What percent of your trading is volatility ETFs? Most backers really dislike vol traders, for obvious reasons.
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.
Where can I go for funding?
- Thread starter Hookway
- Start date
Ty for clarifying. I get your view now.
I think that, by your description, I am "niche", I just trade a few instruments, Volatility and a few big Tech stocks
I do ALSO trade the broad market. SP500, but it only works in ideal setups.
(I don't think that I ever said I wasn't 'niche')
But its an interesting for me to view it that way as niche, I hadn't considered it that way before.
Agreed, I've no time for semantics, I think you're views are helpful, if only because I like contrasting views.
< There is definitely a universal formula >
I remain doubtful about this. The example given is well known, but I think the devil is in the details, and more a myth than a reality. Surely, it'd be the privilege of giant and wicked banks (JPM, GS etc) playing market wizards? And if they're that big they have corresponding liquidity concerns
Even if my theory is wrong there's some factual principal to the way price is moving, that I am getting correct with what I am using. Not that I want to be wrong on my theory, but my main concern is does is work in a consistent manner. If it does and I am wrong on why it does, so be it.
I've live traded with a lot of traders and you can tell when they are trapped and sometimes so can they(not to be construed to say the market is after them individually per say, just saying in general) You can hear it in their voice and looking at things while not in their position you're like yeah there about to get slammed. Yeah, that's totally anecdotal but that scenario I've seen play out a lot.
Surely such a universal formula would be arbitraged away?
No and I can explain why. Someone will always go first to make the first move and someone will always make a mistake. That's the entire job of you as the day trader to wait, identify and than take advantage and jump in once you see the mistake made. Even if market was is mainly AI, if they are competing one will eventually lose and be forced to capitulate. It's very hard (obviously) for people to wait patiently though and most traders are the first to jump in and make the mistake and therefore lose their money. Everyone always said "you have to be patient". Which meant nothing to me, but simply viewing it from the way I described helped me to actually be patient.
For example, I know of a very apparent setup where a universal formula could apply, its frustratingly technical, and I'm convinced that some people are exploiting it, and I'm incensed with envy. But this just shows how rare the application of universal formula is, even when its a very valid usecase.
My best guess at a universal formula would be via the artful application of TA. via a set of rules. I kind of do this occasionally via Pennant setups (but even then I convert it to Maths) and preconditions have to apply.
This is what I am talking about regarding experience and context. This is the only way to have a long term career in day trading. Just having one strategy isn't always good enough(unless you make so much money off it you don't need to trade anymore), because once market dynamics change, your strategy could stop producing overnight. How many countless threads do you see of people confused why they are no longer profitable (I see tons on reddit, forums and etc). That's also the issue with automated bots. You need to know when to run your bot and when to not (which again comes back to experience( being able to understand market stability and context).
Ty for the conversation
On a lighter note I just wanted to respond to some of your comments, just open up the quote if you want to read it. I am aware I ramble a lot, but that's just the way I do it.
What percent of your trading is volatility ETFs? Most backers really dislike vol traders, for obvious reasons.
Zero %.
I trade Vix futures.
I can understand their reluctance to vol, but vol is part of the market if they're trading it or not.
It's part of the market, of course, but it's hard to convince people to fund a trade with a highly asymmetrical payoff.Zero %.
I trade Vix futures.
I can understand their reluctance to vol, but vol is part of the market if they're trading it or not.
It's part of the market, of course, but it's hard to convince people to fund a trade with a highly asymmetrical payoff.
True. Though, I think there's ways around the asymmetrical, i.e.
tight stops,
trade backend months,
many short term trades
Not rely only on Vol
etc
On a lighter note I just wanted to respond to some of your comments, just open up the quote if you want to read it. I am aware I ramble a lot, but that's just the way I do it.
These views are contrasting and interesting.
< there's some factual principal to the way price is moving>
Yes, I think there’s an element or a component (only) of the universal within successful trades.
I can often see where people’s mistakes become cannon fodder for successful trades. In fact, I suggest this can even be predicted and become an essential part of a trading model. And this why, for me, such an approach might work with some instruments (eg vol) but not others (eg OJ futures). I find people panic and return from panic in a predictable fashion.
< regarding experience and context. …, your strategy could stop producing overnight. >
Agreed. However, I tend to frame the “when to use it” aspect as part of the model itself, rather than the skill of the operator, and so I tend to avoid seeing it as “experience and context” (although it probably is), because I like to keep the things confined to (over relying on?) the analytical model.
I’m uncomfortable with there being an “X factor” to the trader, because it leans towards hubris and ego and feeling special etc. This is a vulnerable area for me, it’s unmeasurable. I could improve by crediting the experience without seeing it as ego.
Well, the problem with all of these approaches is wide tick size. At 5c bid/ask and daily vol is 50c, VIX futures are hard to turn around without paying an arm and a leg.tight stops,
trade backend months,
many short term trades
Well, the problem with all of these approaches is wide tick size. At 5c bid/ask and daily vol is 50c, VIX futures are hard to turn around without paying an arm and a leg.
It looks that way, but it's not the case.
A wide tick size can be an advantage for the patient trader in a more genuinely free market (as opposed to a CFD-like service). Often I get the better of both ends of the wide spread, moreso EOD and afterhours.
In fact, right now, VIH24 will yield good results trading the spread alone, from 15.10 to 15.00 without even moving anywhere and no expectation of a trend.
A daily vol of 50c is a huge inherent advantage. Low vol for high decay.
I've no problem with low vol of vol environments! Its the high vol of vol that's difficult
How long have you been trading VIX futures specifically and what are your strategy metrics?It looks that way, but it's not the case.
How long have you been trading VIX futures specifically and what are your strategy metrics?
About 10 years
By strategy metrics do you mean performance KPIs of the strategy eg r/r, Sortino etc
ie portfolio KPIs
Or, do you mean metrics unique to the Strategy?
I've my own metrics unique to the Strategy but each one is a vast topic in itself
For example, "BiBeta" is a unique metric
Within the Strategy, it measures the contrast between the Beta[bull] of vol & the underlying during bullish periods vs the Beta [bear] during Bearish periods, and there's beta [neutral].
See, often "experts" refer simply to the beta between 2 instruments but it's fallacy, or is inadequate for strategic purposes.