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Love of the Game: Former CME member starting over
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Love of the Game: Former CME member starting over

  #1 (permalink)
Elite Member
Pittsburgh
 
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Favorite Futures: ES, GE, M6E
 
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Thanks: 70 given, 250 received

Love of the Game: Former CME member starting over

Hello, and welcome to my trading journal. I hope to post frequently here, and for it to become a place of informative and entertaining discussion that helps us all to become better traders.

About myself:

My passion for markets started young. I have family in Chicago and spent a lot of time there growing up, I looked up to my cousin who began as a runner and worked his way up to being a very successful local in the currencies and later indexes. It seemed like the best job in the world. Actually....it definitely was.

As I was nearing the end of college around '05, I began researching how to break into trading. My cousin actually cautioned me against it somewhat...this was right as most of the business was moving to the screens and he, like many locals, was not transitioning to the same level he once was.

I read voraciously and researched on my own, about candlesticks and indicators etc, the technical analysis that screen traders apparently used. I had 5k saved and when I felt ready, I opened my first futures account to trade the indexes at age 22. I'm not sure how long that first account lasted....but I'm pretty sure I blew up within a month.

Broke but unphased, I looked into prop shops. By sheer luck, a resume I had out was found and I got a call to interview for a prop firm. I was hired and moved to Chicago to "train"....which, if you know anything about prop shops, means I was basically turned loose with a one lot and expected to learn by osmosis and mimicking successful traders. The product, strategy, and just look of the market and trading style were foreign to me, and I did not catch on. I was fired, quickly rehired, only to be fired again.

I spent maybe 5 months trying to figure out where I should go from there when I got a call from one of the principles of the firm I was fired from. He was opening an office and needed a clerk that was familiar with the market and their platform. I had clearly demonstrated that I wasn't profitable...but he said my work ethic and passion for markets made an impression on him. So I was hired to watch positions overnight, work orders etc, and was able to start again with one lots.

Finally I caught some traction. I was still trading the product/strategy that didn't feel so natural to me...but I was starting to catch on to what this discipline is all about...mastering yourself. In less than 6 months I was up to trading 40 lots and was taken off salary and given my own account to trade.

This time I progressed quickly. I went from being a broke 25 year old to a 100+ lot trader regularly turning 20-40k a month. Though a lot of that was owed to my backer (I was technically a backed trader, not a prop guy).

My volume was soon very high and the idea of buying membership seemed like it made sense. My backer put up some money, I put up every penny I had, and the good people at Lakeshore Bank in Chicago agreed to cover the rest, and I put my 350k bid in the IMM Seat market. Filled!

My success continued for awhile. At this point, since making the turn, I barely had a draw down. I made money every single month, and in my first 2+ years....mayyyyybe there were 2 weeks I finished in the red. I was very consistent and considered very risk averse.

I attributed this consistency to developing a good feel for when my edge and personal nuances were working for me, and when they weren't. I was active and profitable when I was jiving with the market, but had no problem sitting on my hands when I wasn't in tune. I believe this gave me a very consistent equity curve. And I had no interest of being the kind of trader that was up 10k one day, down 5k the next. My losing days were small and infrequent, a few hundred dollars....most days I was up 1k - 4k depending on opportunity.

When the market changed (haha...of course this was coming)....I spent way more days in front of the screen not seeing opportunity. My volume went down and I was making much less. If I was an independent trader with a paid off seat, this would not have been a problem....but I wasn't. All told between my seat loan, my backer, and my overhead and desk fees, I had to make 10k/month to break even. And I was only getting half of what I made beyond that.

I had been successful but I had not been prepared to deal with adversity like this, stress got the better of me, and without guidance on how to deal, the weight of my overhead got the better of me and I decided to sell my membership and relieve myself of the burden of my overhead.

Even though as stated, I never had a losing month, and barely ever a losing week....this still effectively ended my trading at that point. This is because without my seat, I didn't have the overhead....but also didn't have the accommodating fee structure needed to exploit my edge. I did have a few other big traders, prop shop owners in my network, that I'm sure would have given me some kind of deal....but they were all experiencing the same struggles and were not dealing well either. The feeling of "the market changed and now we don't make money" was pervasive, and I didn't like the way it felt.

So I left the business I had loved my whole life. Fortunately I had saved and built equity in my seat, which I was able to sell successfully. So I left with a healthy nest egg.

Like a maniac, I ended up buying a small restaurant. I don't recommend this. I spent the ensuing 8 years learning just what I had gotten myself into. Again, in a new industry, I learned every possible mistake before seeing a sliver of "success". I ended up bringing on partners and expanding to catering, and then later to a second, larger location that includes a liquor license and bar.

My passion for the markets never left me. If I could do it all again I never would have walked away like that. I would have sold my seat, taken a few months off, then started back independently and well capitalized. And I would have traded MY game.

But I didn't. I just didn't have the guidance, and at this time I had been trading from home in Pittsburgh, and being away from the trading culture distanced me as well. Oh well. I'm thankful for the luck and opportunity I received in other areas.



So here I am. My decision to return to the markets actively began on Jan. 1. I have been doing some Sim trading and trying to determine the structure of my trading day. I am fortunate to have an opportunity few have....I can trade every morning, and really most anytime, uninterrupted, while my businesses provide my living expenses. This opportunity comes because I have good parents and people around me that have supported me in this path.

