Best Thread Arabian's *serious* Thread

[arabianights]

Timsk has informed me he will kill my girlfriend and my mother if I do not start this thread! We negotiated further and he will now kill my girlfriend and spare my mother if I do start this thread.

Anyway, to begin with the initial posts are lifted from another thread, and they refer to one specific trade. I intend, and I cannot say over what time period, to include a few rather different trades... and add a bit of colour, as well. As I write this I am about to make the transition from office most of the time (I have been able to trade remotely for quite some time, but it's not a great setup so I am mostly an office trader, certainly so on busy days - I mostly use the setup at night to close out the day's positions) to a full time home trader (although I shall be trading for the same company - this is a relocation, nothing more, and it's 95% driven by the two extremes of my night owl nature and the ridiculous times I need to wake up at the moment for a 7am market open at work) so no doubt I shall have some thoughts to express in that direction too.

And something else will come up. It always does

Anyhow, thanks to Jon for sorting this thread out, and let's see what happens!

Edit: I also encourage absolutely any questions you have! If I don't want to answer, then I won't!

 

[arabianights]

Re: 101 ways to kill a cat

Here is a very easy trade I did yesterday:

Someone sold 11 000 lots of March 12 Short Sterling at 14. That's a very large trade for a sterling outright. Because I know the evil algos that run that market teh majority of the time "think", I knew they'd dump a little bit at 13 (they did) and then manipulate it up to 14 to see if they can a) get the market moving up and if not b) at least dump a bit of their inventory to idiots, before then assuming the big trader is right and trading in his direction.

Now a) isn't going to happen because the market is coming off for a host of reasons (ECB tomorrow (i.e. today) being a major part of it so no one wants to be long fixed income (for what we can now see is very good reason) as well as sterling PMI plus a general downward trend) so I instead take the opportunity to sell 14s... in my role as an individual liquidity denier*

Of course very shortly afterwards we're trading 12 and I'm out there, as algo (and others who are longer than they want to be) gets out.

Now a slight digression... you may wonder why if people have a problem being long there, why on earth were they on the bid? Well there's two major reasons. Firstly that level caused a lot of calendar spreads to trade as well, as I believe it was actually 15 before hand and someone just went to market with a load of size, so they bought in other months two. Secondly, many traders and almost all algorithms put more on the bid than they actually "want", as the market are usually pretty slow and 15s would trade again before the 14s would trade out... so by bidding for too much (the fill algorithm is not quite pro rata but for simplicity let's call it that) they can buy what they want if 14s partially trade, then pull the order.

Is that my only, or even my main strategy? No. I trade order flow and news. But that's an example of how to trade using order flow, backed up with a knowledge born of experience about how the market behaves.

*My little joke... officially locals on liffe are "individual liquidity providers"

 

[amit1986]

Re: 101 ways to kill a cat

in my role as an individual liquidity denier*

 

[timsk]

Re: 101 ways to kill a cat

...and it was worth the wait Just goes to show that the king of lulz is quite a sharp operator after all.

We all know that he is, which makes the excessive lulz to quality post ratio all the harder to stomach.
that's for you Dave!
Tim.

 

[barjon]

Re: 101 ways to kill a cat

Arabian,

Like most pro traders I know - not a chart in sight. So, for us lesser mortals, do you think it was possible to identify this action from the chart?

Cheers

Jon

Here is a very easy trade I did yesterday:

Someone sold 11 000 lots of March 12 Short Sterling at 14. That's a very large trade for a sterling outright. Because I know the evil algos that run that market teh majority of the time "think", I knew they'd dump a little bit at 13 (they did) and then manipulate it up to 14 to see if they can a) get the market moving up and if not b) at least dump a bit of their inventory to idiots, before then assuming the big trader is right and trading in his direction.

Now a) isn't going to happen because the market is coming off for a host of reasons (ECB tomorrow (i.e. today) being a major part of it so no one wants to be long fixed income (for what we can now see is very good reason) as well as sterling PMI plus a general downward trend) so I instead take the opportunity to sell 14s... in my role as an individual liquidity denier*

Of course very shortly afterwards we're trading 12 and I'm out there, as algo (and others who are longer than they want to be) gets out.

Now a slight digression... you may wonder why if people have a problem being long there, why on earth were they on the bid? Well there's two major reasons. Firstly that level caused a lot of calendar spreads to trade as well, as I believe it was actually 15 before hand and someone just went to market with a load of size, so they bought in other months two. Secondly, many traders and almost all algorithms put more on the bid than they actually "want", as the market are usually pretty slow and 15s would trade again before the 14s would trade out... so by bidding for too much (the fill algorithm is not quite pro rata but for simplicity let's call it that) they can buy what they want if 14s partially trade, then pull the order.

Is that my only, or even my main strategy? No. I trade order flow and news. But that's an example of how to trade using order flow, backed up with a knowledge born of experience about how the market behaves.

