Considering Trading Treasury Bonds Futures

Doing a little research on hedge funds (CTAs/managed futures) might get you a little invested for now while you're still a lawyer. Seeing how other successful traders trade might help if you're new to trading.

I've been invested in multiple CTAs/managed futures for the past 15ish years with decent results. You need to know what to look for when doing your review or you'll get burned but it's similar to knowing how to review your own trading results. Number 1 on my list is maximum drawdown. If it's too high then I have no interest regardless of how good the returns are. If they don't control risk well, it's just a matter of time before the luck ends. Recovering from a sizable drawdown can take a looooong time if you should happen to get in shortly before a drawdown. Option writers can be dangerous unless they use protection (spreads/futures). I'm much more willing to give up return for smaller drawdowns. I'd also suggest getting into multiple programs to diversify. Better to split the money with multiple traders.

There are several websites where you can do the review of programs. Jokertrader listed one above. Here's another one I use.
https://www.iasg.com/en-us/managed-futures/performance

If you find something you think you like, I'd be interested in giving it a peak to let you know why I would/wouldn't consider investing. In the end though it's your money, just my opinion.
 
bonds are rather tradable especially those LT bonds.

take about US Ultra T bond. margin requirement is $4.7k.
and for Germany buxl , margin requirement is 5K eur.

not sure how much of $3m you plan to use for trading.
That amount is very high.


# lots you could trade is 1000.
so in one day, if you earn say 30 ticks, profit would be roughly 1000*300= > $300 K
similarly losses of 15 ticks would be roughly > $150K

But then,
It could be a way to reach financial freedom in just few months or perhaps weeks.

Happy trading !!
 
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dozu888 said:
I’d double like this if possible.

Why do people like to pick the highest hanging fruit. Quit $200/hour job and come day trade like them losers living in their moms basement.

Even in trading. Proven nobody can beat the qqq. Yet people want to sweat all day to scalp for 25 cents.
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Yeah seems absolutely stupid to start trading with 3MM. Pull some cash if you want to play the markets, but go get a financial advisor and lock in a nice consistent return so you can retire in your early 40s.

Too much money, not enough sense.
 
orderbookacolyte said:
I have been considering getting into trading treasury bond futures using depth of market/order book, but I am having some qualms about whether it is the right path.

I have a little over $3m and I am in my early 30s. I am a corporate lawyer (with lots of finance experience so I have a decent grasp of finance although not much experience with derivatives). But I don't want to stay in this field. But given my young age and the family we're starting (one kid), I can't just leave my job....I don't have enough money to essentially retire....I need to bring in some income. That is why I became interested in trading.

But I could just invest some money into a hedge fund or prop fund trading treasury bond futures using depth of market who are probably a lot better at it than I could ever be (OTOH the funds charge fees). There is also the question of whether that is the best return that I can get with that money. I have financial advisers and hopefully they are picking good investments and are more capable at doing so than I am.

So it really only makes sense for me to pursue trading treasury bond futures if I can reach the point of (i) making a pretty sizable amount of money each year (say $100k pre-tax) and (ii) making a pretty high ROI (so I make that $100k using a pretty small amount of capital...maybe $200k or even less if possible). I have no idea whether these things are realistic. I know it would take awhile for me to become good. And then I know that I would be up against algos. Personality wise I think I would be well suited to trading but I can kind of tell that it probably is not what I am looking for.
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I don't have enough money to essentially retire

I mean... you do. You absolutely do. Doesn't mean you should retire, or become a full time trader, but this is enough money to retire on. You probably shouldn't retire right now, but you can.

