Catchphrase

Years ago, maybe it's still going, there was a goofy TV games show in the U.K. called Catchphrase. The game involved the contestants watching a cartoon drawing to be revealed bit by bit and them having a contest as to who could say the well known phrase that the cartoon depicted. The compere (do they still call them that) kept urging the contestants to "Say what you see!"


Trading becomes exactly that. Trade what you see. I've often kicked myself when I see a picture and say to myself: "Ah, that's hit resistance (support) and it should reverse here" and then I DON'T trade it. I feel pretty stupid afterwards and don't know why I didn't take the trade. Lack of focus or lack of conviction at that moment? I don't know, but that's an issue I'm working hard on now: "Trade what I see".

Are There More Outliers?

Mrs EL and I are big readers and have moved to both Kindle and iPad for our reading. Very convenient and easy in every way.

I'm currently reading a book called Outliers by Malcolm Gladwell.  His main idea, and he sites references, is that according to scientific research it takes 10,000 hours of practice to become master a skill, be it the arts, sports, computer programming or anything else.  He also states that these people who master a skill to a high level need not be genius smart, but only smart enough and they had to encounter a set of circumstances that gave them an opportunity in their chosen field that may not have been available to others.  But they all required 10,000 hours of practice to become good enough to take advantage of the opportunity. Finally, he says that no one, not rock stars, not software billionaires and not even geniuses -- ever makes it alone. All had help of some kind.

Day trading and trading in general by retail traders has become more pervasive over the last 10 years and I think that if Gladwell's hypothesis is correct, and I think it is, then many more people have hit their 10,000 hours and have received the help needed. Why do I think this? Well, the general wisdom is that more than 90% of traders lose, a wisdom that I have repeated myself as it was the number generally used in the industry.

Well it looks like that number, 90%, is no longer true, if it was ever true. In the quest for more transparency and regulation of the Forex markets in the United States, a new law was passed there requiring, amongst other things, that the Forex broker/dealer publish a statement about how many of his customers were profitable and how many were not profitable. In complying with this law, lots of filings have been now made.

I received a copy of one of these filings in an email from TradeStation that said that just over 20% of their customers were trading FX profitably. Looking at other filings I saw that, with one exception, most forex brokers/dealers reported that between 20% and 26% of their customers were profitable. The exception was Oanda whose profitability figure was almost 50% (because, I believe, they provide forex services as well as trading and that skews the figure). Great news, in a way, 20% profitable is better than 10% profitable, but all in all not a very large percentage.

My first aim when I started with this blog was to use it as a place to keep all the info I wanted Kiki to remember.  As this blog developed, my other aim has been to try and help people shorten their learning curve to CP. I know I am on my way to achieving that with many of you, from the feedback through both this blog and through the training I provided by the webinar/seminar and DVD/mentoring route. But there is still more work to be done. So with that in mind, here is today's trading sequence.

Today's ES was pretty straight forward. It was a bullish day and the market obliged. Here's the vid.

Saturday Testing...

We went out to FAR on Saturday. It was a normal Saturday at FAR.

• UCLA was fireing a 2Klb Nitrous Hybrid Motor.of their own design. They had a good firing and learned a lot.
• There were several EX solid flights including an M.
• An experimental Steam Hybrid Motor.
• The site next door, RRS fired a large 10K lb (my guess) biprop liquid for a 10 seconds or so a good rumble.
• We fired our small Gasoline/H2O2 regen 3D printed DMLS stainless motor.

We had a good firing, basic results:

• Our Cat pack issue is resolved, it started right up and ran perfectly. It looks like lots of anti channel rings are really important.
  
• The motor is running a bit lean as the flame was completely transparent.
• We ran for about 60 seconds so we reached thermal equilibrium.
• We are completely paranoid about material compatibility on the H2O2 side of the test stand. It appears we need to be more paranoid about the fuel side as the gasoline ate the seals out of one of our fuel valves.
• I'll try to publish data this week.
• We should also have access to video later this week.

Unreasonable is basically testing with a two person team. This makes it really hard to take proper pictures and video of the testing. On Saturday there were some guys from a couple of LA hacker spaces (crash space and null space) that came out to FAR and were filming everything. They took a bunch of pictures and videoed the test. When they post these we will post a link here. So... if anyone wants to comne otu to the site and take pictures you are always welcome. We expect to be testing on the first and third Saturday of every month for the foreseeable future.

Rocketman

Mrs EL and I had tickets to Elton John's concert last night at the Geneva Arena, again. I say again because the tickets were originally for December but Elton cancelled a few days before. We couldn't understand why until a few days later when he announced the birth of his new baby, so it all made sense.


