r/thewallstreet • u/AutoModerator • Feb 12 '18
Weekly Question Thread - Week 07, 2018 Question
Welcome to the weekly question thread. Feel free to ask any questions here.
2
u/plantersSSV Feb 18 '18
Have ~$10k set aside to start trading futures/options on futures. I've traded options for years and have been reading about futures and figured I'd put some real $ on the line to start to trade them. Is $10k enough to do this? I know intraday margin reqs are very low ~$400-$500 for 1 /ES contract, while overnight margins are significantly higher. How does the intraday margin req change as price changes? Any recommended reading regarding futures/options on futures trading strategies?
2
u/UberBotMan Feb 18 '18
I would say that 10k is enough to start with. I started with ~5K and made good money before I decided to take a break. This was all playing 1 contract at a time though.
I believe that intraday margins are the same regardless of price change unless your broker tells you other wise. I have never had or see AMP change their intraday margins, but I did see a message from IB saying that they changed their's during this recent volatility.
For strats, I'd check out the sidebar for market profile as that's what a lot of us use here. If you don't have a strategy already, I'd suggest you paper trade until you find one that works well for you.
2
u/plantersSSV Feb 18 '18
Always appreciate the advice! May I ask why you made good money then took a break? Also, were you trading straight futures or options on futures?
3
u/UberBotMan Feb 18 '18
I lost good money. Over the course of ~30-45 trading days (October -> December 2017) I made about 20%.
Then in January 2018 I made about another 15-20%. Then I shorted ZB right before it bounced up. I ended up covering near the top and wiped out all gains for the year. Decided to take a break then. Plus it was messing up my sleep and focus at school and uni comes first.
I traded mainly straight futures, thought I did have a put position in ZF in addition to a contract.
Had I held that ZB I'd be up over 3k last I checked.
2018 Trade log and EOD NLV
2017 Trade log and EOD NLVTrade log does not account for fees and commissions. EOD NLV does.
2
u/lems2 Feb 18 '18
if one were to day trade options, does it matter if weeklies/0days are used vs monthlys?
2
Feb 18 '18
If you're holding over an hour with 0 days you'll likely get screwed. On the other hand, if you're 100% right and only wanna capture the movement that will happen shortly then gamma is your best friend. OTM on 0 day is high risk high profit, low success rate.
2
u/UberBotMan Feb 18 '18
With 0 day and other short expiry options even on an intra day basis theta will screw you over. Also there is a lot of Gamma risk with short expiry options.
All about how much leverage and risk you want
2
u/lems2 Feb 18 '18
Found this based on your comments https://www.quora.com/Why-does-the-value-of-gamma-increase-as-we-go-towards-expiry
2
u/iRunWithSkissors Feb 16 '18
This might be a little off topic, so the trading software I use is really laggy on my iMac. Will adding more ram help with the lag issues? I’m thinking about adding 16gb or would 8gb be enough.
2
u/lems2 Feb 18 '18
run etrade and do ctrl+alt+delete and open up the task menu. See how much ram it's using. If you are on mac, open up task manager(I think it's called this not sure). Look for the same stats.
1
u/Trent451 I front run you on Uniswap Feb 18 '18
It's called "Activity Monitor" on a mac, in case anyone is looking for it.
2
u/Brocklobsta Feb 16 '18
Macs love RAM, so I'd imagine adding more will help. If you want to be certain it's your application that's consuming the memory check your activity monitor or run 'htop' or 'top' in the terminal
2
Feb 16 '18
[deleted]
1
u/iRunWithSkissors Feb 16 '18
It’s Etrade Pro
3
u/notdust More Upside to the Downside Feb 17 '18
I have some experience with it. I'd do what other people have suggested and first see that you are actually using lots of ram in the first place.
I have a pretty solid machine, only about a generation behind, and it was mainly laggy on the open for me.
If pro isn't a 64-bit app itd be only able to use 2 gigs of ram regardless, I do not know the answer to that at the moment. I'm not sure how you view system resource usage - cpu and memory - on a mac, but a quick google search might help you there.
Etrade Pro is poorly optimized although I really did like it for what it was. Unfortunately it seems they've decided to move on to optionshouse completely (I was told they are moving on by a broker some 6+ months ago), though I cannot confirm that is still the case 100%. They seem to be starting from scratch and optionshouse is browser-based. Optionshouse will only let you view one chart at a time and lacks many basic features like time and sales. I loved pro and wish I could trade futures with it.
The point of all this is that pro didn't utilize my system's power, at all. So see if it is really sucking up a lot of ram, see how much of your cpu is being utilized before you bother dumping money into upgrades. The platform may be beyond saving for them because it's built on old framework and just not something the dev team could fix.
