Proprietary Trading

Proprietary Trading

Author
Discussion

Mr fox

301 posts

150 months

Monday 15th April 2013
quotequote all
R11ysf said:
It is almost impossible to go in and say "I am going to made a grand a day everyday this week" because the markets are so constantly vairable.
With all due respect I am going to have to disagree with you on this point, as having clear defined goals focus you to get them achieved. If you don't have a target then what do you aim for. Yes the markets are variable, and if your not making money from the varying markets, then your stratagy is one that dosent work. Weak stratagy=weak confidence.
Personally speaking I always go in for a 1:1 ratio. Do I always get this, no. Most of the time its 1:1+ even as much as 1:8+ in my favour per trade.
What can be simpler than having clear signs of where to enter/where to exit/where to put your SL. thus eliminating 90% of your emotions out of the trade.

Regards
Mr. Fox.


DonkeyApple

54,921 posts

168 months

Monday 15th April 2013
quotequote all
The danger of defined performance targets is that it means a variable risk strategy but not controlled variance. As such it is one of the contributing factors to most 'blow ups'.

It's essential to manage risk first and foremost and then look for your returns.

Most people work within certain markets rather than trade everything and so a fixed target may seem to work on a physcogical level but it's hugely dangerous in reality.

In crude terms it would mean risking the whole fund to hit a daily target and others using almost none of your fund when you should be riding the opportunity to the max.

anonymous-user

Original Poster:

53 months

Tuesday 16th April 2013
quotequote all
Hoofy said:
Taken out of context this is so Betfair trading. biggrin

So apart from DOM what else do you use?
Apart from watching my ladders I always have my charts up. I'm a spread trader so focus on that chart a lot, the U.S 10yrs, Aus 10 yrs, Bund, Dax and S$P mini. Usually have a 30yr TBond up also along with the Curve book for Aus 3yrs vs Aus 10yrs.

Hoofy

76,253 posts

281 months

Tuesday 16th April 2013
quotequote all
FadeTrade said:
Apart from watching my ladders I always have my charts up. I'm a spread trader so focus on that chart a lot, the U.S 10yrs, Aus 10 yrs, Bund, Dax and S$P mini. Usually have a 30yr TBond up also along with the Curve book for Aus 3yrs vs Aus 10yrs.
Oh, right. This kind of thing? http://youtu.be/l0Wpg6dH45w

R11ysf

1,931 posts

181 months

Tuesday 16th April 2013
quotequote all
Mr fox said:
With all due respect I am going to have to disagree with you on this point, as having clear defined goals focus you to get them achieved. If you don't have a target then what do you aim for. Yes the markets are variable, and if your not making money from the varying markets, then your stratagy is one that dosent work. Weak stratagy=weak confidence.
Personally speaking I always go in for a 1:1 ratio. Do I always get this, no. Most of the time its 1:1+ even as much as 1:8+ in my favour per trade.
What can be simpler than having clear signs of where to enter/where to exit/where to put your SL. thus eliminating 90% of your emotions out of the trade.
So you never have a losing day then? As I said, some days you leave money on the table, some days you are lucky to escape flat. All this pre-defined risk stuff aiming for a 1:1 ratio doesn't work in the actual trading world. It can only work if you have wide stops and longer term charts.

Try aiming for a 5 tick winner with a 1:1 stop over a non-farm figure.

Let me know how you get on.

Mr fox

301 posts

150 months

Tuesday 16th April 2013
quotequote all
R11ysf said:
Mr fox said:
With all due respect I am going to have to disagree with you on this point, as having clear defined goals focus you to get them achieved. If you don't have a target then what do you aim for. Yes the markets are variable, and if your not making money from the varying markets, then your stratagy is one that dosent work. Weak stratagy=weak confidence.
Personally speaking I always go in for a 1:1 ratio. Do I always get this, no. Most of the time its 1:1+ even as much as 1:8+ in my favour per trade.
What can be simpler than having clear signs of where to enter/where to exit/where to put your SL. thus eliminating 90% of your emotions out of the trade.
So you never have a losing day then? As I said, some days you leave money on the table, some days you are lucky to escape flat. All this pre-defined risk stuff aiming for a 1:1 ratio doesn't work in the actual trading world. It can only work if you have wide stops and longer term charts.

Try aiming for a 5 tick winner with a 1:1 stop over a non-farm figure.

Let me know how you get on.
Ofcourse I've had not only losing days, but weeks, and months, and that was when I didn't have a clue about how to trade/read a chart. I can however say that I havn't had a losing week in over 6 months to the point where I was contacted by BBC Radio 4 yesterday to talk to them about the joys of succsesful trading, but I see myself as an amateur on a good run at best, so politely declined(If you send me a PM I will pass his contact details to you if you wish, if you would like to let him know about your successes etc).

