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The brutal truth of day trading

  • #1,081
  • Jun 7, 2021 12:23am Jun 7, 2021 12:23am
Quoting RickM
{quote} "RickM all you are is a immature little jerk, you have Australia written on your profile but really i dont ever think I have met a fellow country man quite as pathetic as you" Hope you had a great weekend and trade well next week. Please don't let your emotions effect your trading next week. All the best mate.
What a put down.
  • #1,082
  • Jun 7, 2021 10:32am Jun 7, 2021 10:32am
Quoting GEfx
I have criticized Peter for his rambling, disjointed and disconnected thinking and communications style
The best way to communicate with PeterCaleb is:

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Observer effect
  • #1,083
  • Jun 7, 2021 10:35am Jun 7, 2021 10:35am
Quoting remonpilip
To increase your edge, some markets have a higher historical trend component. These are the ones you want to trade! All successful systems employ some method of identifying trend. Like all things in trading, simplicity is the best route.
100% right. This is why I trade MSFT stock. Very very trendy in long term. And my EA optimization/backtests of 15 years shows "buy the dip" works perfectly with MSFT.

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Here in myfxbook you can see my live results so far with MSFT: profit 33% in 3 months. Longest trade 21 days.

You can diversify risks by various trendy blue-chip companies' stocks to trade (amazon, crm, google, fb and other...)

If the main issue of trading is to identify trends (start, end) then stocks are the best choice.

When I started trading several years ago I focused on currencies. This is a mistake for newbies. Better to trade stocks.
  • #1,084
  • Edited 5:13pm Jun 7, 2021 2:14pm | Edited 5:13pm
Quoting ryuryu
{quote} The best way to communicate with PeterCaleb is: {image}
Peter ridicules people for putting him on their Ignore list. I would never give him that satisfaction.

I've challenged him to spend a trading session with me, on line together, right here on this thread. Nothing complicated or complex. Just post what we're trading, explain what we see in the market, what we like or dislike, what pairs are attractive that session, and what is included in our trading plan. No trade calls -- just call what we trade and why.

So you see, if he's on my ignore list, I would be denying him the opportunity to prove his trading skills to everyone here. He's a self-described expert on thinking, learning, and trading. He's failed at proving much on thinking and learning, so this gives him a chance to shine at trading. I just couldn't sleep at night if I knew he'd been denied this opportunity.

I'll be spending my time tonight and tomorrow writing, so maybe he'll agree to meet me here on Wednesday at the NY open.
  • #1,085
  • Jun 7, 2021 6:11pm Jun 7, 2021 6:11pm
So join the "trading circus" .... And what ... add to the mountains of erroneous BS that already exists on this site ? Yeah no thank you.

Life is a better teacher than you could ever be GEfx. Sorry to disappoint your disfigured idea of reality.


Peter
Real Trading is not gambling.
  • #1,086
  • Edited 8:47pm Jun 7, 2021 7:54pm | Edited 8:47pm
I only care to respond to the thread starter's first post.

Day-trading commodities or futures is highly lucrative. Denying this is ignorance. Yes many are clueless and lose much but it doesn't mean many aren't making a very good living with futures trading. But day trading is very much different than the underlying purpose of the commodity markets. Commercial interests such as airlines use the commodity market to offset the risk of buying fuel to operate their jets. In fact the commodity markets were created for this purpose in the first place. Others not operating multi-billion dollar businesses are not interested in what the cost of jetfuel will be six months to a year down the road. Rather they only care to profit from the minute to minute price fluctuation and so most future traders have it in their best interest to be flat at the end of the NY session.

That being said the thread starter had some very salient opinions regarding trend trading and I believe it was this point he was trying to get across and sadly judging by the soap opera content so far it seems most have completely missed this point. If you disagree then please read the first post in this thread. Trend concepts and fundamentals underpin my forex trading strategy and even my futures trading when I trade futures (I trade forex mostly). I'm not here to make any claims about success or failure. Only that trading with the trend as simplistic as it seems is perhaps something that those lost in these forums, pay-wall websites and chat rooms should consider.

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  • #1,087
  • Edited 9:00pm Jun 7, 2021 8:48pm | Edited 9:00pm
Quoting Winston Reed
I only care to respond to the thread starter's first post. Day-trading commodities or futures is highly lucrative. Denying this is ignorance. Yes many are clueless and lose much but it doesn't mean many are making a very good living with futures trading. But day trading is very much different than the underlying purpose of the commodity markets. Commercial interests such as airlines use the commodity market to offset the risk of buying fuel to operate their jets. In fact the commodity markets were created for this purpose in the first place. Others...
Hi Winston Read

Why do these thread starters start a first post and then never add any further posts?

