The transition to Futures trading

[cynic]

....Many a time sending orders to Eurex I'm hitting out with limits now and missing the prices just cuz of the time delay. Somewhat frustrating.

On another point. Has anyone actually made the shift from trading small $ CFDs to actually getting it right with the futs? To me it seems like a jump just not made? Is there something in that?

I strongly suspect that I'm getting better fills on my DAX CFDs due to the practice of stop harvesting by the liquidity providers.

At times some of my limit entry orders open and achieve their TP intrasecond!

As for trading on a real exchange, I was having a discussion with an actual futures broker the other week about their product offering.

The account could only be funded during Australian business hours.

Further to this the brokerage do not offer a 24 hour margin call, but simply send a few emails and then autoclose positions in the event of margin.

That was enough to convince me that it would be logistically impractical (and financially dangerous) for me to even attempt trading DAX futures with this broker.

So, whilst I thoroughly distrust the OTC industry, for now, they appear to be my best available option.

 

[Trembling Hand]

TH, are you actually able to test the latency to Eurex from MLB?

To Ib EURO servers,

 

[Trembling Hand]

I strongly suspect that I'm getting better fills on my DAX CFDs due to the practice of stop harvesting by the liquidity providers.

At times some of my limit entry orders open and achieve their TP intrasecond!

As for trading on a real exchange, I was having a discussion with an actual futures broker the other week about their product offering.

The account could only be funded during Australian business hours.

Further to this the brokerage do not offer a 24 hour margin call, but simply send a few emails and then autoclose positions in the event of margin.

That was enough to convince me that it would be logistically impractical (and financially dangerous) for me to even attempt trading DAX futures with this broker.

So, whilst I thoroughly distrust the OTC industry, for now, they appear to be my best available option.

Couple of questions,

1. Have you actually tested it with a proper broker?

2. The instant fill and following instant target hit is not the sole domain of CFDs, many a time I have regretted having auto bracket orders with fill entries because the target has been hit before I can open up the distance.

3. When you have these so called " stop harvesting by the liquidity providers" do you have actual and reliable exchange data to compare it to?

4. Why the hell is your system reliant on a margin call? (this if frigin nutz and completely not conductive to long term survival and sanity)

 

[cynic]

Couple of questions,

1. Have you actually tested it with a proper broker?

2. The instant fill and following instant target hit is not the sole domain of CFDs, many a time I have regretted having auto bracket orders with fill entries because the target has been hit before I can open up the distance.

3. When you have these so called " stop harvesting by the liquidity providers" do you have actual and reliable exchange data to compare it to?

4. Why the hell is your system reliant on a margin call? (this if frigin nutz and completely not conductive to long term survival and sanity)

1. No.

2. Yes that is true. My response to your third point will hopefully clarify my reason for believing that I've benefitted from stop harvesting.

3. No. I can tell by the price action. Frequently limit orders are avoided by mere fractions of points during sharp moves and yet when a fill is finally achieved, it is usually at a superior price to the original target. i.e. price action regularly misses the target by less than a point, but when the target is finally achieved it has almost invariably been overshot. I've been witnessing these price behaviours with at least one in every two to three of my orders every single day that I've traded for at least two years!

4. Limited capital combined with the need to maintain multiple accounts to accommodate my methodology and accompanied by a general distrust of the industry.

 

[Trembling Hand]

3. No. I can tell by the price action.

So what data are you using to come to these conclusions?

 

[cynic]

So what data are you using to come to these conclusions?

Visual observation of price action and it's reaction to my limit orders.

 

[Trembling Hand]

Visual observation of price action and it's reaction to my limit orders.

Yeah...... so who is putting the data on your screen that you think "liquidity providers" are screwing with.

 

[cynic]

Yeah...... so who is putting the data on your screen that you think "liquidity providers" are screwing with.

I used to suspect the CFD provider, and once upon a time I believe that was the case. They've gotten smarter since the retail traders started waking up to the practice. Now every provider is quoting similar prices and yet the seemingly "limit/stop order aware" price behavior is continuing nonetheless.

 

[Trembling Hand]

I used to suspect the CFD provider, and once upon a time I believe that was the case. They've gotten smarter since the retail traders started waking up to the practice. Now every provider is quoting similar prices and yet the seemingly "limit/stop order aware" price behavior is continuing nonetheless.

