The Cuckening - Death of Bond Market Volatility

Discussion in 'Financial Futures' started by s0mmi, Apr 20, 2018.

Are you a twink?

  1. Yes

    3 vote(s)
  2. Yes

    1 vote(s)
  1. s0mmi


    First, some statistics (From Australia)

    1. There has not been a single successful trainee in 3 years, from any firm that I have heard of, that has traded Bonds (successful meaning that they made minimum wage for 18 months based on withdrawals and they're still trading). If you are a successful trainee please post in here and tell us about your journey!

    2. Systematic wipe-out of about 90% of the traders I know. They are all gone. Some have had 1-2 years experience, some have had 10-20 years experience. Many in-between. A lot have bruised egos... won't reply to messages... can't look themselves in the mirror... not surprised.

    The hurdle rate is high. You must trade multiple products and you'll need an auto-spreader... and a proper charting package... desk climbs to $5,000-$6,000/month. You need to be precise and perfect to survive. Only the strongest survie!

    If you were a virgin before trading Bonds in 2016, then your cherry has certainly been popped.

    I have spent the past 1-2 years trying to find answers as to why every single Bond Market futures in the world has experienced a death of volatility... and now I have my answer:

    I found the only article on the internet which explains (disable adblock):


    Spreads have been tightening on a consistent basis. Inflation is not as hot as the central bankers would like them to be... and clicky-clicky humans have witnessed the sledgehammer on their career.

    Framework: How to make money

    Before I continue, just a quick caveat that you can still win and here's a frame-work;

    * Multiple products (3-5 minimum)
    * Back-testing and research (Visual / Eye-balling charts is considered research)
    * Lower size (Contrary to the cucks, you LOWER size in reduced volatility and you INCREASE size when the action appears because your probability of making back the juice is higher)

    Forward into time...

    There are two camps of people:

    #1 - Markets will come back so I'm going to take a holiday and/or continue doing the same primitive strategy

    #2 - I have to evolve and adapt

    Only 1 in 20 people go into Camp #2 because it's very harsh on your ego and pride and requires a lot of work. Who wants to sit at home on a Saturday and Sunday, going through exchanges and charts, wrapping studies and charts around your head just for the 'maybe' chance of finding edge?

    If you don't want to, then the guy next to you will...

    So as a general guide if you are in Bonds and you are getting cucked then you have to diversify into:

    1. Equity Futures (Choose from the indices available)
    2. Soft Commodity Futures (Wheat, Corn, Cocoa, Sugar, etc.)
    3. Hard Commodity Futures (Metals like Gold, Silver etc.)
    4. Energy (Oil / Gasoil / Gasoline )


    By the way, if anyone is from any algo firm or trading group, or wants to make free money, Australian Outright Equities on the ASX are easy mode and primitive to trade. Much like what it used to be 2005-2007 in USA.

    If you haven't started a career in Futures yet, I strongly urge you to trade Australian Shares. I have heard stories of people being down heaps of money who were able to turn it around in Aussie shares.
    spread'em, niko79542 and dealmaker like this.
  2. kj5159


    Do you spend a lot of time on misc?
    jys78 and s0mmi like this.
  3. I found Hang Seng futs are very easy to follow too.
    s0mmi likes this.
  4. have you considered ramping up your research from eye balling charts to something more quantifiable, replicable and most important reasonably removed from typical biases associated with just "eye-balling" charts? I was a softs floor trader for years and 1 traders head/shoulders is another traders trend line capitulation point... might be a good pivot point for your traders as they move from camp 1 to #2
    tommcginnis, dealmaker and SillyWilly like this.
  5. s0mmi


    I have but it's much easier and quicker to spend one full day going through 1-min/5-min line charts so you can visually see every single 'blow-out', hard-day, and get an idea of how a spread tends to behave over time.

    There are a lot of things that will eat up your time if you try to quantify it;

    For example there are giant spikes, gaps through closes and sudden moves.

    Also, when I refer to eye-balling charts I don't mean heads-&-shoulders technical patterns... I meant things like seeing that when a spread tends to blow 10-ticks, does it tend to come back...

    Or... does a spread tend to move one way after the U.S. session begins?

    These things are crucial when you go through the charts because you can develop an edge and an idea of when a tend to get directional.
    spread'em likes this.
  6. Hi. I used h/s as an example. Those things you mentioned are easily quantifiable thru line-by-line backtests where hundreds of trades are listed so you don't miss any that satisfies your filters. Examples such as when does the spread blow up? 930-10a NYSE time or 11a-1PM- the "noon balloon" phenomenon ( is that still present nowadays?).You can program "sparse" indicators to answer questions such as when are the volatility bands of your spread widest- Wednesdays or fridays,etc. Does the spread come in after three higher highs past 3 days? or 3 lower lows 20 days ago? These "market steganographies" (tendencies that are hidden in plain sight) can't be eyeballed but can be coded. Just my 2 cents :)
    spread'em, niko79542, Gambit and 2 others like this.
  7. s0mmi


    I agree and thankyou sir. I’m just trying to help the average trader here who might not have any coding skills or knowledge or stats and data manipulation... there is always a way to succeed if you apply yourself.