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The top 3 guys who make over 1 million a year at my firm...
- Thread starter s0mmi
- Start date
Quote from tradingjournals:
Anyone who pays 20K to 30K interest/yr on 200K borrowed from a prop firm is a stupid moron.
>> No I was referring to getting this from a bank as a loan. You would get 100% of the split and if you really believed in your trading ability you could easily cover repayments. It's almost not worth it though since Prop firms are more than willing to take people on and negotiate a deal.
Also, I don't think anyone borrows money from prop firms anyway... they get their split off you/brokerage activity.
Quote from TripleNickel:
s0mmi - great thread/topic. I was wondering if you're able to comment on what spread strategy(ies) you see being traded most frequently? Are these guys into pairs/calendar spreads? Or are inter's more common? Are they trading the near months or further out on the curve? If you've already mentioned it and I missed it, I apologize in advance.
Thanks, and best of luck to you - sounds like you've got a nice arrangement there.
>> Every single prop firm in Australia that trades futures would most likely involve themselves with...
#1 The Aussie 3yr vs. Aussie 10yr spread aka yield curve (most popular and most competitive of all)
#2 Spreading one of the near STIRs (Bank Bill) with the Aussie 3yrs (aka Bills/3yrs spread... some firms force people to use the 3rd Bill with 3yrs because it has an inter-link spread ladder)
#3 Spreading the Aussie 10-years with the U.S. T-notes (primarily works during European/U.S.A session though)
#4 Doing STIR calendar spreads... including normal spreads, butterfly, condor...
#5 Spreading equity spi vs. s&p500 during european + u.s. cash session
These are the most common and I can apply trades to every single one of them now, as well as outrights on every single leg.
>> I started off with just one and it slowly built over time. Almost by forced natural selection because some spreads were getting really, really sh*t for the type of trading I wanted to do (i.e. NOT get out when I'm 1 or 2 ticks offside...)
Most firms, and people that I know of, just stick to seriously only 1 of these as a bread and butter, and then venture into a secondary spread just on the side. The more tight/conservative your firm is, the more they will get you to ONLY stick to 1-tick losses on a calendar billspread, or scratch/1-tick-loss threshold on the Aussie 3yr/10yr curve, or scratch/1-tick loss threshold on Bills/3yrs spread.
The more tight/conservative a firm is, the less willing they allow you to hold stuff for longer periods of time, i.e. through the day session into the euro session re-open, or overnight etc.
Where you decide to trade (near or further out the curve) doesn't really matter because it's rare any free fills get thrown about on different products... so you end up trading the same fundamental thing with just different skewed risk/reward results sometimes.
>> The list I just gave you is basically everything liquid enough for day-trading in Australia. So everyone is in it, and it's getting very saturated over time as people clog everything up, stacking the DOM and queue holding everywhere. The guy with the lowest cost seems to win (ability to scratch most times and still win on average seems very advantageous in our rigid aussie market.)
>> But you can still beat them if you play the game right. All these low-risk threshold short-term rebate-hunters are fighting amongst themselves for the tiniest bread crumb possible. If you can learn to trade an idea and sit through heat on all those aussie products mentioned then you'll have an efficient performance record and clean results.
Quote from Martinghoul:
Not to usurp from s0mmi, but it very much depends on the mkts, innit? In Ozzie, there are things that everyone and their mother trades, such as the 10y Oz-US spread. Personally, I have always been fond of spreading the Ozzie STIRs (IRs) vs Eurodollars and CAD STIRs (BAs).
>> And yes you're exactly right, friend.
It does depend on the markets conditions... what cycle we're in. Sometimes the Aussie 10yrs follow the U.S. 10-yr Note closer than it follows the 3yrs which makes the Aussie 3yr/10yr curve spread almost obselete (basically outrighting 10yrs).
Sometimes it works nice. Everything goes through a cycle. If you're a one-trick pony, the market gets you... unless you are gifted and can really adapt hard to a new fundamental strategy.
>> I'm also curious... what exactly do you spread Aussie STIRs with? Surely it would have a very low correlation factor... since our STIRS are illiquid, low volume garbage pieces of sh*t compared to the STIRS offered around the world.
Which month/contract are you doing it with as well? And what's your time-frame? It would seem like a heavy directional spread to me.
>> Also, does CAD Stirs refer to Canada's Bills? I'd be very interested if they actually worked...
Quote from TripleNickel:
Thank you, this is helpful!
If you have any question about any of those products you can ask me and I will kindly help you out.
I can't begin to explain the amount of ball-busting effort its taken to understand and apply trades to all those products and see what conditions they work & how they operate... etc. etc.
It's taken heaps of effort but they're all part of my arsenal and I watch them every single day, hand-picking the juiciest/safest looking ones to participate in.
Unfortunately it's very, very rare in this industry for someone to sit down with you and introduce you to new things/products and help you out. The obvious reason is that everyone is fearful of losing their edge and they don't want other people coming in and milking any potential good times that come.
Quote from s0mmi:
Unfortunately it's very, very rare in this industry for someone to sit down with you and introduce you to new things/products and help you out. The obvious reason is that everyone is fearful of losing their edge and they don't want other people coming in and milking any potential good times that come.
Good point!
Come on, IRs ain't that illiquid and low-volume and IBs ain't that bad either.Quote from s0mmi:
>> I'm also curious... what exactly do you spread Aussie STIRs with? Surely it would have a very low correlation factor... since our STIRS are illiquid, low volume garbage pieces of sh*t compared to the STIRS offered around the world.
Which month/contract are you doing it with as well? And what's your time-frame? It would seem like a heavy directional spread to me.
>> Also, does CAD Stirs refer to Canada's Bills? I'd be very interested if they actually worked...
I try to do whatever tickles me fancy, but obviously you can't really go much further than the reds in Ozzie. At the moment, I fancy a bit of H4-H5 and M4-M5 action, but that's just 'cause I can't really go much further out. I don't have a particular time frame.
As to CAD, yes, I have done the IR-BA trade previously and it worked like a treat. Unfortunately, when I did it again recently, it turned into a bit of a sh1tshow. But that's c'est la vie, so to speak.
Obviously these numbers don't compute but I learned a long time ago in business that frequenly there is a piece of the puzzle that you end up paying way over the odds for but it means nothing. Sometimes the difference is having that piece completes that particular puzzle and allows you to earn serious money wheras without that piece you limp along earning pocket change.
Earning nickles and dimes instead of buckets of folding money is the real cost in life. Pay up if it allows you to earn.
Earning nickles and dimes instead of buckets of folding money is the real cost in life. Pay up if it allows you to earn.
Quote from tradingjournals:
Anyone who pays 20K to 30K interest/yr on 200K borrowed from a prop firm is a stupid moron.