Making a Living while Cruising

[xavier pernol]

I thank you all, for the good answers The reason I ask these question is because I'm not going around the world,yet.I wonder
how you people can keep the finances in check, without going broke(or poor, or leaving from social security,etc), I mean in 5 - 10 year or possibly a bit longer...
Let me explain ! - If you do it on the cheap,let say $30 000 a year x 10 = $300 000 in just ten years; $400 000 is not out of question - or is it ??? .-(I think I'll have to leave my wife at home -and working !!! -...???) - keep it secret.---
It have to be another way : "Wall Street" is NOT for me. Open up guys !!!

[Cormorant]

There have been a number of other similar threads here on CF, with all kinds of ideas.

http://www.cruisersforum.com/forums/...ist-37982.html

http://www.cruisersforum.com/forums/...ing-17288.html

http://www.cruisersforum.com/forums/...ness-2192.html

http://www.cruisersforum.com/forums/...out-72268.html

http://www.cruisersforum.com/forums/...ing-30004.html

http://www.cruisersforum.com/forums/...ean-32161.html

http://www.cruisersforum.com/forums/...ork-77137.html

http://www.cruisersforum.com/forums/...ing-55737.html

http://www.cruisersforum.com/forums/...ing-12251.html

[ImaginaryNumber]

Delfin, thank you for posting your guide to setting up pages in the IB trading platform. I'm doing battle with it now. It reminds me of a Rubics cube! I also appreciate the screen shots you posted of charts, showing possible opportunities and pitfalls.

I'm wondering if any of the mini futures contracts can be substituted for full-sized contracts, at least for intra-markets spreads? I've found minis for the following commodities. Are there minis for commodities that MRCI has strategies for that I've missed?

Crude Oil
Natural Gas
Heating Oil
Gasoline (RBOB)

Soybeans
Wheat
Corn

Silver
Gold
Copper

Euro-Dollars

For those interested, MRCI has now published the hypothetical results for their 2012 strategies. Their recommendations for straight trades didn't do so well, but their spread strategies resulted in very nice returns. As Boden mentioned, though, June, July, and August were pretty rough months.

2012results

[Delfin]

Originally Posted by ImaginaryNumber

Delfin, thank you for posting your guide to setting up pages in the IB trading platform. I'm doing battle with it now. It reminds me of a Rubics cube! I also appreciate the screen shots you posted of charts, showing possible opportunities and pitfalls.

I'm wondering if any of the mini futures contracts can be substituted for full-sized contracts, at least for intra-markets spreads? I've found minis for the following commodities. Are there minis for commodities that MRCI has strategies for that I've missed?

Crude Oil
Natural Gas
Heating Oil
Gasoline (RBOB)

Soybeans
Wheat
Corn

Silver
Gold
Copper

Euro-Dollars

For those interested, MRCI has now published the hypothetical results for their 2012 strategies. Their recommendations for straight trades didn't do so well, but their spread strategies resulted in very nice returns. As Boden mentioned, though, June, July, and August were pretty rough months.

2012results

Good point. No, there is no reason not to use the mini contracts. The commission rate is the same on a mini as on a full contract so they are slightly less efficient, but transaction costs are not that material, IMO.

[Delfin]

Originally Posted by xavier pernol

I thank you all, for the good answers The reason I ask these question is because I'm not going around the world,yet.I wonder
how you people can keep the finances in check, without going broke(or poor, or leaving from social security,etc), I mean in 5 - 10 year or possibly a bit longer...
Let me explain ! - If you do it on the cheap,let say $30 000 a year x 10 = $300 000 in just ten years; $400 000 is not out of question - or is it ??? .-(I think I'll have to leave my wife at home -and working !!! -...???) - keep it secret.---
It have to be another way : "Wall Street" is NOT for me. Open up guys !!!

Fair enough. What I have noticed is that there are certain trades that are always in demand around boats. One in particular is touch up painting on Linear Polyurethanes. I would hire someone to touch up my boat, and have tried to, but they are always booked. It takes a bit to learn how to do this particular task, but with vinylester and an airbrush you can make most any repair job on Awlgrip, etc. almost invisible. Perhaps learn how to do something that people with boats need and frequently can't find?

