Finally got a hold of my friend who works for the CME!

[ItalianFX]

I'll keep you updated because I'm hoping that he can give some advice as a whole. Yeah, this probably is like a BBV thread, but I'm hoping that something can come from it.

Here is what he said so far:

"I'm a futures trader with a firm here in chicago, I trade at the Chicago Mercantile Exchange, but the best thing about this job is if I want, I can just work from home over the computer anytime... so its pretty awesome."

A little background on him as far as I know...

I met him in the Fall of 2004 when we were both in the Finance Association here at my college. Through talking to him I found out that he was an awesome stock trader. He used the 50/100 EMA crossover strategy and did really well, running up his account 200k in about 2-3 years. He said he has only worked a job for 3 weeks up to that point when I met him. He was always good at sportsbetting too. He is a big Chicago Bulls fan and would bet on 10 different lines for the Bulls, different prop bets. It wasn't uncommon for him to win a couple thousand a night. In fact, one of those years, 05 I think, he bet $1000 at the beginning of the year that the Bulls would make the playoffs. They did, and he got paid $10,000. One time he made an options trade on some firm and it went the wrong way and he lost $10,000 and felt devastated because he never lost that much money. It basically crippled him at the time, but of course, he made his way back. He also traded foreign exchange and one time he decided to trade a demo FX account and after a couple weeks or so, the company deactivated his demo account because he was crushing it. He read a lot of books, and alot of annual reports. Everyday he would go through every industry, every company, look at their charts to find 50/100 EMA crossovers, and he would read their news that you find on Yahoo Finance. He did that every single day, every industry, every company.

He ended up graduating at the end of that year and I couldn't find him for like 2 years. Now I just found him on Facebook.

We'll see where this goes and what I can get from him. I hope it turns out as I expect.

[kimchi]

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He used the 50/100 EMA crossover strategy and did really well, running up his account 200k in about 2-3 years.......We'll see where this goes and what I can get from him. I hope it turns out as I expect.

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Maybe you could find out the risk-adjusted return of his account. Stocks have really soared the past few years.

What specifically do you want from him? I'd be interested to hear more about his strategy since EMA crossovers worked well up until about the 1970s and early 80s. They are usually used as some form of trade filter these days and only make up a tiny % of an overall strategy.

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Everyday he would go through every industry, every company, look at their charts to find 50/100 EMA crossovers.


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I used to do this to look for set-ups, but it's a one-click datamine and there's a 100 more things to consider than an EMA crossover. Maybe you could pick his brain for some important parts of his strategy.

[ItalianFX]

That was back in Fall 04, Spring 05 and so I don't even know if he still does that. I'll ask and see if he still does that whole setup.

He used to go through a few and be able to tell if it was good or not. I couldn't understand how he saw what he did, but i do remember him telling me that he has looked at a ton of charts and he just got the hang of it.

He would tell me about a stock and say he thinks it's going to go up, and sure enough it did.

He bought the CME at IPO at $42. It was near $200 when he told me about it, and he had 300 shares. That was like a $30k gain right there. I think he averaged in. I would bet he is still holding CME. He also bought VLO on the 50/100 crossover and it soared.

Specifically, I am just looking to pick his brain. I asked him for some insights from the CME for trading. I can't remember the exact questions, but he should get back to me fairly quickly - meaning a day or two.

[kimchi]

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but i do remember him telling me that he has looked at a ton of charts and he just got the hang of it

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It sounds like he's filtering stocks using the EMA and looking for set-ups and entries on the chart.

Some old-timers have a really intuitive read on the charts gained through experience, but I think this is relatively rare amongst younger folk.

[poker1O1]

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He used the 50/100 EMA crossover strategy

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Eh? Worth researching? link?

[kimchi]

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He used the 50/100 EMA crossover strategy

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Eh? Worth researching? link?

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Automated trading strategy 101

[Ps3tn0NcYk]

I was going to respond similarly but I thought it might be distasteful considering the enthusiasm of the OP with hooking up with his buddy at the Merc.

[kimchi]

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I was going to respond similarly but I thought it might be distasteful considering the enthusiasm of the OP with hooking up with his buddy at the Merc.

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EMA cross-over isn't a strategy any more than following a pre-flop chart is a poker strategy. There's nothing intentionally distasteful here, but I'm sorry if it was taken that way.

I'd be very interested to hear more about OP's friend and his trading style/technique. I've studied and tested various trading strategies with mixed results, so I'd love to hear about new ideas.

[CrushinFelt]

1) If he's a futures trader certainly not working for the Merc (not allowed to trade if you work there)

2) The CME stock is at like $660 right now ;p

3) Ask him what firm he's with

4) Ask him if he has direct market access from home or if he has to log in to a work computer from home to trade

5) Ask for more details about what products he trades and whether it's mostly futures or options or both

6) Ask him what his goals are going into each day

Just a few points and some good questions to ask him to get him talking about himself... everyone loves doing that.

[ItalianFX]

Here is a new one:

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The CME is great, but it's kind of sad it's all going electronic and you can feel it on the floor. There's not as much energy as there used to be. The funny thing is I've only been here since 2005 and I can feel it. There are guys here that have been traders since the '70s. They're the ones that are having the hardest time adjusting.

I trade E-mini equity futures. S&P, Nasdaq, Dow, Russell, and Midcap. We look for imbalances between the cash market (the quotes you see on TV, like on friday when the dow fell 360 points) and the futures market. so for instance on friday about a half hour before dow cash closed it was trading down 290 some odd points, futures were down 400, so we bought e-mini dow futures trying to capitalize on that imbalance, and get out before the close. Worked out but not great, because cash market kept falling. But we were able to close the gap and got out with futures down 380, so we made 20 ticks.

Right now I work for a firm called Lin Group of Illinois. and he's slowly but surely moving us all to the computer screen. Which is nice because it means trading on the computer at home... you should see the system I have at home now! (3 24inch dell monitors) it's sweet. But the floor is a lot of fun. I was never in a fraternity at IUP, but I'd imagine that's how it is. lol.

Because of my job and SEC regulations, I can't trade stocks or forex on my own anymore. At least not directly. I can trade in our IRA's and 401Ks, but I can't trade for myself. So unfortunately I'm limited to mutual funds. (GOLD. Stick with gold for the next 3-5 years and you'll be a happy man) most of my money since I started working at least in my 401K has been in TGLDX (the Toqueville gold fund). I have an individual 401K account through fidelity, and that's also where my IRA is. The IRA is the "trading account" right now it's mostly filled with Short positions in banks. I missed the great move in C, but I rode it's tails down with my BAC and WM. I'm not allowed to own CME stock PERIOD. so that was a sad day for me, but I'll survive.

My goal is to trade with Lin Group for a few more years, and then officially go out on my own, with no backing. Once (God Willing) that happens I'll be able to trade anything I want, in any account I want.

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