Using Tradovate To Trade Axia Futures Strategies Introduction

In this blog post, we will discuss how you can use Tradovate to trade Axia Futures strategies. The Tradovate platform has been developed ground up to offer low-latency execution and order-flow tools that go hand in hand with the approach Axia Futures preaches. At Axia Futures, our core focus is on leveraging tools such as DOM (Price Ladder), Market Profile, Volume Profile, and Footprint charts. All of those are essential parts of the Tradovate platform and we will have a look at the features that enable you to trade many Axia Futures strategies. Let’s get started.

Tradovate Trading Platform Overview

Introduction Into Tradovate

When you start with the Tradovate platform, you will notice that Tradovate built its platform on the principle of flexibility utilizing a grid system. Each block in the grid is called a module. You can add and adjust any module and customize your trading experience based on the information that is important to you.

In the module system, you have the ability to choose from many features that the Tradovate platform offers. A bread-and-butter tool used by every Axia Trader is the DOM aka Price Ladder. Additional tools such as Footprint, TPO, and Volume Profile charts can be found in the Chart section of the platform.

For code geeks, Tradovate also lets you build your own indicators. Head over to Code Explorer to create and modify hundreds of indicators.

When ready, you can save your module layout using the workspace template on the right.

Tradovate Using Footprint

Every order-flow trader must be familiar with the depth of the market. Given the speed of the DOM, many market activities are somewhat hidden from the human eye. For that reason, Tradovate added extra functionalities such as the Footprint Chart. To set up a Footprint Chart, head over to Chart, then click on the Chart Type icon and select Bid-Ask Volume.

The Tradovate Bid-Ask Volume chart is essentially a Footprint Chart. Given the variability that you get from bid-ask interaction, the Tradovate platform offers extensive settings on the Bid-Ask Volume charting.

Tradovate Using Volume and Market Profile

Now zooming in on a second powerful tool used by Axia Traders, we look at the volume and market profile. Again, head over to the TPO Chart type and start using the power of volume and market profile. Tradovate also added functionalities that go beyond the standard market profile package (more on that in the video down below).

If you want to dive right in and start building strategies using the Tradovate market profile and volume profile tool, head over to the webinar that was recorded with Traver Harnett. Traver was previously the CEO of MarketDelta, the company behind the original Footprint charting package.

Last but not least, what is also great about Tradovate is that it offers a unique Market Profile, Volume Profile, and Footprint experience directly from the Tradovate mobile app. We find that this a nice add-on because not a lot of futures trading platforms offer this functionality via mobile app.

Tradovate is a powerful trading platform and for that reason has been acquired by NinjaTrader. For more trading lessons and tutorials, check out our next free webinar here!

Thanks for reading and trade well.

***

Axia Futures
4 Endsleigh Street London GB WC1H 0DS
+44 20 3880 8500
https://axiafutures.com/

Social Media:
Twitter: https://twitter.com/AxiaFutures/
YouTube: https://www.youtube.com/AxiaFutures
LinkedIn: https://www.linkedin.com/company/Axia-Futures/
Instagram: https://www.instagram.com/axiafutures/
Facebook: https://www.facebook.com/AXIAFutures/
Medium: https://medium.com/@axiafutures/

Contacts:
Demetris Mavrommatis — Co-Founder, Head of Trading
Alex Haywood — Co-Founder Head of Strategy

How do you react when you take a big loser on a high-conviction trade? How do you manage a position that goes instantly offside even when you believe it’s the right trade? But most importantly, how do you reset your mind and bounce back from the big loss so as to attack the next opportunity with even more size and aggression?

In this article, we will first explore how a trader manages a losing trade on the FOMC Rate announcement, but most importantly we will then see how he executes aggressively on a second high-conviction trade 30 minutes later in Powell’s FOMC Press conference.

The key here is to observe and understand the big difference in trading execution between the two trades. In contrast to the first trade, where he was focusing on cutting his size quickly as the market moved against him, in the second trade he attacked much more aggressively with 5X the size of the first trade. This was because he received a positive price response immediately as he executed, whilst observing strong high-volume flows across correlated markets which were all reacting to the comments. Once the big position was built, he then focused on running the trade until the markets took big technical levels.

Watch the live trading execution

In the Youtube video below, Alex is going through the trading execution of AXIA Elite trader Demetris Mavrommatis, over the FOMC Rate Decision on 22 September 2021.

The FOMC event didn’t start well for Demetris as the trades he executed on the FED statement did not work. Although the Fed Dots (SEPs) were clearly hawkish indicating faster rate hikes, the market reaction was not what one would expect. After a brief blip down in US bonds/gold and equities on the hawkish statement, the markets retraced and rallied. Demetris was forced to exit his short positions for a loser.

Nevertheless, 30 minutes later he executed very aggressively on the hawkish Powell remarks in the press conference regarding the timing/conclusion of tapering. As Powell announced that tapering of bond purchases might conclude by the middle of next year (i.e. faster than the market expectation), he built short positions in the US 5-year bonds, Gold and S&P. As the markets were caught off-guard by Powell’s remarks, they sold off to retrace the initial rally that happened on the FOMC statement. Demetris managed to hold the majority of his size in the US 5-year and Gold until the markets traded through the lows of the day and took key technical levels to the downside.

Deep Dive Analysis of the Trade

Market Expectations

The focus was on the FED’s dot plot. The median dots (SEPs) were at 0.125% indicating no hikes for 2022. Analysts were divided as to whether the FOMC members would move their dots up to indicate a hike for next year. Most believed that the very disappointing payrolls report would make most members stand pat on rates, while some others saw the median dot moving up to 0.375% (i.e. showing one rate hike by the end of next year). Furthermore, analysts expected changes to the FED statement that would set the stage for a taper announcement at the November or December meeting.

Scenario Analysis

Demetris was planning to execute in the 5-year Treasuries, the Gold, and potentially the S&P. His dovish scenario was if 2022 and 2023 dots were unchanged. In that case, he was planning to go long in all three markets. Conversely, the hawkish scenario would be if 2022 dots showed lift-off, 2023 dots moved higher and the statement was indicating bond tapering to start in November. In this scenario, he would be selling all three markets.

Trading execution over the FOMC Statement

The FOMC statement hits the wires at 7 pm UK time. Key headlines indicate that FED members now see lift-off in rates in 2022. Even more significantly, FED members now see the Fed Funds rate at 1.0% in 2023 vs 0.6% previously, signaling a steeper path of rate increases.

Demetris reacts by selling the US 5-year bond, however, he goes off-side instantly. He also sells Gold and S&P, but none of these markets seem to play ball with the hawkish headlines. Price confirmation is clearly not there, so he quickly reduces his exposure across the three markets. Nevertheless, as markets continue to rally, he takes a loser as he exits his positions.

Trading execution over Powell’s Hawkish Comments

At 7.30 pm UK time, Powell begins his FOMC press conference where he is expected to offer further insight regarding the FED decision. Note that in the FOMC Statement there was no mention regarding the “pace of tapering” (i.e. how many billions of Treasuries per month to taper). Moreover, in the statement, there was no mention of when tapering is expected to conclude. Most analysts expected tapering to conclude towards the end of 2022.

Soon after his initial remarks, Powell states that “so long as the recovery remains on track, a gradual tapering process that concludes around the middle of next year is likely to be appropriate”. He also states that “the language in the statement meant to flag that the bar for taper could be met as soon as the next meeting”.

These two hawkish quotes from the Fed chair are very significant, and something the market was not prepared for. He indicates that tapering will start and conclude sooner than what the analysts expected.

