I had to manage it. My vision was a trade to the VAH. But my first logical scale point was 1167.50 and I took 1/3rd profit there even though I envisioned a trade to the VAH at 1169.50. I wasn't certain that it would go there. I was also ready to bail the whole position if the picture changed. If it had rocketed through the VAL then maybe I would still hold a piece until I thought it had run out of gas.

Exiting is all about the vision and the order flow and momentum as the vision unfolds. Making hard and fast rules is not the way I go. I am a discretionary trader and I use that discretion on the basis that I keep taking profits all along the way until I run out of bullets. Once I get that trade location, I don't want to just throw it away for 2 points.

 I'm writing this after watching the market get to 1169.00. I am out of 2/3rds and will look at what happens at yesterday's close of 1170.50 ish. EMAs are horizontal with trade on the correct side of them. Whatever else happens, I have a free trade now with my stop at break even plus a tick.

Price went through the VAH where I exited half of what I had left. I exited the balance at 1170.00 on the way back into the DVA.

That was a fairly typical way of managing a trade. the fact that it was a VAL to VAH trade made it easy to explain in writing, which is not always the case.

Dislodged with a crowbar



By now, you've probably listened to this audio recording of Sen. Arlen Specter thanking Allegheny Republicans for endorsing him in this Tuesday's Democratic primary. Laughs emanated from the audience packed full of Allegheny County dems the first time he made the blunder. The second time, though, was no laughing matter for the party elite trying to defeat challenger Joe Sestak.

My mother and I watched the story explode on television, prompting us to wonder if the 80-year-old Specter is all there. "I kinda feel bad for him," my mother said. "He just looks so sad all the time."

"Feel bad for a politician?" I said. "Puuuuuuhlease!"

These people don't care about you or me. They care about the power. They care about the lobbyist kickbacks. They care about the pay, perks and pensions.

And they are hopelessly entrenched in a system that is broken. From municipalities to the state and federal government, these politicos are destroying our democracy. But that might be changing in a non-partisan fashion. Pols from both sides are losing their primary bids to a new generation of people who will probably be no more noble than their predecessors. But at least it's a start.

As Gail Collins of The New York Times wrote yesterday: "The war on insiders does not seem like all that bad a development. The problem with American politics is less that incumbents are being upset than that they usually cannot be dislodged with a crowbar."

This storyline was punctuated on The Daily Show last night when Senior British Correspondent John Oliver opined on the recent prime minister elections across the pond. The Briton explained that voters there don't have the same cuddly feelings for their politicians, like Gordon Brown, when they leave office. As Oliver explains 5:15 into this clip, "it's one of the few things we have to look forward to."

Instead, he said, the British "treat our political leaders like the disposable bureaucrats that they are."

Here's hoping we do the same with our "leaders" this election year.

Rabu, 12 Mei 2010

Bureaucracy at its worst

I certainly hope you filled out your Census information and mailed it in. Because if you didn't you're going to get hounded by a census taker again and again and again. And when you finally do cooperate and give them the needed information, it's very possible ANOTHER census worker will drop by your door to hound you again and again and again.

Unfortunately, the latter position is my new job. I'm a Non-Respondent Follow-up Reinterview Enumerator, or NRFU-RI-ENUM for short. I'm basically quality control for the original enumerator.

Not only does it seem redundant, stupid and wasteful, but it also sounds really dangerous. These people probably aren't happy to give their information to an enumerator in the first place, so they'll be even less thrilled when I come knocking on their door to make sure the first census taker didn't forge the information.

Now, we are not doing this for the entire population that didn't respond, just 20 percent of those. It's designed to be a quality control measure, but it sounds like a big fat waste of time.

For the 2020 Census, I'm suggesting we give each household $50 to respond to the original mailing. And if that doesn't work, start airing commercials informing non-respondents that an army of census workers will be hounding you for months if you don't Mail It Back.

It would probably be cheaper -- and safer -- that way.

How does Order Flow Reveal Itself?

Order flow has somehow become the buzzword of trading. It took a long time for the retail traders to begin to look at what the locals in the pits had been doing.

The pits have two broad groups of locals. One group provides much of the liquidity to the brokers filling paper by taking the other side of their trades hoping to do enough two way business to make a profit - sell retail, buy wholesale, basically fading the moves. The other broad group "goes with the flow" and even creates some of it. This second group trades in the direction of the momentum and nett orders.

