CME futures trader- AMA

Do chemicals in the water really turn the frogs gay?

What is best pizza in Chicago?

Is a career in finance still viable if you're not a PHD math/computer science type person?
What's your average day like? Exciting days?

yes

It isn't likely that CME will affect the price of bitcoin at all.

People who genuinely have a lot of money can't really buy into bitcoin because their money can be hacked, or lost on one of these weird exchanges.

Some people thought that having a CME/CBOE futures contract would alleviate that issue, but at the end of the day, if these firms wanted to fundamentally short bitcoin to hell, it wouldn't necessarily make bitcoin plunge because they're selling the contract and not the actual bitcoin. AKA the futures are at the mercy of the exchanges, which a lot of the programming guys around here are pretty much positive are inflating the price of their coins.

My job depends on the Brent crude price.

Will 2018 finally be a good year again?

>AKA the futures are at the mercy of the exchanges, which a lot of the programming guys around here are pretty much positive are inflating the price of their coins.

>*prints 1B tether*

Uhh genuinely the senior traders don't let us use indicators like MACD and RSI, even those are the most popular ones. They're lagging indicators and make you bet against the trend, which I can explain more if you want me to.

I use volume, 9/50/200 moving averages and draw out my own price supports/resistance levels.

That's about it, had to read a1000 page book on chart patterns too... I like to use Elliot wave.

I use 4 hourly and daily... sometimes 1 minute if I'm really bored, but anything smaller is not useful when trades last months.

Why are you stealing my crypto tendies. GIVE THEM BACK

What are the platforms that support the feature of going back in time and replaying past data to practice practice practice makes perfect? Sofar I only know of Sierra, Multicharts, and Ninja but they cost.

So you think the price on actual bitcoin exchanges will drive the futures price, not the other way around? What do you mean the exchanges are inflating the price of their coins?

which book ? i am very interest in techinical analysis. I have time if you want to say more, bro, thank you

and are you guys only prop trading or do you also have guys doing market making?

What is your opinion on BitMex?

Is this exchange designed for institutional investors?

Upper level management has to take the position that it's not worth looking at right now. I've heard some big banks have a really small position in them, but banks like JP morgan have tons of divisions and they could all disagree with one another on if that's a good idea.

Me and some of the younger guys think it's ok, like one day Charles Schwab will say it's good to have .01% of any balanced portfolio as bitcoin.

I wanted to be a quant analyst doing programming when I graduated in economics, but I had a hedge fund manager tell me straight up that all of their quants are PHD in math and physics and things like that. The whole idea that you should be well rounded is bullshit. Even something like a programming minor isn't useful because you can't even fathom how to create programs like some of these russian guys are that created high frequency trading etc.

Average day has gotten a lot better. When I was first given the leeway to use a lot more money, like going from 50k-1mil I literally started to go blind from the stress at night. I remember my first trade I got up to get coffee and came back and was down 10k already in like two minutes, but thank god I have a risk manager, an older guy, who has saved all our asses before and keeps us in check.

not exaggerating at all about going blind though. had to stop taking any sort of drug (coffee) (alcohol on weekdays)

Likely, there was a bunch of 80$ call options bought up last week for mid 2018, like 30million barrels worth. There were a lot of large budgets approved for exploration of new sources of crude though, may be good for you, maybe not.

Hard to say though, crude oil going up as fast as it's been is hard on countries like India. Nigeria announced today they don't want it going above 65 for a while, but I really don't know if they matter fuck all.

fuck off and kill yourself

please explain more

That'll create arbitrage opportunities to make basically free money. They'll even build microwave links between the data centers if they have to.

Natgas is coming for you, you fuck

What's the likelyhood of CME traders manipulating BTC prices to attack / defend futures positions

OP, do you guys still mostly trade momentum? Is it still as prevailing as it used to be or have more complicated models made their way in? Do you have quants on the floor or just in risk/behind the desk type of positions?

DUDE THE 80S LMAO

Meant to say "strategies", not "models"

It's a logical fallacy to backtest a program. The guys here who are working on it say they can make something work backtested, but it never pans out.

They have to play it in real time and be really patient, but they're on salary so whatever. That's really all I know about programming, it's pretty hush hush.