Because they are plant by owners of FF to generate interest so more ad’s can be clicked.

But getting make to his point on why he / she believed you can’t find a edge on short term trading.
I would argue that trading buy or sell imbalances of orders for just minutes during a thin liquidity market period is far more rewarding that trading longer trends over days or weeks.

Each to their own really, as long as there’s profit at the end of the month.

Short trend trading versus long trend trading strategies has been discussed many times in this thread, just not recently.

Cheers
Trading thin liquidity at the boundary of the charts
  • #1,088
  • Jun 7, 2021 9:27pm Jun 7, 2021 9:27pm
Quoting Winston Reed
I only care to respond to the thread starter's first post. Day-trading commodities or futures is highly lucrative. Denying this is ignorance. Yes many are clueless and lose much but it doesn't mean many aren't making a very good living with futures trading. But day trading is very much different than the underlying purpose of the commodity markets. Commercial interests such as airlines use the commodity market to offset the risk of buying fuel to operate their jets. In fact the commodity markets were created for this purpose in the first place....
The thread starter has posted three times (yes -- 3) in this thread. He seeded this thing, then jumped ship, long ago.

The thread topic has evolved somewhat, but every time a trading discussion gets started, it is quickly derailed with a long and vacuous interruption/discussion on the topics of learning, thinking, real life, and the real world. Admittedly, and sadly, I have helped keep this thing in the ditch for a while now. Too bad.

As for trend trading, we covered that at least once and likely more than that. I like your chart. But, as previously mentioned, most pairs are trending or trading in a range or within a box, depending on your view and timeframe (I like the 4H). I trade less with trend in mind, and more on 4H structure and current PA within structure, which means trending sometimes, and trading range other times.

And now, I promise to focus on writing and not post here for at least 36 hours. Good trading!
  • #1,089
  • Jun 8, 2021 1:04pm Jun 8, 2021 1:04pm
Quoting RickM
Because they are plant by owners of FF to generate interest so more ad’s can be clicked.
they don't work for FF but 1000+ posts.. wow.. lots of traffic lol

they should get paid IMO
  • #1,090
  • Jun 8, 2021 9:09pm Jun 8, 2021 9:09pm
Quoting HeyYou
{quote} they don't work for FF but 1000+ posts.. wow.. lots of traffic lol they should get paid IMO
Some may, some not...

In this case, he also has a Quora profile, with many answers. I under-voted the one related to this thread, because I disagree.
  • #1,091
  • Jun 10, 2021 2:44am Jun 10, 2021 2:44am
Converting Forex Volume Into Dollars
Attached Image


Despite significant evidence to the contrary, many traders believe that Forex spot tick volume is useless because it comes from a decentralised source.

Back in about 2011 an ex bank trader by the name of Caspar Marney did some investigation. His published findings showed that intraday Forex tick volume was highly correlated with the overall volume of the Forex spot market.

The attached article provides a link to Marney’s original work and explains in simple terms and diagrams the useful but often misused statistical tool of correlation.

It also expands on some of Marney’s ideas to show that spot Fx tick volume is highly correlated between a number of different brokers and market makers. Price correlation, as expected, was found to be consistently very high (> 99%) but the tick volume correlation between different brokers and one market maker was also found to be high ranging from 78% to 89% .
Attached Image

This article also looks at Fx futures to see how well it correlates with the spot Fx market and attempts to answer the question as to whether or not Fx futures data is a reasonable proxy for trading the spot Fx market.

The complete article. together with the “R” script and data used for the calculations, is attached.

Attached File(s)
File Type: pdf Converting Forex Volume Into Dollars.pdf   202 KB | 1,842 downloads

Attached File(s)
File Type: zip ConvertingVolumeIntoDollars R file and data.zip   690 KB | 430 downloads
Don't Guess Test
  • #1,092
  • Jun 10, 2021 3:42am Jun 10, 2021 3:42am
Quoting TraderTim125
Converting Forex Volume Into Dollars {image} Despite significant evidence to the contrary, many traders believe that Forex spot tick volume is useless because it comes from a decentralised source. Back in about 2011 an ex bank trader by the name of Caspar Marney did some investigation. His published findings showed that intraday Forex tick volume was highly correlated with the overall volume of the Forex spot market. The attached article provides a link to Marney’s original work and explains in simple terms and diagrams the useful but often misused...
Hi TraderTim

Well that work was probably a waste of time, GBPUSD is the wrong pair to test the correlation of Spot FX to Futures FX.
There isn't enough volume on Futures GBPUSD on 50% of ocassions to be able to trade it with total confident on spot FX. That was one of the things that surprised me when I started, on slow nights you only get a couple of data sets in a minute.
The best pair to gauge the correlation is EURUSD - and that's the best currencey to trade with that correlation.
Another pair that offers great signals is AUDUSD, but then you have to look at Gold / Silver / Indices.