Demetris reacts by selling 600 lots (3 clips of 200 lots) in the US 5-year. A couple of seconds later and as soon as that trade goes onside, he instantly shifts his mouse to the S&P and sells 240 lots (3 clips of 80 lots). He also sells 80 lots in Gold and 50 lots in US 30-year bonds.

The key here is to note how quickly he built these big positions by observing the price action and the flows across markets that were strongly confirming his trade idea. He received a good positive price response seconds after his execution in the 5-year bonds, so immediately he shifted his focus on another market that he wanted to execute. In contrast to before where he entered a “defensive mode” of cutting the trade quickly as the market was moving against him, this time he did the opposite and built large positions across several markets in a matter of seconds.

Once the positions were built, then it was all about size management in order to maximise the potential reward of the trade. After the initial blip down on Powell’s remarks, the markets started trading sideways for a few minutes. Demetris was convinced that there was potential for a full retracement of the up-move on the FOMC Statement release. He felt that Powell was unusually hawkish and that the positioning of the up-move had to unwind and the markets fully retrace the original moves up.

As the moves accelerated through the “scene of the crime” (starting price), Demetris added to his positions and was now targeting the lows of the day in the Gold and furthermore some big technical levels to the downside in the US 5-year. Once those targets were reached he significantly cut his size and locked his profits.

Key takeaways

By analysing Demetris’ FOMC execution we can see firstly how a top trader reacts and manages a losing trade, but most importantly how he then shifts gears and maximises his profits on another opportunity that comes later in the session.

High conviction trades don’t always work the way a trader expects. Even with the best preparation and solid plan, things can go completely wrong. Instead of asking why while being blinded by our bias, we should focus on how to manage the trade. The clues on whether to add to the positions or cut them are in the price action and order flow. Deep observation of correlated markets as soon as the event hits is also critical so as to confirm our ideas and execution strategy.

At AXIA, these Elite trader execution videos are invaluable content for our junior and developing traders. We analyse many of these in our internal training, both on our Career Programme and on our Blueprint Coaching Programme. To register your interest in free training and see more of these, visit www.globalmacrodaytrader.com

Finally, to see more examples of our elite trader execution on other big fundamental events, such as geopolitical events and central bank policy meetings, visit the AXIA Elite Trader playlist on our YouTube channel.

FREE Webinar Sign Up: https://www.globalmacrodaytrader.com

Axia Futures
4 Endsleigh Street London GB WC1H 0DS
+44 20 3880 8500
https://axiafutures.com/

Social Media:
Twitter: https://twitter.com/AxiaFutures/
YouTube: https://www.youtube.com/AxiaFutures
LinkedIn: https://www.linkedin.com/company/Axia-Futures/
Instagram: https://www.instagram.com/axiafutures/
Facebook: https://www.facebook.com/AXIAFutures/
Medium: https://medium.com/@axiafutures/

Contacts:
Demetris Mavrommatis — Co-Founder, Head of Trading
Alex Haywood — Co-Founder Head of Strategy

Top 5 Mistakes Beginner And Retail Traders Make Introduction

Welcome to the top 5 mistakes beginner and retail traders make. The lessons described below are based on the adjusted transcription from the video that has been recorded by our Junior trader Bogdan. I personally relate to all of them, but those that resonated with me the most are Going Live Too Early and Not Intimately Understanding Your Tools And Markets. I find this video very helpful mainly because as Bogdan has mentioned, it is not some generic copy-paste version of top trading lessons circulating the internet but hard lessons and observations from being on the actual trading floor. This is what @Trader_Bran wrote about it:

So enjoy the transcript of the video down below:

Introduction

Hey guys, welcome to the top five mistakes that beginners make while trading futures or any trading for that matter. These lessons are collections of lessons I learned by myself, others from the trading floor, and the sort of collective shared experiences of many who have come before as well. Enjoy.

#Lesson 1 – Putting Yourself Into A Box Too Early In Your Career

Too many times, I see a lot of new traders, a lot of junior traders on our floor, on Twitter, and on internet forums, who love to put labels on the kind of trading they do. And of course, this just extends to everyday life. It’s not just trading, but obviously, within our sphere, we see this a lot where a trader may see how a piece of news affects markets and the huge burst of volatility. They may get scared and start making excuses like “I’m not a news trader”. Or someone who may trade news very well may look at a chart and say: “Oh, you know, I can’t make sense of this. I can’t be consistent in this kind of trading”. And so they say, I’m not a technical trader, I am a news trader. I’m going to be a scalper or x, y, and z type of trader. So here are basically two mistakes. First, you are trying to cut the market up into a very small, convenient box for you to understand, which is a mistake. Especially if you’re new to trading and you have the outsider’s perspective, you have newbie eyes to look at the market and it is very difficult to break up a very complex organism, a complex system like markets into a very convenient box for you to understand. Or take the example of those who say they don’t look at news, they don’t look at fundamentals, because it’s all reflected in the chart. This form of judgment happens too quickly, especially if it happens early in your trading career. Now, for those who are very new to trading, they will find someone who is just an excellent chartist for example. It could be someone like a senior trader who has years of knowledge reading the charts. But that’s just because of their experienced eyes, the lens through which they see things and the way they would describe certain things, and see certain things that may seem completely different to you. This very comparison or inspiration by this trading role model will lead you down the wrong path into overly specialized trading too early in your career. Becoming a chartist only because of this false specialization. This mindset might block your learning and you’ll never open your mind to the possibility of trading news and maybe who knows, you would have become the fantastic fundamentals newsreader or vice versa if you would not pigeonhole yourself into this box of overspecialization too early.

You see this a lot on online communities where people like to place themselves in various tribes, like, “I’m only trading on the ladder”, and my tribe is the best the price ladder tribe, and there’s no other. I’m the best everyone else is an idiot, nothing else works, and so on. So it is very dangerous leaving down that path of the ego and safe tribalism. Now, what I would say is, if you have been finding yourself and if you have been trading anywhere between 3-24months, you should not be making these kinds of claims like I am an X, Y and Z trader because the markets will evolve and so must your spectrum of tools. And you have to understand where you place yourself within that spectrum over time, not too early in your career..

#Lesson 2 – Going Live Too Early

Going live too early or perhaps putting too much pressure on yourself too early. So this is one mistake. I made this mistake myself very intimately at the beginning of my trading career and I see this time and time again, which is this obsession to race to trade live or to trade with some kind of skin in the game simply too early. Now, obviously, don’t get me wrong, skin in the game is essential, especially when learning but that should come much, much much later down the learning curve than one would expect. I see this a lot with a lot of the junior traders where their ability to learn and to soak in information is high. So in its pure sense with no emotional attachment to trading, the quality of learning is just way better. The minute they add pressure to themselves, even if they’re not live, but let’s say there is a requirement for them to pass a funding trial to go live or to meet certain criteria, the learning is suppressed. So in any case, whatever pressure you apply too early the learning curve will be most likely affected. You’re regressing too early. I’ve experienced this a lot in my career and it’s very easy to delude yourself that you are learning when in fact, you are not, which is going to be my point number three. So remember, it’s very easy to fall down that path.

Now let’s take an example of my desk mate on the other hand. So my desk mate here on the London trading floor was on the sim for about 16 months before he went live. Now, of course, during that 16 months, he also had a period where he had to pass a sort of a rules-based assessment for him to be funded to go live. Nevertheless, 16 months for him to go live. Most people watching this video right now, myself included, would not spend anywhere near that amount of time, watching markets, studying markets, really reflecting on what they’re learning. Too many of us will go in headfirst thinking they’ve got this, this is easy, and so on, only to really not only drop your whole account to lose a lot of money, but then to not really learn anything from it. Because of that rush, that agitation that FOMO to get live as soon as possible.

