So here I am back after a couple of years. #imstillstanding So my post a couple years ago seems completely foreign to me now, I've completely shifted my approach - instead of making a few dozen momentum trades a day I make maybe 3-4 big swing trades per week. I'm trading Flys and derivitaves of spreads such as 6*1 month spread vs 1*6 month spread or Kondors. For an estimation of numbers and to get a good view of a prop trader 3 1/2 years into the torturous game of trading (without trying to toot my own horn) - this year since I switched to fly trading I have on approximately 4000 spreads (a 300 lot fly, which is most of my volume - would be 600 spreads). My biggest winner was a 5 week monster that I ended up with a £60k profit (after going offside 50k - unbelievably scary, I think I was in a semi dream state whilst it was down that much). This year has been increasingly profitable month on month as I increase my size, with consistency and confidence. Pulling out £80k one month (after tax and cut).... ------------- Here's how I got there... It's been a shit journey - and looking back at some of the posts I made in this thread I was basically under the impression that I could dance around with flowers in my hands and the power of positive belief could get me through anything easily - load of bollocks - I never anticipated the massive sacrifices I had to make to get where I am now. I genuinely thought I'd work hard in the office and then go out pimping in the the evenings meeting hotties and living a life of excess.. No I was basically a fucking monk that never went out and had zero social life. Trading when done well isn't fun, it's not satisfying in the moment, it's a means to an end. If I start enjoying it I get overconfident and lose money. It's boring and I have a continual feeling of apathy these days for trades that I'm in, I just don't care. It's the only way I've found to not become emotionally invested and steadily become accustomed to huge p/l swings without thinking about the money they represent. From a growth perspective however I'm satisfied, proud of what I've done and how I'm progressing. I think you just have to give it a go, the guys that I've seen fail have done for 2 main reasons, they didn't put in the effort and they didn't truly understand what an edge was. You need to develop an edge and really feel it working, go through the emotions of sabotaging it, adapting it, finding another edge and doing the same over and over again whilst still staying committed as other areas of your life are neglected. You have to be prepared to keep pushing. As soon as you start doing well markets will shift and you'll have to adapt again, it's pretty tough. I've wanted to quit multiple times but I'm glad I didn't. Now I really enjoy the process of learning about new markets, trying new strategies and getting the satisfaction of being a step ahead. But it's taken a lot of pain to get here. I like the buzz that I get when I read a good book about trading and can see something potentially working, trying it out in the market with small size to see if I can add it to my repertoire. I guess thinking about it now, I've learnt to compartmentalize. I'm a complete robot with stuff that works for me, ramping up the size but I still get a rush and thrill with stuff I'm trying out and building. I still make stupid punts without a provable edge for fun, but with tiny size and as more of a way to prevent it getting into my consistent trading. What I enjoy the most is the building and creation aspects of trading, the process, but its draining having to get back up all the time. It's just a constant battle, but looking back every now and then to see what you've accomplished is pretty fulfilling. For a cherry on the top - I'm social again, going out most weekends - it seems the vast black hole abyss has finally gone from my life. Just be aware that truly committing to this journey and doing it well will rob you of a few years of genuine human interaction and life as you slowly assimilate into a profitable trading robot.
an example is watching past star traders and managers go more public via media and cnbc, ie icahn, einhorn. they're both down for the year.. they have trailed the indexes since they became media "celebrities" few years ago.
Could not have said it any better. It definitely is a sacrifice in more ways than one can imagine. Congrats on figuring it out. Im still on my journey but very close.