There's a lot of ways you can artificially inflate an asset.

If you are a high frequency trader (HFT) you can put in a bunch of false orders in.

Example: You put in a buy order for $1,000,000 when a stock hit's $100 and when the exchange goes to fill your order it bumps the price up to $101 for the next guy to buy.... the catch is.... your computer is so fast, it took your buy order away before the exchange could realize, so now you just fucked some guy into buying for $101. If you can do this all day, then you can make it look like there's lots of buys when there aren't any.

Another thing they're doing is putting 1,000,000 in cash in one account and opening another account with a 1,000,000 worth of bitcoin and just buying their own fucking bitcoin. You just swap the coin into your other wallet, but everyone sees a huge buy order and tries to follow you, or algorithms do.

Tether also inflates bitcoin because you can use leverage off of it. There's a few more ways, but I feel like I should answer other people too.

Hey OP, appreciate the AMA. I was watching a Youtube video whereby a BTC trader was referring to the Nikki futures and said it had a bullrun for a year before collapsing 50%, do you think BTC/crypto will have the same run?

This is why I hate the ebin qUAnt and H-F-tee :DDDDD memes.

It's got fuck all to with trading, psychology, and emotional control.

It's fucking around with the "plumbing" of exchanges, with shit like quote stuffing .

OP, what do you think the price of bitcoin will be in 6 months? Total speculation. Pick a number.

Do you think you'll keep doing this for a while? I've always heard there's not a whole lot of upward mobility in trading unless you hit it big. Why this vs traditional corporate job?

Quant doesn't mean HFT by default. Most quants don't do HFT related work.

is going blind really something that can be stress induced? Sounds more like a freak warning of a brain tumor or something man

When an event occurs, like trump's tax plan, RSI tends to hit overbought pretty quickly.

Day one I was taught that assets don't move in straight lines, up or down and that's generally true.

However, if there's a new fundamental event then the trend will ironically rise faster in proportion to how legitimate the the event was. Does that make sense?

So if you found out Amazon beet it's earnings by a crazy margin, your RSI and chart analysis would say it's way overbought and you should sell, which would be correct in the previous paradigm, but it's not anymore.

MACD shows reversals in price action after they've already happened, it's better to just see bottoms in candle formations, rather than using a MACD strategy, you'll get in faster.

You could read this one, but it's a little different because it has some more basics. Still trying to find the one that's pure chart patterns in PDF, which I know is out there. Don't try to cram it, a concept or two a day is better because you can try finding them in charts real time.

mrao.cam.ac.uk/~mph/Technical_Analysis.pdf

sentiment analysis is all you need for crypto.

I understand that, but the fields do interconnect, at times.

Both don't focus on the human aspects of markets - The actual fucking thing that causes prices to move. I have difference in my philosophical view of what's "right" to do in the market.

Although, that's not totally true about quantitative analysis, which could include looking at things like monitoring how much a term is searched, or how many times it appears on some social media page. I guess monitoring sentiment is, in a way, focusing on human aspects.

A lot of quantitative models are based on findings from behavioural finance actually. Take any quant trend trading model for example and you'll find a lot of it can be traced back to Hong & Stein's paper on the momentum anomaly. Would be quite foolish to ignore all of that research, especially stuff from the late 90s when the field really gained traction.

OP, I'd like to know what you think will be the price of bitcoin in 6 months. If you had to pick a number. Gun to your head. And I'll pull the fucking trigger.

i see

how do you deal with the wednesday EPA reports?
ive tried trading UWTI / DWTI in the past (rip) at that moment and its a fucking mess

got any tips? straddle I guess?

I am of the general opinion that once the top happens, you'll know. Read the book "Blink," basically your brain will recognize the change before you consciously do...

We aren't that big, honestly a million dollar buy order on my side, which isn't unusual is filled within 3 seconds if lagging and maybe I see the candle move for a second.

I find it hard to believe there are many market markers out there.