Obviously I have friends who do work for fund's, and they all have targets, expectations of where they feel price will reach etc. Thus simple arithmatic can let you know how much to risk etc. I can position trade, but choose to day trade, as it suits my style(over a 5 min chart).

As for letting you know how I get on I am willing to start a different thread, and outlining my trades for all to see, and scrutinise, but I'm sure no one wants to see that.

Once again let me appologise to the OP for the thread diversion.

Regards
Mr Fox.

Hoofy

76,253 posts

281 months

Tuesday 16th April 2013
quotequote all
Mr fox said:
As for letting you know how I get on I am willing to start a different thread, and outlining my trades for all to see, and scrutinise, but I'm sure no one wants to see that.
Please do. You will get a lot of cynics, though, sadly. Trade2Win might be a better site for that. If you do start a thread on T2W, post a link on PH for us.

R11ysf

1,931 posts

181 months

Tuesday 16th April 2013
quotequote all
Mr fox said:
Ofcourse I've had not only losing days, but weeks, and months, and that was when I didn't have a clue about how to trade/read a chart. I can however say that I havn't had a losing week in over 6 months to the point where I was contacted by BBC Radio 4 yesterday to talk to them about the joys of succsesful trading, but I see myself as an amateur on a good run at best, so politely declined(If you send me a PM I will pass his contact details to you if you wish, if you would like to let him know about your successes etc).

Obviously I have friends who do work for fund's, and they all have targets, expectations of where they feel price will reach etc. Thus simple arithmatic can let you know how much to risk etc. I can position trade, but choose to day trade, as it suits my style(over a 5 min chart).
Do you trade over numbers? Do you hold positions over rate announcements? Do you hold overnight positions?

Not having a losing week for 6 months is great. How long have you been trading? I've been trading for nearly 10 years and I know that traders have good spells and then times where things don't work so well.

If you think that you know how to 'read a chart' and now that's it then great. Good luck to you and I'm sure you will have a successful 30 years ahead of you (or however long until you have amassed so much money that you can't spend a tiny portion of it before you die).

However, having seen predictable rate hike period from Trichet where things were relatively stable, and then July 7/7, credit crisis, government debt crisis, euro crisis etc etc I can say, with a fair bit of confidence, that what you are doing now will hit a market environment where it won't work. As such, make as much hay while the sun shines as when it falters you'll be looking back thinking "why didn't I trade bigger".

As for Radio 4, thanks but I think I'll pass and leave that to the self-promoters.

Mr fox

301 posts

150 months

Tuesday 16th April 2013
quotequote all
R11ysf said:
Mr fox said:
Ofcourse I've had not only losing days, but weeks, and months, and that was when I didn't have a clue about how to trade/read a chart. I can however say that I havn't had a losing week in over 6 months to the point where I was contacted by BBC Radio 4 yesterday to talk to them about the joys of succsesful trading, but I see myself as an amateur on a good run at best, so politely declined(If you send me a PM I will pass his contact details to you if you wish, if you would like to let him know about your successes etc).

Obviously I have friends who do work for fund's, and they all have targets, expectations of where they feel price will reach etc. Thus simple arithmatic can let you know how much to risk etc. I can position trade, but choose to day trade, as it suits my style(over a 5 min chart).
Do you trade over numbers? Do you hold positions over rate announcements? Do you hold overnight positions?

Not having a losing week for 6 months is great. How long have you been trading? I've been trading for nearly 10 years and I know that traders have good spells and then times where things don't work so well.

If you think that you know how to 'read a chart' and now that's it then great. Good luck to you and I'm sure you will have a successful 30 years ahead of you (or however long until you have amassed so much money that you can't spend a tiny portion of it before you die).

However, having seen predictable rate hike period from Trichet where things were relatively stable, and then July 7/7, credit crisis, government debt crisis, euro crisis etc etc I can say, with a fair bit of confidence, that what you are doing now will hit a market environment where it won't work. As such, make as much hay while the sun shines as when it falters you'll be looking back thinking "why didn't I trade bigger".

As for Radio 4, thanks but I think I'll pass and leave that to the self-promoters.
I don't know what "trade over numbers" is, I never check rate announcements, nor check the news, and never hold positions over night.

I have been trading for 3 yrs now, but the last year it has really "clicked". I have however back-tested this stratagy over 2years on a 200 tick chart(same as a 5 min chart) which, as you can imagine has been a long, and laborious task, which has proven a few things to me like, a) news is not a factor to consider, everything I need to know is on the chart, and most important of all IT WORKS. I do use various indicators now, which I didnt use before for confirmation like Kaufman Adaptive Moving Average, DMI, Haiken-Ashi chart, CCI, TMACD, ATR, Elliot wave theory, Fib, and savvy risk management.
wink

As for spending before I die. I think theres more chance of that happening from the lifestyle I lead, as I spend just as quickly as I earn. lol. plus I never trade everyday. For eg. If Ive been out the night before I'll take a few days off to recover, and since I don't have a boss to answer to. Why not. If Im meeting friends for lunch, then I won't trade, as I dont want to have trades occupying my mind. Somedays I'll be in the market for about an hour, grab 2%, and then just switch the laptop off(yes I do have a 4 monitor set-up, but still prefer working from the laptop), and just piss about for the rest of the day.

