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Et tu NQ: Trading the Nasdaq e-mini
Started:May 29th, 2011 (05:35 PM) by Bermudan Option Views / Replies:5,789 / 87
Last Reply:April 25th, 2012 (10:55 PM) Attachments:0

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Et tu NQ: Trading the Nasdaq e-mini

Old August 18th, 2011, 11:53 AM   #21 (permalink)
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thanks for sharing that information guys. like to know what other people feel and think about in this market

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Old August 20th, 2011, 05:49 PM   #22 (permalink)
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Hello BMT

Still alive and kicking here in Chicago. I got laid off from the job mentioned in my first post of the thread. Luckily I was almost instantly hired for a new job that I find very rewarding. Thanks to my new employment (and my ever present scrooge-like traotss) I have the opportunity to add money to my trading account monthly. I have not thought extensively about it, but I believe I will start with the max needed to hold any of the main contracts overnight (in addition to like a grand to avoid instant margin calls) With the rest of money added to my trading account I will use them to invest in/trade options.

Mentally, a month without internet has substantially dwindled my thoughts on trading and my ability to trade. I did complete Trading in The Zone for the 2nd time during my hiatus and I plan on reading Tape Reading and Market Tactics one more time before I start paper trading because I loaded up ThinkOrSwim this morning and have forgotten the story that volume can tell thanks to lack of repetition.

The book on my coffee table at the moment is: The Logic of Failure by Dietrich Dorner. I started reading it because it ties in nicely with my job but I find it to be very relevant to gauging financial markets as well. Dorner has written a great book that says because of the complex nature of the issues we face as a society, the decisions we make to resolve issues today are the seeds to the problems of the future. The idea of a pension is a great example: in theory it is a great idea but it has fundamental flaws by not taking into account the effects of medicine et al.

Another example is the chemical Agent Orange that was used to effectively clear foliage in the Vietnam war. Tactically it was great, but now we know that it created more problems than it solved and those problems far outlasted the benefits in battle and outlasted the war in general. The author shows how causes and effect are never isolated in a vacuum and translates perfectly into financial markets where it is increasingly common for people to attempt to peg the markets movements to an individual instrument like bonds, gold, or the European market.


Last edited by Bermudan Option; August 20th, 2011 at 06:41 PM.
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Old August 20th, 2011, 05:53 PM   #23 (permalink)
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Bermudan Option View Post
... before I start paper trading because I loaded up ThinkOrSwim this morning and have forgotten the story that volume can tell thanks to lack of repetition.

do not use ToS for paper trading... unrealistic fills.. if doing futures, the use NT7 (least evil)... and if options.. use TradeMonster... just my 2 cents...

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Old August 20th, 2011, 05:57 PM   #24 (permalink)
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Bermudan Option View Post
I believe I will put the max needed to hold any of the main futures contract overnight (plus like a grand to give me time to work with before a potential margin call).

so that is $1K above full margin (assuming of course that is the worst case for index or $7500) per contract held right?

btw, why hold overnight.. are you going with swing trades?

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Old August 20th, 2011, 06:19 PM   #25 (permalink)
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sysot1t View Post
do not use ToS for paper trading... unrealistic fills.. if doing futures, the use NT7 (least evil)... and if options.. use TradeMonster... just my 2 cents...

Hey sysot1t, nice to hear from you. I agree that the ToS trade execution is mediocre at best on their simulator but I am not too concerned with entries because I am going to be swing trading so I don't mind having to occasionally chase entries for a point or two IRL although that wasn't the case on the simulator.

As long as Think or Swim don't screw me over after they complete merging their software with TDA, I will likely stick with them for the near future at least. ToS taught me a lot about trading and so i feel kind of indebted. Also their program is free so it is going to take a lot for me to want to learn a new platform and pay to use it. Perhaps I will reach a trading method that requires more from the trading platform in the future but for now I'm content. I do plan on getting my trading commission lowered after about a month of live trading though. Too steep for my liking.


sysot1t View Post
so that is $1K above full margin (assuming of course that is the worst case for index or $7500) per contract held right?

btw, why hold overnight.. are you going with swing trades?

Yeah, $1K above full margin. Futures trading on ToS requires overnight margin regardless of the anticipated duration of your trade but it is fine by me because I only expect to trade one contract for now regardless. Once I start having success and decide that it is time to increase my contract size, I will gauge whether or not I want to move to a different broker.