But lets look at how it should be used instead, on the correlation.
1.. Find Imbalance signals
2.. Find Absorption signals
3.. Find Exhaustion.

Its worth every cent when used with intelligent. An example last week when I was trading with a Forex Factory member who has worked professionally within the trading industry BUT DOESN'T POST - We were trading I think EURUSD and we saw a high volume level in a single M1 candle near a end of a big move. We both sold and made enough in 10 minutes to cover the whole months data fees (the PDF mentioned data is expensive).

Just one trade

Cheers
Trading thin liquidity at the boundary of the charts
  • #1,093
  • Edited 4:07am Jun 10, 2021 3:49am | Edited 4:07am
I personally think this speaks volume/s if you understand what they're singing about........

Inserted Video


My friend's grandchildren love this song and interesting point..... they get the point of the lyrics. Let's see how many "adults" can say that for sure and know how to relate it to Life endeavors.

Hihihihihehehehe

Cheers


Peter
Real Trading is not gambling.
  • #1,094
  • Jun 10, 2021 5:44am Jun 10, 2021 5:44am
Quoting RickM
{quote} Well that work was probably a waste of time, GBPUSD is the wrong pair to test the correlation of Spot FX to Futures FX. There isn't enough volume on Futures GBPUSD on 50% of occasions to be able to trade it with total confident on spot FX.
Hi Rick,
Would you like to provide me with some Fx Futures data for EURUSD and AUDUSD? Since I already have the scripts prepared it is a fairly quick and easy task to run these tests on other currencies.

As for being a waste of time, research often leads the researcher up many blind alleys. That is just the nature of the beast.

Regards
TimW
Don't Guess Test
  • #1,095
  • Jun 10, 2021 6:58am Jun 10, 2021 6:58am
Quoting RickM
{quote} Hi TraderTim Well that work was probably a waste of time, GBPUSD is the wrong pair to test the correlation of Spot FX to Futures FX. There isn't enough volume on Futures GBPUSD on 50% of ocassions to be able to trade it with total confident on spot FX. That was one of the things that surprised me when I started, on slow nights you only get a couple of data sets in a minute. The best pair to gauge the correlation is EURUSD - and that's the best currencey to trade with that correlation. Another pair that offers great signals is AUDUSD, but...
Only three symbols are widely traded on CME futures and options platform: Euro, Jpy and Mexican Peso in that order.
Practice makes a person perfect
  • #1,096
  • Jun 10, 2021 7:26am Jun 10, 2021 7:26am
Quoting simnz
{quote} Only three symbols are widely traded on CME futures and options platform: Euro, Jpy and Mexican Peso in that order.
Yes

The issue is those tests undertaken in Tim's PDF's were on GBPUSD - bad choice for a test
Trading thin liquidity at the boundary of the charts
  • #1,097
  • Jun 10, 2021 8:13am Jun 10, 2021 8:13am
Quoting Winston Reed
I only care to respond to the thread starter's first post. Day-trading commodities or futures is highly lucrative. Denying this is ignorance. Yes many are clueless and lose much but it doesn't mean many aren't making a very good living with futures trading. But day trading is very much different than the underlying purpose of the commodity markets. Commercial interests such as airlines use the commodity market to offset the risk of buying fuel to operate their jets. In fact the commodity markets were created for this purpose in the first place....
Follow-up
Markets do trend and often have an identifiable rhythm that can be exploited.
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  • #1,098
  • Jun 10, 2021 10:39am Jun 10, 2021 10:39am
Quoting simnz
{quote} Only three symbols are widely traded on CME futures and options platform: Euro, Jpy and Mexican Peso in that order.
Hi Simz,

I am not and have never claimed to be an expert on FX Futures. I do not have and never have had an FX Futures platform and data feed so of course I have never used it to trade Fx spot. I am however very interested in volume and order flow and I am keen to investigate this subject for my own benefit, the benefit of some of my trading colleagues and the benefit of anybody else on this forum who might be interested.