But please don't misconstrue what I have written, as someone who has, say "discovered the holy grail of trading". I hav'nt. I've just found a system thats working for me.

Thank you for your words of encouragement, and you could be right, that there might come a time when it dosent work, and if that time comes then yes I will kick myself for not trading more, and saving more, but until that time comes ignorance is bliss, and I'm just enjoying trading.

I hope that's answered your questions.

Regards
Mr. Fox.

anonymous-user

Original Poster:

53 months

Wednesday 17th April 2013
quotequote all
Mr fox said:
I don't know what "trade over numbers" is, I never check rate announcements, nor check the news, and never hold positions over night.
Are you saying you never check when news announcements are scheduled? You're fine with potentially opening a trade when the BOE announce more/less QE, or the EU cuts rates?

afrochicken

1,166 posts

208 months

Wednesday 17th April 2013
quotequote all
Hoofy said:
Mr fox said:
As for letting you know how I get on I am willing to start a different thread, and outlining my trades for all to see, and scrutinise, but I'm sure no one wants to see that.
Please do. You will get a lot of cynics, though, sadly. Trade2Win might be a better site for that. If you do start a thread on T2W, post a link on PH for us.
hehe The last time Mr Fox started such a thread, it didn't go so well. In fact, I'd say he had a mini-meltdown.

Mr Fox's trading journey


Mr fox

301 posts

150 months

Wednesday 17th April 2013
quotequote all
FadeTrade said:
Mr fox said:
I don't know what "trade over numbers" is, I never check rate announcements, nor check the news, and never hold positions over night.
Are you saying you never check when news announcements are scheduled? You're fine with potentially opening a trade when the BOE announce more/less QE, or the EU cuts rates?
Yes that is correct. As strange as the notion seems the majority of times you'll find "price procceed's the news", and the rest of the time, well I'm not in the market, because as soon as I have made a satisfactory amount. I'm out, be it 10 mins working, or 1hr. I don't care if I've took a target of 10 pips from the market, and then it shoots 100 pips in my favour. All I care about is that my target is met(control your greed). Even if you take the crudest of news announcements like Bloomberg, there is so much scaremongering going on there that any sane person would'nt even dare to trade. I firmly believe that people who know what they're doing either don't tell anyone, or scare you away. Should I check the news on a daily basis, Ofcourse I should, but during back-testing its proved one thing. Your either in the trade, or not.
HTH.

Regards
Mr. Fox.

anonymous-user

Original Poster:

53 months

Wednesday 17th April 2013
quotequote all
Mr fox said:
Yes that is correct. As strange as the notion seems the majority of times you'll find "price procceed's the news", and the rest of the time, well I'm not in the market, because as soon as I have made a satisfactory amount. I'm out, be it 10 mins working, or 1hr. I don't care if I've took a target of 10 pips from the market, and then it shoots 100 pips in my favour. All I care about is that my target is met(control your greed). Even if you take the crudest of news announcements like Bloomberg, there is so much scaremongering going on there that any sane person would'nt even dare to trade. I firmly believe that people who know what they're doing either don't tell anyone, or scare you away. Should I check the news on a daily basis, Ofcourse I should, but during back-testing its proved one thing. Your either in the trade, or not.
HTH.

Regards
Mr. Fox.
I'm sorry but opening a trade pre a big release is nothing other than a gamble. Good luck.

Mr fox

301 posts

150 months

Wednesday 17th April 2013
quotequote all
afrochicken said:
Hoofy said:
Mr fox said:
As for letting you know how I get on I am willing to start a different thread, and outlining my trades for all to see, and scrutinise, but I'm sure no one wants to see that.
Please do. You will get a lot of cynics, though, sadly. Trade2Win might be a better site for that. If you do start a thread on T2W, post a link on PH for us.
hehe The last time Mr Fox started such a thread, it didn't go so well. In fact, I'd say he had a mini-meltdown.

Mr Fox's trading journey
Well Afrochicken all I will say on this matter is it's not nice being called a liar, scammer, cheat etc on every aspect. There were people on that thread whom even questioned my spread being 1 or less, even after I explained that if you have a substantial amount in your trading account, yet now even my broker FXCM has on their front page spreads under 1pip(on the proviso that you have over $25,000)
wink

Regards
Mr. Fox.

Hoofy

76,253 posts

281 months

Wednesday 17th April 2013
quotequote all
afrochicken said:
hehe The last time Mr Fox started such a thread, it didn't go so well. In fact, I'd say he had a mini-meltdown.

