...I just quickly read over this topic and replies...what the heck is this all about? I have a short attention span, get to the point -- words just confuse me
BRAVO BARON! The Internet allows anyone to be a bully, thank's Baron for keeping Elite Trader above the trash heaps of Yahoo Message Boards and StockTwits where assholes and mean spirited people roam free.
If I had a short attention span like you then I wouldn't be here. I guess you were unaware yesterday was the biggest data figure of the month and requires every trader to their ritualistic research and planning before/after? I'll give some specific trade ideas here in this post because you're a kind sir. Looking at U.S. spreads, you need to be a multi-market trader multi-purpose trader to compete because all the old order flow ways of trading are mostly gone. Correlations with currencies and equities vs. Bonds are all DEAD because of QE. You need to evolve. Anyway I've done the homework for you so here it is. A great way to start making money is to have access to the following products: [U.S.A] 1. FYT (5yr-10yr) 2. NOB (10yr-30yr) 3. BOB (30yr v Ultra Long End) You can't just have 1 chart up anymore, you need a few (because every day, you might not be getting the best selection). That's what I have up. As you can see I also have the TUF (2yr-5yr) but that is completely useless now because of the dead interest rate cycle, and the brokerage is INSANE especially for international traders like me. The GTEX, in case anyone is wondering, is the difference between the T-Note (10yr) and the T-Bond (10yr). The T-note is actually 7yr cash delivery, the T-Bond is 10yr. The T-Bond does way less volume than the T-Note and no-one really hits it first on anything, so I guess its more a momentum or mean-reverting trade. Anyway moving on, let's look at one product the FYT. 5yr note v 10yr note. You can't just have the interlink up and trade off that because it resets to 0 every day. You don't know if todays price is cheap or expensive for bigger players. Just use cqg and manually create the chart, (3 times 5yr note) minus (2 times 10yr note) A few things on this chart which are important: 1. If you're day trading you should probably have a 5 or 15 min chart scrunched up. In these dog shit conditions, since you are not trading fundamental trends in the noise anymore, you need to trade based off standard deviation (bare bones trading). All I have up there is two bollingers, the green line is 2nd standard deviation and red is the 3rd st dev. Both of these are 24-hour bollingers (so value 144 I think for 5-min). I never used to have a single technical up many years ago because you didn't need to, but unfortunately now these products are all fucked thanks to triple QE and interest rate fuckery. 2. The blue parts of the line, visually, let you see the U.S. session. You can't see all of it, but there's a pattern for the past 3-5 months... the U.S. session (shown in blue) usually either reverts the spread back or creates safe ranges to play. This is great information to have so you can trade. You can trade either off a noise scalp, or a noise reversion if you like. You can sort yourself out with a full clip or half clip trade on either. You still need to watch the interlink chart because you want a good price and to see how its trading is most important. Having wolf-like focus is always going to keep you ahead of the game. So there you have a few products at your disposal, bollinger bands to gauge distance, and U.S. session information to tell you that your primary trading times should be 1-1.5 hrs before E-mini cash open, and rest of U.S. session. 3. You can make money off this info except you must respect Tier 1 data and news. Use the fact that algorithms are 99% of the market now to your advantage. They're all cockroach scum cunts so its easy to hit stuff with them. Tier 1 data like U.S. CPI, GDP, FOMC minutes, FOMC meeting, etc (note: everything RED on Forex Factory) is very important. In these conditions most money I'll make on these is off data figures or around noise if you scalp and don't get to aggressive. If you get into these you need to 1. Never hold a position into Tier 1 data (because it can move them 5-10 ticks and blow your risk/reward scheme) 2. When the Tier 1 data comes out, never fade it (unless its in-line and theres a decent spike after it). All the 2yr and 5yr short end volume will be pumping one way with the data most of the time, do not fight it. Either go with it and scalp out, or wait for a range to settle, and go with the pullback. 3. Risk/reward. You don't want to getting in and averaging heaps because when you lose it will be on 3 clips times 4 ticks = 12 ticks but when you win you will only get a pathetic 1-2 ticks in these conditions Profit/Loss Risk/Reward Going off me and everyone I know who is winning right now, there's two times they're making money. The first time is 'Noise' although its pretty shit. The next is 'Data'. 'Noise' requirements 1. Timing (I just solved it for you, 1 hour before E-mini Opens is when to start sniffing) 2. Set your profit/loss scheme plan out. I advise staying away from taking a fixed profit amount every time. In stead, get in and see how far its gone, and aim for that exit. But every day can change. Some days you'll get 1 tick, some days 4 ticks. 3. Have a time-stop and Black-swan dollar stop. 1-2 hours before the U.S. session ends, and whatever your stop is. If you could make $1k-2k in these products its probably wise to set that Black-swan figure at $10k. Hopefully it doesnt hit it this, and if you do take hits its -$3k to -$6k Finally, many million dollar traders couldn't take these ranges and the pain hence are all out of a job. This is what the market gives you. Instead of 6 tick profits from 10yrs ago maybe now you have to take 1-2 sometimes. Also the reversion is something you have to figure out because it depends on many factors like if the Bund is being a cunt, how the interlink is trading and ranging etc. Its not that hard to figure out, the important part is everything I just mentioned above with the charts and informational advantage. Participating in high-probability trades is the only way to move forward in these tough times. 'Data' requirements 1. Timing (Check Forex Factory for red flag releases) of Tier 1 2. Do not have a position going into the data or event. Must be flat or else you really love gambling. 3. Plan before hand, if it's great number etc. you go trying to sell the FYT or the NOB at certain prices, if it's a bad number you buy them, and if it's in line then you are happy to fade somewhere. Once again you need a time-stop. Is it 15mins or 60mins you want? The dollar figure should be the same. ==== There's a lot to soak in but I just gave a blueprint of how you can still scalp away in these markets. Obviously my returns on risk this year are the lowest they've ever been, and from the ~8 people I've gathered information from, they are also risking twice as much to make the same amount as last year or the previous years. Note this is all in bonds though.
