This series of trading floor stories will explore some of the core practices, routines, and trading frameworks of our AXIA Elite Traders. In the first installment, we explore one of our most diligent practitioners of what it means to journal trade ideas and why he does it. He is the Profile Engineer.

Decades before Harvard psychologist Daniel Gilbert’s witty and wise observation that “human beings are works in progress that mistakenly think they’re finished,” The Profile Engineer is the antithesis to this idea as his core belief framework subscribes to the notion that he needs to constantly evolve with the shifting landscape of market opportunity whilst carving his own unique personality on the trading floor.

The Profile Engineer has been slowly fermenting his process over the past 6 years on the London trading floor into a brew that has refined itself into a classic vintage that will be recognised for all its delicate but purposeful acts of trading and its process re-engineering of a world-class nature. A constant grafter at his art and yes his trading is his art and his purpose is to constantly seek the masterpiece in his trading which he knows is a constant journey and piecemeal adaptive process.

Perhaps his greatest strength, that separates him on the trading floor, is his constant pursuit of understanding how we learn, how we make decisions, and how we evolve during the cycles of understanding ourselves emotionally whilst grasping the patterns of the market.

One of his other powerful traits which dovetails perfectly into the trader development process is his “depth of field” and seeing the long game like a Conifer tree forgoes competing for immediate gain and gratification against the angiosperms for sunlight territory. The Conifer slowly sacrifices short term gains whilst assembling its natural assets before it hits an explosive growth rate later down its development cycle and then becomes the true outstanding feature of the natural world. What all our new traders can learn from the Profile Engineer is that whatever you practising today is sewing the fruits for tomorrow.

Developing Outside The Trading Floor Environment

A prolific reader on wide-ranging subjects which he sees helps him grasping reality and expanding his mental models to encapsulate the wide spectrum of market opportunities with high levels of understanding but more importantly to generate a more creative approach to his market understanding. He is a pioneer in the team among many of his trading floor colleagues in leading the way to how we record patterns and most importantly how we recognise them in their reoccurrence in real-time and how to structure plays by leveraging his ideas when the auctioning nature of the market coincides with his technical plan. He is a large proponent of the Market profile and using the price ladder as confirmation to initiate his technical zones of conviction. A momentum seeker by profession but is equally adept at aggressively positioning in counter-trend flows after extreme exhaustion events. He has built himself up to trading significant size in Bunds, Emini-SP, and Crude Oil. His daily swings can be anything between 6 – 7 figures. This is just the start for him as given his style and approach in the market he has the ability to significantly leverage numbers of 10 X his current performance without having an influence in the liquidity dynamics of the markets he trades. 

The Profile Engineer is religious of a fundamentalist nature in terms of having a rigorous routine and process in recording his observations of the patterns of the market by way of having confidence in logging his observations routinely. 

Other Trading Floor Articles That May Interest You

• How a trading floor can accelerate your learning
• Profile Engineer executes market profile trade
• Profile Engineer manages big size using the price ladder

Intellectual architecture and expanding one’s latticeworks of mental models

In a famous speech in the 1990s, Charlie Munger summed up this approach to practical wisdom: “Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ‘em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form. You’ve got to have models in your head. And you’ve got to array your experience both vicarious and direct on this latticework of models. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and in life. You’ve got to hang experience on a latticework of models in your head.”

The scope of one’s interest and genuine infatuation to LEARN is one of the driving factors in expanding one’s mental models of digesting “reality” so as to tackle the markets with a more skillful and imaginative manner. This helps to a great degree to manufacturing true EDGE. The shape and variety of one’s intellectual framework I believe is the determining factor to constantly harvesting profitable ideas from the market. This is cultivated by one’s wide array of interests. The diversity in his interest, away from the trading floor, and curiosity spectrum being it from learning to surf, weekly yoga practice, learning new gastronomic dishes feeds his intellectual hunger for that sort of cross-disciplinary curiosity and self-directed learning which in turn expands his creative edge in the market.

