Specially in the last few weeks the price action is terrible. Everytime a price goes bid or offered, there is already more then 2000 contracts there; and then you see massive size being traded at one price and it won't go anywhere; like today 116.25 traded about 25,000 contracts in about 5 mins before it finally went somewhere. It has to be the machines!! Damn trading systems!!
I thought it was just me. I feel that since the beginning of March there has been a major change in the way the Bund is trading. You get these periods where its trading 2/3k in each 3 minute period...tick up and down 2 maybe 3 ticks then it will just start trading bundles at one price...like 6 to 8k each 3 minutes until the price does about 25k. Its amazing that out of thin air a matched buyer and seller want to trade that much size and only few k either side. Its got me stumped, and has wrecked my trading this month.
Anytime.. the pleasure will be all mine Seriously now, what edge do you have to trade the book/tape? It's the battle of the machines, all about speed.
Not much of one anymore it seems. Been trading for 8 years, had a spell of 5 years without a down month, but its all going a bit wrong now. Adapt or die I know, but old habits are hard to break.
i think the problem we all have and i assumming 'we all have' are prop traders based at arcardes or trading through arcardes is the following: i trade mainly euribor and eurex or euribor against eurex. my leg up rate and execution has got a lot worse in the last month or so. i was getting legged on 3 out of 10 trades now its more like 7 out of 10. when i am legged im not just a tick away from the market which is worth the risk im 2 or 3 ticks away from the market. now i am at a new arcarde set up with supposed decent hardware and connectivity etc etc and they dont understand why im having the problems i am. the reason for this is that the competitors for us like black box systems,grey box systems, hedge funds and institutions etc are continually evolving their technology and connectivity on a daily basis spending fortunes in the process. the key points are that the smarter ones have their equipment right next to the exchanges and they do this by renting space next door. rental premiums are trading at a high around exchanges purely for this reason alone. they have such low trading fees its incredible. the exchanges are bending over backwards to slash the fees for these type of players because they do the most volume. one black box fund i know of can scratch 75% of all trades. they have the fastest execution out there. when you shout missed it those guys dealt. these small millisecond changes are the differences between getting legged up and filled. one part of their dealing technique is profiling. the profile traders into various pools. one pool can be bobl shatz traders that take the other side of the spread. these systems can quickly analyse when a pool of traders are one way. they do this by getting the times and sales data from the exchanges.yes our trading information and process this backwards to work out who is doing what. this is just the tip of the iceberg. i dont even moan anymore about missing it or getting legged up i just accept that the market has moved way on. the arcade i work for are still under the impression they can compete in this market place with their systems. what a joke forget it . its time to face reality boys 2007 will be the hardest year for arcade traders and for the arcades. i predict a lot of people will not be doing this job at the end of the year. that is the reality of the situation like it or not.
That's a good reply THE-BEAKER. I understand it, and I can see it all happening. I think this all got worse with the new upgrade done by Eurex, which was designed to stimulate black-box and systems trading. While other systems can now connect to Eurex via 10 megs line, we are still on I think 4 megs, since we're still using TT X-trader 6 which is not compatible with the new 10meg lines. Like u said, every millisecond counts in this game, and machines can think, calculate, react faster and also have faster access then us! I also agree that 2007 will be a very difficult year for the prop business, but what we all have to think is that the markets are always moving and therefore there will be always opportunities to make money. Good luck!
A good observation. I suppose its inevitable really. Interestingly enough beaker I just read your American beauty post. I have been thinking a lot along those lines as well recently. As a trader you have to be able to see the broad trend and the one that is occurring in these markets and the effect on opportunity is undeniable. It really was a lot more 'fun' when you felt as if your price action actually influenced the price to a greater degree, and the subsequent human reactions of other participants. It really is like watching paint dry these days and you do just feel as if you are watching life pass you by. It will pick up, it always does, its just a lull, I keep getting told. It has a whole different feel to me this time though, like when you have a trade where all the signals tell you your right, but something else is telling you to get out, that inner voice of subconscious processing that often saves you an arm and a leg. Something I would like to be wrong about.