Trading ES in a prop firm?

[Nattdog]

"ES have to be one of the most untradeable markets out there. And anybody good enough to make money in them, could probably make 10 times the money with a more diversified game."

That is funny. the es is my favorite market to short term trade. note i didn't say day trade.. it is so uncomfortable to realize that many opportunities open up if u can hold a position just that bit longer.. Note that I didn't say jump on the crazy train to glory.. this is a market often about feet and yards, like running the football.

Think about it. this market, more than most anything, is tied into the crowd mood or psychology of the market. The public wants to buy funds at highs when they feel regret for not being involved, and want to sell when it is scary. the sp500 funds must track the whims of the public, in order to manage their exposure. The smart money is by and large controlled by the flows of customer funds. Customers want to put more money to work at highs, and want to withdraw at most lows. The day trader is afraid to death of holding overnight, and is controlled by that fear. losing alot on a trade scares to death. the fears of various participants, be they the longer term holder or the overleveraged fear of the day trader, create opportunity for someone with a different perspective.

It reminds me of a poker match against tight players who fold too often.. Lean on them to take their money, just be careful to have a back door exit to prevent being trapped... or even better set enough aside for when are!!

 

[FranklySpeaking]

Thanks for the info Maverick.

Quote from Maverick74:

NY? No, I don't know of any in NY, although I'm sure there must be some firms there that do. Chicago has a boatload of them.

Yes, it's very possible to daytrade the ES. Every guy in my office does it.

As far as tape reading, keep in mind, there are many definitions of tape reading out there. It's a very vague term. You cannot read the tape in the traditional sense. But under certain definitions, people probably claim to be reading the tape.

 

[Don Bright]

Quote from Astrologer:

Hey Don
What do u mean by this : Sure we do, after proper screening - ???????
Is there any reason u have to screen people to see if they are qualified to trade or do they have enought $$$$ power
I know trading future is risky but i never heard any company screening pll for trading future .
Also can i trade from you platform future and equities togeather and also option if possible -?
Don thank you for your time

We "screen" by asking some basic questions about arbitrage, options expirations (quadruple witching and all that)...FV relevance, and most importantly to make sure that they realize how difficult it is to trade the "leading indicator" vs. the (more) easily traded lagging stocks and other equity based techniques. We do our best to protect our traders from themselves whenever possible, as any good "partner" would do (I would hope so, anyway).

75 cents round trip (approx) vs. $4.00 or more round trip is hard to compete with.....but, as Mav says, his guys are good at scalping and overall trading of them...to each his own.

Yes, REDI has futures and options as well as stocks.....

All the best,

Don

 

[Astrologer]

Hey Don
thank you foR your time
I think redi is a great platform and i know u have a strong balance sheet
So if u can give me your direct # i would love to speak with you
Also is it possible if i can get a demo of your platform
Astrologer

 

[Maverick74]

Quote from Don Bright:

We "screen" by asking some basic questions about arbitrage, options expirations (quadruple witching and all that)...FV relevance, and most importantly to make sure that they realize how difficult it is to trade the "leading indicator" vs. the (more) easily traded lagging stocks and other equity based techniques. We do our best to protect our traders from themselves whenever possible, as any good "partner" would do (I would hope so, anyway).

75 cents round trip (approx) vs. $4.00 or more round trip is hard to compete with.....but, as Mav says, his guys are good at scalping and overall trading of them...to each his own.

Yes, REDI has futures and options as well as stocks.....

All the best,

Don

Don,

Don't you screen all your traders regardless of what products they trade? Also, what is the 4.00 vs .75 comparison for?

 

[Pa(b)st Prime]

From old threads...

Quote from Maverick74:

I'm going to say something that might offend a lot of people on here. But to be honest with you, I really don't care. The fact of the matter is, I can count on one hand how many profitable futures traders I have heard of. Not guys that I know, but guys that I have heard of from other prop firms. While it may be true that only 10% of traders in general are able to eek out a living, I think that number drops to about 2% when we talk about pure outright futures traders.

Now having said that, why should a firm put up their risk capital to get behind a guy where there is a one out of fifty chance he will ever makes a dime? I certainly would not make that bet nor would anyone on this board. This is the problem we are faced with.

Quote from Maverick74:
Don....

I'm pretty good with the linguistics. I see you caution your words carefully and I just want everyone to see what you are saying. Of course, through survivorship bias, anyone that is at your firm 2 years or more and who fall under your definition of "seasoned" will have a 50% success rate or greater. It should be close to 100% in theory.

But that was not the original question asked. My guess is that only 10% (20% tops) of all new traders ever make into their 2nd year at Bright or anywhere else for that matter as net profitable traders.

Don, I'm not pulling these numbers out of my ass, I talk to over 50 different prop firms in the Chicago area that trade everything from fixed income products, to index futures, to stocks and options. The numbers do not change!!!!!!!

Mav, why the change of heart?

 

[Pa(b)st Prime]

Mav, I respectfully disagree.

As you know I pioneered being the wise-guy mean reversion f(tr)ader, lol. You've seen the damage I can do to an account by fading ES moves.

Index products are the WORST product for that style of trading. A few points.

How many commodity, fixed income or FX markets can rise by 10X as the indicies did during the 90's?

What other market closes at it's day's extreme (on LOD or HOD) more often than the index?

Memo to Hog (no pun intended), Beans, Sugar, Cotton, Bellies are trading at the same freakin' prices as when I entered this biz in the late 70's. Where was the Naz Comp in 1978?

Quote from Maverick74:

Yes and no. I think all the futures markets are hard to trade because of the mean reverting aspect of most of them. ES is the worst in the mean reversion category. However, many traders know how to trade mean reverting products and do quite well with them. If you ever want to trade size and manage a lot of money, the ES is bar none the best product out there with the liquidity in both the futures and options markets. That's the tradeoff. Sure, you can be a great trader trading BBY, I was, but how much size can you really swing in that stock comfortably.

I personally trade all 4 of the index products. They are all different. Some are better for momentum, others are better for mean reversion. I happen to like very liquid mean reverting products and trade them well. Others hate them. Bottom line is, trading is tough no matter what product you are trading. So you better either have liquidity or volatility on your side, preferably both.

 

[TGM]

http://www.the-tca.com/


This is a great london shop. They are looking to add a location in NYC.

They have some of the lowest rates I have ever seen. (like under.28 for eurex...)

 

[Maverick74]

Quote from Pa(b)st Prime:

From old threads...

Mav, why the change of heart?

Well, I stand by my statement that I know of very few successful futures traders. However in the last 6 months I have made a change in my opinion of the viability of futures trading.

I have developed a trading methodology based off of one of the most, if not the most successful oil trader in the country. I modified his system to fit the index futures markets.

I stand by my statement that the failure rate for futures is probably considerably higher then stock or options guys due to the leverage involved in futures trading.

 

[TGM]

Quote from Maverick74:

Well, I stand by my statement that I know of very few successful futures traders. However in the last 6 months I have made a change in my opinion of the viability of futures trading.

I have developed a trading methodology based off of one of the most, if not the most successful oil trader in the country. I modified his system to fit the index futures markets.

I stand by my statement that the failure rate for futures is probably considerably higher then stock or options guys due to the leverage involved in futures trading.

the failure rate for futures is about the same as the failure rate of Fat people who loose weight and keep it off.

Interestingly enough, I have traded on trading desks with plenty of successful futures traders. All of us doing radically different stuff.....but all profitable at the end of the year. One thing to note, either you will be the only successful futures trader in your area OR you will be around a bunch. Successful traders tend to be lone wolves with 'pack' tendancies.