A little over 2 years. But I have asked manyyyyyyyyyyy questions to the biggest and the best traders at my firm. Their life stories, their ups and downs, how they improved over time, what they do, etc. I am gathering more and more of it. I ask questions about certain scenarios and what they do. Sometimes my jaw drops, I'm like "What the hell? Last week the same thing happened and you were long. And then before that, it went really far... how the hell did you just fade that and survive straight away? Why did you do it?" They're just super human freaks. I'm a sponge that literally grabbed onto every pearl of information I can. There's truly tremendous people I work with. Our head trader is one of the nicest and best guys out there. I have extreme respect for him. If I was doing all of this by myself I'd only know like 10% of what I do.
reading your posts on the aussie forums, you seem to have been at trading more than 3 years, right? at the start, what was your trading regime? if not 16-18hrs day then , what was it ? and when did you change ? and what made you change? Also, as you are now a spreader, just for my own curiosity, in terms of daily $ returns: what is the $ return when one has a $50k stop ? Thanks for taking the time to post in here. Personally, I never managed to understand spread trading - not fault of trying. So went the outright route, and that's working for me. Just now sorting out my psycho/spirituality that was really badly damaged by some 3 clowns parasites these last couple of years. So if you have some good links and references regarding spread trading - the practical side mostly- then feel free to share.
I've only been trading for 2 years so far. **My trading regime at the start was 8-hours. We were trading the Asian market session. Correlations were extremely low, price action was inexistent, and nothing moved together. You never knew whether you were wrong or right, it was random. Actually... it's still like that today. The guys who make money off the Asian session are really gifted out-right traders. They have some sort of advantage, where it be holding queue positions or trading between 5 to 10 different products at their discretion (currencies, nikkei, shares, aussie spi, bonds, s&p etc. lots to choose from) **I decided to change because I realised after 7-8 months that I was no better than a flip of a coin. I could only make money in the month by punting on news announcements and I had such a tiny edge to beat the flip of a coin. This wasn't good enough. I was extremely determined to continue this career and I would not stop at anything. So I decided to start doing the European + U.S. session (for my local time that's between 5pm to 7am from with-in the office) and eventually traded products that operate almost 24/7, which is where I'm at now, products that can get to the region you want them to at any time of the day. It was a long process, but I am much more suited to having a longer-time frame available if I need it. If I can exit a trade after 5-minutes for profit I will, but I find that just paying across a spread big-time by a certain time is inefficient, hence I sometimes reduce size or stay up to continue watching my position and carry it on through multiple-sessions. It's a dynamic game. **I can't speak for everyone because it changes for different people if we were to talk about returns on a stop. My style is to win 80-90% of the days and when a blow-out happens I accept reality and deal with it in order to cushion the blow as much as possible. If somebody had a $50k daily stop and traded fairly conservative like me, I would say they needed to make between $5k up to $15k per day. I wouldn't expect them to hit their stop more than twice a month, otherwise they would be trading far too aggressively and with too much size. Or, they need to step to another side-market and stop providing liquidity in such a heavy-direction market! **With my style, it's not common that I go near my stop and breach risk parameters with-in a single session. It's a slow toxic process of averaging and exiting and re-entering where I am very wrong on a direction and I can only scalp back a certain amount for myself. Over time I am now more inclined to respect the market, suck up my loss, cut off the tumour, have a nap and re-awake to look for more opportunities. I believe when you can definitely trade 3 or 4 different products with decent confidence then you are okay. If you just trade 1-product then you are prone to sometimes stepping infront of a train because you literally have no other trade to do! Sometimes the straight line is so far you just feel you have to be taking the other side! If you had access to trade a few more markets you wouldn't put all your risk in one, and probably perform better too (well it did for me anyway). **I noticed with the most experienced traders that they develop an "all or nothing" attitude after about 7-8 years plus in the game. They've seen markets for far too long and they just make money for fun at this point. This means they would rather alter a ratio of a spread and take a punt of some sorts such that if it doesn't work they only lose a little bit, but if their idea is right they are able to ride the move all night and make a huge chunk of their stop in one night. I am not at this level, and I don't want to be. I would rather consistently make money every day/every week/every month rather than hit a point every fortnight where I go "Im going to set up this spread such that if s&p has its down-night of 1% or more I'm going to make a killing". Also I'd like to say that I am very happy you have developed consistency and trade successfully! Well done friend. If you believe outright is fine for you, then by all means do not change! If you have find nice risk/reward execution styles of outright then there is no reason to ruin yourself psychologically and try to change everything just to spread for the sake of spreading. I started spreading because I was terrible (and I'm still terrible) at outright trading and direction picking. You have a talent and gift that I am envious of so congratulations, work on perfecting your art. If you have any questions I'm happy to answer. Most of the things I learn/develop are not original, rather they're just shared and taken from other great traders I've learned off and traded around me.
