what op meant by 'collect' is a certain price range to build a position.i mean, it`s hard to accomplish that with a small $10-20-30K account.
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The top 3 guys who make over 1 million a year at my firm...
- Thread starter s0mmi
- Start date
what op meant by 'collect' is a certain price range to build a position.i mean, it`s hard to accomplish that with a small $10-20-30K account.
collect, it what prop firm get when you loose your original deposit.
they make heap big money
post on internet
ah well, if you're that stupid
you deserve to lose
they make heap big money
post on internet
ah well, if you're that stupid
you deserve to lose
Quote from kid.fx.cross:
prop trader: I make a million dollars a year
Independent trader: What is your ROI?
prop trader: What's an ROI? and what the hell difference does it make? I make a million dollars a year!
That`s EXACTLY how it goes with the big hitters, and i can confirm that.They don`t give a fk on ROI,Sharpe,etc...Your just a clueless small clipper.So please,do not disturb the scene.
Quote from actionzip54:
Are you ever worried about having all your size on in your losers and never having any size on in your best trades, the ones that go your way right off the bat, because of averaging?
Also, I'm really confused because first you said that all the big guys didn't scalp. Then you say when they have their biggest size on they are just looking for 1 tick.
>> This is something you 'learn to develop' over time. People who have played Poker are generally good with the way they think about this. But for others, it must be developed over time. You don't need to be a Maths genius, but you just need to experience the pain of winning $1000 to $1,500 on a winner... but then when it goes wrong you're taking a $9,000-20,000 loss.
>> The worst part, for beginners, is that sometimes the market enters this seductive state where the distances of certain spreads and outright positions get less random. What happens is, people like me will never trust it, and just never get aggressive.. but others in my firm, newer guys, will pump risk up because they've never seen the 'real moves' or 'real variance'... the market can be kind-of-safe for 3 months.. 4 months... but then when it wants to violently change, it can really take you for a lot. This is where it's important to make sure you know what your winners are like, what your losers are like, what your month is like... study your own pnl and performance over time and journalise everything so you know yourself as well as possible.
>> After many months of battling... I finally come to know myself and how to execute in a way that properly positions me in a healthier state than before. You really need to sit there in pain and watch the numbers go against you to REALLY learn from it.
>> Also, with averaging, there is more a dynamic to it. Some people prefer to average a little more and then exit only the recently-added-size if it doesn't work with-in an hour... others, like me for example, prefer to let it all ride out, then after certain time has passed, add a little more.
You're at the mercy of how back and forth the market is at this point in time. Unfortunately, over time, more algorithms/bots have saturated the market. This means the back-and-forth motion has been restricted to very rigid movement. To get paid, you need to hold longer and be less part of the really short-term noise that bots are so in-love with (let's face it, most bots/algos are coded by some nerds in a back-room who cannot contemplate heavy duty risk concentration).
>> It's very hard to pin-point one thing so I apologise if its confusing. When I say the big guys don't scalp I specifically mean:
--> When they get into their trade, they are not getting into with a small tick loss stop. They are getting in it, with the confidence that they are able to weave their way out and they're willing to be in it for 6 up to 18 hours. Just because they buy at a level somewhere and it 'breaks' doesn't mean they are just out.
--> When I mean that they have their biggest size and scalp on it, I mean to say that they are just like any other person. If they have been averaging and it's still going one way, as soon as it pulls back, don't forget that they have been nervous/sweating the whole time too, as SOON as it comes back to near-scratch or a tick onside they cover as much as they can to exit. They want to take all the liquidity out for themselves as swiftly as possible.
--> So to summarize... NONE of their primary trading involves this type of thinking: "Ahh, this price is a level, I am going to Buy here with a stop 1-basis-point below (in Bond Futures) because that means the level is broken."
>> Instead, they think of, I am going to get long here.. if it goes 'X' distance and after 'T' time I will think about adding more. I will be able to weave myself out by being aggressive/passive in different circumstances as it plays out, perhaps spreading it off with other things, and being willing to sit here for a long time to weave my way out.
This is exactly how I trade... it's nasty, BUT it's the only way to scale up. What I apply to '20' lots I can apply a very nice multiplier to it, in terms of risk/size/clip amount.
So to contrast, a spreaders way of thinking is different to an outrighters 'Profit Target = X, Stop target = X-2 ticks' thinking. A spreader thinks more dynamic... more like a Boxer who is in the ring with his opponent, copping a few punches to the kidney and jaw, and just having the confidence that an opening WILL eventually emerge. Something will appear. Your idea of relative value will create more opportunities with more legs/chances to keep yourself in the game.
>> I could go through specific scenarios if you like in terms me and another trader who are both looking at the exact same things in one Bond market. We will both approach it from a "long" but with completely different strategic variability.