There are many different reasons that trades are made in, say, the ES: a hedge against a stock position, a hedge against an option position, transferring risk, place holding, speculation, part of a complex arbitrage and so on. Some of these trades are trades that MUST be put on at certain times because of their interdependence on other transactions, some of these transactions MUST be put on at specific price levels, some of these trades are reactive against certain price movements, some of these trades take place when certain market activity takes place and so on.

So the environment that we are trading in is a very complex one with many different types of market participants with many different time frames and motivation.

When we trade, we try and synthesize this into just one trader - is he buying or selling. However, because of the complex activity - ES can trade 3 million contracts a day - to be able to synthesize the action and determine an overall order flow, I need to look at many parts of the picture in different ways. Information from just one bar in isolation is meaningless. The relative activity of the bars tells a story as does the volume that is traded. These are the only two pieces of information the market gives us. We then take this data and mine information from it. How we organise and extract data from the price and volume activity is crucial to our success because we must draw a conclusion from the information we have. If we organise the information incorrectly and rely on that information then the conclusions we draw will be incorrect.

This may sound obvious but I'm talking about it again as many traders put things into their charts without a reason. If I have something on my chart I want it to tell me something I need to know and I want it to tell me the truth.  My interaction with my charts is a like having a spy telling me what the enemy is doing. Listening to this information is a like listening to a squawk from the floor with additional secret information being conveyed. If what is on the charts does not do this, why are they there? What is the indicator saying about order flow and momentum direction and strength? This is what matters.

Today's ES Gap trade was not on. The 45CCI was clearly showing upward momentum. CVD was buying. There were a series of bounces off the 33EMA support. The market got ahead of itself twice for a good outside in trade but the Profile showed that the market was accepting value higher up.

Selasa, 11 Mei 2010

Trade the Trend?

Trend days are about 2 or 3 per month. So for day traders, trading the trend is not a profitable strategy. That leaves 2 other ways to trade: fading a move or going with a move. A fundamental part of your trading plan is the identification of the type of moves you are trying to capture. If you haven't done that then you may find it hard to both work out how to enter a trade and when and how to exit.

So, the first part of my trading plan is under the heading: What's My Business. As soon as I have identified this I can go on and work out the rest. Just going into a day's work and winging it will not cut it.

I'm not saying not to trade a trend. If a trend develops on those 2 or 3 days of the month, I'll exploit it but within the parameters of my trading plan. I am a very short term trader as most of us are that come from the floor. However, my plan calls for scaling out and re-entering so I am able to benefit from the trend days while at the same time capturing the smaller average wins that the market gives me on most of the other 17 days.

There were 2 trades of the day today. One of them was at 4am this morning, London time. I usually wake up at 5am and often earlier. In the last couple of days I have gone straight to my computer to see what was happening. There was a great sell of the ES at about 4.20am London time when support broke and momentum reversed to the downside. I took about 5 handles but missed the re-entry continuation as was having coffee. The 5 points took just over an hour to get.

The second trade was the Gap trade when the RTH ES market opened. It was a clear buy at 1146.00 after resistance broke. First stop was the Fib at 1151.00. This time the 5 points took only 18 minutes. These gap trades can be your one and only trade of the day once you get the knack of them. I held the balance as the MomDots held as the Fib blue rectangle was attacked on the way through the VA. The POC did not hold and my target became 1156.00, the previous close and almost VAH. I exited the whole position just above the rectangle and then began eating the elephant one bite at a time as you can see from the green arrows. The market was nervous and gave me a series of two point trades, retreating back to support where I was buying. The last gasp to 1156.00 was finally made with a bit of tooing and froing.

There are 3 "setups" that can give you a great living trading. This is one of them. I'm going to spend a lot of time on these 3 trades during training. Lots of nuances but not hard to learn when you see it live. Kiki learned the gap plus one of the other two and got to CP. The third was next and she stayed with these 3 for quite a while. Even now, most of her trades are these same ones as they have a very high win rate and it's stress free for her. Very important.

Senin, 10 Mei 2010

Should you use Indicators?

Yes!!! Kiki has gone back to using the indicators you see on my charts. I realised that you cannot transfer the experience of 30 years of watching the markets without providing the tools to substitute for that "screen time".