Can you give us some rough predictions on BTC?
How high will it go? Will it crash? How hard?
I know its impossible to answer correclty, but Im really curious about your opinion

But you are quite correct in pointing out that markets are human driven (which should be quite obvious haha), thats why the emergence of behavioral finance was so important, previously we had an assumption of EMH and Brownian motion and so on. Which, for all intents and purposes, is pretty much bunk. A quant is simply someone operating under the assumption of market inefficiency and someone trying to exploit said inefficiency methodically rather than relying on specific indicators and so on.
On HFT I kind of tend to agree with you 99%. I believe its not really driving anything forward... There are arguments to be made about market making and so on, but yeah...

Likely 0.

We crunch the numbers on what the fundamentals will be and create a price target based off of that, assume a timeframe and if it is rising too quick, sell some prematurely. I.E. 6% up target, two days in it's up 2%, sell all/half position, buy again where you did two days ago.

There are a lot more complicated ways to trade, but I can't really get into them. The example above is oversimplified.

There can be more upward mobility, but you have to meet certain criteria, sometimes that means having gone to an ivy league to join "the club." I've heard it's a lot harder than it was pre 2009.

I'm fascinated with it and I will likely do it forever. I'm old money and Im trying to just get some experience to manage the family trust. My accounting friends from university all love their jobs at big 4 firms though, probably easier to do that and if you do the books for a big company they will give you like 100k at the end to go party in some ski town for a week, not an exaggeration

Yeah Quant guys don't usually even talk to the HFT people.

Nah it's totally a thing, just an ocular migraine, watch some elon musk interviews, he talks about the same thing happening to him. Losing money causes actual physical pain to people. That's why its hard to get out of a losing position, which is why we have risk managers who sometimes terminate our losing trades when we don't want to.

Also do you think getting a job in that field is possible without a degree?
I played poker professionally for the last 6 years making 6 figures every year (which is pretty hard nowadays), learn super quick and think I would do well, but obviously have a trash cv.

OP has not once predicted price of BTC. useless thread which is the only thing people want to hear.

> We crunch the numbers on what the fundamentals will be and create a price target based off of that,
So factor modelling mostly?

Derivatives *DONT* have any effect on the underlying. That isn't to say that traders watching sweeps won't make decisions based on yuge positions

Why is OP afraid to answer the big question. Seems cowardly.

There's a pretty good program out there that tracks positive twitter mentions to % gap up of a stock the next day.

If I had a gun to my head I would say less than it is today, but I have tried to do a paper trading bet with another trader friend of mine and we both got burned shorting bitcoin on paper. 16k?

Yeah trading EIA will get you wrecked because it's not a surprise to firms like mine most of the time, I have the numbers down a few days in advance with like 95% accuracy. At that point we plan according to our trading target, so even if it's good, it can still be a sell.

I think it's better to know nothing than it is to only know a little. Maybe try just working on your technical analysis and view EIA and API as a distraction?

To be honest again, the psychology of bitcoin seems to be at the "New Paradigm" bit that I saw in that Veeky Forums copypasta. My friend the other day texted me telling me to just buy some sort of coin, which to be is a sign I shouldn't.

However, like I said, when the tops happens, you'll know. Generally you will experience fear when checking up on your positions because something is acting in a way that does not fit your description of how it should be acting. Again, my bitcoin advice is not great at all.

because predicting bitcoin price is retarded and unnecessary?

take everything OP says with a grain of salt, he still sleeps in a twin bed...

When hft is used for market making it's fine, because it's providing liquidity and likely doing so with small spreads. It's just stuff like front-running and quote stuffing which I dislike.

If I had a marketing degree, what would I need to do to more align myself with a position you're in? Honestly, maybe I'm insane, but the stress sounds exhilarating

Needs a Drive poster t b h

Because it's completely impossible given bitcoins lack of actual utility.

im planning to write/already trying to write an insider trading detection software
what are the likelyhoods of me sucessfully doing that?
do big trading firms have such programs (im sure the authorities do..do banks and do you?)

Bitcoin market cap hit 500billion last week and a lot of funds were diversified into other coins, that's why you saw litecoin,ripple,etherium jump.

As much as I want to say this is the top it's probably asinine to do so. Think about a top at the 1 trillion market cap. However, if bitcoin trades sideways around here for any decent amount of time I would expect a big retrace.

Maybe I'll chart it out to see if I can get a better idea, or like a definitive possible target number.