[xavier pernol]

Thank You for the in-coming ideas. But I was hop-ping for a wider and more fluent banch.
I'm not looking for ideas just for myself, as you will see, and to make my-self clear enough,
here are some more trades (smattering) :
Diesel and petrol engineering
Carpentry
Compass adjusting
Electric - AC or DC
Carpentry
Electronics
Food preservation
Paramedical skills
Plumbing
Sail repair, etc.
...and I have more.
But I want the brain-nies to prove themselves and shine brighter and brighter...
What you say guys - girls ?
(I apologize for my grammar) - is Spanglish

[David_Old_Jersey]

Originally Posted by xavier pernol

Thank You for the in-coming ideas. But I was hop-ping for a wider and more fluent banch.

As per Cormorant's links above - I think this thread has been a popular one in recent years for general ideas:-

http://www.cruisersforum.com/forums/...ist-37982.html

It's long! - and be forewarned, no "magic" answers! - but no doubt things to at least think about.

[Cormorant]

Originally Posted by ImaginaryNumber

I'm wondering if any of the mini futures contracts can be substituted for full-sized contracts, at least for intra-markets spreads?

That's a great idea. I have just started playing around with IB's TWS (not placing actual trades yet), and it seemed that the required margin for the silver-gold spread was something around $19,000, which would put it out of my reach. Minis would be perfect there. The NG calendar spread had much lower margin requirement.

I'm not sure if I'm reading the margin requirements correctly, though. I use the "Smart Spread" to create the spread, and once the combined item is placed on a line in my portfolio, I double-click on it to see "Contract Info," then "Margin requirements." I don't see a single number for that margin -- just two separate numbers for each leg of the trade. So before a trade is placed are they taking into account the hedged nature of the spread, or do they just present me with the independent margin requirements for each leg?

And again a big thanks to Delfin -- without his tutorial on using IB, I would be lost deep in the woods.

[ImaginaryNumber]

Originally Posted by ImaginaryNumber
I'm wondering if any of the mini futures contracts can be substituted for full-sized contracts, at least for intra-markets spreads?

Originally Posted by Cormorant

That's a great idea. I have just started playing around with IB's TWS (not placing actual trades yet), and it seemed that the required margin for the silver-gold spread was something around $19,000, which would put it out of my reach. Minis would be perfect there. The NG calendar spread had much lower margin requirement.

Apparently some/many of the mini's have very little volume, and so may have large slippage. Concerning the metals a broker told me:

So, the only metals spread you could reasonably trade with mini contracts would be the Gold / Silver [or, Silver / Gold] spread. There are no mini platinum contracts and while there are miNY-Copper contracts traded on the CME Globex exchange, their liquidity is not sufficient to trade them.

There are actually a few mini gold and mini silver contracts available, but the preferred ones are the contracts traded on theNYSE Liffe U.S., NYSE Euronext’s U.S. futures exchange.

Notice that the mini-Gold contract is a 33.3-oz. contract – one third the size of the better-known 100-oz. contract traded on the CME Globex exchange, whereas the mini-Silver contract is a 1000-oz. contract – one fifth the size of the better-known 5000-oz. contract traded on the CME Globex exchange.

The leverage of the two suggests trading 2 mini-Gold (66.6% of the 100-oz. contract) and 3 mini-Silver (60% of the 5000-oz. contract) to better match the leverage of trading a gold / silver spread using their full-sized relatives.

Briefly, you would use the same futures contract months for these markets as you would for their full-sized relatives.

Liquidity is plenty sufficient to trade theses markets.

There is some information about mini volumes here:

E-mini - Wikipedia, the free encyclopedia

But the table is dated 2010, so may not be too useful.

[sailorgal]

Here is a book recently published by a couple of cruisers. The name(s) may be familiar to some on this forum.

Their philosophy is that you are out cruising for fun and shouldn't be spending many hours a day trying to make a living. They trade a couple of hours a month and are able to sustain their lifestyles.

I recently bought the e-book version and there are some great ideas that I plan to follow.

Live on the margin: Patrick Schulte, Nick O'Kelly: 9780578116648: Amazon.com: Books

[Delfin]

Someone sent me a PM today on spread trading, and in wandering back over this thread, the results from Moore Research spread recommendations for 2012 weren't ever posted. Those results can be found here: 2012results

The theoretical results without slippage was a gain of around $96k with around $45k committed in margin requirements on deposit. I say theoretical because they calculate their results as if every trade was executed at exactly the closing of the market for that day. There will always be some slippage, and I wouldn't recommend trying to trade at the close of market. I now prefer to set my trades to automatically execute at 9:00 am, when the market has plenty of liquidity. My actual results, with me trying to outsmart the system by staying out of some trades, flaking off and forgetting to enter some or exit others on time is usually around 80% of the theoretical results.