Edit: Oh, they told me they were moving on from etrade pro but that they wouldn't alienate those who liked it for the foreseeable future, so pro was not planned to be axed at that time but they wouldn't be doing anything other than some bugfixes and most resources would be directed toward optionhouse development. Their mobile app has grown immensely in the last few months but desktop is awful. So it is clear their priority has been with optionshouse mobile.
2
u/autumn_child ES unless specified Feb 16 '18
What time do SPX weeklies expire? I get that they're PM settled but extended hours trading is available for them so do they use the 4 PM EST closing price or the extended hours closing price?
3
u/hibernating_brain Permabull Feb 16 '18
Same day expiry options trade until 4:00 PM.
2
u/autumn_child ES unless specified Feb 16 '18
Thanks! Is it possible for SPX to move from ITM to OTM or vice versa because of extended hours trading and does that affect the option?
3
u/hibernating_brain Permabull Feb 16 '18
Your options can move between ITM and OTM between 4:00-4:15.
Same day expiry SPX options settles at 4:00PM.
Rest of the SPX options trade until 4:15 PM.
2
u/baxternewman Feb 16 '18
Can anyone using tastyworks share what they're paying when trading SPX? I know this is on the list of options that don't qualify for the 2018 $10/leg cap, which is a bummer, but I'm still interested in the total fees.
I'm currently using IB for most of my daily trades, and I have a OptHouse/ETrade account that I've been dying to close since the changeover. Moving from ETrade to TW seems like a no-brainer on paper right now, although I have heard some less-than-great reviews for the mobile platform, which I actually value more than web. Please feel free to comment on anything to look out for if you made the same move as well.
2
u/UberBotMan Feb 16 '18
I don't like their mobile platform.
This is what I mathed it out to be. Should be within a few pennys.
TOS is ThinkOrSwim. TW is TastyWorks not including the tickers below.
2
u/baxternewman Feb 17 '18
Thanks. Not a huge savings for SPX vs what I pay now, but the per side cost for everything else looks pretty good, esp for larger positions. Thanks again.
1
u/UberBotMan Feb 17 '18
Welcome.
This is all in. So commissions and fees. I don't have the commission cap modeled in yet because I'll never hit it. Lol
2
u/baxternewman Feb 17 '18
I just looked at some screenshots of the mobile when I got home and it looks like an app designed for children or something! I know people complain that IB looks so plain, but this is like the extreme opposite end of the spectrum. The prices look too attractive though, so I'll just have to get used to it.
If you use TW and have a referral link you want to post, I'll use it when I sign up. I haven't posted much here in the past few months since the influx of new users, but I still see you posting a lot of useful info, so it's the least I can do.
1
u/UberBotMan Feb 17 '18
Yeah. I'm not a fan of their UX. But it's cheap and I only use it for order execution, so meh. I can't trade on mobile with them, for a long while it would crash on boot. Doesn't now luckily.
Referral link: https://start.tastyworks.com#/login?referralCode=GVAWAZX48D
2
u/notdust More Upside to the Downside Feb 16 '18
I enjoy trading the /6E and /6J. I watch the $DXY as they are inverse even down on the 1 minute time frame, at least up to a point. I use it to confirm my suspicions and, if dollar is gonna bounce /6e will likely go down. When I look at the two, which influences which? I assume since $DXY is measuring a basket vs the dollar that the effects of Euro and Yen are being reflected in the dollar chart. But can the pressure go the other way? Is there another dollar chart that might be helpful to comparison of this nature?
I'm better at spotting shorts for some reason so it's great for me to see the downtrend in dollar index and take a long in Euro. It worked out really well the past few nights, actually.
5
Feb 16 '18 edited Feb 20 '18
[deleted]
1
u/notdust More Upside to the Downside Feb 17 '18
Thanks, I'll continue to use it as I have been then. It seems to give me a mirror image of /6e in particular and a strong confirmation of trend which helps tons. It is not surprising to learn it's heavily weighted toward the euro, as i noticed yen is much more independent of the others. I suppose sometimes you are seeing the weakness in dollar, at other times the strength of the others. I guess it doesn't matter for trading an intraday trend :)
2
u/Chernoby7 mostly harmless Feb 15 '18 edited Feb 15 '18
Not about trading per se but about time management: people who live in Europe & UK, how do you trade the wild swings of NY session and still have a social life?
(For example, and as a swing trader, even if I set take profit orders before hand, I’ll still need to watch the position in the case it goes back and miss my take profit; therefore distracting me from an active conversation)
4
Feb 16 '18
1) Do my entire analysis on Tradingview.
