Confused

[benjamin]

I am very confused about arcades after reading peoples comments can I please have someone clear this up I would really like to know if I will be throwing my money away.I know of people who have done very well and others who have failed.I am 23 and have about £20,000 trading capital and enough money to cover costs for about a year.I would like to trade futures spreads in an arcade what are my chances of succeeding bearing in mind I believe have the right attitude and am really interested in trading and the futures markets and am willing to do what ever it takes to succeed.

If you go on a split with an arcade from the off do you still have to pay desk fees and all other costs and then share a profit with the arcade? what advantage does this offer over going 100% self funded where you do not have to share profits.

Can you make a good living from spread trading futures eg over 6 figures or do you have to trade outright for this?

If you do have your own capital and are not a grad is it possible to bargain with the arcade eg put up some of your own money and use some of there money from the off.

 

[ERA]

Howzit Ben,

Firstly, I think the type of action you are going to get in an arcade will not suit spreads. This is my opinion for the following reason, most arcade futures traders are trading outright electronic futures mainly indices and more liquid markets, a lot of scalping and short term trades. So when you come along and mention your seasonal bull spread in hogs, you are going to get some blank looks. Spreads are definately a longer term outlook trade. So you want to surround yourself with like minded traders.

There are two real 'benefits' of arcades. 1 is the platforms and data services ( which cost a bomb!). For spreads you don't need all that, all you need is MRCI spread reports and an end of day analytical chart package like Metastock to get your timing right, keep your overheads low when you start.

The other benefit is having other traders around to keep you company, people passionate about trading are great to hang out with and talk BS when the markets are quiet. But if you see other players with short term strategies entering and exiting , you could find yourself changing to a style that doesn't suit you.

I have great interest in traded spreads and traded them a lot and think they are great if you are patient. I see you are Saffa like myself, let me know if you want to talk more and we can make contact.

Cheers

 

[TraderPattern]

You don't need to trade futures spreads in an arcade. Trade from home and use a specialist US commodities futures broker.

Spreads cannot be traded intraday. It is the closing number that counts. Intraday technical action on spreads is pretty non-existent. To be frank, if you want to trade commodities futures spreads:
1) keep your day job
2) do end of day analysis in the evening with a simple line chart of closing prices and one or two technical overlays
3) email your limit orders to your US broker
4) Hold the evolving spread for days to weeks, if it is going your way

Trading commodities futures spreads in an arcade would be similar to going on holiday to Baghdad with an "I am American" T-shirt on.

 

[mikeyk]

Alright Fella's

I might be wrong but I thought there was only a couple of arcades that did out rights and that the rest are all spreaders

I know for a fact that people can and do make money from intraday scalping of STIR spreads.

Benjamin, from what I know six figures can be made spreading and that the people doing better than this are using increased volume to make money from the exchange rebates. You may have heard me mention on another thread that there a couple of people I know who are making seven figures from intrday spreading with volume and the rebates this brings. Its by no means easy - very hard to make profit and one bad day can wipe out a week or months work.

Other people I've heard quote say that after your first year you can expect to make 50-100k. Whatever you do make sure you get with a top dollar arcade who has commitment to its traders and low round turn costs, cos round turn cost will kill you if high.

Spreading is generally considered less stressful than out rights but the trader has to be more patient and careful not to overindulge in charts or analytics.

 

[mikeyk]

if your thinking of putting up money bear in mind that some places will let you jump in at the deep end and trade with little support and when your moneys gone they'll finish you. Its a very easy way for them to take little risk and get a good deal from it should you turn out good. I can't help but think that off all the traders finished at various places a quite a few more might have been profitable should the arcade been more committed and supportive.

 

[Moneycat]

If you are already profitable and don't need capital, why would you trade with an arcade?