Edit: Perhaps I mispoke when I said I was trading all the main futures contracts. Some contracts like the /ES have too much money at stake per tick for me at the moment. I am looking more at FX Futures and commodities that show a low risk and high reward that can allow me to create a position without large amounts of capital


Last edited by Bermudan Option; August 20th, 2011 at 06:31 PM.
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Old November 8th, 2011, 04:43 PM   #26 (permalink)
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Laid off of my job at a start up company last week lol.

On the plus side, it was the first job I've ever had that allowed me A) Complete control over everything I did B) I got paid to think.

Great experiences there but this economy is hard for any business to make it in. I was prepared to be let go in the last few weeks and now I can refocus on trading again (and looking for another new job smh)

I haven't looked at any charts in about 5 months so although I still have a good idea of the way I want to trade, it is going to be challenging getting into the actual groove and execution. Currently, I am reading about Consumer Behaviorisms (thanks a lot 'old job') and looking at the theories that translate well into the financial world.

For example, consumers ignore contrary ideas challenging their strong beliefs, until it is repeated enough to become a new norm. The same idea would hold true in terms of a bull/bear market: people don't necessarily believe that things are turning for the better/worse financially until they here it day after day after day. Usually by the time they attempt to take advantage of the shift in perception, it is almost over anyways and the cycle continues again.

Another interesting similarity was the idea of the subjective norm and the sphere of influence. To elaborate, when we buy a pair of shoes, we consciously ask ourselves how will our peers view this purchase: are these cool/trendy/expensive/etc. In the financial markets, we do the something similar: we form opinions based on conjecture of those we hold as powerful figures in finance. However, when it comes to financial decisions, our influence effect us before we even make the decision to buy (or sell) so we often incorrectly attribute our decision process of consistling entirely of our own volition. The influence can be Ben Bernanke, PIMCO, Zerohedge, Tophat, or CNBC's daily harpings - the source is not important - but the effect it has on you is.

The effect it has are those times when you are bullish or bearish for a reason you can't discern why and the chart is neutral. The times when you pull the trigger prematurely on entering a trade or hold on longer than you should have because of a tangent belief you unconsciously aligned your trading strategy to.

Also I am sifting through Crowdsourcing by Jeff Howe and creating theories on the effect this might have in the market. The larger the diversity of the crowd, the better the results will be. If you choose a concentrated group of experts, then more than likely their actions and mindsets will be very homogenous and limited as a result. They are likely to cite the same case studies, draw on similar theories, reach similar conclusions etc.

However, a larger, more diverse group, although having its share of dead weight, will also have a subset of individuals that will approach problem solving from a unique perspective thanks to their prior experiences and diverse backgrounds. That is why the guys with all the money in the room still stand a chance to get it all wrong if they all come from similar backgrounds and are of the same breed.

Just reading for now but will start looking at charts again sometime in the next week or so.


Last edited by Bermudan Option; November 8th, 2011 at 04:55 PM.
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Old November 8th, 2011, 05:08 PM   #27 (permalink)
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Here are pieces of a post I made previousuly that describes how I view the markets and plan to trade:

About Volume

Bermudan Option View Post
The way I see it, the smart money dukes it out at key support/resistance levels and bears or bulls will win. Let's say bearish sentiment prevails at resistance. From there, large bullish traders know that it is low probability to enter the market in the immediate future because they just attempted to do so and the bears prevailed. They retreat and sell out of their positions and the markets head lower on heavy volume. Volume soon dissipates but drifts lower as retail traders see that the markets are heading lower. Eventually, another position arises where the bulls think they might be able to withstand an assault and the large bull and bear traders fight it out at support/resistance again.

About Time of Sales

Quoting 
The most advantageous time to watch the large prints on the Time of Sales is when these key areas are encountered. Let me use war as an analogy: When the enemy contemplates a retreat to give up on their current mission and retreat to salvaging a different strategic location, it will first show in the trenches before it is evident in the battle/war. Tape reading is basically a way of getting the information from the trenches and confirming an idea of who is in control based on the rawest data available. Once again, I think a key reminder is to use the trenches to confirm what the war has told you thus far and not to create theories of how the war will turn out based on the trenches. Time of Sales should confirm hypotheses about volume/price action , not create them.

