Showing posts sorted by relevance for query how-tough-has-trading-been. Sort by date Show all posts
Showing posts sorted by relevance for query how-tough-has-trading-been. Sort by date Show all posts

Friday, December 21, 2018

Info!! How Tough Has Trading Been?

Thanks to a savvy trader for this graphic of the Soc Gen Short Term Trading Index, which is the composite results of the hedge fund surgery was positive for the commencement quarter of 2017, but the surgery of CTAs was negative over that same period.  These results mirror my ain sense working amongst trading firms:  those trading short-term together with those trading inwards a momentum/trend mode accept been performing worst.  Those performing best inwards Q1 were ones focused on Asia, every bit good every bit activist funds together with funds trading volatility strategies.

In other words, those marketplace participants amongst specialized strategies accept been outperforming the generalists.  Working at a publish of funds every bit a surgery coach, I tin country you lot that--on average--those placing directional bets on involvement rates inwards Q1 greatly underperformed those trading relative value strategies.  Even amidst twenty-four hours trading firms, uniqueness of strategy has been an of import predictor of success thence far inwards 2017.  Those traders twenty-four hours trading big liquid instruments accept underperformed those finding unique opportunities inwards carefully selected private stocks.

I'm non then certain this is all that unlike from the dynamics inwards the broader work concern world.  If novel participants come inwards a crowded space, they are less probable to move successful than if they honor unique niches.  This is an of import challenge for those aspiring to trading success.  The necessitate chances tolerance of near trading firms does non allow long belongings periods for directional positions.  This tends to throw everyone inwards the short-term army camp depicted above.  You're non going to win past times playing the same game every bit everyone else, but every bit you're non probable to honor gilded if you lot prospect the hills that accept been good picked over past times previous miners.

It's non plenty to larn how to trade; it's critical to merchandise uniquely.  It's non plenty to merchandise amongst rules together with discipline; i must too honor chance creatively.  The firms achieving the results depicted inwards a higher house are trading trends inwards liquid markets inwards a disciplined fashion.  Influenza A virus subtype H5N1 peachy approach to success would move to inquiry strategies that made coin during months when those other participants were performing worst.  There is no guarantee that futurity returns volition mirror backtested ones, but excavation for gilded inwards well-mined fields is a pitiful risk/reward proposition.

Further Reading:  Creativity together with Innovation inwards Trading
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Monday, January 28, 2019

Info!! Best Practices Inwards Trading: Creating Checkups For Your Trading

There's a lot to last said for a periodic checkup from the cervix up.  It is slow to speak ourselves into trades, veering from our border inwards markets.  How do nosotros know if we're genuinely aligned amongst our best practices?  That's where checklists too checkups tin last really helpful.

Today's best utilisation comes from Mike Bellafiore too Steve Spencer from SMB Capital.  They depict a twice-weekly checkup that helps ensure that junior traders are genuinely rigorous inwards their pick of trading ideas.  They depict the procedure that occurs on their trading floor:

"Each Tuesday too Th at 1:30 PM EST nosotros run into inwards our theater preparation room inwards midtown Manhattan for...The PlayBook Checkup.  The PlayBook Checkup?  What, is individual sick?  No, at that spot are no doctors or nurses present; merely traders too developing traders.  This is a best utilisation that has helped our traders position too maximize their trading edge.

Here's how it works.  H5N1 junior trader on our desk prepares a merchandise inwards template form--an SMB PlayBook trade--of a setup that makes feel to him or her.  Then, he/she presents this merchandise to other traders inwards our preparation room.  I host this learning session amongst tough questions to the trader regarding stock selection, a merchandise catalyst of lack thereof, preparation or lack thereof, thinking, too execution.  Here I 'checkup' on the favorite trades of our novel traders--their edge.

The junior trader breaks downwards a favorite merchandise into v variables for their presentation (the SMB PlayBook Template):

a.  The Big Picture
b.  Intraday Fundamentals
c.  Technical Analysis
d.  Reading the Tape
e.  Intuition

Each hateful solar daytime our novel traders archive a setup that made the most feel to them earlier they exit the trading floor.  From these PlayBook trades they lead 1 to acquaint nether the pressure level of constructive scrutiny during the PlayBook Checkup.  They know to lead wisely too last stimulate to defend their trade.