don't worry, no way I will be changing the way I approach trading. Paid my due for that. There is always this question in the back of my mind : what is it about spreading that I could not get? May be I don't want to die a complete idiot. lol.
Don't feel silly at all. I get asked this quite often. When most people approach spreading they think it's complicated, and that you're prone to two markets hurting you going up or down, and that there's greater risk. Also they don't know what they're looking for... why should I get in or get out? What do you do when you're in a spread? // As a very basic measure, what I simply do is I chart an ATR of the spread, and I basically just go through the chart for the past 1 to 3 months and just observe how far can it go. This research pays off, and it's just for confidence purposes whilst averaging etc. // So when you have some sort of range for how far it can go and what a big versus small session is, you try to capture maybe 10 to 20% of an average session as profit. The truth is that I spread for three key reasons: 1. I cannot outright pick direction. But I can plot a chart, look at a spread, and fade a spike. When the time comes for world sentiment to change over the next 10 minutes or 3 hours, I am betting that the expensive product sold would be weaker than the cheaper product I'm long. 2. When you enter the spread, it's best to make sure at the start that you're entering both simultaneously. You are trading the spread, not outright. Get filled on a bid in one, and hit market in the other. 3. Watch the price action and the language that both products speak with each other. There's no immediate 'stop out' point, so get ready to collect more parcels at a certain region. Once you are filled in the spread, you're just quoting one market or the other by placing bids or offers (whichever side you want to get filled) for your profit target which is a distance. As one leg moves, you adjust the profit target again. And that's it. This allows you to spread through data figures, over longer periods through-out the session etc. and carries less risk. Now that you've seen technicals, it's a good thing to trade it for a few months, and eventually you will be able to discuss 'fundamentals' with other people who trade the same product. What this will help you with, is encourage you to either 'go with the spike' sometimes, or simply not step infront of a train when there's interest-rate sensitive or fundamental data related activity going on. When you're happy with the distance its deviated, you can get in and try to scalp around. By the way, when you get filled for your profit on one leg, you just exit the other for bid or at market. No legging risk. That's true spreading. People sometimes try to complicate it at the start, but it's not worth it unless you have years of experience. What I mean is, they will start buying and averaging 1-leg only, and then after 30 minutes or so if it's still offside they start averaging into the 2nd leg. This is wild and has many flaws, but is one common strategy of what people do when they get into a mess. I advise simply just trading a spread, entering and exiting together!
wow, thanks for the explanation. I'll give it a try on a long time frame spread over the week-ends. May be that will clarify what made it hard for me to understand spreading. Thanks a lot.
I like this thread and this advice. I also want to learn how to push myself a bit harder but then I realize that a lot of it is your surroundings and what you focus on. Many people who work from home tend to find that they need a separate âofficeâ to actually do work, just because itâs easy to slack off. I think this applies to trading as well. Looking at the same charts over and over wonât help, you need to learn to write good trading systems and actually put yourself in a place where you can do that. Thatâs the hard part⦠Actually analyzing the data (not just present charts) but actually looking at prior data, finding correlations, performing backtesting, etc. But if you put yourself in the right frame of mind, you can do that pretty easily.
People chose how much they will invest in trading : the key is to do the 10 000hrs. Some prefer doing 16-20 hrs/day , ohers 5 hrs/day. Trading offers things for everybody's preferences. I think from the material point of view (home office or ouside office), it is really about how you slice your days. Home office is totally viable if for instance you start with going to the gym, and slice your days with meditation outside home - in a garden for instance. Not true that looking to a chart over and over again MIGHT not help you: who is to say you will not pick up nuances? Then writing good trading systems : this is an approach many go through.
This happens to most of the traders that they face this dilemma when they are trading in the forex market. Its always the "never die" "do or die" attitude for me in the forex trading business and thus i tend to push myself even at times when am low.