Are you a consistently profitable trader?

I've been trading since 2008, it wasn't until I stopped getting bogged down with too many different indicators... listening to too much news... and started to draw from my own experience before I started to make steady profits.

If i'm trading or not I always have charts up, there is nothing more beautiful than a candle stick... it's like art.

you can learn from others but it's not until you find a style you can commit to and you believe in that profits will come

I agree it has it's advantages of moving the market, but the disadvantages outweigh them.

Sometimes they move the market to enable them to open or close a position with as little movement as possible .Sometimes they are unable to move the market to their advantage and have no choice but to move the market against themselves.

If the advantages are greater wouldn't there be discounts for taking large block trades instead of premiums charged?

If you offered a large hedgefund the ability to enter and exit large positions without moving the market do you think they wouldn't take it because they would rather the ability to move the market? There is a reason this option isn't offered.

Edit: the option is kind of offered to a certain extent through options (premiums are charged)

you have to understand this market.who and what makes this market


Fundamental economic strategies can have long-term effects. Position traders will definitely be looking at that kind of info.

I agree, when you zoom out, the picture gets very clear.

Good comments!!!

FX4

Thanks for the link. Just want to paint a scenario then I'll make a comment.

The scenario:

If a trader had let's say $200.00 in their account. With 500:1 leverage they could use $10.00 and trade Eur-Usd. With a position size of 0.05 lots...if they could get just 10 pips twice in one market session...that would be 5% for the day. If they did that for 2 market sessions (US and London etc), they would have 10% for the day.

Now, a trading method was posted by ultramoe that seems credible...works for them...with a very high probability. Now, if a trader scaled in to the trade...entered with 1 micro, then just went up from there to 0.05 lots, with some practice, it might be a reality. If they could make it work for two market sessions, that would be $20.00 per day x 20 days = $400.00 per month. What percentage increase is that??!! Even if they did half that, they would have doubled their account that month. Seems unrealistic, but it has already been done...just keep the losses minimal. Even ultramoe's method has a way to get back to breakeven if the trade doesn't go as planned. The stops used in his system might be tough though. If the TRADER can make it work, it WILL WORK.

Now on to the comment:

A few years ago I was speaking with a gentleman, who is kind of like a father figure. He had his Doctorate and was doing some studies and research. I happened to come by the office when he was in the midst of doing what he does best. I saw all of these reference books on his desk by well-respected published authors, so I asked, "Are these some of the materials you use to do what you do?" I will never forget his reply, "I have a Doctorate just like they do, and I use the same tools that they use. I am just checking to see how close they come to what I have."

I can tell you, I have already heard (through the grapevine) from someone working in a bank that they have seen results from traders who outperform what their own traders are doing. Don't let that "big-looking stuff" out there fool you. Sometimes people get in the door just because they know someone...you know how the game goes. But then again, the stress they're under to perform is certainly at a different level...who knows.

Think you get my point.

FX4

Bravo !!! If traders read the posts here, they'll see a consistent theme in the comments made in those posts by those who are achieving consistent results. It is doable.

FX4

You're thinking for yourself it seems..... A strong trait of successful traders btw .

FX4

Yes and yes !!!! I actually have a worksheet that I use to find the pairs that look most promising...need to get back to doing it daily. La-zy . Short cuts are a no-no. Good trading is boring.

Thanks for sharing. I hope traders who are serious about wanting to turn their trading around for the better are picking up these and other nuggets.

FX4

hello
FX4Newbies & my all other trading friends

I've been investing in National stock Market for about 6 years and doing fairly well, now recently about 2-3 years ago I discovered Forex which is a new challenge for me.

From a personal perspective to be consistently successful ( here profitable trader ) one must stick with one strategy, one instrument with one target.
Believe in yourself & on your trading plan/system, do not look for new trading system everyday, never betray your own money management rules
but for that we should need discipline & consistency in our honest efforts.

Go slowly, steadily but confidently.

wishing consistently profitable trade for all of you.........

Super advice, especially for those just starting out!!!

FX4

Just crossed the 100 mark for the number of voters in the poll!!!

FX4

Thats your OPINION and of course you are untitled to it.

Now "opinions" apart you have to agree that those big institutions make money consistently. Now "consistently" does not mean every year. They have some years down but the important part is that they manage to make up for their losses.

I'm gonna say it again. The biggest difference between institutions and retailers is that the retailer can lie and get away with it.

