(eBook) Stocks & Commodities - Various Trend Trading Articles.pdf
Day-Trading Commodities and Navigating the Prop Firm …files.meetup.com/1004673/Day-Trading...
Transcript of Day-Trading Commodities and Navigating the Prop Firm …files.meetup.com/1004673/Day-Trading...
Day-Trading Commodities and Navigating the Prop Firm Universe
Personal Background
2002 Graduate from University of Notre Dame
Equity Prop Trader Tape reading Opening strategies
Futures Prop Trader Technical analysis Psychological analysis
Agenda
Futures Market Overview
Proprietary Trading Firms
Technical Analysis
Trade Strategy/Examples
Futures Markets
Market Participants
Hedgers Speculators
Farmers, Manufacturers Hedge against future
price risk Lock in price margins
Benefit from risky nature of futures markets
Provide liquidity Does not intend to take
delivery
Characteristics of Futures
Margin Different from equities/options Determined by exchanges
Expiration Monthly and quarterly
Leverage Control large amounts of a commodity with little
capital
Crude Oil Futures (WTI)
Traded on NYMEX/GLOBEX 1000 barrels/contract Margin = $3,740 $10/tick Pit Hours: 9:00am – 2:30pm Avg. Daily Volume = 210,000 contracts Avg. Daily Range = $1.70
Proprietary Trading Firms
Traditional Model
Profit Split/Draw/Fees
How to gain entry
Prop vs. Retail
Retail Trading Prop Trading
Keep 100% of profits
Need substantial capital
Responsible for support
Profit split
No capital needed
Access to software, community, etc
Equity Prop Trading
Personal Experience Spike Trading/Assent ECHO Trade
Current Landscape
Prop vs. Arcade
Capital Contribution vs. Fee for education
TopStep Trader
Education & Recruitment
Chat room Product rooms Energies, Metals, Equities, FX, Interest Rates
Guest Speakers Dr. Andrew Menaker, Ron Feinstein, Anne-Marie
Baiynd, John Bougearel, Wally Labuz
Topstep Trader Chat
TopStep Trader Combine
Used to evaluate trading talent
$30K, 50K, $100K and $150K accounts
Evaluation Metrics Can not hit daily “loss-limit” Achieve profit objective Winning day percentage > 55
$50K Combine Example
10 or 20 trading days
5 lot max position size
$3500 profit objective
$2000 max drawdown
$1000 daily loss limit
Patak Trading Partners
Combine Live Trader
Junior vs. Senior trader
Mentoring
Morning meetings
Technical Analysis
Trend Lines
Support/Resistance
Fibonacci Retracement/Extension
Trendline
Trend lines (example)
Trend
Trend (Example)
Support/Resistance
Support/Resistance Example
Fibonacci Retracement/Extension
Most important retracement is 61.8% (Golden Ratio)
Key Zone = 61.8% - 78.6%
38.2% - 50% is used as a trend indicator
161.8% extension used for targets/support/resistance
61.8% Retrace
61.8% Retrace (Example)
CL 161.8% extension
CL 161.8% extension
Trading Strategy
Top-down view to find levels Fibs Trendlines Highs/Lows
Focus on the psychology of the markets Springs/upthrusts Flags/pennants
Momentum – used for entries at key levels
Springs & Upthrusts
Provide excellent risk:reward situations Immediate feedback Occur on all timeframes Powerful with the trend Spring An immediate rejection of a previous low
Upthrust An immediate rejection of a previous high
Spring – Daily Chart
Upthrust – Daily Chart
Spring – 500 Tick Chart
Upthrust – 500 Tick Chart
Continuation Patterns
Flag Pattern Sharp move higher/lower Tight consolidation near highs/lows Continued move higher/lower
Pennant Pattern Forms in top of uptrend/bottom of downtrend Series of lower highs/higher lows Continued move higher/lower
Flag
Flag (Example)
Pennant
Pennant (Example)
Q &A