MF Global Bankruptcy – A Concern for Day Traders?

As of midnight on Monday, MF Global, a brokerage firm, was about to be acquired by Interactive Brokers due to MF’s irrecoverable position. The deal fell through and MF Global has filed for bankruptcy. More surprisingly, at the final hours of the original deal’s negotiation, MF Global disclosed that approximately $700 million dollars in customer money is missing. In many cases, the announcement of missing money during acquisition talks is considered normal; however, the amount in question is much higher than expected. As the investigation is still underway, additional money is expected to trickle in to reduce the unaccounted for $700 million. MF Global believes that this money is “stuck in the system,” existing in banks.

Leading to MF Global’s downfall, the company had purchased large debt holdings from Eurozone countries with the expectation of quick profit through crisis resolution. Upon the revelation of such filings, MF Global was pressured to put up more money to support its trading positions, thereby destabilizing the company’s remaining cash.

Another contributor to the demise of MF Global was a downgrade to “junk status” (as determined by two rating agencies) after its loss of more than 67% of market value. MF Global, facing investor desertion and raised borrowing costs, could not stay afloat.

With the company devalued, a pending investigation and banks refusing to do business, MF Global’s only option was bankruptcy.

As a side note, brokerage firms, as regulated by the government, are not allowed to use customer funds for any purpose other than facilitating the direct buy and sell of derivatives between a buyer and a seller. Brokerage firm capital must be kept separate from customer money. In the case of E-Mini trading, for example, brokers require regulation that prevents the selling of courses, automated systems, etc.

What do you think?

Was MF Global gambling too much with the company’s assets instead of considering the finances of its customers?

Should brokerages be required to submit regulatory filings more frequently? Would this increase transparency?

Do you expect MF Global or its agents to be accused of a financial crime?

If anyone has used MF Global, what was your experience like with their services?

How does this impact you as a futures day trader?

How to Use Market Replay with NinjaTrader 7

Why should you use NinjaTrader’s Market Replay?

  • To practice placing trade in simulated, real-time conditions
  • To back-testing a strategy to see its effectiveness when trading live
  • To bypass the need for a live data feed (although live trading with a free demo account is always recommended)
  • Few other day trading platforms offer such a feature
  • When your schedule doesn’t allow for real-time paper trading, this is the next best thing.
  • Don’t wait until tomorrow to practice under live trading conditions!

With NinjaTrader 7, it’s possible to replay market activity for nearly any given day. After downloading a given day’s replay data, NinjaTrader uses the data (either minute or tick) to plot price at the exact values at the exact time as recorded. More specifically, you can see price plot on your charts and DOMs as though the day (or night) is unfolding in real-time. Orders can be place and success can be tracked using the Replay101 account (similar to Sim101 account). Replay101 is NinjaTrader’s designated Market Replay account. Unlike previous versions of NinjaTrader that require the user to record the data locally for replay, NinjaTrader 7 lets users download history for free on a per request basis.

Here’s how to use Market Replay:

1. If you are currently connected to a data feed, disconnect from it.

2. Download the latest Replay Data through NinjaTrader’s Control Center:

File > Utilities > Download Replay Data
Choose the market you want data for
Choose the date you want data for
Check both L1 and L2 boxes
Click OK

3. In the bottom right corner of the Control Center, you will see that the Replay Data is downloading. This will take a few minutes. Before continuing to the next step, please wait until the downloading status disappears.

4. Go to File > Connect > Click Market Replay Connection. Open a chart and a DOM if you don’t have them available. Make sure that the replay connection is selected in the chart and DOM. You should also see the Replay player. With this tool, you can pause market activity, fast forward and play. Drag the slider to advance to a specified time frame.

5. Trade like you’re using a real account.

Keep in mind, the data on the DOM won’t contain every increment / decrement in the Buy and Sell columns as experienced during the day’s live trading. The packaged history is optimized in terms of file size and useability.

If you run into problems missing historical data in Market Replay mode, you may both download and view the historical data that you have saved on your local computer by going to the NinjaTrader Control Center > Tools > Historical Data Manager > Edit tab. As long as you have data for the days you are requesting in the Edit tab, then you will see that data when you are using the Market Replay.