Specially "forum traders" can lie that they make 10 or 20% a day. They maybe not prove it, but you can't prove them wrong either because it is word against word in a virtual world .

Institutions have to produce a statement at the end of the year, quarter or even monthly for their clients. Yes they can lie for a while but they get cot sooner or later.

Around the internet a "trader" can lie almost indefinitely.

So if you are saying that retailers can outsmart people like Tudor Jones just because they claim it in a internet forum I would advise you to reconsider the grounds of your beliefs.

I'm going to state here in this thread again.

You are untitled to believe in whatever you want to believe, but I honestly can't take just peoples word for it.

My way of thinking has protected me from countless scams over these 5 years I trade forex.

I would like to expand a little on that "belief' part. I have often heard this mantra, and I used to have a problem with this. Because this is not religion in order to blindly believe, this is trading. And one is supposed to have some kind of proof before "believing" in a system and sticking to it. But many times one will hear that in order to see good results, you have to believe in the system.

So you need belief in order to see results and results in order to believe. A little like the chicken/egg problem.

In the same vein, one will often hear that "any system will work as long as one sticks to it". Which is both correct and wrong: In these cases it's not the system itself that works; it's just that after countless hours of staring the charts, one develops a discretionary method that will improve the inherent win rate of any system. And most systems have an out-of-the-box probability of success that is no better than chance.

So, what most systems offer is actually a framework within which a diligent trader may develop his discretion. Especially the simpler systems, the ones that can easily be programmed into an EA, they are guaranteed to be no better than randomness in the long run. With that in mind, the "belief in the system" that will yield results is nothing more than learning slowly which trades are good and which are bad within the rules of that system.

Now, if one can find something that has chances better than 50% of being profitable in the long run WITHOUT discretion, and then develop discretion on top of it, that would be the ideal.

Genius!!!

Let me just add to that my 2 cents...once a trader has "found" a system that they think has the reliability that they need to see, they then need to infuse some courage into the mix to get the ball rolling. Courage is one ingredient the trader must bring to the table. Once they have tasted the positive reward of the system, it becomes easier to be confident the next time around. The system, of course, should also have a built-in protection mechanism against loss, so profitability is probable.

Great thoughts for traders to sink their teeth into. Thanks all.

FX4

found this article posted on another thread,interesting how he carved his own edge from a negativly expectancy game.


The Man Who Broke Atlantic City

Don Johnson won nearly $6 million playing blackjack in one night, single-handedly decimating the monthly revenue of Atlantic City’s Tropicana casino. Not long before that, he’d taken the Borgata for $5 million and Caesars for $4 million. Here’s how he did it.
on Johnson finds it hard to remember the exact cards. Who could? At the height of his 12-hour blitz of the Tropicana casino in Atlantic City, New Jersey, last April, he was playing a hand of blackjack nearly every minute.
Dozens of spectators pressed against the glass of the high-roller pit. Inside, playing at a green-felt table opposite a black-vested dealer, a burly middle-aged man in a red cap and black Oregon State hoodie was wagering $100,000 a hand. Word spreads when the betting is that big. Johnson was on an amazing streak. The towers of chips stacked in front of him formed a colorful miniature skyline. His winning run had been picked up by the casino’s watchful overhead cameras and drawn the close scrutiny of the pit bosses. In just one hand, he remembers, he won $800,000. In a three-hand sequence, he took $1.2 million.
The basics of blackjack are simple. Almost everyone knows them. You play against the house. Two cards are placed faceup before the player, and two more cards, one down, one up, before the dealer. A card’s suit doesn’t matter, only its numerical value—each face card is worth 10, and an ace can be either a one or an 11. The goal is to get to 21, or as close to it as possible without going over. Scanning the cards on the table before him, the player can either stand or keep taking cards in an effort to approach 21. Since the house’s hand has one card facedown, the player can’t know exactly what the hand is, which is what makes this a game.
As Johnson remembers it, the $800,000 hand started with him betting $100,000 and being dealt two eights. If a player is dealt two of a kind, he can choose to “split” the hand, which means he can play each of the cards as a separate hand and ask for two more cards, in effect doubling his bet. That’s what Johnson did. His next two cards, surprisingly, were also both eights, so he split each again. Getting four cards of the same number in a row doesn’t happen often, but it does happen. Johnson says he was once dealt six consecutive aces at the Mohegan Sun casino in Connecticut. He was now playing four hands, each consisting of a single eight-card, with $400,000 in the balance.
He was neither nervous nor excited. Johnson plays a long game, so the ups and downs of individual hands, even big swings like this one, don’t matter that much to him. He is a veteran player. Little interferes with his concentration. He doesn’t get rattled. With him, it’s all about the math, and he knows it cold. Whenever the racily clad cocktail waitress wandered in with a fresh whiskey and Diet Coke, he took it from the tray.
The house’s hand showed an upturned five. Arrayed on the table before him were the four eights. He was allowed to double down—to double his bet—on any hand, so when he was dealt a three on the first of his hands, he doubled his bet on that one, to $200,000. When his second hand was dealt a two, he doubled down on that, too. When he was dealt a three and a two on the next two hands, he says, he doubled down on those, for a total wager of $800,000.
It was the dealer’s turn. He drew a 10, so the two cards he was showing totaled 15. Johnson called the game—in essence, betting that the dealer’s down card was a seven or higher, which would push his hand over 21. This was a good bet: since all face cards are worth 10, the deck holds more high cards than low. When the dealer turned over the house’s down card, it was a 10, busting him. Johnson won all four hands.
Johnson didn’t celebrate. He didn’t even pause. As another skyscraper of chips was pushed into his skyline, he signaled for the next hand. He was just getting started.
The headline in The Press of Atlantic City was enough to gladden the heart of anyone who has ever made a wager or rooted for the underdog:

