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How dull ....

 

Squared up on the dip just then.

 

No volume or momentum either way and a waste of time. May get another rush for the top before 2.30/2.45 pm but again market is uninspiring.

 

3472 breaks maybe the high of 3486 ...

 

the bottom looks safe at this stage but crucial at 3441 ... its miles away ....

 

Trying to pick the direction withing either crucial point is a waste of time and money.

 

Back to sleep

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Regarding CFD's ...

 

Just went to this paluka's web site you are pushing.

 

CFD's and the idea of this sort of dealing has been around for a very long time.

 

A famous book written around the turn of the century delves into the pro's and con's of these orginisations. They are referred to as betting shops. They operated back around the turn of the century in the belief that 90 % of all traders loose money. Very little has changed since then. These betting shops operating around the turn of the century were eventually out lawed.

 

Now we have them back.

 

The book I referred to is " Reminiscences of a stock operator" by Edwin Lefevre and was first published in 1923

 

It follows the life of one of the big time speculators around the turn of the century.

This book should cost you around $30- buy it and you won't do the course.

 

Now I have been amazed these type of shops are back, they are betting shops. They allow you to go short or long on a selected group of stocks or commodites or futures.

Nowadays they dont charge you any fee's ... how they supposidly make their money is if say bhp is $12.19/$12.20 in the market they will make you a two way price to go either long or short at say $12.17/12.22 ... they make the money out of the spread.

the betting shop takes on the risk and really hopes it gets hit on the other side and picks up the spread or even better the position goes against you and you stop out at a loss.

The betting shop in the meantime does not enter the market or hedge and just runs the risk. I suspect sometimes this may not be the case and the betting shop could enter the physical market and squeeze the position against you.

 

Now either way you are trading with a leveraged position. That is you may only outlay $1,000 but be in control of $100,000 shares and either win or loose according to the swings.

If you are short and the company is taken over tuff luck. Same if they announce after the close they have gone belly up.

 

Now liquidity is spotty at best in these products and I have seen the web sites go down for extended periods. Even worse , since they make the market I once saw an index remain around the 48/52 level depite the actual market going down to 39/40 ... they make the price and you have no choice but to use their quote to get in and out.

 

Even worse last month I saw the quote disappear all together over the non farm payrolls number. It was not a glitch they stoped making prices one minute before the numbers and didn't come back for a few hours. All that time you are stuck. One broker last month who made CFD's on the US tbond market did exactly the same thing and pulled out of the market all together the next day. Sucko if you had a position. Only was out is usuing their price.

 

I shall repeat the favourite trick again. betting shop hit by traders on a stock at say $11.50 .... Betting shop drops price a bit ... real market share drops to $11.30/31 ... bvetiing shop is probably still quoting something like $11.38/43 ... depends rerally on the houses position. If the stock starts going back up ... the betting shop knows all your positions and you are screwed ... stock goes on the market to 11.51/52 ... betting shop knowing everyone is short is $11.54/58 and so on ....

 

be very very careful with this. Futures heavily regulated. prices set by market. Your price maker does not know your position !! Futures markets open always during trading !!!

Any anomoly between futures and cash market will not last long due to arbitrage.

 

Please buy the book first.

 

As to doing this persons course. Who is he ?? Never heard of him. Paying $2,000- for any course is ludicrous. Buy 15 books and learn a lot of styles from technical anaysis, mechanical systems, value anaysis, how to read a balance sheet and a hell of a lot more.

This guy has 25 in each of his courses at 2,000 a pop that is 50 k a throw less say 8 k to hire the room thats 42 k profit. He seems to run a course every 2 months so thats 250k a years he gets for his wisdom .....

 

I shall tell you a little secret. How to make money every single trade day in day out.

I wont even charge you a single cent !!!

 

There is no way. Mechanical systems don't work. Markets change and the factors that move them change as well as the rate and amount they change. Fundamentals don't always work short term. Better to use disciplne. Stop Loss and don't fall in love with a position.

 

Just go buy this book and save yourself $1,970- .....

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kahuna,

 

Thats a good common sense post.

 

The same strategy that the cfd betting shops use is used by the forex shops where sometimes for only 1% margin, you can take a huge position ($1000 to get a $100,000 position). You can open an account with $2000 to $10,000 depending on the shop running the business.

 

Common sense and a bit of work with a spreadsheet shows that the probability of a having a continual series of succesful bets so that a small account is not wiped out quickly is very small. You need a reasonable size account to start with to survive the drawdowns and be able to continue to trade.

 

Also, as you say, many of these and the cfd shops are set up so that they win both on the spread and also can win on an adverse move against you, and there can be so many unexplained sudden delay in getting out of a position.

 

I have similar misgivings about the cfd despite the seeming attractivness of the advertisements.

 

Your point about the value of these courses was well taken also. If the guy giving the course actually knew how to make money, he would not be giving the course, he would be making money in the market. They often present an argument that they are raising money to enter the market, but if they had a good system that actually worked, they could raise any amount of cash quite easily.

 

 

 

 

 

 

 

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Sorry to offend you all. I am not pushing anything! someone asked me about it. I attended the course and found it very rewarding. I have been trading for 8 years. I am a former cynical broker. I have found success with trading a handful of CFDs that cover about 10 stocks. It works well for me and the market depth is a mirror image of the real ASX depth , in fact i do not work off the CMC platform but use Phoenix which is similar to Bourse Data. My orders go through CMC however. Brokerage is 0.1% or $25 bucks round trip on a 1000 BHPs - that is about the same as the $25 round trip per contract I was paying at LQuay.

