# DH7 Trades the Bond Futures



## darkhorse70

Ok, so I didn't end up making the pass through to Propex. Bummer I know but whatever. Frankly I don't have the same faith in the system as I once did. What I mean by that is that I believe willing your going to put in the time and always have the mindset of trying to improve, there's no reason why you can't become a great trader on your own.

Whether this is true or not, I need to believe so if I'm going to succeed at this.

Anyway after trying to trade the way I was taught at Alioms for 6 weeks, I concluded it was impossible due to the commission fees. Trying to scalp when you've got the chance to scratch out of several trades before you score one tick will eat your profits away taking you closer to a negative expectancy.

Anyway while trading under Propex's guidance during the recruitment phase we were trying to spread trade US and Aussie bonds. Every one knows there is a correlation between them and there are several correlations between the equities, bonds etc.

Anyway as the weeks passed I realized my performance was constantly improving.

So I thought i'd give this a shot on the sim before hopefully taking it live in the next few months.

Basically I use the e mini and the t notes plus aussie bonds as confluence for setups. Using a combination of market flow and the short term structure of the market, I scalp small setups and some times hold for a few points.

I prefer a smooth equity curve so taking small consistent profits just works well for me.


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## darkhorse70

Like TH mentioned in another thread, Q trader which ill be using doesnt really have the means to track stats. Ive created a basic spread sheet to track my performance. Basically the most important thing for me to understand is, when are my scalp trades most reliable (in what market conditions). By figuring this out, I can eliminate trading days where I know I shouldnt be scalping. For example a strong up trending day some times see's me get whipsawed all over the place. If I scalp, I usually trade back to value which has worked well so far.

I also have a formula to spread trade between the 10 year aussie bonds and the 10 year notes so im going to be focusing on that as well. This will allow me to trade it when volatility is really and reduce my risk exposure.

I've come to the conclusion that in order for me to succeed in this industry and make a living, Im going to have to eventually start managing money for other people. This requires me to understand the concept of risk at an extremely high level. Understanding how to hedge against risk when volatility increases or before a figure is released is one of my learning priorities for the year.

I know how to hedge up but different markets move apart depending on micro economic conditions so I need to develop strategies to minimize my risk.


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## darkhorse70

Although I use charts, I dont worship them. I don't use any sort of EMA or any formulas. I only have volume, ATR and my candlesticks. The candle sticks only consist of a 30/60min and a daily. I might use a weekly for better reference when need be.

Honestly apart from what happened yesterday and the past few days, I really don't take notice of the bigger picture. I only become cautious as markets approach important levels (support/resistance).

When I trade, I try to visualize the positions of people hurting. This allows me to trade people covering positions and usually when people start covering, the market moves temporarily. 

Using the price ladder/DOM is crucial for me. Understanding the current flow of the market is huge. Flow of the market is constantly changing but each day,hour etc has its own personal character and that's when you really get an edge. 

I'm going to trade from 11am till possibly 12am. Trading the notes is very very slow. It's not unusual for the market to move a few points in several hours so once your in a position, its time to wait. That being said I'm usually out after 1 point or 2. This might happen twice a day or so.

My q trader account will be up and running tomorrow again. Unfortunately I dont have the sim mode either so my buys/sells will be screen shotted and posted immediately for proof.

I plan to trade 2 lots with a possible max size of 4. My hypothetical account size will be $20,000.


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## darkhorse70

I had to make this equity curve as again, q trader doesn't provide those options. From tomorrow on, Ill be continuing the equity curve on a daily basis. Hopefully it provides some value to ya'll.


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## darkhorse70

This is a screen shot of my setup. Ill be adding some currencies, possibly the spi, asian markets and hopefully some euro markets.


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## skc

darkhorse70 said:


> I plan to trade 2 lots with a possible max size of 4. My hypothetical account size will be $20,000.




I don't know too much about bonds... but this account size seems very small (even for sim) for bonds?

Take a look a few recent market dislocation events and see if your account is big enough not to be wiped out. I can guarantee you there'd be a few of these events in 2016.

Nice thought out post otherwise... best of luck.


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## darkhorse70

Thanks for the input SKC. As far as I was aware the ATR has roughly been around 17 points. I'll have to  sift through the charts today and see how its moved through out the last few years. Per tick on the US T Note was is $15USD.

So per point is around 30$USD.

I usually risk a few points at times but I usually trade with a rough stop loss in mind contrary to popular advice. The way I see it is as things unfold, more information is presented and if things are going south and don't seem to be exhausting then I get out.

Thats my strategies only downfall. Taking one or two big losses once in a while which ill have to manage better.

Ill go through the charts again tonight and see what the swings are like during volatility though. Thanks


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## CanOz

darkhorse70 said:


> Thanks for the input SKC. As far as I was aware the ATR has roughly been around 17 points




I've got handy range indicator that you can use to tell you the average daily range if you want it DH...


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## skc

CanOz said:


> I've got handy range indicator that you can use to tell you the average daily range if you want it DH...




Not the daily ATR... but what happens during a market dislocation event? 

Doing spreads is like writing insurance... you collect small, steady premiums in sunny weather... but you have to know the loss you will payout in the next storm. You can't look at the daily average rainfall to calculate the risk of flooding and associated claims.



darkhorse70 said:


> Thanks for the input SKC. As far as I was aware the ATR has roughly been around 17 points. I'll have to  sift through the charts today and see how its moved through out the last few years. Per tick on the US T Note was is $15USD.
> 
> So per point is around 30$USD.
> 
> I usually risk a few points at times but I usually trade with a rough stop loss in mind contrary to popular advice. The way I see it is as things unfold, more information is presented and if things are going south and don't seem to be exhausting then I get out.
> 
> Thats my strategies only downfall. Taking one or two big losses once in a while which ill have to manage better.
> 
> Ill go through the charts again tonight and see what the swings are like during volatility though. Thanks




$15 per tick? That sounds tiny.... I thought bonds have massive face values and large tick sizes. Shows my ignorance.


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## CanOz

skc said:


> Not the daily ATR... but what happens during a market dislocation event?




Yeah, but this is quite handy to go through the history and check out how events (eg. better than expected unemployment rate, China surprises) affect the bonds. You can see the daily range as well as the average...


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## CanOz

This is just handy to show what the daily potential of the market might be like, but you can use it to see what ranges do when they blow out....I like it better than an ATR, which is ok for a general idea of volatility.


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## darkhorse70

Thanks Can, ill pm you for the indicator.

SKC I think each account full point is $1,000USD but its divided into 1/32.

So 1 point is 30$USD X 32 If im not mistaken.

I should have been more clear. Currently I outright trade the t note but I have done a few spread trades either going long or short the 10:10.

I see the potential in them.

In terms of dislocation, you are right. I heard one of the senior traders sayign how the spread between the bond markets were insane during the gfc before any one new what was happening. People kept averaging into positions and eventually got blown away.


That's also the great thing about spreads, You can average into them if im not mistaken and if things aren't really out of whack, you increase your odds.

I know there's a formula which tells you which market should go bid first. Say the aussie and notes are both bid and youre looking at the 10:10, theoretically depending on the positions one should go bid before the other. Unfortunately I never got that far. It would be a useful to indicate if there is excessive buying or selling in one of the markets. That would of been handy for scalp trades.


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## jmg86

darkhorse70 said:


> I know there's a formula which tells you which market should go bid first. Say the aussie and notes are both bid and youre looking at the 10:10, theoretically depending on the positions one should go bid before the other. Unfortunately I never got that far. It would be a useful to indicate if there is excessive buying or selling in one of the markets. That would of been handy for scalp trades.




Its not that one will go bid before they other its that you need to leg the Aussie 10's first then pay up in the Notes to put the trade on.

1 tick in XT = .5 basis point = 35 USD
1 tick in Notes = .2 basis point = 15.625 USD

Also if your doing any range studies, you really need to separate the day session from the night session.  The Aussie Bond market is a completely different market during SYCOM. 

Are you intentionally trading every session but the US cash market hours?


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## minwa

Watching with interest ! 

Don't you find 5 DOMs on one chart too busy ? Or are you able to monitor them and spot the setups ? I wouldn't have a clue even with just one DOM personally haha.


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## darkhorse70

Hey, minwa two of the doms on there I dont really use so Ill be getting rid of them and will be adding
currency and stuff. It's not really over whelming and once you can manage one, you start to focus on two etc.

I tend to not be able to focus on a DOM unless I get a position on. It becomes way more exciting then watching a chart because you can see all the little battles going on between the bid and ask and it really gives you a deeper feeling for whats going on.

The photo attached above was the setup I had at the prop shop. Mind you, I could have had way more DOM up there and that type of trading was the most exciting. Every thing was happening so fast and your looking for opportunities and placing limit orders and cancelling stops every 5 second. I traded like that for a while at home but it was impossible as I mentioned before because you would need super low prop shop commission rates.


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## darkhorse70

Mind you that photo I just posted is missing T & S as well.


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## darkhorse70

Barely any charts were glanced at. Pure market flow trading.


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## CanOz

darkhorse70 said:


> Barely any charts were glanced at. Pure market flow trading.




Yeah, when i want to know if the markets are going bid or offer all at once, the glance at the Doms is the quickest way to tell....mind you I'm so slow ( ld: ) by the time my eyeballs roll back to my Dom, the moves happened....


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## darkhorse70

haha Steve, some markets like the DAX are really fast. The t notes move really slow and even when theyre bid they usually are slow enough. There has been moments that it drops 10 points over a figure. Lesson learnt lol


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## kid hustlr

jmg86 said:


> Its not that one will go bid before they other its that you need to leg the Aussie 10's first then pay up in the Notes to put the trade on.
> 
> 1 tick in XT = .5 basis point = 35 USD
> 1 tick in Notes = .2 basis point = 15.625 USD
> 
> Also if your doing any range studies, you really need to separate the day session from the night session.  The Aussie Bond market is a completely different market during SYCOM.
> 
> Are you intentionally trading every session but the US cash market hours?




And the Aussie open?

Having sat where you are and finding out how difficult it is I'll be watching with interest. All the best DH


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## darkhorse70

Hey JMG, didnt see your post mate. 

Um well as far as I knew the atr on the Aussie bonds is roughly 2 times smaller than the notes. Hence I think a spread of 1:1 is fairly even. Im not sure if that answers your question?

The way I trade spreads is if it looks like the bonds have excessively sold off and the notes are still strong then a few things can happen. Im expecting that either the notes will start to sell off faster than the bonds or the bonds will rally faster than the notes. That's if im right. If im wrong the bonds could continue to sell off while the notes sell off at a slower pace or not sell off at all.

So id long the 10:10 spread If I thought the aussie was going to outperform the tnotes and sell the spread if it was vice versa. 

Now hypothetically, lets say I think the bonds have bottomed out in the scenario above. Ill go long the bonds given the bonds look like theyre going bid. This will be done out right. As soon as I feel the markets could possibly go offered again or the bids on the notes look like they could give way, Ill sell the notes as well.

It's easy for me to visualize the dislocation given the formula as its a lien graph with obvious ranges. Once it gets over extended I start to pay attention.

I havent really spread traded much but I can see the benefits, especially if im holding a position and figures are about to be released etc.

As for not trading the US cash session, theres two reasons. I tend to get out because if I get in during that time, theres no way im going to go to bed haha. The second reason is, im usually in a position before the cash session and as it gets closer to the US cash session my trades usually go my way so I get out.

I guess it's been working so far so I havent really seen the need to trade the US session. But there are times where im holding a position and I need that slight volatility to get a move under way so I hold through the open. Usualyl liquidate before the us figures come out.


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## darkhorse70

Thanks Kid Hustlr. I'm going to pm you.


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## kid hustlr

darkhorse70 said:


> Thanks Kid Hustlr. I'm going to pm you.




I replied.

Anything I say should be viewed in the context of this thread:

https://www.aussiestockforums.com/forums/showthread.php?t=28003

Some 3-4 months after that last post I kicked it in as I got sick of being a break even trader. For me it was the correct decision. I think my prop shop actually shut up some 3-4 months after that to.

*
On 'Making it'*
For a young 18-25 year old guy it is very difficult to 'make it'. a long period of learning, months of trading small size whilst fighting desk fees, software fees, brokerage, etc puts you up against the wall from the get go. Add to this external pressures from family/gf/etc from those who don't quite get how you can work 10+ days for free and there's a lot of things holding you back. Most who make it probably had a little bit of luck along the way. *Don't be discouraged about not getting through the Aliom phase - it's not the end of the world but it does mean you now need to work even harder, find contacts online, read blogs, whatever it is as you won't be able to lean on traders sitting next to you for assistance.*

*
On Trading the Aussie bonds*
For me I saw the game change before my eyes. Our firm used to have a whole bunch of bread and butter type trades - sitting bid/offer in the close, trading data successfully, managing queue position, making good money in the rollover period which all got eaten away by technology and algorithms. As such pure scalping become almost impossible because taking half a tick didn't cut it anymore. My style (almost arbitrage in a way) was no longer successful and I wasn't willing to try to start again. I also found there were plenty of days with maybe 1 opportunity all day - it made it very hard to be consistent.

Noting the above, regardless of your style, if I have any advice for you:
1. Manage downside risk. Scratches, half tick and one tick losers won't blow you up
2. Understand when to average - I know people justify spreading by saying they just average it out - too me this is flirt with danger and you need some type of plan.
3. When you are seeing it well, throw the kitchen sink at it. I mean this the most. Once a week for a few hours or a couple of times a month with enough experience, it will move in slow motion for you and you need to throw everything you have at it. Size up and go big. My biggest day's should have been twice as big. I remember a couple of days where there was little momentum algorithm buyers or sellers - traded properly and it was as close to free money as you get. Or sometimes you see something you like on the chart, combined with the time of day and some depth action and you just think 'wow I know what's going to happen here'. Everything lines up. In those cases go for it and HOLD ON.
4. Assume every day is a war. This is the mentality you need. There are guys in the sky scrapers in Sydney and Singapore trading 20 hours a day managing a huge book. They are punters like you and are in it to make money. These markets more than ever have a huge % of locals who are trying to rob you. You need a killer instinct to kill.

Good luck mate. Document as much as you can in here - your style will likely change 10 times in the next 6 months.


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## captain black

kid hustlr said:


> 1. Manage downside risk. Scratches, half tick and one tick losers won't blow you up
> 2. Understand when to average
> 3. When you are seeing it well, throw the kitchen sink at it.
> 4. Assume every day is a war. This is the mentality you need.




Best post on ASF I've seen for a while.


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## darkhorse70

Agree with all of it Kid.

Regarding going big on set ups you see, some thing on that line happened a few days ago. The market just completely went aggressively bid in the bonds. Equities just turned around and its that moment you know some thing big is going to happen. Going big on those plays and holding on is one of those big pay out type of days.

All I did during aliom was trying to front run the Que in the bills. I thought that style had a lot of merit given practice and learning how to Que through different spreads etc.

I'll print out the key points for future reference. 

I'll be documenting every day religiously. Some time's it's just the fills and the results. Other days it'll be more descriptive. 

I don't think I can ever turn back. I've tried that once and I just felt empty. I felt as though part of me was missing. When youre around other people who are talking about their careers and passions and when I tried to take a slightly different avenue I just felt lost.

This is where I have to be. I just hope I have the wits to one day pull it all together. I sure as hell dont have the ability to socially win people over or express myself in a dominant type of way. I guess that's why the only way I can prove it is through mere results.


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## jmg86

darkhorse70 said:


> Um well as far as I knew the atr on the Aussie bonds is roughly 2 times smaller than the notes. Hence I think a spread of 1:1 is fairly even. Im not sure if that answers your question?
> 
> So id long the 10:10 spread If I thought the aussie was going to outperform the tnotes and sell the spread if it was vice versa.




