Revisiting from 3 years ago -- I'm now a futures trader

[boofis]

Btw, trading isn't all a fairytale either. There's a chance you can hurt yourself more by doing these spreads, but that's the game, get ready to step back in the ring and put up another fight. Always leave ammunition in your gun.

I fail to see how spreading can hurt ones account more than outright directional trading. ?

 

[galumay]

Thanks Sommi, I have no interest in, and never will be a futures trader. Never the less your willingness to describe and share your learnings is admirable and selfless. As someone else said, you have a knack for communicating and write about it very well.

I certainly admire your tenacity and ability to learn, there are lessons for all investors in what you have told us here, thanks mate.

 

[sommi]

I fail to see how spreading can hurt ones account more than outright directional trading. ?

Sorry, I should have been more clear. That statement was referring, specifically, to the example I outlined of where you're caught in a trade and you enter another spread to protect yourself from data announcements.

I didn't want to create the impression that just building spread portfolios out of nowhere is some sort of magic potion of protection. Granted, they definitely do have a good strike rate of working, but how long you're willing to hold and how much pain you're willing to take is always going to be a factor.

And definitely, proper spread trading will always be healthier than outrights over the long run.

Thanks Sommi, I have no interest in, and never will be a futures trader. Never the less your willingness to describe and share your learnings is admirable and selfless. As someone else said, you have a knack for communicating and write about it very well.

I certainly admire your tenacity and ability to learn, there are lessons for all investors in what you have told us here, thanks mate.

Thanks for your kind words.

Everything I've shared are things I've picked up from the giants around me.

 

[boofis]

Sorry, I should have been more clear. That statement was referring, specifically, to the example I outlined of where you're caught in a trade and you enter another spread to protect yourself from data announcements.

I didn't want to create the impression that just building spread portfolios out of nowhere is some sort of magic potion of protection. Granted, they definitely do have a good strike rate of working, but how long you're willing to hold and how much pain you're willing to take is always going to be a factor.
.

Ah k, that's understandable. Kudos on your diligence and results!

 

[skc]

If you aren't staying sharp, focused, concentrated, and if you worry too much about your recent daily/weekly profits when you're trying to make a 10-15 year career out of this, then you will be viciously beaten up and left bleeding on the floor when it's done with you.

This doesn't include the past few months. I have had hiccups recently, though I've definitely been positive as each month goes on. This is a cumulative PNL and I've highlighted two significant points of interest.

Thanks Sommi. What you've posted here are truely awesome stuff. I don't know the first thing about spreading bonds, but the things you talked about in terms of learning, expanding your areas of competence, needing to be your own critics and how to damage control are some of the best I've read.

FWIW, I am a equities spreader (or pairs trader) and so some of the stuff around spread vs outright, and where you decide you must puke it out and move on, really resonates.

I have been trading prop for ~8 months now and I found sizing up to be way more of a challenge than I expected. Instead of being able to get in and out of trades with one click without affecting the bid/ask line, each trade kind of becomes 4-5 mini trades as I have to split the order, decide whether to cross the spread or sit in queue and wait to be hit. It's not just time consuming, it also takes your gaze away from other market action (I hold up to 15 pairs at a time). I am not quite at the stage where my position takes 5 days to exit, but with equities, a lot can happen over 5 days.

Anyway, this must be what a spreader's equity curve should look like. The red lines are limit increases, while the flat periods are reporting seasons (Aug and Feb) where my trading becomes quiet.

 

[cbc1]

On ya sommi,

You look right at home on the futures market.

 

[So_Cynical]

Anyway, this must be what a spreader's equity curve should look like. The red lines are limit increases, while the flat periods are reporting seasons (Aug and Feb) where my trading becomes quiet.

View attachment 51778

Quiet because you want to avoid any market moving announcements?

 

[sommi]

Thanks Sommi. What you've posted here are truely awesome stuff. I don't know the first thing about spreading bonds, but the things you talked about in terms of learning, expanding your areas of competence, needing to be your own critics and how to damage control are some of the best I've read....

That's a really good equity curve. You're obviously very consistently profitable.

If you're tied up with up to 15 pairs at once then there's no point moving to spreading in the futures market. Really, you should only consider expanding your portfolio if you can directly see/feel/suspect that your risk/reward edge is deteriorating away from black-box algorithms and other small-time coward/no balls traders that keep distorting orders.