I have searched for answers to some of my questions all over the internet and have been generally disappointed by the lack of coherent, objective information available.

Most traders who have been at this game for as long as I have will have had similar frustrating experiences trying to find valid and honest answers to their questions on just about anything to do with trading. The way I have managed to resolve many of these ambiguous issues for both myself and others is to contrive and run appropriate tests.

A lot of my Forex trading knowledge has been gathered in this way.

I asked on this forum for a small amount of Fx Futures data AUD, JPY, EUR, GBP, CHF to do some testing with. I offered to post all my results back on the forum because I thought some others might be interested in what I found and my conclusions.

I was only given GBP data so that is what I went with.

Of course I visually inspected the GBP FX data before testing it and it looked Ok to me. Just the distribution was different. In other words the time when a lot of activity is going on in the Fx futures market is not the same time of day when a lot of activity is going on in the spot market for the GPBUSD currency pair and vice versa on the particular dates that I tested. And yes I did time adjust all the data so that the futures and spot data were correctly aligned in regards to date and time.

Of course this particular pattern may be different for EUR, JPY, MXN or whatever which is a valid issue that you guys seem to be raising.

I am happy to run tests on these other currency pairs that you have suggested to try and find out. The same as last time I will post my findings here for everyone to see.

In order to do this I need Fx Futures data. Can one of you guys with access to CME futures data please send me a few recent days (say 3) of EUR, AUS, JPY or whatever else you think is worth testing. It should only take a few minutes of your time to extract the data from your Ninja Trader terminal or whatever you use for your futures data as a txt or csv file and post it on this forum.

You can help to add a little bit of genuine knowledge to this fascinating field of Forex trading instead of all the hype and bullshit that we all continuously have to try and wade through.

Looking forward to a little bit of help.

Regards
Tim
Don't Guess Test
  • #1,099
  • Jun 10, 2021 11:28am Jun 10, 2021 11:28am
Quoting TraderTim125
{quote} Hi Simz, I am not and have never claimed to be an expert on FX Futures. I do not have and never have had an FX Futures platform and data feed so of course I have never used it to trade Fx spot. I am however very interested in volume and order flow and I am keen to investigate this subject for my own benefit, the benefit of some of my trading colleagues and the benefit of anybody else on this forum who might be interested. I have searched for answers to some of my questions all over the internet and have been generally disappointed by the...
I trade on IB. So I do have access to the level I data and can access level II by paying a subscription.

WS Market Depth offers traders the following benefits:

  1. Color-coded for instant recognition.
  2. Access Level II data by subscription.
  3. Display Level I data from exchanges that don't offer deep data, for which you don't have market data permissions, or to which you subscribe but haven't selected.
  4. Configure the Market Depth window to suit your own preferences.

If you wish to access CME Level II data, I can pass the credentials of a spare IB paper trading account that uses live data of Market Depth. You can use it for a couple of days because IB restricts data flow for a real trading account or paper trading account (anyone). I can pay for level III data for a month so that you can use it.

I use IB mobile trader to execute trades. Not even desktop.
I analyze trades on MT4 because it is easier for an indicator to generate spreadsheets for probability studies. My consistent profitability is largely because of the
probability statistics the spreadsheets churn out.

My trading strategy veers around Daily Open as the axis of trade rotation. Trade rotation can be measured by Pips, Percentage, or tick volume. I use Pips while RickM uses volume. Some use percentages as well.

I don't know Excel or any programming language. I don't use any technical indicators, Moving Averages, oscillators, or Bollinger Bands. My brain makes the decisions.

Practice makes a person perfect
  • #1,100
  • Jun 10, 2021 5:46pm Jun 10, 2021 5:46pm
Quoting TraderTim125
{quote} Hi Rick, Would you like to provide me with some Fx Futures data for EURUSD and AUDUSD? Since I already have the scripts prepared it is a fairly quick and easy task to run these tests on other currencies. As for being a waste of time, research often leads the researcher up many blind alleys. That is just the nature of the beast. Regards TimW
Hi Tim

I’ll talk about something in a PM, but the question needs to be answered.

Why does the major players, financial institutions discredit the correlation between Futures FX and Spot FX when it’s almost exact.
How come I am highly profitable if the signals were incredibly accurate.

Answer

They don’t want retail traders to “see their dirty little tricks” and join them in low risk trading.

Cheers
Trading thin liquidity at the boundary of the charts
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