Barjon's Money Machine

[Martinghoul]

If you wanna see a very brief summary of how this is done in the industry (at least they describe some of the techniques involved), this is decent, if very skimpy:
http://www.futuresindustry.org/downloads/Audio/Companion/Three-812.pdf

 

[ChocolateDigestive]

If you wanna see a very brief summary of how this is done in the industry (at least they describe some of the techniques involved), this is decent, if very skimpy:
http://www.futuresindustry.org/downloads/Audio/Companion/Three-812.pdf

thanks martinghoul much appreciated sir. some would have us believe futures spread trading cannot be made to work lolololol. funny i was chatting to an aquaintence at IB prop oil desk, i asked if he traded outrights and he openly laughed. lololol nothing wrong with a single instrument mind like anything plenty of ways to skin a cat.

 

[Martinghoul]

thanks martinghoul much appreciated sir. some would have us believe futures spread trading cannot be made to work lolololol. funny i was chatting to an aquaintence at IB prop oil desk, i asked if he traded outrights and he openly laughed. lololol nothing wrong with a single instrument mind like anything plenty of ways to skin a cat.

Indeed... Lots of way to trade. None are easy money/free lunch.

 

[DionysusToast]

thanks martinghoul much appreciated sir. some would have us believe futures spread trading cannot be made to work lolololol. funny i was chatting to an aquaintence at IB prop oil desk, i asked if he traded outrights and he openly laughed. lololol nothing wrong with a single instrument mind like anything plenty of ways to skin a cat.

No-one has said it wont work.

What has been pointed out many times is:

Jon has no plan for when to stay out of trades.
Jon has no idea what sort of events could make a trade go against him, rather he thinks they don't exist because they didn't already occur.
Jon does not understand the impact of currency in these trades or rather that he is expecting his SB to carry the currency risk.
Jon has no mechanism to get out of a trade that goes against him when he is away from the screen.
Jon thinks that if something didn't happen in 40 years, it will never happen.

In short, Jon is focused on the upside.

Apart from that, it's fine and dandy...

 

[DionysusToast]

Yesterday 19/7/12 Difference was 7227
17/04/12 - 7287 - Looking good so far but not much risk OR reward , just spreads and commissions
20/07/10 - 5090 this is over 2000 points difference from the difference!!!! and in only 2 years with no major events on these dates.
.

Jon - out of interest - how do you account for this?

It seems you are saying the correlation never changed...

 

[DionysusToast]

OK - pop quiz.

How many stocks in the DOW 30?????

OK - that was easy enough....

What would happen if one of Merks drugs were found to be causing death in the users and it looked like they would get hit with a suit large enough to sink them?

Would it do anything to the DOW at all?
Would it do anything to the FTSE?

Would it be wise to not enter a trade when the spread widened after the above occurred?

 

[Martinghoul]

All true... But you know what they say? You gotta put your **** in the custard...

 

[Lee Shepherd]

Once again many people want to believe this is the holy grail. It's no different from any other method of trading apart from paying two lots of commissions.

Even the title of the thread gets em all in - Barjon's Money Machine - And Barjon himself would know this attracts many, look how popular the thread is.

If I launched a thread called 1000% in minutes I would expect the same responses. The bright ones, the traders and the ones who figure it out for themselves know straight away where the obvious flaws lie and move on to something more substantial or look to keep it simple. The hopeful ones, the losers, the wannabe's and the noobies all believe it must work because someone said it does and work on it till they curve fit it then lose money and disappear.

If that doesn't call for lulz I dont know what does.

Going back through the years we can all see it's changed dramatically, the information is available to all of us, just by picking dates at random I can see so much change.

Here's some more dates:

20/07/11 Dow closed at 12571 and ftse at 5853 making a difference of 6718
Just a couple of months before:
01/06/11 Dow closed at 12290 and ftse at 5928 making a difference of 6362

That's an extreme of 356 pts in less than two months. I've already pointed out over 2,000 pts in two years, where does this end - I know, when someones broke.

come on people, help me out here. If I am missing something and this really does work because "THE MARKETS ARE CORRELATED" then please show me some evidence at least. Not just some "its moved 30pts so that's extreme I'm gonna trade it"

Where's the stops at, what's the target prices on either of the markets. Where are they actually correlated and by how much. It looks good over the last couple of months but that's about it. Typically this means it will throw you out and make you puke as soon as you get comfortable with it. This is simply curve fitting.

