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Zumthor's Trade Journal
Started:July 19th, 2014 (05:08 PM) by zumthor Views / Replies:422 / 6
Last Reply:August 5th, 2014 (05:15 AM) Attachments:0

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Zumthor's Trade Journal

Old July 19th, 2014, 05:08 PM   #1 (permalink)
Trading Apprentice
South Africa
Futures Experience: Intermediate
Platform: Multicharts
Broker/Data: IB
Favorite Futures: ES
Posts: 4 since Jul 2014
Thanks: 2 given, 1 received

Zumthor's Trade Journal

Greetings to futures.io (formerly BMT)'s citizens, or rather anyone who takes the time to read this stuff.

Apart from providing another means of improving my trading and fulfilling the "pay it forward" principle, my goal with this journal is too hopefully chronicle my journey from just another struggling amateur to firstly a competent trader, and maybe one day a world class one. And if it ends with my success I guess I better add some background.

I'm 28 years old and have only wanted to be a professional trader since about age 21. For my first year out of university I tried my hand at trading and while I became hooked, I was incredibly naive in terms of my expectations and learnt some hard lessons. The year after that I did the CAIA qualification to add another layer of education that I did not intend on using. After that I went to London to look for work as a trader of some sorts and learnt of a company called Futex. I did all the aptitude and numerical tests and was invited back for an interview with a director there. We had a chat for a while and he said that he thought I was a good candidate and offered me a place in their three month training program. Unfortunately, for a number of reasons (personal, financial, style of trading, contractual) I had to turn it down. Curiously I got a job back in Cape Town working as a trader for a betting exchange (Matchbook) and while I didn't realize it at the time a lot of what I saw there really mirrors what goes on in the financial markets.

Four months later those trading jobs were shipped to Canada, I was jobless again. A friend suggested I buy myself some time and go back to university, so I spent a year and a half getting my masters degree in applied economics, and while I hope I will never need it to get a "real job" I definitely learnt a few handy things there which will help in my future trading once I get the basics down. Soon after submitting my thesis I set myself the goal of getting funded through TST, again I was incredibly naive and while I actually got reasonably close on my first trial, most of my profits were erased. Three trials later, two of which were rollovers and I wasn't even getting close, if I had to add up all the profits and losses from those trials I am about even. Thing is though my approach constantly changed during those trials as I was trying to meet all the parameters they set out and I couldn't really focus on finding a proper edge or which approach would give me the best chance of getting funded

Things changed when TST allowed trials through Multicharts, which I had been using for a few years and had spent a decent amount of time testing strategies and learning more about automated trading. I had experimented with systems that take advantage of relatively quiet overnight conditions and decided to let my system loose on a TST trial, after three or four nights I was on course to meet the profit target in under ten days. Then some hidden gremlins in the code were revealed and plenty profit was wiped out due to excessive risk taking.

Then I had the somewhat obvious realization that amateurish attempts to become a trader would not make me into a professional. Does 3 or 4 hours a day really constitute maximal effort in achieving your ultimate goal? No, it does not. Does having read just over half a dozen books on technical analysis or a hundred hours programming relatively straightforward trading systems necessitate that you become successful? Again, no.

Nothing short of compete immersion and total commitment to every aspect of trading will give me the best of chance of success. So I found a list of books ( dalton, steidlmayer, steenbarger...etc) that are cited as important ones to read, researched some of the tools that pros use (market/volume profile, order flow...) and set about filling the knowledge and experience gaps as quickly as I could. Of course studying a couple books and looking at some volume profile charts and footprint charts doesn't make you an expert but I honestly feel that I know what I need to do and what approach will get me funded and KEEP me funded.

I will make use of the following (small) edges I believe I have in order to reach my goal.

I am one hour ahead of London, I can prep comfortably before London opens and make sure I am ready. I also am well ahead of the US open so I have plenty of time to get ready for that and take any opportune trades should the price be in an interesting place during ETH.

I have decent programming skills in Multicharts and have clean data sets for most of the major future contracts that extends back over ten years.