Over 15 Points Possible Using Atlas Line the Last 3 Days on E-Mini

In this video, John Paul recounts the performance of the Atlas Line trading tool for the last three days. At least 15 points of profit were possible in total for the last three days based on the trades the Atlas Line pointed out. The Atlas Line automatically tells you when and how to enter the market. These signals appear on the chart as Long or Short signals exactly at the price you should enter, prior to the big moves. In addition, the line plotted on the chart serves to provide confirmation – stick with Short trades if price is currently plotting below the Atlas Line. Go with Long trades if price is above the Atlas Line. The signals the Atlas Line generates are the same for all users across all supported platforms (NinjaTrader, TradeStation and eSignal).

Free live training is included with purchase. In the live training, you will learn several unique trade setups that can only be identified when using the system. These are the Bounce, Pullback and Strength trades. John Paul conducts each training session personally, so you are able to ask questions and receive answers directly from the expert.

Visit the Atlas Line page to purchase or attend a webinar.

High Frequency Trading – Economic Effects

High Frequency TradingMark Cuban, owner of the Dallas Mavericks, Landmark Theaters and Magnolia Pictures, recently wrote an editorial regarding the OWS (Occupy Wall Street) movement. As someone who is “part of the 1%,” it may come as a surprise that Mark is in favor of the movement. His reasons are stated in the Business Insider article.

Whether you’re for, against or neutral on the OWS movement, Mark’s high frequency / black box trading comments are interesting. In part four of the editorial, he states the following:

“In a world of High Frequency Trading and black box trading that does nothing but create a platform for ‘financial hackers’ to turn the market into their own proprietary financial playground, we need to figure out a way to revert the Stock and Bond Markets, and the derivative instruments created from these equities, back to their original purpose, a place to raise capital for growing business. Instead, today it’s a platform for financial engineers and hackers looking to exploit every and any opportunity. When 60% or more of trades are from High Frequency/Algorithmic traders and the correlation for every market index rushes past .7, the market is no longer a market, it’s a platform.

The simplest way to change this is to place a very simple per share tax on every transaction. 10 cents a trade. Every share. Every option. Every Bond. Every currency transaction. Every trade.

The obvious response is that trading volume will plummet. So what? Let it. The next response is that traders will merely move their trades to foreign exchanges. Yes they will. Will transaction costs go up? Duh.. that is the point. The market thrived when spreads and transaction costs were much higher just a few short years ago. It will survive now.

More importantly, it might just put the market back to the basics of what the stock and bond markets are supposed to be, a means of raising capital to support corporate growth. There used to be a time when Investment Bank Partnerships made their money scouting out small companies in need of capital and matching them with investors. They weren’t as big as they are now, but they managed to create quite a few growth industries. Something we could use some of today. Making the stock market a launching pad for companies will have far greater value and impact employment far greater than making sure High Frequency Traders can get their trades in.”

Day Trade to Win is obviously not a high frequency system, nor do the methods we teach dabble in producing an excessive amount of trades using hundreds of thousands of dollars in contracts. Our traders are considered “retail” – observing market conditions and manually take trades at their own pace using a strategy they feel works best under current market conditions. Many of our traders make a living at home, without a degree in finance, astrophysics or software engineering. In addition, DTTW-style trades are placed using publically available platforms such as NinjaTrader or TradeStation. These trades are placed from locations throughout the world by humans; not by advanced AI software running in a 40 degree room a block away from the CME.

Should there be an additional government tax on every trade placed such as Mark’s proposed 10 cents a trade?

Is high frequency trading ruining the economy?

What would day trading be like, as a retail trader, without market movement caused by high frequency trading?

Does day trading (stocks, options, futures, etc.) offer any value to business, the economy or humanity as a whole?

Let us know what you think.

Two Point Profit During Today’s Atlas Line Lesson

We stand by our products. If we see a setup occurring (and know there’s a good chance to make money), we take the trade! This occurs during live training sessions, as seen in today’s webinar for first-time Atlas Line customers.

This trade occurred as a result of the Atlas Line Dbl Bar Short signal 1213.75, reaching our profit target at 1211.75. In case you don’t know what this means, the Atlas Line tells you to go either Short or Long at a specific price. Advanced warning lets you place your order in time to make profit. The types of stops and where to place profit targets are covered in the included live training.

You might not be aware that when you purchase a Day Trade to Win trading course, a free live lesson is included. Day trading coach John Paul teaches each session personally, to make sure you fully understand how to use the software and/or understand the course, whether you’re trading the E-mini, currencies or other markets.