So I'll guess the answer to my question and say you have not got real market data but are only going on synthetic prices provided by whatever the bucketshops are giving you?

 

[cynic]

So I'll guess the answer to my question and say you have not got real market data but are only going on synthetic prices provided by whatever the bucketshops are giving you?

Correct!!

 

[Trembling Hand]

So I'll guess the answer to my question and say you have not got real market data but are only going on synthetic prices provided by whatever the bucketshops are giving you?

Correct!!

Then how can you say with any certainty that you are correct if you have not seen what actually happened in the market?

And do you think you have any chance of success in an extremely hard field with vastly inferior tools and possibly fundamentally bent beliefs from said inferior tools?

 

[cynic]

Then how can you say with any certainty that you are correct if you have not seen what actually happened in the market?

I cannot say it with absolute certainty.

I can only say that there is certainly something so highly suspicious going on that it cannot be explained away as mere happenstance and must have some underlying cause.

Numerous times this past week, I've been chatting with a friend whilst trading and letting him know where my nearest limit order has just been placed. Whilst watching the subsequent price action we've ended up laughing our heads off at how easy it is to use limit orders to create temporary support and resistance levels when trading such products.

And do you think you have any chance of success in an extremely hard field with vastly inferior tools and possibly fundamentally bent beliefs from said inferior tools?

As you well know the chances are generally slim for any retail trader when trading such products.

At the commencement of this financial year, I believed my techniques were sufficiently adept to grant me a far superior prospect to the average retail trader.

However, the fact that I'm about to complete my fourth consecutive losing quarter (the last time this happened was over five years ago!) is calling my trading capability in the current climate into question.

 

[Trembling Hand]

I cannot say it with absolute certainty.

I can only say that there is certainly something so highly suspicious going on that it cannot be explained away as mere happenstance and must have some underlying cause.

Numerous times this past week, I've been chatting with a friend whilst trading and letting him know where my nearest limit order has just been placed. Whilst watching the subsequent price action we've ended up laughing our heads off at how easy it is to use limit orders to create temporary support and resistance levels when trading such products.

Mate you know there are a lot of people who trade CFDs who use the real data from the exchange. Do you understand what a massive free arb opportunity there is if the CFDs deviate from the underlying instrument?

 

[cynic]

Mate you know there are a lot of people who trade CFDs who use the real data from the exchange. Do you understand what a massive free arb opportunity there is if the CFDs deviate from the underlying instrument?

Certainly. If this can be achieved without violating certain clauses in the client agreement and the positions can be held concurrently without fear of autoclosure (or possibly even cancellation) on the OTC side of the transaction.

 

[fiftyeight]

Mate you know there are a lot of people who trade CFDs who use the real data from the exchange. Do you understand what a massive free arb opportunity there is if the CFDs deviate from the underlying instrument?

I just opened a small IG account courtesy of sportsbet and was pondering this my self. I have not been at home since opening the IG account but I assumed between the spread and IG having much faster, well everything, there was little chance of finding anything.

I may have to reassess when I am home next with a decent internet connection

 

[CanOz]

To Ib EURO servers,
View attachment 63029

Cool, not bad though if you were trading the FESX.

By the way, are you trading your own account now?

 

[Modest]

To Ib EURO servers,
View attachment 63029

Handy tip...


If you are using ADSL/DSL login to your Modem Router and see if INTERLEAVING is enabled. If it is, it is adding on about 50 - 60ms to your latency. You can generally disable it on the ISP side by calling the ISP.

 

[Trembling Hand]

Cool, not bad though if you were trading the FESX.

By the way, are you trading your own account now?

Yep. I'm now a retail punter jobing the DAX after 3 years of prop HSI - blood pressure is already 20 points lower.
Using AMP.

 

[Trembling Hand]

Handy tip...


If you are using ADDL/DSL login to your Modem Router and see if INTERLEAVING is enabled. If it is, it is adding on about 50 - 60ms to your latency. You can generally disable it on the ISP side by calling the ISP.

I'm on cable. Still possible?

 

[Modest]

I'm on cable. Still possible?

I believe interleaving is only for ADSL, don't know if there is a cable equivalent but may be worth researching.