#Lesson 3 – Not Having A Structured Learning Process

Okay, so let’s talk then about mistake number three. And this is really something everyone can implement right now, from day one. Your progression does not start until you get these things right, which is a proper routine and a proper structure every single day, weekends included. This means you’re going to show up and have a morning routine, you’re gonna have a preparation routine, before the market opens, you’re going to consistently trade the same market hours for as long as possible, every single day when the markets are open. And then you’re gonna go through a period of reflection of the debriefing when markets are quiet. And of course, doing something of a more macro a wider approach on the weekends. That is the bare minimum entry requirement of hard work that you should be doing to even be considering having a career in trading. Ticking off boxes, day in day out, reflecting over time what is the proper debrief for you. What are you trying to capture from the markets? What are you trying to achieve? What evidence are you trying to gather and learn? How are you understanding the market through your own lens? It is so many of these little things which count but makes your eyes spin at the beginning. But there is no way around it. And, you know, perhaps you skip reading here because you already know all of that but it’s probably the most important point in these lessons. You need to have a learning system, a debriefing system, a way for you to reflect on good trades, bad trades, and understanding where that is and how to access it fast.

Relating to mistake number two, which is putting pressure too much on yourself too early, even by being on the sim trading thinking about taking trades is one step removed from pure learning. When I bring up your learning what do I mean? It’s sitting there day in day out, not even taking trades, even on the no consequence simulator. It is just sitting there observing markets holistically, looking at how they reprice risk, how they price risk, how news affects them, how news doesn’t affect them, how the market profile looks like how the order flow looks like when you know markets move around and everything. So you’re soaking in how are you learning from that process, and then you’re adding another layer of the debriefing and learning. Then, once you’ve slowly applied the pressure at the correct time, then you’re thinking: “Okay, and now how do I improve my processes?” How do I extract more from my good trades? How do I stop incurring so much damage from my bad trades for example? And this is not, again, an exercise where you’re just entering an excel sheet of the entry-exit size that you took, and so on, it’s much, much deeper than that. We talk a lot about this on the Axia trading floor. Where are the nuances in your trade and how are you placing these nuances? What sort of features were unique to that trade you saw, perhaps next time when you see a similar type of trade, you will take action with higher conviction.

#Lesson 4 – Denying Responsibility

So this trading mistake manifests itself in many, many different ways. But one of the most popular ones which we see repeatedly is blaming things on the algos, blaming things on the hfts, the stimulus, etc. This really comes from two things. One, you will actually notice that the less time someone has been actually trading, the more opinionated they are on this. The less time someone’s been trading, the more they’ll tell you. They’ll tell you order flow doesn’t work. They’ll tell you charts don’t work. They’ll tell you, you cant trade the news because of the algos and on and on and on. They’ll use this escape mechanism because they still don’t understand that because they expected they will trade markets for two weeks and do amazingly well from the beginning. And if they can’t get it, no one else can. So there must be some kind of catch, there must be some kind of thing that makes it impossible for anyone to trade. And they know it because they read some forum posts about someone or some tweet about some random stranger saying how it’s impossible because of the hfts, because they also can’t perform to a high level and they find some kind of mechanism to absorb responsibility. Now the big mistake for you is that you’re onto this. And then flying under the banner of new contract order flow because of the hfts you can’t trade well. And so really the mistake is understanding this kind of feature where so much of this conversation is made by other people who have traded for a very little amount of time or may have traded before and were successful and now are no longer successful. And you enter this fear too which is very difficult to resist and to be honest, you will not know any better either because you are just starting out too, trying to figure it out. This relates to mistake number 1: do not box yourself into this kind of negative thinking and this sort of mentality. So regardless of what’s going on, there will always be opportunities in the markets. You just have to be open-minded enough to shift your perspective and to take advantage of these market features and opportunities that will come. If your edge stops working, it is a normal part of trading and then it’s your responsibility to readapt, relearn and move on, instead of then absorbing responsibility saying, I can’t do this, and the market is rigged.

So again, it’s funny to see that many of the people who will give you these strong opinions probably have not been trading for very long. And as you go across the curve of people who are consistently profitable, who are career traders, who have been trading for very long time, you will notice the abundance of opportunity and how they’ve shifted their careers from trading one thing many years ago, and now are trading something completely different. And in the next five years, they’ll also probably have evolved their trading just suits the current market. And that is the story of everyone, especially all the senior and elite traders, here on the prop floor.
They can all attest to this, of how you have this constant evolution, and should not get dragged down by others with this sort of negative mentality or this way of denying responsibility.

#Lesson 5 – Not Intimately Understanding Your Tools And Markets

So mistake number five, it’s not understanding at a granular level, the tools you are using for the markets, you are trading. So, for example, there’s plenty of people who claim that they are order flow traders, yet, if you talk about using a footprint, if you talk about using certain things like the Delta, they ask you how this relates to that. They don’t intuitively understand how the price ladder mechanics work. And that’s because the questions they ask me in AMA if they truly understand price mechanics, they could intuitively figure out the answer to those questions. So it’s easy for me to pick out those who don’t understand that the moment they ask. Dynamics like passive vs aggressive bid/offer, absorption, various auction processes, what happens when someone has to liquidate, etc. How deeply you understand the dynamics of both the market auction mechanics and your specific market you are trying to trade.

And again. Do not insist on understanding just the price ladder intimately. Dig deeper. It is your duty to do this if this is your career to understand every single asset class closely as you expose yourself to those opportunities as early as possible because there are fantastic opportunities to be found. Yes, I’m looking at the price, standard profile, and many other things. But I’m also going to take the time to understand the derivatives I’m trading, what are actually futures in the first place? Why am I even trading futures? What’s the underlying market? How do bonds behave in certain market conditions, how do the equities behave, and so on. So again, it is making sure you don’t, in a way absorb responsibility as well by saying, “you know, this is too difficult for me to understand”. That is your duty to self-learn, self-educate. So the spectrum is broad, from footprint dynamics, price ladder to product understanding and fundamentals because you’re building a whole career for the rest of your life, ideally, into this field.

Closing Note

Treat yourself as a high-level athlete, you’re building yourself to have a high level of an athletic career, which is the best metaphor in trading, and while you’re building all these skills, you’re becoming a multi-dimensional trader. And that requires a lot of different skills that are completely different from each other. You are building this as time goes by because it is an investment into your future edge. You. It is a very difficult profession. And it is akin to something of a high caliber, professional, high caliber sport, which you know, to remind everyone, there is no amateur league in trading. You will be competing with everyone who intimately understands the price ladder, knows to the nth degree everything there is to know about asset class fundamentals in multiple different asset classes. You’ll be competing on the same level of stuff, in one arena. So for you to even have hope of reaching that kind of level, you have to be putting in the work early in your career, and hopefully by understanding these hard-earned lessons make a career in trading.

Thanks for reading this adjusted transcription of the 5 Lessons Beginner And Retail Traders Make and in case you would like to check each mistake in the video on its own, here is the breakdown:

00:00​ – 5 Trading Mistakes
00:28​ – Putting Yourself In A Box
04:10​ – Going Live Too Early
07:21​ – Not Having A Structured Learning Process
12:25​ – Denying Responsibility
17:25​ – Not Intimately Understanding Your Tools And Markets
22:59​ – Conclusion

If you liked this type of content, you might check these videos as well:

• The Biggest Mistake Traders Make With Market Delta – Footprint Chart Trading | Axia Futures
• Biggest Trading Loss lessons – Live Trading| Axia Futures
• Amateur Vs Professional Traders – Footprint Chart Trading | Axia Futures

If you like our content and would like to improve your game, definitely check one of our courses that teach you all the techniques presented by AXIA traders from a market profile, footprint, or order-flow. If you are someone who likes to trade the news, we have a great central bank course. And if you are really serious about your future trading career, consider taking AXIA’s 6-Week Intensive High-Performance Trading Course.

