I agree manual spreading is on its way out against the machines but this is hardly a new shock forecast. Still plenty of good moves in the outrights. With the likes of Goldmans flagship hedge fund hosing cash there's still money on the floor to pick up for an outright trader. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8PI19Ra9_.g Bear in mind that the bond markets as a whole are trying to negotiate the interest rate cycle turn point. Back when Dusienberg finished cutting at the ECB the markets turned pony for a few months with lots of independent traders moaning it was the end of the game. This is exactly the same, central banks and paper are sitting on their hands waiting for a convincing argument. Slowly but surely and after a few false starts to be sure, we'll be back to big moves and clear directional trades. The market is at a neutral standpoint which is why we keep making a run one way only to see it reverse, sometimes several times. Get a good book, sit on your hands and don't dig yourself into a hole. Keep the faith As Wilde said "Consistency is the last refuge for the unimaginative"
i agree with you in principal on the interest rate cycle but i think your wrong on the profitable outlook. this is a whole different kettle of fish. whether the fed start cutting or not these markets will only get harder. FACT AS I HAVE NOT BEEN PROVED WRONG SO FAR. im under the impression the arcade market and prop traders are in a state of denial. all i ever here is next month things will pick up,next quarter will be better. NO IT WONT. this is the new market like it or not. its not about being a pessimist its about being a realist. Machines and black box systems will not go away they are here to stay. This is the same technological arguement that has taken place in every industry and the net result was the human lost out.
Well I just had my best quarter in 5 years. Quit whining and adapt your trading style. I have more faith in you than you do! Quit trading tactics that used to work and find a some new ones. The game changes every few weeks, you learn the rules and exploit it until some nerd rewrites the system and you learn it over again, it's what makes this job interesting. Pull your socks up, get out of spreading and have some faith in your own ability and adaptability! Lose this illusion you have that all money is in a one way stream from arcades into black boxes, there's plenty going the other way. Good luck, although I really don't think you need it. Just identify what's not working, stop doing it, try new strategies on small size and grow those which work. These are warning signs to me that you are not fluid in your thinking and openess of trading in a new way, these comments denote outright stubborness to me and a sense of "I quit." Take a look at yourself before you do some irrevesible damage to your trading account.
i agree with what some of what you have said. however i disagree about the whining element. there is nothing wrong with spreading. its a form of trading that has existed for a long while. it suits certain type of people. i trade outright in other products and trade larger size on spreads. the point i was trying to make and maybe i did not relate it well was that i dont have a problem with my positions going against me. i take a spread position not for a tick or two but with a view and will try to get 5,6,7, ticks from a spread. i never whinge when my positions lose or go against me and never have.i accept it as part of the job. what i object to is a system that is promoted as fair and a level playing field but clearly is not. i would say the market is now more corrupt in favour of bigger bro paying clients than it was on a floor based open outcry system. the point of screen based trading is that everybody would be equal on a level playing field and because of the reasons in my earlier post i now dispute this. as for trading i too am still making money as i have evolved as i always have done and will always do. but dont be naive. black box systems get more edges than me or you purely because of their size in volume, backing in dolllar terms, it expertise and execution of orders.
I agree with with Dogfish. Yes, it is difficult, but as I also mentioned before, the markets are moving and there will be always opportunities to make some money. There will be new black boxes that will take money from the black boxes that are dominating now, and we'll be in the middle grabbing some crumbs. Also a great thing about this job is that we can trade whenever we want to. We don't have to trade all the time, even everyday; I've cut the number of trades I do in a day, but when I do get in, it is when I have really high conviction and a bigger size. I do hope things get better so we can all make lots of money, but they can also get worse. Good luck to you all!
I concur with what you replied and yes I agree about the level playing field aspect too, I only mentioned whining because this thread was beginning to look like a Grumpy Old Men episode! I have never spreaded so could only pick up from your descriptions.
I have followed this thread with some interest, so I thought I would add my (limited) thoughts. I am a Bund/Bobl spreader of some 5 years experience. Although I found the 1st quarter of 2007 hard, my profits were about on target. However, this last fortnight has seen me ground to a halt and I am currently struggling. Hopefully this is a blip rather than the "beginning of the end" for my strategy. I find it interesting that spreaders are profiled and targeted. One of my current problems is that spreads that should be onside immediately cease being so, and I end up scratching them (often for them to revert to being onside). The same applies to decent fills in the bod/offer. I have to confess to being frustrated on occassion. I too am finding I am slower to hit or lift stuff. A couple of questions to those who are better connected : (1) I often see prints go through in size and the market do the opposite. Are people trading in-house? (2) Are some of the black boxes not paying the full 40 cents exchange fees? (3) Where has the flow gone from the Bobl - it hardly ever trades until its time to go bid/offered because of the Bund. Your views on the above would be much appreciated.