Slide 1
Day-Trading Commodities and Navigating the Prop Firm UniversePersonal Background2002 Graduate from University of Notre Dame
Equity Prop Trader Tape readingOpening strategies
Futures Prop TraderTechnical analysisPsychological analysis
AgendaFutures Market Overview
Proprietary Trading Firms
Technical Analysis
Trade Strategy/Examples
Futures Markets
Market ParticipantsHedgersSpeculatorsFarmers, ManufacturersHedge against future price riskLock in price marginsBenefit from risky nature of futures marketsProvide liquidityDoes not intend to take deliveryCharacteristics of FuturesMarginDifferent from equities/optionsDetermined by exchanges
ExpirationMonthly and quarterly
LeverageControl large amounts of a commodity with little capital
Crude Oil Futures (WTI)Traded on NYMEX/GLOBEX1000 barrels/contractMargin = $3,740$10/tickPit Hours: 9:00am 2:30pmAvg. Daily Volume = 210,000 contractsAvg. Daily Range = $1.70 Proprietary Trading FirmsTraditional Model
Profit Split/Draw/Fees
How to gain entry
Prop vs. RetailRetail TradingProp TradingKeep 100% of profits
Need substantial capital
Responsible for supportProfit split
No capital needed
Access to software, community, etcEquity Prop TradingPersonal ExperienceSpike Trading/AssentECHO Trade
Current Landscape
Prop vs. Arcade
Capital Contribution vs. Fee for educationTopStep TraderEducation & Recruitment
Chat roomProduct roomsEnergies, Metals, Equities, FX, Interest Rates
Guest SpeakersDr. Andrew Menaker, Ron Feinstein, Anne-Marie Baiynd, John Bougearel, Wally Labuz
Topstep Trader Chat
TopStep Trader CombineUsed to evaluate trading talent
$30K, 50K, $100K and $150K accounts
Evaluation MetricsCan not hit daily loss-limitAchieve profit objectiveWinning day percentage > 55
$50K Combine Example10 or 20 trading days
5 lot max position size
$3500 profit objective
$2000 max drawdown
$1000 daily loss limitPatak Trading PartnersCombine Live Trader
Junior vs. Senior trader
Mentoring
Morning meetingsTechnical AnalysisTrend Lines
Support/Resistance
Fibonacci Retracement/ExtensionTrendline
Trend lines (example)
Trend
Trend (Example)
Support/Resistance
Support/Resistance Example
Fibonacci Retracement/ExtensionMost important retracement is 61.8% (Golden Ratio)
Key Zone = 61.8% - 78.6%
38.2% - 50% is used as a trend indicator
161.8% extension used for targets/support/resistance
61.8% Retrace
61.8% Retrace (Example)
CL 161.8% extension
CL 161.8% extension
Trading StrategyTop-down view to find levelsFibsTrendlinesHighs/Lows
Focus on the psychology of the marketsSprings/upthrustsFlags/pennants
Momentum used for entries at key levels
Springs & UpthrustsProvide excellent risk:reward situationsImmediate feedbackOccur on all timeframesPowerful with the trendSpringAn immediate rejection of a previous lowUpthrustAn immediate rejection of a previous highSpring Daily Chart
Upthrust Daily Chart
Spring 500 Tick Chart
Upthrust 500 Tick Chart
Continuation PatternsFlag PatternSharp move higher/lowerTight consolidation near highs/lowsContinued move higher/lower
Pennant PatternForms in top of uptrend/bottom of downtrendSeries of lower highs/higher lowsContinued move higher/lowerFlag
Flag (Example)
Pennant
Pennant (Example)
Q &A