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Trading for a Living - Cliff Notes

  • #341
  • Jul 18, 2009 8:51pm Jul 18, 2009 8:51pm
Quoting The Fool
Speaking of large cash volume accounts, I have thought (based on very limited knowledge) that traders who had the means would trade directly through a bank that offered that service (Deutsche, UBS...?) and so might gain advantages in doing so over retail trading, such as (and here I am still assuming)....

- trading directly off the bank's data feed (i.e., Reuters?) with ability to see some depth of market type data

- negotiated (lower) fees for trading based on volume rather than spread

- security/segregation of the clients' funds held in...
I don't know the answer.

I trade retail now... Oanda... the spreads are low and I can still get in and out quickly.

If there comes a point when either of those two fail or change I will do some research to find the best combination.

The spread is important but I sincerely don't know at what level my scalps would break down.

Could I get in and out if I were scalping 400/PIP?

I don't know.

m
  • #342
  • Jul 19, 2009 1:44am Jul 19, 2009 1:44am
Quoting acumen
Based on the NY close.

m
What are your thoughts on pivots based on the GMT close?
  • #343
  • Jul 19, 2009 8:27am Jul 19, 2009 8:27am
Quoting Ipips
What are your thoughts on pivots based on the GMT close?
I can tell you the pivots I use are very accurate.

I'd place the pivots you like on the chart and watch them for several weeks.

You'll know their effectiveness after a short period of time.

m
  • #344
  • Jul 19, 2009 11:02am Jul 19, 2009 11:02am
Attached Image (click to enlarge)
Click to Enlarge Name: ! gbppip.gif Size: 15 KB


H4 price action at daily, weekly, monthly pivots.
  • #345
  • Jul 19, 2009 11:04am Jul 19, 2009 11:04am
Attached Image (click to enlarge)
Click to Enlarge Name: ! gbppip.gif Size: 13 KB


H4 price action at prices ending in 00.

What can be gleaned from these 2 charts?
  • #346
  • Jul 21, 2009 12:26pm Jul 21, 2009 12:26pm
After you’ve demo tested a mechanical system you feel comfortable trading it you’ll know where your stops should go.

Intraday traders rarely use stops above 75 PIPS and often have a system for taking profit.

I like a two step process on taking profit.

I use 2 lots.
  • #347
  • Jul 21, 2009 1:53pm Jul 21, 2009 1:53pm
Quoting acumen
This takes a lot of practice an patience.

I use pivots and psych levels because of the bounce factor.

For example... when the market is trending down and price moves back to the pivot it will bounce off of that level 8 -10 PIPS 85% of the time.

m
Hey acumen,
Don't give away our trade secrets! If other's want to trade with indicators and osillators, let them do so.

  • #348
  • Jul 21, 2009 2:33pm Jul 21, 2009 2:33pm
Quoting Forex2010
After you’ve demo tested a mechanical system you feel comfortable trading it you’ll know where your stops should go.

Intraday traders rarely use stops above 75 PIPS and often have a system for taking profit.

I like a two step process on taking profit.

I use 2 lots.
A lot of traders use two lots.

Very common practice.

Take profit on one lot and move stops to BE.

m
  • #349
  • Jul 21, 2009 2:46pm Jul 21, 2009 2:46pm
Updated ebook for Trading for a living with trading examples.
Attached File(s)
File Type: pdf Trading for a living - By Acumen updated 2.pdf   121 KB | 911 downloads
  • #350
  • Jul 21, 2009 3:02pm Jul 21, 2009 3:02pm
Quoting The Fool
- trading directly off the bank's data feed (i.e., Reuters?) with ability to see some depth of market type data

- negotiated (lower) fees for trading based on volume rather than spread

- security/segregation of the clients' funds held in the bank

Can you comment on any of this? Do you do the fund trading through a bank or through retail brokers?
Most ecn brokers offer the things you mention above too, IB offers quite good market depth [limited to their network of course but quite high liquidity - I would assume better than most banks because it's aggregated] and all ECNs give you naked spread with commission. About segregation - I would never trade with a broker that wouldn't have segregated client funds.