Greetings All, Standby fellas, cause you ain’t seen nothing yet! The next step, if you can call it that is when over time, you begin to realize that this “whole thing” called trading and life is a just a process, and the journey of becoming more, is not “arriving” at a destination. You’ll then begin to see your world,…and the world differently. A quiet kind of “confidence” begins to emerge within you. There is no need to suffer from the frustration of “Hurry Sickness” to get someplace on some fanciful ephemeral schedule you have conjured up in your mind, because that will not be your objective anymore. I have come to realize that I have been continually “arriving” in this business for the last 27 years, but I didn’t see it, or enjoy it to the fullest until I “arrived” at the realization that there is no destination. I came to this understanding during the last struggle I had with myself and the market a several years back, when my lifelong trading edge started losing some its efficacy. This struggle came about because I had thought that I had “arrived” at my trading destination many years before, and that pseudo reality was being taken apart daily. Now I know and understand that there,….“is just the journey”, and just a new jumping off point for you right around the bend, waiting for the next transport to arrive, and start the ride again. Yes,....you see, some rides but not all, are just plain bumpy, uncomfortable, and painful. But there is no growth without some degree of discomfort. As Cervante’s said long ago; “The road is better than the Inn”. This guy Cervantes knew what he was talking about. When you come to take your joy and satisfaction from the moment to moment interaction with yourself, and with the market, and begin to see yourself as a growth, expanding, and becoming more and more, than what you were just a few moments, months, or years ago. That’s when you’ll understand what Cervantes meant, and what I have just expanded upon. The fun is in the process, and that is when life really begins! Life is just a series of moments to moments. Here on ET, you’ll begin to better appreciate the positive and constructive interactions with like minded people and traders, who realize too, that they are also on a journey in a process as well. You’ll also clearly see that there is little time, for spending your valuable life’s time interacting with those who add little to the process…..your process. Wingz…it’s good to see you’re back from your "Pass of Pain"..…better and wiser. Let’s continue to talk and share some more on the next ride waiting for us all just around the corner. Your words have brightened this day that much more,…..I’d like to hear more. Enjoy the journey. KDASFTG
I didn't really thoroughly read the entire post...but I'm a bottom line kind of guy... What is your Profit/Loss profit margin %...since you began this little journey of yours ops:
Greetings Again Guys, Lawrence said: “I didn't really thoroughly read the entire post...but I'm a bottom line kind of guy...” Lawrence, if I may be so bold as to pen what I believe Wingz is saying in the hope that you can see the essential “bottom line”. The Wingz Lessons Learned: 1. Wingz: "From a growth perspective however I'm satisfied, proud of what I've done and how I'm progressing." Response: This is a good temporary place to “arrive”, we all need these little “successes” along the way, but don’t sit too long at this destination, or you’ll miss the next essential ride…just coming around the bend. 2. Wingz: "You need to develop an edge and really feel it working, go through the emotions of sabotaging it, adapting it, finding another edge and doing the same over and over again whilst still staying committed as other areas of your life are neglected". Response: Lawrence, this is the lesson you need to learn right now. Wingz “stuff” isn’t going to help you as much as you believe it will. Because what he eats will never make you poop. What you’re doing is tantamount to asking if you can borrow his trading shorts for a while, because your own are uncomfortable. That is not healthy for either of you, and just plain cheating yourself out of the real joys and satisfactions in this business. You need to start where you are, and with what you’ve got, and begin seeking out what you need. His PnL, method,...…etc.....aren’t the things you need. You need to engender the kind of self-confidence and self-assurance to move out to create your own! If you don’t know what you need; first “fix” the place where you currently are and what you're doing, then choose the place you want to go, get busy building yours, then ask if and when you need help and guidance to get there. That's the process. 