Mrs. BlueCollar's nephew Shane Cordeau of Ketchum, Idaho, is a member of the US Ski Team (freestyle moguls) and skied last Thursday at Steamboat for a spot on the US Olympic team. Unfortunately, he didn't get the last slot for the trip to Vancouver but he skied well and needless to say, we are proud of him! Shane is only 23 years old and if he can stay healthy, has a bright future ahead. We had a chance to see his run on NBC sports on Saturday and the color commentator singled him out as the "dark horse" to win, though it did not come to pass. Speaking with his parents on Christmas day, Mrs. Bluecollar learned that he had broken his pole(s) sometime prior to his run and had been given replacements that were the wrong size. At his level of competition, this slight deviation made a world of difference and affected his performance. He is now focusing his training on World Cup and the 2014 Winter Olympics in Sochi, Russia. Shane is the son of Mrs. BlueCollar's older brother, former 4-time world champion mogul skier Joey Cordeau and outstanding competitive mogul skier Barb Cordeau. Shane's older sister Christine Cordeau is one of the finest all-around mogul skiers in the country. They are truly the "First Family" of United States competitive skiing. Check out the following:
http://www.youtube.com/watch?v=TbG2YU4NoY4&feature=related
http://www.youtube.com/watch?v=FBFiw3qneiw&feature=related
See his intense crash at the US Nationals 2009:
http://www.youtube.com/watch?v=mm4mkuld8Sc&feature=related
And finally:
Sunday, December 27, 2009
Wednesday, December 16, 2009
December 16th
I had a chance to get back into the markets to papertrade for an hour or so this morning. I have a lot of dayjob to do here though so I'm closing it down at 12:30pm. A large volume of day job projects have landed on me and the next two weeks are fully booked including the week-ends. So, there is not a great likelihood that i will do much in the markets until after the new year has arrived. I'll try to sneak in if I'm here between appointments but much of my work starting on Friday will take me away for full days... then, of course, there's the Christmas and New Years Day holidays.
Add to that the construction project we are doing over our garage! I've budgeted 6 months to complete it and it will likely take the full amount as I will be doing a large chunk of the work myself, with the exception of the plumbing, insulation, and drywall. So, running a business, home construction, then the regular home duties and an occasional night out will fill my months ahead. The big picture is that once we can get the apartment finished and establish a tenant, it may offer a bit of financial freedom to allow me to pursue my dream of training to be a full-time trader. The final piece of the plan will be to sell my business. My goal is to sell by end of 2010. Not just to pursue trading. I am weary of it after nineteen and a half years and need a different path. I do hope that the path is trading for a living, just as I note in the header to my blog. I'm certainly proceeding with that goal in mind.
Saturday, December 12, 2009
Friday December 11th
Didn't get to post last night because of day-job requirements. In fact, I just finished some Saturday day-job stuff and am putting up my one paper-trade from yesterday; a trade I took while I was here between work appointments. I only had about twenty minutes to look in on the markets and this trade was pushing the time envelope so I covered it even. Too bad, the chart shows my instincts were correct and it would have been a winner had I been able to stick around the office a few more minutes. No worries... it's just one more in a long line of practice trades which will eventually lead to my goal.
Thursday, December 10, 2009
Wednesday, December 9, 2009
December 9th - EOD
One more papertrade when I got into the market late. Busy out plowing, shoveling my own and my neighbors driveways/walkways while they are away in the Carribean.
December 9th- Morning trades
Paper-Trading:
I was able to catch the open as work appointments were cancelled because of the furious snow here in Southern Maine. I am out of the markets now as I must still venture out for other committments then return to take care of non-market responsibilities. I'll try to have a look in on the markets at the close if possible.
Good trading to all!
Tuesday, December 8, 2009
December 8th End of Day
Made a couple more paper-trades, this time in GG when I had a chance to sneak into the market later in the day.
Note the "What's Familiar" notations on the chart... the Yellow Lines which point to candle's closing at the high or low of the 5-min timeframe and dojis or near dojis, all of which tend to have a high correlation to reversals. Also note the high volume spikes as signs of reversal/ tops & bottoms (thin white lines from the volume bars up to the corresponding candle.)
December 8th
This morning's open where I closed out a short from EOD yesterday.
Risky to hold overnight but I had a good feeling, given the recent up/down action. A break upward would have killed this trade in a huge way. I'd never hold real money overnight in a 3x ETF... Never!