If you are trading serious capital, there are even better alternatives [for commission] but then you have to have really serious capital (check vcap cax for example - never traded with them so I really have no comments about them)

Acumen, are you trading with hedge fund with Oanda? Or was that comment just about your personal trades?
  • #351
  • Jul 21, 2009 3:24pm Jul 21, 2009 3:24pm
Quoting Ipips
What are your thoughts on pivots based on the GMT close?
I know the question wasn't directed to me but what the hey...

In my limited experience, they are very accurate during the Asian and London session. NY session walks all over them sometimes as they use their own pivots for their books. I scratched my head at price action during the NY session for longer than I care to admit before figuring that one out.

It's best to adjust the pivots for the NY session if you use GMT and then back during the Asian session/London sessions. PA ends up making a little more sense to me that way.

London session scalping with GMT pivots has been very good to me.
  • #352
  • Jul 21, 2009 3:26pm Jul 21, 2009 3:26pm
Quoting mikkom
Most ecn brokers offer the things you mention above too, IB offers quite good market depth [limited to their network of course but quite high liquidity - I would assume better than most banks because it's aggregated] and all ECNs give you naked spread with commission. About segregation - I would never trade with a broker that wouldn't have segregated client funds.
Hi Mikkom,

I was referring not to liquidity but to DOM data, as in futures, i.e. you would be able to see (to some extent) the buy/sell orders as reported by the Bank's data feed. I don't think any ECN brokers are showing this, although I might be wrong. Also, I have heard new MT5 has a DOM feature but I don't know anything about it either.

Regarding account segregation, sure your money may be segregated as held by your broker, but it is typically unsecured. No spot brokers that I know of offer any kind of government securitization for client accounts. If I were holding someone else's money I would want it held in an FDIC-insured bank or equal.

I don't know anything about plus/minus aspects of trading through a bank as opposed to a spot broker. I had hoped someone here might have gone down that road & had some insight.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #353
  • Jul 21, 2009 3:37pm Jul 21, 2009 3:37pm
Quoting The Fool
Hi Mikkom,

I was referring not to liquidity but to DOM data, as in futures, i.e. you would be able to see (to some extent) the buy/sell orders as reported by the Bank's data feed. I don't think any ECN brokers are showing this, although I might be wrong. Also, I have heard new MT5 has a DOM feature but I don't know anything about it either.

Regarding account segregation, sure your money may be segregated as held by your broker, but it is typically unsecured. No spot brokers that I know of offer any kind of government securitization for client...
Yes, IB offers Market depth for their liquidity (check tws "booktrader") as does MBTrading and so does Dukas. Not very deep but quite good anyway. And you could always use currency futures as well of course. I meant their liquidity is not the whole market so they can't show the full market but at least IB is quite liquid.

And as segregation yes I did mean real segreation and in my other case also full FSA compensatin [if we are talking about the same thing now, it's not very good, just the first about 50k with fsa for example] - I'm currently using activtrades (and IB) http://www.activtrades.com/index.aspx?page=forex_faq#19 and http://individuals.interactivebroker...?ib_entity=llc

Acumen, sorry if I'm leading this thread to wrong direction.
  • #354
  • Jul 21, 2009 4:02pm Jul 21, 2009 4:02pm
Quoting cobraforex
Updated ebook for Trading for a living with trading examples.
thanks for the effort !!!!!!!!!
  • #355
  • Jul 21, 2009 6:24pm Jul 21, 2009 6:24pm
Quoting cobraforex
Updated ebook for Trading for a living with trading examples.
A gentlemen and a scholar you are... and there aren't many of us left.

  • #356
  • Edited 6:33pm Jul 24, 2009 4:49am | Edited 6:33pm
Hi guys, i must admit pivot point trading really got my attention, mainly because of acumen videos back at his site, and the intriguing way he explains his philosophy of trading in general

I have though found a little problem with my broker...

