SpreadProfessorInterest Rates, Equity Index, Equity Pairs, Energy, Metals, Softs, Cash and Futures Forex, OTC - Shares, Cash, Futures, Options, and Swaps     |
|
January, 2020 Email from a new Client for the "Light" contract package: "I received the materials today and I have to say, this is quite impressive content. It's an enormous amount of files, too."
December, 2017 Email from a Client who started paper trading the system in October of 2017. Keep in mind that at the time of this email this client is very green and the paper trading performance metrics almost always improve substantially over time. From WBB: "I've been reviewing all my winning trades and all the losing trades. The result, particularly with the losing trades, is kind of funny and encouraging... Looking through the losing trades... very few regrets. Yes, in a couple instances my stop was just a hair too tight. I'll fix that going forward. The vast majority of the losses were 'signal flips', meaning the hit to the bottom line was small. My average loser was only -$562 while the average winner was +$1,237. I'd like to get the win/loss ratio up into the low 60's from the mid-50's. That ratio is currently only 54%. But it's tough to have a lot of regrets with a P & L that shapes up like this. With 26 closed out trades, the net is +$11,887." (Note: three months on a simulated $50K account) "Plus, I have 5 paper trades still open and all 5 of them are in the black."
My preference for clients is a price-based mechanical entry system (three confirming functions) with a rules-based position management procedure established at time of trade entry. There are literally thousands of inter and intra market spread combinations that can be modeled, so there are plenty of opportunities. Furthermore, the overnight margin costs for spread positions are amongst the cheapest futures leverage available through the use of SPAN margin credits. I recommend that clients swing trade spreads and use the exchange-supported spreads whenever available for safety and slippage considerations.
Trade holding timeframes are entirely dependent upon the specific
spread's OTR average trading range and volatility. For example, you might hold
on to a Eurodollar butterfly spread for four months ( moves about 2 tics a
day ), and for an RBOB vs CL spread or a Gold vs Silver spread ( both very
high vol spreads ) your holding timeframe might be a couple days.
Personally, my preference is to lever less volatile spreads - but each
client has his own risk tolerance profile. We are modeling markets using
longer timeframes and we are swing trading. This is not designed to be a
high speed day trading endeavor. Spreads are cheap to margin overnight and carry - and the idea is to not enrich your broker and the exchange. I encourage my clients NOT to day trade. It is not unusual for a client to hold several
different spread positions working in several different markets
simultaneously - in fact, that's the idea if the trades present themselves.
We model hundreds if not thousands ( depends on the motivation of the client ) of different spread combinations in just about every electronic market available. I stress to my clients to be selective and to use that large pool of trading
opportunities to good advantage. Forcing trades is never a good idea, and
often-times that can't be helped if you are day trading or scalping a
singular market.
When we enter a trade, we set the profit target and the stop-loss level,
and it would be a good generalization to say that at that point in time the Risk/Reward is typically 1:1. Never worse, sometimes much better. But usually 1:1. The important caveat here, however, is that as the trade unfolds over time and works in the market, we find that for a significant percentage of our losses our indicator package takes us out of losers before the stop-loss level originally set at trade entry is reached. In other words, if the original conditions for taking the trade are no longer valid - you're out even if you have not hit the stop trigger.
Each client tracks his performance metrics, including drawdowns, during
the paper trading and peer review process ( weekly group webinars ) of the
training. Additionally, I encourage clients to schedule individual webinars with me in order to review their paper trading performance and ways to improve their trade selections.
Spread combination construction and the selection of products and expiries is a really big deal - I would rate it as more important than the indicator package in terms of good trade selection. I spend about 50% of my time during client webinars reviewing the different aspects of spread combination construction.
When you contract with me, you are buying my IP for your personal use
only. The terms and conditions and security of that IP is clearly spelled
out in the contract. In addition to providing the programmed .efs files for
eSignal, I provide the coding for the indicator package so that you can
adapt it to a number of charting packages that can chart synthetic and
exchange-supported spread expressions. I have several clients who have
adapted the indicator package to CQG ( easy ) and to Bloomberg ( harder, but
doable ). You've purchased the indicator package for your own use with the
fee, and there are no additional costs to use it.
Finally, over the course of several years from my observations I find a direct correlation between the effort and time the client takes during the spread construction and paper trading phase of the program to have a strong correlation to his relative success using the strategy for himself in the live markets.