Monday, December 7, 2009
Market Maker vs. Small Trader
In his recent reply (December 4th) to my question about why he favors the QQQQ as an indicator, Scott of Fear and Greed Day Trader makes a point of mentioning Market Makers...
"The QQQQ doji told me of the greater probability of the overall markets dropping again. That little AAPL pop up was just a gift to short it at a higher price. Thank you market makers. 15 minutes later the bulls are crying in pain as the markets pile drive them to surrender, not coincidently at the 44.38 level on the QQQQ by the way. I cover with over a $6.50 gain when it ran out of steam."
So, while researching the blogs I like, this post I found at Dr. Brett Steenbarger's site (December 6th) caught my eye... It is a lengthy essay but I encourage you to take the time to read it. You can find it and other resources at his site: www.traderfeed.blogspot.com.
"Sunday, December 06, 2009
Lessons for Developing Traders: More on What Moves Markets
In the first post in this series, I offered a perspective on what moves markets that I wish I had learned during my early years trading. In this follow up post, I will offer a second insight that I wish I had learned in those formative years: what moves markets over short time frames.
While large institutions move money across global regions and asset classes, creating large trending moves, the factors that move markets over a time span of minutes to hours are quite different. Understanding how market participants are segmented by the time frame of their participation is crucial to interpreting market movement.
Here's a crude analogy: Suppose you are standing in the ocean and someone asks you what makes the water move around you. You would be right to mention the moon and its effects on tides and patterns of waves. Of course, you might also be right to mention winds and local climate conditions, particularly if a storm were brewing. Then, too, you could take a look at the kids splashing in the water all around you and notice that they were contributing quite a bit to the water's movement around you.
Markets are like the ocean: there are longer-term forces that affect supply and demand, and there are also more immediate, local forces. It is the interplay of these forces that creates the movement we observe. If we look immediately around us--a few feet in each direction--the tides might account for little of the movement relative to the splashing of all the people surrounding us. If we look across the broad expanse of ocean, all we'll see are the waves and the effect of the winds and tides.
The short-term trader is like the person surrounded by splashing swimmers: the turbulence in the immediate environment is created by liquidity providers, also known as market makers. They are the ones who offer shares or futures contract for sale and who put out bids to buy. Their goal is to profit from immediate movements around the latest bid and offer price, including the spread between bid and offer.
What I wish I had understood better early in my career is that, while institutions (and global flows of capital) dominate markets over long time frames (the tides); it is the liquidity providers that dominate trade from minute to minute (the splashing). While fundamentals win out over a period of years, the short-term movements of markets are determined by the sentiment--the buying and selling biases--of market makers.
In the past, the market makers were traders on the floors of the exchanges. Then, they increasingly became proprietary traders in electronic markets. Most recently, they have become computer programs, executing sophisticated algorithms to exploit imbalances in the order book.
When I first came to Chicago to work full time with prop traders, I was astounded that few of the traders made active use of charts and technical tools for decision support. Yes, they looked at charts for broad reference, but the bulk of their attention went to depth-of-market (DOM) displays that constantly updated the number of contracts being offered and bid and various price levels. It was the flow of bids and offers in and out of the book--order flow--that showed the traders whether buyers or sellers were coming into the market.
For instance, if the prop traders saw bids firming up and a couple of large offers come out of the book, they would quickly buy and then work an offer a bit above the market. When the offer was lifted, they would have a one or two-tick winning trade. All day long, those ticks added up, particularly given the leverage available to the prop firms. There were situations where traders would trade all day like that, barely ever looking at a chart, and barely even knowing the specific price of the index they were trading. All they were seeing were bids and offers above and below the market and trading those.
As liquidity providers became bigger and bigger, they controlled more size close to the market. They could hold large bids, for example, at several price levels below the market's current price. All it would take is a simultaneous pulling of those bids and firming of offers above the market to drive the price down tick after tick after tick. That, of course, would scare out other traders; it might also entice some sellers into the market, thinking that a fresh downtrend had begun. Little did they realize that the liquidity providers were working large bids even further down the ladder, picking up contracts at very good prices. As they firmed up those bids, no further sellers materialized, and the market would bounce right back toward where it had begun. Splash, splash.
