How often

[Shakone]

ChocD again this doesn't make sense. If you're talking about random direction, then it could just as easily be the other way. So your statement amounts to saying that taking away spreads your chances in both directions are a lot less than 50%. Doesn't make sense.

Do you mean that the markets behave in such a way, that seems to work against most traders or against human nature? That I'd agree with.

 

[rathcoole_exile]

How often do you make a mistake trading -

i once listened to you in the Bulls Head - does that count ?

 

[ChocolateDigestive]

ChocD again this doesn't make sense. If you're talking about random direction, then it could just as easily be the other way. So your statement amounts to saying that taking away spreads your chances in both directions are a lot less than 50%. Doesn't make sense.

Do you mean that the markets behave in such a way, that seems to work against most traders or against human nature? That I'd agree with.

ok the below should help. I am talking about the dumb flow, the dumb money. So lets take a typical dumb flow trade on 1 ES contract with a 10 tick stop. The trade is entered by mistake, random direction, random timing. Lets say the trade is closed at a random time later when the trader discovers he has made a trade by mistake and closed the trade.

now the are 4 possible outcomes when the trader realises he has made a mistake.

(i) The trade is in profit and he closes for profit
(ii) The trade is in loss and he closes for a loss
(iii) The trade is at break even and he closes for break even
(iv) ......................

I will let you fill in the blank for the 4th possible outcome when the trader discovers the mistaken trade.

now I think you would agree that the combined probability of (i) to (iv) = 1. It is safe to say that (iii) is very close to 0. It is also fairly safe to say that (i) and (ii) are equal in probability. The reason (i) & (ii) are substantially less then 0.5 is due to (iv). ignoring (iii). (i)+(ii)+(iv) = 1

now thinking about the market as a ZSG the dumb flow loses most of the time on random entry (ignoring spread/other nasties). the participants who on average make money from the markets by definition must take this money from the dumb flow (which isn't hard), you can then progress to thinking about how the dumb flow loses and how the winning participants win.

I hope that is of some use to you.

GTTY

 

[barjon]

..................the participants who on average make money from the markets by definition must take this money from the dumb flow (which isn't hard)...................

GTTY

I would have though most large "trader" participants take money from "business" participants who are hedging their business exposure and don't give a damn whether the price goes up or down since they have "locked in" their business exposure at the price they want.

 

[ChocolateDigestive]

I would have though most large "trader" participants take money from "business" participants who are hedging their business exposure and don't give a damn whether the price goes up or down since they have "locked in" their business exposure at the price they want.

there are many different types of 'large' trader in the market and they make money in different ways. I think what you are referring to above is where company goes to bank A and says they want hedge. bank A provides them the forward required and takes a position to hedge on EBS. company has what it wants and has completed it's objective. bank A shows liquidity to bank B, bank B is then able to 'safely' show liquidity to broker A,B,C,D and it filters down through the tiers. and the dumb flow loses big most of the time.

there are another group of large traders who are speculators and they will be active in trying to make the dumb flow lose because they can move price either by either removing liquidity or changing the liquidity 'balance'. they understand how the dumb flow trades, they understand that they must be made to lose for them to win.

 

[scose-no-doubt]

So oil goes down to 80bbl and almost all companies begin to hedge their upwards exposure. Who takes the other side when liquidity is 'safely' shown?

 

[ChocolateDigestive]

So oil goes down to 80bbl and almost all companies begin to hedge their upwards exposure. Who takes the other side when liquidity is 'safely' shown?

troll denied. When i mentioned 'safely' shown this is specific to the structure of the Spot FX market, the oil market is not structured in that way but you knew that right. I cannot sensibly discuss what I mean by 'safely' shown to you as you do not have the relevant knowledge to understand. The concept of only showing your hand to someone who is ready, willing and able to trade with you right now on the spot is lost on you.

dont google it mate, it wont help.

GTrollingTY

 

[scose-no-doubt]

Okay. Well you never specified you were talking about FX only - you were actually talking about the ES initially so you'll have to forgive me for my confusion.

It's new month/quarter and EUR/USD goes down to 1.20 or the bottom of a historical range. Almost all US based companies with European import components begin to pile in and hedge their upwards exposure. Who takes the other side when liquidity is 'safely' shown?

This troll stuff and your silly insults are getting old now mate. Why you can't just discuss your views (that you're scattering liberally across the boards) when any degree of scrutiny is placed on them (or someone even asks you a question) is beyond me.

The concept of only showing your hand to someone who is ready, willing and able to trade with you right now on the spot is lost on you.

Please enlighten me as to how this works in FX. I'm sure the others would love to know too.

 

[ChocolateDigestive]

It's new month/quarter and EUR/USD goes down to 1.20 or the bottom of a historical range. Almost all US based companies with European import components begin to pile in and hedge their upwards exposure. Who takes the other side when liquidity is 'safely' shown?

that would require you to know what 'safely' shown is. You can 'safely' show large liquidity to your clients (who you have liquidity agreements with) if you know that if they decide to trade you can easily hedge. If you 'safely' show liquidity to someone then anyone you show that liquidity to could be on the other side but that's irrelevant for the purposes of this thread.