If someone hires a mentor or educator and just expects to be gifted with an ATM with very little effort on his part - then again that person will never succeed. If that sounds like you, please don't waste your money and my time. The secret is that there is no secret. No holy grail. Every successful trader works his ass off at it. And if someone requires certainty - go get a government job because trading is definitely not your line of work. Absolutely no one can predict what markets are going to do in the future. But some trading systems are much better than others, and one of the key mistakes I see from clients during our initial time together is that in their previous trading endeavors they spent all of their time concocting a magical trade entry, but position management is a case-by-case afterthought.
Over the past few years in particular, we have accumulated a number of both individual and group webinar recordings where we review live and paper trade set-ups, clients review their performance metrics, and we construct spread combinations and talk about many topics like correlation analysis and execution. I also record special instructional webinars on a solo basis where I present specific topics, concepts and materials.
So, there is a much larger body of work that the new client receives in terms of background materials and instruction than there was just a couple years ago.
As of January 2018, it typically takes a new client anywhere from 2 to 4 weeks just to initially review the new materials. At that point, the client will take the proprietary indicator package and the spread combination build-out spreadsheets ( typically using eSignal ) and will then proceed to construct his own chart modeling platform. After several weeks, a client might have several hundred spread combinations in all worldwide electronic futures markets. The client then begins a phase of paper or SIM trading under my review and tracks his performance metrics ( especially drawdowns and W/L ratios ).
Regarding the Advantage Futures Year-End Trading Statement Post further down in this website page; a posting from Baron Robertson, ET Founder and posted on the Elite Trader website:
"I received a response from a third party regarding the disputed statement so I am sharing it here. I'm not reopening this thread for further responses, but will continue to post opinions from emails sent to me by other third parties should they arrive.
Regarding my integrity and value for clients as posted on the Elite Trader website:
From Baron Robertson, ET Founder:
"For 17 years, this site has always been ultra-critical of education providers, and rightly so. From my experience, most of them simply don't have what it takes to back up their claims of past performance and potential profitability. But I said most, not all. Although he has taken tons of heat over the years from a variety of different angles, I think bone has repeatedly demonstrated a level head by answering questions, providing statements and references, and generally being one of the rare education providers who actually tries to work through the criticism first instead of just complaining about it to me immediately.
I would also like to state for the record that bone has been a sponsor here for many years. And in that time, I've never had a single client of his contact me with one negative comment about him or his services. So although everybody may have different opinions about aspects of his education business, I think he's a big asset here at ET and has established a solid track record, especially given the extreme scrutiny he's faced."
Client Comments posted on the Elite Trader website from 09/19/2014:
RockMachine:
At the risk of voiding my contract with Bone, I wanted to give an unbiased opinion of Spreadprofessor's service.
1. The price is high = yes. However, as stated Bone ONLY wants experienced traders. Well, experienced traders are MUCH harder to train because you have to un-train them first. New clients after a few weeks/months are encouraged to post their trade setups. Often, they show head and shoulder and archaic setups with multiple squiggly lines, etc. Myself, I had a nasty habit of placing tight stops, which every few months I revert to. Point is, Bone didn't teach this stuff.
2. The Guy really cares = Hell Yes! I'm on my 10th month of a 6month contract. Why? because I'm not ready.
But to be clear, I contribute and I want it!
3. The $500k trade issue = Don't know. Semantics wise, if I were to make x$ in say the "Crack spread" for 2013, I would phrase it " I made X$ trading the Crack Spread last year. "
4. Is this the Turtle Experiment = Kinda. Richard Dennis said that he could publish his strategy in print and MOST people would lose money. In fact his original group has some who prospered and others who crashed.
Weakest link is always the trader.
5. Overall, Bone's experience and knowledge of spread trading in 2014 is easily top 10,5,3 in the world. However, if you trade automated by ticks and turnover 100's of trades per day, then you will need to be un-trained, unless of course your infrastructure budget can compete with the big boys.
6. Finally, I have met and worked with a few people on ET, some were good, others would eat their children for $500..YOU KNOW who you are.. As for Bone, he's legit and cares and is very cautious as to working with the right people and especially before he lets you trade live.
Eudamonia:
As a current client I made my decision regarding Bone's services based on discussions with his references (former clients). Were they able to apply what Bone taught them and derive an edge? And the answer to that was yes - although it would require a lot of work on my part to learn the system (hence why it is a 6+ month contract).
Currently, after four months of simulated trading I'm sitting on a 70% win ratio with a 1:1 reward to risk. Several other traders have shown their results in our trading room of their own trading that is similar or in some cases better. After a few more months I will switch over to live and anticipate I'll see similar results in a live account (because I have accounted for commissions and slippage in my estimates).
