NexusFi: Find Your Edge

Home Menu


Trading calendar spreads?

Discussion in Commodities

      Top Posters
    1. looks_one SMCJB with 6 posts (9 thanks)
    2. looks_two wintergasp with 3 posts (3 thanks)
    3. looks_3 Fx93 with 2 posts (0 thanks)
    4. looks_4 i960 with 2 posts (5 thanks)
      Best Posters
    1. looks_one mstier with 6 thanks per post
    2. looks_two i960 with 2.5 thanks per post
    3. looks_3 SMCJB with 1.5 thanks per post
    4. looks_4 wintergasp with 1 thanks per post
    1. trending_up 12,248 views
    2. thumb_up 30 thanks given
    3. group 15 followers
    1. forum 22 posts
    2. attach_file 0 attachments

Search this Thread

Trading calendar spreads?

(login for full post details)
  #21 (permalink)
SMCJB's Avatar
Houston TX
Legendary Market Wizard
Experience: Advanced
Platform: TT and Stellar
Broker: Advantage Futures
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Posts: 5,007 since Dec 2013
Thanks Given: 4,334
Thanks Received: 10,097

That's a bold statement. I can see how that could be true or maybe partially true in equity index's but do you also believe it's true in commodities such as crude, gold, lean hogs, etc?

Reply With Quote
The following user says Thank You to SMCJB for this post:

Can you help answer these questions
from other members on NexusFi?
Volume profile TradeStation
EasyLanguage Programming
Request for MACD with option to use different MAs for fa …
Trader Dale [email protected] or Scammer Dale
Trading Reviews and Vendors
The space time continuum and the dynamics of a financial …
Emini and Emicro Index
ISO Equity Curve Indicator
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Tao te Trade: way of the WLD
30 thanks
GFIs1 1 DAX trade per day journal
28 thanks
Supertradersams Thread Journal on NQ/MNQ
27 thanks
Just another trading journal: PA, Wyckoff & Trends
12 thanks
1% Risk Journal
11 thanks

(login for full post details)
  #22 (permalink)
TradingTech's Avatar
Chicago, IL
Experience: Master
Platform: X_TRADER, TT
Trading: ES, NQ, ZN, CL, 6E
Posts: 167 since Feb 2016
Thanks Given: 72
Thanks Received: 122

Yes that is a very bold statement. I think the growing world of managed futures / commodity trading adviser would beg to differ. As would the large number of prop traders who regularly buy puts for establishing positions and not simply for protection.

If you have any questions about the products or services provided, please send me a Private Message or use the " Ask Me Anything" thread
Follow me on Twitter Reply With Quote
The following user says Thank You to TradingTech for this post:
(login for full post details)
  #23 (permalink)
teee's Avatar
Sydney Australia
Experience: Beginner
Platform: CQG,NinjaTrader
Trading: Oil, ES, Bund, Currencies
Posts: 47 since Nov 2014
Thanks Given: 134
Thanks Received: 103

Interesting post.

I used to trade CL spreads but not anymore.

SMCJB is the expert in this field and he had pretty much covered most of the key points already. Here's my take of why trading spreads can be difficult:

1.Almost complete opposite to outright trading in terms of methodology/psychology/money management, that is why most Prop shops that apply spread trading prefer to hire new traders with no prior trading experience/knowledge
2.Requires deeper pocket for margins and ability to hold through short term pain
3.Emphasis on fundamental analysis instead of technical analysis , hence requires good knowledge of physical markets and seasonality of the underlying asset. To really stay on the top of this game, one also needs to have a good understanding of the curve movement and economic cycles.
4.Statistical Arbitrage style of trading that requires good amount of historical data and good statistical knowledge to perform back-testing
5.Natural restriction to scale up
6.Only suits certain personalities of traders because it is about making small amount of money consistently while taking occasional big hit.
7.Heavy commission fees

Given the above, it is not strange to see majority of the participants are institutional traders. It is extremely difficult for retail traders to find and retain an edge in spread trading because of all these natural barriers.

Visit my NexusFi Trade Journal Reply With Quote
The following 2 users say Thank You to teee for this post:

Last Updated on November 17, 2016

© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts