CL Dec Spreads
- Thread starter maninjapan
- Start date
cdcaveman is one of the few bloggers I respect on ET and he knows a lot more about the fundamental aspects of the energy curves then anyone I've come across on here.
Spreads of spreads is the way to go. Don't get too caught up in the curve as a whole because that's not where the money is for individual traders or even prop traders for that matter. Flys, condors, double flys are where you can compete. Bone knows these very well and knows a lot about spreads but I've seen him post that clients can do the strategies with $20k accounts and not that you cant it is just very difficult to do as a profession with that kind of account size. I personally do these strategies in multiple markets and can vouch for what it takes from a monetary side to get involved on a professional level.
Here is a list of monthly cost:
1) TT X_Trader Pro or CQG IC = $1200-$1400/mo (most people us TT to execute and CQG for charts which will cost you about $1800/mo)
2) Lease a NYMEX seat = $900/mo + one time fee
3) Cheap broker fees = (probably need to get them down to at least .20 a side)
4) Server side execution. I mean access to a server in Aurora (this can vary depending on what you want but you are looking at bare minimum $300/mo + upfront costs)
5) Good set up with at least 4-6 monitors ($3k-$6K)
So you're looking at probably close to $3,500 a month of overhead costs before you even place a trade and that's not including a place to trade (not including set up costs)
On top of this you need to probably drop another $20k-$40k in losing trades and 4-8 months of trading and watching the curve move before you get the hang of things, maybe longer if you don't have any experience or good guidance.
I'm not saying that this is not a good way to trade but like we all know, learning how to trade comes at a price and that is either time or money but usually both. I was just lucky to find someone who would pay me for my time to learn this... even though it was peanuts!
PM me if you have any specific questions
I have big swinging dick pro trader clients with $4M New Edge accounts and I have clients with $15K Crossland accounts who work full time jobs or run businesses during the day - so please don't paint me as a snake oiler. I never claimed that my smaller account clients were deriving all of their income from trading ( aka a "profession" ).
I have a client on the Goldman Sachs Singapore Energy Desk, and I have a client in Texas with a swimming pool maintenance business. My clientele profile runs a very broad spectrum.
I am simply a one-man crusade saying that it probably makes more sense for a smaller speculator to use exchange supported futures spreads to trade than to take flat price singular instrument bets.
Having said all that, I do have a client who is a full time professional engineer, and who started with a $25K Advantage account in 2010, and who is now seriously considering taking his trading full time.
There is no singularly correct way to trade spreads.
I am, however, saying that it is absolutely a herculean feat for someone to think that he can scalp for a tic manually with a mouse and make a go of it. I would like to see more smaller speculators spread trade.
And I used to trade 500K RTs a month spread trading here in Chicago, BTW. Ask David Ellis.
I have a client on the Goldman Sachs Singapore Energy Desk, and I have a client in Texas with a swimming pool maintenance business. My clientele profile runs a very broad spectrum.
I am simply a one-man crusade saying that it probably makes more sense for a smaller speculator to use exchange supported futures spreads to trade than to take flat price singular instrument bets.
Having said all that, I do have a client who is a full time professional engineer, and who started with a $25K Advantage account in 2010, and who is now seriously considering taking his trading full time.
There is no singularly correct way to trade spreads.
I am, however, saying that it is absolutely a herculean feat for someone to think that he can scalp for a tic manually with a mouse and make a go of it. I would like to see more smaller speculators spread trade.
And I used to trade 500K RTs a month spread trading here in Chicago, BTW. Ask David Ellis.
I don't paint you as a snake oiler.. although i could care less if you are.... I sometimes come to the forum to hear myself talk against other peoples ideas to see if i make sense to myself against their points.. even when i'm not posting i'm doing that.. Although i can say one thing for sure no one is handing out help for free out there.. you either pay your dues, make a good friend, or pay consideration from someone who knows... I can't imagine mentoring if i had the capacity to trade a 500k account successfully.. but hey not everyone is like me..
Well - pay for TT, a Bloomberg, CQG, seat leases, and a desk fee each month. Then, pay five cents overage on each trade as a house haircut. Then, split your profit 50/50 with the firm. Then, with what's left, get paid on a W-2 so you get taxed at ordinary income rates ( not blended capital gains ).
Realize that TT Pro isn't the answer - markets are getting more efficient and automated. Price out ORC and RTS at $19K per month. Price out the ECN you will need as well.
At some point in time you say: "fuck it, I'll just trade for myself". Swing trade smaller size and stay with a trade much longer. Decide to take on some consulting clients from time-to-time so that you can distract yourself in a constructive way and not do something impulsive and stupid and trade a gajillion contracts a day like you used to. Works for me.
Couldn't agree more! Furthermore, if I'd been doing this for 20+ years and posted statements of me making $500k in just one account I don't think I would waste a year of my time teaching someone who paid me $7500 or posting an advertisement for my services under every post that I have here on ET.
Bone I don't think you sell snake oil at all! Spreading spreads is a great strategy! TED spreads are great! Spreading power vs. NG is okay if you know what you're doing. These aren't any secrete. You can look on the CME website and find information on how to trade any of these strategies.
Getting good at trading them involves time behind the seat and a willingness to actually spend the time to research and understand what you are doing and why you are doing it.
If you have a track record I can get you a much better deal out here in Chicago.
50/50 to start with 5% increase for every $250k you do (max 70%), all business expenses top lined (TT, CQG, Bloomberg... whatever you need to make money) + free coffee in the office! After a getting to know the team you will be able to trade from home. You get 1099'd.
Interested? Seriously? pm me
Quit politely bashing me one post and then trying to hustle me the next. I live in Chicago and can get that action you describe all day long. Not interested. Been there, done that. DE Trading and Ronin. And for stupid size.
I want to carry multiple positions longer term for points and not doink tics all day long for size and be told to get flat before close.
The shorter timeframe edges always disappear on you - sometimes much sooner than later.
Oh, and some of my clients are very good traders ( before they hire me ) and I do manage to pick up some very good ideas from them. I like the consulting aspect. There are some very good traders here on ET who do not bother posting. And who can blame them.