I have had an uncanny knack for predicting the market across all time frames. Something I have observed though is that the market will tend to jump at my highest point of uncertainty. Unfortunately, this jump is often at the same level that one will want to close their trade with the assumption it isn't … Continue reading Jump from highest uncertainty
HFT's like to buy the low of the market. The way this game works is (1) add significant size to book just below the lows, (2) aggressively buy the market near the lows. The HFT knows that both long and short biased traders are more likely to experience cognitive biases near price lows. This will … Continue reading More HFT patterns to watch for…
Before, I warned against attempting to trade with a single contract. The active futures trader should only attempt to make a small amount of profits per day from $50 to $100 per day on 1 lot. If you are a great world class trader, this is very feasible. Once a trader becomes adapt at trading … Continue reading If you’re a discretionary futures trader do not do this…
Here is a conjecture for how the HFT in the e-mini S&P 500 may be trading: A group of technical traders find a predictive pattern in the market or trade in similar fashion. Those traders act in unison at similar times or prices in the market. This creates an imbalance of buying with predictable stop … Continue reading HFT in the Eminis?
A small dose of reality... Recently, I have been experimenting with trading with very tight risk limits. I am doing a combine in both TopStepTrader and trying out for an account at OneUp Trader, as well (for more information about these firms see my article: Prop Funding at my other blog). While I just started … Continue reading If you’re a discretionary futures trader do not do this..
In this post, I wanted to share a few of my graybox tools that I'm currently using in my active futures trading. My setup is still very much a work-in-progress. As a tape reader, I use my AlphaReveal software which gives me key insight into the market micro-structure: Beside AlphaReveal, I have Tradestation running. On … Continue reading Some of my current graybox tools…
Typically, I do not included trade costs in my initial exploratory work because I want to understand the general properties of a market which is best understood without imposing trade costs. Many times a strategy that shows promise but one that does not overcome trade costs can be improved to overcome those costs-- but including … Continue reading Quick tip: Manipulate Trade Cost For Insight
In my recent exploratory analysis and back testing, I have started to employ the formal process of capturing the entire change history of my work. Programmers have long made use of the concept of "version control" or "revision control" which is the formal process of saving all the modifications of a program's source code to … Continue reading Save Every Change, Improving the Process
Two problems that often result from system optimization are one (1) a reduction in the number of trades, a system that generates too few trades can both be more difficult to trade and a low number of trades does not inspire confidence, and two (2) there is a selectivity or specialization risk that, by sheer … Continue reading Multiplex For Greater Profit
Here's one quick tip for a backtesting mistake to avoid: on Tradestation, if you develop a strategy using a stop market and a stop loss that gets you out on the same bar: the platform won't be able to verify whether your stop or target was hit first unless you enable "Look Inside The Bar … Continue reading Quick Tip: Backtesting mistake to avoid