Quote from shooter:
Thanks for the post. Not many insights from prop firm traders on this board (maybe cause in the US they are dying).
>> You're welcome friend. I really enjoy informing and helping others out. There's not that much condense information out there about this. The world of trading is an enigma shrouded by clouds of opinion. I am telling it how it is, as best as possible. Sometimes, I come across gems on this forum and elsewhere and I am glued to it and I really enjoy reading it. For example... the interview with the Flipper.
Quote from shooter:
Well from reading ET it seems that after '08, prop firms are diminshing, due to any number of factors, more regulation, high frequency trading eating their lunch, etc.
>> This is definitely true. I recently met a trader who traded in London for 10yrs, doing STIRS. He has also admitted that prop shops really dried up over there.
>> I think the new prop shop is actually just replaced by hoards of algo companies all doing the same thing in the game. Don't worry, there will ALWAYS be room for discretionary traders. It's how you adapt.
I came into the game knowing and smelling the algorithms. I knew that they were in there, and I could see how PATHETIC their risk/pain was. They have the tiniest balls of all. They are not big scary things. They are little weakling wankers who cannot take any ounce of pain. Now there's lots of them, and it seems the biggest algos of all, with the lowest transaction cost (economies of scale) end up winning. Their short-term win/rate game is not in competition with me.
You can succeed as a day trader. You just need to do the hours.
Quote from Rorschach_test:
what op meant by 'collect' is a certain price range to build a position.i mean, it`s hard to accomplish that with a small $10-20-30K account.
>> Yeah this is right. As spreaders looking for value, we look at a chart and go "I like this region... then if it goes good, I will take profit, if it goes bad, I will wait.... then wait for the next region I like..."
>> But sir, you are wrong about the account. Trust me, you do NOT need a big account to do this. It is all scalable with the right size, timeframe, and timestop.
If you have a $500 daily stop you can very easily trade in a very scalable, less-in-out, less prone-to-algorithmic-manipulation way.
For example, you may want to long the U.S. tnotes at Price 1. If you use a 1-lot, that's only $15/tick. If it crashes against you, to Price 10, you can wait for it again, and add another one, and if you're not comfortable, scale limit-orders to your scratch point.
If it keeps crashing and you are scared, then exit most of your size, with the intention to get back in. You can do a lot with a $500/stop.
Quote from xelite777:
People naively believe that spreading is a no risk, easy profitable trading business.
Then sooner or later the spread turns ugly and you get hit by the maximum on both sides of the spread, leaving you with huge, huge losses.
>> Lol. Friend. I was one of the earliest 'scalping spreaders' in the office because the outright game got exponentially harder with the primitive strategies that were being used. Guys who had been there a year on me would very often tell me the exact same thing. "Ohh see with you, it's just gonna keep working for months and then one day it won't and you'll just get really fukt." Well instead of that one spread product I've now got about 5 spreads. Yes, they go through bad directional periods, but that's the game. Nothing is going to work all the time anyway.
>> This is exactly what irrationally scares people. This is the same as saying, "oh you keep averaging in the outright position but if it doesn't come back you're fukt",
OR
"you just keep buying 15-min levels but the one day it just down-trends for 8 hours straight you've taken like 8 market losses in a row and you're fukt"
>> Point is, people are always going to focus on the bottom deviation occurrence. 250 trading days in year, they will talk about the worst 10% (25 days/scenarios).
>> Trust me when I say this, from the bottom of my heart, that spreading is not dangerous IF you study the spreads, try to understand what you're doing, and WATCH it over time. There's a reason why we have dollar stops, and time stops... to avoid the grind-to-death.
Quote from tradingjournals:
What about someone who goes long a stock that goes to zero overnight, and short a stock that goes to "infinity" over night? Or just 100% and 50% changes with 20:1 leverage?
I think your spreads prevent it from happening, but not everyone is as wise/thoughtful as you. So the concept of spreading could be extremely dangerous or safer depending on who is using what.
I would not be surprised if some prop firms were to allow spreading only in a pre-approved list of stocks, and/or no overnight holding.
>> This is exactly what I referred to just above. You are quoting like the worst scenario of all time. Hey, you can long the S&P500 and 3 major banks can get a glitched algorithm to liquidate 500,000 contracts in 5 seconds and make it blip down against you too.
>> If you are spreading two stocks, you should know the fundamentals behind them. Why/how are they related? And you would obviously have time stops and day stops. It can only go a certain distance in a certain amount of time... and if that fails, just get out at your dollar stop.
>> Most spreading that I know, is occurring in things you can fundamentally relate. Bond yield curves in different countries. Some countrys relate their bond prices together.... with some decent correlation. Equity indexes as well. Find a niche, study it well, then you know how it moves... you got the informational advantage over the retail punter who just jumps in and thinks he knows it all.