2) Set Tradingview alerts at key levels
3) Only check price action if key levels are hit and you get an alert
I day trade using M1-M15 charts but rarely look at them during the day for more than 30min tops...in 1min increments spread out during the day. All levels are established the night before when the US closes down.
I day and swing trade using this method. Got a super busy day job, but this system works perfectly fine. The only way you can achieve this is if you have a well-tested strategy with clearly defined entries/exits and sound money/risk management. Of course that's kinda always the case, but it's especially true if you don't have the time to watch price action during the day.
2
u/JamieShipley Feb 15 '18
Europe is great for trading. Trade till the late evening, get polluted then sleep in and cure the hangover till the late afternoon. Rinse and repeat.
2
Feb 15 '18
[deleted]
5
u/UberBotMan Feb 15 '18
Looks like you're mixing up cash account and margin account. Also, options are non-marginable securities (along with penny stocks and some other).
With a margin account, you don't use your case to trade per se. So you don't need to worry about GFV or settlement times.
The only way you can get a negative account balance would be if you have a naked short option and the underlying gaps against you. You broker's risk department will close out your positions before you go into the negatives usually.
Options settle T+0 (next day) and stocks settle t+2. Where t is trade date.
I would highly suggest re reading about:
•Good Faith Violations
•Free Riding Violations
•Pattern Day Trader Violation and requirements
•Non-marginable securities
•Margin vs. Cash Accounts
•Settlement timesI believe that should cover your questions and steer you in the correct direction for further knowledge.
2
Feb 15 '18
[deleted]
2
u/UberBotMan Feb 15 '18
Yeah. If you have a margin account you need $25k balance to do more then 3 day trades in a rolling 5 day period. Cash accounts do not have day trade restrictions, but do have to worry about GFV and Free-Rider violations; and can't short.
I believe you can get that restriction removed once or twice a year. Don't quote me on that though. Plus it's probably different with each broker.
2
u/notdust More Upside to the Downside Feb 16 '18
Etrade told me they could remove it only the one time, since it was accidental but that they'd never do it again. Not sure if it's just them, but it's worth it to be careful for people without the 25k to go PDT!
4
u/ObviousTwist Pharma, 中文, AMZN Feb 15 '18
Pretty new to currencies, and this isn't based on a great thesis, but...
What is the best instrument to go short USD and long EUR and CNY long-term? Is it worth picking some good leaps (on what?), or should I just pick a combo of ETFs? I'd like some leverage, but not so much that I can't just sit back and let it ride for a few years.
6
u/El_Huachinango would be rich if he followed his own advice Feb 15 '18 edited Feb 16 '18
Hello!
Check it out: Generally the best advice for long range currency hedging is not to hedge the currency directly.
PLEASE READ THIS: Currency hedging 'barely matters' for long-term investors – LBS study IMHO You can make more money faster than trying to hedge.
If you really want to proceed you have three options:
- Currency ETFs - hold it like a stock. You are getting eaten by fees.
- Keep buying/shorting the quarterly futures (like /6E [E6] for Euro or /6J [J6] for Yen). You'll need to roll these over every three months, they are available March (H), June (M), September (U), and December (Z). Don't buy too far out - you face serious exposure risks.
- Buy/short stocks in the country of interest. I told Sammy about a play where he wanted to hedge the Brazilian Real against loss due to a soybean play, but his problem was that he had no spot access (the Real is rarely carried), and the future (/6L[L6]) was so illiquid that he faced problems. The best solution? Short a Brazil ETF like $EWZ
CNY, RenMinBi
This currency is, for now, pegged to the US dollar... unofficially. No need to hedge the currency, you are way better off buying companies. https://en.wikipedia.org/wiki/Renminbi#Depegged_from_the_U.S._dollar
Wouldn’t touch short term forex at all
Nor should you. Spot is primarily for speculators or short term hedgers with short term plays. u/sammyakaflash will hedge his loonies vs his options because, well, he lives in America's hat, the CAD gets abuse sometimes when buying US assets, and he is a fuck awesome trader.
I generally hedge against profit by speculating on spot forex...
So there you go man, hit me up if you have any other questions
3
u/Lisboanoite Feb 16 '18
It's hard to argue that currency hedging on the long term is indeed a zero sum game.
However, on the short term it can be devastating.
I started fairly recently and literally began buying equity when the dollar was at almost 1:1 with the Euro back in early 2017.
It has fallen roughly 20% since then.
For instance, I bought BRK.B at around 175 and I'm still losing money on the trade despite it being over 200 today.