Yesterday we drove down (about 35 minutes) to the venue right next to the Geneva airport only to be told as we arrived at the front of the parking queue that the show was again postponed, this time until May. Rocketman was again a no show but he's still standing.


It doesn't bode well. A few years ago, we had tickets to a summer concert by Pavarotti at a country house half way between London and Yorkshire (can't remember it's name). We were really looking forward to the Champagne and strawberries in the early evening British sunshine. He became ill and the performance was postponed for a year at the same venue. Sadly, Pavarotti died and we didn't get to see him. I hope our luck with Elton is better. I last saw him in Budapest, Hungary in the early 1980s. It was a great show.


I was trading mostly the Euro and the ES today, The Euro trade in the video is fairly typical of currency trades lately when there is a trend change or a resumption in trend after a rest. Timing them is a little challenging and the trade in the vid shows that working out what "they" are doing is more important than getting frightened by price.

Making Adjustments

As a long time proponent of range momentum bars to rid myself of some of the noise of the market, I have found that with the way that the markets and the participants are acting, adjustments have to be made.

For a long time, I often did not change the "periodicity" of my range bars. With the activity of the HFTs and the various worldwide impact from events, I have found that I am making range bar changes quite often. In fact, I may trade the morning in London with one range length and another in the London afternoon. Why? Because the markets often just trade differently and I need to make adjustments. Changing the range bar size is like zooming in and out. If I were to trade the ES during the NY lunch time, I would definitely look at a different range bar size as volume declined. Additionally, if I am scalping for fewer ticks I reduce bar size too.

One thing that should be borne in mind, the important thing for me in using range bars is that I get a smooth looking chart. The result of shorter bars can be tighter stops as well as closer targets. The reason is that if I am trading the peaks and troughs, the shorter range bars catch more micro moves. The risk is that the average profit per trade falls and that is something that needs to be tracked.

While I may change the periodicity of a range bar, I do NOT change the methodology. My EMAs and CCIs remain the same in all time frames including day and week. Volume Breakdown is not as useful when I'm scalping as a lot of delta information can be, and is being hidden by the size traders in the very short term, although they can't hide their footprints. "Invisible Man".

Google Hotpot now on Google.com and around the world

[Cross-posted from the Hotpot Community Blog]

Back in November, we introduced Hotpot, a new local recommendation engine powered by you and your friends. Using Hotpot is simple: you rate places on google.com/hotpot—restaurants, hotels, cafes—and add friends on Hotpot whose opinions you trust. Then the next time you perform a search, Google will serve up personalized results, listing places based on your tastes, as well as recommendations from your friends.



We’ve watched Hotpot grow and change over the last couple months, and today Hotpot is really going places: to a Google search box near you and around the world.

You can now enjoy Hotpot recommendations in your regular search results on Google.com. So say you’re looking for a restaurant in Barcelona. Go to Google and search [restaurant barcelona]. If a friend has rated a particular restaurant, you might see their rating and what they had to say about it—as well as their name and photo—directly beneath that restaurant’s listing. To see all recommendations by your friends, click “Places” on the lefthand side of the page, and choose “Friends only.” Remember, you’ll need to be logged in to your Google account in order to see recommendations.

Seeing place recommendations based on your tastes and those of your friends across more Google searches will make results more relevant to you and maybe lead you to discover a new gem. If you don’t have Hotpot friends yet, you can invite them to share all the places they love with you by using the “Friends” tab on google.com/hotpot.

But Hotpot will only be half the fun if you can’t share it with all your international friends. So starting today, we’re making Hotpot available in 38 new languages—including Chinese, French, German, Italian, Korean, Polish, Russian and Spanish—allowing people to share their favorite places in their native language.

Start rating and sharing recommendations with Hotpot everywhere, anytime: at google.com/hotpot, on Google Maps, using Google Maps for Android with an easy widget, and on our new iPhone app.

Happy rating!

Posted by Lior Ron, Product Manager

Home and Hosed

As I write this, I'm lying in wait for the Gap trade on the ES. I was short coming down to the Fib where I want to reverse into an upward gap fill of a few points.

Snow in Chicago. The floor opening will be delayed, so the dynamics will be a little different. The impact of the few guys I saw left in the S and P pit is less, but none the less there are one or two who are quite energetic and are not giving up their livelihood with out a fight. I'm 4 ticks from covering the last of my shorts @ 1299.25 and making a decision whether to go long or not there, or hold out for a few ticks lower. I'll just continue writing when something happens.

I covered my last shorts as price blew through my bid. Not buying just yet as there is still over 15 minutes to go to the RTH open and we're hovering around the Fib.

Bought the RTH open and scaled a couple of times towards the UNCH.  The last couple of ticks took a bit but never looked like it wouldn't get there. Once the 2 EMAs were cleared, I was home and hosed (as they say in Oz).