ATR may be twice the size of the XT but when you are spreading Bonds you are essentially spreading cash, which is reflected in basis points not in ticks.  A roughly 1:1 ratio is correct but if you judging relative value based upon the Notes moving more ticks than you aren't really making a trade on out-performance.  You need to do it based on DV01 values (Value of 1 Basis point) which is a bit messy as the notes are priced differently.

The DV01 of an XT is $100 AUD or $70 USD and equal to 2 ticks.  

The DV01 of the Notes is $79.80 USD (see link below).  If a tick in the Notes is worth $15.625 then a 1bp move is 5 ticks. 

If you apply that to your trading, seeing the Notes falls 5 ticks whilst the Bonds only move 2 ticks isn't actually outperformance so to speak.  They both moved the same amount and your spread p/l wouldn't have moved.  

http://www.cmegroup.com/trading/interest-rates/invoice-spread-calculator.html


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## darkhorse70

captain black said:


> Best post on ASF I've seen for a while.




Agreed.


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## darkhorse70

Hey JMG, I read about dv01's by Guy Bower. I understand some of the stuff youre saying. To be honest, the spreading stuff still confuses me. 

Im spreading future bonds (does that make a difference). I know there are two types. The yield and the price?

To be honest again... when we were trading for 6 weeks every one used different terminology for ticks/points etc etc. I guess the fundamental stuff didnt really matter at that point. Some people even got so confused that the trainers were just like view the movement of the price by supply and demand not the consequences of the yield curve etc.

So if I see a trade where there is possible support in one market and not in the other or an over exaggeration in one, then ill try to spread it.

The funny thing is some of the traders didnt even understand most of the fundamentals or how things were priced. 

I dont want to frustrate you as I dont know much about spreading and using the dv01 to figure out how much one markets over exaggerated is out of my league.

Isn't my way still doable?


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## darkhorse70

On another note I found out cqg q trader doesn't support more than 1 chart at any one time. 

Im setting up multi charts. Its confusing as hell. Hopefully be ready to work off within the next few hours. Good thing its good sim mode and hopefully stats options.





Progress is slow but hopefully the setup looks better once im finished lol.


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## jmg86

darkhorse70 said:


> Isn't my way still doable?




Potentially, but the 1:1 ratio you are using is derived from the DV01s which is why you trade on that, not on ticks.

79.80 USD (Notes)/70 USD (XT) = 1.14  so the DV01 neutral ratio is something like 11 XT against 10 Notes but with smalls 1:1 is ok.

Think of the Aussie 3/10s which are priced identically as 100 - rate.  If both move 1 full point (1 basis point) on a 1:1 ratio you have made 100 AUD in the 10s and lost 30 AUD on the 3's, which is why they trade them as a 33:10 ratio.  In your case you have the ratio correct, but not the price changes.


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## darkhorse70

Ok I get what youre saying now.

Well I should have been more clear. I never really looked at the perfect hedge ratio. But even when you spread trade, youre never really completely hedged or you wouldnt be able to make money.

In terms of actually hedging up against risk getting a more accurate hedge ratio is important.

I guess I was throwing out a superficial number off the top of my head but youre right.

Thanks for the input.


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## CanOz

*jmg,* have you noticed a thinning out of spread trading in Australia in general? Speaking to a few people i know in the business, there seems to be less of the traditional arbitrage like opportunities now, as Kid was saying, perhaps from more volatility in bond futures? 

I've always been interested more in equity index spreading, as watching many different indices at the same time while directional outright punting lends itself to auto-passive observation of opportunities as they develop. Tons of opportunities in the Asian and China linked indices due to intervention but as well in Eu indices around the ope and before the US opens. (For example, the CAC was lagging the Dax yesterday, but it caught up in the end)

Also, i had heard that there had been a big loss at one of the Singaporean prop firms due to a blow out in the bonds recently....and, but not related to that episode, that several well known Australian bond spreaders had exited the business altogether or had switched to equity index spreading and directional outrights...any further insight here?

Cheers,


CanOz


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## darkhorse70

Quick update as ive been setting up the charts plus doing exercise and trying to catch up with the market flow. 

E mini looks like its possibly topping off for the time being. Its close to the high of yesterday. Looks like slight exhaustion for the meantime.

T note looks like it might be bottoming out.

Need to focus on market flow for 30minutes and see if I can get in with a low risk set up for a few ticks.

Ill screen shot if i get in to a position.


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## relval

Spreading is a good solid strategy when done right.  My advice to anyone starting out is to forget about trying to trade spreads intraday, and look for opportunities over a swing trading period (1-3 days).  The intraday horizon is very competitive, and brokerage/execution is critical.  You can spend a lot of time finding a niche edge only to have every one jump on it and you are back to square one.

If you can develop the skill to hold for a few days, you have developed a business model that is scalable and largely impervious to transaction costs.


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## darkhorse70

Ill let you know what price I buy at, why I do so and what price I sell at plus any relevant thoughts...


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## darkhorse70

Bought 2 long @ 17.5

Was going to try and go to long at 17.0 but I got mistaken to to the set up. Lets see if I can get 2 ticks or what ever the official terminology is.

Hoping for the emini to continue sell off and for the bonds and notes to start going bid. 

Using cqg I had a tool that helped me see the current direction of the last 5 or so moves on the dom. I dont know if MC has that so i might lose some slight touch....


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## darkhorse70

Ill need closer screen shots. My pc is a mess now. Will fix every thing tomorrow.


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## kid hustlr

CanOz said:


> *jmg,* have you noticed a thinning out of spread trading in Australia in general? Speaking to a few people i know in the business, there seems to be less of the traditional arbitrage like opportunities now, as Kid was saying, perhaps from more volatility in bond futures?
> 
> I've always been interested more in equity index spreading, as watching many different indices at the same time while directional outright punting lends itself to auto-passive observation of opportunities as they develop. Tons of opportunities in the Asian and China linked indices due to intervention but as well in Eu indices around the ope and before the US opens. (For example, the CAC was lagging the Dax yesterday, but it caught up in the end)
> 
> Also, i had heard that there had been a big loss at one of the Singaporean prop firms due to a blow out in the bonds recently....and, but not related to that episode, that several well known Australian bond spreaders had exited the business altogether or had switched to equity index spreading and directional outrights...any further insight here?
> 
> Cheers,
> 
> 
> CanOz




My understanding is plenty of local traders 'jobbing/scalping/spreading around the curve have struggled over the last 2-5 years. In my view it's not a volatility thing - that comes and goes, its the ability to rely on queue position for a fill which has been taken away. Algos just took over and removed this edge. You can't be a market maker anymore. Good traders adapt to high and low volatile periods in my view, so long as the market has a base level of opportunities each day, they will hang around.





relval said:


> Spreading is a good solid strategy when done right.  My advice to anyone starting out is to forget about trying to trade spreads intraday, and look for opportunities over a swing trading period (1-3 days).  The intraday horizon is very competitive, and brokerage/execution is critical.  You can spend a lot of time finding a niche edge only to have every one jump on it and you are back to square one.
> 
> If you can develop the skill to hold for a few days, you have developed a business model that is scalable and largely impervious to transaction costs.




Agree with this entirely. 

Darkhorse - learn not to sleep.


https://www.youtube.com/watch?v=lsSC2vx7zFQ


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## Trembling Hand

kid hustlr said:


> Some 3-4 months after that last post I kicked it in as I got sick of being a break even trader. For me it was the correct decision. I think my prop shop actually shut up some 3-4 months after that to.




Got the felling this will be the theme now. Everyone is chasing the same game of ASX rebates while churning trainees through a program designed to have them flat before costs...... 



kid hustlr said:


> *On Trading the Aussie bonds*
> For me I saw the game change before my eyes. Our firm used to have a whole bunch of bread and butter type trades - sitting bid/offer in the close, trading data successfully, managing queue position, making good money in the rollover period which all got eaten away by technology and algorithms. As such pure scalping become almost impossible because taking half a tick didn't cut it anymore.




I reckon every few years you have to reinvent yourself as a intraday trader. Markets never stay the same for long.



kid hustlr said:


> My style (almost arbitrage in a way) was no longer successful and I wasn't willing to try to start again. I also found there were plenty of days with maybe 1 opportunity all day - it made it very hard to be consistent.




I understand why prop push you towards small tick per day instruments but I am always perplexed why an independent trader will choose that route. I've always looked at the big movers because I often have my first 3-5 trades go bad while I'm feeling out the market. On the DAX or HSI thats 15 minutes of Monday morning, 30 min into the week and I'm back positive and making money. On the Bonds 5 bad trades and that is the week gone!!!!


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## darkhorse70

Relval, I agree with hat your saying. Maybe even putting on some butterfly spreads etc. If only I knew how to do that.

Kid, I watched motivation videos for 2 months straight. I'm slightly immune to them now. It's a balance between keeping my anxiety under control while developing into a good trader. My life style is like one huge routine. Work my butt off, then go cycle then work again then spend a few hours bonding with my dad or brother or some thing.

Once I establish that I can trade, then its just a matter of increased trading exposure. More time spend behind screen = more opportunities. Currently if ive had a good day, I dont like to get over confident and destroy good gains and chase it during the entire week.

TH, I was great at trading the DAX. It felt like second nature to me but I didnt have that kind of capital to sustain a bad trading day. I know they have a mini DAX now? As far as slow moving markets, if you are consistent, just increase the trading size. Load up on more lots? 

I dont have enough stats to compare markets and say this is the best market for me. I'm just dipping my toes into different markets. The margin on these t notes is 1g. The margin on a contract for the DAX is a few thousand?


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## darkhorse70

As far as 5 bad trades in the bonds, my stops are usually tight. Im only aiming for maybe 2 points a day. Youve got a 14 atr range and it feels as though they have a much more ebb and flow character which means it comes more down to timing the trade and you have a better chance of getting out of a bad decision.


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## darkhorse70

Im no expert so ill always contradict myself as I learn.


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## jmg86

CanOz said:


> *jmg,* have you noticed a thinning out of spread trading in Australia in general? Speaking to a few people i know in the business, there seems to be less of the traditional arbitrage like opportunities now, as Kid was saying, perhaps from more volatility in bond futures?
> 
> I've always been interested more in equity index spreading, as watching many different indices at the same time while directional outright punting lends itself to auto-passive observation of opportunities as they develop. Tons of opportunities in the Asian and China linked indices due to intervention but as well in Eu indices around the ope and before the US opens. (For example, the CAC was lagging the Dax yesterday, but it caught up in the end)
> 
> Also, i had heard that there had been a big loss at one of the Singaporean prop firms due to a blow out in the bonds recently....and, but not related to that episode, that several well known Australian bond spreaders had exited the business altogether or had switched to equity index spreading and directional outrights...any further insight here?
> 
> Cheers,
> 
> 
> CanOz




I think the traditional days of locals 'tap n scratch'  type of trades in Bills and 3 years are over which is probably what DH7 has already observed.  The 10yr roll is also non-existent these days on local side with the exception of one firm compared to prior years which I believe was a huge edge for locals in the past.

Im not to sure about the bigger guys, but smaller guys trying to get queue and then take a tick or stop out with a volume triggered stop across the curve are definitely struggling.  Whether thats due to algos or a relatively stable rate environment I dunno.

I agree re equity spreading.  If I was DH7 during the Euro & US hours I would definitely look at Stoxx/ES or SPI/ES etc..I would also look at the US curve products which I reckon offer far better ops than 10:10s.

http://www.cmegroup.com/trading/interest-rates/files/TreasurySwap_SpreadOverview.pdf


----------



## darkhorse70

JMG, I'm going to pm you.

Damn, instead of selling at limit @ 19.5 I went market order at 19 just before market went bid. Still getting use tot he functions...

Anyway, still 1.5 points. The emini started curving off. I'm not usually tempted to stay long enough to find out what happens. Once the move gets underway im usually out. I believe in consistent small profits. Win ratio goes up, peace of mind increases and I dont find my self chasing trades because I waited to long.  

Sold 2 x @ 19.0

I'll be watching the markets for another few hours. Going to go for a cycle now and clear my head. That took hours..





You cant see anything in the photo. My snipping tool is behind MC and I cant get to it. Ill have to figure out a way tomorrow so screen shots are bigger.


----------



## darkhorse70

Long 2 x @ 15.5


----------



## darkhorse70

Sold 2 x @ 16.0

1 tick profit

I got filled through a limit order. Ill pull up the T&S from now on to shop fills. 

For some reason my previous gains arent shown on the sim position. Need to look around to see total profit. But just a photo of the 1 tick. Im trading based off a 20k account .Need to configure settings later.


----------



## darkhorse70

Bought 2 x @ 15.5 again. Looks like emini might top out as well as the notes might have a small rally.

Some times you just need the confidence to take the trades...


----------



## darkhorse70

Sold 2 x @ 16.5

Profit 2 ticks/1point


----------



## darkhorse70

I think its a wrap for tonight. 

Up 2.5points = $150USD

3 Trades, all profitable.

Generally how I trade. Unless the market has a really great set up and in for a major sell off or some thing, I usually get out. Needless to say, the t notes are about to go bid @ 18.0


----------



## kid hustlr

If you are trading SIM I would cross the spread every time you trade (both in and out). It will most likely under exaggerate your profits but at least you won't get the dodgy fills where you sit on a bid behind 1200 and get filled when 3 lots trade. Just a thought.


----------



## darkhorse70

Thanks kid, I guess ill just hit at market instead of putting in a limit order. Most of the times thats how ive been trading anyway, so shouldn't make too much difference.


----------



## darkhorse70

Quick update on last nights market activity. Equities sold off again. E mini closer under 1900. T notes rallied but were faced with selling. They still managed to closer higher for the session although not above the previous days high.

Oil inventory was much lower than expected. I dont really know what oil inventories implications are and what it means. Need to find out.

Emini is at an interesting cross roads. It might see some short covering rally or it might go lower.

Aussie figures coming out at 11:30. Employment change and unemployment change. Possible dislocation between the bonds and notes.

Ill have to sit and wait on the sidelines till I see a good set up. 

Will report as I go.


----------



## darkhorse70

https://www.youtube.com/watch?v=1grhmdzoHrw

For now lets play a tribute to Lemmy


----------



## darkhorse70

Uh, such an easy looking set up. Notes are clearly bid and emini looks like its going to possibly plunge.

But some times you need to bite your tongue and wait a while.


----------



## CanOz

Shanghai opened down 2.6% as well....somethings up again...they're struggling to keep the currency afloat i reckon...

Expecting lots of intervention again today in the China markets.

Last nights sell off in the US was very direct, like there were no buyers anywhere...


----------



## darkhorse70

Interesting Can. Crazy how China has that effect on every where else and the scary thing is we dont even know the level on intervention by them.


Just shorted 2 a 128'0.5

Looks like some one is holding the emini up. Some sort of buying.




Update :

Notes are rallying again/ Off side a few ticks


----------



## darkhorse70

I got in at a less than good price. Should have been a bit more patient. Hoping for that emini to push up and feel some down force on the notes.


----------



## darkhorse70

Bought back 2 x @ 0.5

Was in the money 2 ticks but thought there would be stronger rally. Emini looks like it might be turning back around and notes might be going slightly bid..


----------



## darkhorse70

Going to wait for the emini to give it another push lower. This will drive the notes up and position me for a better entry short later on if the mini fails to go lower.


----------



## darkhorse70

Sold market 2 x @ 1.5


----------



## darkhorse70

Ok bought back long 2 x @ 30.5

Profit - 3 points/180USD





eMINI looks like it might cause a small short covering rally. My eyes are about to pop out of my head and I need to go for a walk. So I took my chips off.