As I understand you, You are basically day-trading for your company? Do you trade often for yourself? Are you allowed to trade your own securities? Does your job give you experience that you can apply to your own accounts?

and what do you know/have you heard about Ichimoku, specifically being used by pros?

>I do the WTI/Brent crude oil analysis
do you make money trading this spread?

do you follow eurodollar futures and if so what's the deal with those?

what's the overall sentiment toward bitcoin of people you work with?

Can you get more into it how and why I will know when the top happens?
And I am already experiencing fear checking every time
But thats probably because 4/5th of my liquid assets are in crypto

>Maybe I'll chart it out to see if I can get a better idea, or like a definitive possible target number.

Please do

Is it just simply we misunderstood each other or should I really be shocked and appalled that they actually give you a million dollar book?

What knife do you carry?

>technical analysis

>it wouldn't necessarily make bitcoin plunge because they're selling the contract and not the actual bitcoin

hem

Are you sure you're really a trader?

Of course that shorting a future is impacting the underlying price. If it was not there would be massive arbitrage opportunities.

t. actual equity index future trader

Sam Hyde really been letting himself go...

>technical analysis

Lurker here. Thanks OP. One of the best threads on Biz I've seen in a while.

ehh theoretically they argue they provide liqudity, but when researched recently it's been the contrary, i saw.

It is exhilarating, until it's 24 hours a day. Wake up in the middle of the night because london just opened and you think hey why not check my position. You're down 20k today, maybe you'll just watch it until it goes up more because it's a fluke, now you haven't slept.

It takes a toll being under that much stress for so long. I get up pretty early, but I still go home to take a nap every day after work just because I'm exhausted from adrenaline.

Your marketing degree doesn't help you in this field at all. My boss even gives me shit sometimes because I studied econ and that's useless too.

If you can get your foot in the door somewhere though, that's all you need.

Yeah, working on it.

There are programs out there that alert you when big bulk order are put through, I find this is pretty useful. Maybe you could do this, but I think it would have to be more indirectly than you think.

The most fascinating thing that's happened to be in this job was around this time last year before the first opec cut went in and oil was trading at 46.3 and I was like holy fuck this just shot up half a dollar in a second and I saw 40 billion in buy orders go in within five minutes.

The industry standard of price target to risk reward is 3:1 so I took my price target of 55, assumed a $9 target profit per contract, assumed then they would be willing to take a $3 loss and a few days later saw whoever those people were about to get stopped out at 43.3 and lo and behold Iran and other countries had their ministers announce through reuters and bloomberg on twitter that the deal would definitely go through.

I literally saw a country back up a trade on twitter.

Nov 14 last year, if you had access to the 1 minute chart you can see where the algos picked up the news. Looks like it got slightly past their stop, same idea

>a lot of the programming guys around here are pretty much positive are inflating the price of their coins.

What are the prevailing theories on tether? money laundering? wash trading? just old fashioned money printing?

Pls chart it out. I'm interested in your analysis, however gay and ignorant it may be.

Lel just imagine how that must feel. Without that defect he would have the perfect body.

i was thinking more like analysing huge options on stocks that usually dont have big volume, with a very unusual buy shortly before its expiry. saw a couple of those this year where they went 10-20x overnight, mostly in pharmas and tech

What happens on charts is an expression of what goes on in order flow.

Support and Resistance arise out of big orders preventing price movement in a certain direction.

Breakouts occur due to a large order/bundle of orders being filled/removed, allowing price to rapidly move in a certain direction.

Trends occur because orders are being filled/removed over a longer period of time.

Technical analysis can be used as a way diagramitically understand what's taking place, which can allow for decision making such as where to enter/exit trades, and how to manage risk.

Any analysis that is used for "prediction", whether that's FA/TA, cannot and will not always work, which is why risk must be managed.

well its a chicken and egg kind of shit isnt it? price is affected because of those arb opportunities that arise with contango/backwardation

Ayyo hol up that's far from perfect. Waist is too wide, delts underdeveloped. I mean I'm not sayin I'm perfect but I think my genetics hold a better frame.

THIS is perfection...

99% of girls would still fuck him after seeing that

Yes both are equally impacted by each other.
It's like if you have one big market, because you have always some people to do instant arbitrage.
And also the market makers who are selling and buying the future are usually instantly hedging with the underlying (bitcoin in this case).