Some phrases heard inwards our preparation room during these sessions:

*  Yeah, don't brand that merchandise again.  You are non going to brand coin trading plays similar that.
*  Where could you lot accept been bigger inwards that trade?
*  How the heck did nosotros allow a Boston Red Sox fan into this firm?
*  You accept to last bigger inwards this trade.  You are leaving coin on the tabular array past times non beingness bigger.
*  If you lot are non going to properly laid upwards for a trade, what makes you lot mean value the marketplace volition permit you lot succeed?
*  This is precisely the type of merchandise you lot tin build a career around.

Here's what the PlayBook Checkup helps traders accomplish:

1.  Define their favorite setups
2.  Eliminate setups non worth their intellectual, financial, too emotional capital
3.  Guide traders to internalize their trading border amongst their PlayBook
4.  Helps traders acquire skillful risk/reward trades from their peers
5.  Offers them a merchandise review past times a trading partner amongst a deep dive into a specific merchandise setup
6.  Provides a forum where standards of lineament trades for our desk are set
7.  Teaches them how to mean value through their setups similar a pro
8.  Builds an chance for us to bond, joke, too portion a mutual learning experience"

This is a nifty event of how trading tin acquire an effective squad sport.  Steve too Mike works life the checkup equally role of their preparation program, but inwards fact this is a procedure that whatever trader could implement amongst 1 or to a greater extent than trading buddies.  It enables traders to mean value virtually their thinking, hone their edges, too acquire from each other.  The cumulative behaviour on of engaging inwards such checkup review each calendar week is significant.

Further Reading:  The Power of Teamwork inwards Trading
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Saturday, December 22, 2018

Info!! 5 Primal Questions Traders Demand To Hold Upwardly Asking

Here are 5 helpful questions that traders also rarely ask:

1)  What was the toll path of what I was trading *after* I stopped out of the trade?  Does my conk execution real add together value?

2)  What has been the toll path of what I've been trading afterward I entered the trade?  Does my entry execution direct maintain positive expected value, or am I ameliorate off entering inward a rule-based, mechanical fashion?

3)  When I've added to trades, what has been the P/L merely for those added pieces?  Does adding to trades genuinely add together to my profitability?

4)  What has been the toll path of trades I create upwards one's hear to non direct maintain because of lack of conviction?  Does my conviction inward an visit genuinely correlate alongside the profitability of trading that idea?

5)  How does my P/L behavior afterward I've had a string of winning trades?  Influenza A virus subtype H5N1 string of losers?  Does recent functioning bear upon my trading, and--if so--is that impact positive or negative?

Tough to come upwards up alongside answers for ameliorate trading if we're non cry for the correct questions.  

Perhaps the best inquiry of all:  How much fourth dimension create yous pass studying your trading vs. studying the markets yous trade?

Further Reading:  Preparation as well as Success
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Saturday, January 12, 2019

Info!! At That Spot Is No Such Matter Equally Trading Psychology

I'd similar to advance a principle:  The values together with emotional/behavioral patterns that nosotros enact inward our trading inevitably reverberate those nosotros alive exterior of our trading.  Who nosotros are equally a trader never strays besides far from who nosotros are equally people.  In that sense, in that location is no such matter equally trading psychology.  There is solely psychology; nosotros cannot sustain patterns inward our trading if nosotros create non alive together with reinforce them inward our daily lives.

We late returned from a trip to Norway, trekking mountains together with fjords.  Every yr nosotros get got at to the lowest degree i opor-garai that places us exterior our daily routines together with expands our cultural together with environmental horizons.  That's also fourth dimension that nosotros pass together apart from the routines of daily life.  On a smaller scale, nosotros purpose weekends to respect novel things to create together with places to go.  Sharing novel experiences keeps a human relationship new; it also keeps i from becoming besides wrapped upward inward 24-hour interval to 24-hour interval function together with markets.  This emphasis on life perspective has been cardinal to keeping a grade caput inward trading.  It is hard to overtrade when you're seeing the larger motion painting of your personal together with trading development.

Similarly, adopting iv rescue cats together with beingness involved inward the lives of our 5 children keeps us inward a agency of retainer leadership.  It's tough to larn overconfident inward markets together with merchandise amongst your ego when yous pass a expert share of the 24-hour interval helping others. 

I was late driving on a highway together with the route separate into 2 sections, each going the same way.  The left fork was a unmarried lane labeled express; the correct fork was a double lane labeled local.  My trip was several hours inward duration but I at nowadays took the local option.  My instantaneous reasoning was that if the unmarried lane became blocked past times an accident or automobile breakdown, traffic would hold upward trapped--potentially for hours.  If the double lane saw an accident or breakdown, in that location was a fighting adventure of getting past times inward i of the other lanes.  In short, I speedily made my determination based upon the administration of downside (tail) risk.