----------



## darkhorse70

Came back to the emini which is rallying. 10 year t note down to 24.5


----------



## darkhorse70

If I hold most of my trades for a while, there usually decent trades. I just have the tendency to always want to lock in profits. Theres a cut off point where trying to hold on profits means less winning trades as a result. I need to find that sweet spot.

Im not stepping in for the time being as my edge is not there. I need a good setup to form. Usually its trading back to value.


----------



## darkhorse70

Strong rally in the bonds and t notes. Equity (emini) is re attempting to sell off again.


----------



## darkhorse70

Sold 2 x @ 0.5


----------



## darkhorse70

Bought 2 x @ 128'0

Profit 1 tick = $30USD


----------



## CanOz

Wow, what an afternoon on the Dax I was nearly on the day stop again and managed to catch the last thrust down on the Dax, bringing it back positive again for the day. Sure took some handy mouse clicking at the rate the orders were hitting the bid...I'm stuffed....


----------



## darkhorse70

sHort 2 x @ 0.5

Bought 2 x @ 1.0

Net Profit = -1 tick


Markets just whipping around Can?

The emini doesnt know what its trying to do.


----------



## darkhorse70

I put on a crazy trade. Shorted 2 x @ 1.5.

Looked like the equities was going to hold. Then it started dropping and the notes really started rallying. They nearly hit the previous days high.I was offside 4 points but at that moment it was the crucial test. The emini so some buyers step in at that low again. Now im only offside  1 point. US session going to open in 10minutes. 

I want to hold this position as ive taken the risk and it could go in my favor now. It would be stupid not to. Ill take my positions off before the unemployment claims or before hand.


----------



## darkhorse70

Helll yeah, just sold 2 x @ 30.0 i think.

It was 3.5 points = $210USD

Total 6.5 points for today.

The move might of kept going but Im tired and want to watch a movie before i shoot off to bed.

This was todays hardest trade. The mental challenge to stick to a trade like that especially when your days profit is being vaporized.


----------



## Modest

I am enjoying this thread I haven't really seen this kind of trading before, it's very interesting even though it's all flying over my head still.

Good luck mate!


----------



## darkhorse70

Thanks Modest, Ive been keeping an eye on your thread to. 

I guess were both are in the same boat. We do well on the sim but the real test is going live. Every day you count the profits and say to your self "If I can do this live then ill be rich". Ive made a plan so when I want to go live, I can possibly tell my brother to make the deposit at any given time without my knowledge. That way ill tell my brother to swap my sim account over haha and hopefully I want have any sort of bias towards the live training.

This strategy is simple to what your doing. Your watching the emini. Same thing here but I also have the advantage of another few markets so I can make the choice when they all confirm the same information rather than just basing all my decisions based on one price action.


----------



## darkhorse70

US equities made their way up yesterday. Possible short covering rally.

Unemployment claims came in a bit higher than expected. Didnt really do much. I think they attempted to sell off but buyers stepped in. Cant really tell, my chart timing is US time. Need to fix that.

As for today, im just viewing some levels. Trying to get a feel for the market might want to do and waiting for some levels to trade off.

A couple of big figures coming out tonight from the US.


----------



## darkhorse70

Long 2 x @ 29.5.

E mini looks like it might be selling off for a short period of time. Notes look slightly bid. Going to make a quick scalp if possible, 

It's what they say, if you want more price confirmation, your going to have to pay more for it. Some times being the early ones is the best position to take. Thats how I trade,


----------



## darkhorse70

Ok sold 2 x @ 30.5

By the time I took a screen shot the notes had went back offered slightly but the profit figure is their of $60+

For some reason my T & S isnt showing properly. Going to fix that now. 
Looks like the emini is going to go down and the notes might keep going but my style is to take the profit off the table quickly. Unless theres a very prominent move happening.


----------



## darkhorse70

Long 2 x 30.5


----------



## darkhorse70

Sold 2 x @ 128'0

Profit = 1.5 points/90$USD

Screen shot markets had just gone back offered for a second. Markets currently trading at 0.5 Emini might continue to sell off but its collecting consistent profits for me.


----------



## darkhorse70

An important quote by Mike Bellafiore " Is this trade worth my risk".

Some thing I should keep in my head.


----------



## darkhorse70

Made 1 tick on a potentially crappy trade. The market seems like it might want to tank and the notes look like they want to have a run through the highs but I guess the figures that are coming out of US are holding it back.


----------



## darkhorse70

I'm speaking with my friends brother so I think ill stop trading for today.

Total Profit = 3 points for today.


----------



## Modest

darkhorse70 said:


> An important quote by Mike Bellafiore " Is this trade worth my risk".
> 
> Some thing I should keep in my head.




His book one good trade was one of the earliest books on the topic of trading I ever picked up... You have motivated me to re-read it over the weekend.


----------



## darkhorse70

Ive got both his books. Actually I just watched a random vid of his today and thats where I got the quote from.

The trainer from Aliom said smb's days are over. He said all equity traders these days are struggling. Not sure hwo true that statement is but he said thats why they offer all these courses. So they can make some sort of revenue.


----------



## darkhorse70

Equities going down. Notes are pushing up real hard. This is going to be a really wild night. The notes has moved up nearly 30 points in the last 2 hours. Thats nearly 2 times the ATR.

Lets see what the equities are going to do.


----------



## darkhorse70

Those lows could be tested which were made last year around August.

Either a great trade back to value or a huge trend night.


----------



## darkhorse70

Total profit for week = 12.5 points/$750USD

10 Total Trade

8 Positive

1 Negative

1 B/E Trade


Total days traded = 3


----------



## VSntchr

darkhorse70 said:


> The trainer from Aliom said smb's days are over. He said all equity traders these days are struggling. Not sure hwo true that statement is but he said thats why they offer all these courses. So they can make some sort of revenue.



That's a big call. I've cut my teeth trading equities and have noticed changes in the market making mean reversion a little tricky, but conditions for directional news event trading have been superb...just my opinion of course.


----------



## darkhorse70

Hey VS, I think his statement was in response to why prop shops are trading bonds and spread rather than outright equities. 

Most likely just defending his argument.


----------



## CanOz

darkhorse70 said:


> Ive got both his books. Actually I just watched a random vid of his today and thats where I got the quote from.
> 
> The trainer from Aliom said smb's days are over. He said all equity traders these days are struggling. Not sure hwo true that statement is but he said thats why they offer all these courses. So they can make some sort of revenue.




Seems Aliom was the struggling, Epoch bought them out.


----------



## Trembling Hand

darkhorse70 said:


> Hey VS, I think his statement was in response to why prop shops are trading bonds and spread rather than outright equities.
> 
> Most likely just defending his argument.




They do it because its a high brokerage, high cost, low risk method. Consider this,

They get 10% back of your bro cost in GST rebates they don't pass on to you,
They get a similar rebate from the clearer on clearing cost,
They Get all the ASX new prop trader brokerage rebates for the first year,
They get a good slice of the platform cost they charge you for TT or CQG,
They charge you $500-$1000 desk fee per month.

Then they say you have to hedge out all risk on positions!!!!! Probably get $10,000 to $15,000 out of each trader if they are flat come the end of the year.

High cost - low to no reward......... trader cracks after a year..... just get in a new class...


----------



## darkhorse70

Wow CAN, I wonder if some of the guys I knew are still trading there.


TH, basically your saying it's a big con job, at least from the perspective of a trainee.

The fuunny thing is when I asked my trainer about rebates, he said there was no such thing. I like to think they cut me from the program because I was asking all the "wrong" questions.


----------



## darkhorse70

A rough review sheet I created.

From next week on I'll be doing a pre analysis of market action, recordings of all trades (whether long or short),
post analysis of performance and some possible scenario plans of how I could trade the day.

The most crucial part is identifying the long/short trades. 

From past experience, I havent always been great at trading long positions. Naturally I feel as though short plays are quicker to move while long positions takes more balls of steel/discipline etc.

In conjunction to this, understanding the market behavior of the day is important. 
Obviously the behavior of the market changes as different markets around the world open and close so its hard to say the markets were trending all day or doing this or that. The best you can do is identify the market behavior for that period of time and your trading style for that period of time.

A critical part of becoming better is removing the things which hold you back. I guess it's the most difficult part about trading. Refining yourself as much as possible as well as becoming party systematic. 

I dont think creating a stop loss before hand and sticking to it is really that feasible. To me the markets are constantly feeding us with new information. I think its slightly absurd to put a stop loss and say well if this is hit, im out. I believe in being reactive and as new information is presented, so to does my hypothesis.

The problem is, when cr@p hits the fan and your not cutting your losses and you take a huge hit, its mentally hard to recover from as well as financially.


----------



## darkhorse70

My biggest fear of trading is, that its all one big lie. That markets can't really be beaten permanently. Atleast not on a longer term scale. 

Sorry to say this, but there are so many members on trading forums and most of them have been studying or trading for a long time. Like TH said, he hasnt really seen many people atleast on an intra day level make it.

Is it really feasible to win this game?

I need to believe so in order to continue but Not sure. It's definitely possible but perhaps not likely. 

I don't really get excited anymore. Iv'e been there, done that and its a disappointment. 

Just take things one day at a time, hopefully be prepared enough to make some money and get out of this rat race we call life.


----------



## Trendnomics

darkhorse70 said:


> My biggest fear of trading is, that its all one big lie. That markets can't really be beaten permanently. Atleast not on a longer term scale.
> 
> Sorry to say this, but there are so many members on trading forums and most of them have been studying or trading for a long time. Like TH said, he hasnt really seen many people atleast on an intra day level make it.
> 
> Is it really feasible to win this game?
> 
> I need to believe so in order to continue but Not sure. It's definitely possible but perhaps not likely.
> 
> I don't really get excited anymore. Iv'e been there, done that and its a disappointment.
> 
> Just take things one day at a time, hopefully be prepared enough to make some money and get out of this rat race we call life.




The question of system trading validity and longevity plagues me from time to time. Any doubts of mine are eliminated, by reminding myself of the robust back-testing that was performed and my place in the trading ecosystem.

From my years of studies and back-tests, I would say that short term trading is not the place for an everyday retail trader (tough trading ecosystem to survive in - just think who you are competing with?).

Most long-term surviving retail traders I know of, have thrived in the world of long only equities.


----------



## Triathlete

darkhorse70 said:


> My biggest fear of trading is, that its all one big lie. That markets can't really be beaten permanently. Atleast not on a longer term scale.
> 
> Sorry to say this, but there are so many members on trading forums and most of them have been studying or trading for a long time. Like TH said, *he hasnt really seen many people atleast on an intra day level make it.*
> Is it really feasible to win this game?
> 
> I need to believe so in order to continue but Not sure. It's definitely possible but perhaps not likely.
> 
> I don't really get excited anymore. Iv'e been there, done that and its a disappointment.
> 
> Just take things one day at a time, hopefully be prepared enough to make some money and get out of this rat race we call life.





I do not trade intraday or really short term so not sure how valid this comment is but I do remember* listening to a Professional trader say  *that it is difficult for an average trader to beat the markets over these very short time frames and one reason he gave was the fact that you are up against the very fast computer trading systems which can trade upwards of 10000 trades a minute where we can maybe do one.

He went on to say that most traders should look to trade longer time frames because these computer systems do not really effect you when taking positions into the future months etc.

He also made these comments......Your job as a trader is to predict the future, thus predicting what will be in the newspaper in 6 - 12 months time.
Professional traders buy or sell assets now, so that in 6-12 months time when the news becomes mainstream, and the story is over, they can use the liquidity of the traders that are " late to trade" ( Retail Traders ) to get out.

Those that trade intraday of course are trying to make a living from there trading but for any new trader starting out needs to realise that these short time frames are also the most difficult to be successful at.* Most traders are under capitalised so they also need to take greater risks with there trading in pursuit of trying to make a living from their trading.* This puts a great deal of stress onto the trader which can cause many mistakes in there trading.


----------



## darkhorse70

Hey Trendnomics, I tried pursuing the art of programming and back testing a while ago on amibroker but a) I didnt know what i was trying to test and b) That art requires a whole new skill which requires time.

The question regarding going long, long term equity investing, how much of it is luck?

If most established businesses listed on the asx200 grow over time, a good portfolio is going to grow. So how much of it was based off actual skill and how much was off luck.

To me, short term trading requires skill in the long run to survive. Im not saying long term investors dont have skill but I know that if I can master short term trading, its a skill that can never be taken away. Just like receiving a degree at uni.

Triathlete, I agree with your statement. The only problem I see with long term trading is that it takes to long to build any real skill. For example, If I make 10 trades a day, thats 50 trades a week. Thats 2500 trades in 50 weeks. While a long term traders puts on a trade, all he can do is research other companies or research about the economies state etc.

A short term trader is building on thousands of hours worth of screen time a year, analyzing the behavior of the markets and refining their skills.

Again the chips are stacked against the short term trader.


----------



## Triathlete

darkhorse70 said:


> To me, short term trading requires skill in the long run to survive. Im not saying long term investors dont have skill but I know that if I can master short term trading, its a skill that can never be taken away. Just like receiving a degree at uni.
> 
> Triathlete, I agree with your statement. The only problem I see with long term trading is that it takes to long to build any real skill. For example, If I make 10 trades a day, thats 50 trades a week. Thats 2500 trades in 50 weeks. While a long term traders puts on a trade, all he can do is research other companies or research about the economies state etc.
> 
> A short term trader is building on thousands of hours worth of screen time a year, analyzing the behavior of the markets and refining their skills.
> 
> Again the chips are stacked against the short term trader.




Geez darkhorse70 if you are going to do that many trades and with closing out your positions  at $15 x 5000 that is $75,000 in brokerage?

I read an article once with the below message that always stuck with me. 

The best traders trade well, not often and generate far more profit than those who trade frequently.

CFD providers in Australia all share the same view that traders who make the least amount of profit are those who trade intra-day or over a few days simply because they are chasing the market.

Here is a thought let us say you can find 5 stocks to trade and because I use Elliot wave and cycles theory in my analysis I see that the stock is  at the beginning of a wave 3 , now with this theory I know that a wave 3 usually runs a minimum 100% but usually 162%-262% if I know this would it not be easier to follow this stock and use CFDs at 10:1 to leverage this position??

We can also use range trading which will allow you to trade with the momentum of the trend and to trade the trend until it ends. You will do less work to make more money but importantly trade with lower risk. Range trading allows you to take your capital out of the market at the earliest possible time while still enabling you to participate in the growth of the stock or market as it continues to trend in the direction you are trading.

When adding to positions the ratio of 4:2:1 is used to lower risk yet still profit from the momentum of a move. A trade will eventually move against you and when you least expect it, therefore adding in a ratio of 4:2:1 will allow you to minimise the risk you take with your capital.


----------



## ThingyMajiggy

darkhorse70 said:


> Hey Trendnomics, I tried pursuing the art of programming and back testing a while ago on amibroker but a) I didnt know what i was trying to test and b) That art requires a whole new skill which requires time.
> 
> The question regarding going long, long term equity investing, how much of it is luck?
> 
> If most established businesses listed on the asx200 grow over time, a good portfolio is going to grow. So how much of it was based off actual skill and how much was off luck.
> 
> To me, short term trading requires skill in the long run to survive. Im not saying long term investors dont have skill but I know that if I can master short term trading, its a skill that can never be taken away. Just like receiving a degree at uni.
> 
> Triathlete, I agree with your statement. The only problem I see with long term trading is that it takes to long to build any real skill. For example, If I make 10 trades a day, thats 50 trades a week. Thats 2500 trades in 50 weeks. While a long term traders puts on a trade, all he can do is research other companies or research about the economies state etc.
> 
> A short term trader is building on thousands of hours worth of screen time a year, analyzing the behavior of the markets and refining their skills.
> 
> Again the chips are stacked against the short term trader.