The posted results also show the return on their recommended straight trades, and illustrate why I don't do straight commodity trades. A tremendous amount of drama for essentially no gain. This usually doesn't happen, but who needs to go from up $60 k to down $40 k in a couple of months? Not me. Spreads are much more, er, sedate.

As already noted, this isn't recommended for everyone.

[TheNomadTrip]

I was flirting with this last year but life got in the way.

It looks like I might soon be taking off, so this is more relevant again. I have a really general question:

- Given the nature of cruising (off the grid, usually), can a system like this be work by connecting to the internet only a couple of times a month?

My assumption is that you need to be able to get in/out of these positions consistently, when MRI says to. IE - if you're not around, and not trading, for a month you would lose the real benefit to trading this way - consistently following MRI's suggestion.

[TheNomadTrip]

Originally Posted by sailorgal

Here is a book recently published by a couple of cruisers. The name(s) may be familiar to some on this forum.

Their philosophy is that you are out cruising for fun and shouldn't be spending many hours a day trying to make a living. They trade a couple of hours a month and are able to sustain their lifestyles.

I recently bought the e-book version and there are some great ideas that I plan to follow.

Live on the margin: Patrick Schulte, Nick O'Kelly: 9780578116648: Amazon.com: Books

So - did you take any of their advice? How'd it work out for you? I read the book, enjoyed it, and wouldn't mind playing with it a little.

[Cormorant]

Originally Posted by TheNomadTrip

- Given the nature of cruising (off the grid, usually), can a system like this be work by connecting to the internet only a couple of times a month?

If you had good internet access twice a month, i.e. every 2 weeks, you could do this just fine. Delfin mentioned that he sets up all his trades each Sunday to execute automatically throughout the week. When you place the trade, you enter a "condition," and that condition is the date and time after which you are willing to buy/sell the spread.

The only tricky part would be getting out of spreads that have hit their "stop loss" level -- the level at which MRCI recommends bailing out if things aren't going well. This can't be set automatically on spreads (though it can on straight trades).

Delfin once asked MRCI if they had modeled the portfolio both using stops-losses and not, and apparently over time, there's no real difference. Some spreads come back from an anamalous plunge. Others don't.

Edit: One last thought -- MRCI releases their recommended trades one month in advance. So, say, on March 1 (or sometimes the 2nd or 3rd depending on weekends), you would have all of the March recommendations and all the April ones. So theoretically you could enter them all for automatic execution and take off for 2 months, return on May 1 and do it again, return on July 1, etc. You would need to be well margined in case a few went bad. But it's doable.

[Delfin]

Originally Posted by Cormorant

If you had good internet access twice a month, i.e. every 2 weeks, you could do this just fine. Delfin mentioned that he sets up all his trades each Sunday to execute automatically throughout the week. When you place the trade, you enter a "condition," and that condition is the date and time after which you are willing to buy/sell the spread.

The only tricky part would be getting out of spreads that have hit their "stop loss" level -- the level at which MRCI recommends bailing out if things aren't going well. This can't be set automatically on spreads (though it can on straight trades).

Delfin once asked MRCI if they had modeled the portfolio both using stops-losses and not, and apparently over time, there's no real difference. Some spreads come back from an anamalous plunge. Others don't.

Edit: One last thought -- MRCI releases their recommended trades one month in advance. So, say, on March 1 (or sometimes the 2nd or 3rd depending on weekends), you would have all of the March recommendations and all the April ones. So theoretically you could enter them all for automatic execution and take off for 2 months, return on May 1 and do it again, return on July 1, etc. You would need to be well margined in case a few went bad. But it's doable.

I agree with all you say, Cormorant. As an FYI, the way I handle managing a daily review of spreads that have hit the stop loss is to have my son take a look at each spread in the evening, then if a stop loss has been hit, he just puts a sell order in on the spread about 5 minutes after the market opens. In other words, I get some help when gone for longer than a couple of days.

It helps to lay out the spread in a way that someone else can figure out what is going on, and the image below (hopefully is displayed) shows my method. The spread number, exit date, projected profit and stop loss values are entered, the the legs of the spread. All my son has to do is see whether or not the stop has been reached, if not, he ignores it until the next evening. Not tough to manage when out of sight of land with a little help.



p.s. If you look at Moore's recommendations for straight leg commodity trades - NOT RECOMMENDED - they don't use stop losses at all for the reason Cormorant notes.