Spread Trading for Dummies

Discussion in 'Strategy Building' started by tbomb, Apr 13, 2005.

  1. tbomb


    I've been trading prop live for about 2 months now. The first month I got beat pretty bad, basically scalping outright. At that time, I was using Market Profile, S.Stochastics, candlesticks, etc. I found it difficult to stick my levels, and often bent my own rules just to put a trade on. It usually ended up as loss.

    This month I've been spreading the ED against the FV, and have had much better success(variation of the TED spread). My daily routine has changed dramatically and I'm concerned I'm developing bad habits. My prep work for the day has been cut in half. I used to watch and track all the levels in the 30, 10, 5, ED, etc. I used to try and memorize all this stuff and now I just get in and look at what the spread did overnight and pick an upward or downward bias. I feel that I'm just looking to buy the spread when the 5 min looks cheap or the sell when it hits the high of the range. I've been got caught a couple of times when the market broke out, but have been holding my own.

    I'd like to use a better or more sophisticated system to trade, and would like to know what indicators or tools some of the more experienced spread traders use or find helpful. I eventually want to trade a spread such as the FOB or NOB which offers more opps. For the time being, I'm content learning as much possible with the TED and would really like to develop a solid system. Any help is appreciated, thanks.

  2. mamt8r


    How has your TED trading been working out? I've been looking into it, but don't know anyone who trades it. How did you come up with your ratios?

    Have you ventured into the FOB & NOB yet?
  3. tbomb,

    Remember that succesful traders generally use simple systems.

    Focus on yoru money management - you look like you're on the road to success.

    It's good to see that you've gotten this far mate - Best of luck!