I don't believe that my $7,500 has been anything but an excellent investment and highly recommend Bone's services.
R1234:
I signed up with spread professor last year. When I first signed up I must admit I was a bit concerned it might be a waste of money or maybe even a scam. But as I began adding his method to my existing methods I can say it does add value and I have more than made back my investment. His method is legit if used consistently and does carry an edge.
J-Law:
From a prospective client in Australia with his observation about the successful traders at his proprietary trading firm: "Reason I'm interested in spreads as I noticed the biggest earners and generally least stressed traders were the spreaders, and the secrets to this art form were very closely held."
Client feedback via email from March, 2014:
""I did however apply your methods in my live account for trading on NSE, India in last month and had 2 profitable spread trades on equities and indices and I could hold them for 2-3 weeks which I have found difficult with outright contracts."
"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."
New Client Emailed Initial Impressions on the Materials Received from the Consultant on Day One:
"It took me two weeks to watch the historical recorded webinars alone. Seriously. Two weeks."
"I started watching the webinars over the weekend, and downloaded the proprietary study indicators into eSignal. I am overwhelmed at the massive number of spread combinations"
" Holy Shit. It took me the entire weekend and half my hard drive to download all this stuff - where the hell do I start ?"
Now providing proprietary charting studies and indicator package to clients designed specifically for Spread Trading
Please Note: there is a rules set of specific conditions that is required to be met before a trade entry can be taken. The provided proprietary charting package is useless without proper adherence to the rules set. The rules set is explained in great detail with literally hundreds of actual market examples in the recorded webinars. The entire process of spread combination construction and modeling is also covered in the webinars. The trade selection and risk management process of setting profit targets, stop-loss levels, and entry price ranges is also covered in great detail in the webinars.
SpreadProfessor Live Market Training Progression
SpreadProfessor is acting as a training Consultant to the Client and is not making any offers or recommendations to buy or sell securities to, on behalf of, or for the Client. There is no legitimate way that SpreadProfessor can make any representations in terms of Client performance expectations. The client's capitalization bankroll is entirely dependent on the client - I have independent clients clearing IB with $20K and I have independent clients clearing New Edge which requires a minimum $3M initial account balance. I have European prop clients clearing Schneider and I have Australian prop clients with Silk Road clearing MF... I have CTAs and hedge fund clients; it's just all over the map. So, it isn’t easy recommending capitalization levels.
Time-to-Live Trade is also entirely dependent on the client. I still trade quite a bit personally, so I keep a controlled number of clients and I rotate them through the program at fixed intervals. They all start out training with me personally on a one-to-one basis with the modeling tools and the trading system procedures. For the first few training sessions the consultant introduces the client to the trading models, the spread position construction combinations, and helps the client set up his own personal trading station in order to run the models. Once a certain competency threshold is met the client starts paper trading with the consultant. During the paper trading process with me they are getting very consistent feedback from me with respect to the model trading signals, trade signal confirmation, the profit targets, and the stop/loss levels. At that stage in the training, I will also start to teach them how to construct their own spread combinations and make modeling adjustments.
Let me explain the term "paper trading" as it relates to me and my clients at least - as soon as they get a trading signal on their own personal trading stations at their office or home they provide me with a few model specifics, the market, the price level, and their profit and stop/loss levels via email. In that way I'm able to give them feedback, and the email notification gets tracked and trended by me. Once they close out the trade, they also notify me. So, in terms of the training and feedback process for the model and the trading system there is definite accountability and a progression to things. During the course of this "paper trading" phase, there is a great deal of email interaction between the client and consultant about trading signal validity, holding timeframes, and valid stop/loss and profit target levels for the trade.
Time-to-Live Trade can be somewhat abbreviated with experienced professional traders; for example, I took on a Chicago CTA as a client in late June of 2010, and he started trading live the first week in September of 2010.
For example, during August 2010, 3 clients who started in June 2010 had the following Win-Loss records paper trading with me:
DS: 39W, 11L, 9S
CL: 41W, 32L
MH: 16W, 7L, 1S
So, everything is pretty much client-dependent in terms of capitalization and to some extent Time-to-Live-Market trading time horizons. Generally speaking, I like to see my clients in the 58-65% Win-Loss ratio percentages in terms of their own paper or SIM trading before I would recommend to them that they're ready to open their own account and make their own choices about risking capital in the live marketplace.
Where's the Value In It?
Going It Alone: reflect upon your background, experience, capital and time resources. That evaluation needs to include trading losses, expenses and the time value component required for development. Failure is also a very real possibility. How likely is it that you can sift through the internet, various seminars, academia, or texts and mine worthwhile information? Make sure that your personal assessment is realistic.