Mr Fox's trading journey
But that wasn't his trading that went wrong so much as him getting annoyed with everyone disagreeing with him, IIRC.

I mean, I could argue all day about gambling on football being money thrown away, only the bookies win etc etc but fact is I take money off the table every Saturday afternoon.

Edited by Hoofy on Wednesday 17th April 10:12

Mr fox

301 posts

150 months

Wednesday 17th April 2013
quotequote all
FadeTrade said:
Mr fox said:
Yes that is correct. As strange as the notion seems the majority of times you'll find "price procceed's the news", and the rest of the time, well I'm not in the market, because as soon as I have made a satisfactory amount. I'm out, be it 10 mins working, or 1hr. I don't care if I've took a target of 10 pips from the market, and then it shoots 100 pips in my favour. All I care about is that my target is met(control your greed). Even if you take the crudest of news announcements like Bloomberg, there is so much scaremongering going on there that any sane person would'nt even dare to trade. I firmly believe that people who know what they're doing either don't tell anyone, or scare you away. Should I check the news on a daily basis, Ofcourse I should, but during back-testing its proved one thing. Your either in the trade, or not.
HTH.

Regards
Mr. Fox.
I'm sorry but opening a trade pre a big release is nothing other than a gamble. Good luck.
I assure you it's not a gamble if you know what your doing. Think about it. If no-one ever traded before a news announcement there would be no trades placed at all, thus the market would not move at all. If you need someone to teach you this let me know, and I'll reconmend you a few good books to help you become a better trader.

Regards
Mr. Fox.

anonymous-user

Original Poster:

53 months

Wednesday 17th April 2013
quotequote all
Mr fox said:
I assure you it's not a gamble if you know what your doing. Think about it. If no-one ever traded before a news announcement there would be no trades placed at all, thus the market would not move at all. If you need someone to teach you this let me know, and I'll reconmend you a few good books to help you become a better trader.

Regards
Mr. Fox.
I'm trying to work if you're being a condescending git or not?

You're an intraday trader, news announcements WILL affect you. Think about it. If you'd like me to explain it to you, do let me know.

Let me know how you go when your stop gets gapped 50 pips on a news announcement you knew nothing about.

afrochicken

1,166 posts

208 months

Wednesday 17th April 2013
quotequote all
Mr fox said:
Well Afrochicken all I will say on this matter is it's not nice being called a liar, scammer, cheat etc on every aspect.
To be fair to you, as is the way with virtually every market related thread on PH, a lot of people jumped on you and I didn't blame you for the "mini-meltdown" as I called it. Trading polarises PH. Some refuse to believe that anyone can do any better than just buying a FTSE 100 tracker and any out-performance is just one-off luck. Then some chime in saying that if someone is so good that they can out-perform then why don't they own a private island yet.

When someone speaks of having an edge over the markets (which is completely possible), it's natural and healthy for others to question it. But like so many others, that thread went too far. No doubt this thread will head the same way.


Hoofy said:
But that wasn't his trading that went wrong so much as him getting annoyed with everyone disagreeing with him, IIRC.
Very true.

Mr fox

301 posts

150 months

Wednesday 17th April 2013
quotequote all
FadeTrade said:
Mr fox said:
I assure you it's not a gamble if you know what your doing. Think about it. If no-one ever traded before a news announcement there would be no trades placed at all, thus the market would not move at all. If you need someone to teach you this let me know, and I'll reconmend you a few good books to help you become a better trader.

Regards
Mr. Fox.
I'm trying to work if you're being a condescending git or not?

You're an intraday trader, news announcements WILL affect you. Think about it. If you'd like me to explain it to you, do let me know.

Let me know how you go when your stop gets gapped 50 pips on a news announcement you knew nothing about.
I assure you I'm not being condesending at all, and know how hard this path we choose is, and short of giving my statagy away(and why should I when I've paid good money for it), I'm all for helping others, and more importantly learning from others(and learning from others does not mean I want to know your edge).

Yes please I really would like you to explain it to me if you can. Also can you give me an example when the market has gapped up or down say 20+ pips, and I'll let you know how it would have affected me.

Regards
Mr. Fox.


anonymous-user

Original Poster:

53 months

Wednesday 17th April 2013
quotequote all
Ok, I'll bite.

Everyday there are at least 1 high impact news announcement from UK/Europe or the U.S. These can cause movements from 15 pips upto 200+ pips in the space of minutes. If you're in a trade pre announcement and happen to be on the wrong side, quite simply you'll get your stop slipped considerably if it's a big move due to liquidity issues in the market.

Below is EURJPY from the March NFP. A 50 pip spike higher then an immediate reversal to fresh lows. That is solely caused by a fundamental shift, no indicator or pattern will tell you that would happen.