So if a huge load of bitcoin futures at sold it will definitely make the bitcoin price drop.

>tfw he realizes btc is bearish

My family has a trust fund for me and the family so I have no need to save/invest for myself-- it's like 2 million for me atm. They ask me for advice though.

Yeah at my firm you get to use some amount of their capital and the longer you're there or the more you make the bigger % of the profit you get and the more you can trade with.

haha sorry I guess once you've been staring at charts for years your responses to things are a lot different. try to chart out to see if there are any bat/butterfly patterns, or an elliot wave, head and shoulders or something. If you find a pattern that matches it will make a random system seem logical and you won't be as stressed.

In terms of bitcoin, I saw last week there was a 20% down day, but it closed more than 50% off the low. Maybe if you see a 20% down day and it closes near the bottom it's something to be scared of? Trading mid candle is not a great idea if you're new

A million is pretty average? Get 200k assume 5x leverage break it into 2-3 bits to buy in as it goes down. A million dollar block order feels pretty cozy when you see a billion in buys at the same price in a block.

I thought about getting a benchmark, but I've been stabbed before and honestly I'd really rather not get into a full knife fight because nobody comes out of those as the winner. Chicago is pretty safe where I am, but there's always crazies on drugs.

It's all cash settled from what I heard, so no bitcoin involved. Could be wrong.

Will attempt technical analysis on parabolic function now- fuck.

Hey OP what books would you recommend to get a basic understanding of reading charts. I'm talking about real bare bones basic beginner stuff.

>It's all cash settled from what I heard, so no bitcoin involved

The settlement method has little impact. It's all a matter of risk.

Market makers needs to be delta hedged when buying a future, the most obvious way to do it is by selling a bitcoin.

How to displace and replace the kikes with crypto?

Price might also get affected indirectly if futures are heavily used for their intended purpose (minor point, as I don't believe it will move price in a meaningful way). For example miners hedging out their risk by settling for the future rather than the underlying. Or miners offsetting risk to speculators. Might lead to price impact purely on psychological grounds too.

mrao.cam.ac.uk/~mph/Technical_Analysis.pdf

is one.

That's true, I just don't understand why a lot of people would want to buy the futures at all.

jeff pls go

> That's true, I just don't understand why a lot of people would want to buy the futures at all.
hedging as usual

How much do you earn? How much do you see your salary reaching in 10 years? Also, age?

This

Most firms aren't trading leveraged, but some do.
>break it into 2-3 bits to buy in as it goes down
But no professional trading firms' risk managers will allow that much risk concentrated into one like this and this quoted text makes it sound like you concentrating up to 30% of your total risk exposure into one.

>feels pretty cozy when you see a billion in buys at the same price
Yeah I used to be into that too but starting to realize that seeing someone refreshing the bid or offer and repeatedly lifting the offer, the offer being absorbed, etc etc, isn't really ultimately whats driving things. That could be a spread trader executing one leg of their spread and has nothing to do with what you're looking at.

After reading this post glad to see someone else here who knows what's up.

are you autistic?

Sorry for using TV, I'm doing this AMA on my macbook, which I don't have any trading software on so I'm not tempted to check on things.

Really the only thing I could think of drawing out given the parabolic rate.

Elliot wave patterns like this have variable rates of retrace, if I knew more about the underlying I would be better able to decide what those degrees might be... so it goes.

20,000 is a big resistance, perhaps entry could be 50 day moving average which is the top of wave one, a support (17k).

A lot of you are asking me if it can hit 25k, so you're all at least somewhat aware of the concept of a trading range. For example, it breaks 1k, then maybe it hits 10k? breaks 10k, maybe hits 20k?

Thought it was convenient that the next wave is 25k retrace to 22k, final target 28k, seems weird arbitrary to me as a trader, but whatever. If this were oil I would hope to see final target as something like $65 which is a level frequently mentioned in the news.

I didn't measure super precisely, could be off a bit.

This chart also implies to not get caught in the bull trap just above 25k, firms frequently send prices just above major supports so they can cause a short squeeze to give them enough shares to sell their position without losing too much in slippage.