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:

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?

Frank D. Reviews Scalping Courses and Atlas Line

Frank D. of Indiana recently switched from trading long term stocks and options trading to short term futures. This switch was the result of a losing short position in the Yen that was contradicted when price skyrocketed due to Japan’s seismic activity in March.

While searching for a new way to trade, Frank came across other day tradings systems and found them to be too convoluted. Frank describes these non-DTTW systems as “an interpretation mess.” He was pleased to see our courses are based on simple price action techniques, using quick analysis without indicators or cluttered charts.

Frank purchased our scalping courses and found success paper trading a week, then moving to live trading with a daily average of $200 using a single contract. Frank also purchased the Atlas Line and has been paper testing the system in recent days. His experience with the Atlas Line has also been very positive.

The best way to go about Scalping is to have both price action methods in your repertoire. The Scalping Mastery Combo Package includes both techniques, the Price Action Scalping Course for the E-Mini and the Trade Scalper (for the E-Mini and other markets). You can find out the difference between both systems by visiting the Mastery page. As always, these techniques are included/taught in the Private Mentorship Program.

New Trading Price Action Live Webinar Recording

If you missed the live trading webinar with John Paul, there is good news and bad news. The good news is that the webinar was recorded and you can watch it below.
The bad news is that you missed the 2 trades he took using the Atlas Line live during the webinar. The room was booked to capacity and there will be a next time, we promise.

If you have questions or would like to sign up for the any of the price action courses, or need mentorship/coaching details please visit the home page www.daytradetowin.com.

First Atlas Line Trade Up 2.75 Points on E-Mini

Today’s first Atlas Line trade was Long Pullback with a target of 2.75 points (11 ticks). We entered at 1181.50. After a short time lapse, we were filled at our exact profit target of 1184.25. Yesterday (September 6, 2011), was another great day on the ES (E-Mini S&P futures). Atlas Line users saw several long signals prior to a long, bullish trend that consumed most of the day. This trend allowed for numerous Strength and Pullback trades. If you took advantage of each setup, you probably made an easy 10 points. Determining where to place profit targets, stops, identifying setups, and other tricks of the trade are taught in the live training session that’s included with purchase.

This Friday, we’re having a free webinar where you can come ask questions and observe the Atlas Line plot in real-time.
When: Friday, September 9 at 10:00 a.m. US/Eastern.
Room Link: http://www.omnovia.com/event/66711315413014