*My little joke... officially locals on liffe are "individual liquidity providers"

 

[arabianights]

Re: 101 ways to kill a cat

A tick chart possibly, but otherwise no

But then you wouldn't be trading like that unless you were plugged in to the market anyway... it's not something where you could call up a broker or whatever.

 

[arabianights]

Re: 101 ways to kill a cat

In fact here's a tick chart of that afternoon in that particular short sterling month.

You can see the big trade but you would have to watching an awful lot of contracts... I use a different approach I will try to illustrate next week (I suppose I watch about 40 contracts) once I'm working at home and won't have people wondering wtf I'm doing when doing screenshots etc

 

[kimo'sabby]

Re: 101 ways to kill a cat

In fact here's a tick chart of that afternoon in that particular short sterling month.

You can see the big trade but you would have to watching an awful lot of contracts... I use a different approach I will try to illustrate next week (I suppose I watch about 40 contracts) once I'm working at home and won't have people wondering wtf I'm doing when doing screenshots etc

Good post my man. Dave, what's the tick size on SS.

 

[arabianights]

Re: 101 ways to kill a cat

1 lot is £500k notional and a tick is £12.50. So the eleven thousand lot guy was doing £137 500 per tick.

(those who complain, "but there's ten thousand ticks from 100 to 0 and that's only £125k!" are invited to learn how STIRs work )

 

[kimo'sabby]

Re: 101 ways to kill a cat

1 lot is £500k notional and a tick is £12.50

Sorry mate, minimum price increments.

 

[arabianights]

Re: 101 ways to kill a cat

Sorry mate, minimum price increments.

what it looks like from the chart, i.e. 0.01 per cent

 

[arabianights]

Re: 101 ways to kill a cat

I'm considering, after the emotional blackmail by timsk (lulz), starting a serious thread... anyone interested?

 

[kimo'sabby]

Re: 101 ways to kill a cat

what it looks like from the chart, i.e. 0.01 per cent

Cheers mate. You don't pay a spread do you? How many spins do you do a day?

(sorry for being intrusive, pm me if you want)

 

[arabianights]

Re: 101 ways to kill a cat

Depends to both questions! I will rarely pay a spread... depends how urgently I want in or out.

Spins depends. Most I've done in a day is about 10k... least is.. er... 0. Or if we ignore 0, 1

 

[kimo'sabby]

Re: 101 ways to kill a cat

Depends to both questions! I will rarely pay a spread... depends how urgently I want in or out.

Spins depends. Most I've done in a day is about 10k... least is.. er... 0. Or if we ignore 0, 1

You f*ckin rinse that market, dontcha? Very nice matey!

 

[arabianights]

Re: 101 ways to kill a cat

No not really. I know some people who do though

10k cars a huge amount for me. The person who trained me averaged that a day last month.

 

[kimo'sabby]

Re: 101 ways to kill a cat

No not really. I know some people who do though

10k cars a huge amount for me. The person who trained me averaged that a day last month.

Modesty will get you nowhere with me lover.

 

[Black Swan]

Re: 101 ways to kill a cat

Here is a very easy trade I did yesterday:

Someone sold 11 000 lots of March 12 Short Sterling at 14. That's a very large trade for a sterling outright. Because I know the evil algos that run that market teh majority of the time "think", I knew they'd dump a little bit at 13 (they did) and then manipulate it up to 14 to see if they can a) get the market moving up and if not b) at least dump a bit of their inventory to idiots, before then assuming the big trader is right and trading in his direction.

Now a) isn't going to happen because the market is coming off for a host of reasons (ECB tomorrow (i.e. today) being a major part of it so no one wants to be long fixed income (for what we can now see is very good reason) as well as sterling PMI plus a general downward trend) so I instead take the opportunity to sell 14s... in my role as an individual liquidity denier*

Of course very shortly afterwards we're trading 12 and I'm out there, as algo (and others who are longer than they want to be) gets out.

Now a slight digression... you may wonder why if people have a problem being long there, why on earth were they on the bid? Well there's two major reasons. Firstly that level caused a lot of calendar spreads to trade as well, as I believe it was actually 15 before hand and someone just went to market with a load of size, so they bought in other months two. Secondly, many traders and almost all algorithms put more on the bid than they actually "want", as the market are usually pretty slow and 15s would trade again before the 14s would trade out... so by bidding for too much (the fill algorithm is not quite pro rata but for simplicity let's call it that) they can buy what they want if 14s partially trade, then pull the order.

Is that my only, or even my main strategy? No. I trade order flow and news. But that's an example of how to trade using order flow, backed up with a knowledge born of experience about how the market behaves.

*My little joke... officially locals on liffe are "individual liquidity providers"

Enjoyed reading that...

 

[Martinghoul]

I await with bated breath the wonders that are surely forthcoming here.

 

[arabianights]

I await with bated breath the wonders that are surely forthcoming here.

They're being moved ya cynic!