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Anyone heard of SpreadProfessor?


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Anyone heard of SpreadProfessor?

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  #1 (permalink)
 KLTF 
Austin, TX
 
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Hey all,

Been looking into spreads lately and have of course passed by spread-trading.com which to me seems gimicky at first look so I've already looked past it unless others have a different experience. But I've stumbled upon

SpreadProfessor - Home

Who claims to have over 20+ years of experience trading spreads and is the "best" at spread trading. And I was wondering if anyone has actually worked with this man personally or taken the course? It seem's interesting and more legit than spread-trader.com but when I emailed him he seemed to be very tight with his knowledge and I got some pretty vague answers back.

Thanks,

KL

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  #3 (permalink)
 julien 
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I had a very bad experience with Peter Humby the so called spread professor who charges very high amount of money for such a very small amount of knowledje. The content of his course is very limited and not worth the high price he is charging.
Also, if you critisize him or have an issue with him, he will insult you instead of trying to find a resolution to the conflict.

I strongly do not recommand him, there are no valid statistic to back his claims

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  #4 (permalink)
 indiantrader 
Mumbai, India
 
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I have finished Peter Hamby's 6 months spread trading course this year.
Peter was a floor trader and a prop trader specialising in energy spreads and tresuries and he trades futures spreads exclusively.
My impression about this course is here.

Pros:

1. One learns about basic spreads, pairs, butterfly, condors and inter-market spreads and its charting using eSignal...every week there is a group webinar where there is a discussion about new trades and its validity...
2. For correlation studies, he refers to csidata website which is quite useful and any instruments can be analysed for past 20 years of correlation data
3. The method of trading is based on price action, range of spread and a simple indicator which is easy to follow with all in- all out trade management
4. The spreads relevant to swing trading are those which do not follow the underlying and the spread chart has to look like a separate instrument...which is important to understand

Cons:

1. The cointegration studies, lead-lag analysis are not taught in the course but just a rough idea about them
2. The mean reversion is not accepted at all but its still relevent when cointegration is high between the pairs....
3. The fundamentals like yield curve, bond valuation, energy basics are not taken into account at all...I feel they are very important like FOMC meet which affects eurodollar pairs....or middle eastern shocks which affect crude oil spreads
4. Only futures pairs are included on CME, Eurex and Liffe...the equities pairs, ETF vs stocks pairs are not included however some clients do spread equity pairs....(problem with equity pairs is there is no benefit of margin credit)
5. Only weekly and daily charts are referred to and no intraday spread trading methods are included...the reason being the indicator used acts on daily and weekly charts better....so drawdowns with those charts are huge before spread moves in desired direction...so if one wants to trade intraday spreads, he has to find his own methods...according to Peter intraday spread trading is worthless..
6. and lastly $7500 is definitely high for the course compared to the knowledge one gains through it...either the price should be low or he should include more techniques and more instruments like equity spreads to make it worthwhile

Having said this, I am ready to trade spreads in my live account and currently choosing between X-trader and T4 platforms for spreads.

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  #5 (permalink)
 indiantrader 
Mumbai, India
 
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Update on SpreadProfessor course:
A quick update on the spread trading course since my last post. Pete has extended his services and weekly webinar discussion even beyond the 6 months period without any additional charges and he expects just a regular contribution to weekly webinars.
With regard to my results with his methods, over 65% trades were closed in profits over last 8 months and I feel confident using the method adopted in his course. I could feel the difference between holding an outright contract and holding a spread trade for days to weeks. With spreads, I was more comfortable holding overnight as I am relatively immune to broader market movements and sudden geopolitical events. Overall, I am satisfied with my spread trade results.
I just hope Pete would introduce us to more advanced concepts in spread trading in the future.

Sent from my SM-T311 using Tapatalk

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  #6 (permalink)
PropArb
Chicago Illinois
 
 
Posts: 26 since Mar 2014
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I took Pete's course a few years ago when it was a little less expensive. Since I had primarily been trading interest rates up to that point for prop firms in Chicago, I found it quite worthwhile in the sense that after Sim trading it for a few months I had the confidence to venture into energy, grains, stock indices, etc. He has quite a few experienced Chicago area traders as clients.

IMHO, Pete designed the system as a best overall type of compromise in the sense that in many respects it is not a pure academic financial engineering exercise but was meant for practical application for the broadest segment of the trader demographic - and that includes day traders and scalpers.

I would say that my experience at least was a positive one and and it is a profitable and consistent system if you have the discipline to obey the entry and exit rules and have the patience to stay with a swing trade.

Pete is actually a very funny person and a good guy. Not sure what someone would have to do to piss him off.

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  #7 (permalink)
 traderwerks   is a Vendor
 
 
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I had an un pleasant discussion with him a few years ago when his course was cheaper. I decided not to take his course because of his attitude. Nothing major, it just made me wonder about the guy.

Anyway, he is a vendor selling $7,500 courses so it is what it is. YMMV.

