"when they have a flow to them".
What does it mean on screen, exactly?
Thanks for your time,
Bernard
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Trading 10 year or 30 year?
- Thread starter youngtrader
- Start date
"when they have a flow to them".
What does it mean on screen, exactly?
Thanks for your time,
Bernard
THESE ARE THE COMMENTS FROM A SIMILAR THREAD THE OTHER DAY WE WERE ALL DISCUSSING. IT SEEMS RELATED TO WHAT YOU ARE DISCUSSING NOW.
i think the problem we all have and i assumming 'we all have' are prop traders based at arcardes or trading through arcardes is the following:
i trade mainly euribor and eurex or euribor against eurex.
my leg up rate and execution has got a lot worse in the last month or so. i was getting legged on 3 out of 10 trades now its more like 7 out of 10.
when i am legged im not just a tick away from the market which is worth the risk im 2 or 3 ticks away from the market.
now i am at a new arcarde set up with supposed decent hardware and connectivity etc etc and they dont understand why im having the problems i am.
the reason for this is that the competitors for us like black box systems,grey box systems, hedge funds and institutions etc are continually evolving their technology and connectivity on a daily basis spending fortunes in the process.
the key points are that the smarter ones have their equipment right next to the exchanges and they do this by renting space next door.
rental premiums are trading at a high around exchanges purely for this reason alone.
they have such low trading fees its incredible.
the exchanges are bending over backwards to slash the fees for these type of players because they do the most volume.
one black box fund i know of can scratch 75% of all trades.
they have the fastest execution out there.
when you shout missed it those guys dealt.
these small millisecond changes are the differences between getting legged up and filled.
one part of their dealing technique is profiling.
the profile traders into various pools.
one pool can be bobl shatz traders that take the other side of the spread. these systems can quickly analyse when a pool of traders are one way.
they do this by getting the times and sales data from the exchanges.yes our trading information and process this backwards to work out who is doing what.
this is just the tip of the iceberg.
i dont even moan anymore about missing it or getting legged up i just accept that the market has moved way on.
the arcade i work for are still under the impression they can compete in this market place with their systems.
what a joke forget it .
its time to face reality boys 2007 will be the hardest year for arcade traders and for the arcades.
i predict a lot of people will not be doing this job at the end of the year.
that is the reality of the situation like it or not.
RESPONSE.......................................................
Well I just had my best quarter in 5 years. Quit whining and adapt your trading style. I have more faith in you than you do! Quit trading tactics that used to work and find a some new ones. The game changes every few weeks, you learn the rules and exploit it until some nerd rewrites the system and you learn it over again, it's what makes this job interesting. Pull your socks up, get out of spreading and have some faith in your own ability and adaptability!
Lose this illusion you have that all money is in a one way stream from arcades into black boxes, there's plenty going the other way.
Good luck, although I really don't think you need it. Just identify what's not working, stop doing it, try new strategies on small size and grow those which work.
RESPONSE...........................................................................
These are warning signs to me that you are not fluid in your thinking and openess of trading in a new way, these comments denote outright stubborness to me and a sense of "I quit." Take a look at yourself before you do some irrevesible damage to your trading account.
--------------------------------------------------------------------------------
i agree with what some of what you have said.
however i disagree about the whining element.
there is nothing wrong with spreading.
its a form of trading that has existed for a long while.
it suits certain type of people.
i trade outright in other products and trade larger size on spreads.
the point i was trying to make and maybe i did not relate it well was that i dont have a problem with my positions going against me. i take a spread position not for a tick or two but with a view and will try to get 5,6,7, ticks from a spread.
i never whinge when my positions lose or go against me and never have.i accept it as part of the job.
what i object to is a system that is promoted as fair and a level playing field but clearly is not.
i would say the market is now more corrupt in favour of bigger bro paying clients than it was on a floor based open outcry system.
the point of screen based trading is that everybody would be equal on a level playing field and because of the reasons in my earlier post i now dispute this.
as for trading i too am still making money as i have evolved as i always have done and will always do.