Indicators provide information. When I trade without indicators I am "seeing" the information that was previously provided  by my indicators - the change in momentum, the trend, where the Fib reversal point can be and so on.

Some people criticise indicators because "they lag". Well, they don't lag. An indicator tells me exactly what it is indicating at that moment in time. It is up to me to use the correct indicators correctly so that I am getting present tense information that I can process in real time to make a trading decision.

My screen is bombarding me with information as every tick unfolds. Indicators can summarise a lot of that information and point it out to me "in my face" that I may otherwise overlook. I can and do create alerts based on those indicators and the price action to make even more "in my face". I need to make this stuff as easy as possible.

As part of Kiki's progression after she achieved CP, I started removing indicators with the aim of only leaving the volume stuff. As soon as we started down this road her stress level increased and her trading suffered. At first I thought that was only a temporary step back but as the days went on I began thinking of why I was suggesting this. She was trading great with indicators. Sure she had a few issues which we worked on and resolved but overall, she was a star. Why on earth was I trying to fix what was not broken and what was obviously working so well, just to see some esoteric trading?

It wasn't one of my better decisions. Mea Culpa as they say on the Continent.

Kiki is back to trading with the range bars, EMAs, Keltner, CCIs,MomDots and Market Profile and is stress free again and making as much money as before. The correct indicators, used in the way I taught her, took her to CP and is now leading the way to her increasing her size.

Today was a harder day to trade due to the air underneath. The Gap trade was a no go. There were some VAH/VAL trades but all in all a scalpers day again.

Jumat, 07 Mei 2010

Drinking on the job

There are few job postings that really stick out. Most of them look basically the same with bland details about what your bland job duties will be. But this posting for a "public relations" position on Craig's List really caught my attention...

Beer Pong Promotional Reps Needed (Pittsburgh)

World Beer Pong Tour is looking for promotional reps to promote upcoming events at Buckhead Saloon in Pittsburgh May 22-25.

Reps sign teams up and sponsors for the tournament. Please fill out a job application for Promotional Rep at worldpongtour.com/jobs/reps.php

More info on World Beer Pong Tour at www.worldpongtour.com

Uhhh, there are no words to describe that position. As expected, the job is part-time and workers are paid by commission. Now, I'm no salesman, but how hard can it be to get a bunch of drunk frat bros to sign up to play a little beer pong? On the other hand, if this blog suddenly disappears from the tubes of Internet, you'll be happy to know that I've found my calling in life.

The Jackson Pollock Effect

Boy, was the heading to the day before yesterday's post an understatement. Yesterday we had over 3 million contracts traded in each of the ES and the EuroStoxx50. A large part of that was clearly due to HFT (high frequency trading), the buzz word of our day, that went a little awry . When the shazbat, as Mork used to say, hit the fan just after 2.30pm NY time, the Bots went to war and for a few minutes the charts looked like a mad painter had throw red and green paint against the canvas. The Jackson Pollock effect. One seeming mistake kicked it off and then the computers pin-balled and did exactly what their algorithms told them to but in an abnormal context. The huge flicks in price were reactions against each other and painted a surreal canvas on my screen.

I had gone to vote. In Oz, voting is compulsory which I believe is a good thing as any election is the result of the whole eligible population. Yesterday I made sure to exercise my vote as I couldn't stand the mess the UK is in and thought I would do my part to try and avoid a hung parliament. So I had finished work before the madness.

Today was a very good trading day as you may have expected. I've changed the background colour back to black.

I have also gone back to marking the actual triggered trades rather than the setups. Additionally, I'm now showing both inside out and outside in trades.

Kiki has graduated to trading all the setups she can find. Her size is still small and I will recommend it stays that way until at least October. By then she will not have just perfected her skills having experienced markets of most types but will have also achieved the very needed mental attitudes. In any case she is earning more than the average wage so there is no pressure on her to move faster.

As you can see, I exit and re-enter on days like this when there is a lot of two way rotation - I'm in scalp mode. I hate giving a profit back so I take the profit and re-enter on the pullback. You may want to trade the swing to it's end rather than break the trade into a number of trades like I have today. There are good arguments for both methods. There were 14 trades in the EuroStoxx50 before lunch with quite a nice range. I broke yesterday's Profile into it's distributions and used the S and R that was revealed. The VB and the inside the bar stuff of MD confirmed the trades when the momentum change occurred at the S and R areas.



