Training at Arcade

Does anyone care to enlighten us on the training techniques used at prop shops and trading arcades? I think this would be a valuable comparison to stuff found in most technical analysis books. Or maybe the usual stuff IS used.

I only went to one interview, but never took the position. There they were focussed on using Market Profile. I have studied it ever since.

Regards,

Tubbs

Most arcade traders that I've meet are focused on scalping short term interest rate futures (e.g. EURIBOR) using low risk and high trade volume spread strategies such as boxes and calendar spreads.

It's widely believed that the high turnover techniques are used to ensure that the arcarde maximises the commissions they charge. However, a lot of directional volatility is stripped out using these spread combinations making it easier to trade.

What exactly do you mean by Box Spread? Is it an options play, as described here (Box Spread), or something purely involving futures?

http://www.trade2win.com/boards/spre...x-spreads.html

Tubbs,
market profile is commonly used when traders are trading the outrights directionally, or inter-market spreads such as bund/bobl, it formed a core part of the training programme at Refco/Marex and I believe Mind over Markets was the MP handbook used at the time.

Calendars is much more about maths and basically working the spreads against other spreads to get onto advantageous prices - direction becomes much less important.

The term 'box-spread' caused me some confusion since it appears to relate to different strategies depending on whether they are used in the futures or the options markets. (Hence the thread given by 'black-star' in a previous post).

Gentlemen, thank you for your replies. So the next question is - do neutral direction stratagies offer more potential over the long run?

In my view:

- neutral direction strategies are easier to learn, but less scalable (that's not to say you can't pull a good six figure income out of them)
- due to transaction and spread costs they are more suitable for professionals with software and DMA.

A lot of the edge comes from speed of execution. So it's hard to say whether or not there's more potential over the long run.