but dont be naive.
black box systems get more edges than me or you purely because of their size in volume, backing in dolllar terms, it expertise and execution of orders.
i think the problem we all have and i assumming 'we all have' are prop traders based at arcardes or trading through arcardes is the following:
i trade mainly euribor and eurex or euribor against eurex.
my leg up rate and execution has got a lot worse in the last month or so. i was getting legged on 3 out of 10 trades now its more like 7 out of 10.
when i am legged im not just a tick away from the market which is worth the risk im 2 or 3 ticks away from the market.
now i am at a new arcarde set up with supposed decent hardware and connectivity etc etc and they dont understand why im having the problems i am.
the reason for this is that the competitors for us like black box systems,grey box systems, hedge funds and institutions etc are continually evolving their technology and connectivity on a daily basis spending fortunes in the process.
the key points are that the smarter ones have their equipment right next to the exchanges and they do this by renting space next door.
rental premiums are trading at a high around exchanges purely for this reason alone.
they have such low trading fees its incredible.
the exchanges are bending over backwards to slash the fees for these type of players because they do the most volume.
one black box fund i know of can scratch 75% of all trades.
they have the fastest execution out there.
when you shout missed it those guys dealt.
these small millisecond changes are the differences between getting legged up and filled.
one part of their dealing technique is profiling.
the profile traders into various pools.
one pool can be bobl shatz traders that take the other side of the spread. these systems can quickly analyse when a pool of traders are one way.
they do this by getting the times and sales data from the exchanges.yes our trading information and process this backwards to work out who is doing what.
this is just the tip of the iceberg.
i dont even moan anymore about missing it or getting legged up i just accept that the market has moved way on.
the arcade i work for are still under the impression they can compete in this market place with their systems.
what a joke forget it .
its time to face reality boys 2007 will be the hardest year for arcade traders and for the arcades.
i predict a lot of people will not be doing this job at the end of the year.
that is the reality of the situation like it or not.
RESPONSE.......................................................
Well I just had my best quarter in 5 years. Quit whining and adapt your trading style. I have more faith in you than you do! Quit trading tactics that used to work and find a some new ones. The game changes every few weeks, you learn the rules and exploit it until some nerd rewrites the system and you learn it over again, it's what makes this job interesting. Pull your socks up, get out of spreading and have some faith in your own ability and adaptability!
Lose this illusion you have that all money is in a one way stream from arcades into black boxes, there's plenty going the other way.
Good luck, although I really don't think you need it. Just identify what's not working, stop doing it, try new strategies on small size and grow those which work.
RESPONSE...........................................................................
These are warning signs to me that you are not fluid in your thinking and openess of trading in a new way, these comments denote outright stubborness to me and a sense of "I quit." Take a look at yourself before you do some irrevesible damage to your trading account.
--------------------------------------------------------------------------------
i agree with what some of what you have said.
however i disagree about the whining element.
there is nothing wrong with spreading.
its a form of trading that has existed for a long while.
it suits certain type of people.
i trade outright in other products and trade larger size on spreads.
the point i was trying to make and maybe i did not relate it well was that i dont have a problem with my positions going against me. i take a spread position not for a tick or two but with a view and will try to get 5,6,7, ticks from a spread.
i never whinge when my positions lose or go against me and never have.i accept it as part of the job.
what i object to is a system that is promoted as fair and a level playing field but clearly is not.
i would say the market is now more corrupt in favour of bigger bro paying clients than it was on a floor based open outcry system.
the point of screen based trading is that everybody would be equal on a level playing field and because of the reasons in my earlier post i now dispute this.
as for trading i too am still making money as i have evolved as i always have done and will always do.
but dont be naive.
black box systems get more edges than me or you purely because of their size in volume, backing in dolllar terms, it expertise and execution of orders.
Quote from youngtrader:
Ok, Ok I know now that my system is on its way out fairly quickly. But really besides the initial big economic report the bonds pretty much trade in a straight line the rest of the day. How do you day traders make money in the bonds if there is vertually no volatility after the first few hours of trading?