I switched to the ES just before RTH trading began. The first couple of minutes were strange with people rushing to close out errors which resulted in volatile sideways action. Then into scalping mode again for the first hour where 7 trades were triggered. I tended to exit too early due to the volatility but was lucky a couple of times when the market moved too fast in my direction and I didn't have time to bail too quickly. 


Kamis, 06 Mei 2010

The Marks on the Charts

The marks on the charts are the bars where the criteria is met for one of the setups NOT TAKING INTO ACCOUNT THE CONTEXT. MarketDelta will mark EVERY bar where a pre-programmed condition is met. I am a discretionary trader. I exercise my discretion when I look at all the information, including the context. I also evaluate the trade at the close of every bar.

The marks are really useful, especially when you are a new trader or are looking at multiple markets as it draws my attention with a ding (next version of MD will allow better voice alerts). I can then decide whether there is a trade and whether to keep a better eye on that market.

How can you use this information on the chart? When the marker first appears, decide whether that is a trade or not. You can reverse engineer the things YOU would want to see for the setup to become a trade.

The attendees will get these as part of the training and I will show how to create them. This is not possible in the blog as it would take pages to try to explain. At the moment I am creating a training manual for this, which is where this information can be explained clearly. 

The chart below has these markers. Let's look at the setup marker "1". Here the 33EMA support was broken with the momentum of the 2 CCIs confirming the trade. VB and CVD had turned RED too. I'm not even mentioning the 45CCI divergence This was a trade. You can also see that there was in fact 2 setups signaled here. The next bar said one of the setups was still there and as a late entry I would have taken that. Now let's move to "2". Here, two setups were signaled at the same bar again. The signal was after a higher low, momentum had turned up according to the CCIs. Market action for Longs and Shorts tends to be different and this trade was one of those. We have had a good down move and buyers are nervous. That's reflected in the pullback after the entry. I could have waited until after the 45CCI crossed zero but would have given up a lot of my profit. The previous lows that held in the same area also gave me more confidence in the trade.


Now looking at the next chart below, there is a signal at "1". This trade would be rejected as it is very clear from the CCIs that there would be a probable pullback. This in fact happened at "2". The good thing about the methodology is that had I made an error and taken the trade at "1", I would have reversed at "2" without much of a loss.


Finally, today was more selling in the ES. I have marked all the major selling points. There was really no reason to cover until the price broke back up through 1151.75. There will probably be another selling opportunity. Support is at around 1146.00 and change.



 Done for the day, off to vote.

Leaving class to horse around

By Michael Jones
For the Tribune-Review

Anxious stares quickly gave way to wide smiles Tuesday morning as 13 students from Bethel Park High School's special education program visited a Washington County horse farm for the ride of a lifetime.

The activity gave the students a hands-on experience with horses after they recently finished reading "Black Beauty" for class.

Sherry Parise, an autistic support teacher, could barely contain her enthusiasm watching 16-year-old Hannah Dibble prepare for the first ride of the day at the Horse 'N Soul farm.

"This is so exciting," Parise said as Hannah climbed atop a brown equine named Nash.

Parise said Hannah is usually quiet in class, so she was encouraged as Hannah responded to an instructor's direction to tell the horse to "walk on." With that command, Nash began moving forward with an instructor guiding the horse around the ring.

Parise was just as excited a few moments later when Jimmy Tosic, 19, mounted the next horse and gave the same instructions. Flashing a wide smile, Jimmy waved to her and other students while riding Rocky in the pen.

"Just to see him so relaxed on that horse," Parise said. "He's not going to want to get off.

"I love animals and kids, so this is the perfect place for me."

Read more...

(Photo by Keith Hodan/Pittsburgh Tribune-Review)

Rabu, 05 Mei 2010

Catching up....

A bunch of Random thoughts... Business is picking up and if we can manage the many parts shortages I should be able to fill in the LLC $ hole I dug in 2009 and even do some modest development.