3. Wingz: "Now I really enjoy the process of learning about new markets, trying new strategies and getting the satisfaction of being a step ahead. But it's taken a lot of pain to get here. I like the buzz that I get when I read a good book about trading and can see something potentially working, trying it out in the market with small size to see if I can add it to my repertoire." Response: Now you’re starting “cooking with grease”! I’ll have some of that there fried chicken if you don’t mind! 4. Wingz: "I guess thinking about it now, I've learnt to compartmentalize. I'm a complete robot with stuff that works for me, ramping up the size but I still get a rush and thrill with stuff I'm trying out and building. I still make stupid punts without a provable edge for fun, but with tiny size and as more of a way to prevent it getting into my consistent trading." Response: "Stupid Punts"....Hey that is part of the process!!! Embrace it! Rejoice in it! Hey! Here comes the next ride…don’t miss it! 5. Wingz: "What I enjoy the most is the building and creation aspects of trading, the process, but its draining having to get back up all the time. It's just a constant battle, but looking back every now and then to see what you've accomplished is pretty fulfilling." Response: The “constant battle” will cease, when you accept it as one part of the two sided coin of life. You cannot have one side of the coin without the other, doesn't that make sense? The rewards are there for anyone willing to accept the challenge to mind and spirit,.....and do the necessary work! 6. Wingz: "For a cherry on the top - I'm social again, going out most weekends - it seems the vast black hole abyss has finally gone from my life. Just be aware that truly committing to this journey and doing it well will rob you of a few years of genuine human interaction and life as you slowly assimilate into a profitable trading robot." Response: Yes! Take in all that you think that you need to take in at the time, because these too are going to change in time! It’s part of the growth process! But please....Trading Robot?...…indeed…....smile. The Wingz “Future” Lessons to be Learned: 1. Wingz: "It's been a shit journey - and looking back at some of the posts I made in this thread I was basically under the impression that I could dance around with flowers in my hands and the power of positive belief could get me through anything easily - load of bollocks". Response: Think about it for just a moment, if it was truly a “shit journey” you wouldn’t be in the “light of wisdom and experience” that you are experiencing right now......would you??? I wouldn’t call it “shit journey”, I call it sort of a “fertilizer journey” for the future growth and nourishment of something better.......smile. 2. Wingz: "Trading when done well isn't fun, it's not satisfying in the moment, it's a means to an end." Response: Depends on what you call the “it”. If it’s the desired outcomes you’re seeking, then you will never have any sense of control, because the outcomes are somewhat out of your control in the game. If it’s the “Process” then you will always be in control of this. Change your perspective/belief and you can change your life. 3. Wingz: "If I start enjoying it I get overconfident and lose money." Response: Again, depends on what you call the “it”. If it’s the "Outcomes", you will never have a sense of control. If it’s the “Process” you will always be in control. Change your perspective. 4. Wingz: "It's boring and I have a continual feeling of apathy these days for trades that I'm in, I just don't care. It's the only way I've found to not become emotionally invested and steadily become accustomed to huge p/l swings without thinking about the money they represent." Response: Again, depends on what you call the “it”. If it’s the "Outcomes", you will never have a sense of control. If it’s the “Process” you will always be in control. Change your perspective. And yes....repetition is the Mother of Habit.....get in the Habit. Guys,....Hope this helps. Wingz...if you believe I got it wrong here,...please let me know where. I'm never afraid to learn.....anymore. KDASFTG
