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Futures trading

Discussion in 'Other Off Topic Forum' started by cohiba_man, Jan 25, 2004.

  1. cohiba_man

    cohiba_man Formula Junior

    Jan 23, 2003
    937
    Canada
    Full Name:
    John
    Anyone into futures/ commodities trading? I've just started out with the S&P500 e-mini's (learning right now, not real $$ YET), I've got a simulator, and it starts out with 50K in margin, $7 round trip trades, and it trades real time, so its not one of these things where all the trades are instant, they can be off by .25-.50. Anyway, this is about the same amount I'd have in real $$ in the account to start, and so far I've made 4-5K a day profit on 20 contracts, with only 1 loss out of 26 round trip trades. I know several people (some anonymously online and thus income claims are unsubstantiated, some friends in real life, claims are substantiated) who trade the e-minis and make 5-30K per day (seriously, 20 contracts minimum, 3-5 points per day or more) on a VERY consistent basis (maybe one losing day per month), so its possible with LOTS of studying and experience to make a VERY good living at this... but I'm sure 95% don't have the dedication and guts to do it...I've got a simple system thats working so far. I'm using RSI and BB as a start for indicators, sub 15 minute time frame...anyway, anyone have experience futures trading, care to share some insights/ educational resources? Success stories?
     
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  3. ralessi

    ralessi Formula 3

    May 26, 2002
    1,093
    Houston, TX
    Full Name:
    Rikk
    Just a question about your program - is it freeware? Could you provide a link? Thanks
     
  4. cohiba_man

    cohiba_man Formula Junior

    Jan 23, 2003
    937
    Canada
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    John
    Yes its free, its called Best Direct, its awesome, everythings real time and order execution is accurate, BUT the charts they provide don't allow for ANY technical analysis and an annoying broker calls you every night (provided you give them a real phone #) to check up on you.

    http://www.pfgbest.com/best/aboutbest.asp

    30 day trial.
     
  5. cohiba_man

    cohiba_man Formula Junior

    Jan 23, 2003
    937
    Canada
    Full Name:
    John
    One other thing, a minor annoyance, it doens't have ANY way to record your historical trading record so you can prove to your futures trading friends that you really are making 5 points a day ;)
     
  6. noahlh

    noahlh Formula 3

    Aug 28, 2003
    2,225
    NYC, NY
    Full Name:
    Noah
    I had a _very_ interesting 3-month experience w/ S&P e-mini trading about a year ago that I'll post more details about tomorrow when I have some more time. Quick summary: Definitely possible to make loads of money, but you've gotta pay to play and have to be willing to work really hard at at. Making 3 - 5 E-Mini points per day, very consistently, is VERY VERY VERY difficult.

    Anyway, check this out...best piece of software on the net for this kind of stuff:

    http://www.wealth-lab.com/

    If you're going to do this seriously, a) get an Interactive Brokers account abd b) spend the ~$600 and buy Wealth Lab Developer 3.0.

    More tomorrow...

    nlh
     
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  8. cohiba_man

    cohiba_man Formula Junior

    Jan 23, 2003
    937
    Canada
    Full Name:
    John
    3-5 points is pretty tough, I know people who do it very consistantly though. I make about 3 points per day usually following my system strictly, then just scalp for the rest of the day for a couple more, but lets see how my track record is after a couple months. The thing is, it doesn't matter how many points you make, as long as its consistent. If you make a profit 25 out of 30 days of the month and have strict stops in place so your downside on those 5 days isn't too bad, even if you can just make 1 point per day, eventually you could just save up enough margin to trade 100 contracts and make good $$ without big points. I think the people that can consistently make profits and take $30-50K a day (or more) are just gluttenous, WHO needs that much money, its ridiculous really. 5mil a year is the most I could take that way without feeling guilty IMO, if you have built a successful business, sure you deserve as much $$ as you can get, but if you just have a system for milking the market, to me it almost just seems unfair to take all that money. Just IMO of course.

    PS... I can't wait to hear your story.
     
  9. cohiba_man

    cohiba_man Formula Junior

    Jan 23, 2003
    937
    Canada
    Full Name:
    John
    Don't leave me hangin', wheres the story?
     
  10. ralessi

    ralessi Formula 3

    May 26, 2002
    1,093
    Houston, TX
    Full Name:
    Rikk
    Are there any websites about this futures trading? I.E. sample systems etc.? Where do you learn your stuff, and is it really possible for some people to make 30-50k a day just sitting at the computer clicking away and looking at charts?

    I mean is this something I could research for a few months and do in the summer to make some money for college?
     
  11. dantm

    dantm Formula 3

    Nov 1, 2003
    1,093
    YYZ, BOS, SFO
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    Dan B.
    ralessi if it could be done so easily, we'd all be sitting at home clicking away and becoming millionaires overnight.

    In general based on my experience with investing for the long term is to invest in what you KNOW. While daytrading might offer a niche for some, most successful investments can be in your areas of expertise.


    /Dan
     
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  13. atheyg

    atheyg Guest

    Paper trading does not factor in slippage if you use market orders or no fills for limit orders, using limit orders sometimes the market will hit your price and you still won't get filled.

    How many contracts are you trading also? You may not get filled on all of them the same with when exiting your position.

    It also gets different with your own money on the line, fear and greed are human nature and cloud your judgement.


    I like Futures trading the best the charts are more pure with less surprises, less chance of manipulation such as a stock like GLBT, if you are doing good on paper give it a shot, but I would start very small with trading 1 contract only to get a feel for it
    and a goal to make good trades not big $$, once you trade well you can always work you way up to multi contracts and go for the big profits.
     