BLACKJACK PLAYER TAKES TROPICANA
FOR NEARLY $6 MILLION,
SINGLE-HANDEDLY RUINS CASINO’S MONTH

But the story was even bigger than that. Johnson’s assault on the Tropicana was merely the latest in a series of blitzes he’d made on Atlantic City’s gambling establishments. In the four previous months, he’d taken $5 million from the Borgata casino and another $4 million from Caesars. Caesars had cut him off, he says, and then effectively banned him from its casinos worldwide.
Fifteen million dollars in winnings from three different casinos? Nobody gets that lucky. How did he do it?
The first and most obvious suspicion was card counting. Card counters seek to gain a strong advantage by keeping a mental tally of every card dealt, and then adjusting the wager according to the value of the cards that remain in the deck. (The tactic requires both great memory and superior math skills.) Made famous in books and movies, card counting is considered cheating, at least by casinos. In most states (but not New Jersey), known practitioners are banned. The wagering of card counters assumes a clearly recognizable pattern over time, and Johnson was being watched very carefully. The verdict: card counting was not Don Johnson’s game. He had beaten the casinos fair and square.
It hurt. Largely as a result of Johnson’s streak, the Trop’s table-game revenues for April 2011 were the second-lowest among the 11 casinos in Atlantic City. Mark Giannantonio, the president and CEO of the Trop, who had authorized the $100,000-a-hand limit for Johnson, was given the boot weeks later. Johnson’s winnings had administered a similar jolt to the Borgata and to Caesars. All of these gambling houses were already hurting, what with the spread of legalized gambling in surrounding states. By April, combined monthly gaming revenue had been declining on a year-over-year basis for 32 months.
For most people, though, the newspaper headline told a happy story. An ordinary guy in a red cap and black hoodie had struck it rich, had beaten the casinos black-and-blue. It seemed a fantasy come true, the very dream that draws suckers to the gaming tables.
But that’s not the whole story either.
Despite his pedestrian attire, Don Johnson is no average Joe. For one thing, he is an extraordinarily skilled blackjack player. Tony Rodio, who succeeded Giannantonio as the Trop’s CEO, says, “He plays perfect cards.” In every blackjack scenario, Johnson knows the right decision to make. But that’s true of plenty of good players. What gives Johnson his edge is his knowledge of the gaming industry. As good as he is at playing cards, he turns out to be even better at playing the casinos.
Hard times do not favor the house. The signs of a five-year slump are evident all over Atlantic City, in rundown façades, empty parking lots, and the faded glitz of its casinos’ garish interiors. Pennsylvania is likely to supplant New Jersey this year as the second-largest gaming state in the nation. The new Parx racetrack and casino in Bensalem, Pennsylvania, a gigantic gambling complex, is less than 80 miles away from the Atlantic City boardwalk. Revenue from Atlantic City’s 11 casinos fell from a high of $5.2 billion in 2006 to just $3.3 billion last year. The local gaming industry hopes the opening of a 12th casino, Revel, this spring may finally reverse that downward trend, but that’s unlikely.
“It doesn’t matter how many casinos there are,” Israel Posner, a gaming-industry expert at nearby Stockton College, told me. When you add gaming tables or slots at a fancy new venue like Revel, or like the Borgata, which opened in 2003, the novelty may initially draw crowds, but adding gaming supply without enlarging the number of customers ultimately hurts everyone.
When revenues slump, casinos must rely more heavily on their most prized customers, the high rollers who wager huge amounts—tens of thousands or even hundreds of thousands of dollars a hand. Hooking and reeling in these “whales,” as they are known in the industry, can become essential. High rollers are lured with free meals and drinks, free luxury suites, free rides on private jets, and … more. (There’s a reason most casino ads feature beautiful, scantily clad young women.) The marketers present casinos as glamorous playgrounds where workaday worries and things like morality, sobriety, and prudence are on holiday. When you’re rich, normal rules don’t apply! The idea, like the oldest of pickpocket tricks, is to distract the mark with such frolic that he doesn’t notice he’s losing far more than his free amenities actually cost. For what doth it profit a man to gain a $20,000 ride on a private jet if he drops $200,000 playing poker? The right “elite player” can lose enough in a weekend to balance a casino’s books for a month.
