Hi tomas262, I looked closer at seasonAlgo and they do not mention data feeds or cost for data. Right now I am using Ninjatrader which does not support spreads. What is required to use seasonAlgo as far as data? I am looking for a cheap option right now to learn.
I decided that for 2021 before I crap on someone elses ideas and work or snakeoil that I would at least give them a chance and check them out since I can listen to a podcast or a video while driving and I am going to open a thread here for everyone personal opinion of people who are offering paystuff on you tube or instagram etc. this is not to endorseanyone. I feel it will be a way for many of us to share what we think about people online who say they can teach or trade or both. I listened to GUY BOWER on 3 of his videos and it was not as bad as i thought it was going to be but there is a ton of filler and just nothing really about execution of trading styles and plans. Scalp bonds like a prop trader had zero to do with how actual prop traders trade the bonds.. and I mean ZERO however he did bring up some good points about converting prices to yield. All in all there are a few tid bits of info that may be helpful if you are new to trading but very far from anything I would ever pay for and I would say the flashier the videos the more you should be suspect of what they really do but he has a very professional demanor about his vids unlike this guy FORTE who popped up in my youtube algo feed! this forte guy was hilarious to watch and a bnunch of others who use silly dumbed down language to act like anyone can do it so please buy their picks. The CFTC and NFA needs to reign in a lot of these guys especially FORTE who acts dumb and then says stuff right after like.. yeah i cannot believe my algo is doing nothing but making money. HA AH AH Ridiculous really anyway i will start a new thread where we can post up a review of trading GURUS and teachers!
I mentioned Guy Bower only because he piqued my interest in learning more about spread trading. As BKR88 stated there is a lot of free education out there and I've spent most of this long weekend looking at it. I doubt GB has 800 dollars of wisdom in his course so I'm going to pass on it. I did purchase a 9.99 course on spread trading from UDEMY which was interesting. I now have an understanding of spreading. I also stumbled across https://www.danielstrading.com/turners-take/turners-take-podcast which looks like an interesting source of education.
I don't pay a lot round trip on commission so that doesn't bother me. As far as "double slippage" as I understand it the spread markets are even more liquid than the outrights (at least from the examples I've seen). From what I understand so far you will not get double slippage unless you try to leg into a spread. Of course I have no experience yet so you may be right.
You can start from CME: https://www.cmegroup.com/education/courses/understanding-futures-spreads.html And yes, generally, spreads will have lower margin requirements since there are 2 opposing legs in 2 different expirations, so practically, risk is lower than the outright or directional (But not always). The Exchange & Clearing House will define each spread margins and this will be subject to change based on several factors. About limited risk, no futures spreads are not limited risk, they still come with unlimited risk. The catch with spreads is that you are tempted to trade them in bigger size (Because they offer lower margin requirements) and also because the movements are usually small (compared to the outright), so without realizing, you end up taking a much larger risk (Thinking that it's not that risky), while in fact it is, so you have to be aware of that. Future spreads also tend to be not that liquid (When you trade them natively). Many exchanges & brokers support native spread orders, where you don't have to worry about executing 2 legs separately. You just submit a spread order and that's it. At the end of the day, you want to buy a corn spread for +1, you don't really care if you long March21 Corn at 400 and short June21 Corn at 399 or long at 500 and short at 499, the spread order handles this. Back in 2008, I lost over $120k in a single spread trade over the course of 1 week (it was the expiration week). It was partially my mistake, because I was holding a very large position in a relatively illiquid market and the 2008 general conditions even made it more illiquid and I didn't close out my position (Or even reduced it) until expiration was very close, so with 1 week to expiration, I was like pinned and I had to close out, someone on the other side took advantage of that and I was screwed of course. Anyway, so you need to watch out for those when you are trading spreads. Also you can't rely only on seasonality of the spread or on technical analysis or chart analysis. You must understand the fundamentals of the market very well, because spread trade ideas are primary based on fundamentals (Or seasonality if you are playing on seasonality, which is also derived from fundamentals). Hope this helps and good luck.
Spread trading is difficult and complex but it is not utterly useless as per say. Spread trading can bring major benefits in times when the swing in the markets is not clearly defined. We know that the difference between particular legs can widen or shorten because anticipating the relative movement of two securities is easy. For example Tesla’s stock will go up but no one knows how long this upward trend would continue because of the emergence of companies such as Mercedes and Toyota with their own electric cars. We can anticipate more easily that the difference between the two will decrease in the future because both of the stock prices would increase.
There is so much disinformation in this thread that I will start a new thread in this forum addressing recent commodity futures spread opportunities. It was a very good year for commodity futures spread trading.
2020 was a really good year for trading commodity futures spreads. We are swing trading exchange supported spreads. We are not legging spreads manually and we are not buying bids and selling offers in an arbitrage or day trading scenario. We are taking advantage of cheap overnight margins, and retail commission rates are not a factor. We are not taking $12.50 out of a trade - we are taking much more than that. Paying $20 in fees and commissions for a one lot butterfly is not a problem if you're taking $750 out of the trade. In terms of liquidity - when comparing best bid and best offer there is always more volume on the intra market exchange supported futures spread than there is in the outright market. It's true for Corn, it's true for Eurodollars, it's true for Crude Oil.
Just to expand a bit on the exchange supported spreads. In terms of liquidity - when comparing best bid and best offer there is always more volume on the intra market exchange supported futures spread than there is in the outright market. It's true for Corn, it's true for Eurodollars, it's true for Crude Oil. If you've got TT or CQG IC or another trading platform that shows implied orders you can easily compare.