Thanks for reading again and until next time, trade well.

JK

‘The underappreciation of finely tuned process’ in the binary world of trading‘

The purest understanding of trading can be viewed as binary. Long or short, buying or selling, the option to be flat adds some variety to your array choices. Money is made or lost on any given trade, over a period of time or specific event. As a result of these deeply simplistic boundaries which traders operate within, our worldviews of success and failure become very apparent. Immediately, and more so over time the market taps into the dichotomy of the two states. What proceeds, is the extraction of unknown scarring fleshed out explicitly through market reflection.

How an individual manages this should be bespoke, however, broad foundations can be laid in order to better understand our complexly intrinsic relationship with success and failure. It is dismissively simplistic to group people, actions and basically anything you can imagine into the two binary categories of success and failure. Moreover, the boundaries between the two are constantly blurred and often much closer than you realise. Throughout a period of profitable trading you view yourself as a success, believing you are creating a bigger divide between the stereotypes of success and failure. Only for this reality to be shattered entirely, how could it be possible to fail so badly – what has gone wrong? Without refined, as well as fluid frameworks which constantly evolve with success and failure, it is very easy to fall into counterproductive habits which flatten your learning curve and inevitably your equity curve. These market participants are doomed to drift between success and failure, as a result of unclear definitions regarding the two states and what they mean relative to their learning curves.

The first topic I wish to address touches upon the idea that a given success today can easily be deemed a failure tomorrow, how does this shape a market participant’s learning curve? What pushes a trader onto ‘greater success’ is how they compare themselves to their prior success, this is obvious. However, the vital and often overlooked part of this reflection is in the context of how this comparison is framed. If you frame your success entirely within the parameters of binary outcomes, profit or loss, right or wrong, you are suffocating the creative life from your learning curve. In this case, your learning curve no longer reflects personal growth, the deep perspective gained from changes in market personality and an overall appreciation for the challenge at hand – mastery of self. Instead, what it resembles is something much closer to your equity curve, a despondent and non personable entity, a scoreboard for those who aren’t willing to probe deeper into their decision making process. Getting to a place where a trader can make sense of success outside of their profit and loss, undoubtedly takes time, but also requires them to go through the infancy stage of their career in which their success is entirely dependent on increasing their equity curve. The juxtaposition between breathing life into your fragile trading career through increasing equity, versus the intricacies of learning about oneself in order to leverage your own strengths and weaknesses within the backdrop of the markets, is exceptionally challenging and in reality is an open ended lesson. As mentioned, this is a by-product of poor understanding regarding the two states of success and failure, but also the result of over reliance upon them in the first place. A trading scenario presents itself and you trade it according to your plan / strategy/ instincts, resulting in a profitable trade – potentially a sizable profit relative to your recent equity curve. How you go onto frame this event is frighteningly critical with regards to the path of one’s learning curve going forward. Not necessarily immediately, but undoubtedly at some point in the future. When we are presented with a similar situation, and feel as if we’ve underperformed, many are met with the feeling of failure. Anchoring themselves to said previous experience, losing all objectivity toward the information that led them to that decision. Was this trade of the same quality to the one you’re currently anchored to? How high was the original level of questioning? Did I in fact over perform relative to the opportunity that just presented itself? The cost of framing a recent experience entirely on the equity outcome of a given trade, instantly caps the outlook for growth, it numbs the sensory feelings of how you are interacting with the market – limiting the questions you are willing to ask of yourself as well as oversimplifying an undefinable experience.

So, what is the solution to this innate human flaw most of us deal with on a regular basis? I believe it derives from the underappreciation of finely tuned machines, in relation to ‘definable success’. What I mean by this, is that we heavily overvalue clear binary outcomes, over the natural development of ruthlessly diligent routine. Take the example of your pre-trading routine, the period of time between waking up and sitting down at your desk, whenever that may be. What is done during this time is hugely overlooked and underappreciated, relative to your end of day / end of week / end of month profit and loss. If you can build an environment in which success and failure is based entirely on the effectiveness of your incorporated machines, you reframe some of the binary elements of trading that pull on your psyche. By doing this, what you are creating is a self evaluating regime; detached from the craving to be categorised within the confines of success or failure. What you are doing instead is building confidence via clear controllables, which over time you can hold yourself accountable to – making these machines even more efficient with time.

I highlight pre-trading routine deliberately, with hindsight I significantly overlooked the role that it played within my overall cognitive machine. Prior to covid, this window of time was managed with extreme precision, minor but explicit details and nuances which could not be recreated in a working from home environment were so key on reflection. Knowing exactly what time I had to leave the front door in order to get a specific train, followed by dedicated time to breathing exercises once on said train, only once this part of the machine had finished would I transition to check overnight markets – deliberately avoiding any newswires until I had sat at my desk for half an hour. Yes, of course this could be re-created in some facet whilst working from home, however, I am trying to draw upon the significance of these tiny little processes. Their effectiveness accumulated over time. My body and mind became primed to these minor events, putting me in the best position possible to be ‘successful’ on any given day.

“Expectations also shape stereotypes. A stereotype, after all, is a way of categorizing information, in the hope of predicting experiences. The brain cannot start from scratch at every new situation. It must build on what it has seen before. For that reason, stereotypes are not intrinsically malevolent. They provide shortcuts in our neverending attempt to make sense of complicated surroundings.” Dan Ariely – ‘Predictably Irrational’

Success and failure are undoubtedly shaped by expectations, they are the underlying driver that define our ever changing view of the two states. Expectations are the misleading, unavoidable third wheel that further complicate our perception of success and failure. They are often a great hindrance to learning curves, unless monitored closely. This is not to say that there is no place for expectations or even bold aspirations; without these I believe it is impossible to maintain any level of trading consistency. Without expectations of oneself, you’re left to the mercy of randomness. What is of paramount significance is the direct relationship between expectations and your learning curve, if the market participant can shift their view of expectations to focus entirely on controllable variables, the development of a sustainable learning curve becomes more probable.

As a result of this thinking, the participants’ equity curve should follow a similarly sustainable path. I firmly believe that if you can get to this place of effective self criticism regarding your controllable variables, instead of jumping to the immediate extremes of profit and loss, the likelihood of positive returns increase drastically. As the opening quote states, stereotypes provide us with shortcuts in order to make sense of complicated situations. If you succumb to attaching success and failure to the two polar opposites of profit and loss, discreetly you will damage your learning curve. Trading is a never ending complex pursuit which seeps into your life, in many ways consuming your life. There is a danger of oversimplifying the open ended challenge of improving relative performance, by how you view success and failure, how you evaluate yourself relative to binary outcomes and in how your self-worth is packaged within recent ‘success’ or ‘failure’.

I warn of danger recalling recent experiences, it is worryingly easy to fall off the regimented route of finely tuned processes, in favour of chasing the dull comfort of binary success. I find myself craving the simplicity of stereotypes, when in reality at this moment you must ask the most introspective of questions. It is vital that you get to a place of believing in constant questioning and live by it undeniably. One of the hardest things a market participant can do, is reflect on a profitable period of trading and recognise it as unsuccessful – relative to their controllable expectations. During these periods of equity growth and depleted self reflection, you are creating a divide between your learning curve and your equity curve. This divergence can persist long before you see a correction in your equity curve, it’s at the first juncture of binary failure that you are given an opportunity to reassess and return to the original sustainable path. The gut wrenching feeling of hard binary outcomes has its place, it is essential, but if you are dependent on them solely to fuel growth, you are only scratching the surface of broad and sustainable trading success.

