It was a mistake to not qualify my statement with regards to size. With ag spreads you'll often have a problem with more than 3-5 contracts, and that's the whole thing with floor traders: they provide the liquidity at a price of some ticks (which of course is fair if they're not too greedy). Obviously, you get electronic fills in milliseconds whilst reports of fills from the floor takes a good while longer - you cannot convince me otherwise. Not to mention the need to check that there's no human error. And of course, electronic trading is much slower if you want a position of 20 contracts in a spread - leaving you to bid five times for 4 contracts. That certainly is slower than going to the pit. My trading style in equities (which is what I really do) is somewhat similiar - when I find cases that I know inside and out and am totally confident in I don't have a problem pushing for size and being concentraded on just a few positions. So I agree with you and Buffet. I don't know if I'll narrow down my markets later, my plan is already in place until April next year. It does cover a wide variety of markets, but it's not based upon doing a lot of research in each of these markets - or looking too carefully at them. Now, I've stated earlier in this thread that my experience so far is that one cannot be religiously married to entry and exit dates based solely upon historical seasonality - in addition to the need for position sizing, stops, and looking at the charts before entry to avoid buying tops. Plus profit targets and trying to figure out that a move ends "prematurely". So basicly, it starts to resemble discretionary trading - not solely trading on statistics. On Globex and eCBOT it cannot really be referred to as fraud, I'd rather call it games. As long as you have the money to back up an electronic order it should be possible to enter it. Sorry to hear about that Cotton trade - I think I understand what you're talking about.
Hi Rosy2: I just found out the answer to your question. Interactive Brokers routes your order every which way they can to fill it. This means that if they did not succeed in filling the order electronically at Globex, they will go to the floor to complete the transaction. This in a way is good. When I trade electronically, I place my orders in such a way that if they are not filled electronically, they are routed to the floor. Since my orders are not small, most of my orders are filled in the Pits. I hope this answers your question. By the way, your CLU7-CLV7 Spread showed a Hammer at the top today, which is not a good sign. It closed at 48 points. Hence, keep an eye on it. If I have time tomorrow morning, I'll check and give you some suggestions.
Hi hrokling: That's ok. I've got all my money back plus a lot more. It's an experience I am trying to highlight to save some of you the agony of going through such. I just realized that we are mixing Electronic Spread Trading or Execution with Electronic Fill. They are different. Placing the order through the computer does not mean that the order was filled electronically. It appears Interactive Brokers concentrates more on Electronic Fills than in the Pits. In my case, I have to indicate whether I want it to be filled electronically at Globex, in the Pit or a combo. We are all hoping that in the future, everything will be electronic. Have a good day.
hrokling, The posts between you and SupremeTrader provide an excellent education - thanks to both of you. I had forgotten about scarrtrading.com but is it reliable? For example, the 15 year seasonal HO spread under discussion is very different from the MCRI chart, in fact it is way below the current spread. Are you using any other pages besides the "Spread Seasonals" page? BTW, are you still hanging in on the RB and HO spreads? What stops do you have in place if any? Thanks
Yes, we might be talking about two things at once here - you're right. I think what might happen is that hedgefunds and prop traders will step in and provide electronic liquidity that floor traders traditionally provides, meaning we'll just get more volume alltogether.
I only have the 15Y MRCI seasonal spread chart with 2004 as the latest year (no subscription yet). These look different, with Scarrtradings 15y chart (from 1992 to 2006) finishing the move Sep 1st and then showing a sideways volatile movement until mid October. The 1990-2004 MRCI seasonal chart has the move until the middle of October. I looked at the spreads making up the difference: 1990: The upwards move continues from Sep 1st to mid Oct 1991: Same as 1990, but not as steep 2005: A peak on Sep 1st and then sideways high volatility 2006: Negative from Sep 1st and through the fall The removal of 1990+1991 and the addition of especially 2006 makes it likely that Scarrtradings charts are correct (unless it's too early for me in the morning). I'm sure MRCI online has an up to date chart, and if someone has that service they could confirm whether I'm right or wrong. Yes, RB and HO spreads are still on. The spreads are wide, and I'm still comfortable with them. The Nov/Feb RB is closer to stoploss as I recall, but I am on my laptop now and don't have the exact stops fresh in my mind.
Hi Kahai: Always place your trailing stop at 200 points for the HOX7 - HOG8. The market closed yesterday at -0.0344 and hence, if you are entering at this price, then your stop should be at -0.0544. If the market moves up to -0.0255, your trailing stop will now be -0.0455. If your stop is hit, close your positions and reenter later if you the trend continues in the same direction. This is a very volatile spread and hence, if you are already in, be careful. And do only one contract. In response to your question about my posting in other Forums, my answer is yes. I will give you more details later. Finally, you and hrokling should not focus so much on the closeness of the historical patterns as described by MRCI. These patterns are just guides and subsequently, the time frames for them to occur may not be as shown in the MRCI charts. The Spreads differ slightly or enormously year to year. Always use your common sense.
Hi SupremeTrader, I am glad you take such an active interest in this thread, I have much to learn and hrokling is far ahead of me, and from what I have seen on other threads he is apparently a very successful stock trader. BTW, I was talking with hrokling about the HOZ7-HOK8 spread which he entered at .0960 (not the HOX7-HOG8 one). Now, what I have heard about placing stops is that during the night session some brokers apparently have the ability to manipulate prices and hunt down the stops - I don't know if that applies only to outrights or also to spreads. Any truth about that?
I am getting rocked on the (+MAY08 ZW -SEP07ZW) wheat spread. My first spread what good way to start off!! lol
I would get the hell out if I were you. By may 08 you can be damn sure they are gonna get plenty of acres after this surge in price. Remember it won't be long and we will be planting the wheat! But in sep 07 we are at 30 year low stocks and we need the wheat now so that will underpin prices.