Just create something that people think they need/want for their trading(Jigsaw, BookMap, Webinars, prop shop etc etc), that's probably the best way to make money out of trading  Not actually trading, just selling an idea of being a successful trader, or some product that will make people SO much better traders 

Who knows if it's possible in the real world or not, especially short term. I'm probably yet to see anyone who has "made it". They might have for a period of time(yeah yeah the golden days pre-GFC) but since have been a bit hit and miss. Others that do okay just dabble so not HUGE dollars, usually because they have a real life and a business as their main income which comes first anyway, and some do okay from long term investing, but that's generally a given as you mentioned as most indexes go up over a long enough time period. 

But I guess to really make it in ANY field, to be one that hits the big bucks, it's all going to be just as hard, being an expert and exceeding at anything is hard, all depends on whether YOU think you can do it and if you can see the opportunity there, whatever field you choose. Who knows. We only learn from experience and we only get experience from making stupid decisions.


----------



## Trendnomics

darkhorse70 said:


> Hey Trendnomics, I tried pursuing the art of programming and back testing a while ago on amibroker but a) I didnt know what i was trying to test and b) That art requires a whole new skill which requires time.
> 
> The question regarding going long, long term equity investing, how much of it is luck?
> 
> If most established businesses listed on the asx200 grow over time, a good portfolio is going to grow. So how much of it was based off actual skill and how much was off luck.
> 
> To me, short term trading requires skill in the long run to survive. Im not saying long term investors dont have skill but I know that if I can master short term trading, its a skill that can never be taken away. Just like receiving a degree at uni.




Success in long term investing can be luck dependent, but it is also the path of least resistance for retail traders/investors:


Brokerage drag less significant
Dividend opportunities
Tax efficiency (CGT discount + franking credits)
Long term equity prices not greatly affected by HFT
EOD price data easily available (compared to minute/hourly price data)
Less screen time and no need to automate trading strategies
In a rudimentary sense, a top 200 equity index (i.e. ASX200) is a form of trend-following / relative-strength trading (i.e. weaker companies are replaced by relatively stronger companies - hold the strong, cut the weak). Skill can be measured, if you are able to outperform such an index over the longer term.

To survive and be consistently profitable in short term trading, requires absolute skill. And I agree, developing this skill is similar to obtaining a tertiary education (i.e. it can serve you in the future). The only problem is that short term price dynamics are ever changing, a skill developed today may not be valid for tomorrow (just think how HFT has changed short term pricing recently). Longer term price dynamics, has stayed relatively unchanged since the introduction of HFT - in fact HFT has assisted longer term traders with the additional intra-day liquidity provided.


----------



## Trembling Hand

Triathlete said:


> Here is a thought let us say you can find 5 stocks to trade and because I use Elliot wave and cycles theory in my analysis I see that the stock is  at the beginning of a wave 3 , now with this theory I know that a wave 3 usually runs a minimum 100% but usually 162%-262% if I know this would it not be easier to follow this stock and use CFDs at 10:1 to leverage this position??
> 
> We can also use range trading which will allow you to trade with the momentum of the trend and to trade the trend until it ends. You will do less work to make more money but importantly trade with lower risk. Range trading allows you to take your capital out of the market at the earliest possible time while still enabling you to participate in the growth of the stock or market as it continues to trend in the direction you are trading.
> 
> When adding to positions the ratio of 4:2:1 is used to lower risk yet still profit from the momentum of a move. A trade will eventually move against you and when you least expect it, therefore adding in a ratio of 4:2:1 will allow you to minimise the risk you take with your capital.





Triathlete would love to see you do 20 - 50 trades with this method.


----------



## darkhorse70

Triathlete, forgive me. In terms of brokerage fees, lets say I make 3/4 trades a day, 15-20 a week. I know for bills it was $5 AUD per round trade. Im assuming it will be similar for notes. So thats 5 x 2 (2 contracts for time being) = roughly 150-200$. 

Now one average trading day can cover those costs for the week, assuming you ca be consistent. 

I studied elliot wave by Nick Radge when I was still relatively new to trading. The concept and theory is great but there's no way I can put my faith into a system like that. Im no expert in that field but to me it would feel like throwing a coin and hoping it turns heads. However it all comes down to probability so It could work.

Hey thingy, actually after I left Aliom, I was developing a project related to trading however it was more a means to an end than a passion. I just want really getting excited about it however I understand your point. A normal business even though it has expenses and its ups and downs, money usually comes in consistently . Trading money comes and goes and you might found yourself losing more than your earning really quickly. Me and my cousin are the same age and he's got his own little business. We are really competitive and I some times get jealous when hes getting clients. More so because most businesses are much more stable than trading. On that note, I might be plateauing for years on end then suddenly every thing comes together and my profits increase exponentially. I guess its the nature of the beast.

I keep telling my parents to back off and treat this situation as me going to university to get a degree to become a doctor. They just don't understand the challenges and the steps which need to be taken before a real income can be created out of this.


----------



## darkhorse70

Trendenomics, I see your point with the trend following and the incentives of long term investing. I wish my parents put my into go kart racing when I was young or forced me to take random lessons. I suffer from anxiety which I always have and at one point it got really bad. Aiming for some thing ridiculously insane yet possibly feasible is some thing that keeps me going.

It's like the light at the end of the tunnel. As long as I feel like im making small progress towards that goal, I feel like I can be at peace. I guess as a unpopular kid at high school, you always strive to be respected for some thing great. In my social circle I want to be great at some thing. It's a huge challenge.

Im saying all of this in response to the tertiary education. Hopefully this is what it is and eventually I can survive off this. I guess part of the challenge also is adapting to new challenges of changing markets.


----------



## darkhorse70

TH, youre one of the most brutal people on this forum lol.

I mean this as a compliment and this is assuming that the myths about you are real but for some reason most successful people who are at the top of their game come off as a holes. Im like that with my younger brother, I think he slightly resents me for it at times haha. 

I guess this is a combination of being so blunt and truthful (at least from their perspective).


----------



## banco

darkhorse70 said:


> Ive got both his books. Actually I just watched a random vid of his today and thats where I got the quote from.
> 
> The trainer from Aliom said smb's days are over. He said all equity traders these days are struggling. Not sure hwo true that statement is but he said thats why they offer all these courses. So they can make some sort of revenue.




Not to get off topic but I purchased access to SMB's webinar library and it was all pretty trite stuff.


----------



## darkhorse70

Thanks for the heads up Banco. 

In all honesty, I dont think ill ever buy another trading book again. Unless its to teach me about the basics of an instrument because all these tips and stuff, its great but it's all relative to context. I specific tip might be great for a certain way of trading or combined with a few things its great, but alone its meaningless.


----------



## darkhorse70

Some comments about Fridays market activity. 

Looked like there was a huge short covering rally/squeeze or whatever you want to call it in the notes.

The US at least pushed their way down to that 1850 mark (emini).
Levels which were seen during August 2015.

It pulled back atleast 20 points which looked like possibly a) shorts covering or possibly buying. 

Now the emini was able to close back within the previous day levels. 

There could be strong volatility around this area. 

Unfortunately I dont have access to data past October for the notes (not sure why maybe due to contract roll over). 

I just nede to figure out what the effects are if the equities continue to fall. Im always curious as to where inventory is built up at. This game revolves around manipulation and stop levels. Always thinking two steps ahead. Trying to think like the losers and going against them is the goal.

If im not wrong the VIX index has been pushing further up. 

As TH mentioned (hate to constantly use you as an example but whatever haha) I need to build more context. Ive got access to alot of the markets if im not wrong. I need to connect my third monitor so I can chart the chinese markets/euro markets.

Even though i personally believe what ever happens in them usually (note usually) effects the us equity even during eth, Its good just to know what the hecks going on.


----------



## darkhorse70

I need to pull up some currency markets as well.

One of my biggest problems is being to lazy to take new action.

Once you incorporate new behaviors into your daily routine, it become automatic. But that action needs to be taken. It's like the principle of constantly pushing out of your comfort zones.


----------



## darkhorse70

At the moment I think all eyes are on China. So keeping an eye on where its at and what its doing is important to understand how the rest of the world is going to react.

Looking forward to tomorrow.

Adios.


----------



## CanOz

VIX....


----------



## darkhorse70

Level of possible acceptance?


----------



## darkhorse70

No real figures out today.

US equities have gapped open lower today. 

Nothing to major yet.

Possible some players trying to cover over the weekend. Maybe related to sanctions being lifted in the iran deal and potential oil price impact??


----------



## darkhorse70

Long 2 x @ 12.5

Need to take the first trade of the week. Hate the hesitation.

Not sure how likely this trade is. Keep a close eye on it.


----------



## darkhorse70

Im hoping the equities start selling off plus the crude oil starts selling off.

Going to take profits off quickly and scalp around positions.

The aim is not to get caught in a strong market and try to fade small pull backs.


----------



## darkhorse70

Been stuck in this offside position for hours. If it starts to go my way, im going to load up one more contract.


----------



## Modest

darkhorse70 said:


> Been stuck in this offside position for hours. If it starts to go my way, im going to load up one more contract.




Offside = flat?


----------



## darkhorse70

Bought another lot @ 11.0

Averaging down losers - Could be effective if done correctly.

Oil starting to sell off. Could be a catalyst for a rally in notes.


----------



## darkhorse70

Unrealized losses Modest. 

I was up 2 points on 3 lots but i didnt sell out and now the markets turned again and i feel like smashing my head through my computer screen lol


----------



## darkhorse70

Im bloody fuming because now im offside 3 points and I havent gotten off my computer chair since 10am. I need to get out of this house for some fresh air but I cant do so till im closed out.


----------



## Trembling Hand

darkhorse70 said:


> I was up 2 points on 3 lots but i didnt sell out and now the markets turned again and i feel like smashing my head through my computer screen lol




Ha! That's another advantage of a market that moves versus bonds. Bonds you can convince yourself that it will come back onside eventually. Equities/commods etc just throw you out when you are wrong... quickly.... next trade.




darkhorse70 said:


> Im bloody fuming because now im offside 3 points and I havent gotten off my computer chair since 10am. I need to get out of this house for some fresh air but I cant do so till im closed out.




Some genuine bid lifting in the Euro Equities.


----------



## darkhorse70

Yeah I agree with you TH about the your wrong quick thing. But I was offside for a while, maybe close till the entire day. I think atleast 3/4 points but it eventually came back my way and up 2 points. At that point it looked like the equities were going to go down and crude oil looked like it was positioned beautifully for a down move. Thought it would be a great time to see some shorts go covering.

Then that strong buying came in as you suggest in the euro.

Now im just sitting here hoping that by the time this hour closes up, I need to see some sort of weakness or its time to get out.


----------



## Trembling Hand

darkhorse70 said:


> At that point it looked like the equities were going to go down and crude oil looked like it was positioned beautifully for a down move. Thought it would be a great time to see some shorts go covering.




Nice quick gap close to start off the weeks cash open. 



darkhorse70 said:


> Then that strong buying came in as you suggest in the euro.
> 
> Now im just sitting here hoping that by the time this hour closes up, I need to see some sort of weakness or its time to get out.




Maybe...... but Guys that lift bids like that don't normally disappear after 30 min.....


----------



## darkhorse70

Im just trying to be optimistic. You know the losers mentality lol. Pure punting when your hoping the market makes up for your days losses.


----------



## Trembling Hand

darkhorse70 said:


> Im just trying to be optimistic. You know the losers mentality lol. Pure punting when your hoping the market makes up for your days losses.




Your guess with bonds is probably better than mine going on experience with them....


----------



## darkhorse70

haha i'll take that as a compliment. Just made 1 point on 3 lots.

Im down at a total of $180USD.

Going to go for a cycle, clear my head out and come back and trade.

Not going to fight the trend at the moment. Its always suicidal to trade on tilt.


----------



## darkhorse70

Come back from cycling and see the eminis pushed back down and the notes rallied AGAIN!


----------



## darkhorse70

Reducing trading size to 1 lot.


----------



## darkhorse70

Long 1 x @ 11.5

Sold 1 X @ 12.5

Profit 1 point


----------



## darkhorse70

Total loss for today $160.

Considering the amount of mistakes I made and things I learnt, I think it was a good day. The market worked me like a dog today. 

No direction what so ever. More side to side with the notes hardly even moving.

I learnt that if my entry position isnt optimum, I can scale in with half the size and possibly but another lot averaging down. That way I can get a better price. I know this goes against the rule of averaging losers but notes feel like they move more up and down before heading one way.


----------



## skc

darkhorse70 said:


> No direction what so ever. More side to side with the notes hardly even moving.




US on holiday might be a reason?


----------



## darkhorse70

Doh, I scanned through forex factory and was only focusing on High Impact Figures. Must of missed that part lol. Thanks skc


----------



## CanOz

darkhorse70 said:


> Doh, I scanned through forex factory and was only focusing on High Impact Figures. Must of missed that part lol. Thanks skc





Just get the Eurex daily briefing emailed to you....it's free


----------



## darkhorse70

Hey Can, ive got it on my other email but ill subscribe on my newer email address.

Long 2 x @ .305 on the aussie 10 year bonds.

Not sure if the american markets are trading with the proper liquidity due to holiday hence why im seeking movement through the aussie markets.


----------



## skc

darkhorse70 said:


> Hey Can, ive got it on my other email but ill subscribe on my newer email address.
> 
> Long 2 x @ .305 on the aussie 10 year bonds.
> 
> Not sure if the american markets are trading with the proper liquidity due to holiday hence why im seeking movement through the aussie markets.




Don't forget China GDP figure @ 1pm Sydney time. A potential market mover...


----------



## darkhorse70

Hey SKC, thanks for reminding me. 

For some reason I had thought about it and remembered that I didnt know how to hedge up in an aussie market but regardless im out.

Sold 2 x @ .310

I went offside for a while but yeah decided that 1 tick profit was as far as I was willing to go.

Ill look for setups after china gdp.


----------



## darkhorse70

Once the CNY GDP figures came out (didnt even know what they were at the time), ntoes went bid immediately. I hesitated, chased it and bought. Notes went offered, emini went bid. I had only gone in half clip (1 lot) and then I averaged down buying another clip at the support level. 

Regardless of the outcome, I think I made 1 point.

It says Im up $126USD for the day so thats always good.


----------



## darkhorse70

I checked what the figures were before I averaged down though, just to make sure it wasnt some thing ridiculous.

The markets have been acting really sluggish so im just taking profits off the table quick. Don't want a repeat of yesterday.

Every profit is valuable boost to the morale gained after a bad trading day.


----------



## CanOz

Well the GDP number is out, they faked it again...honestly when will they learn. Unfortunately the culture of FACE gets in the way of reality once again. The markets don't like it, risk off again. CL down, but bounced off 29...back to setting up this TT Platform


----------



## darkhorse70

haha, when the government kidnaps it's own citizens, it hardly comes as a suprise.

Well bonds are making there way up too. Should of held on a little more but my ego is still pleased.


----------



## Modest

CanOz said:


> Well the GDP number is out, they faked it again...honestly when will they learn. Unfortunately the culture of FACE gets in the way of reality once again. The markets don't like it, risk off again. CL down, but bounced off 29...back to setting up this TT Platform




Let me know how the web version works mate!


----------



## CanOz

Modest said:


> Let me know how the web version works mate!




AMP is hopeless, i've already funded the sub account and TT says i'm not associated with any account


----------



## CanOz

darkhorse70 said:


> haha, when the government kidnaps it's own citizens, it hardly comes as a surprise.
> 
> Well bonds are making there way up too. Should of held on a little more but my ego is still pleased.




