Sunday, January 30, 2011

A tough month

A trader from another arcade revealed that he had been losing money since the year started, everyday in a row for 3 weeks! It's unprecedented, he couldn't believe his ass luck, it has never happened in his entire trading career for such a long spell of money losing days.

Yes, few of my traders lost money this month too. What exactly happened to these seasoned traders?

We are now trading against better, more informed traders as well as our greatest enemies, the big Algos who uses their muscle power to push the market up and down sometimes for no apparent reason to squeeze the smaller traders.

I must admit that the operators behind these Algos are good, they are well capitalized to intimidate the smaller traders with their size. They have the speed, at least a 1000 times faster than any trader, using machines that have no emotion. These powerful machines can feel the pulse and the heart beat of the market to sense a certain market direction.

Machines don't need to rest while traders need to be alert at all times. With trading hours extending longer and longer to almost 24 hours trading, the volatility shrink making it even more difficult for a trader.

Another factor that heavily favours the Algos is the volume rebate given by the Exchanges for the high volume of trades churn out by the machines and big time traders. Their transaction cost is so much lower.

Scalpers and Calender spreaders are most affected by the Algos with their high cost of trading. Comm take up a big percentage of their profit which allow only a small margin of error for their trades.

I was told the " The Flipper" has set up shop in Singapore to take advantage of the smaller market to corner and the system here that favours the Algos. Just google and read more about this single largest and most successful individual futures trader on planet Earth. He can simply put anyone of us in his pocket.

I think there are many more smaller "Flipper" now in our market supported by big Prop firms, that's what make trading so tough.


coconut said...

well, i just being "accused" of being a flipper!

i had a new account where i just input my pre market orders as usual but somehow the system cannot accept some orders. try and try as i may but they all rejected for no reason.

in frastration i resort to the other accounts for help.

on wednesday morning while still trying i got a call from the dealer of my new account, "hey mr coconut, you can't flip your orders! thats why your orders being rejected!", the orders that had been rejected were 2 counters that i have a small net short positions.

haha seriously i do not understand why or whats the big deal. but anyhow i was told that they are trying to improve their system to accommodate it. meantime i will resort in using 2 account to trade. i do not have any problem with the other account.

Fat88Trader said...

What an honour to be associated with the Flipper.

Well, the Flipper uses Algo to execute thousand of orders with just a blink of the eye.

Your flip is in the dinosaur age! Ha ha, your broker's system is as old as you are.

coconut said...

ha my apology, i thought flipper means a person who flip their trades very often in a flash like what the locals did.

i don't flip my position that often.

Unknown said...

yes, i did find making money from the intraday trading more difficult but did manage to make some but was very selective about my trades, which helped I think

Fat88Trader said...

Yes, be selective = patience, one very important characteristic to be a successful trader.