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Well, I wouldn't recommend or advise a client to trade the S&P 500 versus the Nymex CL contract as a spread position. I would trade February CL versus March CL, or HO vs. CL, or RBOB vs. CL, or Brent Crude vs. CL, but not CL vs. ES. Just because instruments are correlated does not...

"When I back tested pairs, if they don't move rapidly, they converge very well. But they move rapidly, they diverge for very long time." I'm not sure what you mean by the term 'moving rapidly'; if you are trading fundamentally and statistically correlated instruments (with >93% positive...

Well, the message-to-fill ratio varies between exchanges, and each exchange website will have a circular or member notice detailing their latest policy. Usually it is around 18:1. They also change the policy sometimes between products to promote liquidity, and some exchanges designate...

If you trade without a stop, does that mean you never take a loss? In other words, even if a trader does not have a 'stop', he/she has a pain threshold - 'uncle' point or whatever the terminology. And by definition, is that 'pain threshold' a dynamic stop based upon capital preservation...

I actually clear them both, no problems for me. But as I mentioned in a previous post, you do have to make sure your FCM's Risk Manager is on board and can enable your execution platform to recognize the overnight SPAN margin credit offsets on an intraday basis. It is also somewhat sensitive...

Dan, I really like the exchange-supported implied spread markets for anything they are offered in. The legging risk contains slippage variables that can defeat the entire purpose of spread trading as a strategy. The 'challenge' with trading outrights based upon spread correlations - which...

Well, the ability to leverage a futures spread is not my opinion - just fact. Look at the performance bond margin credits you get for inter and intra-commodity spreads in each exchange's margin rates which are posted on their websites. If you can select a spread whose price action is...

For the Heating Oil crack I am specifically looking at the HDD forward curve and the short-term Nat Gas forward curve. Then, of course, the API/DoE data for the fundamental supply component.

Thanks to the OP and all the participants to this informative and civil discourse.

If you are spread trading, make sure that the FCM risk manager has set up your account correctly for the intra and intercommodity SPAN margin credits - it makes a little bit of capital go a long, long way and you can carry them days and weeks with the correct margin offsets. For example, you...

"The essence being that we both treat the trade as being dynamic by nature." Fair enough. The big piece for us at least is that the stop and the profit target are set when the trade is entered. Personally (and this is just me), I can't imagine putting on a trade and not having a clear...

Not exactly. When we enter a trade, we also set a resting GTC order for the profit level, and enter a Stop-loss limit order (should look like 'SL' in your order ticket DOM window) which is also GTC. Those levels are determined by among other things the volatility of the product we are trading...

"so we are to gather from your post that 100k per contract is the way to trade the ES" FWIW, we set the profit target and stop/loss level when we enter a trade. Some of my more experienced clients use trailing stops to squeeze winners, and some of my clients trade size and will scale into...

Which means in a couple of years 98% of the practicing U.S. doctors will be first generation immigrants willing to work for $45K per year. We did it to manufacturing and IT, why not blow out health care?

Nobody wants to mention the most applicable and profitable variable: the timeframe (s) you choose to sample. This has been done ad nauseum - look at timeframes for real traction.

The only reason I have my banner configured as described was to piss off the trolls. Healthy discourse about price action analysis and interpretation will be debated until the end of time - I have no final say on the topic. What's more, there are many, many legitimate means and methodologies...

I second that - not secret, but "closed". OTC energy in the late 90's and mid-2000's for me. Turret system with live direct lines to brokers - and most importantly [incredibly], IMs with an AOL account. Firms like Garban/ICAP and Prebon Yamane do most of their business like this. It...

"Give your head a shake, nobody that makes any cash just stepped into this job and made millions without help from others." You are completely correct in that regard, no arguement from me at least. My only point was that I have never seen an individual carry a multitude of others on...

It took me eight years and eight months to respond to my first JH post, but for obvious reasons (to me, at least) that one struck me as a perversion beyond compare. And I will not respond to his follow-up post on this in order to preserve logic in the universe. ASSININE. ACSCININE...

Oh hell yes. Stocks are arbed to death with the pairs (stat arb), futures a bit more opportunity in terms of capital efficiency and profit potential. The performance bond requirement on a tier 3 Eurodollar futures spread is less than $600 all in total. Swing trading futures spreads (pairs)...