Today’s Atlas Line and Power Price Action Webinar

We had over 100 people attend today’s Power Price Action webinar. John Paul shared his charts (ES, 6E, CL, GC, etc.) allowing attendees to see the Atlas Line call trades in real-time. In addition, John spotted a few ATO and Power Price Action setups, each indicating great profit potential for otherwise ‘difficult to trade’ market conditions.

Here’s a 5% off coupon code for all products, incl. Private Mentorship:
DAYTRADINGSYSTEM

The Atlas Line has two affordable payment options:
6-Month License for $599
Lifetime License for $1800

Power Price Action also has two payment options (plus bonus Floor Traders Secrets Course)
Two Payments of $595
One Payment of $995

ATO (At the Open) Course
One Payment of $595

Heather Reviews Day Trade to Win Trading Methods

Heather from Australia was kind enough to share her experiences with trading the Day Trade to Win methods. At first, she relied on various signals and indicators; resulting in confusion and an inability to see the candles. This disconnect from the market was fixed after finding Day Trade to Win and employing price action methods. Using candle movement and patterns, Heather has had “excellent results” and will soon reach her goal of becoming an income trader. Although she doesn’t say in the video, she uses the Atlas Line, the Trade Scalper and a couple other strategies we offer.

Trading System Development – Don’t Trade Alone

Don't Day Trade Alone

If you’re like us, then you have undoubtedly spent hours upon hours of your time scrolling through chart history to see if there is any discernible pattern hidden amongst the candles. As traders, we are tinkers by heart, who choose to make a laboratory amidst a sea of seemingly random price data. Perhaps your market analysis includes the use of well-known patterns or tools such as Fibonaccis (a rigid, mathematical approach) or Elliot Waves (psychological). Either type of approach is subject to the final test – price action, where price is plotted and at what time. This is why trading system development, or relying on any type of purchased system, should be based on the finality of price data. Each day presents new directions, caused by traders breaking from known patterns either by choice or due to news events. While there are those who will only trade / back-test a self-created system, Day Trade to Win is for everyone else who prefers to trade objectively using proven price action. For example, a product like the ATO has stood the test of time as a formidable E-mini trading strategy since its creation almost ten years ago. One could say that it has been back-tested every single day from the point at which it is purchased. One can also make the point that anything that is on the market this long and continues to receive product reviews has to be the real deal. The same applies for other day trading courses at Day Trade to Win. John Paul has done his homework and simply has made the most effective price action strategies available to the every day retail trader.

Day Trader Leaves BBC Host at a Loss for Words

A professional day trader offers his opinion on where the global economy is headed, particularly the Eurozone Rescue Plan effects (or lack thereof). Many regard his views as pessimistic, as he believes another recession is underway, partially led by fear-driven markets and the heavy-handed financial players (Goldman, JP Morgan, etc.). His views take many non-traders by surprise – he speaks rather candidly compared to the canned responses seen on most mainstream media outfits.

There has been some discussion on various forums that criticize this trader’s integrity – is he perhaps trying to sway the market in his favor by injecting his own opinion? He doesn’t appear to be selling and products or courses outright. His input is simply a drop in the ocean.

If the Eurozone collapses, money may be be transferred / infused into the U.S. economy, possibly giving rise to the U.S. Dollar. He may be right that governments do not rule the financial world, private financial institutions are in control. As a trader, you should ready to trade what makes money, up or down, (markets) without bias.

What do you think about his take on the immorality of trading?

Do Individual Traders Have Too Much Power?

rogue trader
This time, it isn’t
Ewan McGregor…

Last week, UBS (Switzerland’s largets bank) announced that an individual, “rogue trader” caused an estimates loss of $2 billion for the bank due to an unauthorized trade. The accused trader, Kewku Adoboli, was arrested on charges of alleged fraud (although UBS did not initially confirm the suspect). UBS expects to recover the loss by cutting 3,500 jobs within the next two years. Today, a Forbes article says the use of the phrase “rogue trader” is mere spin, used for UBS to create distance with the Adoboli’s fraudulent activities.

The following questions remain unanswered and are perhaps best left for personal judgement:

Should there be a formal inquiry into the trading matters of a private institution?
Do you think a single trader should be capable of bringing a company potentially to its knees?
Was UBS just in deciding to cut jobs for thousands of workers?
Was Adoboli secretly acting for the benefit of a hidden party?
How did Adoboli have access to even place these “unauthorized” trades?
What do you think will be the outcome of this case?