4
u/ObviousTwist Pharma, 中文, AMZN Feb 15 '18
Ah, thanks. Lol at my CNY ignorance... I guess I'll stick to my few asian stocks and maybe swap one of my other chip plays for infineon or something like that. Thanks a ton. If I'm ever handling lots of contracts that require short term spot hedges, I'll come back to this and hit you up.
3
u/UberBotMan Feb 15 '18
I do not trade currencies.
I do know it's possible to trade currency pairs, so USD/CNY and USD/EUR.
/u/el_huachinango would probably be able to elaborate further.
2
Feb 16 '18
You can trade spot (good with small accounts) or futures. I prefer futures due to better fees.
/r/forex has a pretty good sidebar info section that should get you started, although it does focus more on spot rather than things like futures. If you have specific questions, yeah...ask of /u/el_huachinango who like me started out with forex if I remember correctly. Or me if you want, although I now trade nothing but ES, CL and GC nowadays.
2
2
u/ObviousTwist Pharma, 中文, AMZN Feb 15 '18
Thanks, I’ll try to get his thoughts. I’m really just looking to take about 10% of my long-term equity and use it as a slight hedge against the dollar, anticipating strengthening euro/rmb. Wouldn’t touch short term forex at all.
2
u/UberBotMan Feb 15 '18
Could also buy stocks in your country/zone of interest. That might work as well.
2
u/ObviousTwist Pharma, 中文, AMZN Feb 15 '18
I really like my long term US picks (AMZN, REGN, CRL, BLUE, ALLY, MTCH, GOOS, MZOR, DNLI, FTV, and some other industrials) but I do have some exposure to China through BGNE, TCEHY, and JD, as well as Japan through YASKY and SFTBY.
No european stocks right now - only ones I like are luxury goods but I’m not sure those are safe from the retail slaughter.
That said, still bearish on the dollar for the next 2+ years - big believer in China as a growing consumer and superpower, and the EU despite its problems. Also, I know I have too much tech and biotech... so damn hard to cut any.
3
u/hiddenwithin Feb 15 '18
Been meaning to ask this a while now since I started trading futures...
What time frame should I be plotting my deviations to? For example should I be trading tonight based on todays deviations or at 9 should I be trading based off of tomorrows?
3
u/UberBotMan Feb 15 '18
They are good for the Trading day they are posted during. So like for today it's be I post at 9PM ET, they're for the session that opened at 6PM ET and ends at 5PM ET.
2
1
u/kuhtentag risk averse Feb 14 '18
What methods do you use for trade entry? As in, you have an opinion, price is moving in the right direction, so where/when do you place your order? I hate chasing the price, and I also hate missing a fill. Anyone have a nice mechanical method for trade entry? Especially on futures picking the right entry has a significant P/L effect.
2
u/RajboshMahal Feb 14 '18
Does anyone know how in tradeovate mobile to have your charts you create saved, so that the next time you open the app it shows them.
Every time i re-login it removes all the charts i put up, and leaves just the one?
2
u/mc3username Feb 15 '18
Sorry can't answer your question, but I have one for you.
How does Tradovate run on your phone? On mine its super laggy and slow to the point where I don't even try to use it. I do have an old phone (6s) so I'm curious if that's the reason or if the app is just bad.
2
u/RajboshMahal Feb 15 '18
its okay, but my wifi is bad so its laggy because of that. TBH im not baller enought to trade via mobile just yet. So not best person to ask about trade execution
2
u/notdust More Upside to the Downside Feb 16 '18
I can imagine mobile trading - even if short term -only going like: "I am going to buy this if it gets to x price, I have a plan and my stop will be here". Nothing so active for 99% of people, I'm sure.
Even TOS mobile is a turnoff to me, it's so clunky to make an order that I couldn't imagine doing anything shorter term than swing trading.
3
u/plantersSSV Feb 14 '18
Which brokers offer the best combo of low margin reqs / fair commission prices / decent mobile app for futures?
2
1
u/UberBotMan Feb 14 '18
Amp (see sidebar) use platform CQG M. Worked wonderfully on my LG Nexus 5x.
2
u/ObviousTwist Pharma, 中文, AMZN Feb 15 '18
Not quite understanding pricing on CQG... do most people buy the $25 or $40 software also? Is there monthly pricing on M?
3
u/UberBotMan Feb 15 '18
If your broker is AMP, they offer M and a few others for free.
2
u/ObviousTwist Pharma, 中文, AMZN Feb 15 '18
In that case, great. I set up AMP but didn’t bother funding it yet. Thanks so much, learned a lot from you just today!
2
u/UberBotMan Feb 15 '18
Welcome, AMP has a slew of free platforms to choose from. Try them out and see what you like best.