To get funded I can attack it using both automated and discretionary trading, leaving an automated system running while I am sleeping.

One dollar equals over ten South African rand (woeful), however it does mean that I need far less profit to survive than other people, this should allow any modest success to buy me more time to build expertise.

I have spent a ridiculous amount looking at a screen using only Bollinger bands and have picked up a few things that will aid in system development.

More explicitly I am going to rigorously test, using multicharts, my Bollinger band strategies on things like the ES and 6e to establish a basic edge after transaction costs. Because programming a complete system that takes into account market context such as volume profile developments, order flow, and recent price action in lower frequency data is beyond my capabilities at this point, my system will essentially be semi-automated and I will only have the power to accept or reject trades based on my reading of this market context. Hopefully I have enough discipline at this point to at least not harm the basic edge, but instead add to it.

Once I have traded enough replay data on ninja trader and passed enough "trials" I will attempt another TST combine. I hope to start one the beginning of August even though I may be marginally undercooked I am confident of at least getting a rollover. I will probably be able to get in about four or five trials before the year is out. Hopefully I only need one.

Wow, this took longer than expected

If this post has been too long or boring I apologize, but I hate failing and to avoid doing so publicly is a powerful motivator, that's the real reason this post has been so in depth.

Till next time.

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Old July 19th, 2014, 05:08 PM   #2 (permalink)
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Old July 19th, 2014, 05:33 PM   #3 (permalink)
Elite Member
Futures Experience: Advanced
Platform: Tradestation, TOS
Favorite Futures: commodities, TF
mfbreakout's Avatar
Posts: 7,244 since Oct 2010
Thanks: 3,467 given, 15,205 received

Trading Career

I try not to give trading career advice because i never listened when i got one and no one has taken my advice when

i gave one.

However, your introductory note has compelled me to give advice any way.

1) You are still relatively young and have a fair chance of getting into a reputable trading firm. This is the best

way to learn and make a career out of trading.

2) Internet ( including forums like Big Mike etc) have a ton of resources as far as trading goes. Problem is there is so much information which has

very little to do with being a successful trader. Lack of structured training is one of the key reasons traders
keep spinning wheels years after years.

3) regarding TST combine- all i will say that hedge fund manager Daniel S. Loeb ( and a host of very successful

managers) are up nicely YTD around 6.5%. Based on 6.5% ytd performance Daniel will not qualify for TST combine. However, he is a billonaire. TST program has many good attributes but i will not worry too much if you do not

qualify for one. The program simply is not realistic in terms of what is expected. TST master trader gets funded for $150,000. This is not shabby. The problem is for a trader to make a decent living one has to get 50% or higher

on retail comission along with pipe dream of NO RISK and 50%+ returns. Of course TST is not asking you to get 50% return but if one can not even make 70K /year after paying everything else- what's the point.

The biggest trade of your life you will make is to decide about a pathway to a trading career. After this trade every other trade will pale in comparison.

Best way to approach something like TST combine is to do in conjuction with having a job. In my experience trading full time with TST combine with no other source of income is not a trade an experienced trader will take.

Good Luck.

Last edited by mfbreakout; July 19th, 2014 at 06:05 PM.
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Old July 20th, 2014, 03:14 AM   #4 (permalink)
Trading Apprentice
South Africa
Futures Experience: Intermediate
Platform: Multicharts
Broker/Data: IB
Favorite Futures: ES
Posts: 4 since Jul 2014
Thanks: 2 given, 1 received

Thanks for the feedback mfbreakout.

I agree the TST requirements are unrealistic, comparing indices of CTA performance to the profit targets they set highlights this. Maybe my post made it seem that the combine was an all or nothing proposition, rather it's just an intermediate goal I have set to get me to focus and ramp up my efforts. If I don't make it I have a plan b. As far as getting a job, I live in South Africa, our country is being run into the ground by inept thieves and due to government policy white males who are well educated and looking to get a job in finance have no chance, but that's another story!