From the book Great mental models they succinctly explain the importance of expanding one’s latticework of mental models for the benefit of helping and profession or skill pursuit you may embark upon.

Latticework is an excellent way to conceptualize mental models because it demonstrates the reality and value of interconnecting knowledge. The world does not isolate itself into discrete disciplines. We only break it down that way because it makes it easier to study it. But once we learn something, we need to put it back into the complex system in which it occurs. We need to see where it connects to other bits of knowledge, to build our understanding of the whole. This is the value of putting the knowledge contained in mental models into a latticework. It reduces the blind spots that limit our view of not only the immediate problem but the second and subsequent order effects of our potential solutions. Without a latticework of the Great Models, our decisions become harder, slower, and less creative. But by using a mental models approach, we can complement our specializations by being curious about how the rest of the world works. A quick glance at the Nobel Prize winners list shows that many of them, obviously extreme specialists in something, had multidisciplinary interests that supported their achievements.

Distillation Process Away From The Trading Floor

One of his core learning beliefs is how one cements the learning from the past trading week once away from the trading floor. In the heat of the battle and after each trading day when our emotional and energetic reservoirs are depleted it becomes challenging to fully harness our personal learning from the market. Although his end of day routine includes Evernoting (Digital Journaling) the daily patterns of the market and his subjective observation on his self-aware state it is not until the weekend where he can fully observe and deeply investigate his performance from the past week. A key point to observe here is his end of day realtime journaling is critical as it records his direct real-time self-evaluation of the day, it is just more difficult to fully digest the learnings from day until a more productive mental state is engaged when one can fully develop and implement one’s market lessons. Only when one is full of renewed energy and has stepped outside the cauldron of market battle can one in a relaxed setting start using our critical faculties of evaluation to isolate our key areas of market performance and update our pattern observations and cement ones learning and key takeaways from the past trading week. One’s comprehension skills are amplified in this relaxed but focused setting. This is what he calls the distillation process where one’s neurological faculties are firing a different tune, a tune that is absorbent of key information that then gets transformed into trading knowledge. The distillation process is where our conscious observation and questioning application we engage on the weekends results in the alchemical transformation into our unconscious pattern recognition states of awareness when we essentially start training our instinctive recall skills. This is where deep synthesis takes place and enhances our understanding of deep market mechanics and pattern dynamics.

Many traders on any professional trading floor can be deeply committed to their weekly routine of keeping a journal both of market patterns observed and their self-talk analysis but without the weekend distillation process then much of the hard work done during the week is wasted. Without distillation, we do not reprogram our market mind and are at the mercy of repeating the same degenerative bad habits from the weeks gone by and one’s market growth and improvement are thwarted. It’s like building an F1 sports vehicle with all the modern technology by all the best engineers who have developed a world-class vehicle but without the tires, the vehicle becomes of no use. Journaling during the week without the weekend critical analysis is in essence not putting the tires on your vehicle and thus you remain stationary in your learning no matter the quality of your daily journaling.

The London Trading Floor Live Stream

If you are unable to join a trading floor but wish to get the next best thing, check out our daily live streams from our London Trading Floor or learn to trade with a range of our Trader ​Training courses on offer. The Axia Futures 8 Week Career Programme can be attended in-house or virtually from home as an online trading course. These are the most comprehensive training programmes in the world of proprietary trading​ 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/
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 first key building block to developing one’s trading skill is being surrounded by successful traders on a trading floor whilst immersing yourself in an informational ecosystem that is rich with an opportunity spectrum of approaches and proven edges. It then requires an open mental faculty of digesting and filtering through the key informational flows from such a trading floor. However a trading floor that is successful but without a voice is like Lewis Hamilton teaching a teenager to drive blindfolded. No matter the talent of any instructor, if one cannot see or hear their teachings then there is little room to learn from anyone with a track record of success.