KDASFTG What a brilliant and thoughtful response - I can't thank you enough for taking the time and effort to go over my post and offer so much value. It’s going to take some reflection and won’t be an easy task to properly respond to your post. I actually wrote the second part of the post a couple of months ago so I can be a little more objective in looking over what I wrote. Let me start by clarifying a few things in my head, by trying to build on what I wrote. My post combined with your insights KDASFTG, can broadly be split up into two categories, the process of building edges and the process of building yourself so you can trade them and develop more edges - Process of building an edge I think I went over the emotional basics of this reasonably well in my post, I’ll post an example of some of the processes I go through to build edges, but you have to be able to trade and adapt your edge consistently and that’s the real journey. Finding something with an edge is relatively easy in comparison. Process of building myself In order for me to transition to where I am now I had to get rid of bad habits and completely shift my style of trading, almost starting from scratch. I had a pretty bad year in 2014, I kept trying to fight what was a losing battle with the style I was trading. I had to burn the bridges and move into a new style. In doing this I didn’t want to bring over any excess emotions or crazy ideas and wanted to start from scratch building a new edge. So I started out small, and built up my size as my edge was confirmed. It’s almost like starting a new relationship, you bring over a little baggage but you also bring over your experience, I had to completely shift my style (find a very different kind of girl). In doing so I fully focused on the process of building an edge and getting accustomed to completely new emotions. I might have temporarily turn off a few things in that process, leaving with the impression that I had become a robot, but I’m starting to see differently now. Moving on KDASFTG - In your ‘Future’ lessons section you’ve rightfully spotted some of the remnants (that evidently still remain) of that transition period. The language I used sounds pretty dire! To a certain extent I was writing to my ‘old’ self as a reminder to push forward. I was under the impression that my results were due to apathy, I now think that the ‘robot’ phase was more of a cleaning out phase and just what I needed at the time so I could give new behaviours a chance to develop and remove unwanted old ones. It was just the ‘fertilizer’ period . The result of which is a good edge in the markets and the confidence in my ability to take a process based approach and keep adapting. It’s not the apathy that brought me the results I have now, it’s the commitment to going through the process of building an edge – the apathy just gave my mind a break and let me get on with it. I feel like I’ve taken another step towards process thinking and thank you very much for clarifying a few points in my head and providing a framework to develop from. Next of course comes the discussion about just how difficult it really is to have a process based approach, removing ego and living in the present. Further down the path we’re essentially talking about different stages of some form of enlightenment. It sounds like you’ve been on this journey for a while. Exciting times ahead!
Developing an edge I'll copy over a few things from my journal that describe the process of developing an edge. I write to myself every so often to get thoughts out of my head to properly analyse and review later. Here are a few bits and bobs that might be relevant. It's the continual refinement of ideas and improving that keeps me focused on what really matters in my trading and less focused on the emotional aspects - I get my validation from improving my approach more than random P/L fluctuations. I often write down lists of things I've done well with and areas I need to improve, here's an example from a few months ago - Areas developed Dealing with large P/L swings Holding offside and onside positions with indifference Psychological P/L Hedging through diversifying into multiple FLY and COMBO strategies Patience Basics of Averaging Use of leading/lagging correlated spreads Momentum based legging into FLYS Areas to work on Understanding my positions on the matrix and alternative more efficient entry/exits – (currently looking at each position independently) Entry efficiency – scaling in appropriately at good levels Exit efficiency – leaving money on the table, execution errors or emotions Trade some new markets, such as WTI and Cocoa Continue increasing size Average more at better prices given a mean reversion trade Improve flip and reverse trades, trade ranges from both sides more effectively Study into automating setups with an algorithm Set targets and goals for trading and work towards them Increase turnover – trade more Find more spread permutations that not currently looking at, 2v2 condors, 2 vs 6 month A small section of my FLY Guide - which is essentially a short book I'm writing for myself with things I've noticed or developed - I find that writing something that I would call a 'book' pushes me to improve the quality of what I say and focuses my thoughts. I look back on what I've written when times are tough in the markets to tap back into the clarity of thought I had when writing it Intro This is a guide I'm continually adding to