Toward that end I've been working on several things.
The four motors shown in the back of the rocket two blog posts ago are meant to be 3D printed with built in cooling passages. I had a plastic version I was showing at Space Access, the Metal version I ordered arrived today and it looks really good until you try to pass fluid through the cooling passages they are all plugged with sintered metal. Its a really pretty $400 paperweight.
I may have to build in a conventional way or change to a more expensive 3D printing process.
I used a supplier that uses the Prometal R1 and would really like to have the work done on a
EOSINT 270 M, but that process is about 5 or 6x as expensive.

Last weekend I went out to the San Diego Tripoli club launch and Joined Tripoli and successfully flew my Level 1 and Level 2 Qualification flights using the poorly painted Liberty 2 I discussed earlier. I'm in the process of building some test hardware to evaluate several lower cost IMU and GPS solutions that I will fly on the Liberty next FAR weekend (the 15th)

I'm working at doing some development work to lower the overall cost of things. One of the areas I'm working on is a lower cost IMU based on MEMs sensors. The Mems Sensors are getting much better and lower cost. The area I'm sort of stuck on is doing the drift bias correction stuff. The guys at www.diydrones.com have been working on IMU drift correction for aircraft and have generated some really good stuff. I just started a discussion topic over there that I hope will help me make some progress in extending some of this work to highly accelerated rockets. (http://diydrones.ning.com/forum/topics/rocket-imu-thoughts)

Volatility is Back!

The last 2 days shows the globality of the markets from a trading perspective.

So many of the moves are beginning during the European time zone. Traders are being challenged to meet the physical requirements of being able to profit from the beginning of a move. Being able to straddle the European and U.S. time zones has become a distinct advantage since the European Union created the Euro currency. The almost 400 million people who now live in the EuroZone has created a Yang to the U.S.'s Ying. It will be interesting to see what happens if/when Asia gets it's act together and becomes a real economic force. They will dwarf both the U.S. and the EuroZone if they get a real middle class with some purchasing power. In the mean time, we, as traders, need to address how to be able to reap the opportunities being given to us.

Typically, the best time to trade a futures market is in its opening hour or two, when the market is looking for balance and exploring and finding where value is. The other time there is opportunity is when the U.S. markets close -  that last 30 or 45 minutes when people trade who have to, either to create or close positions for specific reasons such as hedges, closing day trades and the likes.

On most days, initiating trades outside of those golden hours, results in lower profitability. Often, that first hour sets the high or low for the day. Traders who like that style of trading - putting on a position at a major support/resistance or break thereof and then scaling out. If you are an even shorter term trader, scalping the market, the golden hours provide higher volatility and momentum for you too.

In creating a scalping methodology, it is not uncommon to switch periodicity on your charts as the volatility changes during the day. The key being, to catch the move early while balancing the risk and the reward in a way that meets your trading plan's objectives. As I have said, using range bars makes money management easier as you can trade with a consistent size more readily. Switching to bars that have inconsistent lengths puts you in the position of having to recalculate your size to conform to the now variable risk per contract you are taking.  There are ways around this to a certain extent but this issue needs to be addressed.

One solution to these "dilemmas" is to become both a discretionary and automated trader, dividing your risk capital. This is one way to resolve the timezone issues as well as managing the risk from short term non range bar charting.

Today was really rock and roll. Between the Greeks showing their sadness at the austerity to come and the roumors about Spain, Euroland hit the Euro and the stock market. I could have traded light crude too. All in all, the order flow was fairly easy to follow as you can see from the setup reminders on the chart. If you look just after thr U.S. RTH open, you can see a very anxious buyershowing himself/themselves as a spike in the VB (14:54 London time). This was the start of the rally. The CCIs showed it all too.


The phone interview

I've interviewed hundreds of people for stories over the phone, but this was the first time someone was asking me questions using the ole rotodial. A local college called a few days ago asking me if I would be interested in interviewing by phone for a public relations position I applied for months ago. Of course, I was excited and wasn't about to turn them down.

My cell promptly rang at 9:30 this morning and we moved right along with the questions. But it felt strange talking to three potential bosses sitting miles away speaking through a conference call. It was impossible to gauge their reactions or feed off their enthusiasm, which I think makes personal interviews so interesting. They asked the standard answers and I gave them the standard responses, hoping I would eventually be elevated to the next group of applicants that get the one-on-one treatment.

Of course, I don't blame them for conducting phone interviews to narrow the list. It surely saves time as they move forward with the hiring process. It just was a very different -- and probably very useful -- experience on this winding road of unemployment.