Your learning progress is accelerated when a trading floor has a healthy voice and the source of its voice is the product of consistent and routined success. Being on a trading floor with such a voice that is conversational in respect of real time market-action, made up by multiple successful traders, has an exponential effect on the learning process of a developing trader. Being governed by a variety of specialised market opinions, voiced in real time, provides many varied angles of attack and ways of interpreting and understanding the underlying market mechanics being witnessed in each moment.

This running commentary, especially when markets awaken with systemic volatility or when a specific market enters new price territory and brings in a wave of market participants creating new auctioning flows, can provide the right fertiliser for a developing trader. It stimulates curiosity when one is surrounded by senior, profitable traders who focus their attention in a certain area or dynamic zone and creates a full sensory learning experience in how they interpret and react to new market information. Being exposed to this quality of focused attention with live vocal commentary by a successful trading floor is pure learning gold for any junior trader.

The key, if you want to build habits that last, is to join a group where the desired behavior is the normal behavior.

James Clear

Trading Floor learning dynamics

Beginners Mindset on a Trading Floor

However it requires a beginner’s mindset, a solid questioning framework and self awareness to fully exploit one’s learning in such a dynamic environment. This is especially true in an environment that commonly has extremely strong characters. Without enough self awareness, you can fall subservient to every mouse click you hear on the floor as your identity is slowly hijacked. In such an environment it is important how you choose to listen to the trading floor and not merely act upon what you hear. Rather, you should listen, digest and assimilate the rationale for the ideas that are reverberating around the trading room. It is this synthesizing process that is the first port of call for one’s own rapid progression. You can see many examples of how one of our Elite Traders rapidly processes information on our YouTube channel or in this previous post on how he traded China Trade Wars.

Consolidating Your Trading Floor Experience

At the end of day is then critical to journal and consolidate your experience so that you do not lose the lessons you have gained on the floor. By consciously recording your experience and observations you will embed the many subconscious patterns and cues into your psyche. Neglecting to do this often makes the developemental journey even longer especially if your goal is to cultivate your own skills of unconscious pattern recognition.

As the processing capacity of the mind to train your skills of pattern recognition is most fertile at the end of your session, this is when one’s experience needs to be harvested to the maximum degree, otherwise a day loaded with powerful ammunition for learning is simply wasted. At Axia Futures, we call this your end of day debrief of deliberate focused attention and meditative assimilation in order to develop core recall skills. This is a major topic with multiple approaches that we unpack in-depth on our 8 week career trading course.

Removing Your Trading Floor Input

As a group of high performing traders, our primal instincts are to benchmark best practices and ignite healthy competitive spirit within the team. To continue growing as a group and to do this on a mass scale, we continually need to ensure that individuals are surrounded by top performers, as this is what drives us to higher levels of performance. Exposure to constant daily informational inputs from the trading floor uncovers many blindspots that each individual may have not noticed in their trading day. As Axia Futures, this may have dovetailed into our EDGE Zone sweetspot.

I have seen many traders in my 16 year career who were incredibly successful on the trading floor that then left for “greener pastures”. In many instance they predomantely trade on thier own and slowly slip down in P&L over a few years and never exceed their previous performance levels. Whilst the individuals in the group continue to grow, the individuals who leave become lone wolves and inevitably plateau in their P&L curve.

From developing on a trading floor to later going solo, you effectively remove the key inputs that initially helped you to build a sense for the market. This was informed by the energy on the trading floor which acted as a barometer for energy within the market. Therefore, I always say to our traders who are keen on growing to keep on doubling down on what you doing well and maintain the habits and environmental design that has led to your current success.

• Take a look at our training if you wish to develop your trading career
• How to build your footprint chart on Sierra
• Join our daily livestreams direct from our trading floor

The London Trading Floor Live Stream

If you are unable to join a trading floor but wish to get the next best thing, check out our daily live streams from our London Trading Floor or learn to trade with a range of our Trader ​Training courses on offer. The Axia Futures 8 Week Career Programme can be attended in-house or virtually from home as an online trading course. These are the most comprehensive training programmes in the world of proprietary trading​ 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/
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

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