Regarding Volume again

Quoting 
Sometimes volume doesn't precede a reversal but if volume does not confirm a reversal, then it is safe to say that the people bringing the markets down are small traders who are not worth following... not because they are unintelligient, but because they don't have the capital to direct the markets anywhere. Sure the market can drift down on low volume, but more often than not, that sh!t gets put to a stop by some large traders. Moves on small volume happen because no large trader finds value in entering/exiting the market at that price level. The minute large traders do enter, the move can accelerate or abruptly end. When you trade low volume breakdowns where volume doesn't accelerate on the downturn, you are at the mercy of large traders and your success relies on their decision to sit out the rally/decline or hope that the small traders saw value before the large traders and that the large traders will piggy back on a move started by retail traders. Unlikely imo.

Who knows what I will think tomorrow but this is what I believe today

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Old November 8th, 2011, 05:38 PM   #28 (permalink)
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Bermudan Option View Post
Laid off of my job at a start up company last week lol.

On the plus side, it was the first job I've ever had that allowed me A) Complete control over everything I did B) I got paid to think.

Great experiences there but this economy is hard for any business to make it in. I was prepared to be let go in the last few weeks and now I can refocus on trading again (and looking for another new job smh)

see it as a blessing in disguise... even if it sucks a little.. #1) make sure to claim your benefits... unless you got a severance pkg... #2) use the time to search for a job, but at the same time, try trading FT... investment profits are not considered employment income... which enables you to continue even pass the 26 weeks unempl.. and if your state allows 99 weeks.. even better... of course, you should still try to get a job while you are claiming..

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Old November 8th, 2011, 08:58 PM   #29 (permalink)
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Bermudan Option View Post
Here are pieces of a post I made previousuly that describes how I view the markets and plan to trade:

About Volume


About Time of Sales


Regarding Volume again
Who knows what I will think tomorrow but this is what I believe today

You're off to a good start a because you realize that an understanding of the market begins with an understanding of it's participants, i.e., large specs, small specs, long/short time-frame players. Then inter-market relationships, correlations, and patterns in price action and volume can be considered, along with an appraisal of market structure, liquidity, and capital flows, and currently Fed intervention and margin levels. Whatever technical or quantitative models you choose, make sure they have demonstrated a robustness across multiple markets and time frames.

Personally, I don't hold much significance to attendant volume anymore; it seems anachronistic in current markets. Algos and HFTs have rendered the metric significantly less important. I have seen way too many low volume rallies keep going and going and going. Had I dismissed them , I would have missed out on some very important moves, and had I faded them, I would have gotten badly hurt.

The same goes for liquidity; there's a price to be paid for trading a liquid and diverse market. The premium you will pay for the reduced risk, will be a market that follows through less and backs and fills more. Trading an illiquid market or a liquid market, where the liquidity has been pulled, will offer moves with greater volatility and velocity, because it is thinner, and there is less diversity among it's participants, so they are more likely to be the same way.

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Old November 22nd, 2011, 11:50 PM   #30 (permalink)
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About an hour ago, I was reading whilst listening to an old set of Carl Cox's playing in the background, when, for the first time in a while, I felt the urge to trade. I fired up Think Or Swim, updating to the latest version, and looked at the /NQ. I haven't executed a single trade yet, but I have been sitting down and thinking. I am reading a book on self control which discuss the need to make our goals as tangible and understood as possible to increase the likelihood of success. So without further ado:




Trading Instrument: NQ
Futures contract with a tick price that won't wipe me out.

Minimal requirements to trade for a living: $450 (22.5 pts)
This equals out to an $11.25 for a 40 hr work week. I plan to put in overtime of course but I will assume that it is expected and unpaid for an up-and-coming trader.

Daily
Goal to reach that: $90 (4.5 pts)
I wish to use the daily requirement to curb greed and to set a tangible goal, however I don't want to automatically stop trading for the day once this goal has been reached. Instead, I will take a step back and assess the market. Then I will decide whether what we have, we hold, or if I should continue trading.

Stop Loss
: $30 (1.5 pts)
1/3 of my Daily Goal

Suspend trading for the day after: Net loss of $90 (4.5 pts)
Aka three losers and no winners

Move individual stop up after
: $90 move (4.5 pts)
Trend permitting, I will adjust my stops so I never give back the daily minimal once I have it in my pocket. That way, no matter what happens, I have completed my goal for the day. It is vital that I am adjusting my stops to manage risk and NOT fear.

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