Of course, high rollers “are not all created equally,” says Rodio, the Tropicana’s CEO. (He was the only Atlantic City casino executive who agreed to talk to me about Johnson.) “When someone makes all the right decisions, the house advantage is relatively small; maybe we will win, on average, one or two hands more than him for every hundred decisions. There are other blackjack players, or craps players, who don’t use perfect strategy, and with them there is a big swing in the house advantage. So there is more competition among casinos for players who aren’t as skilled.”
For the casino, the art is in telling the skilled whales from the unskilled ones, then discouraging the former and seducing the latter. The industry pays close attention to high-level players; once a player earns a reputation for winning, the courtship ends. The last thing a skilled player wants is a big reputation. Some wear disguises when they play.
But even though he has been around the gambling industry for all of his 49 years, Johnson snuck up on Atlantic City. To look at him, over six feet tall and thickly built, you would never guess that he was once a jockey. He grew up tending his uncle’s racehorses in Salem, Oregon, and began riding them competitively at age 15. In his best years as a professional jockey, he was practically skeletal. He stood 6 foot 1 and weighed only 108 pounds. He worked with a physician to keep weight off, fighting his natural growth rate with thyroid medication that amped up his metabolism and subsisting on vitamin supplements. The regimen was so demanding that he eventually had to give it up. His body quickly assumed more normal proportions, and he went to work helping manage racetracks, a career that brought him to Philadelphia when he was about 30. He was hired to manage Philadelphia Park, the track that evolved into the Parx casino, in Bensalem, where he lives today. Johnson was in charge of day-to-day operations, including the betting operation. He started to learn a lot about gambling.
It was a growth industry. Today, according to the American Gaming Association, commercial casino gambling—not including Native American casinos or the hundreds of racetracks and government-sponsored lotteries—is a $34 billion business in America, with commercial casinos in 22 states, employing about 340,000 people. Pari-mutuel betting (on horse racing, dog racing, and jai alai) is now legal in 43 states, and online gaming netted more than $4 billion from U.S. bettors in 2010. Over the past 20 years, Johnson’s career has moved from managing racetracks to helping regulate this burgeoning industry. He has served as a state regulator in Oregon, Idaho, Texas, and Wyoming. About a decade ago, he founded a business that does computer-assisted wagering on horses. The software his company employs analyzes more data than an ordinary handicapper will see in a thousand lifetimes, and defines risk to a degree that was impossible just five years ago.
Johnson is not, as he puts it, “naive in math.”
He began playing cards seriously about 10 years ago, calculating his odds versus the house’s.
Compared with horse racing, the odds in blackjack are fairly straightforward to calculate. Many casinos sell laminated charts in their guest shops that reveal the optimal strategy for any situation the game presents. But these odds are calculated by simulating millions of hands, and as Johnson says, “I will never see 400 million hands.”
More useful, for his purposes, is running a smaller number of hands and paying attention to variation. The way averages work, the larger the sample, the narrower the range of variation. A session of, say, 600 hands will display wider swings, with steeper winning and losing streaks, than the standard casino charts. That insight becomes important when the betting terms and special ground rules for the game are set—and Don Johnson’s skill at establishing these terms is what sets him apart from your average casino visitor.
Johnson is very good at gambling, mainly because he’s less willing to gamble than most. He does not just walk into a casino and start playing, which is what roughly 99 percent of customers do. This is, in his words, tantamount to “blindly throwing away money.” The rules of the game are set to give the house a significant advantage. That doesn’t mean you can’t win playing by the standard house rules; people do win on occasion. But the vast majority of players lose, and the longer they play, the more they lose.