I trade both intra day and over a period of several days to a week if I feel good about my position. This fellow who does the course does not profess to be a guru as I said. He claims to make a decent living from the market (he has a substantial pile of diarised contract notes to show ) and makes good money from seminars that he plows back into longer term investments like real estate. There was no bullshit in his course - it was ideal for beginners and experienced alike. There was no magic formula, just good common sense methodology. That is Methodology not System - I never said system . To call someone a Paluka is a bit harsh if you have not met him nor attended.

My experience is futures is broad enough and I know many ex-floor traders who make a good living out of it. There are many ways to skin the cat. Don't get all huffy about someone just discussing another method as we are all different and suited to different trading vehicles. I respect your trading method and strategy and I am here to listen to other peoples ideas not trash them. Take it easy. Remember this is a forum for discussion.

Hector

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Sorry if I sounded huffy. But seriously one by itself would have been bad but the two together ....

 

Never was a broker. Always been a trader. 15 years with banks. 7 on my own. Always a primary risk taker.

 

Now I don't doubt you may find CFD's work for you now.

 

 

However one has to ask onesself how do the betting shops make their money ??

 

What do they do when you go short at $12.40 in BHP ... how do they hege themselves ??

Do they actually hedge themselves ?? Or do you really believe after a few wins it will keep going this way !!!

 

Get the book read it ???

 

Maybe another one "winner takes all " by gallagher

 

Big difference between a broker and a dealer. Most who even call themselves dealers are little more than secrectaries or position keepers. In a dealing room of 100 people there are probably only 3/4 real risk takers for an orginisation. A lot are merely paper shufflers. Some service customer flows. Some are arbitragers whether risk or credit. The few who are left are the real ones which you are trying to do. The make their money purely by picking direction and picking it correctly. They do not rely on margins from customers or customer orders they can front run or usuing the banks name for credit risk arbitrage or product arbitrage. Not many proprietary dealers out there most are usuing orginisations books/client base/ orders to make their money.

 

For you to suggest some course will teach someone how to be a fantastic trader I cannot believe. Having hired/worked with hundreds and maybe even thousands of traders and actually seeing their profits, one thing I know is they are all different. One trader may trade one way and be successful and another trading the same product may also be successful usuing a completely different method.So maybe this course worked for you. Doesn't make me believe in CFD's, the examples of them stitching up their clients are recent. The bond market CFD maker pulled out exactly one month ago. Maybe you are being sucked into a false sense of security ... they are just waiting for you to increase your size and then whammo .... you have no recourse. They make the prices ... don't believe me. But don't cry when it happens .... oh system has gone down ... took 20 mins for a fill !!!

 

 

Very very sceptical of book writers and course runners and magic systems.

 

Elliot of elliot wave fame was not a rich man when he passed away.

 

Larry williams a perrenial course runner has a background you would not believe. If you can get the transcripts of the USA'S NFA (national futures association) and the case they ran against him in 1983 I think you will be amazed. Larry is a big seminar holder and bookseller.

 

Welles Wilder founder of a lot of todays technical analysis tools had never traded at all until recently. All he did was wrote books with no trading background but is regarded by many as the founder of many systems. I understand he started a fund not too long ago ... lost 50% of its money quickly and closed down.

 

All three made their money from selling books or holding seminars. One I would go so far as to say he is criminal.

 

Thats why maybe I sound huffy when you recommend some system that supposidly works.

 

AS to CFD's mentioning them when the game has been around for ages on top of a book seller and seminar holder just makes my day.

 

 

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Suspect that was the low around 3469 ish and shall grind up from here.

 

Stops if it breaks 3465

 

Always hard to call on days when we are going into new ranges.

 

Currently sitting 69/70 ... seems an awful lot of sellers but probably the best time to buy

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The ASX and i guess SPI are both very quite today - both exchanges are unmoved - no news drivign the marktes - it would appear that tomorrow and next week might be the times if you are looking for liquidity which is missing today - the ASX about 3 pts down. Thats 0.01% ?
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Market trapped again.

 

After recent rally to new highs of 3512 the market did an abrubt about face to support around the 3460 level.

 

At present in limbo land at 3480/85 and expect with the long weekend here and US market closed today Friday for Regan's funeral for it to be thin.

 

Could honestly close anywhere from here today but have a feeling it could be a bit weaker.Not much conviction in that however. Just too thin.

 

Longer term expect the high we saw earlier to be tested sometime soon. Market still has its bull shoes on. Awaiting some decision out of the US fed and when that is out of the way off we go again.

 

Danger is a break of 3460 .... on the top would be looking for a rally but only to get short.

Would like to see 3528/38 level to sell.

 

Bonds if anything more dull than the SPI. Really no reason to even have a position with them poised in the exact middle of a large support and resistance range.

 

AUD ... the spot market is still in the 6800-7100 range and stick to it. Saw a good level to sell the other day with the AUD above 7050 briefly. Yesterday was too good to pass up with the AUD dipping below 0.6875 ... again not much but better than a kick in the face. Current levels right in the middle of the bigger range.

 

Shall be staying sq ahead of the weekend

 

 

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Hmm dull market again.

 

SPI under pressure and suspect maybe lower short term.

 

Longer term like the market down here and a retest of new highs.

 

Look for a lelevl to take on a small long below todays lows of 58 and hold for a retest of the high. See where we close to set the level .. lower the better!!!

 

Bonds also starting to get too low and suggest a small buy on dips tonight. Would like somewhere below 90 in the Sept ... looking for a bounce back to the 20 level sometime over the next week or so. See what the US brings tonight.

 

On the AUD again buy when the spot gets to around 0.6775 ish with a stop say 50 points lower. Susapect the 6800/7100 range will be tested on the bottom but fail to break lower.

 

 

Hmmm all longs ......

 

Know what they say about trying to pick bottoms .... all you get is smelly fingers !!!

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