Selasa, 04 Mei 2010

I was in Dire Straits

It was Money for Nothin' (no chicks) today. The 45CCI stayed under zero -+showing the momentum was down, the volume delta was pretty good at hitting the bid and there were plenty of pullbacks to re-enter on if your style is like mine and you love paying the clearing firms. At 1180.00 it looked like it would bounce but it didn't. Looks like the long liquidation is continuing. It was hard to be wrong today. My vision for the day was lower and even though it started slowly, I could not see any real buying at all so I didn't have to be too smart. Kiki loves these trend days as she can let her last piece run until the close. It's a way to go yet and we'll see if there is any reversal. I expect some profit taking but hopefully it will be just another opportunity if we read it correctly.



I have just started checking the redundancy of my setup here in London so that there are no glitches for the training. We have plenty of computers and they all have charting software and will have the Go to Webinar software too. I've ordered new routers/modems for each of the two internet connections we have, both cable and ADSL2. We are currently testing how big the files will be for an all day recording of the the webinar. It looks like about 1Gb per 30 minutes. We are getting in an additional terrabite of storage to cope. I have also upgraded the ADSL2 upload speed to double so we can get the videos online as quickly as possible. I won't know how long the uploads will actually take until we try it in real time at about 9.30pm London time. There is lots to organise for an effort like this.

I have started work on documentation. Although the fact that this will be live and that the setups will reveal themselves in real time, I thought some written material may be a useful addition for those that learn that way. What the attendees will be learning is how to read the market by processing, in real time, the information that is coming in. The first stage in the process is to have the help of signals and arrows that appear on the chart to remind you what is happening. This will help not to miss something. I will be saying what I am thinking as the market progresses and pointing to what information is useful in which context. It becomes very inuitive. It's changing the mindset from looking at indicators to looking at what market information the indicators, including the bars, are telling you.

There is an introduction in the documentation I am writing where I talk about the first Star Wars film where Obi Wun Kanobi is teaching Luke Skywalker to fight. He blindfolds Luke and tells hime he has to feel the force. This is the same as successful traders who process the information they see, know its a trade, pull the trigger and then manage the trade. Just as we did in the pits.

More questions rolling in as you can see below. My answers are in red.

       Comments:

Tartan said...
Tom: Over the past month, I have noticed that many of your trades are labelled with the type of setup that was used. I have noticed the following labels: - Delta (meaning Delta Divergence) - TR (meaning Trend or 30 EMA cross??) - SL (not sure what it means) - S&A (not sure what it means. I notice these are High Frequency Trades) - No label (simply Buy or Sell with no label when other trades on the same chart are labelled). Would you be able to tell us what these labels stand for? Even if you cannot provide us with insight into each of the specific setups, it would help to know their names as it may give me a clue when I try to "reverse engineer" your thinking. Thanks!
These are reminders to me of parts of setups and things in my trading plan. These are the things I suggested in previous posts traders create for themselves.
Anonymous said...
Hi EL, I've enjoyed your blog for several months now and I'm signed up for the training. I've gotten much better at selecting entry points, but my struggle right now is managing the trade after I'm in it. Sometimes I have a hard time staying in a trade because I'm not sure what's normal heat and what's a real change in market direction. I'm hoping you cover this in the training. Thanks again for your excellent blog.  
It certainly will be a huge part of the training as its critical to CP. I'll show different ways to do this depending on your style - lot's of shorter trades with re-entries or let it run.  
TrueBalance said...
"the setups are important but the magic is learning how to evaluate them against the context" How true. How do you learn someone to "think right"? I can't wait to see how you plan to convey that knowledge. You've obviously succeeded before, at least with Kiki. Common trading lore has it that it can only take place through thousands of hours of screen time - and that is if you are lucky. By the way, it would be nice with a Kiki update. How's she been doing lately?
Kiki is a star. She is having an issue with managing the trades due to the changes in volatility. We've almost got it licked. I'll show you how in the training.
Anonymous said...
Mr. ELocal ..Will your videos of the entire training be available for sale at a later date without mentoring?
Mr Anonymous, I wasn't planning on doing that, but I must be upfront and say I have made one exception to this for a long time reader of the blog who for personal reasons can't attend live.