Like Bone i am a former Floor Trader in the Bonds at the CBOT. And like Bone I find it much easier to "scalp" the index's. I agree with Dr.S, off the floor bond trading takes patience and room. While a large buy or sell program in stocks may be a 100 million dollars, the pricing of a corporate offering (hedged in Treasury futures) may be a billion dollars. Thus a 32nd comes awfully cheap to size institutional players. They are often getting an sixteenth of a point edge on a new issuance, or a MBS, or strip ect. Thus anything these traders can take out within 4 ticks of their cost point is gravy. That's why scalping is so futile. You are litrerally at the mercy of every big random order that enters the arena. In Bond's the swing's the thing!
Bond Futures
- Thread starter spreadem
- Start date
Like Bone i am a former Floor Trader in the Bonds at the CBOT. And like Bone I find it much easier to "scalp" the index's. I agree with Dr.S, off the floor bond trading takes patience and room. While a large buy or sell program in stocks may be a 100 million dollars, the pricing of a corporate offering (hedged in Treasury futures) may be a billion dollars. Thus a 32nd comes awfully cheap to size institutional players. They are often getting an sixteenth of a point edge on a new issuance, or a MBS, or strip ect. Thus anything these traders can take out within 4 ticks of their cost point is gravy. That's why scalping is so futile. You are litrerally at the mercy of every big random order that enters the arena. In Bond's the swing's the thing!
(hi SethArb)
I read with a lot of interest this thread.
It seems several are trying bonds coming from other places and find them quite challenging.
It's funny because I find bonds easier than let's say, ES. However, you can't apply the daytrading styles used in ES in the bonds futs.
I use a market making style and my time trading NYSE stocks with that style helped a lot during the transition.
bonds are trendier than other markets imho. They are in the same family than currencies, good trending markets. Although that does not help daytraders much. For positions they are great. In a long term portfolio, the way up as well as the down in bonds were very profitable here.
so trading them long term (multi months positions) and/or market making style are two very profitable ways.
both with a better profile risk than ES or NQ imho. but that's me.
don't be fooled by the margin though. recently the bonds were in a bubble and now in the nasty correction after it, so we have increased volatility.
if you load your margin, eventually you will be hurt (or liquidated anyway).
in the day to day, I don't care about economics (besides reports time obviously ! lol ). in the longer time frame, I agree with the posters in this thread. I think we are witnessing a very important time of this bear market we are in (stocks).
and I will add that I see big trouble ahead with the occasional relief. that's actually why I left stocks, although it was going well.
volatility decreased as well as volume (it improved a bit since, but I believe it's temporary).
it will be more and more difficult to make serious money with them imo. possible of course, but more difficult. other markets are 'easier' and I don't see the necessity to work in a difficult area just for the challenge of it, or because I traded that before.
for once I disagree with Pabst.
Or maybe I do agree
scalping is difficult. however with my market making model (which some also call scalping, since I am not a real market maker.. ) I have no problem at all trading bonds futs very very short term.
We also agree that maybe 'traditional' tricks won't work there.
and anyway, very few are trading the way I do, so that validates Pabst's statement. we agree afterall.. a few guys doing it, don't make a majority and don't make a trend.
I read with a lot of interest this thread.
It seems several are trying bonds coming from other places and find them quite challenging.
It's funny because I find bonds easier than let's say, ES. However, you can't apply the daytrading styles used in ES in the bonds futs.
I use a market making style and my time trading NYSE stocks with that style helped a lot during the transition.
bonds are trendier than other markets imho. They are in the same family than currencies, good trending markets. Although that does not help daytraders much. For positions they are great. In a long term portfolio, the way up as well as the down in bonds were very profitable here.
so trading them long term (multi months positions) and/or market making style are two very profitable ways.
both with a better profile risk than ES or NQ imho. but that's me.
don't be fooled by the margin though. recently the bonds were in a bubble and now in the nasty correction after it, so we have increased volatility.
if you load your margin, eventually you will be hurt (or liquidated anyway).
in the day to day, I don't care about economics (besides reports time obviously ! lol ). in the longer time frame, I agree with the posters in this thread. I think we are witnessing a very important time of this bear market we are in (stocks).
and I will add that I see big trouble ahead with the occasional relief. that's actually why I left stocks, although it was going well.
volatility decreased as well as volume (it improved a bit since, but I believe it's temporary).
it will be more and more difficult to make serious money with them imo. possible of course, but more difficult. other markets are 'easier' and I don't see the necessity to work in a difficult area just for the challenge of it, or because I traded that before.
for once I disagree with Pabst.
Or maybe I do agree
scalping is difficult. however with my market making model (which some also call scalping, since I am not a real market maker.. ) I have no problem at all trading bonds futs very very short term.We also agree that maybe 'traditional' tricks won't work there.
and anyway, very few are trading the way I do, so that validates Pabst's statement. we agree afterall.. a few guys doing it, don't make a majority and don't make a trend.
Dr, Thanks for your reply.
Yes, Sundays are made for BBQ, I hope you invited Arnold the future governor of your fine state. I know living in the NE, I am always California dreaming during the winter. Alas, if I had caught most of the 16 point bond move, it should have been enough to retire in CA. unfortunately all I made was 21 ticks...so much for trying to swing trade the dreaded bonds...
I think your self developed protocols seem to serve you well. Its that long term approach of looking at marco factors. I agree with you and the moderator, bonds behave somewhat like the currencies, another mkt I have trouble with...
I as a system trader have not made any good money in the bond mkt. The only profitable trading I have done is option writes in the 10 yr t-notes. I think while trading bonds/notes looking at anything less that 60 minute charts doesn't work.
All the best.