What this tells us is that, non solely does our daily psychology larn our trading psychology, but our trading psychology has a agency of filtering into our daily lives.  Trading teaches us lessons nearly risk, reward, discipline, together with flexibility together with those larn life lessons.  We merchandise amongst the psychology that nosotros cultivate exterior of marketplace hours.  Who nosotros are equally traders helps cast who nosotros are equally people.  There is no trading psychology, solely psychology.

So what does that mean?

If there's a blueprint you'd similar to alter inward your trading, figure out how that blueprint is playing out inward your personal life together with brand that the focus of your alter efforts.  In other words, your destination should hold upward to hold upward the individual exterior of trading hours that you'd similar to hold upward inward your trading.  Life hence becomes a practise soil for trading, but equally the opposite is the case.  Becoming a ameliorate trader is no unlike from becoming a ameliorate person.

Well, Mali but walked into the room when she heard my music playing; she solely seems to walk inward when the romantic tunes are playing...Next inward my queue is an electronic mail offering a partnership inward a money-making chance to pitch trading psychology videos.  Think I'll pass about partnership fourth dimension amongst the lilliputian daughter instead...

Further Reading:  The Ultimate Value of Trading
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Sunday, March 29, 2020

Info!! Tough Swing Trading Marketplace Lay Too About Wednesday Resources

* No Trend, No Friend - Since 2006, the correlation betwixt the electrical current day's cost alter inwards the S&P 500 Index (SPY) together with the adjacent day's alter has been -.095. Since June of this year, however, it has been -.214. Buying later an upwards solar daytime or selling later a downwards solar daytime has been a losing strategy. The tendency has non been a friend for swing traders of late.

* Impressive Rally, Less Impressive Indicator - The marketplace rose sharply on Tuesday, only nosotros alone had 1027 stocks making fresh 20-day highs against 868 novel 20-day lows across the NYSE, NASDAQ, together with ASE. That is fewer novel highs than nosotros saw during the prior marketplace bounces inwards July. I volition hold out watching closely to run across if the rally is gaining or losing traction, especially amid the minor cap stocks, which convey shown less relative trace of late.

* Signs of the Times - The alone ii sector groups inside the S&P 500 universe that are currently showing a bulk of their highly weighted stocks inwards downtrends (my Technical Strength measure) are Materials together with Energy, the ii commodity-related groups. Consumer Staples together with Health Care, ii sectors unremarkably idea to hold out to a greater extent than recession-resistant, are the strongest sectors. Note how Utilities convey been next the commodity/energy stocks lower. We've seen a 2008 depression for aureate together with silvery mining stocks ($XAU), which convey been hammered of late.

* What's Hot? Instant Bull displays the stocks that convey gotten the nearly searches over the final 4 days, equally good equally calendar links to teach economical together with net news. See too the tidings search engine at NewsFlashr, amongst regularly updated headlines, including a page of fiscal headlines amongst search.

* Staying Current - FinViz stays on pinnacle of fiscal tidings together with weblog updates. Check out their screener equally well, equally good equally their sector-based oestrus maps.
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Sunday, January 27, 2019

Info!! To A Greater Extent Than Skillful Materials To Commence The Trading Week

*  Above nosotros come across a cumulative running full of the pose out of NYSE stocks giving purchase versus sell signals alongside abide by to their Bollinger Bands.  This is 1 agency of looking at the breadth of forcefulness versus weakness over time.  After notable weakness going into the October, 2014 drop, nosotros convey been working our agency higher inwards this measure.  More stocks convey been showing forcefulness than weakness, every bit much because of the relative absence of sell signals every bit the high presence of buys.  

This is a rattling of import concept for developing traders:  How nosotros are wired socially, emotionally, together with cognitively defines where nosotros volition detect our border inwards markets.  We are best positioned to know markets if nosotros get-go know ourselves.

*  I've been making increasing role of the Investing.com site.  I similar the feature that tracks advancing together with declining stocks across international every bit good every bit United States averages.  I besides similar the coverage of international markets, FX, together with the international commentary.

Of the hold out past times posts tracked past times Abnormal Returns this past times week, I peculiarly similar the 1 that outlines problems that often accompany backtests.  Another peachy link is Meb Faber's post service on diversification together with protecting against an overvalued stock market.

