This is a collection of articles I have read over the weekend to further my education and to get a feel for the overall macro conditions / themes.
Chat with traders with Ari Pine
EP 061: A scientific trading perspective, process over outcome, and the law of large numbers w/ Ari Pine.
Ari Pine has many years of real market experience on his side, and during this time he’s traded a whole range of markets in various positions and roles…
Some of those include; working at J.P. Morgan, developing risk management software, trading for a long volatility hedge fund, making markets in gold and silver options, and even giving presentations to the Chinese stock exchange.
Our conversation includes all the above, plus some really valuable info about; positive expectations, the law of large numbers, and process over outcome.
Very interesting listen, worth an hour of my time. The best stuff for me starts at 44 mins in.
Full story at Chatwithtraders.com
An Alternate View: Filter Ticks
I have been very impressed by my friend Japhy’s new enterprise at datatraderpro.com, which provides a “deeper look” beneath the surface of the markets. One feature he has promoted strongly on his twitter feed is to watch for block institutional trades and what transpires around the price levels where they occur.
FT71 had a similar insight the other day where he called out some very large block trades just before the market opened, that turned out to be the key resistance zone before price surged upwards.
For this reason I was extremely interested when Investor RT announced tick filtering in version 12.5.
I am always interested in the new features of Investor RT and how people are using them to improve their trading.
Defining “No-Trade Zones”
The problem we attempted to address was one of continual attempts to fade long and extended price swings, finding that instead of timing that entry to perfection we more often than not end up with two to three stop outs, and a mindset destroyed for the remainder of the session.
Lance Beggs articles are always an interesting read about applying price action practically into real markets. This article about timing a pullback, has a lot of useful advice on fading a move (pullback). Something most of us can identify with.
Train your pattern recognition to become a fluent chart reader
Trading is all about pattern recognition and the setups you trade are patterns with unique characteristics that allow you to put the odds in your favour by reading market clues. Your job as a trader is then to make sure that you can reliably identify your setup patterns and differentiate between high probability and low probability setups.
Pattern recognition is a skill and you can train your brain to process information in better and more efficient ways so that you are able to recognize patterns fast and accurately.
Developing pattern recognition as a skill. It is important to remember that it is not practice that makes us perfect, it is perfect practice.
Three reads for the weekend.
Commitment of Traders and the US Dollar
Notes from the Underground