As touched upon, there is an important place for binary success and failure. What I wish to deter people from, is accepting progress through an entirely binary worldview, once this mindset takes control it indicates your ideology for learning has become stale. It is essential to be checked by yourself, third parties whomever it may be, to stay in motion with the ever changing states of success and failure. Deliberately using these perspectives to reaffirm a positive learning curve, in exchange for delayed positive outcomes in the future. The majority of factors influencing learning curves are lagging your current equity curve. When your thinking is restricted to binary scenarios, you are past the point of holding yourself accountable to a growth mindset. Instead, you’re held hostage to the simplicity of definable success or failure, disregarding self accountability to your own controllable variables. Proclamations of success and failure entrap you, they instantly cap the ceiling of your learning curve. Undoubtedly you need to take stock to recognise growth of account, increased position size, but many miss the underlying yet discrete successes which lead you to these binary outcomes. Once you become attached to the latter as opposed to the former, your worldview regarding progress can become extremely tainted as well as damaging. I believe this is the biggest hurdle that any aspiring, let alone experienced trader faces everyday of their career. The never ending balancing act between a learning based worldview, and the unavoidable reality of hard binary outcomes is extremely challenging. I say the biggest hurdle, as it is one that is constantly in motion and impacted by infinite inputs. You are constantly forced to re-examine and evaluate the intricacies of yourself, in an attempt to stay true to a positive path regarding your learning. You need to embrace this dilemma with curious fascination, it is the untapped well that can drive you from relative mediocrity to unimaginable realities. The backstop that reverts you to a place of synchronicity after a period of mental block.

In totality, it is hard to measure how much of an impact our understanding of success and failure impact our learning curves. I believe that most severely underestimate their influence, often requiring very blunt reality checks, in the form of large drawdowns to even consider their worldview needs readdressing. There is nothing wrong with developing finely tuned processes in the aftermath of violent market experiences, arguably this is the best way to incorporate such machines into your trading system. It is more the consistency of this approach that is so key for survival in this game, if only traumatic market experiences force you to question your current learning curve you are treading a futile path. Riding the highs and lows of this pursuit is simply human, in the moments of neutrality you must take most responsibility to address your current path of learning – ignoring the binary nature of your equity curve. With success and failure come expectations and excuses, unavoidable obstacles which nullify learning. They dull the surprise of new events, particularly ones which we don’t understand, creating potentially huge blind spots within our systems if left unchecked. One can take reassurance in knowing that the dilution of your learning is inevitable, it is how you respond to this realisation that will shape your career – for however long it may last.

Joe

Axia Futures
4 Endsleigh Street London GB WC1H 0DS
+44 20 3880 8500
https://axiafutures.com/

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Contacts:
Demetris Mavrommatis – Co-Founder, Head of Trading
Alex Haywood – Co-Founder Head of Strategy

In the morning of Monday 9th November 2020, the world welcomed a huge milestone in the war against the pandemic as Pfizer announced that its experimental Covid vaccine was found to be 90% effective in preventing Covid infections.

This announcement on the vaccine’s efficacy surpassed even the most optimistic expectations and as a result it sparked huge Risk-On across the financial markets, with global stock markets rocketing while safe-haven government bonds and Gold tumbled. 

This event created big opportunities for global macro day traders who were able to execute trades as soon as the announcement got released.

In this article we will explore how our top AXIA macro trader reacted to this event, as we go through his trading execution step-by-step and see what was going through his head as he was trading the extreme volatility sparked by the event.

We will see how he truly maximised the opportunity presented, by aggressively executing large positions across five futures markets to achieve a 7-figure P&L in the space of a few minutes after the announcement hit the wires.

Watch The Live Trading Recording:

Background: The significance of a highly effective vaccine

The fight against the pandemic and the recovery of the global economy rests on vaccination of the world’s population. Only then we will go back to normal and the world’s economies will emerge from a pandemic-induced recession.

After successful and promising Phase 2 studies from the frontrunner vaccine manufacturers, the whole world and the financial markets were focusing on Phase 3 study results. These studies involve around 40,000 people and are the final hurdle before the health authorities approve and start manufacturing the vaccine. 

For a couple of months now the markets were eagerly waiting for results from the companies that were near completion of the Phase 3 study and these are: Pfizer+Biontech, Moderna and Astrazeneca.

The preliminary results of these studies would show us 1) if the vaccine has been effective and 2) what was the Efficacy rate in the study (i.e. what percentage of people who took the vaccine actually achieved immunity)

Market Impact on different sectors of the economy

For traders and investors around the world, these results would have huge implications in the financial markets. The FDA had stated that a vaccine with around 50-60% efficacy rate would be good enough for approval so this was more or less the minimum threshold. 

But at the same time if this efficacy rate was a lot higher then it means that we would get out of the pandemic much faster than expected. The baseline expectation based on Phase 2 studies was that the vaccine should be at least 60% effective, the higher the better.

The vaccine results would have a different impact on different sectors of the economy. Since the beginning of the crisis we have seen the cyclical and value stocks (like the big industrial names) get battered while some of the huge tech companies like Amazon, Netflix and other stay-at-home stocks managed to weather the storm and outperform significantly, as their revenues exploded. 

So we have effectively seen a big rotation from value stocks to tech stocks. This massive rotation is best reflected when we compare the Nasdaq 100 index over the last 9 months vs the Russel 2000 or the Dow 30 index. Looking at the chart above we can see how Nasdaq has massively outperformed the Dow since the March lows. The Nasdaq took out its previous all-time-high on 5th of June and kept rallying since, whereas the Dow only took its previous ATH in the futures on the Pfizer Covid Vaccine announcement day (9th November).

Trading Scenario Analysis

In terms of trading execution, it is quite obvious that a highly effective vaccine (high efficacy rate) should spark big risk-on. On the flipside, if for any reason the Vaccine does not meet its primary endpoint and its not proven effective enough, expect HUGE risk off across the board in the markets.

Having said that, it’s also key to select the markets that offer the best risk-reward potential when the announcement hits. Going back to previous reactions to positive Phase 2 study results as well as other therapeutics announcements, we could see that the biggest impact is on the Equities (and more specifically on the big industrial names and value stocks). So in this case we expect markets like the Dow, DAX, Russel, Spoo to react big to the upside while the Nasdaq undeperforms. 

Nonetheless, if the announcement causes huge risk-on, you would also expect government bonds/gold to sell off as investors would pair their stimulus and easing bets going forward.

Pfizer announcement hits the wires

At exactly 11.45am on the day, Pfizer releases a statement saying that its Covid vaccine is found to be over 90% effective in its large Phase 3 study. This was a bombshell statement which beat even the most optimistic expectations and an enormous milestone in the fight against the pandemic.

The 90% efficacy finding for the vaccine produced by Pfizer far outstripped expectations of a 60-70% reading among analysts and compared to around a 40-60% efficacy rate for seasonal flu vaccines. 

Such a high efficacy rate meant that the global economy could recover faster than previously expected and this was a very big positive development. As one would expect, huge risk-on was sparked by this announcement, and within the first few seconds, global equity markets skyrocketed.

Elite trader reaction to the news – Building the big positions

As we have seen with past streams, our Elite trader is renowned for trading these types of events, executing with maximum conviction and aggression, hitting the markets as hard and as fast as possible. 

As soon as the results of the study were released, he bought 400 E-mini S&P and 90 DAX. Within the next few seconds his PnL was printing over $300,000.

In his head, this was a massive event and a huge opportunity to possibly achieve his best day ever, so at this stage all he is thinking is how to add to his positions and take even more risk. As he explained, in situations of extreme volatility like this event, he manages to stay focused by visualising the huge reward if the trade works out as he expects.