Great serial of posts on mindfulness inwards trading past times SMB Training together with Bruce Bower.  The clearest problems alongside mindfulness hand when nosotros are caught upwards inwards emotional reactions to marketplace action.  Less appreciated is that nosotros tin lose self-awareness every bit a business office of expert trading.  If we're absorbed inwards markets, we're non focused on our best trading of those.  It's that transition from marketplace awareness to trading awareness that is key.  Many peachy traders role post-it notes for reminders on their hide exactly because it's when they're about focused on markets that they're to the lowest degree focused on best trading practices.    

*  Are nosotros trending on a twenty-four hours fourth dimension frame?  Stats provided past times Vic Scherer are quite relevant.  I've besides been looking at book every bit a relevant measure.  It's tough for short-term moves to extend if book is drying up.  Note that tendency on an X fourth dimension frame is theme upon momentum at the Y fourth dimension frame, where Y > X.  If you lot convey a stair out that has a momentum edge, you lot tin to a greater extent than often than non define a winning tendency strategy at a lower fourth dimension frame.

Have a peachy start to the week!

Brett
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Saturday, November 2, 2019

Info!! Should Proprietary Trading Firms Accuse For Their Education?

I notice that several readers conduct keep commented upon my recent post service that quoted SMB Trading's Bella. The comments concerned the fees that SMB (and other firms) accuse for their preparation programs. This, to some, smacks of a scam.

So allow me to wade into a contentious area, 1 that has been hotly debated on around online forums:

I yell upwards the model inwards which prop firms accuse a preparation fee earlier a trader tin bring together the draw of piece of work solid is fraught amongst potential problems. How it is implemented makes all the deviation inwards the world.

As I banknote inwards this post in addition to inwards this one, really high didactics fees may hold upwards a sign that this is genuinely the way that the "prop firm" is making its money. When this is the case, the draw of piece of work solid volition conduct keep five-figure fees every bit a dominion in addition to volition allocate very, really modest trading size to traders. The draw of piece of work solid volition too accuse traders high committee rates. If the trader hits a for sure loss restrict (and the vast bulk volition because of the modest size in addition to high commissions), the trader volition either lose their "job" or volition hold upwards asked to advance to a greater extent than capital.

This, inwards my opinion, is an outright scam. There *is* no prop firm, only the illusion of 1 to lure newbie traders into educational programs. Very often, these efforts at didactics are quite thin, consisting of nix to a greater extent than than the sort of garden-variety technical analysis y'all could pick upwards inwards whatever trading text. There are no skills edifice efforts through simulators, no noun mentorship. Often, these watered downward programs are offered to traders who merchandise remotely (i.e., from their domicile locations). That's genuinely a alarm sign: truthful prop firms value teamwork, hands-on mentorship, in addition to trading technology; it's tough to sustain those when traders are remote.

Another alarm sign, ironically, is that the less-than-legitimate firms volition characteristic unusually high payout ratios, allowing traders to cash inwards one's chips on well-nigh all of their profits. That way that the draw of piece of work solid is non counting on trader profitability for their ain profits, in addition to it ordinarily way that the draw of piece of work solid is non firmly committed to trader profits. Rather, fees in addition to commissions are what the draw of piece of work solid is after. The trader is a client of such a firm, non an employee.

If y'all desire to bring together a prop firm, y'all should hold upwards able to come across the trading floor, interact amongst the traders, in addition to come across offset manus who is making their living from their trading. If the kimono isn't opened upwards to that degree, beware.

OK, that having been said, permit me conduct keep the other side of the argument:

I conduct keep no work amongst firms charging a fair fee for their educational efforts. This is peculiarly the representative when the draw of piece of work solid is offering the didactics every bit a stand-alone offering. There are really few prop firms that brand their preparation available to exterior traders. For instance, it's really hard to uncovering credible educational programs on reading society menses (tape reading). The plan at SMB is available at a fee for those who aren't affiliated amongst the firm. Traders tin assess the fee in addition to the content of the plan in addition to create upwards one's hear if it's a fair deal.

As a rule, if the educational offerings conduct keep a structured curriculum, opportunities for skills edifice (and non exactly information), in addition to final for weeks or months (not exactly days), they conduct keep the potential to motion traders' learning curves forward. I am non a fan of brief preparation programs, every bit they only lack the fourth dimension to develop skills.

When a trader is required to become through the educational plan (at a fee) to bring together the draw of piece of work solid every bit a prop trader, it's of import to watch the draw of piece of work solid every bit 2 sort out companies. The offset companionship is the didactics provider; the 2nd is the trading firm. It is possible that y'all could similar the companionship for its education, but non for its actual trading--or vice versa. By separating out the didactics from the prop opportunity, y'all tin evaluate each on its ain merits.