The Bond traders I know aren't scalping it.
They are swing (overnight holds for a day or so) and position traders (several trading days to weeks).
As for day trading opportunities (non scalping stuff)...
Usually its on trading days when bonds will react (increased volatility) to a regular schedule market event.
Thus, other things move the Bonds besides an economic report.
You need to study your historical charts and what occurred on those trading days to find out what else moves the Bonds...your homework assignment if you want to day trade it on trading days when there's expected volatility.
I'll repeat...you need to study your historical intraday charts if you plan to day trade the Bonds.
Also, if your going to be trading Bonds...
I recommend you to be following their respected Yields side by side with your Bond charts because the Yields provide additional trading info that will help to trade the Bonds.
Simply, Bonds are a good day trading instrument but don't expect them to be like trading the Emini Futures or something like that.
You just need to know what days to day trade it and what days to either sit on the sidelines or trade something else (Oil, Gold, Eminis et cetera).
Summary, pick your spots when volatility is expected to be there and leave the other times to those that haven't done their research.
Mark
Quote from mcurto:
As someone who has watched the 10yr order book non-stop for the last 4 years or so I will try to impart some advice on this subject. First of all, you should really watch the time and sales prints. These are very valuable in a few aspects. It will allow you to see which part of the curve the paper is giving up most edge. We are talking big orders in one print (1000+ lots in 30yr, 3000 to 7500 lots in 10yr, 3000-5000 lots in 5yr, and 5000+ lots in the 2yr). Once you can figure if paper is say giving up huge edge lifting offers in the 2yr you probably want to be getting long the market (trying to get filled on 10yr bids below if lucky) or playing a steepener throughout the day (by jumping on back of strong 2yr buyers). Obviously you can reapply this back and forth many ways across the curve. But most importantly find where the paper is giving up edge. Second, if there is no paper whatsoever on the whole curve watch for Hardy Brumfield and a few other monster 10yr outright locals to push through levels. If there is some Market Profile or volume only support/resistance level out there that sticks out like a sore thumb on a chart they will try to push for stops around it about 99.99% of the time. This is easily done because over a 30 minute period without paper some of these guys can put on a position equivalent to the banks and then get out of it if they hit enough retail stops. Finally, try to get a hold of some dealer commentary (maybe through a friend or something) as they describe how their customers and themselves are positioned into various data releases.
Youngtrader, if you learn to recognize the situations that MCurto described above you will do fine. When the big locals start pushing the market around get ready to buy dips or catch the top of a run. Of course, the key is when to get in and out but that will take time, study and unfortunately some money. But, remember that you're competing against many of the best traders in the
world so it will take time to be successful.
If you want more of a fast paced scalp, try the ES.
Quote from mcurto:
As someone who has watched the 10yr order book non-stop for the last 4 years or so I will try to impart some advice on this subject. First of all, you should really watch the time and sales prints. These are very valuable in a few aspects. It will allow you to see which part of the curve the paper is giving up most edge. We are talking big orders in one print (1000+ lots in 30yr, 3000 to 7500 lots in 10yr, 3000-5000 lots in 5yr, and 5000+ lots in the 2yr). Once you can figure if paper is say giving up huge edge lifting offers in the 2yr you probably want to be getting long the market (trying to get filled on 10yr bids below if lucky) or playing a steepener throughout the day (by jumping on back of strong 2yr buyers). Obviously you can reapply this back and forth many ways across the curve. But most importantly find where the paper is giving up edge. Second, if there is no paper whatsoever on the whole curve watch for Hardy Brumfield and a few other monster 10yr outright locals to push through levels. If there is some Market Profile or volume only support/resistance level out there that sticks out like a sore thumb on a chart they will try to push for stops around it about 99.99% of the time. This is easily done because over a 30 minute period without paper some of these guys can put on a position equivalent to the banks and then get out of it if they hit enough retail stops. Finally, try to get a hold of some dealer commentary (maybe through a friend or something) as they describe how their customers and themselves are positioned into various data releases.
so i can just clarify what you are saying can you tell me how i reckonize the difference between a black box system lifting the 10 year in clips of 2000 or 3000 as part of a system and 'a genuine paper trade going through' .
im under the impression the market does not tell you or announce 'hey this is a paper order going through all get long as it is going up for definite'
i watch time and sales and i see nothing in terms of what your telling me just that there is an account buying and selling 2000 or 3000 at a certain price.
if anything your better off not knowing and stay out of the noise.
whenever i hear an account paper or not is buying for an example this has been the surest thing its going the other way.
