The top 3 guys who make over 1 million a year at my firm...

[tradingjournals]

My understanding of their meaning of backing is that I give them capital. I do not want that.

What I am proposing is better: I give IQ and they give funds.

Actually they would not give funds, they would just click some buttons in their computer and the cash will stay with them.

If you own a prop firm, and you are flush with cash, it should be easy for you to invite me.

 

[newwurldmn]

Quote from Maverick74:

TJ, the partners saw your FX journal. They were sooooooo close to backing you. Then they read your journal.

I heard that ken griffin was intrigued by his free option ideas.

 

[murrica]

Quote from tradingjournals:

My understanding of their meaning of backing is that I give them capital. I do not want that.

What I am proposing is better: I give IQ and they give funds.

Actually they would not give funds, they would just click some buttons in their computer and the cash will stay with them.

If you own a prop firm, and you are flush with cash, it should be easy for you to invite me.

May I make a humble suggestion? If you are too under-capitalized to trade your own account, why not go out and work to save money?

Just trying to help.

 

[tradingjournals]

Thanks for your suggestion, but my proposal is solid and better, because it is a better deal than what the prop firm offers. I am giving the firms the opportunity to have my expertise and IQ vs. their unintelligent dumb dollars. I am giving them a favor to invite me. If you think it is not, I respect your opinion, but please limit its application to yourself. If they do not like my offer, they can pass it or make a counter offer and I may look at it (but I do not guarantee I will look at it but I will do my best).

 

[murrica]

Quote from tradingjournals:

Thanks for your suggestion, but my proposal is solid and better, because it is a better deal than what the prop firm offers. I am giving the firms the opportunity to have my expertise and IQ vs. their unintelligent dumb dollars. I am giving them a favor to invite me. If you think it is not, I respect your opinion, but please limit its application to yourself. If they do not like my offer, they can pass it or make a counter offer and I may look at it (but I do not guarantee I will look at it but I will do my best).

I don't have an opinion one way or another. Was just trying to make a (hopefully) helpful suggestion. Whether you have something to offer a firm or not, you would know better. I have not read through your posts enough.

But going out to make money consistently via job/consulting or whatever works for you will be a good hedge while you shop your ideas.

 

[cmb]

Quote from Maverick74:

TJ, the partners saw your FX journal. They were sooooooo close to backing you. Then they read your journal.

great one Mav!


You want backing? Topstep will back you, just pass a small test

 

[eurusdzn]

TJ,

I am reminded of a fellow Chauncey Gardiner. He too was well respected with an IQ
seemingly "off the charts".
This is a great thread. Let it be brother.

 

[williamn]

Thanks for that s0mmi, no joy with your shop, starting at the other place let's see how it goes, but i'm still going to trade xt/zn.

 

[s0mmi]

Quote from williamn:

Thanks for that s0mmi, no joy with your shop, starting at the other place let's see how it goes, but i'm still going to trade xt/zn.

I've heard some disgusting things about the alternative shops out there.

I won't go into details for obvious reasons but the probability of succeeding is much less at those shops than mine.

However, if you're determined and will stop at nothing until you succeed at trading then it can be done.

 

[londonkid]

Hey Sommi

Thanks for sharing. I am involved with some Eurex spreading and I am interested in taking a look at this US 10s versus Ozzie 10s. What is the most popular ratio for your people to trade it intraday?

Thanks

londonkid

Quote from s0mmi:

>> Hi friend.

Prop shops rarely teach you the real ins and outs about spreads. But all they do is aware you that people trade them. Maybe they give you some ideas as to how some people trade them.

>> To learn the ins and outs what you have to do is.... trade it. That's it. Just trade it every single day, talk with other people who know about it, get them to help you and tell you all the juicy gossip about it over the years and how you're executing etc. and then keep trading it.

It's all about the hours.

>> I always advocate longer hours here. This thread is filled with me just saying to do more hours and work harder. There are so many nerd quant types here who can't get their head around the fact that people make multiple millions without any statistical measurement of volatility, any economic models, no back-testing, no rigorous course of formulation or anything.

Just sit down, watch it every day, start trading and participating, and learn from your mistakes.

>> What country are you from? I find it necessary to know because a big part of one's edge comes from the fact that they live in a certain country. You will have what I all a 'home advantage'. You can read local commentary about the general consensus towards interest rates, local economy, and the know-how about things.

For example, in Australia, I am aware of certain economic commentators and what their opinion on Australia's fundamentals are. I also am familiar with Glenn Stevens (Governor of the RBA) and the type of language he uses.

You don't really need to know this, but it just increases your chances of finding experienced people who trade the same stuff at you and you will be able to communicate with them easier.

>> Here's an example of a trade below... and this trade is really basic. Anyway, you'll find 95% of trades you do, spread or not, are simple and eventually after lots of hours you aren't thinking too much about them and you don't need to explain to anyone why it's an amazing trade. The most important thing that matters is what you do to escape, and what your plan B & plan C is. This is seriously the difference between winning and losing in the long run. That is what I cannot depict in the next picture...

