Learning to Spread Trade with a Full Time Job

bone

bone

I have fielded some questions from ET Members about learning to spread trade while simultaneously holding down a full time job.

I have some clients who have done it successfully. One in particular, a licensed professional Civil Engineer in California, started training with me in 2010. After several months working with me, he started a very modest account with Advantage Futures. He takes a laptop in to work with him in order to occasionally check on positions and working orders. At present, he is giving serious consideration to trading full time.

In many ways, I think it is an advantage. You can take your time to really learn the system well, build out your charting platform, and you can paper trade or SIM trade and track your performance metrics to the point where you feel confident and truly ready to trade live capital.

Serious prospects are welcome to individually contact and query some of my clients who have taken this path.

The best part about trading futures spreads is that their capitalization ( exchange required initial SPAN margins ) and drawdown characteristics are much more manageable than flat price futures - especially further out in the curve. Depending upon the volatility and trading range of a particular spread, you can swing ( position ) trade several positions simultaneously for only a few thousand dollars in margin.
 
I have already ventured into this, i was a full time pharma regulator affairs professional and now i have left the profession for being into the forex trading full time and it has been four years of trading experience for me now. :)
 
Like you guys I have full time gig doing IT Consulting and think spread trading is the way to go for a part timer like me. I'm always trying to learn more. Thanks Bone for giving that link, I'm going to check that out. @Pipflow, I have never tried Forex Trading, how is that treating you? I have thought about it, but I have never tried. I guess it's out my comfort zone.

@ Bone any other suggestions or links on spread trading?
 
Quote from geostrathmore:

Bone any other suggestions or links on spread trading?
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I think that the very best free information on spread trading is available on the exchange websites' educational section. CME, Eurex, and Liffe-Euronext all have some very white good papers on the topic.

My personal observation is that "seasonal" tendencies have become less prominent over the past several years, and IMHO that has to do with more modern price-based technical systems and HF and prop group order flows entering the markets. So, personally I would tend to shy away from trading traditional "seasonal" plays unless you can confirm the entry with a price-based technical system.

Another pointer would be to shy away from simple calendar spread pairs that include the front months - they are simply too delta directional with the prompt futures contract. They are so many other combinations that "behave" better and model better and carry less risk IMHO.

Lastly, I am proud to say that one of my clients recently took a position with UBS in London, and another client took a position with GS in Singapore. I don't want to take credit for that, but it does make me proud that they both started trading new strategies in new market spaces that ultimately made them very appealing in a tough IB job market.
 
I personally think that the exchange websites, under the educational resources sections, have the best material that I have seen that is "free".

Most of the white papers are excellent, especially the ones authored by the exchange product specialists.
 
Does backtesting is covered by your services. Do you recommend for your clients a backtesting SW for spread trading.
 
Quote from a5519:

Does backtesting is covered by your services. Do you recommend for your clients a backtesting SW for spread trading.
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We are much more concerned with the historical statistical fitness ( correlation ) between each of the spread combination components.

And that is covered by my services and I do recommend a SW for that.

So you could say that we backtest - but in a different way than you are probably referring to.
 
Quote from bone:

I personally think that the exchange websites, under the educational resources sections, have the best material that I have seen that is "free".

Most of the white papers are excellent, especially the ones authored by the exchange product specialists.
More...

Could you give links to the white papers, and names of authors who are specialists?
 
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