What's The Best Way To Convert This Edge Into Money?

drownpruf · Dec 5, 2013

Quote from SplawnDarts:

The average win in CL is about 8-9 ticks. Other than inefficiency from a commissions perspective, and potential liquidity issues, I can't see any reason that is a problem.

Plenty of money has been made on single ticks as far as that goes.

If your stops are run you could lose 3-5x that, or more. CL is a monster and you trade it because of the noise. Nothing wrong with that, just stating the obvious.

I would work on a swing trading method where you can monitor stuff from your smartphone (on the job).

Maverick74 · Dec 5, 2013

Quote from SplawnDarts:

The trades themselves are pretty independent unless you believe some VERY odd technical theories about minute bars and tape ticks days ago driving current price. The confidence test used didn't require normality and in fact, assumes it doesn't exist (and it clearly doesn't in this case).

What obviously IS a concern is whether the underlying system is static, which on a long enough time scale clearly it isn't. If anything that argues for trying to ramp aggressively while the getting is good.

As far as backing, I find your statement odd. You're always the one pimping Topstep, and I'd say there's a 99%+ chance of passing a combine simply by presenting them appropriately sized trades out of the above method. The question is whether that would buy me anything of value, whether there's a better place to go etc...

Always the one pimping Topstep? I "pimp" them, as you put it, not for guys to get backing, but for guys to realize the value of their day job and not trade. Pretty much the same advice I'm offering you here.

Do you really think someone is going to back you?

SplawnDarts · Dec 5, 2013

Quote from drownpruf:

If your stops are run you could lose 3-5x that, or more.

Are you suggesting 30 tick stop slippage events are common in CL away from maybe news announcements? I've watched it for years and I can't recall every seeing something like that in the tape. If you have examples, I'd love to know about it.

In any case, an event like that would cost maybe 2-3% of account value since I'm planning on one contract per $10K. Shitty day, sure, but not that big a deal.

murrica · Dec 5, 2013

Quote from gmst:

I hope you getting it what I am going to say. Just borrow cash against your cards and borrow from some friend/employer/bank a personal loan of 50-60k or so. You already have 13k, that will make it 60-70k. You should be able to borrow this much amount within 7 working days.

Disagree strongly on the above. Trade with risk capital only (money that you can afford to lose, not on a loan). Just my view. Surely others have made it work out favorably on a loan of some form, but then again, surely others have ended up creating very difficult, life changing situations (for the worse) for themselves (and potentially others) by doing so.

dbphoenix · Dec 5, 2013

Quote from gmst:

1) I agree with your point that you should ramp up while the going is good. With 200k yearly income, you must be getting 12-13k in hand after all taxes, IRA etc. You must also have 3-4 credit cards with limits approaching 50-100k.

2) I hope you getting it what I am going to say. Just borrow cash against your cards and borrow from some friend/employer/bank a personal loan of 50-60k or so. You already have 13k, that will make it 60-70k. You should be able to borrow this much amount within 7 working days.

3) Go trade that 60-70k for 2 months. If you continue to get positive results, take your results to someone rich or some prop firm and with 2-3 months of real trading with 60-70k in account and hopefully 10-20k in profits, someone will back you up.

For those of you who weren't there, welcome to that wonderful year, 1999.

SplawnDarts · Dec 5, 2013

Quote from Maverick74:

Always the one pimping Topstep? I "pimp" them, as you put it, not for guys to get backing, but for guys to realize the value of their day job and not trade. Pretty much the same advice I'm offering you here.

Do you really think someone is going to back you?

I have no idea. My point is simply that there's one outfit that might, even though they appear to be total clowns. It certainly raises the question of what else might be out there.

SplawnDarts · Dec 5, 2013

Quote from murrica:

Disagree strongly on the above. Trade with risk capital only (money that you can afford to lose, not on a loan). Just my view. Surely others have made it work out favorably on a loan of some form, but then again, surely others have ended up creating very difficult, life changing situations (for the worse) for themselves (and potentially others) by doing so.

I'm inclined to agree with this point and keep the leverage to a reasonable level.

NoDoji · Dec 5, 2013

With $13K and trading the morning session hours you indicate, your edge should take care of your P/L readily. I don't think you'd be able to qualify with TopStep trader as a micro-scalper.

Although it's rare, I've been slipped between 8 and 21 ticks trading CL and that was on minimal size.

So the answer to your question is to trade your edge in the mornings and watch the money appear

murrica · Dec 5, 2013

Quote from Maverick74:

Keep the day job.

Unless you are not worried about the long term financial (and life/family/marriage/health/etc.) risks, this is probably the most important advice here.. how can it be justified to leave a $200k salary job (very enviable to most) unless you are pulling in significantly more (think millions per year) trading to offset the long term risks?

If you can automate your strategy and/or do it part time in a way that does not interfere with your lucrative career, why not do so?

Again, just my $0.02.

gmst · Dec 5, 2013

Quote from murrica:

Disagree strongly on the above. Trade with risk capital only (money that you can afford to lose, not on a loan). Just my view. Surely others have made it work out favorably on a loan of some form, but then again, surely others have ended up creating very difficult, life changing situations (for the worse) for themselves (and potentially others) by doing so.

In general, you are correct. But his salary is 200k, a 50k loan is just 5% of his annual salary. Plus, he has been trading real money with PF > 2, and he wants backing. Assuming his edge exists, A lot of effort must have gone into developing a PF 2+ strategy on liquid markets like CL/ES. He should feel confident to risk at least 50k on this business. Otherwise, why will people take him seriously if he has only 13k in his trading account.

My main point is if he is a college student with 13k in his trading account, people might still talk to him, but 200k salary common he shiold be able to put in 50-60k in his account, especially when he has the strategy and the execution worked out. Thats all I am saying