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TopstepTrader's Michael Patak (Founder) - Ask Me Anything (AMA)


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TopstepTrader's Michael Patak (Founder) - Ask Me Anything (AMA)

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  #501 (permalink)
Kansas City, MO U.S.
 
 
Posts: 211 since Mar 2015
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IMO, trading the news is gambling. Smart professionals stay flat until the reaction.

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  #502 (permalink)
Courtenay, Vancouver Island, Canada
 
Experience: Intermediate
Platform: NT
Trading: futures
 
Posts: 12 since Feb 2011
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shzhning View Post
the reason is simple: you can trade news release using bracket order on a SIM account with nice profit due to unrealistic fills, but stand no chance on a live account when the book is thin and move is volatile during news releases.

You know this from personal experience?

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  #503 (permalink)
Courtenay, Vancouver Island, Canada
 
Experience: Intermediate
Platform: NT
Trading: futures
 
Posts: 12 since Feb 2011
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DrewDown View Post
IMO, trading the news is gambling. Smart professionals stay flat until the reaction.

Have seen screenshots of live accounts using this software and showing nice returns... and also some video's of live trades getting about the same fills as sim101. Slippage is an issue... but it goes both ways.

What little I could find on the subject said their fills on a live account weren't much different than sim.

Would be interested in hearing from anybody who has traded news releases on a live account compared to sim.

As mentioned earlier everything is evolving... software/hardware is getting more efficient... fills are happening faster... it's not the same as it was even a year ago.

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  #504 (permalink)
Legendary Elite_Member
Wiltshire, United Kingdom
 
Experience: Beginner
Platform: Jigsaw daytradr
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tradertron
This will be where you read the news rule.
I can't imagine it would be worth asking them to relax it for you unless you could show that you have traded your method on a live account with good results. Even just a few contracts live is going to fill differently to sim.

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  #505 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
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tradertron View Post
Have seen screenshots of live accounts using this software and showing nice returns... and also some video's of live trades getting about the same fills as sim101. Slippage is an issue... but it goes both ways.

What little I could find on the subject said their fills on a live account weren't much different than sim.

Would be interested in hearing from anybody who has traded news releases on a live account compared to sim.

As mentioned earlier everything is evolving... software/hardware is getting more efficient... fills are happening faster... it's not the same as it was even a year ago.

Hi there

I have been a news trader on forex for several years.

To cut the story short, you can trade news on futures, but it's not an easy task and far more difficult than just straddling the market. In regards to the fills, actually you might be right comparing fills on Ninja's Sim101 and live account, if Simulation is set up pessimistically (this is by default AFAIR) and in my experience slippages on a simulator can be really greater than live. However. When trading Combine you are not trading on Ninja Sim, but on TST Sim. Not sure how the one for Ninja works, but in my experience trading with tst using T4 and Sierra, CTS Sim is incredibly optimistic, actually giving you positive slippage quite oftenly. This is not to be expected in live market.

I believe you can test it for yourself and know for sure by opening a small live account yourself and do few trades during news releases with 1 contract.

IMO there are better ways to trade, but trading news has one big advantage - you know when to trade and never overtrade nor spend countless hours in front of PC waiting for pieces to form a jigsaw.

Trade to live. Not live to trade.
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  #506 (permalink)
Courtenay, Vancouver Island, Canada
 
Experience: Intermediate
Platform: NT
Trading: futures
 
Posts: 12 since Feb 2011
Thanks: 8 given, 0 received


matthew28 View Post
tradertron
This will be where you read the news rule.
I can't imagine it would be worth asking them to relax it for you unless you could show that you have traded your method on a live account with good results. Even just a few contracts live is going to fill differently to sim.

Thanks for finding this.

So this rule is basically referring to trades that are already in the market... a trade that has a bias... in which case you would be basically gambling going into a news release as it's a 50/50 chance or worse adding on commissions.

Also note that it says " In most cases, the Funding team would like funded traders to be flat..." So not all cases.

Trading the news release itself is a whole different ballgame... you are stepping up to the plate and ready with tools in hand for whatever happens... either way and without a bias. You are almost guaranteed that it is going to move at that point in time... and if it doesn't then you are out of the trade.

TST has evolved over that last few years with help from members in this community and others to improve upon it for all those involved.

I realize this is an uphill battle but maybe it is time to open this door a little more and change the way it's been looked at if a certain method can be shown to be profitable for the equtity partner.

As mentioned earlier everything is evolving and becoming faster and more efficient... traders are finding new ways to be successful in this ever changing marketplace.

I notice that most of the traders passing the combines are trading CL exclusively. It has been pointed out that CL was not moving like this a year ago. What will it be doing in a year from now?

News releases also change in importance and movement over time but you can easily go back and see those changes on a 1 second chart and adjust accordingly... so as an equity partner why not diversify and allow traders to trade the news releases right from the start if it's working.