I'd make the following suggestion:

  • It's really difficult to make money consistently from trading, especially if you have never done it before. But with $3 million you probably don't have to. Assuming you can live on twice the US average household income (let's call it $100K) you only need to earn 3.3% in dividends or coupons. Your first step should be to invest, say, 90% of your liquid net worth in a diversified portfolio with roughly about 15% in bonds, the rest in stocks. This will provide you with 'coupon income' of close to $100K a year after taxes.
  • With the rest of the money you could think about starting to trade.
  • With your background as a corporate lawyer you might be better off using your skills, rather than competing in an arena where you know nothing and the odds are stacked against you (primarily because of leverage and costs). So consider trading a medium to long term, bottom up equity value type strategy where your ability to look at a balance sheet may be valuable. Diversify your portfolio between 5 to 10 stocks.
  • This would mean you could continue working, since such a strategy requires just a few hours a week which you can do at weekends. Whilst you are working, see if you can get your expenses down to $100K a year. Alternatively, try and keep your expenses frozen whilst your 'coupon income' gradually grows.
  • If there are profits: Invest half your trading profits in your 'coupon income' portfolio. Reinvest the rest in your trading portfolio.
  • If there aren't profits: Maybe this isn't for you. But if you have diversified you will still have capital to play with. Think of it as an expensive hobby. And you may get the hang of it, eventually.
  • Take up other hobbies. Spend more time with your family. Start to think about what you'd actually do if you did retire. Many people in high pressure jobs have no idea what they would do if they did retire.
  • When you get to the point where your 'coupon income' is greater than your expenses (factoring in any future changes such as college tuition), and you know how you would like to spend your time, then feel free to retire (or maybe take a sabbatical from your job).
  • Spending all day in front of a screen punting treasury futures isn't my idea of fun, and I would be surprised if it would be yours. Committing yourself to that future without trying it seems crazy.
  • Keep at the equity investing, if you want, but maybe allocate 20% of your 'trading capital' to futures trading. Keep your risk low and diversify your positions. Don't just trade a single contract; you should have the money to trade several asset classes. Maybe you will be able to use some of your skills from equity trading. Maybe you will be good at it. Maybe you will enjoy it. But if you don't, you won't have lost anything.

GAT

PS I retired when I was 39, so I know what I'm talking about.
 
Fund an account and take a day off and try it with one lots. Then take a week off.

With a large account you may be better off teaching yourself to invest. Take a subscription to seeking alpha and look at the newsletters available there.
 
1. Do buy&hold investing for long term.
2. Consider this portfolio: 50% gold, 50% TQQQ(3 X ETF for NDX). Hold them for long term.
For the past 20 years, this portfolio made about 40 times profit, which translates into 20% average annual profit. The idea is if we have a bull market, TQQQ will gain big.If we have a bear market, gold will gain more than TQQQ lose, therefore to protect your portfolio.
For example, during the 1999-2009 period, which were mostly bear market, and NDX was down,this portfolio profit about 2 times. During 2009-2019, we had a bull market,this portfolio profit about 20 times.
3. If you think this is too risky, then trading is 100 times riskier.
 
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bbpp said:
1. Do buy&hold investing for long term.
2. Consider this portfolio: 50% gold, 50% TQQQ(3 X ETF for NDX). Hold them for long term.
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My friend. I'm usually a little bit of an asshole when it comes to replies to recommendations like these. I'm trying to improve my karma so I'm trying to be nice.

Look at the prospectus of the of every leveraged fund and you will notice - by using simple calculus - that they are horrible, horrible long term investments. They leverage the daily return, so they will get killed by lack of autocorrelation

Trade the QQQ on margin as investment, trade leveraged ETF's intraday, not vice versa.
 
I don't want to argue with you.
What you tell me, I already knew long time ago.
What my post says, you did not understand.
 
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Question: when u say 50% gold and 50% TQQQ how do u know how much TQQQ for every GC? Or is it same $ for GLD and TQQQ?

sorry if I am reading this wrong
 
It's GLD, not GC.
Just check TQQQ and GLD's historical price for past 20 years.
For TQQQ, I only have its price since 2010, when the ETF initiated.TQQQ was $1.6 in 2010 and it is $76.5 today.
So I was underestimating its profit by about 130%. Since in 2010 NDX appreciated about 50% from 2009.
You can adjust GLD or TQQQ's proportion in the portfolio according to your risk and reward appetite.
Also if you are aggressive, you can add to TQQQ with the part of profit on GLD when TQQQ is beaten down huge in a bear market, and that may increase you profit potential by several 10 times in long run.
 
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