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Hi Jeff
Lots of good questions ...
My interests are more extensive. I don't believe anymore in the simplistic
TA ideas of "forget the company, trade the chart" or however it's currently
expressed in TA or on MSNBC.
Especially in the futures markets. There are too many major players.
I spent most of my trading time trading optimized spreads. They're really
simple, "enter on or about the 13th .... close it out on or about the 22nd
trading day" etc. They either work or they don't work ... and when you have
700 to 800 per year to look at it doesn't really matter because there will
be another along very quickly to look at. I never even thought about FND or
anything else for that matter. I just watched my risk and didn't over-trade.
Then I started thinking ... how do you optimize a spread. Big mistake <G>
Now I look at the different spreads within the 240 day main spreads right up
to contract ending. That means that I have to think about who else is
spreading. Well ... it's a major commercial activity <G>
So who are the commercials ... i.e., users, producers ... how do they trade,
what are their strategies and most importantly where are they sitting with
their resting stops. Why do they buy, when they buy and sell when they sell?
If a move goes up ... who's paper gets triggered and where. If a move goes
down ... who's there. That's what I like about futures there's always
somebody sitting there <G>
Like Cargill, giving the day-traders a real surprise the other day in the
last 5 minutes. Nice fast market <G>
I understand that you and other trader's like to go contrary to the funds,
but why are the funds where they are in the first place? A major fund move
can take 3 days to place in the markets. Why are they placed there? They
have the money and talent for best information, the best historical
analysis, etc. what's going on? what are they trying to capture?
Obviously, there are lots of questions.
Whether or not Steve knows the answers, which he may not because of his
professed interest in charts only, or whether he wants to discuss his
knowledge of the grain markets is immaterial. There's lots to learn. There's
enough traders on the List to have a good discussion.
Best regards
Walter
----- Original Message -----
From: "Jeff Ledermann" <j.ledermann@xxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Friday, May 05, 2000 3:14 PM
Subject: RE: Wheaties
| Walter,
|
| Hey - I always trade against the funds - it's when I'm trading against
Steve
| that I get worried <g> (and yes, I'm short July Wheat).
|
| Nevertheless I think you are making a point that has worried me about
| Steve's published signals for some time. I do hope Steve rises to the
bait
| and tells us some more about how he does it.
|
| Now take Cybercast T-Bond trades for instance Feb-May which were more
| or less breakeven. No big deal or was it ---
| (I'll assume entry at open for this, but it doesn't make that much
difference)
| 23rd Feb Short @ 95.31
| 20th Mar Short @ 96.25
| 3rd Apr Short @ 97.81
| by 7th/8th Apr highs we were 130pts against that first short
($4000/contract)
| Reversed on 28th April @ 96.31
|
| Now that's what I call volatility and I would have thought quite unusual
for a CTA.
| As far as I can tell, Steve's system works on the principle of a very high
ratio of
| wins to losses but consequently weathers very large drawdowns. Risk is to
a
| certain extent limited by diversification but I do wonder how he avoids
running
| out of money and yet still return reasonable NAVs.
|
| Come on Steve, how do you actually do it. We know it isn't the laser
guided
| accuracy of the Cybercast signals that keeps you afloat. Don't expect you
to
| give away any dark secrets but an outline of your money management methods
| would be really helpful to some of us I'm sure. I guess the key question
is, do
| you really truly hand on your heart not use stops? And if so, how do you
| calculate your risk of ruin?
| Oats will go to "zero" one day... (but very probably not next week).
|
| Cheers
| Jeff.
|
|
| > -----Original Message-----
| > From: owner-metastock@xxxxxxxxxxxxx
| > [mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Walter Lake
| > Sent: Friday, 5 May 2000 23:41
| > To: metastock@xxxxxxxxxxxxx
| > Subject: Re: Wheaties
| >
| >
| > Hi Steve
| >
| > You've got to tell those meat-head CTA's running the funds all about
this
| > indicator so they won't be stampeding all over the markets.
| >
| > So ... you go short while all the funds clean out their short positions
and
| > go flat ... maybe even start to build longs? Gee golly ... what's a poor
boy
| > to think <G>.
| >
| > Seriously ... you never mentioned about position size ... are you
running
| > full size or have you cut back to adjust for risk?
| >
| > How low can you go before you hit major paper?
| >
| > Best regards
| >
| > Walter
| >
|
|