If you don't want them to trade this way in a funded account then why bother to let them successfully pass a combine and get funded only to watch them flounder around trying to build up enough equity in the account by some other method that doesn't work for them? Unless all you wanted to do was make a few bucks off the combine... which I don't think is the case.

I haven't traded this live myself but as mentioned earlier I've seen live trades and live accounts showing good returns using this same specialized software.

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  #507 (permalink)
Courtenay, Vancouver Island, Canada
 
Experience: Intermediate
Platform: NT
Trading: futures
 
Posts: 12 since Feb 2011
Thanks: 8 given, 0 received


xelaar View Post
Hi there

I have been a news trader on forex for several years.

To cut the story short, you can trade news on futures, but it's not an easy task and far more difficult than just straddling the market. In regards to the fills, actually you might be right comparing fills on Ninja's Sim101 and live account, if Simulation is set up pessimistically (this is by default AFAIR) and in my experience slippages on a simulator can be really greater than live. However. When trading Combine you are not trading on Ninja Sim, but on TST Sim. Not sure how the one for Ninja works, but in my experience trading with tst using T4 and Sierra, CTS Sim is incredibly optimistic, actually giving you positive slippage quite oftenly. This is not to be expected in live market.

I believe you can test it for yourself and know for sure by opening a small live account yourself and do few trades during news releases with 1 contract.

IMO there are better ways to trade, but trading news has one big advantage - you know when to trade and never overtrade nor spend countless hours in front of PC waiting for pieces to form a jigsaw.

Thanks for chiming in.

If you are talking about trading with a forex broker on MT4 then that would be a different ballgame than with NT.

So you don't know for sure how the slippage compares on NT then. I guess the question would be why would slippage be different on TST sim then any other broker's sim accounts?

NT support say themselves that sim isn't the same as real but they do use different metrics such as the amount of orders sitting at the bid and ask, the speed of the market, etc. in order to get it close. You said it is set by default AFAIR. Does that mean the broker can change it to be less slippage or more slippage?

I would think that TST would want to at least have it set at default or set for more slippage so as to better weed out the traders. But again... slippage is a two-way street.
Maybe Michael can comment on this too... is slippage set different on the TST sim101 account?

Who's to say what is a better way to trade... for someone else. I say follow your own heart because it's your journey. But you did hit on some key points to what I am finding out about this style of trading.

-And that is... as you mentioned... that you don't over trade... there may be 5-10 good trading opportunities a week. I guess you could put on a trade afterwards using some other method but if you weren't confident with the method... why would you?

-If you want you can come in only 15 minutes before the news release to set everything up with complete focus on what needs to be done... and then take the time to analyse the trade after it is over. At most this would take an hour.
I personally take screenshots of past and present reports on a 1 second chart and am now taking videos of the trades so they can be analyzed in slow-mo afterwards. And also have spreadsheet for the vitals.

Knowing how the report moved in the past on a 1 second chart can help to set your sloploss very conservatively. I have set them as close as 2 ticks with a 5 tick break-even. CL is a good case in point as 9 times out of 10 it picks a direction and goes for it with zero whipsaw.

If you can... I would recommend to anyone to videotape their trades because you definitely see things a lot different after the fact then in the heat of the battle and can learn a lot from them... can also see how the platform reacted... where exactly the slippage happened, etc.

-You don't take trades out boredom... likely a challenge for most... a big challenge for me personally.

-As you mentioned... you don't spend countless hours in front the computer waiting for signals... depending on your trading style. Some traders enjoy it... I don't.
Some traders enjoy researching and analyzing so this method suits that strength.

-Can be a good risk reward ratio with the ability to place the protective stops close to price and can quickly be in a risk-free trade.

I live in Canada... in B.C. in particular which makes it pretty much impossible to open a futures account in the U.S. Can find 2 brokers in Canada that have NT as a platform and their minimum account size if 10k. Which I don't have on hand or I wouldn't be going this route.

This is getting long so will cut it off here but appreciate all the feedback. Hopefully Michael P will be by this week to reply.

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  #508 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
xelaar's Avatar
 
Posts: 1,517 since Feb 2013
Thanks: 1,740 given, 2,565 received


tradertron View Post
Thanks for chiming in.

If you are talking about trading with a forex broker on MT4 then that would be a different ballgame than with NT.

So you don't know for sure how the slippage compares on NT then. I guess the question would be why would slippage be different on TST sim then any other broker's sim accounts?

NT support say themselves that sim isn't the same as real but they do use different metrics such as the amount of orders sitting at the bid and ask, the speed of the market, etc. in order to get it close. You said it is set by default AFAIR. Does that mean the broker can change it to be less slippage or more slippage?