 

[Trembling Hand]

Some words in this vid sounds like your journey,

 

[CanOz]

Thats was awesome...

 

[merlinnn]

Amazing clip, great motivator!

 

[baby_swallow]

Amazing clip, great motivator!

Yeah but he didn't experience blowing his account.....like I did .(..many times )

 

[kid hustlr]

ya great clip,

part 2 fwiw:

http://www.youtube.com/watch?v=9NwyXwn72kc

 

[Joules MM1]

good going!

 

[white_goodman]

those interested in learning spreading, some of the best info are on the exchange websites

 

[kid hustlr]

Sommi are you still around?

Wouldn't mind picking your brain a little further.

 

[r4jen]

Sommi are you still around?

Wouldn't mind picking your brain a little further.

HI there,
IF Sommi is still around, I would be intrigued to see how his trading has been during the US shut down. Having been trading for 6 years, i have found this particular period very difficult for Spreading.

 

[havaiana]

HI there,
IF Sommi is still around, I would be intrigued to see how his trading has been during the US shut down. Having been trading for 6 years, i have found this particular period very difficult for Spreading.

He has some good posts on another forum too, elitetrader from memory, google will find it. Not anything recent though since I last checked

 

[jeebs]

> Also, my vision was never to be a small, I want as much size as the biggest guy I know (he takes about 3 days to exit a position). I personally believe that over time, the algorithmic bots and black-box trading mechanisms will continue to wipe short-term edges out such that the only discretionary traders left are those who are able to beat institutions, not the bots. (You beat them by taking good risk/reward)

Hi Sommi, I hope that we can get this thread up and running again. There is a lot of good points that can be further discussed. With regard to your statement of holding a spread position for 3 days, does that mean that the position is offside and you are consistently averaging while waiting for the position to revert back into profit?

 

[olambeth]

A few years ago I had another account where I just kept asking around about trading and how to get into it etc.

Well I just thought it'd be nice to come back to thank aussie stock forums for the advice/resources/skepticism provided here. I left uni and walked straight into a prop firm and Ive been finding success for over a year trading futures after spending a good 8-10 months of not making money at the start. Its great we have an aussie forum where we can discuss local trading stuff because we are a relatively small community compared to the epicness of the e-mini, dax, u.s. tnotes or german bund.

I am always happy to answer any questions regarding futures trading and definitely have absorbed a lot of knowledge from experts who have been involved in aussie products, as well as futures trading in general, for over 10 years. I know how the guys making 1 to 5 million a year think and what they're doing as well and its always very interesting to learn their psychology.

Now a a little about what I trade:
>Aussie Curve (3yrs and 10yrs Bonds)
> Hedging Aussie 10yrs with the U.S. 10-year Tnote
> Australian Bank Bill Butterfly spreads (1st/2nd/3rd butterfly)
> Spreading the Aussie SPI with the E-minis overnight
> Hedging Aussie Bank Bills with the Aussie 3yrs


And what i'm currently looking at
> Spreading the U.S. Tnote with the Bund
> Other European Bond products and hedging them with the T-Note, Bund, or Aussie 10yrs
> Other secret spreads




Home setup uses 4 monitors, though I am going to be doubling and using 6 to 8 after about 3 months from now:

Hi Sommi,

This is certainly the best thread I've read from the perspective of a pro trader and cutting though the fog of what we perceive and what is actual reality of trading/spreading with the big boys.

I'm sitting here in Melbourne learning to DOM trade via No BS day trading's webinars and figuring out how I will potentially spread the Aussie Treasuries and scalp/spread Bund,Bobl,Buxl in the evening.

I'm going to tuck into Steven Aikin's STIR Futures 'Trading Euribor and Eurodollar futures' to learn more about spreading and also from the exchange websites as it was gratefully mentioned in a previous post.

Are there any other pieces of gold from traders that have perhaps shared their experience spreading in a paper back (other than Baldwin and perhaps Rotter in Market Wizards)?
Or even Youtube, trading threads etc?

What are your thoughts on only spreading from 5-9pm Aussie time on the Bund, Bobl at the Eurex open? Is this possible provided positions are exited before you shut up shop around 9pm?

Do you see a lot of game playing in the Aussie bonds? Flipping, icebergs, spoofing etc?
What's your perspective in adapting your strategy when it comes to spreading Aussies and Eurex/US bonds?

Hope you're still about! I'll try and hunt you down on EliteTrader forum if I don't hear from you!!

Cheers