  14. cohiba_man

    cohiba_man Formula Junior

    Jan 23, 2003
    937
    Canada
    Full Name:
    John
    I made 6K today.


    QUOTE:"Paper trading does not factor in slippage if you use market orders or no fills for limit orders, using limit orders sometimes the market will hit your price and you still won't get filled.

    How many contracts are you trading also? You may not get filled on all of them the same with when exiting your position.

    It also gets different with your own money on the line, fear and greed are human nature and cloud your judgement.


    I like Futures trading the best the charts are more pure with less surprises, less chance of manipulation such as a stock like GLBT, if you are doing good on paper give it a shot, but I would start very small with trading 1 contract only to get a feel for it
    and a goal to make good trades not big $$, once you trade well you can always work you way up to multi contracts and go for the big profits."







    I totally agree about being a good trader, and consistent, and gradually working your way up to the big $$ rather than focusing on that at first, BUT what you said about paper trading doesn't apply to my sim, it accounts for everything you talked about, since its real time trading based on real (no $$) orders. Slippage occurs all the time, from .25-.50, sometimes limit orders aren't filled, when exiting my position I often get filled in different amounts (# of contracts) sometimes at different price levels. The most relevant difference is that its not real money, which is the big thing. I'm working with 20 contracts on it. I'm definately going to start out with 1 contract, and for every month with 20+ days profit, add one more, everymonth with less than 20 days profit, take one away until I'm at 20 contracts (less than 3 years hopefully).


    As for Rallesi:

    Obviously if any normal person could click away at their computer and make 50K a day, we'd ALL drive 360's. Successful trading requires knowledge, discipline, guts and hard work, and some people who have all of that can try for years to be consistently profitable and lose due to numerous factors. I'd guess 1% of people that try to trade futures are ultimately successful and full time at it, BUT its not impossible, if you have the right attitude, knowledge, a good sytem and stick to it strictly day in and day out, you can make the big (huge) $$. I was lucky enough to speak to a few people who are successful at it, and picked up some invaluable advice and techniques.
     
  15. gabriel

    gabriel Formula 3

    Okay as to all that. What's the buy in?
     
  16. ralessi

    ralessi Formula 3

    May 26, 2002
    1,093
    Houston, TX
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    Rikk
    I know that anything like that is "too good to be true" except in certain circumstances of course... if you are exceptionally good at anything you will be successful (monetarily). But where do you guys get your info? If you have any websites or books or anything that you could recommend it would be nice, so maybe I could start researching or find something interesting to do? Thanks a lot, any help would be great.
     
  17. noahlh

    noahlh Formula 3

    Aug 28, 2003
    2,225
    NYC, NY
    Full Name:
    Noah
    #14 noahlh, Jan 27, 2004
    Last edited by a moderator: Sep 7, 2017
    atheyg is absolutely right -- slippage is the key and is usually the downfall of any "good" trading system. Try plugging the system into Wealth Lab Developer and running it with constant 0.25 slippage on both directions, and see how the results turn out. It's usually quite surprising.

    The other thing to consider with any system is the maximum drawdown that it sees -- be sure to check the swings. In other words, one system might make you $5k / day over a few months (with a margin requirement of what, $50k?), but if there's one month where you have to go down $200k in order to keep playing the system, is that worth it?

    (btw -- I love when people use the phrase "drawdown" -- it's just a fancy way of saying "HOLY CRAP I LOST HOW MUCH??? I BETTER KEEP MY FINGER CROSSED AND KEEP THROWING MONEY AT THE MARKET" ;) )

    Anyway, net community, this is one of the most active websites for S&P traders:

    www.elitetrader.com

    Decent bunch of guys, some full of crap, others genuinely trying to help. Worth checking out.

    So my experience:

    It was fun....I played a few different strategies over a 3 month period last year...I pretty much did it 1/2 time (9am - 1pm every day), and learned a heck of a lot. I started with equities, then discovered S&P minis, which if you're going to do this seriously are by FAR the most effective way to play.

    Biggest lessons I learned: Unless you have a tested, methodical system, you are gambling, pure and simple. There are lots of folks who like to play the "I trade when my gut says to trade" and some that even make money doing it, but it's as good as going to the slots. Playing a system (that's backtested over a good amount of data -- good amount = 6 months or more) is the best way to go.

    I made a bit of money here, a bit there, lost some here, lost some there -- eventually gave up because I didn't like the stress of things. I found myself waking up every morning with a knot in my stomach, and the days when I made money were equalled in their euphoria only by the misery of the days when I lost money, and I decided that this wasn't for me.

    I played a BB-based swing system that didn't care whether the market was going up or down, just liked the moves. I'll tell ya though -- it feels GOOD when things work like they're supposed to. I posted a picture of the best day I had below (made about $2200 on 5 contracts in about an hour):
    Image Unavailable, Please Login
     
  18. tonyh

    tonyh F1 World Champ
    Lifetime Rossa Owner

    Dec 23, 2002
    14,372
    S W London
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    Tony H
    I'm afraid that paper trading is totally different to doing it for real, but i'm sure you know that! The best piece of advice i can give to any professional trader is run your profits and cut your losses.....sounds so obvious but you'd be surprised how difficult it is to do in practice.The markets are driven by fear and greed and as long as you maintain your discipline, you'll be back trading tomm.
    I know a lot of futures traders and can count on the fingers of one hand the guys who are making anywhere near £4k a day.I would say the average was £750-£1k a day after all costs.That's still £20k a month and a very decent living.
    Hope this helps.
    Tony
     
  19. cohiba_man

    cohiba_man Formula Junior

    Jan 23, 2003
    937
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    John
    Thanks for the advice.
     

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