Not sure what I'm going to be put on initially, I'm ok with volatility - having legged into the bund/bobl/schatz fly, especially in the last half of 2011. Where I used to trade the guys who got started generally traded the Oil FLY and would wait hours to get legged into a trade, it was all about the queuing, whereas the fixed income fly guys would usually be in within a minute or so. Can't really say much more until I get started.
Thanks that's really interesting and definitely relevant - (off the top of my head) if nothing else than it will give me an indication about the trading environment and whether I should scalp or swing. Ill have to read and test into it further then try to find some sort of correlation.
First week Ok so a quick update, nothing crazy in my first week. The guys were just teaching everyone the mechanics of how to use the front end software. It's what I was using previously so a nice refresher. We will be using a spread matrix to get an overview of the markets and even enter orders through it, I personally prefer ladders but I can see that after everything clicks I'll be able to see lots of opportunities with the spread matrix. Some of the questions Ive been asking myself this week that I'll aim to properly answer when on the sims. How can I determine what the 'curve' is doing? what are the fundamental factors that influence this market and are there any tradeable opportunities? How can I anticipate 'fills'? What is the correlation of the back month spreads to the front month? how does volatility change when you increase the time between two contracts? what is a 'free' trade - how can I find them? am I able to program in relationships using excel to alert me to possible areas of value? when should I build a 'synthetic' spread out of building blocks (e.g build the 6 month from two 3 month spreads) - what are the costs and benefits of this? ------------------------------- Other than the trading - I'm sticking to a good diet; I feel I need to add some more carbs during the day to keep my brain working, so I might add a little pasta to the food I bring in. Going to the gym consistently, keeping a good sleep cycle. Just building on from here I guess!
Wingz, I do my best to avoid trading forums these days, but I can't quite resist when I see a thread title that intruiges me - as this one did. Kudos on the thread so far, I enjoyed reading it from page 1, these last 20 minutes. The story you've told bears striking similarity to my own. I recently joined a prop firm (although unlike you, I have no prior-prop firm experience), and I too recently moved so that I could be within 10 minutes walk of the trading floor. In your earlier messages you placed particular emphasis on routine: namely Gym/Diet/Sleep/General Living. Funnily, over the last several days I have been devising very thorough diet plans + inducting myself into the local gym. [To run off on a complete tangent for one moment, I'm pursuing this simple but supposedly effective programme: http://forum.bodybuilding.com/showthread.php?t=998224&page=1] I am also impressed/inspired by how introspective you are, with regards to becoming both a better trader & presumably better man. Thanks for referencing a number of books - I will see about reading them in the coming months. You listed topics of interest that you will be writing on, and I think it was great to include this one: "Having a balanced life" Even before I moved house so that I could be closer to the trading floor, my commitment to becoming a successful trader was (and still is) an obstacle to a balanced lifestyle. Now that I have moved, and am at least temporarily isolated socially, I think I more than any other ET member will have to carefully read any thoughts you might have on balanced living, hehe! One or two friends have jokingly remarked I am in danger of turning in to Patrick Bateman. [http://www.youtube.com/watch?v=CGeAMVK75T4] Anyway, look forward to reading more of your journal. I hope you stay motivated enough to keep posting. P.S. I had to chuckle to myself when I read this: "Goal outside of trading in socializing - to take pimping to the next level" Definitely worth a topic of its own at some point.
I'm not sure what really brought me back to this forum but I'm guessing it has something to do with me doing reasonably well lately. I began writing my mini articles as a way to consolidate the knowledge I had learned before getting stuck into a new trading firm. I had a LOT of time on my hands before I started, now I'm pushing 12-13 hour days of pretty intense trading and rarely have time to kick back. Anyway this post is entirely selfish - as it should be in my opinion! After trading for more than a year I'm still down on my account, after costs of around $4500 per month - however I've started to turn a corner recently and I'm covering those costs and more - It's a time to reflect and push harder to maintain the momentum. ----------------------------------------- So let's get started. First 3 months For the first month we traded the demo accounts, all the other guys decided to trade the Gasoil spreads while I opted to mainly trade the Sugar spreads - at the time it was pretty volatile and I could hold onto my winners for a few ticks while confidently cutting my losers for a small loss - confident that I'd find a big winner to cover the losses and more. It worked well for a few months and I thought I'd cracked the trading game! Big mistake :O Markets changed and I moved onto the Gasoil spreads after 3 months as the seasonal volatility of sugar died down. Next 3 months So I transitioned into trading Gasoil which is what 80% of the guys on the floor were trading at the time. I also experimented with rapeseed, milling wheat and cocoa. Still complexly oblivious about how to trade spreads. Next 6 months After studying about how to trade outrights from years of reading trading books and watching videos I developed a trading strategy that relied upon using the outright moves as a leading indicator for a correlated spread move - as once an outright starts going up, the outrights towards the front of the curve generally move more than those at the back of the curve. So, for example I would buy DEC13 Gasoil and sell DEC14 Gasoil based on breakouts of the front month which at the time of writing would be SEP13 Gasoil. Generally the moves would be correlated and if I got on early I could make a decent profit without much risk. Last few months In the last few months I've definitely adapted my strategy to take into account the market environment. The spreads don't always correlate with the outright, it depends on the time of the month and the general liquidity of the market. The closer to a months expiry the stronger the correlation and the tighter the outright ranges the lower the correlation. The more likely it is that a big spread paper order could dominate the market regardless of the outright moves. It's at this point that I started experimenting with different position sizing for higher conviction trades. I also moved on from trading Gasoil to trading Brent Crude spreads as the DECDEC moves could be up to 70-100 ticks in a day rather than 5-10 in Gasoil. ------------ So long story short I transitioned to the most outright correlated markets that had the largest ranges. I got better at determining the environment and I established what trades were high conviction enough to put more size in. I think this is what fit best with my personality. --------------------------------- The best advice I could give to someone starting out is that it will take a LONG LONG time to get to break even. You have to make the same mistakes at least half a dozen times before it finally sinks in - it's best to keep a really self-aware understanding of yourself in the form of a journal so you can see patterns quickly. Also - check out the Al Brooks Video trading course - took my understanding to a whole new level. Any questions feel free to PM me or ask on here. Best case scenario you guys ask questions that push my understanding so I can reach the next level and at the same time I can give you a decent answer that will help you on your way or contribute to a discussion Wingz
Fascinating stuff Wingz. Thank you for being so open to sharing your journey and the thinking and materials that have influenced you with others. I just ordered Leonard's book and look forward to reading it. Good luck to you going forward!