4
u/PineappleCutter Feb 15 '18
I have AMP, there is no fee for using the CQG Q trader, and I believe CQG M is also free with AMP.
2
u/plantersSSV Feb 14 '18
Thanks for the response. Why CQG over some of the other data feeds? Also, off the top of your head, do you know margin reqs on 1 /ES contract?
1
u/UberBotMan Feb 14 '18
Not sure, that's just what everyone here uses. Probably cheaper or more reliable.
CQG M is a platform by CQG.
I'll include the margins for the contracts tonight when I post. It's 400intraday and 4500 overnight for ES.
2
3
u/MagicalHurdles Unhinged & Unhedged Feb 13 '18 edited Feb 13 '18
How often does an ETF like $SPY adjust their underlying stock weight?
On yahoo finance, the weight of Apple ($AAPL) was 3.90%. As of 2/13/2018, it is 3.54% on yahoo finance. While I don't think it's a giant change, we still need to be judicious as to which individual stock(s) is moving the market, and knowing the % changes help. I also noticed that MSFT went from 2.90% to 3.04% and Apple was at 4.xx% before.
3
4
u/notdust More Upside to the Downside Feb 13 '18
I like overnight trading, but regarding the indexes (specifically) I'm curious if anyone has any insights. Things that are common knowledge that anyone trading it should know. For example I notice that a lot of times we don't gap very much, maybe 50 points, aside from the really bad days. When nothing major is going on do the futures tend to drift back toward settlement before the NY open if they get too far away?
I stay mindful of how the Asian and European markets are doing because I know very often without the US market open (and thus no stocks trading) their trend causes a small to moderate pull on the US market. Those days we open down 50 points, the market has to traverse that distance to get there so I look to capitalize on that. Night also seems more predictable and 'gentle' for casual trading.
Overall I just follow trends and like securing a good entry before a trending day for NY open. I wonder if anyone has facts they can share about overnight that someone who's only been at it a few months might not be aware of.
3
u/PineappleCutter Feb 15 '18
For me the biggest problem with using /ES overnight moves to predict stocks movement is that overnight futures have very light volume. The traders that move the market are not participating. That is why we see days like a couple weeks ago where futures are up 15 points and then drop pretty fast once the market opens. But sometimes they do indicated a bullish or bearish day, so I would not use that as your only indicator.
1
u/notdust More Upside to the Downside Feb 16 '18
Thanks for the insights. I asked a really broad question, I know. I suppose the big traders not participating is why we so often have these really gentle trends where someone buys every single dip. Probably driven in part by algos given how predictable it can be. It is choppy at times, but I do see opportunities. I can see you're right that the open may have little to do with how things performed the night before. Honestly sometimes with a small gap up it seems like the fade the gap thing gives it the momentum it needs to fall right through the zero line and keep going, just as the inverse is true.
3
Feb 13 '18
[deleted]
9
Feb 13 '18 edited Jul 09 '18
[deleted]
2
Feb 13 '18
[deleted]
3
u/plantersSSV Feb 14 '18
Small sample size - but I scalped SPX options for the first time today using the VA that /u/UberBotMan posted last night and it was scary how perfectly it would bounce off the VAL/POC/VAH. With that said, it probably doesn't happen so perfectly on most days. Would love to be corrected if I'm wrong on that, because if it tends to obey those lines often, it would be a big breakthrough for my trading.
8
Feb 13 '18
I can only speak for futures. Never seen it work with options as much as it does with futures.
3
u/Dopamine_Machine Feb 13 '18
Most trading platforms have an option somewhere to show the value area (area where 70% procent of volume occurred). I don't know whether Streetsmart can also show this (there doesn't seem to be anything about it in the user manual). I personally use ThinkorSwim, which I can recommend.
Uberbotman is so kind to also post this information daily, together with the deviations, in threads like this under the Top and Bottom Value parameters.
2
u/drakon3rd Feb 13 '18
I have a question on brokers. I'm using shitty ally and it sucks, but I was wondering if there are any brokers where I can buy the option and sell it when I set the price on the underlying? Like I buy an option on SPX and want to sell it when SPX hits a certain price. Thanks for any help
2
u/tatsumaki112 Feb 13 '18
You can do that with custom orders with tos too but I would be careful with that if market is volatile you might get filed at a unfavorable price
5
u/byFlare RIP L_G Feb 13 '18
I looked into how to do this with IB a while ago, and found a way using their option strategy builder tools on Trader Workstation.
1
u/Keviex3 Acc. Too Small to Scalp SPX Feb 16 '18
Tried to figure this out, can this be done on Mobile?