Math. A gateway drug to reality.
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  #8 (permalink)
 budfox83 
Singapore + Singapore
 
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Here are my thoughts...

Trading is a tradecraft and has been traditionally passed along, at least in the banks, in an apprenticeship type model. You find someone who is more experienced than you who is willing share their experience and knowledge with you, and will show you (partially) how they do things. No one wants to lose their job to a young whippersnapper.

Pete is obviously a trader. He is a bit rough around the edges, at times curt, can be domineering, and is very convicted about his ideas. (We've butted heads a few times of course. So I can sympathize with what some members are saying) But so is practically every other experienced trader on the desk. If he were very smooth in his client management skills, I might question his trading abilities, and think he came from the sales side of the desk.

What you're paying for is not a 'system' in the sense of a set of rules that you can execute every single time and make money. And if you're looking for that you're already asking the wrong questions from the beginning. You're paying for the apprenticeship from a more experienced trader to teach you how he thinks about 'spread trading' across multiple asset classes and what from his experience has worked for him. Like with all things, you need to do your own homework, and make it your own.

As for the comments about incorporating fundamentals... if you're experienced and you know how to do the analysis, you're going to be doing already. If you don't have experience, you are really fooling yourself into thinking you know the market by incorporating your understanding of 'fundamentals' after reading Oil 101, the FT, or worse investment banking research.

I'm not discouraging people from doing fundamental analysis. But it takes years of specialized experience, and information on flows (which you don't have btw), to understand what's going on on the short term basis. The more medium-term fundamental setup doesn't really change that much each year either. And you can only trade one or two markets with that type of knowledge. So a px-action system can offer a better winning %-age than your ideas on your one or two markets, and give you more breadth.

I'm not a very good intra-day trader so I can't really comment on that front. However, I know the prop guys at Schneider here in Singapore are all losing their shirts this year. Everyone with TT Pro, Autotrader, and co-located server-side execution, thinks they can design some algorithm to arb the Nikkei or Gold, or scalp the Simsci faster than everyone else with the same setup. But, there's not a whole lot money left, IMO, and based on people's returns. But if you can make money consistently that's great.

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  #9 (permalink)
cubano
NYC, NY
 
 
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about 2 years ago I had a chat with him... what he said made sense, until I started to perform due diligence... I personally was unable to verify his background.. the resources he gave to verify were email, but I was able to get phone numbers via personal research... I also chatted with a few guys from Chicago that heard of him from his floor days and had no opinion of him (neither good or bad)... ultimately I decided against the idea...

the best way to learn to trade spreads in futures is by 1) learning about the products that interest you, and 2) trading... whatever you pick to trade spreads on, just make sure that you can research the market and dig enough info about the market... good candidates to learn, with enough vol anyhow, are grains and energies...

spend $500 in a few books, take the other $7K and open an account with an FCM that will recognize SPAN and fund an account with them... start small and try not to loose too much and just go from there... if you are after ideas for spreads, look at MRCI... you can subscribe for free to Craig Turner's newsletter from Daniels Trading.. and look at the CQG newsletter... Joe Souhlakis from justjoecharts.com contributes regularly there...

in the end, it will come down to what markets you want to trade... pick a product and focus on it... that is what someone told me and that is what I am doing myself... dont spread (no pun intended) yourself too thin by following so many markets that you are a jack of all trades but master of none...

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  #10 (permalink)
PropArb
Chicago Illinois
 
 
Posts: 26 since Mar 2014
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cubano View Post
about 2 years ago I had a chat with him... what he said made sense, until I started to perform due diligence... I personally was unable to verify his background.. the resources he gave to verify were email, but I was able to get phone numbers via personal research... I also chatted with a few guys from Chicago that heard of him from his floor days and had no opinion of him (neither good or bad)... ultimately I decided against .

I did not bother trying to contact the references on his CV. In this business a boss or coworker on a desk from six years ago or even a couple years ago is likely not going to be at the firm someone lists on a resume - that's a universal given in trading and clearing and banking.

The due diligence I performed came after having a Skype interview with Pete where I was permitted to directly contact clients. ( not listed on his CV and references, BTW ) I directly emailed three of his clients, spoke with one of them on the phone for about 45 minutes - and their opinions ultimately reflected what became my own experience with the course.

Honestly, if you really put the effort into it on your end during training ( and that is KEY ) you can make $7500 on one good trade so I'm not sure where the logic is regarding the fee. Personally, my accountant deducted the fee as a business expense on my tax return.

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 tflanner 
Chicago, IL
 
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I started trading treasury futures spreads in 2001 (yield curve) on the screen. Had a very good run trading spreads and it essentially ended in 2009. I am a Chicago guy and I knew over 100 guys trading these spreads. A handful were 7 figure traders. Today I know of just around 5 guys trading these spreads and it is hard. The other 95% are essentially out of the business or in my case trading the indices (outright).