Youngtrader,
You need some kind of edge. Mcurto gave you one based on the curve. You can momentum trade bonds or notes on a trend day. If it is NOT trending, you need to be able to trade highs to lows etc and know about a bunch of intra-day tricks.
Both the bonds and the 10 year can be profitable if you know what you are doing (ditto for bunds, bobls, 5years and 2 years). You have to remember that margin is around 350 dollars intraday on the 10 year and even with IB is only like 500 bucks. So intraday if you have a 10 lot on and make a tick ---well that is 300 bucks. In a little rip you can take out a couple ticks in the 10 year with size on and do quite well. But you must pick your spots.
The good news is --- you WILL NOT outgrow it. There is a HUGE advantage to learning to trade in a market that you CANNOT outgrow even with market orders. You are worried about getting filled on the limit as if you were trading live cattle. What is just as important is getting out with size on. So it is a give and take.
Take your time and learn. Took most of us (speaking for myself) years and I am still learning
You need some kind of edge. Mcurto gave you one based on the curve. You can momentum trade bonds or notes on a trend day. If it is NOT trending, you need to be able to trade highs to lows etc and know about a bunch of intra-day tricks.
Both the bonds and the 10 year can be profitable if you know what you are doing (ditto for bunds, bobls, 5years and 2 years). You have to remember that margin is around 350 dollars intraday on the 10 year and even with IB is only like 500 bucks. So intraday if you have a 10 lot on and make a tick ---well that is 300 bucks. In a little rip you can take out a couple ticks in the 10 year with size on and do quite well. But you must pick your spots.
The good news is --- you WILL NOT outgrow it. There is a HUGE advantage to learning to trade in a market that you CANNOT outgrow even with market orders. You are worried about getting filled on the limit as if you were trading live cattle. What is just as important is getting out with size on. So it is a give and take.
Take your time and learn. Took most of us (speaking for myself) years and I am still learning
When I used to scalp the Notes and Bonds, I found that if I joined the bid, by the time someone hit me I didn't want to be long anymore.
I usually tried to be the last one to buy the offer as it turned bid or the last to sell the bid as it went offered.
If I missed buying the offer I knew I was close to the front of the queue. As long as some size came in behind me I'd lean on it otherwise I'd pull my bid and look for the next trade
As someone else mentioned, when the flipper comes in it's untradeable as a scalper.
I usually tried to be the last one to buy the offer as it turned bid or the last to sell the bid as it went offered.
If I missed buying the offer I knew I was close to the front of the queue. As long as some size came in behind me I'd lean on it otherwise I'd pull my bid and look for the next trade
As someone else mentioned, when the flipper comes in it's untradeable as a scalper.
Hopback made some good points as well. I would agree most of my good trades come from giving up edge to get in (contrary to what most prop shops say to do) and then working the bid or offer to get out. If you can stomach some decent swings take positions into numbers, I do that quite a bit if there are some gaudy options flows 5 minutes before a release and it is a new position (that is obviously telling you something). On the other hand, when the big longer-term vol sellers come in I tend to look to just sit on the outer edge of recent ranges and not look for breakouts.
Quote from Surdo:
There is plenty to be made scalping 4 ticks at a time in the 30 YR.
I mainly swing trade so my goal is generally 16 ticks to a point, but I am in and out every day to enhance my cost.
good trading,
el surdo
agreed, volatility comes and goes. i remember back when the bond margin was 2700! you can also do quite well just taking out a couple ticks in the notes.