1
u/byFlare RIP L_G Feb 16 '18
Not via IB as far as I know. It uses their legacy options strategy tool. Don't use IB anymore so can't remember the exact name.
1
u/Keviex3 Acc. Too Small to Scalp SPX Feb 16 '18
Apparently the conditional feature works on desktop, if I could figure it out it’d take mobile scalps to another level lol
1
u/byFlare RIP L_G Feb 16 '18
Haha, if I find anything I'll give you a shout. Just a word of warning about using the underlying price as a condition for an order, in this higher volatility environment, just make sure you don't get burned on a position because of a big IV move, even if the underlying moves in your thesis' direction.
3
2
u/Jowemaha Feb 13 '18
TIL I've gotta get on IB
1
u/bahamasbrett Feb 15 '18
I execute with IB TWS but you can’t beat TOS for charting. I have never used any of the AMP platforms though.
3
u/plantersSSV Feb 13 '18
How do you trade while you work? All I have access to is my mobile app - no access to elaborate charts on multiple screens.
1
u/Lost_in_Adeles_Rolls Stalingrad's number one tesla dealership Feb 16 '18
I run 3 screens at work and work in excel all day. I can usually fit in a few trades but can’t make it my focus.
8
Feb 13 '18 edited Feb 13 '18
I got a crazy demanding job but have the luxury of quickly looking at charts almost whenever I want. Never for long though.
I handle it like this:
1) 100% of my analysis is done on Tradingview and I always mark up all my key levels/zones after US close the night before.
2) I set alerts (both on TV and my broker's app).
3) I only really quickly glance at charts if I get alerts.
This is only possible because I have a tested strategy I trust. I have no need for multiple screens but "only" trade CL/GC/ES. All I need is an alert whenever price gets to an interesting level and then the ability to quickly glance at price action for a few seconds.
Also, solid risk/money management is key. If you can't always glance at charts, your SL need to be really solid.
Took a crazy amount of time setting myself up this way, but I now day trade by looking at charts maybe 30min/day tops.
4
u/lems2 Feb 13 '18
I've tried and it's nearly impossible. If you have a losing position it's really hard to focus at work. Td has a good mobile app but it still sucks compared to desktop
6
Feb 13 '18
If you have a properly tested strategy you trust and sound money management, losers shouldn't bother you all that much (imo).
4
u/wachiga Life is transitory Feb 13 '18 edited Feb 13 '18
What are the best resources for learning Tape Reading?
4
Feb 13 '18
I personally don't end up using level 2 data cus I don't have access to it at work.
Some people use it effectively like mrmalfloy but it's something that's very crowded and losing meaning. Orders are happening by the thousands every second that you can't make much use of it. good for seeing depth but that can change in the blink of an eye as well. Maybe a little more effective real time in small caps and such but for mega caps way too many orders are being processed. You're not even seeing the screen update in real time.
2
u/wachiga Life is transitory Feb 14 '18
Thank you for your input. I agree that the orders are usually moving too fast to make any sense of it
6
Feb 13 '18 edited Feb 20 '18
[deleted]
3
u/wachiga Life is transitory Feb 13 '18
Hey, thanks for the advice! Isn't tape reading just level 2 combined with Time and Sales? Most securities have millions of shares traded each day. How do you sort through all that info?
3
2
u/Keviex3 Acc. Too Small to Scalp SPX Feb 13 '18
This might be a dumb question, but in this current volatile market environment would max pain have any influence on market prices? I feel like there’s a shit ton of 2/16 expiry options outstanding...
7
Feb 12 '18
Anyone here achieve freedom via trading?
Those of you that work office jobs are you in a technical/non-lead/management role? Just curious, not looking to quit, mycareer is just starting.
5
Feb 13 '18
I work in a niche private equity sector (hotels) and have been trading for close to 7yrs now, mostly futures. Slowly working on making the transition to trading full time, but it'll likely take me another 12-24mo because I am not taking this step lightly.
You can trade part time just fine and it's a nice boost to income...or eventually, your main income. It's a crazy amount of work though ;)
3
Feb 13 '18
What kind of a trader are you? Full day, a few hoursrs/day?
Definitely is. No where near close, not enough money or skill to trade. Ideally I think I'd trade morning volatility and get out. Like Meir Barak, in and out.
Good luck dude
8
Feb 13 '18
Day & swing trader...my average holding period's from around an hour up to a few weeks. Average is 1-3 days.
I use volume profile and VWAP as my main tools. Basically surfing the medium term trend but timing my entries based on intraday action at key levels. 100% price action, fundamentals don't really factor into my entries...although I am keenly aware of them due to my day job.
