“Simplicity is the ultimate sophistication.”…Leonardo da Vinci How detailed should your trading plan be? There is of course no right answer apart from whatever works best for you. Some people need detail – lots of it. Others will never need more than a single page, with anything longer simply gathering electronic dust as it sits…
Reader Email: To: Your Trading Coach Hi Lance, I thought this was pretty cool and just wanted to show it to you. Nick Attached Image: (*** Click on the image to open a larger copy in your browser! ***) My Thoughts:
Trading stopped for me yesterday (22nd December) and will not recommence till the first Tuesday in the new year. Yes, markets are open during this period, but with many professional and institutional participants on holidays, volumes will be lighter and any opportunity will be lower probability. I prefer to take a break rather than…
Over the ten years that I've been running this site, I've spoken with quite a few traders on the verge of quitting out of frustration. In the last month, there have been two. And for both, as for everyone before, I've offered an alternate plan. Because I don't think frustration is a valid reason for…
I often get asked, ‘when is the best time to trade forex intraday?’ Great question! Just because the market trades 24 hours a day doesn’t mean that there are opportunities available all day every day. The market typically varies in range, and therefore opportunity, at various times throughout the 24 hour period. Some periods of…
One of the greatest processes you have at your disposal, for maximizing your learning and fast-tracking your development as a trader, is your review process. Let’s have a look at how I recommend you carry out this often-neglected part of your daily trading routine… For too many traders, the review process is simply entering their…
But one can overcome their disadvantages over the big guys using automated trading robots.
Of course the couple of dozen robots I’ve bought so far didn’t work. Just unlucky I guess. But if I buy just one more…. 🙂
I’m actually curious to know what kind of advantage the big guys have besides being able to buy/sell in large enough quantities to move price for a bit.
Depends on which instrument you trade. Institutions have more of an advantage in FX just because they can see the order book from the institutional side while the retail trader has much more limited access. In futures the playing field is a little more level just based on the added amount of information that the retail side has access to. Of course the biggest advantage is much much deeper pockets and professional training. I started out in FX like many do but as soon as i was capable enough to make the switch to futures, i did, and have never looked back.
Great site and outstanding education here Lance. After 3 years of fumbling in the dark your YTC material really was the turning point in my trading. It didnt solve all my problems and didnt make it easy but for those that are willing to put in the serious amount of work required, it is one heck of a great place to start.
I’m glad you’ve found my writing to be of value. Much appreciated. 🙂
All the best with your trading,
See the reply from William. He’s correct in that some market participants have access to more of the order book. Other participants have advantage in timing due to close proximity to the exchange.
It’s certainly not a level playing field for all participants. But this is the reality of the business and we must work with the tools available to us.
Size does not necessarily always mean an advantage though. Think of the large funds who fail to outperform the index year after year!
Hmm very interesting, so if I lived on the east coast of the USA near New York it would provide a small advantage vs where I actually live (west coast)? What had you leaving the forex markets for the futures Mr Beggs?
Is futures tougher to trade? I have to say ever since I discovered markets and more importantly day trading I find it all quite fascinating.
The time advantage I was talking about was more referring to HFTs positioning themselves in the immediate vicinity of exchanges.
For a retail trader there are bigger things to worry about than the couple of milliseconds longer it might take for data to reach you, compared with another retail trader in another location.
Why did I move forex to futures? I moved 5 years ago because futures provided a better cost structure, faster and cleaner execution and better platforms. Note though: this was “better” for my needs and circumstances at the time. What is the right market for you? Only you can determine that, as it will depend upon your needs and circumstances. Trial and error is the only way. There is no “best” market. Each has pros and cons.
Awesome thank you for your input sir.
After reading Mr Williams reply again I found something that peaked my interest, he mentions, “I started out in FX like many do but as soon as i was capable enough to make the switch to futures, i did, and have never looked back.” Is futures trading more difficult then forex? One thing I really like about forex is that the market is open 24/5. Are futures the same? Sorry this will be my last off topic question here ?.
Well technically futures are open around the clock, very similar to FX but the overnight session ( Im on the east coast of the US) is very much dead until after the London traders come on after 3 am. Even then i dont trade it due to lack of any substantial volume.
As far as one market being more difficult than the other, I would say that any market in and of itself is basically very similar to any other market with roughly the same amount of daily volume. Of course there are minor difference based on the location of the market and the type of participants that trade it but overall they are very similar. The biggest difference for me was the amount of information made available for Futures traders compared to FX, namely complete market depth and much more transparency overall. All trades are cleared through the same exchange so its possible to see whats really going on in any given product. Actual volume is available in Futures as well, which is not available in FX either. The main reason that I started with FX is because i could trade early mornings and still work during the day. The other reason (and this was a big one) was that FX would allow me to trade super small positions where a full loss would only cost a few dollars. As a comparison I now trade the E mini S&P and instead of a 1 pip loss costing a few cents in FX, a 1 tick loss in the ES costs $12.50. A full stop out for me will run about $100.00 minimum. I could have never taken that much heat when i was just starting out.
Hope that helps
Thank you very much sir I appreciate the info it was very informative.
Dam, that was unexpected.