Sophisticated gamblers won’t play by the standard rules. They negotiate. Because the casino values high rollers more than the average customer, it is willing to lessen its edge for them. It does this primarily by offering discounts, or “loss rebates.” When a casino offers a discount of, say, 10 percent, that means if the player loses $100,000 at the blackjack table, he has to pay only $90,000. Beyond the usual high-roller perks, the casino might also sweeten the deal by staking the player a significant amount up front, offering thousands of dollars in free chips, just to get the ball rolling. But even in that scenario, Johnson won’t play. By his reckoning, a few thousand in free chips plus a standard 10 percent discount just means that the casino is going to end up with slightly less of the player’s money after a few hours of play. The player still loses.
But two years ago, Johnson says, the casinos started getting desperate. With their table-game revenues tanking and the number of whales diminishing, casino marketers began to compete more aggressively for the big spenders. After all, one high roller who has a bad night can determine whether a casino’s table games finish a month in the red or in the black. Inside the casinos, this heightened the natural tension between the marketers, who are always pushing to sweeten the discounts, and the gaming managers, who want to maximize the house’s statistical edge. But month after month of declining revenues strengthened the marketers’ position. By late 2010, the discounts at some of the strapped Atlantic City casinos began creeping upward, as high as 20 percent.
“The casinos started accepting more risk, looking for a possible larger return,” says Posner, the gaming-industry expert. “They tended to start swinging for the fences.”
Johnson noticed.
“They began offering deals that nobody’s ever seen in New Jersey history,” he told me. “I’d never heard of anything like it in the world, not even for a player like [the late Australian media tycoon] Kerry Packer, who came in with a $20 million bank and was worth billions and billions.”
When casinos started getting desperate, Johnson was perfectly poised to take advantage of them. He had the money to wager big, he had the skill to win, and he did not have enough of a reputation for the casinos to be wary of him. He was also, as the Trop’s Tony Rodio puts it, “a cheap date.” He wasn’t interested in the high-end perks; he was interested in maximizing his odds of winning. For Johnson, the game began before he ever set foot in the casino.
Atlantic City did know who Johnson was. The casinos’ own research told them he was a skilled player capable of betting large amounts. But he was not considered good enough to discourage or avoid.
In fact, in late 2010, he says, they called him.
Johnson had not played a game at the Borgata in more than a year. He had been trying to figure out its blackjack game for years but had never been able to win big. At one point, he accepted a “lifetime discount,” but when he had a winning trip he effectively lost the benefit of the discount. The way any discount works, you have to lose a certain amount to capitalize on it. If you had a lifetime discount of, say, 20 percent on $500,000, you would have to lose whatever money you’d made on previous trips plus another $500,000 before the discount kicked in. When this happened to Johnson, he knew the ground rules had skewed against him. So it was no longer worth his while to play there.
He explained this when the Borgata tried to entice him back.
“Well, what if we change that?” he recalls a casino executive saying. “What if we put you on a trip-to-trip discount basis?”
Johnson started negotiating.
Once the Borgata closed the deal, he says, Caesars and the Trop, competing for Johnson’s business, offered similar terms. That’s what enabled him to systematically beat them, one by one.
In theory, this shouldn’t happen. The casinos use computer models that calculate the odds down to the last penny so they can craft terms to entice high rollers without forfeiting the house advantage. “We have a very elaborate model,” Rodio says. “Once a customer comes in, regardless of the game they may play, we plug them into the model so that we know what the house advantage is, based upon the game that they are playing and the way they play the game. And then from that, we can make a determination of what is the appropriate [discount] we can make for the person, based on their skill level. I can’t speak for how other properties do it, but that is how we do it.”
