Monday, January 26, 2009

Resources for Traders

Making Better Charts - Recall that I posted a request for comments to the blog regarding improvements traders wanted to see in their charting software. The response was most gratifying, with dozens of excellent suggestions (they follow the blog post linked above). Well, the software firm that I met with, Market Delta, took the comments to heart and has illustrated in their own blog post how many of the ideas that were suggested can be tracked in real time. They are adding new features to the Market Delta program that will make it possible to follow such indicators as money flow, cumulative TICK, cumulative Delta, pivot-based price targets, and Market Profile-based value areas--all on a single screen. I look forward to the new release and hope to use screenshots and Twitter "tweets" as free blog-based tools for trader development.

A Day in the Life - Here is a really well produced video that provides a peek at the life of a prop trader at SMB Capital. I especially like the midday review and the focus on trading as a team, with traders learning from each other. Great stuff.

Common Trading Patterns - Certain patterns repeat in markets across different price and time scales. One common pattern is that a market will move above or below a clear area of support/resistance (often defined by prior day's lows/highs), but the breakout move will fail to attract significant fresh selling/buying. The reversal back into the range traps the traders who were playing the breakout and, as they disgorge their positions, the market moves back into its prior trading range, often with the day's or week's pivot level as a price target. If you review my Twitter comments on the day (free subscription), you'll see where I pointed this out. In the future, I'll be using Twitter for market comments as well as indicator updates and links; many of these comments will be designed to help traders recognize these common trading patterns.
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11 comments:

Sami said...

Brett,

The link to the video does not seem to be working.
Thank you. Thank you also for the great information you provide to all of us.
Sami

Sandor Tucakov Caetano said...

"a peek at the life of a prop trader" link is not working

Jorge said...

Dr. Steenbarger,

What can one say? Thank you!

Best trading,

Jorge

Brett Steenbarger, Ph.D. said...

Hey Sandor,

Thanks for the heads up; I fixed the link--

Brett

Brett Steenbarger, Ph.D. said...

Thanks, Jorge. The fun part of writing the blog is discovering how much good stuff is out there--

Brett

bruce said...

Here's a day in the life.
http://nymag.com/news/businessfinance/53617/
These Milman boys were at broadway trading when I was there. Real deal.
I was very interested to read that serge,(the brother, also the one that was on the cover of forbes back in the day)trades someone else's money) Only reason I can think of is he might have one of those "carried interest" kind of deals set up to dramatically cut taxes. These guys are not the squeamish kind of guys that need to trade someone elses money for psych reasons.

Marc said...

Brett,

Thanks for the video link...it's great!

Since you mentioned pivot values, I noticed today that the R1 pivot turned the SPY back and we dropped quite nicely. Do you see any correlation from bouncing at the R1 or S1 level vs. the wider levels eg. R2, R3? In other words, if we blow through a resistance level, does it become support?

Thanks,
Marc

procol said...

That New Yorker piece could have been written 10 years ago.

Same crazyness.

How many will be enticed to try it , since they make it sound like a daily event. Lose a few grand (just to warm up), then turn it around and close out the day up large.

Easy game.

market aberrations said...

the best suggestion I have forMarketDelta is to give us some option to buy the software WITHOUT SUBSCRIPTION, even if it's more expensive.

Because, in the long run, as a matter of fact it's MUCH cheaper for customers.

And it's better for company, too.
Because HUGE amount of client NEVER EVER pay a pennie as far as they do not have such option.

WHy?
It's because some people pay 100% balance to their credit card companies, and not suggested $15 :)

MarketDelta, you could be holy grail even, but I never ever touch you, without ability to not pay each month subscription.

And, you know, I'm not alone :)

John said...

Hi Brett
Thanks very much for the video link. Very interesting indeed.

A question I have to ask; is the daily programme shown in the video similar to what takes place at kingstree where you work ?

Thanks again Brett

All the Best
John

Brett Steenbarger, Ph.D. said...

Hi Marc,

I haven't studied whether R1 or S1 become support/resistance on continuation moves, but I tend to think not. I'd rather look for the market's own levels from recent moves.

Brett