There was allot of chatter about and one of the possibilities was that they may try and post something more realistic. Since that has not happened we'll need to rely more on industrial production, power usage and PMI data and see how that's digested. China had lost an opportunity to be taken seriously again. This hurts the long term investment potential and the funds will continue to exit. They keep talking about reform, but never do anything...Same with the air quality, talk talk talk....anyway, we're booked on a flight and have started packing.


----------



## darkhorse70

CanOz said:


> AMP is hopeless, i've already funded the sub account and TT says i'm not associated with any account




That happened with me a 100 times. I went nuts at customer support.


----------



## darkhorse70

CanOz said:


> There was allot of chatter about and one of the possibilities was that they may try and post something more realistic. Since that has not happened we'll need to rely more on industrial production, power usage and PMI data and see how that's digested. China had lost an opportunity to be taken seriously again. This hurts the long term investment potential and the funds will continue to exit. They keep talking about reform, but never do anything...Same with the air quality, talk talk talk....anyway, we're booked on a flight and have started packing.




I guess just like any emerging economy, its got its issues. Still needs time to mature.


----------



## darkhorse70

Long 2 x @ 10.0.

Equities look like theyre stalling and seems like a low risk set up for an easy scalp trade.


----------



## kid hustlr

100% serious question.

If the e-mini look like its about to rollover, why do you buy the notes instead of selling the e-mini?


----------



## darkhorse70

While the emini is about to roll over, my eyes are constantly looking at the 5/10 year notes. Im watching to see if they are starting to turn around while the emini is stalling. Im watching the offers shave/get thinner what ever you call it. Im also hoping that the notes will go even further down so I can buy them at a better price.

The notes have a much smaller range. Maybe 15 points a day. It happens a lot where the notes go against you then eventually come back. Plus the set ups in the notes can still proceed even though the emini is nto doing what it should.

So your using I guess a sort of filter to eliminate potentially bad trades.

Who knows, there arent many retail trades in the bonds market or I dont think there is. Possibly removes a lot of noise and makes it more predictable?


----------



## darkhorse70

If I trade the equities on their own, I can only use other equity markets to compare market action.

Bonds might have a direct correlation to the actions of the equity markets. 

Risk > Bonds go up.

Equities feel like they lead and the bonds movement is like  a ripple effect..

Who knows, I'm just trading it because ive just ended up here by chance and if its working, im not questioning it too much haha


----------



## darkhorse70

Another good thing about the notes and bonds is, since the raneg is small, levels are much more noticeable. 

If youve got a huge range, keeping your eye on the dom is a challenge. You cant really move. I can memorize a level, come back and see how the bids/offers have changed. Easier to read


----------



## CanOz

kid hustlr said:


> 100% serious question.
> 
> If the e-mini look like its about to rollover, why do you buy the notes instead of selling the e-mini?




Same for the other indices Kid, when I'm trading the Dax, the FTSE or CAC might be leading and they look toppy i'll be looking for toppy signals in the Dax/FESX/ES/CL and bottoms in the 6E/6J, etc...I feel though, that's the way guys might add other markets to their playbook, by watching them so much as an indicator


----------



## kid hustlr

I guess it was a loaded question - kind of.

I'm all for correlation and confluence (what a buzz word) - not arguing that for a second.

I also agree about the depth in the DOM for thicker markets being more 'readable' or having more meaning.

Further, I agree bond markets are more mean reverting (in my experience, no numbers to back this up).

I guess in my head if you are trading market A because you think market B is about to move in a certain direction, then why not trade market B? 

By the way market B will also offer more opportunities each day.

Now if you frame a trade in market A, and market B confirms your view of what you think (hope) is going to happen in market A, that's a different story (and what CanOz is getting at I believe).


----------



## darkhorse70

Yeah Can is doing the exact same thing in different markets.

I agree with what your saying Kid, I mean if Im really feeling a move in market a) also, its a no brainier to take the set up. Take more opportunities.

Now when your wrong like I was, I lost 5 points before thats when it will hurt haha.

I pulled out my boxing bag from the garage, beat the hell out of it, got my hair clippers and gave myself a buzz cut as I was so frustrated and had to go for a walk.

The lesson is, dont take half setups. Yesterday and today I feel like ive been doing that heaps. Slightly disappointed at myself. The setup was ok, but the emini just kept rising instead of backing off and thats the double edged sword. This still requires you to take some heat and when your wrong, especially at a support level you burn a bit.

Most people say dont get emotional when trading, I guess that applies after a very long time and when you have utmost confidence in yourself and your system.


----------



## darkhorse70

I guess if i can get the notes trading pat down, then I could start taking setups in the emini.


----------



## Modest

darkhorse70 said:


> Most people say dont get emotional when trading, I guess that applies after a very long time and when you have utmost confidence in yourself and your system.




 Up until very recently I use to get super freaking annoyed and emotional during my trading. If you look at my thread from a month or so ago I was a very frustrated little boy lol ... Often times I would flip out and scare the hell out of the cat.

Now days I accept it and move on. It's only recently that I have come to terms with this aspect of the market and that it is okay to have a losers. 

I am much more calm but it has taken nearly a year to come to accept this simple cost of business.


----------



## darkhorse70

Your right about it being a cost of business. Like Kham Dadhwar says, its just a business expense. After every dip, there will be a rally in your equity curve.

I guess its a combination of probability + desensitization (to the norm).

I guarantee even the super elite who made a bad trade during say for example the gfc would have gone nuts haha.

Its highly shunned across atleast in a prop shop to be emotional.

I guess because if your happy and others are doing crap, theyll feel even worse and via versa.


----------



## Trembling Hand

darkhorse70 said:


> Its highly shunned across atleast in a prop shop to be emotional.
> 
> I guess because .......




You're a trainee and no one want to hear anything from them..... 

Those that are live I have always found that the greater their P bit of their P&L the noisier they are. The ones who have the risk manager metaphorically looking over their shoulder waiting to pull the pin are the quietest.

Aint nothing wrong with feeling and expressing your emotions. Its what you do once they arise that makes the diff between profiting from them or not.


----------



## darkhorse70

hahah Im cracking up TH.

Must of been a hell of a boring day.

Cool set up though. 

By the way sold 7.5, bought 6.5

1 point


----------



## darkhorse70

Sold 1 x @ 3.5 a while ago


----------



## darkhorse70

Bought 1 X @ 2.0

Profit  $45


----------



## darkhorse70

Total for today = $-75

Good come back. One bad trade cost the days entire profits plus some more. Managed to bring the damage close to BE which im happy about.


----------



## darkhorse70

Long 2 x @ 9.0


----------



## darkhorse70

Sold 2 x @ 10.5


----------



## darkhorse70

Trade done and dusted in under 2minutes.


----------



## darkhorse70




----------



## darkhorse70

Bonds/notes rallying.

Emini making new lows, Crude oil making new lows. Assuming china is selling off. lets wait and see if buyers step in.


----------



## CanOz

darkhorse70 said:


> Bonds/notes rallying.
> 
> Emini making new lows, Crude oil making new lows. Assuming china is selling off. lets wait and see if buyers step in.




China H share down almost -5%, the Hang Seng almost -4%, The A50 -3%, Shanghai Comp-2.9%


----------



## darkhorse70

Wow... Atleast the markets will provide some excitement for the next few hours.


----------



## darkhorse70

Long 2 x @ 29.0 (if not mistaken)

Sold 1 x @ 30.5

Equities still selling off (emini) and it defiantly looked like notes were bid.There were pushign towards the highs set a few days ago plus its a relatively significant resistance level set in august 15. With that much force on the equities, some shorts are bound to go covering.

Profit 3 ticks (1 lot) = $45


----------



## darkhorse70

Im slightly hesitant to hold as the emini is off more than nearly 40points since the open.

Obviously the rules of atr dont always apply but im just waiting to see if buyers step in. Theres always set ups to be taken advantage of. Play your strengths. Theres so many opportunities in the market that some times we try to chase them all and get burnt.


----------



## darkhorse70

GBP figures coming out in 30minutes. Lets see if the markets can swing back...


----------



## darkhorse70

Sold 1 @ 30.0

Bought 1 @ 29.0

Profit 1 point = $30


----------



## darkhorse70

We had a huge pull back yesterday. Either shorts covering or interest provoked by buyers.

We might see some further short covering today/shorts getting squeezed.

Need to wait up for some good setups. Im waiting to see if this buying stops or keeps going before I get into any position. Atleast the short term buying which is still happening right now.


----------



## darkhorse70

Ok loaded up 3 lots . Accidentally hit market on 2 instead of limit ordering. So i bought another 1 lot averaged down 1 tick.

Just sold 1 lot for 1 tick profit.

Still have 2 lots at a price of 21.0

E mini looks like it could potentially have some pullback and notes might go bid for a while. Revert back


----------



## darkhorse70

Sold another lot at 22.0

Up another $30USD

Might push the last lot to get maximum gains.


----------



## darkhorse70

Sold the other lot at 22 as well. 

Not sure if theres enough conviction to hold on.

So basically I wet long 3 x@ 21 and sold 3 @ 22.0

I screwed up with the entry but I need to learn how to size up in positions and size out of them.

Profit $90usd


----------



## CanOz

ECB Day today, so we might have a quiet EU session ahead of the announcement


----------



## darkhorse70

Thanks for that Can, i completely forgot people might reduce risk before news announcements.


----------



## darkhorse70

Long 2 x @ 19.5


----------



## darkhorse70

Sold 1 x @ 20.5


----------



## darkhorse70

Sold 1 x @ 19.5

Total $30usd


----------



## darkhorse70

Long 2 x @ 19.5


----------



## Modest

You're killing it mate


----------



## darkhorse70

I wish I was. It only matters when you trade live haha.

Sold 1 x @ 20.5


----------



## darkhorse70

Sold 1 x @ 21.5

Total = $90USD


----------



## darkhorse70

Bought 1 x @ 30.5

Sold 1 X @ 31.0

Profit $15USD


----------



## darkhorse70

Long 2 x @ 29.5.

Looks like some heavy suppression in the equities...

Going to keep a tight stop on this incase.


----------



## darkhorse70

Reduced risk down to 1 lot.

Sold 1 x @ 29.5

Theres a little battle going on.

Notes are trying to push higher but they need some reassurance...


----------



## darkhorse70

Sold 1 x @ 30.0

1 TICK = $15USD

Looks like the emini might hold...


----------



## darkhorse70

Obviously im not taking into consideration brokerage fees. Bottom line in this trade would be 5$ lol.

Brokerage fees will be accounted for later down the track. I usually dont go for very small trades of 1 lot 1 tick but its all about assessing a situation. If the markets offered, im getting out.


----------



## darkhorse70

SOld 1 @ 29


----------



## darkhorse70

Bought back 1 long @ 28

Profit = $30


----------



## darkhorse70

Long 2 x @ 18.5

Not very confident on this trade but will keep a close eye on the equities and the notes...


----------



## darkhorse70

Sold 1 x @ 19.5


----------



## darkhorse70

Sold 1 x @ 19.5

Total Profit $60USD


----------



## ThingyMajiggy

darkhorse70 said:


> Sold 1 x @ 19.5
> 
> Total Profit $60USD




Why not just do an end of day summary of what you did rather than 10,000 posts like the above throughout the day?


----------



## darkhorse70

Haha, never thought of it.

Makes sense though.

Ill just type it all up then post at the end.


----------



## minwa

I do enjoy the closer to real-time update though, I look with interest whenever I see a trade. Forums probably a bad medium for it. Anyway post however you're happy, look forward to progress.


----------



## darkhorse70

Well that's what I was thinking to minwa. It's more legitimate. 

Anyone can say I bought at this price and sold at this price. The idea was to prove that my fills were real time.

I was actually in the process of a trading project online but am in the middle of converting it to a blog/community site. When I say community, not an online community but more of a medium to creating real event days in Sydney from the trading group to meet up and discuss ideas face to face.

Plus ill also keep my journal there.

And since you asked for it, 

1 long x @ 21

1 sold x @ 21.5

Profit - $15USD

I should of limit ordered and instead I hit at market when I was going long. Got filled at 21.0 when I could have been filled at 20.5.


haha


----------



## darkhorse70

By the way, notes are bid and equities coming in offered slightly.

Notes bid @ 22.5 currently.

I feel as though most of my trades hypothesis are correct but I can never seem to hold on.

I need to find a balance between taking profits and holding on.

Its a double edged sword. I mean if you have a high win rate, low equity draw down, capital is no problem. The beauty of derivatives is leverage. But hanging on to bigger winners could create a more volatile equity curve with potentially more draw downs...


----------



## darkhorse70

The beauty of trading notes is, there range is tiny. So when I think the equities might go offered, and the notes offers start getting heavier I take a moment to re analyse the scenario. When you are trading a big range equity, its hard to pinpoint the very point of resistance. I have done so with the dax and spotted points where if it broke it would rocket up but when your dom is moving up and down and the numbers are bigger more varied, you lose some of that sixth sense. 

My humble opinion though.


----------



## sinner

darkhorse70 said:


> Its a double edged sword. I mean if you have a high win rate, low equity draw down, capital is no problem. The beauty of derivatives is leverage. But hanging on to bigger winners could create a more volatile equity curve with potentially more draw downs...




It is the illusion of a double edged sword, if you want to trade intraday then ignore the "big winners" and concentrate on the winrate consistency and low volatility equity curve. Just forget it, it will do your head in thinking about it.


----------



## darkhorse70

I agree sinner, thanks mate.


----------



## ThingyMajiggy

darkhorse70 said:


> Well that's what I was thinking to minwa. It's more legitimate.
> 
> Anyone can say I bought at this price and sold at this price. The idea was to prove that my fills were real time.




I was thinking just posting up a screenshot of your fills window, but whatever way you want to is fine, just thought it might be easier to post a broader less-common post, but if you're happy to spend the time posting individual trades, go for it 

What do mean about "more legitimate"? Are you trading a live account?


----------



## darkhorse70

I agree, well then I shall do half day posts on my trading performance with the fills etc and if market activity is changing ill post that separately. That way its more easier to read as well as updating people on whats happening around the world.

No im not trading a live account for the moment but I hope there no differentiation between a live account and a sim account in terms of how I would trade. The bottom line is, to me this is a form of marketing myself as a trader. I'm hoping that I can build up a reputation in a few years (if im competent enough as a trader) to raise capital and run my own fund.

As far as Im aware, managing other peoples money is the most logical route to take. At the moment my performance is meaningless but hopefully a few years down the track I can be credible enough + a track record to use as evidence. With this in consideration, im just trying to be as transparent as possible.


----------



## darkhorse70

Lost 2 points on 2 lots.

Loss = $120USD

Long 3 x @ 13.5 

I was holding before the figure releases at 7pm and 7:30pm.

It was stupid but I realized 1min before the 7pm release. Since the markets were in a position to turn around, hence why I took the trade, I figured the odds were in my favor. After 7pm, notes were slightly more bid so I had a bit of buffer.


----------



## darkhorse70

Sold 1 for 2 ticks = $30USD

Averaged down 4 lots at 11.5

Risky move buy I believe in the trade. Risky in the sense that i could ruin my entire weeks hard work to B/E...


----------



## minwa

darkhorse70 said:


> Its a double edged sword. I mean if you have a high win rate, low equity draw down, capital is no problem. The beauty of derivatives is leverage. But hanging on to bigger winners could create a more volatile equity curve with potentially more draw downs...




I was in the same dilemma few years ago. I found the my sweet spot closest to the best of both worlds is to only enter when price is moving against you in your intended direction and to have a first target and scale out with the rest holding to capture the majority of the daily range.