This is an interesting place for me. I feel I have a lot of market knowledge and instinct, but still a myriad of basic questions that come from not being in the game for so long.

I have opened a futures account but plan to trade a Sim account for the time being. This is for many reasons, most notably, the importance of my schedule and routine needs solidified. I also need to decide on and learn my front end, I'm using ninja now, which I've used at times in the past, but will probably try Jigsaw. I also want to experience some hardships. Right now looking at my sim account, you'd assume I was the love child of Tom Baldwin and The Flipper....I know that's just me being a Sim superstar so I'm not putting a ton of stock into it.

My next post will be shorter and highlight some of my questions, I thank you for reading, and if you are able to offer any insight or advice in response to my questions, I thank you in advance.

Cheers!

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  #3 (permalink)
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Welcome, very interesting story. Look forward to reading your post and seeing your trades, JP.

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  #4 (permalink)
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Welcome, very interesting story. Look forward to reading your post and seeing your trades, JP.

Grazie!

By "JP" you mean you, right? Those are my initials also.

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  #5 (permalink)
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John47 View Post
Grazie!

By "JP" you mean you, right? Those are my initials also.

There can't be 2 of us, or could there be.... You should join our fun trading competition this coming month? Great guys on the thread and it's a very supportive environment. It's the M6E thread by Jackbravo and Rrrracer. Tell them JP sent you!

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  #6 (permalink)
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Sweet story. Looking forward to your journal. Hopefully I can learn the sitting in my hands part watching you trade. Good luck!



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1. You don't know the future.
2. Anything can happen in the market, including:
-market stops you out and keeps going to unimaginable levels
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-market hits your target and keeps going to unimaginable levels
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  #7 (permalink)
Elite Member
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Futures Experience: Advanced
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Posts: 67 since Jan 2018
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Good morning, traders.

Where do you want to be in 5 years, what is the goal? Whatever you're going to do today, what habits you're going to begin, or refinforce....what decisions you're going to make and what mindset you're going to allow yourself to have....are these the habits, decisions, and mindset that if repeated each day for the next five years will bring you that goal?

Make sure that they, we only get one today, an opportunity to put another brick in the wall towards your goals. They add up.



JMP3 View Post
There can't be 2 of us, or could there be.... You should join our fun trading competition this coming month? Great guys on the thread and it's a very supportive environment. It's the M6E thread by Jackbravo and Rrrracer. Tell them JP sent you!

I would enjoy that. I'll try to get on board for at least one week at some point. What trading hours are the competition?


Quoting 
Sweet story. Looking forward to your journal. Hopefully I can learn the sitting in my hands part watching you trade. Good luck!

Thanks. Hopefully that patience is still with me. As a prop guy and backed trader, as I mentioned I was trading a unique product and strategy...it seemed very natural to just see when my edge was available and when it wasn't....and from getting my hand slapped away from the cookie jar plenty of times....I just had no desire to put money at risk if my edge wasn't good. I was encouraged to trade volume, though, by my backers and principles :/

What I'm trying to do in the markets now is very different, I'm expecting a long learning curve.



Question(s):

What kind of internet connection are traders using these days? When I had my home office years ago, I had a Speakeasy T1, backed up by a normal high speed home internet line. The T1 was around $350/mo and had no latency, and Speakeasy guarenteed me it would not be down more than a few minutes within a month or I didn't have to pay.

Wondering what the independent professionals are using these days. I think I have a cable connection now.

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  #8 (permalink)
Elite Member
Wiltshire, United Kingdom
 
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Platform: Tradovate, Jigsaw Tools
Favorite Futures: US Treasuries
 
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As you specifically mention that your monthly overheads became an issue previously perhaps it would be good just to stick with your current cable setup. Having no/or low monthly costs is a nice place to be.
I don't know about you but I have 100mb fibre broadband as standard from my tv/telephone/broadband deal and it works fine. Consumer broadband is so good these days that in most cases, unless you intend to be scalping a lot of volume again, I imagine it should be fine. At least for now or until proven otherwise.
Welcome to the forum.

Trading, ideally structured, is a vehicle for expanding consciousness, not damaging it. - Brett Steenbarger
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  #9 (permalink)
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Interesting story. Good luck.


John47 View Post
Wondering what the independent professionals are using these days. I think I have a cable connection now.

The decisionmaking here is quite similar to what you'd do for home internet, except you have an added requirement of a good service uptime SLA. Any business service except from Comcast should be decent. A dedicated internet access (DIA) fiber circuit is usually typical if there's commercial services at your location.

I had downtime on issues on Comcast Business (coax) before which aren't too different what you'd seen on their residential services, so it seems the only benefit of I'd recommend against them. Otherwise Cogent is pretty cheap and 1 step above Comcast and I'd recommend them. Alternatively, you local, regional last mile provider like Lightower or FairPoint. Webpass/Google Fiber are pretty good as well.

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Learning to use The Force
Indianoplace, IN
 
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Our provider is local, but we've got a 25mb fiber connection that is well beyond adequate... no issues.

Your story is fascinating, very cool to see you here doing your own thing. Looking forward to reading about your foray into futures!

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