No doubt this post will make some peoples blood boil but then all I would say to that is welcome to reality, that's if I can be bothered to post back, to which I probably wouldn't waste my time doing, I've got better things to work on.

 

[ChocolateDigestive]

OK - pop quiz.

How many stocks in the DOW 30?????

OK - that was easy enough....

What would happen if one of Merks drugs were found to be causing death in the users and it looked like they would get hit with a suit large enough to sink them?

Would it do anything to the DOW at all?
Would it do anything to the FTSE?

Would it be wise to not enter a trade when the spread widened after the above occurred?

Toasty

It may fit with some trading strategies to enter there yes, others may choose not to enter on specific events. It all depends how you are playing it and what you strategy is. Some players will actively be looking for events which take the spread outside its norm then play the return to norm.

This was evidenced to me by said pro futures spread trader who actively looks for opportunities when events such as this knock the spread out of whack.

I think you miss the point that most people in the index futures spread space rely on solid mathematics of the mean reverting structure. Couple that with solid risk management taking controlled losses. They are less concerned with these events that can and do happen they just rely on the statistical relationship between the price data.

Say above said event occurs and the spread gets whacked then starts accelerating back toward the mean, this could be a good opportunity for a high prob trade.

This is a simple play on recency bias where humans tend to mentally overweight the most recent event and less the longer term relationship between 2 spread legs.

The irony is a lot of pro's are making money from your line of thinking here.

 

[Soloquan]

Once again many people want to believe this is the holy grail. It's no different from any other method of trading apart from paying two lots of commissions.

Even the title of the thread gets em all in - Barjon's Money Machine - And Barjon himself would know this attracts many, look how popular the thread is.

If I launched a thread called 1000% in minutes I would expect the same responses. The bright ones, the traders and the ones who figure it out for themselves know straight away where the obvious flaws lie and move on to something more substantial or look to keep it simple. The hopeful ones, the losers, the wannabe's and the noobies all believe it must work because someone said it does and work on it till they curve fit it then lose money and disappear.

If that doesn't call for lulz I dont know what does.

Going back through the years we can all see it's changed dramatically, the information is available to all of us, just by picking dates at random I can see so much change.

Here's some more dates:

20/07/11 Dow closed at 12571 and ftse at 5853 making a difference of 6718
Just a couple of months before:
01/06/11 Dow closed at 12290 and ftse at 5928 making a difference of 6362

That's an extreme of 356 pts in less than two months. I've already pointed out over 2,000 pts in two years, where does this end - I know, when someones broke.

come on people, help me out here. If I am missing something and this really does work because "THE MARKETS ARE CORRELATED" then please show me some evidence at least. Not just some "its moved 30pts so that's extreme I'm gonna trade it"

Where's the stops at, what's the target prices on either of the markets. Where are they actually correlated and by how much. It looks good over the last couple of months but that's about it. Typically this means it will throw you out and make you puke as soon as you get comfortable with it. This is simply curve fitting.

No doubt this post will make some peoples blood boil but then all I would say to that is welcome to reality, that's if I can be bothered to post back, to which I probably wouldn't waste my time doing, I've got better things to work on.

Lee the title of this thread was for 'lulz' and not meant to be taken seriously.

Secondly who thinks this is the holy grail?

Thirdly there are about 5 posters to this thread, all of which I highly respect as traders are knowledgeable and know what they're doing (I'm certainly not putting myself in this bracket by the way)

You said the bright ones see the flaws, there are flaws in EVERY strategy out there. There are RISKS in everything you do.

Move on to something 'more substantial'? For instance? Help me out here if this is such a flawed strategy or way of trading why are so many traders using it?

I've read a few of your posts now and you always seem to point the flaws to everybody yet never come up with solutions.

 

[scose-no-doubt]

Jon - out of interest - how do you account for this?

It seems you are saying the correlation never changed...

It's the correlation and deviation in regards to returns that's important not the index value. The spread will obviously diverge and converge as absolute values get higher and lower respectively.