Please enlighten me as to how this works in FX. I'm sure the others would love to know too.

scose - you repeatedly say I am full of 5hite and troll so why would I want to help you? I think I have given enough already I am willing to point the direction but not willing to hand hold. The concept of only showing your hand to someone who is ready, willing and able to deal right now is one that spans markets. Other participants can use that information and you don't want it out. If you are on the floor of an exchange and you have a big order to fill for your client you only show that order to someone who is ready willing and able to transact otherwise it will cost you.

 

[barjon]

there are many different types of 'large' trader in the market and they make money in different ways. I think what you are referring to above is where company goes to bank A and says they want hedge. bank A provides them the forward required and takes a position to hedge on EBS. company has what it wants and has completed it's objective. bank A shows liquidity to bank B, bank B is then able to 'safely' show liquidity to broker A,B,C,D and it filters down through the tiers. and the dumb flow loses big most of the time.

there are another group of large traders who are speculators and they will be active in trying to make the dumb flow lose because they can move price either by either removing liquidity or changing the liquidity 'balance'. they understand how the dumb flow trades, they understand that they must be made to lose for them to win.

I still don't buy it, choc.

I think the articles by Gamma Jammer

A Day in the Life of a FX Spot Desk Trader (Part 1)
A Day in the Life of a FX Spot Desk Trader (Part 2)
FX Market Participants

give a much better explanation of what goes on than this dumb money mumbo jumbo.

jon

 

[The Leopard]

These are indeed good articles. I wonder what happened to Gamma Jamma?

 

[ChocolateDigestive]

I still don't buy it, choc.

I think the articles by Gamma Jammer

A Day in the Life of a FX Spot Desk Trader (Part 1)
A Day in the Life of a FX Spot Desk Trader (Part 2)
FX Market Participants

give a much better explanation of what goes on than this dumb money mumbo jumbo.

jon

what exactly don't you buy? not making any sense amigo.

 

[ChocolateDigestive]

I still don't buy it, choc.

I think the articles by Gamma Jammer

A Day in the Life of a FX Spot Desk Trader (Part 1)
A Day in the Life of a FX Spot Desk Trader (Part 2)
FX Market Participants

give a much better explanation of what goes on than this dumb money mumbo jumbo.

jon

let me add a bit more colour for you, get your juices flowing. london 07.24 reuters reported euro option expiry 1.2550, london lunchtime look at price in the chart. a bigger player took money from smaller players lesser informed players.

GTTY

 

[timsk]

These are indeed good articles. I wonder what happened to Gamma Jamma?

Blimey, would you adam 'n eve it, some good articles in there after all eh - who'd have thought it! All we need now is for the hare and one or two others to second this comment and we can declare a national holiday and have a party.

As to what happened to GJ, I believe he left because he got bored of the interminable lulz.

 

[scose-no-doubt]

Nah I heard GJ got a job that meant he wasn't allowed to p1ss around on the net all day. Poor chap.

We miss you Gamma! And I will always carry the torch for you me amore!

 

[The Leopard]

Blimey, would you adam 'n eve it, some good articles in there after all eh - who'd have thought it! All we need now is for the hare and one or two others to second this comment and we can declare a national holiday and have a party.

As to what happened to GJ, I believe he left because he got bored of the interminable lulz.

Indeed, there are some good articles. There is however a significant difference between the author of the articles I praised and the authors of the majority of articles. This difference in large measure explains the difference in quality of articles.

 

[timsk]

Indeed, there are some good articles. There is however a significant difference between the author of the articles I praised and the authors of the majority of articles. This difference in large measure explains the difference in quality of articles.

Hi Leopard,
In part, I hear what you're saying and I agree with you. However, I've said this before and, doubtless, I'll say it many times more in the future - GET WRITING!

If articles are poor in your view, then post constructive criticism to the accompanying discussion thread. Members that read the article - and your criticism of it - will then be in a better position to form a judgement of their own about the article's merit. If you feel you can write something better - then submit one of your own to me or Paul. We are especially keen to publish 'home-grown' content - but our hands are tied if no one bothers to put pen to paper!

Tim.

 

[the hare]

We are especially keen to publish 'home-grown' content - but our hands are tied if no one bothers to put pen to paper!

You cant beat a bit of home-grown

Goldie Lookin' Chain - Homegrown - YouTube

 

[kimo'sabby]

How often do you make a mistake trading - and actually make money out of it.

I can't remember the last time I screwed up and made money.

I can remember
- finger f***ing my way out of trades
- my daughter placing trades when I was away from the keyboard
- software glitches
- writing stuff down wrong & working off that

For the life of me - I can't ever remember one of those occurrences having an positive outcome.

Should it not, by the law of probabilities, be about a 50/50 proposition - half of your mistakes have a positive outcome & half negative?

It sure feels like the SLIGHTEST thing you do wrong, the market punishes you for it.

Unfortunately, all your mistakes may work against you...and that's 50:50. Sh!t innit

 

[piggybridges]

nobody's gonna hold a candle to GammerJammer in terms of knowledge (possible exception of Martinghoul). The rest of us aren't on the same level, although some kid themselves and pretend they are witholding pearls. Gammers gone and Martinghoul hardly posts. That should tell you something....