and adapting to as I improve my FLY trading. Inherent spread market edge There are two main inherent edges in the spread market for an intraday trader. Providing liquidity for price insensitive traders (intraday, 'execution' edge), fractions of a tick but sometimes multiple ticks. i.e a price insensitive or forced player needs to get out of a position and they're either providing a free onside position to do it or just throwing out free money that can immediately be hedged or taken for a profit. Providing liquidity for longer term hedgers/traders indirectly in the outright markets that cause spread relationships to diverge from the mean range temporarily as their volume is absorbed. To return to more 'normal' or fundamental levels over time. I think the second edge is more significant in my opinion as it's more scalable and you get to pick your levels rather than reacting in the moment to other traders in the middle of the range. In the spread markets it generally doesn't matter who you're against as they usually aren't in the market for the same reasons. A spread is a market within a market, FLYs are another market within that and any inventive combinations or permutations are even more insulated from competition and capable of providing a low risk - trader defined set of profitable strategies. Different FLY trade examples Relative value 6*1Month vs 1*6Month 3*1Month vs 1*3Month Etc.. FLYs 1month vs 1month 3month vs 3month 6month vs 6month Condors Flys in non-consecutive months Equivalently putting on multiple flys Basic strategy The basic strategy given the above inherent edge is a ranging strategy, buy low sell high. Ranges generally offer 80% probability trades. The risk can be equal to reward, but given the extreme ranging properties of the spreads, a larger edge is offered when the risk is higher than the reward and averaging comes into play. Developing Edges Historic spread ranges The Brent 1 month FLYs generally range +/- 10 from 0. Three months usually 30 ticks or so, but more open to higher standard deviation moves. Support and resistance magnets When price spikes within the range and rushes to the highs or lows, the S&R acts as a magnet, this sets up a trade with a good probability of coming back into the range and the breakout failing. On the flip side if price stays at highs or lows for an extended time and is edging out of the range it is more likely to be a successful breakout. Mini spike - elastic snap band effect These occur when a price insensitive or desperate trader needs to get out of a position. They will distort the price relationships in some way. Most of the time the market will correct this inefficiency relatively quickly, it's someone 'giving away edge'. Worth going against in most cases intraday - the inherent edge #1. Breakout pullbacks Most of the time when a range breaks out it will test its initial breakout point and bounce from there offering up the potential for a scratch. The psychology of this is pretty simple, anyone trading against the breakout sees a scratch made available and exits making the bounce aggressive and the breakout a self-fulfilling prophecy. Also there's the possibility to trade the break of the range and reverse the initial range trade with a measured move target equal to the previous range. Measured moves Almost every time a range has genuinely broken out it will make a measured move equal to the range it broke out from. I see this ALL the time. For example if the clear range is between 0 and 10s, if 0s are broken to the downside then it's likely that -10s will at some point be tested. This offers high edge averaging points and provides a bit more structure to an offside trade and clarity for the areas to average positions with the highest edge. This makes more sense than averaging excessively at every price and getting squeezed out of positions. Of course it's never this clean in practice and can get a little messy when the break extends the measured move. It's generally less likely in the spread markets to have a double measured move given the mean reversion properties. This can however be negated in the case of a fundamental move or in FLYs that are closer to expiry. Correlated leading/lagging spread indicators If the front 3 month FLY SEPDECMAR has broken to the upside, then the next consecutive FLY DECMARJUN is correlated and likely to also break up - at some point - its lagging while the front FLY leads the charge. ------------------------------------ What I've written will probably have no relevance to most people reading it but its the continual process of going through and refining my ideas that I think gives me an edge. It's not like I have any secrets that no one else knows, I just find what works for me and continually try to improve it.