So how did all these casinos end up giving Johnson what he himself describes as a “huge edge”? “I just think somebody missed the math when they did the numbers on it,” he told an interviewer.
Johnson did not miss the math. For example, at the Trop, he was willing to play with a 20 percent discount after his losses hit $500,000, but only if the casino structured the rules of the game to shave away some of the house advantage. Johnson could calculate exactly how much of an advantage he would gain with each small adjustment in the rules of play. He won’t say what all the adjustments were in the final e-mailed agreement with the Trop, but they included playing with a hand-shuffled six-deck shoe; the right to split and double down on up to four hands at once; and a “soft 17” (the player can draw another card on a hand totaling six plus an ace, counting the ace as either a one or an 11, while the dealer must stand, counting the ace as an 11). When Johnson and the Trop finally agreed, he had whittled the house edge down to one-fourth of 1 percent, by his figuring. In effect, he was playing a 50-50 game against the house, and with the discount, he was risking only 80 cents of every dollar he played. He had to pony up $1 million of his own money to start, but, as he would say later: “You’d never lose the million. If you got to [$500,000 in losses], you would stop and take your 20 percent discount. You’d owe them only $400,000.”
In a 50-50 game, you’re taking basically the same risk as the house, but if you get lucky and start out winning, you have little incentive to stop.
So when Johnson got far enough ahead in his winning sprees, he reasoned that he might as well keep playing. “I was already ahead of the property,” he says. “So my philosophy at that point was that I can afford to take an additional risk here, because I’m battling with their money, using their discount against them.”
According to Johnson, the Trop pulled the deal after he won a total of $5.8 million, the Borgata cut him off at $5 million, and the dealer at Caesars refused to fill the chip tray once his earnings topped $4 million.
“I was ready to play on,” Johnson said. “And I looked around, and I said, ‘Are you going to do a fill?’ I’ve got every chip in the tray. I think I even had the $100 chips. ‘Are you guys going to do a fill?’ And they just said, ‘No, we’re out.’”
He says he learned later that someone at the casino had called the manager, who was in London, and told him that Don Johnson was ahead of them “by four.”
“Four hundred thousand?” the manager asked.
“No, 4 million.”
So Caesars, too, pulled the plug. When Johnson insisted that he wanted to keep playing, he says, the pit boss pointed out of the high-roller pit to the general betting floor, where the game was governed by normal house rules.
“You can go out there and play,” he said.
Johnson went upstairs and fell asleep.
These winning streaks have made Johnson one of the best-known gamblers in the world. He was shocked when his story made the front page of The Press of Atlantic City. Donald Wittkowski, a reporter at the newspaper, landed the story when the casinos filed their monthly revenue reports.
“I guess for the first time in 30 years, a group of casinos actually had a huge setback on account of one player,” Johnson told me. “Somebody connected all the dots and said it must be one guy.”
The Trop has embraced Johnson, inviting him back to host a tournament—but its management isn’t about to offer him the same terms again. (Even so—playing by the same rules he had negotiated earlier, according to Johnson, but without a discount—he managed to win another $2 million from the Tropicana in October.)
“Most properties in Atlantic City at this point won’t even deal to him,” Rodio says. “The Tropicana will continue to deal to him, we will continue to give aggressive limits, take care of his rooms and his accounts when he is here. But because he is so far in front of us, we have modified his discounts.”
Johnson says his life hasn’t really changed all that much. He hasn’t bought himself anything big, and still lives in the same house in Bensalem. But in the past year, he has hung out with Jon Bon Jovi and Charlie Sheen, sprayed the world’s most expensive bottle of champagne on a crowd of clubgoers in London, and hosted a Las Vegas birthday bash for Pamela Anderson. He is enjoying his fame in gambling circles, and has gotten used to flying around the world on comped jets. Everybody wants to play against the most famous blackjack player in the world.
But from now on, the casinos will make sure the odds remain comfortably stacked against him.

