SpreadProfessor Clients - Thanks !

[Wingz]

Hi bone,

I'm not a client but I'd just like to say thanks for your posts here over the years. While I haven't learnt any particular 'market' edges from you I've definately absorbed some of the mindsets and attitudes you have towards spread trading.

I now trade spreads from a longer time period and look for different permutations that are insulated from competition. While you're only a piece of the puzzle I can see the influence of your posts pretty strongly now. There aren't really any stand out resources for spread traders in print so the only place you can really go to are forums like these.

Upon revisiting your posts I'm ready to start exploring some intermarket spread relationships in the energy markets. So thanks again.

 

[tonysoprano]

I have found through the years that a trader labeling himself a "systems" trader can easily sabotage the rules and protocols he originally established, and that's where the trouble usually starts - and snowballs from there. Could be from boredom, could be impulsive, could be anxiety.... Who knows. Better rules compliance - usually in the areas of trade management and position sizing, will improve any trading system. We set our profit target and stop- loss at the time of trade entry.

By systems trader I meant someone like Ed Seykota (just an example) where his computer determines the entry, exist, stop and position size for a given market and the system trader dutifully enters the orders.
Or maybe lets the computer place the orders with zero human intervention. That's what I meant as systems trader as opposed to a discretionary trader where the trader is using his own intuition/judgement as part of the trading process.
From your response I assume that the majority of outstanding traders you've known over the years were discretionary ... yes?

 

[bone]

By systems trader I meant someone like Ed Seykota (just an example) where his computer determines the entry, exist, stop and position size for a given market and the system trader dutifully enters the orders.
Or maybe lets the computer place the orders with zero human intervention. That's what I meant as systems trader as opposed to a discretionary trader where the trader is using his own intuition/judgement as part of the trading process.
From your response I assume that the majority of outstanding traders you've known over the years were discretionary ... yes?

I would not necessarily say that I would agree with your definitions per se. While tradecraft and experience are important, IMHO the less intuition and judgement the better. Fully automated functionality are not imperative for a system trader. But strict compliance with his rules for entry and trade management are imperative.

 

[bone]

Wingz, you are certainly welcome. My apologies for not being terribly specific with respect to particular matters - unfortunately that's a byproduct of having clients.

 

[bone]

Well, as some of my clients know, my office PC upon which I do my client work had a corrupted and failing HDD - and the external drive backup images were corrupted as well. I had to do a clean install last week and have been reinstalling programs and transferring backup files. I will be able to resume meetings and Hightail distributions next week.

It has been a maddening experience - but hey, five years of hard service on a HDD is about all I could ask of it.

 

[bone]

There's been a great deal of upheaval in the Chicago Futures Prop business model the past several years. Firms (especially Goldenberg-Hehmeyer) used to train newbies - now, nobody does that I am aware of. Don't expect another trader to teach you anything - quite the opposite. Most of these futures prop firms are looking for individuals or groups that already have a proven strategy that the firm principals feel comfortable with. They don't want to train someone, nuture them along, pay them a draw salary in the meantime, and then watch them walk when their one or two or three year contract expires.

There are just a few other types of quasi-prop firms like DRW whose bonus or percentage structure is somewhat discretionary and set by firm principals from what I understand. A firm like DRW recruits at top colleges and hand selects prospects to train internally.

 

[Wingz]

There's been a great deal of upheaval in the Chicago Futures Prop business model the past several years. Firms (especially Goldenberg-Hehmeyer) used to train newbies - now, nobody does that I am aware of. Don't expect another trader to teach you anything - quite the opposite. Most of these futures prop firms are looking for individuals or groups that already have a proven strategy that the firm principals feel comfortable with. They don't want to train someone, nuture them along, pay them a draw salary in the meantime, and then watch them walk when their one or two or three year contract expires.

There are just a few other types of quasi-prop firms like DRW whose bonus or percentage structure is somewhat discretionary and set by firm principals from what I understand. A firm like DRW recruits at top colleges and hand selects prospects

There's been a great deal of upheaval in the Chicago Futures Prop business model the past several years. Firms (especially Goldenberg-Hehmeyer) used to train newbies - now, nobody does that I am aware of. Don't expect another trader to teach you anything - quite the opposite. Most of these futures prop firms are looking for individuals or groups that already have a proven strategy that the firm principals feel comfortable with. They don't want to train someone, nuture them along, pay them a draw salary in the meantime, and then watch them walk when their one or two or three year contract expires.

There are just a few other types of quasi-prop firms like DRW whose bonus or percentage structure is somewhat discretionary and set by firm principals from what I understand. A firm like DRW recruits at top colleges and hand selects prospects to train internally.

I'd second that in London. We havent had a new intake in my office for 3 years.

It was apparently much easier to make a living 5-6 years ago, from what I've heard. It's much more difficult to succeed in prop so I imagine the risk has been skewed.

 

[bone]

I'd second that in London. We havent had a new intake in my office for 3 years.

It was apparently much easier to make a living 5-6 years ago, from what I've heard. It's much more difficult to succeed in prop so I imagine the risk has been skewed.

I heard my old firm, International Trading Group / DE Trading in Glenview IL, closed very recently. They started in 1997 and were one of the most prominent Chicago prop firms.

 

[Wingz]

I heard my old firm, International Trading Group / DE Trading in Glenview IL, closed very recently. They started in 1997 and were one of the most prominent Chicago prop firms.

I think it's because historically a prop firm could be supported by mediocre traders making markets on the bid/offers and covering any losses of those traders through commission revenue. In the spreads anyway. Now algos can do that more efficiently and traders across the board have become more price sensitive, so you'll see less 'edge' given away.

Without that consistent revenue to justify the 'potential' star traders, combined with the flexibility for those traders to easily move to another firm... Results in the model being inherently flawed.

As you've stated entry requirements are become more intense, but ultimately prop firms are becoming 'capital providers' taking advantage of relationships and deals rather than 'education providers'.

 

[i960]

What's everyone's take on 2015 as it's applied to spread trading?