What I didn't realize as a new trader was how to think like a price maker, rather than a price taker. To succeed at short-term trading, you have to think like a market maker, not a retail customer buying bids and selling offers. That means understanding order flow, not just the movement of price on a chart. In recent times, that also means understanding how algorithmic programs can move markets up and down, without necessarily changing the underlying fundamentals of markets.
Indeed, when market makers move prices artificially high in a falling market or artificially low in a rising one, unusual opportunities are created for fleet-footed, perceptive traders. Opportunity exists in the crevices between those participants at different time frames: a lesson crucial for developing traders."
Two seasoned professionals commenting on the presence of market makers and their influence on the market. And the first quote I noted above is not the first time that Scott Farnham has mentioned them at FNG.
Understanding the role of market makers will give us all great insight into what and how the markets move. As I pay closer attention, I have and still am learning the large role that these relatively small group human beings (through their direct action or through their computer programs) have on the movement of price.
That price movement is NOT the whole market speaking but rather highly influenced by a limited number of "controllers" underscores how important it is to understand the human element to trading. As Dr. Steenbarger notes above, looking at the market from the point of view of the Price Maker is more valuable than looking at it from the point of view of the Price Taker.
Good luck to all this week!
"The QQQQ doji told me of the greater probability of the overall markets dropping again. That little AAPL pop up was just a gift to short it at a higher price. Thank you market makers. 15 minutes later the bulls are crying in pain as the markets pile drive them to surrender, not coincidently at the 44.38 level on the QQQQ by the way. I cover with over a $6.50 gain when it ran out of steam."
So, while researching the blogs I like, this post I found at Dr. Brett Steenbarger's site (December 6th) caught my eye... It is a lengthy essay but I encourage you to take the time to read it. You can find it and other resources at his site: www.traderfeed.blogspot.com.
"Sunday, December 06, 2009
Lessons for Developing Traders: More on What Moves Markets
In the first post in this series, I offered a perspective on what moves markets that I wish I had learned during my early years trading. In this follow up post, I will offer a second insight that I wish I had learned in those formative years: what moves markets over short time frames.
While large institutions move money across global regions and asset classes, creating large trending moves, the factors that move markets over a time span of minutes to hours are quite different. Understanding how market participants are segmented by the time frame of their participation is crucial to interpreting market movement.
Here's a crude analogy: Suppose you are standing in the ocean and someone asks you what makes the water move around you. You would be right to mention the moon and its effects on tides and patterns of waves. Of course, you might also be right to mention winds and local climate conditions, particularly if a storm were brewing. Then, too, you could take a look at the kids splashing in the water all around you and notice that they were contributing quite a bit to the water's movement around you.
Markets are like the ocean: there are longer-term forces that affect supply and demand, and there are also more immediate, local forces. It is the interplay of these forces that creates the movement we observe. If we look immediately around us--a few feet in each direction--the tides might account for little of the movement relative to the splashing of all the people surrounding us. If we look across the broad expanse of ocean, all we'll see are the waves and the effect of the winds and tides.
The short-term trader is like the person surrounded by splashing swimmers: the turbulence in the immediate environment is created by liquidity providers, also known as market makers. They are the ones who offer shares or futures contract for sale and who put out bids to buy. Their goal is to profit from immediate movements around the latest bid and offer price, including the spread between bid and offer.
What I wish I had understood better early in my career is that, while institutions (and global flows of capital) dominate markets over long time frames (the tides); it is the liquidity providers that dominate trade from minute to minute (the splashing). While fundamentals win out over a period of years, the short-term movements of markets are determined by the sentiment--the buying and selling biases--of market makers.
In the past, the market makers were traders on the floors of the exchanges. Then, they increasingly became proprietary traders in electronic markets. Most recently, they have become computer programs, executing sophisticated algorithms to exploit imbalances in the order book.
When I first came to Chicago to work full time with prop traders, I was astounded that few of the traders made active use of charts and technical tools for decision support. Yes, they looked at charts for broad reference, but the bulk of their attention went to depth-of-market (DOM) displays that constantly updated the number of contracts being offered and bid and various price levels. It was the flow of bids and offers in and out of the book--order flow--that showed the traders whether buyers or sellers were coming into the market.
For instance, if the prop traders saw bids firming up and a couple of large offers come out of the book, they would quickly buy and then work an offer a bit above the market. When the offer was lifted, they would have a one or two-tick winning trade. All day long, those ticks added up, particularly given the leverage available to the prop firms. There were situations where traders would trade all day like that, barely ever looking at a chart, and barely even knowing the specific price of the index they were trading. All they were seeing were bids and offers above and below the market and trading those.