 

[ChocolateDigestive]

meanwhile down on the farm...... the barjonny spread traded in a nice range London session, will the NY open el busto the range. weekly trend on the barjony spread is up. I wonder if Barjonny will put a big position on prior to nodding off, only to be woken by an angry phone call from the bucketshop....... then he woke up and it was all a nightmare lolololol

 

[Lee Shepherd]

Lee the title of this thread was for 'lulz' and not meant to be taken seriously.

Secondly who thinks this is the holy grail?

Thirdly there are about 5 posters to this thread, all of which I highly respect as traders are knowledgeable and know what they're doing (I'm certainly not putting myself in this bracket by the way)

You said the bright ones see the flaws, there are flaws in EVERY strategy out there. There are RISKS in everything you do.

Move on to something 'more substantial'? For instance? Help me out here if this is such a flawed strategy or way of trading why are so many traders using it?

I've read a few of your posts now and you always seem to point the flaws to everybody yet never come up with solutions.

Hi Soloquan,

Just because theres loads using it doesn't mean its good, I know of prostitutes that get used a lot but doesn't mean they are good for dating.

The main issue with this is the way it was launched, although for lulz, yes I agree. But so many (and I think I can include you with this) think this is a good strat, its one of many thousands but certainly not that great, here is why.

No Protection against direction

No idea of direction - Check this one out before replying. The fundamental reason for this is as Toastie has highlighted above. This is what makes it 'the gamble' for direction. You have to know what is happening to all the 100 ftse stocks and the 30 dow stocks as well as the two country's micro and macro economic structure. This is what throws it out. There's just too much research to do when there's so many other strats that are simpler.

There is no 'Mean'. What is this? A mean reversion is something that, for example, lies at 50 when the figure can go to 100 or zero. The mean becomes 50. With this strat the mean is in the thousands but not confirmed. Its too far out.

There is No pattern

and finally Paying two lots of spreads/commissions

The ultimate Question is can I make money from it.....The answer is yes.

The other question is can I make money from going to the casino.....Again the answer is Yes.

 

[ChocolateDigestive]

I know of prostitutes that get used a lot but doesn't mean they are good for dating.

I am not sure I follow your logic on this lol. most people dont go to a prostitute for a date they go for something else

 

[Lee Shepherd]

I am not sure I follow your logic on this lol. most people dont go to a prostitute for a date they go for something else

No silly billy, I meant dating a prostitute, not paying to f**k her....or him. What ever ones preference.

 

[NVP]

hey gang

CV called him out and Bj posted a stategy......no one said it was going to be perfect .....

Bj - this is interesting stuff and linked to market correlation that I play with a lot on Forex

I had never got (yet) to the wonderous world of Equity indexes - but yes....looking at the opportunities I assumed there was plenty in there to try out and research

I always had a few rough notes down regarding which Equity markets to correlate and I had always assumed that western markets were fairly well correlated re direction ....although I assumed the strength of moves was always going to be more correlated to the weighting of the sectors in each Index ....plus a little country based action ..(assuming a lot of blue chips are global earners)

anyway good stuff and I will have a play .........

have you ever looked at the guys over at FF ( Dreamliner, Hanover, Steve hopgood (hopwood?)..............they all got into bed basket trading forex and again for me one of the potential weaknesses was indeed no stop losses could be fitted (without some extreme programming)

i'm not sure if they got around to playing an index/equities version but i'm sure they must have taken a look ...not sure

anyway .....thanks for posting !
N

 

[NVP]

I am not sure I follow your logic on this lol. most people dont go to a prostitute for a date they go for something else

beat me to it !.....hahahaha

 

[brewski1984]

This exact strategy was the first thing I tried to do when I started out and I suspect a lot of people try to do the same thing. A very simple idea but personally I couldn't sit there and watch one position go into a decent profit while the other one negated it even though that's part of the strategy and not where you make the profit from. In the end I figured I would be better off just taking one trade. Just my personal opinion though.

I think the fact that Barjon only utilises it on spread betting play accounts says quite a lot though really.

 

[Martinghoul]

Like pretty much everything in life, this strategy can work if you do it right and can kill you if you do it wrong. To do it right requires a lot of painstaking analysis and attention to detail. That's all there is to it.

 

[R.Charnock]

I am not sure I follow your logic on this lol. most people dont go to a prostitute for a date they go for something else

Think of it as a date, but with very little chance of ego-crushing rejection.