Greetings Again Wingz, I’m glad to see that you’re coming to consciousness on the true nature of trading and the market, and well on your path to moving out smartly in pursuit of your dream and chosen endeavor. But let me help you clarify some things just a bit more before you move out to “Reinvent the Wheel”,…so to speak. You said: "My post combined with your insights KDASFTG, can broadly be split up into two categories, the process of building edges and the process of building yourself so you can trade them and develop more edges." 1. Process of building an edge 2. Process of building myself That's good! You’re close on these processes but let me help to “take you home” on these two concepts. Its well that you have correctly identified these areas as critical to success, but you have not as yet accurately definitized the concepts. From your words thus far its obvious that you’ve made one hell of a life changing realization about the market, and your role in it as a trader. I might add you’re perceptions are very close to being on target…however,.....Sorry....no cigar just yet…smile. The formal name of the concept you have discovered in #2 is called Mental Analysis (MA). First coined by Douglas in his book - Trading in the Zone. Technical Analysis (TA) is one side of the coin, and Mental Analysis is the other side of the coin. So I would revise your two processes to now look like this: 1. Process of building my Technical Analysis “Edge”: In Technical Analysis, you identify the TRADING PATTERNS, define the TRADE RISK, and determine when to TAKE PROFITS…..that’s just about the limits of your TA. You've already learned over the years the hard way, the essential critical lesson that,......there is No Magic in TA! 2. Process of building my Mental Analysis “Skills & Mindset”: Mental Analysis is an essential skill set, and just as viable and essential as your TA skills. The exception is that MA has at its core a set of certain “BELIEFS” and “THINKING SKILLS” that must be mastered before “CONSISTENCY IN EXECUTION” can be achieved. Mental Analysis is the topic area but the specific subset within that topic area you’re now focusing upon is called “Trade Execution”. Mental Analysis is best defined as; The Essential Skills and Mindset of Trade Execution. However, you never hear the “Old Trading Pro’s” talking that much about the specific topic of Mental Analysis or Trade Execution directly. That’s because in many cases, in these veteran market survivors, those hard won SKILL SETS, and wisdom born of pain has long since gone into the “Unconscious Competent” realm of their trading.They are no longer "conscious" of doing the things, but they do "them" consistently now. That is also why some of the Old Pro’s can’t exactly explain what it is that they do that makes them successful. You oftimes hear them say things like; “Stick with the Discipline”, “Don't Second Guess your Signals”, “Trade Your Plan”, “Keep Losses Small”…etc. They learned these “Trading Skills” and “Trading Mind Sets”, through their own “Pass of Pain”……they just have a hard time explaining how its done to someone else. I‘ll wager that no one has ever told you these things before! That's likely because most traders are caught trapped in a vicious Technical Analysis cycle of Pain and Frustration. You see, TA is only one side of the Market Mastery Coin, but most traders never survive long enough to learn that MA is the other! Mental Analysis is a SKILL SET and just as viable and essential as your TA SKILLS. MA has at its core a set of certain “BELIEFS” and “THINKING SKILLS” that must be mastered before the “CONSISTENCY” that leads to success can be achieved. Now today,....and all on your own,…and through your very own “Personal Pass of Pain”, you’ve discovered this market understanding for yourself. You’ve learned that there is something more and just as essential to Trading and Market success then just this thing called TA. With all this in mind, it’s now that much easier to see and understand why success eluded you in the past? Success in the markets is not granted as some special gift to a chosen few. It is available to anyone who does and works on the right kinds of things, is open to change, and is willing to do the required work. Wingz Baby…..I’d say you’re well on your way…..just a little singed, scarred, and burnt…but eager to move beyond the pain. If you were a Stock,…I’d buy some shares now, you’re coming off a “Long-Term Spike Low” with "Damn Good Prospects and Good Momentum". Hope this helps on your Journey. KDASFTG You said: “It sounds like you’ve been on this journey for a while”. Response: You bet your natural ass…got my own set of Scars, Burns, and Missing Chunks of My Ass to prove it!....But I'm still standing, doing fine, smiling.....and enjoying the PROCESS.
The week so far has been a massively thought provoking and exciting journey - I've probably maniacally written around 5000 words, staying up until 4am last night. It was initially with the intention of writing up a new post (and evidently still is) but I kept developing insights and looking at myself in a new perspective when I tried to translate what I was writing into something others would understand reading. The result of which is a whole new level of understanding for me and I'm grateful that some of the posters and the platform of this forum has helped me work those insights out of myself. Writing a journal for yourself is one thing but doing it in a public way with the intention of writing something intelligible really forces you to truly comprehend what might otherwise just remain a fleeting thought in your head in order to make sense to an audience. This has been the most intense and potentially memorable week trading in my entire career and I've recorded my observations, in detail. I'll edit it down tomorrow. I'm excited. Thanks again KDASFTG.