I can only speak for interest rate spreads, but it is very difficult to make money. Some very talented 7 figure traders can't do it anymore....and they hired quants etc to reinvent themselves. I attribute the difficulty in spread trading to HFTs and QE. Maybe energy spreads are different

My guess is if u pay$7500 for the class u will not be profitable. Save your money.

The Market is Smarter than You Are
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 budfox83 
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One final thought. I think a big part of the decision of whether you think its valuable or not, will also depend on your trading style. Most of the prop guys that I know would have a hard time trading the way P does. Because they want methods that give them a lot of looks, low risk per trade, but a lot of trades.

Sure, you can easily make 7.5K on a spread trade, you could make 75K, or 750K depending on your size. But, most arcade guys are relatively thinly capitalized, do high volume, want huge intraday margin financing. So, they don't like the idea that to make 7.5K, you need to risk a similar amount. Rather they want 10 trades that get you 750 each.

But as previous posters have alluded to, this style of trading is becoming more competitive due to quant and HFT shops. Reducing the holding period and having more looks at trades is what gets you a high information ratio/Sharpe which is what all the quant funds are chasing.

At the end of the day, it's whether you get along with your coach too. Sharapova fired Connors after one game because of bad chemistry...

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 researcher247 
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Good thread 'replies' here from guys who have been there/done that.

Not into spreads myself (outright directional futures/stocks/etf/forex) trader here--but I appreciate the thorough 'spread' replies/discussion.

peace/hedvig

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  #14 (permalink)
PropArb
Chicago Illinois
 
 
Posts: 26 since Mar 2014
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tflanner View Post
I started trading treasury futures spreads in 2001 (yield curve) on the screen. Had a very good run trading spreads and it essentially ended in 2009. I am a Chicago guy and I knew over 100 guys trading these spreads. A handful were 7 figure traders. Today I know of just around 5 guys trading these spreads and it is hard. The other 95% are essentially out of the business or in my case trading the indices (outright).

I can only speak for interest rate spreads, but it is very difficult to make money. Some very talented 7 figure traders can't do it anymore....and they hired quants etc to reinvent themselves. I attribute the difficulty in spread trading to HFTs and QE. Maybe energy spreads are different

My guess is if u pay$7500 for the class u will not be profitable. Save your money.

Energy and grains and softs and even some stock index futures have been exceptionally good spread trades the past few years. Personally, I'm not sure how someone concentrating just on interest rate spreads could be consistent unless he had a very specialized niche or access to something like the swaps market. Even cash treasuries ( Brokertec, Cantor-Fitz ) are incredibly tight and competitive markets that are arbed to the Nth degree.

Interest rate spreads used to be my primary and only trading vehicle, but for me personally diversifying my spread trading into a much broader range of products has saved my ass. That's my own experience FWIW.

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 tflanner 
Chicago, IL
 
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@PropArb....your right diversification is important and a good thing....because markets change and nothing lasts forever. I had all my eggs in one basket and when treasury spread went away...it would have been nice to have another spread trade to fall back on.

However, I was burnt out on spread trading. I primarily traded during Asian and European hours and i could not do that schedule anymore (physically or mentally). Also, my strategy was 100% mean reversion and I imagine a strict mean reversion strategy does not work in the equity and energy spreads.

I enjoy trading the indices now and am very glad not to be trading spreads anymore. However, I made much, much more money trading spreads than I have trading the indices. In my experience, the big money that i have seen made over the years has been in trading spreads.

Good luck!

The Market is Smarter than You Are
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  #16 (permalink)
PropArb
Chicago Illinois
 
 
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tflanner View Post
@PropArb....your right diversification is important and a good thing....because markets change and nothing lasts forever. I had all my eggs in one basket and when treasury spread went away...it would have been nice to have another spread trade to fall back on.

However, I was burnt out on spread trading. I primarily traded during Asian and European hours and i could not do that schedule anymore (physically or mentally). Also, my strategy was 100% mean reversion and I imagine a strict mean reversion strategy does not work in the equity and energy spreads.

I enjoy trading the indices now and am very glad not to be trading spreads anymore. However, I made much, much more money trading spreads than I have trading the indices. In my experience, the big money that i have seen made over the years has been in trading spreads.

Good luck!

Yes, I used to also trade mean reversion for stupid size in the interest rate spreads with a very prominent Chicago prop firm on an intraday basis. As you said, that went away - at least for us "point and click" types. I would even get hung using RTS and AutoSpreader, and I used to throw away one lots like BB's to get my message-to-fill ratios in line.

SpreadProfessor was a gift for me in that regard. He got me into many more products and markets than I ever knew about, and within a few months I had thousands of spread combinations and a very good indicator package to work with. I quit modeling for mean reversion and "fair value". I started trading with the commercial order flows and not against them. For me, it was the best money I spent. I knew absolutely nothing about products like Sugar or Natural Gas or the FTSE - but I gained the confidence to trade them. Yes, you can model spreads strictly off of historical price action, and with a good indicator package and a really huge portfolio of potential spread combinations I would never have had a clue to develop on my own - at least for me, it saved my ass. YMMV

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