----------



## darkhorse70

Hey minwa, yeah i agree with you. I might have to start trading with 3 lots, to possibly sell 2 quickly and hold on one to capture the rest of the run. That way I can increase potential profits while atleast capturing some if it goes against me.

On another note, I screwed up big time last night. I went offside nearly 10points with 4 lots. I was going insane, smashing my computer chair, using all kinds of profanities. Lol can only imagine what my mum thinks. 

I just believed in the trade. Equities kept stalling, stalling then pushing up, notes kept going offered. Notes went bid, I went onside after all that then they went back offered. 

I couldnt do anything but went to sleep, waking up at 8am, only offside by 1 tick.

This weeks been a disaster. I need to calculate losses but its probably around $50-100usd, but I had 3 shocking trading days. Im especially upset that I let a trade go that offside. I stick with trades I believe in but It can cause huge damage that takes days to work back.

The anger I hold when that happens carries on the entire day...

Anyway, like Kham says, dips, peaks,dips peaks.

As long as I havent caused realized damage, theres another day to trade.


----------



## darkhorse70

The hardest thing is trading for 50hrs in 1 week and ending lower on your P/L. I know its not about P/L in the short term but yeah mentally draining. 

Now going to go practice some dirt bike wheelies, need to clear my mind haha.


----------



## History Repeats

DH have you considered other spread combos? also have you considered longer holding period? CME listed spreads have very low margin. Grinding out like you do now seem to me not worth the time, IMO anyway.


----------



## darkhorse70

Hey history, well I haven't really considered other spreads. Theres no way to avoid the long hours, that is if you want to be good. When I was at the prop shop, had to be at the office by 7am and as a trainee, we would leave by earliest 5pm.

Some of these traders would go home in the afternoon, only to wake at at 12am to come in for a figure release, trade that, go to sleep in the office, wake up again in the morning to trade.

Screen time is everything. I enjoy watching the markets. But usually ive got other random things open on the computer as the markets are usually bat sh@t boring/slow.

I know some exchanges offer spreads but if those are available, then I guess heaps of people are already trading them.

I love the rush of short term trading because it keeps my brain active. More stress but more of a thrill.


----------



## darkhorse70

Sorry for the lack of update.

I had it typed out but accidentally shut the comp off.

Long story short, had three trades. Was down $180, now im up $110.

Markets been very very slow apart from the small sell offs in the equity due to the sell off in CL. Not sure if theres another catalyst....


----------



## darkhorse70

Sold 2 x @ 21.5 

Averaged down and sold another one, total averaged @  22.0

To me, when a market stalls and is possibly going to start to head in your direction and you can sell more at a cheaper price, I think its a good strategy. That way I can buy back 2 later on and hold one for a bigger move.


----------



## darkhorse70

Ok, so after taking some major heat in the position and sizing up, the trade came my way.

Unfortunately I only made $140 at the end which is chump change for the size. I was in good shape during the time it was in my favor but I decided to take some heat off and let it run before cutting the position down.

Two things which concern me is how far im going offside at times. It's huge and could be mentally and physically debilitating. I need to get a grip of that.

Second thing is using position sizing and trading bigger size is such an asset to have. As TH said, thats half the game and Im coming to realize, its such an effective tool if utilized correctly.  

Now the key is to learn how to use it effectively...


----------



## VSntchr

darkhorse70 said:


> Unfortunately I only made $140 at the end which is chump change for the size. I was in good shape during the time it was in my favor but I decided to take some heat off and let it run before cutting the position down.
> 
> Two things which concern me is *how far im going offside at times*. It's huge and could be mentally and physically debilitating. I need to get a grip of that.



How far offside are you going compared to your average winner?
Have you considered the impact to your account if the strategy of holding through a drawdown fails at some point?

Not discrediting your strategy at all btw, just poking my head in for a look.


----------



## darkhorse70

Well at two times its gone offside by 900$USD which is absolutely insane. Yesterday it went that far offside before it went onside by about 600$USD. My average winners are between 60-150$

Hypothetically im trading with a 20k account so its still a big drop but from now on, If im going to average down losers, it needs to be planned out more carefully.

The problem is, the markets some times keep going before they turn around and Im exposed to more downside, but if I cut the position, then it turns around, ive lost.

I know every one says cut losers, set stop losses but I feel like I have to explore paths contrary to popular belief. We've been taught all these strategies, which every one says are crucial. But yet, theres so few good traders out there and we really dont even know how they trade. Were just taught that these rules are the 10 commandments. 


I need to start averaging down at better key timings. Believe me, I lose sleep over the fact that Ive gone so far offside and if that trade doesn't revert, Im a goner. I just need to ensure that I hold on for longer when positions go my way. If I can go from being so far offiside to back in the green, then theres no reason why I shouldnt be able to capture bigger profitable chunks.

And of course I know youre not trying to discredit me.


----------



## darkhorse70

Sell 2 x @ 25.5

Bought 2 x @ 26.5

Loss - 62.5

Sell 2 x @ 27.5

Bought 1 x @ 25.0

Bought 1 x @ 24.5


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## darkhorse70

Before any figures came out last night I ended up averaging down a long position in the notes. Thought oil would sell off and possible the equities. Again, went totally offside. My goal was for a small reversion.

Ended up holding the position overnight and getting the trade onside after that huge equity sell off. I think I made 4 points with 5 lots but still not impressed.

I need to manage my lots better and learn when to cut losses.


----------



## darkhorse70

I need to wait for wider moves before I average down. Or else Im taking more exposure and damage and less probability of getting a trade onside. I also might start the trade with 1 lots unless Im really confident... That was my losses dont get big really quickly forcing my to emotionally  average down even quicker.

Short 1 x @ 26.5


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## Trembling Hand

darkhorse70 said:


> That was my losses dont get big really quickly forcing my to emotionally  average down even quicker.




Would like to see your MAE stats compared to your average win. If you are always having to avg down rather than trades going your way pretty much as soon as you enter I would be having a good hard look at what you are doing with your trade ideas and execution of those ideas.


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## darkhorse70

Fair point TH. I'm frustrated because for the last 2 weeks, my trades have been pretty awful. Obviously I havent traded this strategy long enough for any real stats but Im putting my equity volatility  curve down to the fact that markets are quite volatile atm. Atleast in the sense that theyre at an important level and markets are unsure of which way they want to go.

Im just having to make a hypothesis about the direction or the more likely hood of a move happening one way over the other, getting into a position and waiting for that move to unfold.

To me, manipulation is one of the most critical things of trading. You might be correct, but the markets are temporarily manipulated, you get out and youre done for.

I have no stats to show you. In terms of MAE, most of my trades do go my way, but its when I have to really average down on those one or two trades a week that puts me into serious trouble.

Its like what you said, one bad day in the bonds market can ruin your week. Need to manage them better. Hence why, Im going to experiment with cutting down to 1 lot and averaging down slower and smaller.


----------



## Trembling Hand

darkhorse70 said:


> To me, manipulation is one of the most critical things of trading. You might be correct, but the markets are temporarily manipulated, you get out and youre done for.




Trouble with that besides it working 19 times out of 20 and the 20th time you blow out your account. You will find it hard getting backing by using other peps money if you have to have a daily stop of $2000 to make avg $400 a day winner.



darkhorse70 said:


> I have no stats to show you. In terms of MAE, most of my trades do go my way, but its when I have to really average down on those one or two trades a week that puts me into serious trouble.




Are you using Multicharts? I think you add some how a "Performance Report" to a chart to see ya stats,

http://www.multicharts.com/trading-software/index.php/Using_Performance_Report


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## darkhorse70

Agreed, I guess thats the beauty of sim trading. Try to eliminate all the flaws.

All it takes is for the markets to keep trending and trending and its game over. Not sure why, I just feel paralyzed and I have a mental block when it comes to hitting out on the stop.

Im trying to increase the size of my average winners so I can buffer bigger losses.


Thanks for the link, ill get it sorted. I sent MC an email a while ago and they never got back to me regarding performance stats....


----------



## darkhorse70

Made 2.5 points shorting 1 lot.

+ $78USD

Going to play it safe trading smaller entry sizes. Create a buffer for the day then get bigger If I see a good trade.


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## darkhorse70

Only from the beginning of this month. 

Obviously those 2 or 3 potential large losses which could have happened would have resulted in a much different scenario. I need to properly digest the information of this stats so I can work on my issues.


----------



## darkhorse70

Hoping to see the notes slowly grind back up, with the equities grinding back down. Then watch to see if any one jumps in to push up equities/oil. Could be a good trade to sell the notes then.


----------



## darkhorse70

Sell 1 x @ 25.5

Bought 1 @ 24.0


----------



## darkhorse70

Long 1 @ 23.0  

Sold 1 x @ 24.5

Total Profit for today = $170USD


----------



## darkhorse70

Short 2  x @ 129'1.0

Bought 1 x @ 29.0


----------



## darkhorse70

any one know whats going on. equities just went bid including notes. I want to fade the notes but not sure as toop which market is acting up....


----------



## Chris.M

darkhorse70 said:


> any one know whats going on. equities just went bid including notes. I want to fade the notes but not sure as toop which market is acting up....




probably this:  http://www.boj.or.jp/en/announcements/release_2016/k160129a.pdf


----------



## captain black

darkhorse70 said:


> any one know whats going on. equities just went bid including notes. I want to fade the notes but not sure as toop which market is acting up....




Bank of Japan has announced a negative interest rates policy.

Will post link in a minute...


----------



## darkhorse70

Yeah just read it off a friend from FB.

Thanks mate


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## captain black

Link:

http://news.forexlive.com/!/governor-kuroda-boj-meeting-announce-monetary-policy-20160129


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## darkhorse70

Thanks CB, i got smoked out on this trade. Going in big 4 lots long on notes.


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## captain black

darkhorse70 said:


> I got smoked out on this trade




Yeh, I got smacked around with positions on the SPI and Kospi futures when the news leaked out on Reuters 

I've been short on both for the last 25 minutes so feeling much better now


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## darkhorse70

haha, yeah i was confused too. Both markets were heading up. Im going to hold long on the notes for a while. There at their highs atleast since last year near august so there should be some good momentum given if the equities keep going down.


----------



## skc

darkhorse70 said:


> any one know whats going on. equities just went bid including notes. I want to fade the notes but not sure as toop which market is acting up....




Preparations... your daily routine *must *include an overview of major scheduled events before you put any trade on.

You should set an alert (on your computer, phone, trading platform etc) 5-10 minutes before scheduled time. 

You don't have to have a view on the event (although it could be helpful), but you should never be caught off guard with a scheduled event.


----------



## darkhorse70

Hey SKC, yeah youre right. For some reason Ive only been focusing on the US and Euro figure releases. 

Good wake up call.


----------



## darkhorse70

By the way, as far as my performance spread sheet ignore the stats. Its wrong and its changing when I change the dates to impossible results. Sent amp futures an email to get it sorted. Ill posted it up afterwards....


----------



## captain black

skc said:


> Preparations... your daily routine *must *include an overview of major scheduled events before you put any trade on.
> 
> You should set an alert (on your computer, phone, trading platform etc) 5-10 minutes before scheduled time.
> 
> You don't have to have a view on the event (although it could be helpful), but you should never be caught off guard with a scheduled event.




Excellent advice. It's always a tough choice with the BOJ meetings as there's no fixed time, the meeting drags on for ages and like today there's often leaks during the meeting. I don't generally hold positions across big announcements but with the BOJ it's a choice of not trading for half a day or wearing some slippage occasionally like I did today.


----------



## darkhorse70

Well its definitely a lesson I wont forget again.

At aliom as trainees, we weren't allowed to hold any unhedged positions going into high impact figure releases.

In reality, the market could tank suddenly so its one of those risks that could do big damage.

For some reason, im usually more comfortable going into a figure release if the markets going against me rather than if the market is going with me. That is, if i expect the market to turn around and using a figure release as a catalyst.


----------



## darkhorse70

Ok so back to B/E for the day. 2 Lots on that up move caused me $390 in damage. Went long 4 lots immediately after finding out what the news was + seeing the equities getting squeezed back down + the positioning of the notes at their highs since last year august + notes being bid.

Ive still got 1 lot left after selling 2 lots, then 1 lot. I still think theres potential for more upward movement but the equities are pushing back hence im trying to reduce my risk. Im still +90$ on my last lot.


----------



## captain black

darkhorse70 said:


> Well its definitely a lesson I wont forget again.




We never stop learning!

I try to have a backup for everything; spare laptop ready to go, etc.

But...

I had one of my monitors die this morning, guess who'd forgotten to buy a spare monitor when the last one died a few months ago 

A quick browse through the MSY site and I've got 2 spare monitors being shipped. Wont make that mistake again 

I ended up pinching the wife's spare flat screen telly out of her office, not impressed! Guess who's cooking dinner tonight...


----------



## darkhorse70

haha, I want a big flat screen monitor. You could fit like 20 charts and DOM's on that.

haha on that note, that reminds me that I need to make sure I have an alternative to getting out of a trading position in case the internet goes down. Last time that happened and I was fuming, especially because I wasnt sure how to manually exit the trade using IB.


----------



## captain black

darkhorse70 said:


> haha on that note, that reminds me that I need to make sure I have an alternative to getting out of a trading position in case the internet goes down. Last time that happened and I was fuming, especially because I wasnt sure how to manually exit the trade using IB.




If you have 3G or 4G coverage where you are then the Telstra WIFI modems are a great backup. I have a NextG Wifi modem I have connected to the trading lappy as well as the ADSL connection. If the ADSL drops out I pull the ADSL cable and it switches to the NextG connection. There are dual ADSL and 3G modems that will automatically switch over after 30 seconds but I'm always at my laptop so figured I can do it quicker manually.

A good quality UPS is another must have. 

Most software allows a backup licence for another PC. I keep a spare laptop with my trading software set up so if I have a catastrophic failure on my main lappy I can swap them over in 2 minutes and be up and running again.

I even keep a backup office chair 

Wont forget the spare monitor ever again...


----------



## darkhorse70

Sounds like a good plan. The laptops lying around at home are ancient but its always a good idea. Especially if the market is really volatile.

Thanks for the heads up man.


----------



## captain black

darkhorse70 said:


> The laptops lying around at home are ancient




Linux is a great option for reviving ancient laptops. Lightweight Desktop Environments like XFCE or LXDE are quite easy to use but consume very few resources. An LXDE distro like Lubuntu can run on a Pentium2 processor with as little as 256-384Mb of RAM. Of course, more is better for a smoother drive 

There's a TWS Linux version:

https://www.interactivebrokers.com/en/index.php?f=16044&ns=T

Or it could be handy having an old laptop as a backup and use IB's Webtrader just in case you need to close out a position in a hurry.

I have a couple of old Dell laptops with Core2Duo processors and 2Gb RAM running Linux Mint. My trading laptops are I5's running Windows but everything else I do on my old Dells.

There's always the smartphone option as a backup too, I still use a steam powered mobile phone so I haven't a clue about IPhones etc. but I think IB has an app that runs on them?

Enjoying your thread too, I know nothing about Bonds so your posts are forcing me to look up stuff you mention that I don't understand.


----------



## CanOz

My contingency plan is as follows: 
PC - backup laptop always active
Screens - not an issue with 6
Power/wifi - Phone call to one of 4 brokers, either close or hedge


----------



## captain black

darkhorse70 said:


> Sounds like a good plan. The laptops lying around at home are ancient but its always a good idea. Especially if the market is really volatile.




Another option if you don't have a backup laptop/PC is to keep a clone of your hard drive. It's the one thing that usually fails first and only takes a few minutes to slip the old one out and the new one in.


