Firm I can trade say 5 commodities simultaneously positional trading
I am wondering the kind of firm that would give me the chance to instead of call very short term moves and pure scalping, rather step back and have say 5 positions going on simultaneously in commodities and something like ES.
I traded at a prop arcade for 6 months live recently, and hung tough but definitely had a lot to learn. Still finishing up school actually, but just knew I wanted to get some exposure to the futures, and was able to commute back and forth, trading crude from pit open to about noon each day before classes.
I had a $300 loss limit, and definitely had my chances as far as even going beyond the capital I put up. Amazing how myopic and stubborn one can become, and it didn't help that I had literally a streak of 30 straight up days. Problem was I literally was taking a tick or two winner only every time, and it wasn't all that different from literally entering and then max daily loss limit SL (30 ticks on crude). I actually like that general concept (not that risk/reward obviously) of staking a position after lots of conviction/opportunity presents itself, and daring it to go a ways away so I know I was wrong at least, instead of a stupid flush out.
While trading there, I still traded the old scottrade UCO and SCO 2x levered ETFs, and though not much $ in the account, was 10/10 with about a trade per week over the summer. Avg winner 1.4%, .4 to 2.8 % range, avg hold time <1wk. That is not a fluke. It was tough to not be able to translate that to the leveraged futures.
I like the idea of passive trading more, let it play out, have a real thesis, and at least know I was wrong if hits SL. More of a hedge fund idea I guess, but what firms might allow this? Maybe couldn't trade futures, but ETFs. Crude was at low 90s recently, I have conviction based on long exposed wicks and other indicators for it to hit 102-105 eventually, so a long say at 92.50, SL at 90.50 (figures game theory wise it'd hit 89 handle and flush longs and lead to more weakness) and a 2 lot then scale out of one by now (it's near 97.20) and then hold onto one and trailing stop it.
Or say in coffee, way beaten down, no value added to point out that it is now a value buy per se, but a scalp long strategy based on fib support along with more shorter timeframe oversold RSI, and heck, they aren't going to give coffee away for free. This is a cmdty with real intrinsic value and scarcity, not a video game of #s and MA/fib, etc. So buy JO at points and scalp long. If quickly goes up few % take profits and re buy lower to finance underlying long, or just wait until new opportunity in that or another cmdty.
Same idea with the metals. I dare them to keep short selling and get exposed the shortages on the COMEX when it comes to physical metal. Definitely bullish around here.
I like the idea of good risk/reward setups more than lightning fast scalping. Just trying to figure out where I might be able to do this. Maybe have to be a cmdty broker so I can recommend this stuff/trade my own acct. Any thoughts?
The problem with this might be PnL as far as how long this stuff takes to play out, as this is not a deal where go flat every day. Heck, I'd say a short ETF on the ES here and literally an SL at 2100 and targets 1650 and down to mid 1500s (long exposed wicks down in these areas; chart history shows those were bullish then but wind up getting re-tested). That is the kind of 'arbitrage' I look for. Take advantage of the back and forth nature of markets. Crude is volatile, yes, but it's the benchmark energy product and medium term wise should show stability (as it has, staying between 85 and 100 for quite awhile now after the 147 to 32 amazing move).
The thing is of course taking heat on futures is tough to do, but with ETFs it's not as bad. I did well with UCO and SCO, and 10/10 is obviously getting it done. I strongly believe if I had another shot at trading futures like I had been at this arcade I'd demonstrate the maturity I've developed and at least have risk/reward ratios in line and go with my gut more and not worry about what something might do when it gets to a certain level, but be calling that it gets to that level in the first place, so not just a reactionary. I literally bought the .236 and .382 so many times it was ridiculous. It worked a lot, but I didn't give myself a chance as I was too defensive and willing to get out early with quick winners instead of sitting in it. I learned a lot but definitely disappointed.
Applying to a ton of prop shops, but still think this might be my edge. Maybe it is more suited to wealth mgmt or as a cmdty broker who gives recommendations to clients on speculations.
The long exposed wick idiosyncrasy I've noticed applies to shorter timeframes, too, no doubt. Look at a 60 min chart and look at how all the candles with long wicks had those long wicks at least somewhat re-tested. Obviously sometimes it breaks away, but seems like good probability. I study chart histories a lot and look for this kind of stuff, in addition to things like engulfing candles, etc.
Just about any futures broker should allow you trade 5 or more positions in any futures contract overnight. You just have to have enough cash in your account to meet the maintenance margin requirement. For example, my broker, Mirus Futures, requires $4,100 of cash in my account per contract to hold the ES overnight. This may vary across brokers.