He knows how significant this news is and he won’t rest until he exposes himself to the maximum risk he is willing to take. So as the equity futures keep exploding higher, he also goes and buys 150 lots in the E-mini Dow. He feels the Dow offers great risk-reward as he is convinced the value and big industrial stocks will massively outperform on this announcement.

15 seconds after the announcement, and as the price action across markets confirms his thoughts and conviction, he feels he would like to take even more risk, so while he is around 650 lots long across three equity indexes, he goes and sells 540 bunds.

At this point, I felt I got as many limits as I wanted on the equities but I quickly glanced at the bonds and realised that they hadn’t moved much.

I thought this news was a game changer for all asset classes across the board, and I felt that there was potential for the Bund to get sold big on this, given how tight and contained it had been in the last few sessions. 

AXIA Elite Trader

As he explained, he felt that there was big potential for both Bunds and Treasuries to eventually tumble on the huge risk-on sentiment, and on the assumption that central banks might end up scaling back their huge monetary stimulus faster than expected, as the highly effective vaccine would normalise the economy faster than previously forecasted.

Managing the trades – Scaling out & locking profits

After building those big positions across markets, then it was all about managing the trades as efficiently as possible in order to maximise the P&L. As per his usual execution strategy that we saw on previous streams, he is jumping from one ladder to another, scaling out the positions and locking profits. 

Keeping a close eye on correlations and order flow of his main ladders he could get a feel for the overall sentiment and identify which markets were overreacting and which were lagging behind. He uses this information to keep adjusting his positions.

In just over 2 minutes after the announcement his P&L broke the 7-figure barrier and that’s when the equities started pulling back from the extremes. At this point he decided to start cutting his exposure on the equities while holding the majority of his bond positions. 

I realised that the Spoo had done over 50 handles in around 2 mins. Dax did over 250 ticks! 

My thought process at this stage is: This is a very big move in a very short timeframe, and even if we go further eventually, there’s a strong chance that we pull back significantly before the second leg.

So if I see the equities start stalling or pulling back at this stage, then I am ready to cut my risk significantly.

AXIA Elite Trader

His rationale here is that the bonds hadn’t really moved far enough in relative terms and as compared to the huge equity moves. He felt there could be a big delayed reaction in the bonds and he was willing to stick with the trade and not scale out, as he was confident that powerful bearish flows would eventually start hitting the bond space.

It soon turned out that the pullback in risk was short-lived, and equities started making new highs. Although he was a bit upset at this stage that he had covered most of his equity positions, he felt that at the time, being short the bonds offered a better risk-reward opportunity. Over the next ten minutes, the bonds rolled over as he expected and he managed to add significantly to his PnL.

At the same time, he started feeling that the equities had over-extended to the upside at this point. As the NASDAQ started leading the way down as big tech and stay-at-home stocks started getting hit, he took a few short positions in S&P, Euro Stoxx and Nasdaq, and as those positions paid off, he managed to achieve his best day ever, netting over $1,300,000.

Key takeaways from the Elite trader execution

The YouTube video embedded in this article offers invaluable insight into the execution methodology of AXIA’s largest trader, by analysing in great detail his strategy and thought process as he is trading multiple markets simultaneously in extremely volatile conditions.

Our elite trade has cultivated his edge and skill-set in trading global macro events with such confidence and conviction over a career spanning 10+ years. This enables him to put the big size on whenever he feels there is a big risk-reward opportunity to be taken.

As he explains, he always visualises these mega days, i.e. he is using his mind to see his execution over a potential big trade on a certain event, and this makes him super prepared and focused for when the event does happen.

As we have seen he will not hesitate to hit as hard as possible and as fast as possible, and once he is happy with the size he exposed himself to, he will focus on managing the trade actively using his peripheral vision of observing all correlated markets. This enables him to feel the overall sentiment so that he can tweak his execution and adjust his positions accordingly.

To see more examples of his trading execution on other big fundamental events, such as geopolitical events and central bank policy meetings, visit the AXIA Elite Trader playlist on our YouTube channel.

FREE Webinar Sign Up: https://www.elitetraderworkshop.com/

Axia Futures
4 Endsleigh Street London GB WC1H 0DS
+44 20 3880 8500
https://axiafutures.com/

Social Media:
Twitter: https://twitter.com/AxiaFutures/
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Contacts:
Demetris Mavrommatis – Co-Founder, Head of Trading
Alex Haywood – Co-Founder Head of Strategy

The Best Futures Traders Take Time to Debrief

The US presidential election was a one off event to be forgotten for 4 years, so why bother debriefing it? Correct. There is not going to be the same event again for a while. But, the work done now in debriefing and learning from the US election should be done, as with every debrief, as a way of paying forward performance – some of the things picked up from the US election may help sooner than you expect – you just don’t know which of those things they are or when they will help, butt you’ll be grateful when they do. I remember taking a trade at the NYSE open, long the S&P 500 futures after the 2016 US election because the pattern of movement overnight as Trump was voted in was almost almost identical to the move on the Brexit referendum night: S+P drop to limit down overnight, grind back up during the European session as the news was fully digested and then bid up after a small drop as the NYSE for an entry back through the opening price for ~20 handle winner.

So what did we learn from the election of the 46th President of the United States of America?

Not Every US Election Trades Like 2016

Traders expecting a binary event like 2016 were sorely disappointed, back then Trump was seen as ‘bad’ (mainly based on uncertainty) – so an easy sell in S&P 500 futures, which traded to limit down on the night (see below). Now, with him in power, the uncertainty had diminished and whilst Biden was the markets’ preferred choice there was still the the issue, at least for stock markets, of the increase in stimulus being countered by increases in taxes. This created a more nuanced trading environment, focusing much more on flow and the ability of the market to continue or reverse a move as more states were won.

Flow Based US Election Trades

The best performances on our London Trading Floor came on a flow based move back through the range in the E-Mini S&P 500 which was counter the conventional wisdom of Trump being bad: A big lesson from the 2016 election was to watch the betting markets rather than try to interpret every twist and turn as different states reported. What they started to show was a shift in odds towards Donald Trump winning, which initial caused a drop however as continuation was not forthcoming an unwind move back up ensued – this was a purely flow driven move, not based on a specific state being won or necessarily the odds themselves. Key Takeaway: if a market should do something and can’t, the counter directional move is often clean and relatively quick and positions exit. This move is reviewed below.

US Election Trading Opportunities The Next Day

For those wanting to trade the result of each state as their election trading strategy, the best opportunities came the day after, with many of the key swing states still having votes counted the US Election then hinge on these few remaining results making for much clearer trades – for examples Biden wins a swing state: buy, Trump wins: sell. These opportunities are also reviewed above, the most important, which set the tone for the S&P rally for the rest of the day was Biden in Michigan. Something that should always be considered is opportunity cost – many traders missed this move after staying up all night. A question for 4 years time, particularly if some of the similarities of postal votes and delayed counting as well as an even less binary decision is on the cards could be whether it is worth waiting until the final swing states report and trading the results of those?

Remember a debrief should never simply be a re cap of past event but should be instructive in how you will act in future. This a hallmark of many of the best futures traders.

Richard.

In this video, Adam goes through the execution of our AXIA Elite Trader on Tuesday 7th of January 2020 and Wednesday 8th of January 2020. 

This was a record breaking day for our Elite Trader, which eclipsed one of his prior best days just a month ago, and a huge personal milestone in daily PnL.

US-Iran Crisis: Buildup To Trade The Iran Attack

With the beginning of 2020 there was a dramatic escalation in tensions between the US and Iran, after Trump ordered an airstrike on Jan 3rd that killed top Iranian military commander Soleimani. After this, Iran pledged to take “severe revenge” and markets started getting nervous on the prospect of a military conflict between the two nations. 