----------



## CanOz

captain black said:


> Linux is a great option for reviving ancient laptops. Lightweight Desktop Environments like XFCE or LXDE are quite easy to use but consume very few resources. An LXDE distro like Lubuntu can run on a Pentium2 processor with as little as 256-384Mb of RAM. Of course, more is better for a smoother drive
> 
> There's a TWS Linux version:
> 
> https://www.interactivebrokers.com/en/index.php?f=16044&ns=T
> 
> Or it could be handy having an old laptop as a backup and use IB's Webtrader just in case you need to close out a position in a hurry.
> 
> I have a couple of old Dell laptops with Core2Duo processors and 2Gb RAM running Linux Mint. My trading laptops are I5's running Windows but everything else I do on my old Dells.
> 
> There's always the smartphone option as a backup too, I still use a steam powered mobile phone so I haven't a clue about IPhones etc. but I think IB has an app that runs on them?
> 
> Enjoying your thread too, I know nothing about Bonds so your posts are forcing me to look up stuff you mention that I don't understand.




Captain, when you have time. post us a new photo of your workstation...i don't think I've seen it since you moved to Tassie


----------



## darkhorse70

captain black said:


> Linux is a great option for reviving ancient laptops. Lightweight Desktop Environments like XFCE or LXDE are quite easy to use but consume very few resources. An LXDE distro like Lubuntu can run on a Pentium2 processor with as little as 256-384Mb of RAM. Of course, more is better for a smoother drive
> 
> There's a TWS Linux version:
> 
> https://www.interactivebrokers.com/en/index.php?f=16044&ns=T
> 
> Or it could be handy having an old laptop as a backup and use IB's Webtrader just in case you need to close out a position in a hurry.
> 
> I have a couple of old Dell laptops with Core2Duo processors and 2Gb RAM running Linux Mint. My trading laptops are I5's running Windows but everything else I do on my old Dells.
> 
> There's always the smartphone option as a backup too, I still use a steam powered mobile phone so I haven't a clue about IPhones etc. but I think IB has an app that runs on them?
> 
> Enjoying your thread too, I know nothing about Bonds so your posts are forcing me to look up stuff you mention that I don't understand.




CB I think we might possibly have a linux. My brother use to have an awesome sony laptop, but we lost it in a home invasion a few years ago. In terms of all that computer stuff, Ill just get my brother or dad to sort it. For some reason my dad loves fixing the old laptops in the house lol.

My sisters just given me her ipad since my parents bought her a new iphone (spoiled kids these days haha). The ipads manageable enough with a big screen.

Im actually with amp futures atm so I need to figure out how their manual trades work because they provided me with multi charts and the orders can be directly executed through the software.

Glad youre enjoying the thread. I should put up more photos but its always going to look like the same thing. I was actually thinking why or how its nearly impossible to teach some one verbally how to trade. Im not suggesting that im good enough to trade but it almost feels like trading is an intuitive thing based on so many pieces of information simultaneously. Even so much so that some times we can't even reason why we make the trades that we do other than the fact that it felt like the "right" thing to do.


The clone thing seems like a reasonable idea.When my brother built this new pc for me, our ram was faulty and the comp kept crashing. Having a back up file will remove hours of pain as well haha.


----------



## captain black

CanOz said:


> Captain, when you have time. post us a new photo of your workstation...i don't think I've seen it since you moved to Tassie




We're still here in SA, wife's family has health issues so we've had to stay. Looking at the fires and floods in Tassie at the moment I'm sorta glad we did!

Not much has changed in the office apart from the desk and chair getting chewed a bit more by my Labs 

Here's a picture of me hard at work...


----------



## darkhorse70

Can 4 brokers haha awesome. I think im on two and one is about to close on me due to lack of funds. Im slightly hesitant to let IB shut me down purely due to the head ache of opening up another account with them later in the future.

Actually having a  petrol powered generator is probably a good investment to just incase lol.


----------



## Modest

captain black said:


> rom the desk and chair getting chewed a bit more by my Labs
> 
> Here's a picture of me hard at work...




Living the dream mate!


----------



## darkhorse70

A screen shot of the p'l today. Ignore the 0$ trade positions. Theyre when I get flat or open a position. I got out of the last trade as I had to leave the computer and the equities were making a second attempt at the days highs. Notes were pulling away from their highs. It could go either way in terms of if equities would get above and keep going up so i took the profits.


----------



## captain black

darkhorse70 said:


> it almost feels like trading is an intuitive thing based on so many pieces of information simultaneously. Even so much so that some times we can't even reason why we make the trades that we do other than the fact that it felt like the "right" thing to do.




I started out purely trading mechanical systems on the ASX I developed in Amibroker. I still trade them but also started day trading futures a few years ago. The more screen time I have with index futures the more I rely on discretionary or intuitive decisions. I think perhaps it's like high level sport like Tennis etc. where you practice something so many times it becomes almost a reflex action.


----------



## darkhorse70

Agreed. I gave amibroker a go but it felt like a completely separate en-devour on its own. Maybe one day when I actually have a strategy that works.

Lol at the labs. My dog annoys me to. I feel bad for her if i dont go in the back yard for a while. Atleast she forces me to take a break once in a while.


----------



## darkhorse70

On another note im downloading excel + the markets look like theyre setting up really nicely and the catalyst in 30mins cpi EUR could generate a good opportunity.


----------



## captain black

Modest said:


> Living the dream mate!




There's been a few nightmares along the way, got caught up in the MF Global bankruptcy in 2011 at the same time I was in a 20% drawdown. Had a 35% drawdown in my earlier days too when I was systems trading.

It's the best job in the world though, anyone who tells you different ain't doin' it right!!


----------



## darkhorse70

1 x long @ 17.5

Sold 1 x @ 19.5


----------



## darkhorse70

Performance since 13th jan. 

Theres a few skewered results since I wasnt aware that my performance was being tract and so while I was spread trading for experimental reasons, they were recorded. Maybe half a dozen or so.

The results are obviously from start to finish.


----------



## darkhorse70




----------



## darkhorse70

Been close to having 2/3 major blows for the year so that could of changed stuff quite dramatically. 

Im trying to be more responsible with averaging down losers and position sizing.


----------



## darkhorse70

Some of those profits were larger lot sizes or smaller. Effects the end result on profits so its small things like that which ill need to factor in. Go big when a good opportunity arises and small when there isnt much opportunity.


----------



## darkhorse70

Quick Market Review For Mondays Opening:

Equities had a strong rally. Closed off near the highs. Most likely saw a lot of short covering plus potentially some longs.

Notes also saw new highs made for the year. 

Again were at the border of the value in area of the notes. Its pushing near the top of the value area seen last year in august and several attempts before hand throughout 2015. Its either going to reject accepting value higher or accept value higher. Anyway, it's just some thing to be aware of.

Trading markets searching for new value is totally different from trading when markets are ranging/in value. For one, its possibly much more difficult fading moves when markets are out of balance and if volatility is up, position sizes should be reduced and vice versa.

This week is also an important week as we have NFP coming up. Oil is also in the spotlight and its been making a "recovery". Lets see how it fairs during this week. Again, depending on the way this week rolls out in terms of figures, could determine the direction the markets might possibly head.


----------



## darkhorse70

Going to also focus on managing position sizing better. 

Reducing Offside risk

Holding positions longer which I think have good merit

Managing my temper better


----------



## darkhorse70

Another interesting factor is that both equities and bonds rallied last week. So I guess figuring out which market will pull back will be interesting...unless we have some sort of dislocation as a result of monetary policies.


----------



## darkhorse70




----------



## Joules MM1

darkhorse70 said:


> View attachment 65718




the only measure road block i can see is at 2060's other than that the standard thrust would be twice the distance/height of the channel you've highlighted here...

enjoying your thread, DH


----------



## darkhorse70

Hey Joules, in regard to the chart I guess I use it just as help for context. However I can see your point.

The more profound thing on that chart for me would be those long tails on te down side. Just looks like price is constantly being rejected down their. I'd be more interested to see how it reacts down their if it gets that low again soon.

I'm glad your enjoying the thread.

Not sure what it offers other than repetition and slight entertainment but hopefully you can get some thing good out of it.


----------



## darkhorse70

And were off...markets open.


----------



## darkhorse70

Short 1 x @ 17/5

Not shorting 2 lots as my risk would be to great. Might average in 1 lot if need be.

Right now the markets are 50/50 but oil was being pushed lower before buyers stepped in. Equities are trying to push up but not sure if they are either waiting for oil or some confirmation by markets on whether theyre going to go up or down.


----------



## darkhorse70

*Dom's not working till I restart MC. Always does that...


----------



## darkhorse70

Bought 1 x @ 16.0

Markets look like they're stalling for now.

Possibly waiting for CNY figures out at 12pm/12:45pm

Profit = $45USD


----------



## darkhorse70

Boring first figure release. Lets wait for the second one.


----------



## darkhorse70

Averaged in two lots short a while ago.

Total profit $78


----------



## darkhorse70

Waiting for the GBP figure releases. Both markets still relatively close to their opening prices. We need to jump start some thing.

Oils sold off slightly but could be in a good position for a rally with the equities.


----------



## darkhorse70

Ive been slowly averaging into a long position over the last 2 hours on the note. Im hoping for a continual sell off in the equities and oil for the time being till i unload out of the position.


----------



## darkhorse70

Ok I got out of the position.

Only managed to get a profit of $100USD.

Didn't expect the sudden movement of the US figures.

Overall good trading day.


----------



## darkhorse70

Looks like markets have lost interest in oil prices for now.

Oil Markets saw a sell off yesterday while equities made their way higher.
I think if we start pushing lower in oil prices again, it might spark the attention of traders but for now, they might not be as correlated.


----------



## darkhorse70

Long 2 x @ 10.5

Sold 1 @ 12.5

Sold 1 x @ 13.0

Profit = $140USD

Got out purely based on the fact that oil might slightly rally temporarily.Equities are at a pivotal point. What I mean by that is they might try to retest the high, go higher or reject the high. Need some more confirmation before I can get a better understanding of market direction.

Taking profits early on in the day can help create a buffer zone for a bigger trade later on in the day.


----------



## darkhorse70

Went long 2 x @ 10.5 I believe. Scaled out of the first position 1 point up and the other position, 3 points up.

I was challenging myself to hold on with two lots for a little longer as I felt CL was selling off plus equities were going to sell off short term. But I had slight doubt plus the notes looked slightly offered for a moment.

Regardless total profit = $125


----------



## darkhorse70

Been in a long position for a while now.

Averaged in 2 lots. Just sold one lot and hoping oil keeps selling off plus hoping equities keep moving lower. Looking to get out soon.


----------



## darkhorse70

Total profit for that trade = $170

Total profit for todays session = $435


----------



## darkhorse70

Sell off seen in the equity markets yesterday.
The catalyst for this was the sell off in oil which is going to retest the lows seen lately.
The markets are nervous, Government bonds have been rising since last night making yearly highs. Money flowing into safer securities.
Need to wait and see if any buyers will step in to buy the lows.
We have Non Farm Employment Change ADP Tonight.
NFP will be on Friday night. I expect their to be a lot of volatility on those figures. Markets could be taking risk off the table till those figures come out.


----------



## darkhorse70

Looks like oil might be selling off. I missed the ride since I woke up late today. Need to wait for a chance to see if markets will slow down or look for a reversal. 1:30PM BOJ gov speaks so possible volatility.

I have a feeling that markets are positioning themselves for a huge rebound on nfp figures. All about manipulation...


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## CanOz

darkhorse70 said:


> I have a feeling that markets are positioning themselves for a huge rebound on nfp figures. All about manipulation...




So, would that be a bad number, meaning not to raise rates again for a longer period...? Or a good number, with a backdrop of Global sell offs, meaning the jobs scenario is still ok, even though corp profits are sliding off, so economy is hanging on but no rate rise, because of the Global situation...?

Either way i tend to agree as we're pretty over sold now, so there must be a huge amount short that could get caught in the hole...


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## darkhorse70

CanOz said:


> So, would that be a bad number, meaning not to raise rates again for a longer period...? Or a good number, with a backdrop of Global sell offs, meaning the jobs scenario is still ok, even though corp profits are sliding off, so economy is hanging on but no rate rise, because of the Global situation...?
> 
> Either way i tend to agree as we're pretty over sold now, so there must be a huge amount short that could get caught in the hole...




Youve got me there Can, not really sure. I guess a figure thats maybe slightly better than expected is ideal but again markets do the complete opposite of what theyre suppose to do and the media always has an excuse for that. 

As soon as figures drop, I just look at where markets were in terms of setup and if theyre going strongly bid or offered. If neither Ill wait and take my time to plan an entry. If theyre going aggressively one way ill tend to jump on that direction given it makes sense to me.


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## darkhorse70

Went 2 x short an hour ago or so. Timed this with what I thought was the small rally of oil plus the emini with what appeared to be a small sell off in the notes. 

Scaled out 1 lot and the other lot slightly below the first lot.

1st lot = +$62.50
2nd lot = +$109


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## darkhorse70

Sold 1 x @ 6.5

Bought 1 x @ 5.5


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## darkhorse70

Long 2 x @ 0.5

Sold 2 x @ 1.5

Easy trade, so I took it.


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## Modest

I feel so naughty averaging into a trade that's against me (I rarely do it) but wondering what your opinion is on this matter. 

When do you know to NOT average into a position that you're currently taking on heat?

What do you look for to ADD to a position you're already taking heat on? ...What gives you that conviction to add to it? 

Thanks


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## darkhorse70

Hey modest, well firstly i could be completely wrong and it might be a bad strategy. Every book and apparent expert  says dont average losing trades but the first time I ever heard that averaging losers was ok was buy guy bower from propex. Then I learnt it wasnt such a bad thing atleast in spread trading.

I think its important to challenge the rules which weve been taught all along. Atleast when we are a little passed the green stage and know a little or two about trading.

Most of my trades for now are mean reversion. With that being said and as TH mentioned on your thread, being the early bird isnt always the worst thing. The longer you wait, the market demands a premium for more info and that comes in the form of prices being more expensive.

Now to the point. Depending on my conviction will depend on my trading size. If im confident that the markets should turn around and if my entry is close to where I know my trade is wrong (stop loss level even though I dont really use one in that way) then I might decide to trade with 2 lots. 

If im not to sure that the markets have bottomed out, Ill only go in 1 lot and hope to buy another lot at a cheaper price. That way im not missing out on the potential move and I also have the chance to buy cheaper later on.

I never want to load up to my max size straight away because:

a) If my timing is wrong, I need to average down later to allow me to reach B/E and my profit target quicker after being offside

b)It's my most powerful tool to get out of a bad trade, if I can get the timing right.


The only down side to averaging down losers is the potential to do a lot of damage if your wrong about the trade. That doesn't take much, it only takes a strong trending market with possible false reversals.

What makes a good trader? 

Its all these little tools that we have at our disposal and knowing how and when to use them.


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## darkhorse70

Trading, well atleast to me is all about intuition and knowing what works for you. 

Same thing for lot size. After a while, you get the feel for when you should go big, go small, wait, average down slowly or aggressively. 



By the way, Im just a noob and im writing as if I know a thing or two. The fact is I dont and I need to start trading live so I can get some credit for what I say. For now, I feel like a quack when I try to give advice. So take my advice with a grain of salt.


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## Modest

Thanks mate


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## darkhorse70

No worries man. 

I screwed up. 

My mate owes me 3k so hopefully that + possibly selling some of my assets will fund my account again. 

Unfortunately we went to the RSL  a few too many times. There was this stunning employee and I was just in a state of trance and my friend was just losing money on the pokies. I kept funding him and he had a full time job so a few small consistent payments would have cleared the debt.

Unfortunately the debt went out of hand over a few too many visits and now hes having trouble paying....