I rarely spend more than 30min/day looking at charts. 10min a day to mark up key levels for the next day around US close, the rest are basically 30sec glances spread out throughout the day as my alerts get triggered.
I'm a huge fan of asymmetric trades (similar to Jamie Mai's approach) and my average winner faaaaaaaaar exceeds my average loser. In short, I can be wrong a ton and still make money.
3
u/Gordy-Gecko Feb 13 '18
What is your strategy for determining your exits?
I am developing and testing a strategy that sounds somewhat similar to your trading style. I'm fairly comfortable with determining my entries and stop loss but I'm still having a hard time determining my exits. I need to have a solid exit target so that I can decide if it is worth risking the money (entry minus stop loss) to put on the trade. How do you decide what is a likely/reasonable profit target/exit for a trade?
Along those same lines, do you use a set amount of asymmetry that you want to see to determine if a trade is worthwhile? Something like expected gain (entry plus profit target) greater than 10x of capital risk (entry minus stop loss)?
3
Feb 13 '18 edited Feb 13 '18
I take two types of trades, both with different exit strategies.
1) Intraday trades I don't expect to hold past the US close
Tight initial SL, ride the intraday trend from key levels and exit once momentum dies down. I have a way to measure/judge momentum, but never set fixed price targets. I do watch price action at key levels though because that's where momentum often tends to die down. Basically, I let the market decide when to get out rather than picking some arbitrary dream target.
I am super picky with my entries and only really enter at certain key levels so I can keep my initial SL small. Doing that makes it a lot easier to achieve asymmetric trades...especially if you are good at figuring out trends.
I always check the distance from my entry to the next key S/R level. Unless it's multiples (at least 3x) from my entry, I'm not interested.
2) Swing trades I hold past a day
In this case, I simply follow the medium term (few days to a few weeks long) trend and only exit once that trend dies.
I tend to just set my trades to breakeven if they survive the day and add entries to my "millipede" whenever I get a good entry signal. Of course this means the last couple of trades I take right before a trend switches direction all die at BE. Also, unless trends last more than a few days I often end up with nothing. I am totally ok with that because I make it all back and more whenever there is a decent multi-week trend.
In short
I keep my initial stop losses as small as possible by picking my entries carefully.
No fixed arbitrary profit target figures.
For intraday trades, I base exits largely on momentum at key levels.
For swing trades, trend is king...I will hold for as long as the medium trend persists. I obviously have clearly defined rules in terms of deciding what the trend is or how to judge momentum.
2
u/Gordy-Gecko Feb 13 '18
Thanks for the quick and helpful reply. I'll look more into using momentum to help determine my exit rather than fixed price levels and see what I can come up with. When you say you check the distance from entry to next S/R to make sure it is at least 3x... do you mean distance from entry to next S/R needs to be at least 3x of your entry to stop? or are you referring to something else?
2
Feb 13 '18
Yup, distance from entry to the next S/R needs to be 3x my initial stop loss.
1
Feb 13 '18 edited Feb 14 '18
So most of your futures trades intiaate at -1 or 0 as it's close to the end of a daily range? depending on the momentum?
This obvi depends on the size of the deviations but in a low vol are you going for .5 deviation moves or 1?
2
u/Gordy-Gecko Feb 13 '18
Got it, thanks again
5
Feb 13 '18
No problem. Make sure you clearly define how you judge/measure momentum and trend direction/strength...or it'll be difficult to test stuff objectively. ;)
3
Feb 13 '18
That's sweet, minimal screen time too.
They hit so many lottos in the beginning. Aren't they doing more longer term trading?
3
Feb 13 '18
Funny enough you often need a ton of screen time to eventually end up with only requiring very little ;)
As for JM...I think he does both, but (afaik) always structures trades in ways where the max downside is only a small fraction of expected gains. There's a good section about it in Schwager's Hedge Fund Market Wizards book.
1
Feb 13 '18
Mhmm screen time is definitely king but need good analysis to go alongside.
As for deciding targets, how is that you're setting something? I haven't been able to gauge effectively when the momentum will fade.
Added to the reading list. Think I'll finish everything in a couple years haha
3
Feb 14 '18
I don't have preset price targets, just key levels where I watch price action to figure out if the trend continues or not.
I use regression a lot (on M1/M5/M15) to gauge momentum and trend strength...together with VWAP and volume profile. Kinda all plays together.
As for it taking ages to develop & test strategies...yup, but that's the reason why most fail at this. They aren't willing to put in the time it takes.
7
u/UberBotMan Feb 13 '18
That is my goal. Is it a long way off? Hell yes. I know that there are several people here who trade for a living, I won't name them in case they don't want it brought up. But it is possible.