Oil and Gold surged on geopolitical risks after the US strike while equities and risk-assets sold off. The markets were nervously awaiting for Iran’s response although there was the hope for a diplomatic solution and an avoidance of Iran’s retaliation.

At around 11pm London on Tuesday 7th January, various twitter sources started reporting that Iran started firing missiles at Iraqi bases that house US soldiers. With both US and European cash markets closed, futures were slow to react. However as more sources started confirming the attack and more specifically when Iran Revolutionary Guard confirmed that they were hitting US forces, markets were on the move. Oil, Gold and US bonds started rallying sharply while S&P futures started selling off aggressively. 

Rapid Trade Execution Using Order Flow

The elite trader started buying oil and gold very aggressively (around 200 lots in each), buying T-Notes (300+ lots) and selling S&P (200+ lots). Executing with his usual trading style he kept managing the trades in these 4 markets by adding and scaling out as he saw fit. As the news kept getting more and more traction so was the market reaction. The moves from 11:00 to 11:40 PM were quite large across oil, gold, bonds and S&P and he managed to capitalise big on them.

After the initial reaction to the attacks, the market was fearing the worst (potentially a full-blown war between US and Iran) and thus the very big risk off move. However, soon it was reported that there were no US casualties and Iranian Foreign minister Zarif said that IRAN CONCLUDED PROPORTIONATE MEASURES, NOT SEEKING WAR. In addition to this, Trump tweeted saying “All is well! Missiles launched from Iran at two military bases located in Iraq. Assessment of casualties & damages taking place now. So far, so good!”. (See previous examples of how our Elite Trader executed on Tweets that moved the market when he traded the Trump tweet aggressively on China Phase one deal)

All the above feeding into markets made participants realise that the situation seemed like it was contained and that the US probably wouldn’t have to retaliate back. This caused the V-shape reversal in all markets with Gold, Oil and US bonds selling off and Spoo rallying retracing the original move. Our Elite Trader managed to reverse his initial risk-off positions and sold Gold and Oil while buying SnP to add to his PnL. By 3am most markets had retraced most of the moves. 

On the morning of Wednesday 8th of January, after this massively volatile overnight session, the European session was a lot quieter. Equity markets kept drifting higher while safe haven assets (Bunds/Gold) and Oil kept drifting lower as markets were relieved on the limited response by Iran and the fact that there were no casualties. Trump was scheduled to address the nation at around 4pm London time and it was clear that this would be the catalyst for the next move. 

The market price action was indicating that Trump was probably going to sound harsh on Iran but refrain from announcing further conflict or retaliation after the latest attacks. If that was the case we would expect probably another leg of risk-on (but possibly short-lived as this was now priced in). If on the other hand he chose to escalate tensions further, then we would expect risk-off to hit the markets again.

Trump started his speech by saying that IRAN APPEARS TO BE STANDING DOWN. This was the first hint that he acknowledged that the Iran attack was limited and that hinted that he would not choose not to retaliate. Our Elite trader instantly sells 90 lots in Oil and then sells 80 lots in Gold and buys 280 S&Ps. 

As Trump continued talking he struck a very de-escalating tone by saying that he was seeking a diplomatic solution and peace with Iran. This was the best that the market would hope for and as a result risk assets rallied and safe haven assets and oil sold off to completely unprice any war premium. The elite trader played for a final risk-on move by adding to his positions and scaled his positions out as he started seeing signs of exhaustion in the moves.

Learn The Same Trader Skills From “Trading The Iran Attack”

Our elite trader is renowned for trading global macro events and his execution skills on such events are second to none. A few months prior to this day, over the continuous theme of the US-China trade disputes, he executed aggressively multiple big day trading opportunities. 

To review more examples in-depth of this AXIA Elite trader execution style, have a look at our Price Ladder and Order Flow Strategies training. Moreover, to learn to trade this type of trading and understand execution over geopolitical and central bank events, the central banks training covers in-depth central bank trading strategies.

For information on how to develop your career as a high performing futures trader then check out our range of Trader ​Training courses. Our flagship 8 Week Career Programme can be attended live on our London Trading Floor or virtually from home as an online trading course. These are the most comprehensive training programmes in the world of proprietary​ ​futures​ ​trading industry and are based​ ​upon years of successful in-house skill​s ​development​.

Axia Futures
4 Endsleigh Street London GB WC1H 0DS
+44 20 3880 8500
https://axiafutures.com/

Social Media:
Facebook: https://www.facebook.com/AXIAFutures/
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Contacts:
Demetris Mavrommatis – Co-Founder, Head of Trading
Alex Haywood – Co-Founder Head of Strategy

Trading strategy versatility in different conditions with approaches that have high positive skew will ensure that consistency in returns will prevail. This is why I always try to instill into our new traders that are learning to become a trader that survival is the most critical part of their development in the first 2 years whilst they learn to trade so they can be exposed to all the volatility seasons of the market. Only when you bear witness to the different seasons of the market with a strong continuous development approach and questioning framework can you start to harvest the patterns and strategies that are effective in specific trading conditions. An important note: unless you have a rigorous yet dynamic learning approach you will not  be able to discover your strategies that are best fit for the conditions you are faced with at a point in time. The cycles of the market ebb and flow between compressed volatility and extreme excess volatility, and within that spectrum you need to be able to deploy different trading ammunition into the market that hits the sweet spot of performance at every turn in volatility.

Trading Volatility During Covid-19

During the first 2 weeks of March 2020 you would just need to look at the extreme levels of volatility on the VIX Index to understand that the environment was in panic mode. During panic mode certain conditions prevail that make a variety of strategies much more effective and certain order flow dynamics on the price ladder become much more obvious than during slow market conditions such as large panic orders that appear on the book that result in many type of front running strategies which we train on the price ladder course. During the first 2 weeks of March your ability to operate between 4th and 6th gear was constant, and momentum break-out strategies or fast exhaustion fade strategies were the most effective plays in the market. Also another momentum strategy that was being executed on our trading floor was the Hit and Run which we explore in great detail in our order flow course.

• Trading large size during Covid-19 using market profile
• Trading FOMC as an AXIA Elite Trader when volatility spikes
• Trump tweet creates market volatility for our AXIA Elite Trader

Volatility Contraction

However, fast forward just three weeks later and these strategies that were so successful during the beginning parts of March would be net losers if approached in the same manner. Conditions had shifted sharply after the market absorbed all the global fiscal and monetary stimulus and VIX index collapsed from 80 to sub 45. Our experienced traders became less cavalier in the market and shifted back to a stalking mindset whilst staying in 1st gear most of the day and only when a confluence of factors set up they could then shift to 5th gear when the right trade situation manifested. In early March, having strong news awareness coupled with deep understanding of accelerated order flow dynamics were the right ingredients in such a market to be profitable.

How To Develop Volatility Trade Strategies

As a practice to start understanding which of and when your strategies work best in a broader market context with using market volatility as your determining measure, you can use the following PROCESS approaches:

#1. Average True Range

Use a simple volatility measure such as ATR (Average True Range) or average volume in a specific time frame and overlay that when you are testing the success of your momentum strategies as an example. If the volatility measure is high over the chosen period and the pattern you are observing shows strong success, then you are onto a strong measurement for your pattern in play.

#2. Order Flow Mapping When Trading Volatility

Map the order flow dynamics on the price ladder, which we discuss in our order flow course, that made this trade work and build it into process 1.

#3. Technical Landscape

Review the technical landscape that led to that pattern being successful or not successful and build that into your conceptual framework of process 1 & 2.

