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Neal: Do you believe in the back-testing of trading systems? |
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Andy: I'll give you what sounds like a politically correct answer: yes and no. All successful traders do some amount of testing in a simulated environment before going "live" where they are actually losing or making money. But they also understand that real-world trading can and will have different results. I have also seen traders with Ph.D.s in astrophysics who have back-tested their systems for years but were baffled when their system went haywire when they had real money in their account and had to place actual trades in the markets. They didn't bother to learn the details of markets, such as active trading months, liquidity, bid-ask spread norms, and stop slippage. |
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Neal: What type of capitalization do you require of customers? |
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Andy: Commerz Futures is restricted to clearing institutional clients by the definition of the Federal Reserve. Our clients are mostly proprietary traders or treasury people who work for international financial institutions. We also execute orders for the customers of other institutions that clear their customers' accounts but don't handle all the execution services. |
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Neal: What are some of the new or less-known exchange-traded financial derivative products that you or your traders deal with on a daily basis, and how would they impact Chicago-style trading? |
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Andy: Successful futures traders quickly realize that their trading style may suit many different markets. Information on new products is now available free of charge from most exchange Web sites. In the past, if a trader asked a broker about a new product that the broker either didn't understand or didn't know about, the broker would usually try to dissuade the client from |
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