1. Day-Trading Commodities and Navigating the Prop Firm Universe

2. Personal Background 2002 Graduate from University of Notre Dame
Equity Prop Trader
Tape reading
Opening strategies
Futures Prop Trader
Technical analysis
Psychological analysis

3. Agenda Futures Market Overview Proprietary Trading Firms
Technical Analysis
Trade Strategy/Examples

4. Futures Markets

5. Market Participants Farmers, Manufacturers
Hedgers
Speculators
Farmers, Manufacturers
Hedge against future price risk
Lock in price margins
Benefit from risky nature of futures markets
Provide liquidity
Does not intend to take delivery

6. Characteristics of Futures
Margin
Different from equities/options
Determined by exchanges
Expiration
Monthly and quarterly
Leverage
Control large amounts of a commodity with little capital

7. Crude Oil Futures (WTI)
Traded on NYMEX/GLOBEX
1000 barrels/contract
Margin = $3,740
$10/tick
Pit Hours: 9:00am – 2:30pm
Avg. Daily Volume = 210,000 contracts
Avg. Daily Range = $1.70

8. Proprietary Trading Firms
Traditional Model
Profit Split/Draw/Fees
How to gain entry

9. Prop vs. Retail Keep 100% of profits Need substantial capital
Retail Trading
Prop Trading
Keep 100% of profits
Need substantial capital
Responsible for support
Profit split
No capital needed
Access to software, community, etc

10. Equity Prop Trading Personal Experience Current Landscape
Spike Trading/Assent
ECHO Trade
Current Landscape
Prop vs. Arcade
Capital Contribution vs. Fee for education

11. TopStep Trader Education & Recruitment Chat room Guest Speakers
Product rooms
Energies, Metals, Equities, FX, Interest Rates
Guest Speakers
Dr. Andrew Menaker, Ron Feinstein, Anne-Marie Baiynd, John Bougearel, Wally Labuz

12. Topstep Trader Chat

13. TopStep Trader Combine
Used to evaluate trading talent
$30K, 50K, $100K and $150K accounts
Evaluation Metrics
Can not hit daily “loss-limit”
Achieve profit objective
Winning day percentage > 55

14. $50K Combine Example 10 or 20 trading days 5 lot max position size
$3500 profit objective
$2000 max drawdown
$1000 daily loss limit

15. Patak Trading Partners
Combine  Live Trader
Junior vs. Senior trader
Mentoring
Morning meetings

16. Technical Analysis Trend Lines Support/Resistance
Fibonacci Retracement/Extension

17. Trendline

18. Trend lines (example)

19. Trend

20. Trend (Example)

21. Support/Resistance

22. Support/Resistance Example

23. Fibonacci Retracement/Extension
Most important retracement is 61.8% (Golden Ratio)
Key Zone = 61.8% %
38.2% - 50% is used as a trend indicator
161.8% extension used for targets/support/resistance

24. 61.8% Retrace

25. 61.8% Retrace (Example)

26. CL 161.8% extension

27. CL 161.8% extension

28. Trading Strategy Top-down view to find levels
Fibs
Trendlines
Highs/Lows
Focus on the psychology of the markets
Springs/upthrusts
Flags/pennants
Momentum – used for entries at key levels

29. Springs & Upthrusts Provide excellent risk:reward situations
Immediate feedback
Occur on all timeframes
Powerful with the trend
Spring
An immediate rejection of a previous low
Upthrust
An immediate rejection of a previous high

30. Spring – Daily Chart

31. Upthrust – Daily Chart

32. Spring – 500 Tick Chart

33. Upthrust – 500 Tick Chart

34. Continuation Patterns
Flag Pattern
Sharp move higher/lower
Tight consolidation near highs/lows
Continued move higher/lower
Pennant Pattern
Forms in top of uptrend/bottom of downtrend
Series of lower highs/higher lows

35. Flag

36. Flag (Example)

37. Pennant

38. Pennant (Example)

39. Q &A