Bchad, to clarify, I’m not calling it a completely random walk, I’m saying that as you focus on longer holding periods and and larger moves, fundamentals come more to the forefront and the noise fades. It’s the day to day stuff that is dominated by randomness.
Trying to trade on technicals in this oil market with this much news in play without collecting some form of market making spread or premium somewhere seems high risk for meh reward.
^^Well, I know 2 months and about 100 trades is not that much… but it is more intraday experience than you have (with all due respect). My records so far suggest robust results with favorable risk/ reward.
brah before you blow a hemorrhoid, it should be clear from the specific excerpt I quoted that I am only commenting on your math anecdote. I actually do agree with your broader point that the human mind is largely incapable of detecting, or generating, truly random patterns, which ironically was effectively demonstrated by your inaccurate example of using only 25 coin flips - shows that even when you are aware of that particular math anecdote, you still don’t have a good intuitive sense of the scale on which it “works”.
Yea I am with BS on this one. I think people trying to trade intraday would be better off getting a job as a market maker because thats how you make money trading intraday. Dont play this silly game, capture the spread.
Markets appear random to us plebs because we dont have as much information, I am sure they would look a lot less random if you had access to infinite info but again liquidity constraints and human interaction ensure that things arent always done at an optimized time and make it somewhat random
Im not sure what to make of this chart without some kind of comparison of the volume histogram before and after the close and some description of how your before chart leads you to conclude the after chart (or the after price).
To be clear, because I believe you’ve expressed this in other conversations, these are all paper trades…right? Not accounting for transaction charges?
Yes, I am sim trading right now. But I am accounting for transaction costs in my results.
To be clear, I don’t think being a retail day trader is a practical way to make a living. From what I have experienced so far, I think the best I could hope for is being able to pull a partial income. Money is not my main motivation. It makes me happy to challenge myself to do something most people can’t. I may never get rich being a trader, but being a successful one would bring me a lot of fulfillment.
KM, I’m truly interested in your answer and hope this doesn’t come across the wrong way…
Why would engaging in this activity bring you fulfillment? Let’s say you wake up everyday for the next 20 years, trade, make enough of a living to support yourself and your family, and then retire. Would you look back on that life as a successful and productive one?
I’m just thinking that there are lots of other things that most people can’t do, that a smart person like yourself could, which would probably have more positive externalities and concrete value than day trading. I can understand the challenge part of this…like climbing Everest…but would you intend to make this your life’s work?
^ Not sure how many of her posts you have seen but KMD has a very romanticized view of finance where its this place highly intellectual people challenge themselves. In reality thats a very tiny portion of what finance is and unfortunately the intellectually talented people are busy trading stocks instead of helping the world in a more tangible manner.
I would certainly rather all the mathematicians & physicists at RenTech be working on something in the cutting edge of their fields instead of playing wall street and tinkering with algorithms. Unfortunately its easier for them to become wealthy this way.
I don’t disagree.
To fully respond to this would have me writing you a book. The short answer is that I went through the phase where I asked myself the questions (such as “what do I want my life to look like and what do I want to fill it with?”) years ago. Trading is a a perfect fit in a life I want.
The parallels between the devotion I have already put into endurance racing and the devotion I plan to put into trading are telling. I did not start out, at the age of 10, as a particularly gifted runner. However, I was drawn to it becasue I believed I could be great at it. I believed and tried all though Jr. High, Sr High, … College… into my adult years. I never really did develop into the world class athlete I wanted to become (although, by my late 20s I was a highly competitive as a elite armature… and I can probably beat Black Swan in a race 
). The point is, that I spent 2 decades of my life chasing down a dream that never fully happened. You would think I would be filled with regret about all that time and energy, but I’m not. I found and still do find so much meaning (even spirituality) in the process of being a athlete. My experiences as an athlete and those connected to that lifestyle are the ones I look back as holding the most value to me.
So, with trading, I am getting another source of ritual and process that holds meaning to me. With being an athlete the side effect was that it kept me healthy and my body looking great (which had other utility for me 
) With trading, the side effect is that I will earn some, possible all, of my income through it.
Look, everyone, I don’t expect you all to get it. I am obviously wired a little differently.
Understatement of the century lol. Although I can certainly identify with taking joy in following your passions as I think most people can. I just think your passions are a bit odd compared to most (judging that off your posts on here obviously no one here really knows you)
If they sold out to Wall Street, the passion for their fields was not there to begin with. …And I’m not that brilliant. If I was I would have continued with physics. I mean, I’m above average for the general public,. I definitely have my strong points…but a little below the mean for that field. I would rather be the master of my dominion as an independent trader than a bottom tier physicist grading papers… working for the man… not really making a difference.
For $16B, I think anybody would sell out to wall street, I don’t care what your passion is.
you kinda are working for the man 
Are you passionate for technical vs. fundamentals because fo the belief it is either more quickly lucrative or more action packed?
I don’t know about intraday trading. I used to be extremely skeptical of rules based systems, given my natural inclination to fundamental analysis. But several of the quants that I respect talk knowledgeably about trend following strategies. To me, it really seems it has to be rules based if it is going to happen. The mind is just too prone to error dealing with so many quick decisions when real money is involved.
^^^^
For technically driven trading there are two schools of approach.
- Algorithmic trading systems. These are rules based systems that rely on following technical signals for taking a trade. There is further discrete rules for when to take a loss and when to take a profit. These rules are typically programmed, back tested, and further optimized. Once as edge has been established though rigorous (probably "walk forward testing) examination, its signals are followed explicitly (no matter what!) So, there is no emotion involved. The drawback is that these systems have periods of draw down where you must trust that they will naturally correct themselves. Of course, there is no guarantee that they will or that they will necessarily perform as designed. They really are ticking time bombs. However, the modern approach is to have a diversified set of algos running at once that have been tested to have negative correlation so as to hedge each other’s draw downs.
Bottom line is, algo systems ignore CONTEXT
- This brings me to the second approach which is discretionary trading with a process. This is what I do. I have a set of steps, guidelines, and objectives that make up a process for intraday trading. So, like with algo trading, I am looking for something specific to line up to take a trade. However, unlike algo trading, I am not blindly following “signals”. I look for certain price structures and/or behaviors and then make an assessment in the moment based on context. My context comes from my auction based hypotheses that I develop before each session. I also have rules for making sure I have favorable risk reward. Often, the logical location of my stop will define if I will take the trade or not. I’m not going to risk 1:1 … only 1:2 or better. However, there are many kinds of discretionary traders who work with whatever it is that they believe in. So, there is room for emotion to creep in, but part of the training and skill is learning how to block it out.
Why do I like technical more than fundamental analysis? Interestingly, I think the market knows more than any research I could do. It really is completely fascinating.
To me you’re creating a false dichotomy. This isn’t only in technical analysis, people in fundamentals do it as well. Are you randomly making decisions in #2 ? Of course not. To me your argument is really you’re rules in number one isn’t explicit enough. Doesn’t mean you aren’t using rules. This may sound overly pedantic, but I think it’s meaningful.
And I don’t buy the criticism of fundamentals , despite it being the seemingly mantra of traders . But that would be for another thread