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Wednesday, April 18, 2012

REVERSAL




Bond trade #1 is in the books as a profit of 5/32's. The open tonight was 114'26 which was greater than 114'20 our entry so exit at the market, my fill was at 114'25. There was also a new trade generated on the opening so the system is now short at 114'25, I am in the trade. For the purposes of the blog some of these entries are going to be posted a few hours late like this. If this actually becomes a service, they will be posted in the web site in a timely fashion so subscribers can catch them in time. Most of the time you can catch them after the fact anyway as they typically go against the entry direction for at least a little bit even in the good ones. You can typically limit your way into them after the fact. I don't do this because you don't want to start out smarting a system, if you do believe me it will out smart you in the end. I take them just as they get spit out like a blind man would. You can see on the screen where the stop is being carried. Like every trade the profit objective is the first profitable opening unless we get a signal in the other direction, in which case the position will be reversed. Let's see how we do.

Ironically in my discretionary trading this market appears to be setting up for a sell although it is not ready quite yet. I have not bothered to study how often these mechanical signals sync up with my other types of entries, but it might be an interesting study. This system is just designed to catch moves on a very short term basis, whereas my other trading is designed to catch moves of 3 to 15 days or so. My old S&P 500 System has been a disaster in recent years. When I went back and looked at it, almost none of the old setups for trades in the mechanical system have held up at all. The ES is the toughest market to trade by far because it is comprised of a million people with $5000 accounts who have no business trying to trade. They get scared every time they are down $50, so the charts are just so choppy intraday it is brutal. I am not trying to be an elitist snob, that is just reality. You should have at least $25,000 in your account if you want to make a run at trading. You can do it for less but you are very limited.

My very short term indicators are looking very strong for stocks for tomorrow. Then depending on what happens, they could turn back down Friday on a decline, so we are at an inflection point here. I am leaning to the long side, but am not in a trade in the Indexes right now because I don't have an entry pattern. There just is not that much to talk about right now, the markets are horribly choppy.

One market to mention is the Yen. I do think that now this is setup to be a sell on a bounce of a couple of days.



We are in a longer term down trend, we rallied enough to trap some people into thinking the trend is reversing. Next we broke the short term support market on the screen. Now if we bounce up a couple of days then start heading back down, this will be an ideal short setup. If we just take off right here back up, the trend will have changed. It is in a show me spot right here.


4 comments:

cristian said...

I like this post!!! :)

Chris Johnston said...

any particular reason?

cristian said...

no!!! ..simply I like how you write about trading & your view of the market!! :)

I am a trader !!!I look only 2 blog: and one is your!!!

I have the same idea about Yen: I look for short sell market for some days, else if cot commercials are buying position !!!

for esmini and bonds: day trading is very nevrotic, and some trading strategies to short term trading are less consistent than in the past for me too.

Michael Tredr said...

"they get scared every time they are down $50..." LMAO!

as hard as it is for people like me to hear this, it's very true. I don't care what any book written by a market expert or an inspiration guru says, you must have proper capitalization to succeed - especially in this business. anything less and i feel like you're setting yourself up for the vagaries of (for lack of a better term) luck, both good and bad.

that being said, it's funny that you've been doing your bond trades because out of all the markets, I feel like the bonds have been the only ones that have acted like a market - at least for the past 3 weeks or so going through the entire price movement cycle. and i also do believe it is setting up for a sell, although to be frank, i'm rather gunshy on putting any money forward on that assumption.