Experienced Traders: what is a fresh trading revenue stream and exposure to new market spaces and techniques worth? Are you forcing trades in your existing market, and would some proven diversity ease the pressure. Portfolio managers are constantly searching for alpha, and legitimate diversity in tactics and markets is a career-bending enhancement for independent traders.
In an isolated and secretive profession stocked with exceptionally intelligent and competitive people, can a well-regarded and talented advisor working with you on a personal and interactive basis help you take it to the next level?
Why do most hedge funds and bank desks engage heavily in spread trading and relative-value market making, while independent traders and retail-oriented speculators seem to prefer directional flat price risk?
Several existing clients have proven that even quite modest, retail-oriented accounts (Interactive Brokers being a great example) and commission structures are perfectly adequate to trade properly refined relative-value spread trading strategies. High Frequency trading is not required - or even desired.
SpreadProfessor has 20 consecutive years as a trader and private trading consultant to qualified professionals, so save yourself alot of time, expense, and abuse by using my expertise to your benefit. Skeptical? Good - my clients were shocked and subsequently pleased that I am building a business doing what few (if any) others will. E-Mail me, tell me about your background and trading goals, then review my credentials and independently ask my clients questions for yourself before you make a committment.
Important Note: Consultant is not a Commodity Trading Advisor or Securities Broker, and is not making any offers or recommendations to buy or sell any securities. Consultant makes no market or securities risk advisements of any type. Consultant makes no revenue on hardware, software, commissions, brokerage, or any other hidden fees. Consultant makes no performance claims, express or implied. Client performs due diligence on the Consultant, and both parties enter into a contractual agreement for the performance of technical analysis consulting services on securities markets before technical education work begins. A key element for any prospective client's due diligence process is to get an independent evaluation from current clients regarding the consultant's fitness, integrity, technical knowledge, and value. An example of the provided technical studies by the Consultant to the Client includes statistical studies like time series analysis for time and sales data as provided by regulated trading exchanges and disseminated in the public domain.
The CFTC urges you to be skeptical when promoters of trading systems and advisory services claim that their products and services will earn high profits with minimal risks. The CFTC advises you to consider the following:
A number of my Clients are making money in these markets - just ask them for yourself! I teach pre-qualified professional traders a very detailed relative value correlation trading system. As part of the due diligence process, I ask each prospective client to contact some existing clients and inquire as to that client's personal experiences and opinions about their particular profit potential and value. I am happy to provide to potential clients, whom I pre-qualify, with former client contacts so that they can be independently contacted and queried about their experiences.
No subjective interpretation of chart patterns, wave counts, Gann lines or candlestick formations. My preference for clients is a price-based mechanical entry system (three confirming functions) with an established position management procedure.
Reports from Current Independent Trader Clients:
Feedback from JR on 03-03-11 re: his initial experiences live trading, and the possibility of balancing his job with trading:
I didn’t send but I had 3 trades last week that netted 1,600. I only traded one day though. My absolute monster to work through is time – getting to a consistent routine, reviewing markets to identify entries and then being able to handle entry intraday. It’s that crazy simple though just a bear to work through. I’m really thinking about ditching the job ~August and trading fulltime to alleviate this issue.
Feedback from MH on 03-07-11 re: his second week of live trading:
By the way - I'm hanging in there - had a great day on monday - +$1800 (I forget how many trades I had). Today and yesterday were slow. Had a couple of losers (small) and just couldn't get a feel for things, so I hung back. ($500) between the two days.
Feedback from MH on 03-02-2011 re: his first day of live trading:
... last week was my first full week trading the spreads - net P&L was a gain just under $1K. ... pretty damn good spreading one-lot futures!
Feedback from PA on 02-06-10:
Feedback from LW on 02-09-10:
... to that end your help has really made a difference in my existing trading. ... previously I only traded when all factors were favourable, which meant doing only 10-12 trades/month. Now I am doing 30-40 trades/month, as my research showed that my expectancy was almost the same when there was at least one factor/reason to do a trade rather than several. ... I have also largely dropped the mean reversion trades after learning that you only like to follow the trend. It makes sense and I have noticed less 'sphincter-clenching' moments of getting caught in a blow out spread wondering what the hell happened.