Thanks for posting that article. The text in blue are quotes from the article. This is what stood out for me as a trader:

1. Don Johnson won nearly $6 million playing blackjack in one night...

Big wins do come, but maybe not every day. Just focus on trading well.


2. The basics of blackjack are simple. Almost everyone knows them. You play against the house. Two cards are placed faceup before the player, and two more cards, one down, one up, before the dealer. A card’s suit doesn’t matter, only its numerical value—each face card is worth 10, and an ace can be either a one or an 11. The goal is to get to 21, or as close to it as possible without going over.

The market/market maker is like the house.


3. Since the house’s hand has one card facedown, the player can’t know exactly what the hand is, which is what makes this a game.

That faced-down card is either "Buy" or "Sell". When and where it is played will determine what it will become.


4. He was now playing four hands, each consisting of a single eight-card, with $400,000 in the balance. He was neither nervous nor excited. Johnson plays a long game, so the ups and downs of individual hands, even big swings like this one, don’t matter that much to him. He is a veteran player. Little interferes with his concentration. He doesn’t get rattled. With him, it’s all about the math, and he knows it cold.

Keep a clear head. Stay focused and keep your emotions under control.


5. Whenever the racily clad cocktail waitress wandered in with a fresh whiskey and Diet Coke, he took it from the tray.

You've paid the spread so take all the fringe benefits you are offered. Also, there are no free "lunches" in this business.


6. Johnson won all four hands. Johnson didn’t celebrate. He didn’t even pause. As another skyscraper of chips was pushed into his skyline, he signaled for the next hand. He was just getting started.

How many times have you walked away celebrating after a winner instead of staying and taking what else you could? Your edge worked. The market was in your favour. Maximize it!


7. “He plays perfect cards.” In every blackjack scenario, Johnson knows the right decision to make.

Trading offers "hands"...set-ups and entries that produce +pips. The trader wins if he/she makes the decision to take advantage of them, and does so.


8. High rollers are lured with free meals and drinks, free luxury suites, free rides on private jets, and … more.... “When someone makes all the right decisions, the house advantage is relatively small; maybe we will win, on average, one or two hands more than him for every hundred decisions. There are other blackjack players, or craps players, who don’t use perfect strategy, and with them there is a big swing in the house advantage. So there is more competition among casinos for players who aren’t as skilled.”

Newbies beware!!!


9. For the casino, the art is in telling the skilled whales from the unskilled ones, then discouraging the former and seducing the latter. The industry pays close attention to high-level players; once a player earns a reputation for winning, the courtship ends. The last thing a skilled player wants is a big reputation. Some wear disguises when they play.

It's okay to lose a few: good PR/BR.


10. He began playing cards seriously about 10 years ago, calculating his odds versus the house’s.

Now that's some serious preparation! He wanted the lowest risk or the best chance that could exist for him to win.


11. Many casinos sell laminated charts in their guest shops that reveal the optimal strategy for any situation the game presents. But these odds are calculated by simulating millions of hands, and as Johnson says, “I will never see 400 million hands.” More useful, for his purposes, is running a smaller number of hands and paying attention to variation. The way averages work, the larger the sample, the narrower the range of variation. A session of, say, 600 hands will display wider swings, with steeper winning and losing streaks, than the standard casino charts. That insight becomes important when the betting terms and special ground rules for the game are set—and Don Johnson’s skill at establishing these terms is what sets him apart from your average casino visitor.

Take the best trades...they may be fewer in number if your edge is sharp enough; but they'll be good ones.


12. Johnson is very good at gambling, mainly because he’s less willing to gamble than most. But the vast majority of players lose, and the longer they play, the more they lose.

How ironic is that!


13. Sophisticated gamblers won’t play by the standard rules. They negotiate. Because the casino values high rollers more than the average customer, it is willing to lessen its edge for them.

Trade when the Big Boys trade and trade the way they do. Learn to think like they think.


14. When casinos started getting desperate, Johnson was perfectly poised to take advantage of them. He had the money to wager big, he had the skill to win, and he did not have enough of a reputation for the casinos to be wary of him. He was also, as the Trop’s Tony Rodio puts it, “a cheap date.” He wasn’t interested in the high-end perks; he was interested in maximizing his odds of winning. For Johnson, the game began before he ever set foot in the casino.

Have a game plan before you even sit down to trade.


15. So how did all these casinos end up giving Johnson what he himself describes as a “huge edge”? “I just think somebody missed the math when they did the numbers on it,” he told an interviewer. Johnson did not miss the math. (He had beaten the casinos fair and square).

When the market throws you a trade that is squarely in your favour, hopefully you would be able to recognize it and already be prepared to take full advantage of it with all the "emotional and capital" muscle power you've got! That's how you'll stay ahead of "the house" and come out ahead: fair and square.


16. Johnson could calculate exactly how much of an advantage he would gain with each small adjustment in the rules of play.

How clear cut and exact is your trading method/system/edge and trading plan. How detailed is it, really...


17. In a 50-50 game, you’re taking basically the same risk as the house, but if you get lucky and start out winning, you have little incentive to stop. So when Johnson got far enough ahead in his winning sprees, he reasoned that he might as well keep playing. “I was already ahead of the property,” he says. “So my philosophy at that point was that I can afford to take an additional risk here, because I’m battling with their money, using their discount against them.” (At the height of his 12-hour blitz of the Tropicana casino in Atlantic City, New Jersey, last April, he was playing a hand of blackjack nearly every minute.)