Personally, I would watch the chance to merchandise for the draw of piece of work solid every bit an out-of-the- coin telephone telephone option. In other words, if they similar me in addition to I similar them in addition to I practise good inwards the program, I may acquire a large reward yesteryear joining the firm. But I'm going to become into the didactics amongst the thought that the selection may expire worthless. I powerfulness non similar the firm, they powerfulness non similar me, in addition to my trading trend ultimately may non correspond theirs.

Once I conduct keep that mindset, I tin inquire myself: would I pay the fee for the education, fifty-fifty if it doesn't atomic number 82 to an offering to bring together the firm? If the response is no, I enjoin motion on. If the response is aye in addition to y'all too similar the frosting on the cake of the telephone telephone option, in addition to then it makes feel to pursue the training. But no trader, inwards my opinion, should "pay to play". The preparation has to stand upwards on its ain every bit a career in addition to economical value.

All of this way that joining a prop draw of piece of work solid requires considerable due diligence. There are existent scams out there, in addition to at that spot are honorable firms that offering a teamwork, learning-based civilisation in addition to solid training. Just brand for sure that the draw of piece of work solid is selling y'all existent training, non exactly hopes, dreams, in addition to fantasies. The posts below should hold upwards helpful inwards making the distinction.

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Tuesday, January 15, 2019

Info!! Wide Perspectives For A Summertime Marketplace Week

*  Above nosotros run into the daily average of 5, 20, together with 100-day novel highs versus novel lows for all SPX stocks.  (Raw information from the ever-helpful Index Indicators site).  When this multiperiod breadth stair out has been inwards its weakest quartile going dorsum to 2014, the adjacent 5 days inwards SPX accept averaged a arrive at of +.64%.  All other occasions accept averaged a arrive at of alone +.05%.  Interestingly, when nosotros expect simply 2 days out, the strongest breadth periods accept led to an average arrive at of +.15% together with the weakest periods accept yielded an average arrive at of +.40%.  All other occasions accept averaged a two-day loss of -.02%.  On curt fourth dimension horizons, returns accept been a part of either rigid upside momentum or hateful reversion next wide weakness.  When trading cost patterns, it helps to know the context inwards which they're occurring.

*  Management together with leadership concepts don't simply pertain to corporations; they are vital to the running of whatever trading business.  If there's no vision to running your business, you're running blind.  And if you're non running your trading similar a business, create you lot actually accept whatever trouble organisation trading?  

A wide array of  worthy reads from Abnormal Returns, including posts on health, fitness, together with more.

*  Interesting postal service from Price Action Lab:  Why moving average systems lack intelligence.  It's tough to non abide by skilful reads via Quantocracy.

Great overview of the calendar week ahead from Dash of Insight, including a expect at how domestic stocks demeanour during times of international turmoil.

*  From NewTraderU: Character matters: how would you lot merchandise if you lot traded similar a Boy Scout?

Have a peachy commencement to the marketplace position week!

Brett
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Friday, January 11, 2019

Info!! Successful Trading Too The Fine Art Of Bespeak Corking Questions

The nigh impressive traders I know enquire actually proficient questions.  The to the lowest degree impressive traders I know don't enquire questions.

This morning time I've been upwards for a piece as well as having quite a few online conversations.  One of the major topics has been the recent ascent inwards VIX, put/call ratios, as well as options skew inwards the index selection market.  Does that hateful that bearishness is overdone?  Does that hateful that smart coin is pricing inwards a surprise election outcome?  In the human face upwards of such sentiment, how tin i best seat one's risk-taking earlier as well as later election results?

Out of these questions, I chop-chop updated a model of options skew that looked non alone at the absolute grade of skew, but equally good rates of alter as well as skew volatility.  Some really interesting patterns emerged, suggesting that a high grade of downside hedging has been associated alongside subnormal near-term returns, but superior intermediate-to-longer term returns.  In other words, nosotros run into hedging when the surroundings actually is dicey, but it is those dicey environments that ultimately depict inwards value participants as well as atomic number 82 to favorable longer piece of work returns.

Good questions don't simply atomic number 82 to proficient answers.  As whatever scientist knows, proficient questions atomic number 82 to proficient inquiry as well as investigation.  Research tells us that creative, productive people are slap-up at employment finding.  They enquire *meaningful* questions.  If nosotros precisely avoid or piece of work from problems, nosotros never enquire the tough questions that yield of import insights.

Further Reading:  What We Learn From Options Skew
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