This is about the hours. Do the hours, connect some pieces of the puzzle, then continue doing the hours. The mental links and puzzle-pieces will come together exponentially faster over time as you know yourself. The market isn't going to just fall under your feet at any moment now. Yes, it theoretically can, but you can have a heart attack and die too.
It helps when you just focus on 'whats most likely to happen if...' scenarios.
Quote from RonRayGun:
From your experience, are the top traders entering outrights while leaning on spreads or are they putting on spreads from the get go?
>> Very, very good questions. I was always curious about this, too.
The truth is that everyone has their own different flavour...style... execution method. It's all about their execution. No matter what I'm about to tell you, it all comes down to how consistent and sensible you are. That's it. Consistency... sensibility... and over time, the luck-factor variance will be removed and you'll have some confidence in what you do.
>> The more experienced guys, with 8-10 years plus, have their own 'threshold' where to start spreading it off. But here's the thing, the other leg CAN run from you. So it's... very dynamic. I know I use this word a lot, but there's so many variables we need to discuss.
* How close are we next to a level?
* How fast is everything moving?
* What caused this movement? Is it follow-through after U.S. data? Or is it just an order-flow momentum level-break of the U.S. T-notes?
* How big is my initial entry? Can I with-stand being 'caught' and just trying to scalp outright from here on?
* Has everything else moved? Is there anything else I can hit?
>> Here's the funny part. Of ALL these questions, you don't even need to answer them all in your head like a robot. They just go about this by 'gut feel'.
Example 1... (Me!)
- With me, I do not like to just start outrighting. I will accept spread prices exactly for what they are, spread prices. This is just my style. I don't know why, but it works for me. I do not need to just go outright one-leg and hope for a bounce and make it more complicated.
- I just keep trading my idea. That's it. I accept the spread price for what it is. At most, I'll just be long something for 5-minutes before I want to hit off and spread it.
Example 2... other big trader
- I've sat in the office and watched him. He is a lot more loose...averager...punter... than me. Less tight.
- I have seen him say one leg is really cheap. So he will start longing every single price of that leg. Outright. And then.. when it keeps going offside, he will average THE OTHER LEG too!
- Then when it retraces a little bit, he will exit half of everything, and cut/reverse one of the legs into a spread.
- But, I've seen him another time work a little 3-4 tick region of the outright before finally spreading it off after 15-20 minutes.
- He is a lot more random than me... but he has been in it for like 15-20 years, maybe his habits came from the floor when the market moved back/forth a lot more since algos weren't in there squeezing it?
Example 3... another big trader
- As a spread gets cheap, what he will ALWAYS do is have an opinion on direction. For example, if a spread is 10 contracts vs. 15 contracts, he will look for out-right levels where it seems sensible to start having a bias.
- As it approaches there, he doesn't want to just be 10 to 15. He would say "Leg A has more of a chance of bouncing off here over the next 3-6 hours.. if it does bounce I need to long 12 to 15 instead."
-So what he's done is add 20% more contract size to his leg
>> Yes these examples are all meant to be complicated. I have just described the carefully-developed processes of three spread traders who go about executing in the way they think is optimally best for them.
>> Example 1 is me, with very-little-leaning way on bias, Example 2 is a REALLY loose big guy average, and Example 3 is someone who isn't too lose but wants more outright bias on direction so compensates by changing his spread ratio.
>> Here's the thing... over time, you will develop your own trading methodology too. This is why I don't think you can teach anyone specifics. You need to sit there, and figure out what you like the best.
Me, I like to keep it simple. I don't want to bet on bouncing, over/under direction bias, etc. Because I believe over time, after 1000 trades, the profit/loss will be the same no matter what I do. It all comes down to your discipline, hours, and focus.
However, the big spreaders are just executing/leaning on a leg in the best way that they think is going to work based on their experience.
>> If you take enough hits, your body/brain start telling you what seems like the path of least resistance. Make a journal, talk to friends about it, and you can talk about different execution methods.
The truth is that all of these are reasonably sensible and fit enough with the right scale, clip size, time-stop, and aggression/passiveness.
As long as you're consistent to make almost anything work if you have an edge. Do you have an informational edge? Do you know how its moved every day for 3-months? Do you have a rough idea what's caused this over-panic?
>> The more we start to look for the real answer, the more complex and tree-probability style it gets. This neural network just comes naturally...
It's really, really, really hard to gather information sometimes because they're all doing it subconsciously.
"Oh, wait a second... yesterday you just took the spread price but today you went outright for half an hour first before spreading it off?"
I would ask this over and over again and just let the pearls drift into my head. I would always walk away going "This guy is a f-cking genius why didn't he tell me this stuff a long time ago this is so crucial to know.." but the truth is they just lose sight of how hard it once was and start to see everything they do as natural as it comes.