As liquidity providers became bigger and bigger, they controlled more size close to the market. They could hold large bids, for example, at several price levels below the market's current price. All it would take is a simultaneous pulling of those bids and firming of offers above the market to drive the price down tick after tick after tick. That, of course, would scare out other traders; it might also entice some sellers into the market, thinking that a fresh downtrend had begun. Little did they realize that the liquidity providers were working large bids even further down the ladder, picking up contracts at very good prices. As they firmed up those bids, no further sellers materialized, and the market would bounce right back toward where it had begun. Splash, splash.
What I didn't realize as a new trader was how to think like a price maker, rather than a price taker. To succeed at short-term trading, you have to think like a market maker, not a retail customer buying bids and selling offers. That means understanding order flow, not just the movement of price on a chart. In recent times, that also means understanding how algorithmic programs can move markets up and down, without necessarily changing the underlying fundamentals of markets.
Indeed, when market makers move prices artificially high in a falling market or artificially low in a rising one, unusual opportunities are created for fleet-footed, perceptive traders. Opportunity exists in the crevices between those participants at different time frames: a lesson crucial for developing traders."
Two seasoned professionals commenting on the presence of market makers and their influence on the market. And the first quote I noted above is not the first time that Scott Farnham has mentioned them at FNG.
Understanding the role of market makers will give us all great insight into what and how the markets move. As I pay closer attention, I have and still am learning the large role that these relatively small group human beings (through their direct action or through their computer programs) have on the movement of price.
That price movement is NOT the whole market speaking but rather highly influenced by a limited number of "controllers" underscores how important it is to understand the human element to trading. As Dr. Steenbarger notes above, looking at the market from the point of view of the Price Maker is more valuable than looking at it from the point of view of the Price Taker.
Good luck to all this week!
Friday, December 4, 2009
December 4th Opening half-hour
I have no outside dayjob appointments today (as yet) so I had a chnace to sit in on the markets at the open. I took two paper-trades with a $170 gain each. With such a big move at the open, TNA was a great trader; at the top of my list in daily move since the open. My inclination since I began learning this craft has been on playing for reversals of big moves. Today, I tried to play toward momentum, favoring buying in the direction of the primary move of the day. It seemed uncomfortable to me to be buying pullbacks instead of selling tops. It worked out ok for the high-volume rush this morning... of course everything is easier on big momo days. Last spring and summer I would think nothing of sitting here all day practicing but since the late summer I've learned that such moves are foolish. I can't act as though trading pays the bills and pays for others to do my long list of home projects. It clearly doesn't. So, today I am focusing on some day-job admin work and finishing up a cabinet trim project in my kitchen. The week-end is mostly free for the continuation of my project work so I should make great headway over the next three days. Someday, I hope to devote more time to training to be a self-employed stock trader... But for now, it is a part-time indulgence! I might try to get back to the market while I have my lunch a couple hours from now and perhaps at the close.
---------------------------------------------------
Update @ 4:30 pm:
I did not get a chance to get back into the markets so the two papertrades from this morning are the only ones for the day. Too bad... I had CNBC on as I worked on my cabinet project and it seemed to be a wild day... cannot wait to study some charts later to see the action that took place.
Hope all had a profitable day- financially or educationally!
Thursday, December 3, 2009
December 3rd
At about 
20 minutes before the close,
I got a moment to sign in to paper-trade. I made four trades and ended up with gains of only $60 paperbucks.
Still, it's better than losing. Looks like it would have been a great day to have been trading...
20 minutes before the close,I got a moment to sign in to paper-trade. I made four trades and ended up with gains of only $60 paperbucks.
Still, it's better than losing. Looks like it would have been a great day to have been trading...
Tuesday, December 1, 2009
November 30th & December 1st
I took SKF short on a paper-trade yesterday before my day-job duties. I was out and couldn't cover so I covered before going to day-job this morning. Here are the trades. I'll try to get into the market later this afternoon if I can. Doubtful though, as day-job is quite busy...
I had a good feeling about my entry on SKF but rest-assured, this type of trade is not my ideal one. I prefer to get out EOD and not leave trades unattended. Nice gain but too risky for real-money.
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