Build up some foreign capital as a cushion and as early as possible, in every trade, position yourself so you are taking the risk with the market's money. He also was not afraid of winning! When you're on a roll, you should know it!


18. According to Johnson, the Trop pulled the deal after he won a total of $5.8 million, the Borgata cut him off at $5 million, and the dealer at Caesars refused to fill the chip tray once his earnings topped $4 million. “I was ready to play on,” Johnson said. “And I looked around, and I said, ‘Are you going to do a fill?’ I’ve got every chip in the tray. I think I even had the $100 chips.

Trading is a zero-sum game. There can only be one outright winner: if one wins the other must lose. Trade well so that you win!


19. These winning streaks have made Johnson one of the best-known gamblers in the world. He was shocked when his story made the front page of The Press of Atlantic City. Donald Wittkowski, a reporter at the newspaper, landed the story when the casinos filed their monthly revenue reports.

If you can become a consistently profitable trader, money management firms and large institutional firms will know your name. They will find you. There's more money out there to be managed than there are people capable of doing so.


20. Johnson says his life hasn’t really changed all that much. He hasn’t bought himself anything big, and still lives in the same house in Bensalem. But in the past year, he has hung out with Jon Bon Jovi and Charlie Sheen...

When you finally make it big, celebrate but don't lose your sense of reality and get the "big head". If so, before you know it, you'll blow it all and you wouldn't even need to be in a bad trade to do it! By the way, new found friends will come out of the woodwork too: some good; some not so good .


Johnson, now dubbed the 'Blackjack Beast', told the Atlantic that the agreement effectively allowed him to play a 50-50 game against the casino.

In the gambling world, the "advantage" favours the house, and it is usually a fixed one (with a random "winner": bait to keep people emotionally and psychologically hooked). In the trading world, the advantages are variable ones. It's up to the trader to define a system (a trading edge) that would locate the most promising advantages in favour of the trader, and use it (the edge) to benefit from any bias in the market...if they are able to trade it well. Johnson had to negotiate to get the advantage of the house down to a 50-50 level: a level playing field so that he could have a chance to win. A trader's advantages are already built into the "trading game". Take the trades you "know" you can hit!!! A trader has just gotta find them based on their system.

So, go for it traders.... Consistent profitability is the only goal...and it is possible, even probable!!!


Great stuff MisterMe . Thanks again.

FX4

P.S. 21. The Trop has embraced Johnson, inviting him back to host a tournament—but its management isn’t about to offer him the same terms again. (Even so—playing by the same rules he had negotiated earlier, according to Johnson, but without a discount—he managed to win another $2 million from the Tropicana in October). Everybody wants to play against the most famous blackjack player in the world. But from now on, the casinos will make sure the odds remain comfortably stacked against him.

When you become consistently profitable, don't be surprised if you get a call from "the house". They would probably want to congratulate you and to ask, "So, what are you doing differently to be so profitable in your trading?" ...That's your "ace in the hole". Just tell them, "It's an in-house secret," but keep trading by those rules .

Nice thread. The approach that ultramoe uses is very interesting. I was hoping that he/she can speak to the fact that that stop can sometimes be substantially more than 20 pips.

It was stated that upon being stopped out out a trade in the opposite direction would be taken.

that trade would not bring you to breakeven on the day if the stop was greater than 20.

ultramoe, you don't target the same # pips lost on the next trade?, do you?

thanks

Thanks PhilipK.

I expect that you'll be getting a reply the next time they're on.

Take care and thanks for posting. Good observation and question.

FX4

Another interesting poll by Micmic...very simple, and again, if traders are honest...well, you know .

FX4

MM,

Interesting article; thanks for sharing. I assume that the Don Johnson referred to is the actor who played Crockett in Miami Vice.

There are only 3 ways to beat the casino at blackjack:

1. Get lucky for a few hands, and then quit before the house edge defeats you.

2. Become a skilled card counter, and somehow avoid detection by casino personnel. Card counting (when added to correct playing/betting strategy) can shift the odds into your favor. You also need to keep your betting spread low enough to avoid being watched. Not as easy as it was back in the 1980s.

3. Persuade a gullible casino to change the rules, so that the odds are in your favor. Apparently that's what Johnson did. It's hard to believe that a big name casino would allow themselves to be so easily suckered. But that being the case, one could win easily enough by employing a simple playing strategy, and consistent and conservative MM.

There are definite parallels there to trading. Edge + conservative MM + consistent execution = $$$.

David

Hanover, here's a picture of the "Blackjack Beast".

FX4