SpreadProfessor Clients - Thanks !

A note about picking a bottom in the oil markets. Goldman-Sachs and Citibank suggests you make your target $20.

Iran is going to start pumping oil for legal export in 2016, and on Dec 18 the number of NEW U.S. Oil Rigs drilling for shale oil actually rose by 4.

OPEC and Russia are suffering, and in order to support the totalitarian welfare states they simply cannot afford to slow down the pumping.
 
Bone- question for you on the distribution of your clients' performance. In year 2 after training with you, assume a client funds an account with 100k (round number). What would you typically expect in pnl for a below average 10th percentile performer? 50th percentile? 90th? Something like -25k, +20k, +50k, respectively?

I get there are many variables at play, but just asking big picture what you'd typically expect. You've seen quite a few over the years - wondering what you'd expect to see in 2016 and beyond.
 
J, I honestly cannot make any performance representations in a client situation where ultimately:

1. I have no control over the trading and trade management decisions a client or ex-client makes, and 2. I do not have the cumulative brokerage statements from each of my current and former clients. Any "guesses" or "observations" could be construed as a performance representation. I have a squeaky clean regulatory record and would prefer to keep it that way.

The very best thing I can do is to vet potential clients, and then get them in contact with clients who trade the system. There's a regulatory aspect, and then there's a genuine practicality aspect - your best gauge is going to be how well the system has translated to other clients and how well those clients do with it. I realize that is exactly what you are asking, but I don't see client's brokerage statements and not all clients choose to be candid with me - which is entirely their prerogative.

My apologies for not being able to answer your question directly on a public forum. Having said all this, conversations with my clients have generally speaking been quite beneficial to prospective clients.
 
I have two clients who are going live this month, and have room in my training rotation for two new clients.
 
bone said:
Both these Natural Gas and Heating Oil Butterflies hit their profit targets this week: (see original post for chart images)
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Bone, always enjoy your charts, just catching up on these now.

Butterflies are generally a mean reversion strategy (the body of the fly reverts to it's position between the wings). But your posts sound like you are swing trading these positions using trend indicators on multiple time frames. Do I understand you correctly, or have I completely misinterpreted?
 
Trader13 said:
Bone, always enjoy your charts, just catching up on these now.

Butterflies are generally a mean reversion strategy (the body of the fly reverts to it's position between the wings). But your posts sound like you are swing trading these positions using trend indicators on multiple time frames. Do I understand you correctly, or have I completely misinterpreted?
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You understand correctly to a point - notable exception being that mean reversion is a trend reversal and we also trade those just as fluidly using our indicator package and rules set. Legitimate mean reversion needs to be verified through price action analysis, which our indicator package and rules set accommodates.
 
bone said:
You understand correctly to a point - notable exception being that mean reversion is a trend reversal and we also trade those just as fluidly using our indicator package and rules set. Legitimate mean reversion needs to be verified through price action analysis, which our indicator package and rules set accommodates.
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If I understand correctly, your approach offers both a setup (the divergence of the fly from its mean) plus a trigger (your proprietary trend/swing indicators). Very good.
 
Trader13 said:
If I understand correctly, your approach offers both a setup (the divergence of the fly from its mean) plus a trigger (your proprietary trend/swing indicators). Very good.
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Yes, we model and take entries for both spread convergence and divergence. Makes absolutely no difference to us. None.

One incredibly underrated and misunderstood component of proper spread trading is combination construction. Very, very important.
 
If convergence/divergence makes no difference to you, then you are really trading it as a pure trend/swing setup. My initial reaction is your approach is contrary to the structure of a butterfly, which is mean reversion (MR). But on reflection, your strategy aligns better with the price behavior of the spread which is actually trending/swinging. Your charts confirm this.

The forward curves on many of these futures like energy don't conform to the MR principle. They are often shifting/twisting for any number of reasons and not reliable for MR, even when structured as a fly. The exception might be interest rates (e.g., Eurodollars). Interesting topic.
 
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