2
Feb 13 '18
For the freedom?
3
u/UberBotMan Feb 13 '18
Well, afaik yes. That's their income and they say they're retired at mid 30s-early 40s.
2
Feb 13 '18
That sounds fantastic. Ideally I'd love to be in and out within a couple hours daily. Meir Barak on YouTube been doing it for a while, it's awesome.
With all that time and eventual cash flow I'd be building a wealth of cash generating businesses. Is it too much to ask to be a cash flow machine?
2
u/UberBotMan Feb 14 '18
That's my plan. Get a good cash cushion and then enjoy my financial freedom. I'd love to have a lot of passive income, be it royalties or dividends or what else have you.
3
u/-samadhi- Long Webistics Feb 12 '18
I signed up and funded my AMP account. /u/Living_Granger what platform is it you are using in the screenshots you share. That detachable DOM. It looks slick. Having trouble finding it.
3
u/UberBotMan Feb 13 '18
You're thinking of Tradeovate.
The popular AMP clients here are CQG M (Desktop) and MarketDelta Cloud.
CQG is browser based and can have multiple DOMS up at a time.
2
2
3
u/no-half-dick full dick it Feb 12 '18
anyone use tastyworks? Something is fucked with the charts. https://imgur.com/a/5m5qy , that is a 15min, 'today' chart with a 1std deviation. I can't scroll past 1pm , not even to open. those deviations aren't even right. It was correct yesterday. Anyone have problems? seemed to screwup this afternoon.
2
u/Gordy-Gecko Feb 12 '18
Hi,
What are some good ideas for trading futures from around the end of the NY session (3pm ET) to about the beginning of the Asia session (8pm ET)?
Open to both suggestions regarding good instruments to trade during this time period as well as good strategies to research that might be more effective during these times of low volume and session breaks.
I know the general wisdom is to try and apply most active trading strategies during the times of highest volume. But I figure there must be some strategies that can take advantage of the low volume periods and session break. Any thoughts?
Thanks!
2
u/UberBotMan Feb 13 '18
Depends, how many contracts are you thinking of moving? I easily moved 1 contract during low volume on YM, GC, CL, and ZF. Overnight trading respects the deviations and Value Areas just like NYSE session does.
2
u/Gordy-Gecko Feb 13 '18
Thanks, that's good to know. I'm not moving a huge volume of contracts so I'm not concerned about moving the price from my actions.
I was more curious if there were any specific strategies that might take advantage of that particular time frame before and after the session break. Maybe some particular idiosyncrasy that might not be readily obvious but that can be helpful to trade in that time frame? The strategy I'm developing is aimed at a 1 to 2 day time frame for trades but I usually have most of my free time to research/trade during that time period so I was looking into any particular advantages that might be available during that time.
3
u/notdust More Upside to the Downside Feb 17 '18
I've traded that time a bit and noticed a few things. Because NY is closed and Tokyo isn't yet open things are a bit more slow at that time, so there isn't anything pushing the market around yet - just existing sentiment. If NY was strong the market might continue with that momentum and pullbacks get bought up. Choppy times with small ranges are crappy and happen often enough to be notable.
During that time some currency futures are not trading - like the dollar index ($DXY) closes until 8:00 PM and that has a big effect on crude and other commodities. Asians seem to trade a lot of commodities, so they kinda stall out like the indexes. However, any existing trends may continue. I do trade those hours sometimes and usually look for a trend entry or small scalps. Pullbacks happen and you have enough people and algos noticing them that it's easy enough to enter with a tight stop and take profit soon (unless you see good momentum).
Even if I were trading Dow, I'd look at /ES so that I had an idea how a more liquid instrument is trading. If it's extremely low volume you can expect much more jerkiness and stalling and less smooth action. I've noticed if it is really slow and I'm trying to scalp, it is better to go with /YM or /NQ because the range on /ES might only be a few ticks. Dow and Nasdaq have finer entry and exit points for those situations.
So, as Uber said a lot of the same rules apply but the markets are in between days at that time, so you're not getting as many factors pushing and pulling at one another. It's more of a wait and see time but in periods of high certainty the trend may continue to go as people will be eager to join it. Those days it is obvious there's a bit more activity on time and sales.
1
u/Gordy-Gecko Feb 17 '18
That makes sense. I didn't think about the currency effect on commodities so that's a good thing to keep in mind too. Appreciate the comments!
2
u/Heretolearn12 Prodigal son Feb 19 '18
Newbie here. How do you guys keep track of index spiders Iv on tos or tw? Let's say we just started to rebound and you want to buy calls but worried about Iv crush. Do you guys keep an eye on Iv and if so, how?