Yes, an offshore setup somewhere in the Seychelles like Tickmill makes me feel somewhat uneasy. I thought of going with Australia-based Pepperstone Financial which is a large regulated firm. One must diversify for sure. Which MetaTrader4 Forex brokers look reliable to you? I just need high leverage, so it must be outside the US.
500%+ in one year on autopilot - call for beta testers!
- Thread starter babyjake1961
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Was he trading the futures or individual stocks ?
It's a very interesting strategy...albeit not foolproof as when these events occur, the market often paints a "zig-zag" of price action as it attempts to find the true value based on the event. I wonder how he handled that ?
Slippage is another big issue with straddle trading. Sharp market moves signal evaporating liquidity. One might end up getting filled at a completely different quote than planned. Needless to say, big "black swans" can lead to a margin call. One recent example I can think of was the sudden Swiss Franc's un-pegging from the Euro by the Swiss National Bank on January 15 last year - after a promise by the SNB to keep the peg for the time being just a week before the event. I'm sure Mr. Draghi or Madam Yellen can deliver even bigger surprises when the time comes. That's why I designed my bot to trade the post-factum price momentum instead of straddle trading.
I wonder if it's possible to employe options to avoid the margin call problem ?
In other words, all you lose is your premium.
However, I have no experience with the CBOE and how fast they can react even with high liquidity ETF's like the QQQs. Do they even support stop limit orders ?
So in this scenario, I have a long put and a long call just before the event.
Then my bot attempts to sell out of one of the two positions.
My intuition tells me I'd lose the same amount on the one side as I made on the other.....just because options are not as fluid as the futures.
In other words, all you lose is your premium.
However, I have no experience with the CBOE and how fast they can react even with high liquidity ETF's like the QQQs. Do they even support stop limit orders ?
So in this scenario, I have a long put and a long call just before the event.
Then my bot attempts to sell out of one of the two positions.
My intuition tells me I'd lose the same amount on the one side as I made on the other.....just because options are not as fluid as the futures.
You will be additionally charged a commission by your brokerage, taking you net negative.
He coded an API that interfaced with brokerage. This was I think 2007, he walked away with enough to look for higher liquidity providers. At times he went directional too since immediate entry and further progression in the direction of entry occurred. Than as price retraced back hit trailing stop.
All he traded was news events.
All he traded was news events.
By "news events" I assume you mean scheduled data releases and press-conferences. My bot also happens to trade them most of the time - simply because most sharp market moves with a strong price momentum occur in the aftermath of those events. Also, it covers all the "black swans" that one can't trade with a straddle bot and which are often the most profitable with this approach.
He had some huge wins and some moderate losses it worked most of the time. I think in 2007 he was ahead of the curve.
Does he still do straddle trading now? If so, with what brokerages?
not sure lost touch with him,..but he stayed away from bucket shops.. he was looking at much much larger liquidity providers that institutions use.
http://www.ebs.com/about-us.aspx
I think this was one of them.