I'm not looking for a broker, though. I'm talking about prop shops or even hedge funds. As I explained, I like the idea of looking for opportunities on the charts through TA and other idiosyncrasies I see on commodities and stocks, either futures or ETFs, and more so positional trading them. I know most prop shops now are becoming more arbitrage/market making as opposed to directional trading, but I am looking for directional trading. At the arcade I was at, it was the typical setup totally discretionary, but I couldn't really positional trade as I wanted (although I didn't get a lot of opportunity to try it out since I was so mired in scalping and playing fib levels for so long, thinking it was better to do that than just stake a position and see what happens, hang on to it all day if have to) . I'd rather literally be able to play crude, nat gas, gold, SP500, etc. at the same time, and have positions that can play out, as opposed to going flat at the end of the day. I'm talking like buy crude 2 lots at 92.50 down recently where it was, SL at 90.50, and 1 tgt. mid 90s, second trailing stop with that lot looking for 102-104.
I wasn't able to trade like that at the arcade. I think the back and forth, retracing nature of markets is underrated. But obviously in between they overshoot and flush people out, and I hated getting stopped out and then seeing it hit my original target soon after. I'd rather really have to be wrong and get stopped out.
So maybe this is a hedge fund type deal, long/short. Tough job to land I'm sure since I am 22 and just have the futures experience (although ton of success in my scottrade with UCO and SCO etfs, so that is not a fluke).
I'm sure you know this and just a momentary lapse, but overnight margin is dictated by CME. Only intraday margins can be "made up" by the broker.
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I don't have any questions pertaining to margins or anything like that. I am talking about a job in the trading industry where I can recommend to clients or trade in prop fashion based on more so positional trades as opposed to being a day trader and doing quick scalping. I like the idea of coming into a week and entering some positions and have the SL and targets, and let it play out. I did well trading crude oil ETFs in my Scottrade, but couldn't translate that to the futures since I didn't have such a big loss limit, whereas 1% heat in ETF is not as big a deal as being down a grand as it would in CL.
Basically I think what I am looking at is more so the hedge fund long/short type deal. Or maybe a cmdty broker who makes recommendations to clients and finds people who would like to have an acct. with the firm.
If I get another shot to trade at one of these arcades and do the more so short term trading, I strongly believe I'd give it a much better go and be up there swinging so to speak, but I still think I might be more suited for more passive positional trading. Not investing a la 'this company is going to hit it big in X # of yrs' but more so, this commodity is really beaten down and I don't know if it's THE bottom, but I'm going to get a chunk of it's dead cat bounce for a scalp, or something like that. And do that with a lot of positions. And have big stops so if I'm wrong I really have to be wrong, as opposed to just getting flushed out as happened too often in futures trading crude, only to see it shortly after hit my initial target.
I'm applying to pretty much all the main big Chicago prop firms, discretionary to more of the arb/mkt making, and I'll see what happens. It's not arbitrage obviously what I'm talking about with these trade setups I like, but it sort of is the way I see it. For instance, buy a short SP500 ETF today and have a stop loss of ES hitting 2100, and target 1650. That seems highly likely, although of course it could take a long time to play out. Dare the market to do something extreme. Buy gold and while never doing a martingale strategy obviously, I dare them to keep taking it lower and get exposed with the physical shortages and a failure to deliver that will blow up the COMEX/London exchange.
This is more so integrating the actual commodity aspect behind these CME products, as opposed to just looking at it purely from a TA point of view. At the end of the day these are physical resources, and looking at coffee, way beaten down, how much lower can it go when it's obviously not going to be given away for free? Sounds elementary, but I like the idea of trading/investing with fundamentals in mind, and just looking to capture retraces/reversions, as opposed to really quick scalp trades.
when I mean commodity broker, I mean myself become one, as in pass the Series exams, etc. At least then I could make recommendations based on the TA and other idiosyncratic analysis/game theory I have been looking into a lot in the commodities markets especially.
I know I want to be trading and I'm not afraid to put convictions on the line, and am very competitive. Just looking for a setup that would fit what I see as opportunities to capitalize on. I think it's doable and I might well have it in me to make it doing the daytrade scalp setup at say a prop arcade, but I do like the idea of actually stepping back from a 5 min. chart and looking more so at a longer term play (not long as in crude is going to $150, but like I said earlier, from low 90s to mid 90s first tgt, then second lot trailing stop it and look for 102-104).
This is more so investing than trading it seems, and the one thing is PnL, which obviously trading the scalp way at a firm one gets the daily PnL and that's that, whereas the more so positional/let it play out, positions might take weeks to hit the SL or target.
I think you're after more of a discretionary portfolio management position, basically trade your own ideas and they provide capital and technology in return for a %. Be prepared to show a 2+ year track record of substantial profits with a high sharpe (< 2.0). Scour google for a bit and you shouldn't have much trouble finding some job postings along those lines.
Last edited by conorcoen; December 8th, 2013 at 05:26 PM.