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