Feedback from AJM on 11-17-09:
its a big change from the algo stuff or scalping 10's that i've been doing for the last several years but much better than...(what I was doing)... i really am likeing the energy stuff and have been very consistent on everything i'm trading except ed cal spreads. The goal is the same level of consistency with much larger size. I plan on exploring some of the equity spreads in the next month with the goal of automating 15 to 20 pairs although i am quite happy trading futures.
Feedback from JP (a new client with his first consultation on 11-09-09) on 11-17-09:
Things are definitely better, especially since I have more trades to look at. I am still getting used to the (system)...Overall, I have made money with the trades, now I just need to get use to maximizing the (system).
Feedback from Jason on 11-16-09:
Please add my name to your referral lists for future clients.
Feedback from Angelo on 11-13-09:
Feedback from TH on 11-09-09:
Thanks for your thoughts today. Regarding position sizing...When I hit $10k risk per trade will re-assess, hopefully I can get to this level in under 6 months.
Feedback from Jason on 10-02-09:
Pete,
We may have found the cash machine with these ... spreads. Traded 1 lot to figure out how to use the cqg trader.... all winning trades. ... is smooothh. Dabbled in the energy (crack spread) for 4 ticks on 3 lot. I'm thinking 10 ticks might be a good target for this instruments; your thoughts?
Feedback from Alvin on 10-02-09:
Feedback from AM on 9-20-09:
I started trading intraday equity index spreads this week. I am using your model ... I backtested your system over 6 months for 10 different XXX spread combos... I tested the forecasting accuracy of ... As far as I'm concerned this is a huge edge, and highlights to me... the effectiveness of your model. This has been a revelation to me, previously I tried doing... trades - no wonder I couldn't get an edge! ...So in summary, very positive so far, and looking forward to getting more trades under my belt in the next few weeks. (redacted per the client's request)
Feedback from Luke, on 09-10-09:
G'day Pete,
Just thought I'd update you on progress. I've traded a few sessions using your system with 4 winners from 5 trades, so off to a good start.
Feedback from Paul, on 09-04-09:
1st trade: got chopped a bit after the #, but my size was 2 lots.
2nd trade: sold 5 lots ********** spread on the way down at 134.5, just covered at 132.0So up a little today. Yee ha!
Feedback from Tristan, on 09-04-09:
En Trading Consulting Services through S&P’s Vista Research Division:
10. SpreadProfessor does not execute trades for clients, does not recommend specific buys or sells, is not an introducing broker, and takes no commissions or subscription fees or haircuts of any kind from the client other than the initial consulting fee.
11. All clients are required to review, approve, and sign a four page consulting agreement contract. The contract addresses contract terms, intellectual property rights, defines the relationship between consultant and client, and details the risks the client is undertaking.
Terms and Conditions.
Consultant is acting as a training Consultant to the Client and is not making any offers or recommendations to buy or sell securities to, on behalf of, or for the Client. There is no legitimate way that SpreadProfessor can make any representations in terms of Client performance expectations. Client agrees to waive all legal recourse and legal rights against Consultant except as provided under Illinois Law. Clients fully and completely acknowledge that the buying and selling of any commodity, equity, stock, bond, or financial instrument results in the loss of that investment, and that the Consultant shall not to be held liable, responsible, or negligent in any way for the monetary, emotional injury, or any other injury resulting from any loss to the Client. The information the Consultant provides to the Client is deemed to be reliable, but is not guaranteed as to accuracy or completeness. Consultant recommends to Client that anyone trading financial markets should consult with a qualified financial advisor or professional investment counselor before doing so. All financial and securities markets are speculative, and contain a high degree of volatility and risk. Client agrees to maintain the confidentiality and security of the Consultant’s work. Client agrees not to reproduce, retransmit, sell, distribute, publish, broadcast, circulate or otherwise commercially exploit any information or content of the Consultant in any manner without the express written consent of the Consultant.
Past Performance is Not Indicative of Future Performance.
Historical, back-tested, hypothetical, and simulated performance results have inherent limitations. The Client acknowledges that past performance does not and should not be taken as an indication or guarantee of future performance, and no representation or warranty, expressed or implied is made regarding future performance. The Consultant is not responsible for losses or damages arising out of errors, omissions or changes in market factors. The Consultant’s work does not purport to contain all of the information that an interested party may desire and, in fact, provides only a limited view of the securities and financial markets. The Client agrees that he is a sophisticated investor capable of understanding the considerable complexity and assuming the high degree of financial risk involved in all financial and securities markets.
Consultant is Active in the Financial and Securities Markets.
Client agrees that the Consultant buys and sells securities and financial instruments in the same markets that the Client is active in. Client agrees to waive all claims regarding conflicts of interest with the Consultant.