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Old August 4th, 2014, 02:09 PM   #5 (permalink)
Trading Apprentice
South Africa
Futures Experience: Intermediate
Platform: Multicharts
Broker/Data: IB
Favorite Futures: ES
Posts: 4 since Jul 2014
Thanks: 2 given, 1 received


Futures Edge on FIO

How much money do you need to trade futures successfully?

So I am starting a TST combine tomorrow. I have been trading on the ninjatrader simulator solidly for over a month now and have traded 6 months worth of data. Over that time my performance has been steadily improving but it's only in the last two weeks that my responses to market conditions and trade execution has become more automatic and consistent. As per my previous post I ran some tests to test the basic parameters for my only indicator (Bollinger bands) and determine stops and take profits, and when to trail stops any by how much.

I'm trying out on the "150k" account and am reasonably confident of earning a rollover. In prior trials my approach was to try and cherry pick what seemed like the best trades from two or three instruments but what ended up happening was that I would struggle to have a positive average on all three purely because I wasn't trading frequently enough and the chances of having a couple of losses in a row on one instrument were high. In short, it just got out of hand. This time I am trading ES exclusively so I don't have this problem and I can stick with something that doesn't seem to be in a prolonged period of low volatility like the euro.

I have flip flopped a hundred times over which is the best approach to meet this lofty profit target, frequent trades with small wins or trying to pick your spots and go for less frequent but bigger wins. With each round turn costing 5 dollars I suspect it's the latter approach and in all honesty it's the approach that I am more comfortable with anyway. If the simulation I have been doing is anything to go by I will probably only make 5-12 trades a week.

My view on it is that you need one BIG win to help get you to that target. I will probably start trading with a thousand dollars risk per trade, so one 5-6 R trade in the first few days of the trial will give me a great chance, provided I don't burn through a lot of trades trying to find this big winner. Should the winning day percentage become an issue I will lighten up on the contracts widen my stops marginally and bring in my take profit a bit, but only if I need to.

In terms of preparedness I'm probably about 90 percent of where I want to be, I would have liked maybe another month or two of simulated trading under my belt and do a little more testing and analysis of my trading. But I think trading under the conditions of the combine will bring the level of focus needed.

Updates to follow.

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Old August 4th, 2014, 11:12 PM   #6 (permalink)
Elite Member
Mineola, TX
Futures Experience: Intermediate
Platform: Ninja Trader
Broker/Data: Dorman
Favorite Futures: CL
silver99's Avatar
Posts: 328 since Feb 2010
Thanks: 1,270 given, 1,215 received


I have been trading since early 2001, with very limited success and a lot of failures. I was fortunate enough to find mfbreakout's Elite Journal thread a few months before he closed it down. Invest in becoming an Elite member and take advantage of all the great resources in that area.

By watching and communicating with Mfbreakout and DCTrade69 about their trades, I have made the transition from a losing trader, to a scratcher, to a consistently profitable trader. Go read my posts in the closed thread and you will be thoroughly convinced I didn't know what I was doing in the realm of trading just 6 months ago.

Using the ACD and Market profile methodology adapted to my personal style has been the difference in my trading and my confidence.

My advice to you is to read Mark Fisher's books and Jim Dalton's book and then go through the old thread of mfbreakout in the Elite section. You can learn what successful traders are seeing and thinking if you put the effort into it, I did.

My cost for the education and resulting consistently profitable weeks was the cost of an Elite membership and 3 books on EBay.

I do not visit futures.io (formerly BMT) much anymore, but it is a very valuable asset and Big Mike is to be commended for keeping it going.

Best of everything to you, go make your own luck.

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Old August 5th, 2014, 05:15 AM   #7 (permalink)
Trading Apprentice
South Africa
Futures Experience: Intermediate
Platform: Multicharts
Broker/Data: IB
Favorite Futures: ES
Posts: 4 since Jul 2014
Thanks: 2 given, 1 received

Thanks for the input silver99.

I'll check out those resources, I've had an introduction to market profile and do use volume profile, the mark fisher book and method is new to me.

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