Trading As A Full Time Job! | Trading Futures | ThinkorSwim | BOND FUTURES | BOND EDGE

Trading As A Full Time Job! | Trading Futures | ThinkorSwim | BOND FUTURES | BOND EDGE

Hey guys, it's Jonathan.

So, we've been coming out with a lot of these different EDGE Tools and it reminds me of a story.

So from '97 to '03, I traded NASDAQ futures on the floor of the Chicago mercantile exchange. Over time, I became very good, one of the best on the floor, one of the best in my pit. After being down there for five years, the market changed. Volatility got really low and people were having a very difficult time. It was at that time that a brand new bond firm was starting. One of the members of that new bond firm knew of me from the floor, knew of my reputation, knew that I could make money. He asked me to come up for an interview and I accepted.

The timing was perfect because the trade in the NASDAQ was getting tough, I was making less money. I could see people around me were going out of business. It was tough. And what was so easy became very, very difficult in 2003. So I entertained this conversation, but the most difficult thing for me was that I was an independent floor trader. I had been trading for five years. I had just had four straight seven figure years. I was working for myself. I was young. I was dumb. I had too much money, but I did see the opportunity. And so I decided to join this firm because I knew being on my own wouldn't be a good long-term play. I took the chance and joined this firm. What I wasn't happy with, I was now working for somebody, but Hey, that's how the cookie crumbles sometimes.

When I joined the firm, I was the sixth employee. The members of the firm at that time were old-school bond traders. Now in Chicago, the wealthiest, the most respected traders are the old school bond traders. Those are the guys that in the eighties and nineties, they were literally printing money. Everybody I know who traded back then and traded bonds is a wealthy, wealthy individual. If they didn't screw it up and lose it. And I was an arrogant kid coming right from the NASDAQ, I was one of the best down there. But when I walked into the room with these bond traders, I was a small fish. I was a young punk. I learned the trade and in the first month I made $160,000, but I made the money in a different way than all the bond traders were trading. The owner of the firm, who was an old school bond trader himself had something that was different from the other old school traders.

He was really freaking smart. He wasn't just the trader. He could create tools. He could code. He was an absolute genius and noticed what was happening in the industry, that things were being enhanced by computer software. And those who don't move and grow and adjust are going to be left behind.

The majority of people in the office were 50 years old with all these beautiful houses out in Aspen, driving these fancy cars, guys with a lot of money. But I came in and the owner of the firm was working on new technology. It was a new spreader. It was a new way to watch the market. The older guys wouldn't use the new tool. The older guy didn't need to use the old tool. They had a way of making money and they were still making money, but they weren't looking down the line. They weren't saying, wow, what happens if the industry changes? So the new tool that the owner wanted me to use, I started doing it. And again, I made 160 grand the first month. I did the same thing the second month.

And what I've found is going out for dinner, hanging out after the close, working out with some of the older guys, they didn't really respect me. They thought, oh, the spreader's doing the work, you're not doing it. You're just a young trader was following some automated machine. And I'm thinking BS, I'm not that guy. I'm not an MIT quant. I came up to the school of hard knocks. I was on the floor. I was trading with my hands. I don't need an automated program to prove to these guys that I can make money and I can be a good trader.

So I went out for dinner with the owner of the firm, the owner of the firm, again, this is the old school bond guy, but he's also just wicked smart. Put in perspective, this guy's got a plane, he's worth over $20 million. He's the real deal. I said, I love it. I love that I'm learning. I love being with your firm, but I feel like I want to trade a little bit like the old school guys in order to build up my credibility. I want them to see that, yeah. I'm not just making money because of the spreader. I'm making money because I can freaking trade, I'm legit. And the owner of the firm said to me, “What the f***? It's all BS. F*** them. Keep doing what you're doing. Let's grow.”

This is how we're going to be trading. This is the direction the firm is going. Those guys all make a bunch of money. They're stubborn. They're making less and less every year. And if they continue going down the same path, they're dinosaurs. Embrace new technology, embrace change. We're building these tools. And this is what he was telling me, because this is where the industry's going. Trading is competitive. And I always say that the market is going to continue to evolve and improve. Traders, the bond traders, the old guys are going to do this. Yeah, they make a bunch of money. But as the market improves, they're not doing anything. You need to grow with the market. So we're coming out with all these new tools, Bond EDGE. Why are we trading things differently? We're not doing anything different.

These tools do the work for us. These tools are the next evolution of how we're going to be trading. So I got a question yesterday asking “is the old way of trading bonds obsolete? Is this rule only going to be new tools and this way of trading?” The answer is sbsolutely. We're moving forward. If we have a better way to approach the market, why in heck would we ever go backwards? We're moving forward. The tools that Pablo built, Pablo built them because he learned How to trade relative value through my education. He can program. He can code. He started thinking “these are awesome how can I automate them? How can I make it easier? How can we follow more markets? How can we improve? How can we grow? How can we evolve with the markets?” That's what the new edge tools are. That's the direction that we're going in.

As far as ratios that we're using, we're using the same ratios that the board of trade releases. You still Have the flexibility to do anything you want with ratios. But if you stay with me guys, we are constantly going to be moving forward. I'm not trading the same way I did five years ago. I'm certainly not trading the same way I traded 15 years ago and five years from now, I have to keep evolving. I have to keep improving. Don't continue doing the same thing. The tools that we're sharing improve our trading. They're going to benefit us. There are no games. These are not one and done tools that we're going to go back to trading our other way. We are changing our game. We're moving forward. We just want to see who wants to move forward with us.


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