LOLLLL, note - next time dont chat to hot employees haha


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## Modest

darkhorse70 said:


> No worries man.
> 
> I screwed up.
> 
> My mate owes me 3k so hopefully that + possibly selling some of my assets will fund my account again.




Call in that debt mate you're lucky you're a nice guy and don't charge no interest! :axt:


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## darkhorse70

I'm trying.

It's a tricky situation as hes a really close friend and I don't want to compromise our friendship over some small amount of cash. He's been to the psychiatric ward twice and when it comes to a rational person, i'd be less lenient but this guy operates on a slightly skewed ethical view lol.

The reality is I need to get a part time job but I feel like its de constructive to my trading. Ill find a way. Patting down my sim trading is my priority at the moment.


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## Modest

Yeah that can be tough but once you're fully committed to trading you're not going to have any friends anyway... Haha

I think a Part Time job would be the real sweet spot getting going. If once I go live I can trade like I do in the sim I will be looking to reduce my hours to part time and start trading an asian market.


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## darkhorse70

haha, well friends are over rated in someways haha.

Yeah part time is great. I use to work in a kitchen part time and my aunties sister was the manager. My mum,uncle, 2 x aunties worked there.

I left when I went to go to Aliom. Ill have to formulate a new plan.

A CV would be ideal haha.


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## darkhorse70

Slightly disappointing with myself last night. After the ADP figures, the notes felt bid although they were initially going down. I got in on the move, but with the way oil was rallying and the potential for the equities to move up, I sold out. I wasn't prepared to sit behind the comp for a few more hours. When I woke up, notes had made a huge rally before selling off.

My ego is slightly satisfied though...


ADP NFP Results were better than expected out of the US.
Notes still managed to make all new highs before selling off.
Equities sold off prior to making a recovery and closing slightly hgher.
The real mover was oil, making strong gains and pushing higher.
At this point, ill say oil is a really big indicator in terms of risk and volatility.
Equity markets are trying to hold up but are still hesitant and waiting for oil. US Treasuries and other bonds around the world are staying strong for now. Again, NFP figures will be out this week so expect some volatility.


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## Gringotts Bank

Inbox full?


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## VSntchr

darkhorse70 said:


> I use to work in a kitchen part time and my* aunties sister* was the manager. My



Wouldn't that make her either you Mum, or another Aunt?


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## darkhorse70

Gringotts Bank said:


> Inbox full?




Sorry mate, I emptied some out.


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## darkhorse70

VSntchr said:


> Wouldn't that make her either you Mum, or another Aunt?




VS, haha funny story. My dads twin brother works there, her wife is technically my aunty & her sister (not blood related is the manager), then my mums brothers widow works there and then my mum works there. haha


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## darkhorse70

Made a few trades. At first I felt like oil and equities were going to go bid, tried to get in, cut losses (1 or 2 ticks), repeated again.

After 7pm and Draghis announcement, I think I went short on the notes before flipping and loading up 3 lots. Oil felt offered. Sold out near the high of the note, while slowly unloading the position.

Total Profit After losses : 120$


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## darkhorse70

I still feel like the market is coming in bid. Might short the notes .


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## darkhorse70

Went short 2 lots at 31.5

I feel like oil is still bid even though it hasnt been able to move much. Equities look like they have some buyers but its one of those trades I need to keep a close eye on. Willing to risk my profits on the trade.


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## darkhorse70

Scaled out of the first lot at 1.5 points and the 2nd lot with 2.5 points.

Total profit = 125$


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## darkhorse70

Last night went long after the GBP figures released. Went long 2 lots. 

Scaled out of first lot several minutes later = +$78

2nd lot = + $125

Oiled looked like it was going to topple over and equity was showing some resistance to move up.

I was going to hold one lot for longer but if im not in front of the comp  its like punting so I took my profits.


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## darkhorse70

Just hopped on the comp but might potentially smack the offers on the notes in 3 minutes after monetary policy meeting minutes are released.

Oil might be moving up + equities. Notes look slightly over extended. Good opportunity, maybe...


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## darkhorse70

Shorted 1 lot a while ago.

Covered 1 lot long for 1 point profit.

I held on for a while but after going onside for 2 points it pulled back.

Might be a boring day till tonight.


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## CanOz

darkhorse70 said:


> Shorted 1 lot a while ago.
> 
> Covered 1 lot long for 1 point profit.
> 
> I held on for a while but after going onside for 2 points it pulled back.
> 
> Might be a boring day till tonight.




I reckon its good day for Market Replay, going to have a look at the YM from the other day

That is if i can get this klunky clap trap NT working, its crashed 4 times and all i did was rename a workspace FFS...its using 8 gb of memory and i have one chart open....lol


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## Trembling Hand

CanOz said:


> That is if i can get this klunky clap trap NT working, its crashed 4 times and all i did was rename a workspace FFS...its using 8 gb of memory and i have one chart open....lol




Geez Can you have something very wrong there. Think you have some gremlins in ya machine! :badsmile:


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## CanOz

Trembling Hand said:


> Geez Can you have something very wrong there. Think you have some gremlins in ya machine! :badsmile:




Yeah i know...i'm seriously hoping it has to do with the data i have (years) and the speed and packet loss of the connection. So i'm not going to do anything until i get connected in Aust...I've had so many conversations with NT support they address me by my first name as if we're old mates now...they keep saying that i have too much lost data and its the main cause of my problems. So, i'm happy to leave it at that and i suppose i should stop complaining....


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## darkhorse70

CanOz said:


> I reckon its good day for Market Replay, going to have a look at the YM from the other day
> 
> That is if i can get this klunky clap trap NT working, its crashed 4 times and all i did was rename a workspace FFS...its using 8 gb of memory and i have one chart open....lol




lol, at least you didnt accidentally delete your entire workspace and have to start from scratch. I dont even have nt on my comp to use market replay. SIM gets boring, you just want to trade LIVE.

Im going to have to sell my car and one of the dirt bikes to fund my trading account hopefully in August. Till then get more stats and desensitize myself as much as possible before going live.


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## CanOz

darkhorse70 said:


> Im going to have to sell my car and one of the dirt bikes to fund my trading account hopefully in August. Till then get more stats and desensitize myself as much as possible before going live.






I reckon you should save that as a last resort mate....


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## darkhorse70

Ino, well my car/ute I just bought to transport the dirt bikes on. Selling 1 out of the 4 motorbikes will be bearable lol. I actually sent MES Capital some sim fills. Lets see if they get back to me. 

Who knows if the company really backs traders or theyre just fishing for info.


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## darkhorse70

Just read your thread about them and what minwa said. Probably a waste of time.


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## darkhorse70

Just shared this some where else so I thought I might share it here to, just my 2

While I was in my internship trading for a Proprietary Trading company, I viewed the traders and trainers there as Gods. Here I was at the holy grail , the mecca of the trading world where I could surrender all my fears I once had of being a failure. Here I was being taken and accepted under the wings of these professionals and be guided to becoming a great trader. We were given the impression in there that being a retail trader was not realistic, that the trading world had become very difficult and all inefficiencies which once existed were coming under extinction due to the internet, algos and high frequency traders.

On the last day of the 6 week program where I thought I had aced the program, I was told I didnt have what it took. I was gobsmacked. They tried making me feel better by telling me that they had hope in me and I was one of the most passionate traders theyde ever seen. Here they were telling me that there were other ways other than spread trading bills to make money.

We live in a society where we put all our faith into people with positions of power. We believe they have all the answers and they know all. The unfortunate truth is although they might have knowledge and wisdom, its not always the case of "They know better".

As a trader or investor, weve been taught that there are certain golden rules. For example averaging down a loser is a cardinal sin. As a beginner, having some foundations and principles to follow by is important. It allows you to build a stable "enough" platform to start learning. However, these golden rules are just their as guidance. It doesnt mean just because you follow them, your system or strategy is going to work. Actually, what we do know is that 95% of traders lose money or cant beat the indexes.

Its safe to then say, that the people who do make money are doing some thing different. That means they are contrarians. Challenge these golden "rules". Every system is unique and there own principles are only relevant to that one strategy. You need to find what works for you and in order to do so, you must challenge these popular beliefs.Don'e be afraid to challenge the so called gurus. You are no less than these people who have been put on pedestals.


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## captain black

darkhorse70 said:


> Its safe to then say, that the people who do make money are doing some thing different. That means they are contrarians. Challenge these golden "rules". Every system is unique and there own principles are only relevant to that one strategy. You need to find what works for you and in order to do so, you must challenge these popular beliefs.Don'e be afraid to challenge the so called gurus. You are no less than these people who have been put on pedestals.




Spot on!


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## darkhorse70

Thanks CB.


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## CanOz

The other thing to keep in mind there to DH is that many of the Australian prop shops are based on a model that was dependent on rebates... Changes are afoot, there may not be many of those left and what is left spreading will likely be all ADL generated...


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## darkhorse70

CanOz said:


> The other thing to keep in mind there to DH is that many of the Australian prop shops are based on a model that was dependent on rebates... Changes are afoot, there may not be many of those left and what is left spreading will likely be all ADL generated...




ADL?

That would be a great thing. Wonder what would replace it.

Its unfortunate that every where you turn their are con men and you have to be skeptical about each and every firm.


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## darkhorse70

By the way made a trade before for and made $60.

Currently shorting the t note. 1 lot just because not sure if the equities are just going to muck around. Also went short so I can average in if the t notes go bid for a while. Oil looks like its having a small rally so we might have some probability of a successful trade.


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## darkhorse70

Short 1 x @ 14.0

Bought back 1 x @ 12.5

Profit = $45


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## darkhorse70

Currently up 140$. Going to use that as a buffer to trade the NFP.

I think that the equities and oil will probably flush shorts and go upwards. I also think notes will go down.

Will just have to see how the DOM reacts when the figures hit and what type of price structure were at.


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## darkhorse70

I got smashed in last nights figure releases.

Figures hit the market, notes went offered, equities went slightly offered and oil was slightly bid.

For a second I concluded markets in the notes would go bid however the sell off was huge. Went bid, got slapped around, whip-lashed for a few seconds, took a big loss, went short, then flipped again. 

Equities did sell off eventually as well as CL and notes eventually made a recovery.

Great experience but if that was live, it would have been brutal.

Lesson learnt - correlation can be off at times and dont even jump in too quick during NFP unless you want to cry yourself to sleep. I'll view this as a free lesson with a slightly battered ego but a necessary one.


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## Trendnomics

darkhorse70 said:


> I got smashed in last nights figure releases.
> 
> Figures hit the market, notes went offered, equities went slightly offered and oil was slightly bid.
> 
> For a second I concluded markets in the notes would go bid however the sell off was huge. Went bid, got slapped around, whip-lashed for a few seconds, took a big loss, went short, then flipped again.
> 
> Equities did sell off eventually as well as CL and notes eventually made a recovery.
> 
> Great experience but if that was live, it would have been brutal.
> 
> Lesson learnt - correlation can be off at times and dont even jump in too quick during NFP unless you want to cry yourself to sleep. I'll view this as a free lesson with a slightly battered ego but a necessary one.




In the long term, the randomness of the markets will shrink all ego's.


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## darkhorse70

haha couldnt agree more trend.


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## darkhorse70

After taking another huge loss last night I need to re structure my trading strategy. I need to focus on how to minimize big damage. I went to sleep with a position on. I really thought the notes would come in offered and oil and equities would go back bid.

It didnt. Regardless, I think im going to trade more aggressively and bigger on my trades and keep a tighter stop on the trades.

Unfortunately im going to discontinue this diary indefinitely. It probably adds an extra element of stress due to the fact that I feel like a disappointment at times.

Im going to start working as an Uber driver for some pocket money so I can start trading live in August. That is if I can refine my trading style enough not to sustain major damages.


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## captain black

darkhorse70 said:


> Unfortunately im going to discontinue this diary indefinitely. It probably adds an extra element of stress due to the fact that I feel like a disappointment at times.
> 
> Im going to start working as an Uber driver for some pocket money so I can start trading live in August. That is if I can refine my trading style enough not to sustain major damages.




Good luck DH, thanks for starting the thread and posting your trades. I've occasionally thought of doing something similar and posting live trades etc. but it's tough to stay focussed and post trades at the same time, I take my hat off to anyone that does it.


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## darkhorse70

captain black said:


> Good luck DH, thanks for starting the thread and posting your trades. I've occasionally thought of doing something similar and posting live trades etc. but it's tough to stay focussed and post trades at the same time, I take my hat off to anyone that does it.




Thanks CB.

I guess if you have a solid strategy that you find is consistent and you believe you can provide enough value without your idea being "stolen" then it's great. However when your still in the learning phase and you have to change ideas and hop from idea to idea or drastically change it, then your diary goes all over the place.

When you make a bad trade, you have to explain to yourself why that happened and you can justify it and take the lesson from it and become better. But you hate having to re live that by justifying it to people like your parents or partner etc or the entire trading community lol.

Rest assured, once I think ive fixed my faults, ill add more value back here. Till then I bid you fair well CB.


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## CanOz

Yeah, good luck DH, i hope the Uber thing goes well...you'll meet some cool people i'm sure. 

Hopefully you'll come back to the land of equity index 'outrights' when you return to trading


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## darkhorse70

Hey Can, thanks mate. funny you should mention that. I just started trading equities and Im planning on trading oil as well as well as bonds. Since bonds take a while to transpire into a good opportunity, it will mean that my time spent behind the computer will yield more results/hopefully profits and minimize chasing bad trades on the bonds.

I should pull up the FDAX as well 

If I can get one or two jobs a day on uber that will get me by and save enough.


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## OmegaTrader

Trembling Hand said:


> Got the felling this will be the theme now. Everyone is chasing the same game of ASX rebates while churning trainees through a program designed to have them flat before costs......
> 
> 
> 
> I reckon every few years you have to reinvent yourself as a intraday trader. Markets never stay the same for long.
> 
> 
> 
> I understand why prop push you towards small tick per day instruments but I am always perplexed why an independent trader will choose that route. I've always looked at the big movers because I often have my first 3-5 trades go bad while I'm feeling out the market. On the DAX or HSI thats 15 minutes of Monday morning, 30 min into the week and I'm back positive and making money. On the Bonds 5 bad trades and that is the week gone!!!!






darkhorse70 said:


> Ok, so I didn't end up making the pass through to Propex. Bummer I know but whatever. Frankly I don't have the same faith in the system as I once did. What I mean by that is that I believe willing your going to put in the time and always have the mindset of trying to improve, there's no reason why you can't become a great trader on your own.
> 
> Whether this is true or not, I need to believe so if I'm going to succeed at this.
> 
> Anyway after trying to trade the way I was taught at Alioms for 6 weeks, I concluded it was impossible due to the commission fees. Trying to scalp when you've got the chance to scratch out of several trades before you score one tick will eat your profits away taking you closer to a negative expectancy.
> 
> Anyway while trading under Propex's guidance during the recruitment phase we were trying to spread trade US and Aussie bonds. Every one knows there is a correlation between them and there are several correlations between the equities, bonds etc.
> 
> Anyway as the weeks passed I realized my performance was constantly improving.
> 
> So I thought i'd give this a shot on the sim before hopefully taking it live in the next few months.
> 
> Basically I use the e mini and the t notes plus aussie bonds as confluence for setups. Using a combination of market flow and the short term structure of the market, I scalp small setups and some times hold for a few points.
> 
> I prefer a smooth equity curve so taking small consistent profits just works well for me.




Hi Darkhorse,

I was wondering if given your experience at propex and aliom whether you thought it was still a good punt from a newbies point of view in terms of learning and experience.

Also what materials/resources/ could be done to prepare for applying and when being a trainee-What strategies are used for testing trainees?

Finally now that these options have not worked out, what have the results of the other avenues been?

Regards OmegaTrader


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