3 Trading Principles for Volatility

Watch one of our senior traders discuss 3 key approaches and tactics to trading in volatile market environments.

To learn more about how our team approach the markets and develop a framework of trading approaches and strategies then join our 8 week career program where all our desk traders have graduated. This can be attended live on our London Trading Floor or virtually from home as an online trading course Alternatively, check out our range of Trader ​Training courses. These are some of the most comprehensive training programmes in the proprietary​ ​futures​ ​trading industry and are based​ ​upon years of successful in-house skill​s ​development protocol​.

Continued development

The above can be your first simple approach to building an understanding of which of your strategies work in certain volatility conditions.

I wish you all continuous accelerated development and remember that the markets reward those who have a deep curiosity in how they learn, assimilate and distill their patterns.

Axia Futures
4 Endsleigh Street London GB WC1H 0DS
+44 20 3880 8500
https://axiafutures.com/

Social Media:
Facebook: https://www.facebook.com/AXIAFutures/
YouTube: https://www.youtube.com/AxiaFutures
LinkedIn: https://www.linkedin.com/company/Axia-Futures/

Contacts:
Demetris Mavrommatis – Co-Founder, Head of Trading
Alex Haywood – Co-Founder Head of Strategy

In this video, Adam is going through the execution of our AXIA Elite Trader on Thursday 12th of December 2019. 

It was a very eventful day which started with ECB’s Rate Decision and Press Conference, followed by Trump’s bullish tweets on a US-China Phase 1 Deal and finally WSJ sources on China tariff deal details. Late in the evening of the same day, the UK General election was held.

This was Lagarde’s first ECB meeting after taking over from Mario Draghi and had the potential to be very market moving if she revealed her stance on future policy. However with the strategic review coming up early in 2020, she managed to strike a very balanced tone and not cause any big market moves. Nonetheless, our elite trader started positioning short the Bund when he noticed bearish flows hitting the market after Lagarde failed to say anything overly dovish and also due to a bearish intraday technical structure.

At the same time, the market was waiting to hear from Trump on updates on the US-China Phase 1 Trade deal. Because of the fact that on the 15th of December the US was ready to impose new tariffs on Chinese products unless US-China had reached a deal, the looming deadline made the markets nervous and very sensitive to commentary from both US and China. No deal and new tariffs would have caused massive risk-off into year end, whereas the opposite should have led to a relief rally into year-end for risk assets.

As the bund position of our elite trader was drifting more and more onside, Trump tweets the following: “Getting VERY close to a BIG DEAL with China”. The trader reacted by instantly pulling all his resting bids in the Bund and aggressively adding to his Bund position by selling over 350 lots on the back of the positive commentary. He also bought over 300 S&Ps, sold around 200 lots of Gold and also bought 90 lots of Copper.

The tweet caused big risk-on across the board and he was quickly onside in all the markets he was trading. He kept managing his 4 positions very actively by scaling them out as the market was moving in his direction.

Later on a WSJ story came to add to the positive sentiment as more details on a US-China trade deal were revealed. This made our elite trader to add to his conviction and run his risk-on trades more and adding to his size. 

Finally, towards the end of the day, a smash-and-grab opportunity was presented when a CNBC journalist came out with sources which played down the chances of a deal. Our trader quickly reacted to the news but covered very quickly as he thought the sources were not significant enough to change the risk-on sentiment of the day.

To learn more about how to day trade and develop your career as a futures trader within a professional environment then check out the Axia Futures 8 Week Intensive Trading Course and our other more specialised Trader ​Training programmes. It is the most comprehensive training programme in the proprietary​ ​futures​ ​trading industry and is based​ ​upon years of successful in-house skill​s ​development on our trading floor.

Axia Futures
4 Endsleigh Street London GB WC1H 0DS
+44 20 3880 8500
https://axiafutures.com/

Social Media:
Facebook: https://www.facebook.com/AXIAFutures/
YouTube: https://www.youtube.com/AxiaFutures
LinkedIn: https://www.linkedin.com/company/Axia-Futures/

Contacts:
Demetris Mavrommatis – Co-Founder, Head of Trading
Alex Haywood – Co-Founder Head of Strategy

The appeal of day trading Forex and futures captures the hearts and minds of many new traders. Can you imagine earning a living day trading the world’s financial markets without having to leave the comfort of your home? Most people dream about exiting their 9-to-5 jobs so that they can pursue generating an income for themselves and live life on their own terms. While day trading may sound like an exciting option, many inexperienced and newbie day traders are surprised when they discover some the common challenges within their new career path. Axia Futures offers a range of day trading courses that dive deeper into this topic, but in this blog post we’ll help you get a high level overview of what is day trading and whether or not it’s worth your pursuit.

Definition of Day Trading

Day trading is the activity whereby an individual buys and sells an asset in a short period of time, usually within a day. Day traders aim to generate profits on short-term trades and multiply their earnings over the long-term. 

Today, there are a variety of trading platforms and online brokers who have made day trading more accessible to aspiring traders. For those with the right capital and risk tolerance, day trading offers a means of extracting profits from financial markets band being rewarded for your correct analysis and interpretation of market moving data. 

There are many successful pro day traders who have made day trading their full-time job. At Axia Futures we are proud to host some of London’s most elite traders on our futures desk and that we are able to expose new traders to their wisdom. Still, many who join the industry find it challenging to achieve success in day trading. According to a study by Brad Barber at the University of California, researchers found that only 1% of day traders were able to make consistent profits.

In our opinion, one of the major contributors to this shocking statistic is the lack of quality training that’s available to new traders. Further, there are many so called “trading educators” who sell a fantasy about trading but do not earn their primary income from trading. This is a fundamental difference between Axia Futures and other educators. The traders on our trading floor make up the top one percent of traders and our trading courses model their best practices and strategies.

Everything we teach is tried and tested with real capital and is utilised on a daily basis by our team. If you want to learn how to trade successfully, then you need to learn from professionals with demonstrated success.

How to Day Trade

Day trading requires developing certain skills and characteristics. You will need to learn how to embrace uncertainty and unpredictability so that you can benefit from market volatility. You will also need to master patience and develop the ability to wait to act on perfect opportunities. At these moments it’s important to act with speed and conviction while maintaining flexibility in your thinking to reevaluate new information.

On the one hand your personal skills and traits are important and on the other hand so too are the markets you trade. An essential element in every market is sufficient liquidity. Why? Because liquidity dictates the ease at which you are able to scale a position and move in and out of a market without affecting its price.

Why is Day Trading Challenging?

Expert traders understand what it takes to succeed in the world of trading and ensure that they have as many controllable factors in their favour as possible. Top performing traders utilise professional trading technologies, premium tools, data subscriptions and work in teams to identify opportunities and areas of personal improvement.

When new traders enter this highly competitive environment, they are often unaware of how these factors tilt their odds of success and do not understand why they under-perform more experienced professionals.

To learn more about how to day trade and develop your career as a trader within a professional environment then check out the Axia Futures 8 Week Intensive Trading Course and our other more specialised Trader ​Training programmes. It is the most comprehensive training programme in the proprietary​ ​futures​ ​trading industry and is based​ ​upon years of successful in-house skill​s ​development on our trading floor.

Axia Futures
4 Endsleigh Street London GB WC1H 0DS
+44 20 3880 8500
https://axiafutures.com/

Social Media:
Facebook: https://www.facebook.com/AXIAFutures/
YouTube: https://www.youtube.com/AxiaFutures
LinkedIn: https://www.linkedin.com/company/Axia-Futures/

Contacts:
Demetris Mavrommatis – Co-Founder, Head of Trading
Alex Haywood – Co-Founder Head of Strategy

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