I am now demoing these strategies with metatrader, and plan to enter manual orders with mbt navigator, which allows a better order management through various order setups. all with demo account.

BUT... i chose that broker with another strat in mind, one that had max stoploss of 50-60, never less than 20... so now i am putting orders with 10 to 15 stoploss, and the position size gets bigger, so are the commissions...

if i close a market order (12 stoploss 1% risk e.g.) at just 2 pips, i don't get so much, like 1 dollar or so...
if i double my risk %, i also double my lotsize and therefore double the commission, so it's useless.

MB trading gets 5$ per 1 standard lot (100k) each side, so e.g. for usdjpy buying 1 lot of currency you have 10$ commissions, and you have to add spread (which is very low though).

i think it's pretty fair compared to higher spreads of retail brokers, but do you think it's good for scalping?

Maybe i just need to plan more carefully my trades and leave the trade going. (because most of the times the market reach the goals i thought)
In the long term, i think a thousand 1$ gain per trade is the same as twenty 100$ gain and ten 100$ loss....

please advise me on this matter

THX SO MUCH!

jj.

edit: by saying better 20 than 1000 i meant that its better to let go the trades than closing them before than planned.
  • #357
  • Jul 25, 2009 12:12pm Jul 25, 2009 12:12pm
Quoting jennajameson
Hi guys, i must admit pivot point trading really got my attention, mainly because of acumen videos back at his site, and the intriguing way he explains his philosophy of trading in general

I have though found a little problem with my broker...

I am now demoing these strategies with metatrader, and plan to enter manual orders with mbt navigator, which allows a better order management through various order setups. all with demo account.

BUT... i chose that broker with another strat in mind, one that had max stoploss of 50-60, never less than...
The goal is to make money. Commissions/spreads are a side issue. When your lot size is large enough for fees to matter you won't be trading on retail platforms.
  • #358
  • Jul 25, 2009 3:30pm Jul 25, 2009 3:30pm
Quoting gbppip
The goal is to make money. Commissions/spreads are a side issue. When your lot size is large enough for fees to matter you won't be trading on retail platforms.
gdppip is right.

I never look at how much the broker is making... just part of the game.

I trade Oanda because they are the lowest spreads I could find and I can trade off the chart fairly quickly with nice size lots.
  • #359
  • Jul 26, 2009 3:09am Jul 26, 2009 3:09am
to gbpip: i am crrently with an ecn broker, but in my post i was saying that commission is actually a big part of any full trade (by full i mean it reaches my profit targets.
the problem comes if you scalp for 3-4 pips then close the trade... my commissions can count as much as 50% of my total profits.

that doesn't depends on my account size either, as if my acct is 10 times bigger, i'd enter a 10x lot order, and the commissions would also be 10x higher.
if you risk more % each trade is the same thing also.

to acu: my point was: in your trading style, you let go trades that suddenly doesn't turn out to be an insta winner like during a breakout, or you close them before with little (3-4 pips) profit?

and if this is the case, how much do you gain when that happens?



jj.
  • #360
  • Jul 26, 2009 8:50am Jul 26, 2009 8:50am
Quoting jennajameson
to gbpip: i am crrently with an ecn broker, but in my post i was saying that commission is actually a big part of any full trade (by full i mean it reaches my profit targets.
the problem comes if you scalp for 3-4 pips then close the trade... my commissions can count as much as 50% of my total profits.

that doesn't depends on my account size either, as if my acct is 10 times bigger, i'd enter a 10x lot order, and the commissions would also be 10x higher.
if you risk more % each trade is the same thing also.

to acu: my point was: in your trading...
So what if your commissions count as 50% of your trade? It's just a number. If you make 30-40 pips, then your commission is only 10% right?
You have to pay to trade with a retail broker. When your lot size is large enough that commissions are a real concern, you will not be trading with retail brokers.
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