Thanks for the information.Very useful,even though i`m more keen to automation and trying get to the point where i`ll be 100% automated.Still useful,thanks!Some things you mentioned i already imply.
I really advise going away from automation because it becomes a full-time trading job itself anyway. I wish there were lots of examples but everyone who has automated at one point, has done dramatic overhaul changes just to stay in the game. There's no such thing as auto-pilot or automatic it's unfortunate. Do you know of any automated guys? I know of a few. A few of them dick ride from their colleagues, a lot of them are sluts in terms of moving from shop to shop and trying to take the I.T. guys with them. Now that I think about it, I actually do NOT trust a single automated trader that I know of. They are usually either complete shit talkers or habitual liars. Or they conveniently hide important facts (like what the Drawdown was to make such a return in a given month). I'm yet to meet an honest algorithmic coder guy but I hope there's plenty out there. Let me know how your endeavors go and what you're doing because I'm really curious. For everyone new that starts, or close friends that I help, I tell them this: In 10 years you don't know what type of statistical bullshit or algorithmic fuckup could be happening, but you'll definitely know that the U.S. Fed interest rate, CPI, and U.S. Non-Farm Job data will come out every month and guide the big money. I've chosen my side and I'm sticking with it!
"Use the fact that algorithms are 99% of the market now to your advantage." "I actually do NOT trust a single automated trader that I know of. " How does it match,you tell me?
good to see you back posting. its been a rough few years for prop traders, only the best have survived and their accounts continue to grow. I totally agree with what you have written about having friends in the industry who wont listen. This is mainly a function of having to be sure of yourself as a pro trader. Even in a prop environment if you hear someone talking guff or doing really dumb things you tend not to say anything as they wont listen anyway and you dont want to come across as a cunt. It's a fine balance. Every now and again then you see someone who is so obviously on the wrong track that you cannot help but try and reach out, like you intimate most of these people have the blinkers on, that's the nature of the game. You got a nice set of monthly outgoings there, CGQ plus TT, thats the only way if you want to do it properly. That big drawdown you took was ballsy, I have seen people pull those stunts, some of them are still around but others are gone. The question is and I am sure you know this. 'what are you going to do next time it happens?', are you going to cut earlier and rebuild or are you going to leave it all hanging out there. that's when it can get scary. GL
99% was an exaggerating, but a 2012 article, from Financial Times showing that 84% of all equity trading is High Frequency: http://www.ft.com/intl/cms/s/0/da5d033c-8e1c-11e1-bf8f-00144feab49a.html#axzz1t4qPww6r Also, it's just anecdotal evidence, but all of the 'automated' traders I know, as humans, I can't trust most of what they say. They have hidden agendas, or they're just shit talkers trying to sell you something. Maybe it's just Australia but for some reason, every automated or 'algo guy' is notorious for being an untrustworthy shit-talker, a dog or just no-one who can bring you solid facts and objective ideas to the table. We just haven't met one worth associating with yet. They all have similar character traits, and it's pretty shit to be honest. If we can't trust the words coming out of your mouth, then what are you good for?
I`m not here to gain anyone`s trust,to be honest.But i know the guys,from which i got some clues as for what it takes to be 100% automated.Some are summa cum laude,math and compuer science.They do automation and trade millions monthly.I posted their stats in some thread,i can`t remember where.You can search if you want. You just met the wrong guys,i believe.lol...Not many,i agree ,but they exist.