Spread between Au 10yr bond vs. U.S. 10yr Note
Note: only works during certain time zones and is very saturated.

STEP 1 - basic view

- 30-min chart... looks like some sort of trend line. Note I am trading the very very part at the end (this is seriously from the past 12 hours of trading).

- When I see this, I just want to keep buying dips in the trend all session if it lets me. Every night is different, some times I'll be able to do this 1 time, others 2 times, other 0 times. Note that my profit target is larger than a lot of the algorithms and bots and kids you will see in the market. I do this because I am preparing for 200 ZN trades. Others are only taking about 1/2 my distance of profit. It's all personal preference. Some nights it works for you, some nights it works for them. Just stay consistent and stay in tune with your own tuned execution method.

STEP 2 - hows it trading recently? 5min chart

- Use small time frame chart to see how its been trading recently. Market changes often. Sometimes they're rangey. Sometimes theyre straight line up/straight line down.

- The green line is where I'm happy to enter. The red is where I wanna get out. If it pays quick, I'll just get out who cares. The distance I want is about 4 tnote ticks worth (about 0.8 basis points).

- Entering green line = long (Buy XT Aussie, Sell ZN U.S.)

STEP 3 - execution

- So I'll watch the chart and watch the ladders back and forth and just see what prices I need in the book to actually get the spread price represented on the chart. It changes depending on the time. I just placed a random limit order here to show you how I will sometimes just leave the bid in areas that I'm comfortable being long for 2-5 mins unedged.

- I am just a price taker. Many other people like to leg into the notes. I've seen what type of damage to your anus that the tnotes can do if you get legged in them and refuse to enter the spread at a wide/sh*t price... so I just accept the spread price. I'll either limit order XT or ZN and wait for fill, then just immediately market the other one most of the time.

- If you do this for 8-10 hrs a day at least, over time you get a feel for how most markets behave

STEP 4 - back up plan (most important)

-So this is the easily THE most important part of trading that never gets spoken about. The difference between making it and not making it, comes down to analysis like this. I don't sit here watching this chart and doing this analysis before-hand anymore (but it's really good if you're starting.. you must do this if you want to increase chances of making it.)

-The vertical point is just a time-region and we are looking at everything to the east of the vertical line. What I did before-hand was look at each of those blue points. What are they? If you scrunch up the 30-min Tnote chart you can see that they are previous levels/regions where the tnotes have topped out.

-So what I was basically doing is making my plan B, C, D. Tonight the spread was safe, but very often it can go nasty against you. What I did was plan for future situations.... if I am long the spread (remember: my ZN leg would be short) and the tnotes rally against me and out-perform the XT, then I am going to watch the blue areas mentioned...

When the ZN stops there for a good 15mins to 1hour (thats IF they stop) then I will average a little more into the spread. All I am doing is watching the outrights and just adjusting for chances that the Tnotes will stop and retrace.

-Now tonight what actually happened was the Au XT out performed the ZN. A buyer came in and swept it up as the ZN was rallying and I was able to exit. Obviously some big guy was watching the ZN and knew it had broken a series of levels up and was going to finish upwards, so he got his order done early and I got paid.

-This means that, in the very rare chance, I am actually fundamentally right. There are buyers emerging who want to out-beat the Tnotes.

-Now I know why this is fundamentally the case but you dont need to know this to be profitable (it's to do with the Aussie cash bond auctions over the past 2 months which have been bat sh*t low).

-This is a smooth trade. 90% of your trades won't be like this. In fact, if I got the original upwards trend-line wrong, I would just sit in the trade and wait it out, wait until the spread ranges, and then average some more. I've planned for scenarios like that all the time.

-You can only have the confidence to do this if you do a little back-testing over the past 1 or 2 months, see 'how far it can go' recently and then keep trading it so you know what a small, medium and big 'deviation' is in the same session. I'm not gonna give all the tips here, because that is informational advantage I need to survive.

Summary

>> The most important part of trade was the last part. What are you going to do when it hits the fan? How are you going to average? Quarter clip? Half clip? Full clip? Where, when? Can you even average? Do you want to be the guy who cuts early and then gets back in? That's fine, just learn how to execute it consistently to make money. Everyone has a different personal preference when it comes to execution.

Universally, if you are more patient then on average you will always build positions better. I don't know why but markets just don't pay you for sitting on all bids/offers anymore and making money in between. Its smarter and more efficient now. You have to pick your moments to add and subtract risk.

>> I was in that trade for 6-7hrs. The reason why I didn't get out was because it didn't move heaps against me and I was waiting for Tnote activity to pick up. Other days, I might go 3 basis points offside and just be happy to scratch.

>> Finally, if the Tnotes actually sold off from the time interval after the vertical line, I would've made about 25% extra profit and it would've happened in the space of 2 hrs. This is why I spread, I don't know what the outcome of the outright is going to be, all I know is that I'm watching a spread which I hope other big instos are too, and I hope we are thinking the same thing.


>> Hope you found this post useful. You can apply this very very very basic trading scheme to just about any spread you do.