I would think that TST would want to at least have it set at default or set for more slippage so as to better weed out the traders. But again... slippage is a two-way street.
Maybe Michael can comment on this too... is slippage set different on the TST sim101 account?

Who's to say what is a better way to trade... for someone else. I say follow your own heart because it's your journey. But you did hit on some key points to what I am finding out about this style of trading.

-And that is... as you mentioned... that you don't over trade... there may be 5-10 good trading opportunities a week. I guess you could put on a trade afterwards using some other method but if you weren't confident with the method... why would you?

-If you want you can come in only 15 minutes before the news release to set everything up with complete focus on what needs to be done... and then take the time to analyse the trade after it is over. At most this would take an hour.
I personally take screenshots of past and present reports on a 1 second chart and am now taking videos of the trades so they can be analyzed in slow-mo afterwards. And also have spreadsheet for the vitals.

Knowing how the report moved in the past on a 1 second chart can help to set your sloploss very conservatively. I have set them as close as 2 ticks with a 5 tick break-even. CL is a good case in point as 9 times out of 10 it picks a direction and goes for it with zero whipsaw.

If you can... I would recommend to anyone to videotape their trades because you definitely see things a lot different after the fact then in the heat of the battle and can learn a lot from them... can also see how the platform reacted... where exactly the slippage happened, etc.

-You don't take trades out boredom... likely a challenge for most... a big challenge for me personally.

-As you mentioned... you don't spend countless hours in front the computer waiting for signals... depending on your trading style. Some traders enjoy it... I don't.
Some traders enjoy researching and analyzing so this method suits that strength.

-Can be a good risk reward ratio with the ability to place the protective stops close to price and can quickly be in a risk-free trade.

I live in Canada... in B.C. in particular which makes it pretty much impossible to open a futures account in the U.S. Can find 2 brokers in Canada that have NT as a platform and their minimum account size if 10k. Which I don't have on hand or I wouldn't be going this route.

This is getting long so will cut it off here but appreciate all the feedback. Hopefully Michael P will be by this week to reply.

Well looks like you don't need any answers you know it all anyway. I could spend hours talking about liquidity and hft models during news releases but it would be futile. But I can tell you that technology development has nothing to do with decreased slippage, only sell side liquidity does which is easier to remove momentarily with the advancement in technology. Broker sims have nothing to do with Sim101 which is local in Ninja. Tst will not allow trading news (100%) even during LTP. Not sure where in Canada you live but assuming you have power and internet opening futures account in US is not more difficult than for me in Czech Republic or some people in Russia or whatever.
With this I would like to part and wish you success in your endeavors.

Trade to live. Not live to trade.
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  #509 (permalink)
Courtenay, Vancouver Island, Canada
 
Experience: Intermediate
Platform: NT
Trading: futures
 
Posts: 12 since Feb 2011
Thanks: 8 given, 0 received


xelaar View Post
Well looks like you don't need any answers you know it all anyway. I could spend hours talking about liquidity and hft models during news releases but it would be futile. But I can tell you that technology development has nothing to do with decreased slippage, only sell side liquidity does which is easier to remove momentarily with the advancement in technology. Broker sims have nothing to do with Sim101 which is local in Ninja. Tst will not allow trading news (100%) even during LTP. Not sure where in Canada you live but assuming you have power and internet opening futures account in US is not more difficult than for me in Czech Republic or some people in Russia or whatever.
With this I would like to part and wish you success in your endeavors.

No... don't know it all... far from it... just laying down an argument. Everyone has their opinions and theories and models and that's cool... but unless that person has actually put on news trades with NT in a real/live account over the past few months then sorry but I can't really go by that.

As mentioned before... I have seen proof of successful trades being taken on a real account and the account showing past trades with a nice overall growth... with this very same software/method. So that you can go by.

Apparently in B.C. the politicians have somehow made it so the U.S. brokers have to go through a bunch of red tape in order to allow the locals to trade. I have contacted more than a few of them and the answer is always the same... no B.C. residents.

RJ O'Brian Canada and IB Canada are the only 2 with NT that could be found.

Anyways thanks for the well wishes and will see how it plays out.

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  #510 (permalink)
Kansas City, MO U.S.
 
 
Posts: 211 since Mar 2015
Thanks: 301 given, 122 received



tradertron View Post
Have seen screenshots of live accounts using this software and showing nice returns... and also some video's of live trades getting about the same fills as sim101. Slippage is an issue... but it goes both ways.

What little I could find on the subject said their fills on a live account weren't much different than sim.

Would be interested in hearing from anybody who has traded news releases on a live account compared to sim.

As mentioned earlier everything is evolving... software/hardware is getting more efficient... fills are happening faster... it's not the same as it was even a year ago.

If you have a position, and the bid or ask suddenly jumps four points against you on a news release - you're toast. It will just keep running.

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