Traders' Roundtable

See what Ed Seykota has to say regarding buying on dips

http://www.seykota.com/tribe/FAQ/2008_May/01/index.htm

See the last entry.

PS. I don't agree with him 100%.

I personally buy both breakouts and pullbacks, the core concept is something I got out of reading Livermore's stuff - pivotal points!

One problem with trading pullbacks is that in a strongly trending market, the pullback may never happen, so you may miss a big opportunity. This would be a major concern in Futures trading, but not in individual stocks trading. In futures trading, you have only so many markets, and therefore, you ca...

On the other hand, one doesn't need to prove causation to make money.

In the long run, (1) is the way to go, especially if the two instruments are from the same sector, eg, crude oil vs heating oil

Dave: A great catch indeed. Yes, as long as we follow the trend, cut losses, ride winners, and bet small, any trending following approach, regarless of the specifics, has to work in the long run. John W. Henry said: The nature of markets is to trend, the nature of life is to trend! Happy Trading! Ho...

Dave, I admire your disciplined approach and your ability to sit tight with a winner (I personally always find it difficult to let profit run). So in the Rice futures case, what's your exit rule? Are you doing pure long-term trend-following? Also, since you have been in this trade for a long time (s...

Mark,

Very interesting results. Thanks for the effort in doing this.

I am suprised that the VIX futures are ranked high (No. 13). My impression is that the VIX doesn't really trend, it is arguably the few true-mean reverting instruments.

Any thoughts?

svquant, do you see any sign that the VIX futures will steal business from the OTC VolSwaps market. If not, what are the major reasons?

Who are trading the VIX futures besides retail customers? Are the pension fund, mutual funds, and hedge fund using it? I would guss not, becuse the volume is not terribly impressive. Then how do they do dynamic hedging nowadays, still buying index puts? or selling futures?

Mark, I liked your reply, very profound insight! I particularly like the concepts of "tolerable non-smoothness" and "intolerable non-smoothness". I never heard of those expressions, but I immediately know what you mean. Yes, once I am in a trade, I would logically "hope"...

Yes, that certainly is a good start. But in that book, he didn't discuss which market would trend more frequently. Also, other authors (eg, in Art Colins' "Market Beaters") mentioned that the financials trend the best (which is not my impression, which was also not the wise man's impressio...

Yeah, Exit is the most difficult aspect of trading, I am still struggling with that. Seems that there is no perfect exits. Either you miss the remaining part of the trend, or you give back a whole chunk - there is not other way around. Baruch said "only liars consistently catch the top/bottom&q...

A wise man said "From a trend-following perspective, the best trends are not those that move the most, but those that move the smoothest. It is the choppiness of the trends, and the number of false movements that determine the profitability of a market." I Totally agree! A smooth trend has...

The fact that a lot of zero-experience people made money speculating in the housing market tells us the housing trend should be super smooth once a trend is established. So, theoretically the futures in this sector should have very smooth trend. But who knows, because the index is not totally correl...

Anyone trading the VIX futures regularly? Any suggestions on the pros and cons of long or short of the VIX futures. I did a little bit shorting in March when the VIX spiked, with good result. Now with the major equity indexes sitting at strong resistance and on the basis that the intermediate term l...

zacharyoxman, Thanks for the reply.

Yeah, the volume is so low, almost non-existent, I think I'll avoid them at this moment. I hope that the housing index futures as a class will survive. I think they could create unique opportunities for the speculators.

Is the big spike up on US Dollar Index (NYBOT) real or my interactive broker chart has bad data?



Thanks for your input!

Anyone here has traded the Chinese RMB futures? The Chinese currency (RMB) is appreciating steadily, I am thinking of going long the RMB futures, but the liquidity of these contracts bother me a great deal, the move of the underlying might not be able to cover the bid/ask spread. Anybody here has an...

Has anyone traded the housing index futures, liquidity seems to be terrible, but housing market is in a smooth downtrend. Anyone would like to share your experince and thoughts?

I just closed out my long rice position a couple of days ago, it is the cleanest trend I have ever seen, in any market. The thing I don't like is the liquidity, huge bid/ask. Althogh I had a tiny position, I was still worried that I might not be able to get out with a decent slippage. Since looks li...