Education in the Markets

  Here is what can happen when you chicken out and take a little winner. In the end, you really lose...

 Well, opened the charts this morning and had a little surprise. Usually, all of the charts are pretty similar. But this morning, it seems like the longer-term products (ZB and ZN) were looking bullish, while the ZF and ZT were still bearish. Here is a screen shot at about 0900hrs (after the 0830 numbers) to show you an example: So anyway, after the numbers, as prices went parabolic, looked at Fibs to get me an entry point. As the Turning line was on the 50% mark, put a buy order for that. Ten tick stop.  Filled 0844: Bot 1 x ZN @ 114'190. Stop 10 ticks. Tgt 20 ticks.  I want to use a PSAR to move my stop level, as I am looking at this as a day trade (chances that it goes up to a point before end of day are low). Thought about using a 3M PSAR, but the 15M looks better and will give some wiggle room.  After the past month, the hardest part will be not to rush into taking profits before my target. But I know that this is where using the PSAR comes in.  Update 0948...

 Well, what an interesting day. Price seems to be all over the place, so the plan today was to make short trades to close targets and trail my stops with PSAR. Worked OK and am out with a small profit for the day, but almost enough to buy a cup of coffee.  Looked at charts this morning and noted that there were GDP and Jobless Claims coming out at 0830hrs. So, sat on hands until that time. After the numbers, prices were plunging, so looked at 12-tick reversal, but switched quickly to 4-tick on ZT. At 0835hrs, Sld 1 x ZT@103'037. Using 10 tick stop and normal 40 tick target.  Used a 3M PSAR to trail my stop and lock in some gains. At 0911hrs, Bot 1 x ZT @ 103'028. Good trade; continued to trail down stop. I followed my plan. At this point, perhaps heady from the huge profit I made ($50), I decided to look at the other notes. The ZN was setting up for a Fib retracement, so decided to get in. Price had already retraced into the 50-61% zone, so put in Sell stop 1 tick under t...

First thing this morning, I made a plan to wait for the 1000hrs numbers to get assimilated, so I have been watching all morning as price declined but didn't enter. I felt frustrated on missing such a large move down, but kept thinking about trading only according to the plan, do didn't make any impulse trades. In the end, nothing really happened with Investor Confidence. But at that time, price was between the turning and standard line on the 10M chart, so I waited for a better setup, as price will do anything when between the lines. Prices on the 10M chart kept rising to the cloud, spent some time in it, then closed under. I waited for the 10M bar to close, and put in an 8-tick reversal (as 12 would have been way above the cloud), but price moved sharply down. As it continued to make new lows, I moved the sell level down, but after 4 moves, switched to a 4-tick reversal. Filled at 1200hrs: Sld 1 x ZT @ 109’095. Running with 10 tick stop (right or right out) and targeting just ...

 So, markets were continuing to drop last night, so I thought I would use the 2-year notes to continue to take advantage of the drop. I looked at the price at about 2000hrs last night, and entered a 12-tick reversal. When I went to bed, it hadn't been hit, and the price had dropped, so I lowered the sell price and went to bed. Overnight, at 0001hrs, Sld 1 x ZT@103'060. Twenty tick stop, 50 tick target. And the price continued up, so was quickly stopped out. At 0034hrs, Bot 1 x ZT@ 103'085 for a loss of 1R.  These swings are getting tiresome. But stick to the plan for now, and see if the plan needs to change.  Since there are big numbers coming out this morning at 1000hrs, I didn't get into the current waterfall: I will see what happens just after 1000hrs.

 So, as I go through this process of becoming a better trader, I am finding that the hardest part is to calm my mind and be calm when I am trading. When I am not calm, I get anxious, and it ends up with me not taking trades (because I am scared of taking a loss), or taking trades haphazardly that do not meet my entry conditions.  As I work through this, I find that I have missed something: goals. Of course, my goal is to be a profitable trader; one who takes every setup that comes along that fits my parameters, is comfortable with losing, but has a upward-sloping profit curve. As I was sitting listening to something with Sandy, the person was talking about looking at  "Your Miracle Scale"; where you look at what it would take to think you have accomplished a miracle! Ten is completing everything you want, and 1 is doing the opposite of what you want. Every time you mess up, you are not starting at 1, but you are just human and are still somewhere in the middle. If you mak...

 What do you do when you really want to trade, but it doesn't make sense? Do you take the trade anyhow? I guess the answer is that you shouldn't, but today I found myself really wanting to trade, and I disregarded my Trading Plan. What was the outcome? Can you guess? So, lots of numbers today. I was travelling last week, and didn't get in on the nice run up Thursday to Friday. Didn't trade yesterday, as there were some other things going on. So this morning, I was raring to go! After the 0830 numbers, prices climbed and closed above the 10M cloud. Sweet! I will get in at a great price and ride the trade to the sky! Over the rainbow! Put in a 12-tick reversal of the high, and at 0842, Bot 1 x ZF @ 109'192. Stop at 10 ticks. Well, with other numbers coming at 0900hrs that I didn't think about (was concentrating on the 1000hrs numbers), price just continued to decline. Hit my stop and I was out of the trade. At 0856hrs, Sld 1 x ZF@109'167 for a .5R loss. I need...

 So, after a nice weekend with the Shamrock races, I am back at it today. As has been happening the last days, the market is volatile, and moves lots during the night, so ATR is maxed early in the morning.  Started to try to get into ZF about 0810hrs, but couldn't get a 12-tick fill. So, went for a 4-tick reversal, even though I haven't had much luck with them. At 0830, Sld 1 x ZF @109'025. Twenty tick stop ($156). Target was 40 ticks, but will move if necessary. So of course, Canada tries to screw me up. Although the only US announcement upcoming was at 1000 (and Ms Yellen as well), Canada announced its CPI numbers and they were good. So, US bond prices rose. Came within 1 tick of my stop, then turned back down. But all was very slow.  Numbers were upcoming at 1000hrs, and price was slowly making a new low, so decided to take the profit I had and wait out the numbers. At 0949hrs, Bot 1x ZF @109'000. Not much of a profit, but not a loss. Did I get out too fast? Maybe. B...

 So, a new day today, and new trading opportunities. Did a couple today, and detail them below. 1st setup: So, all of the charts for the ZF were showing above the cloud today, so looking for a place to go long. Waited until after the 0830 numbers (that didn't really move the market). As using the ZF, went for a 12 tick reversal. At 0836hrs, BOT 1 x ZF @ 109'297. Stop 20 ticks, target is open. After opening, price moved up 20 ticks, so moved stop to BE+1. Price then proceeded up, but some European numbers at 0915hrs moved the market and I was stopped out, with slippage of 1 tick. At 0915hrs, SLD 1 x ZF@ 109'297.  Very happy with the trade, as I followed my rules and came out with a scratch trade. After being stopped out, waited a few minutes, re-did analysis and then re-entered on 12-tick reversal. Stop of 20 ticks. Will move stop to BE+1 when up 20 ticks. Will have 5 min 2-bar trailing stop (low of bar - 1 tick). At 0919hrs, BOT 1 x ZF @ 110'010.  Moved stop to BE+1 at ...

 Well. This is getting frustrating. I am locked out duirng the day, as ATR moves are so huge I don't want to get in. So the alternative? Get in during the evening. So, looked at the charts last night and put in a short position on ZF (@ 2016hrs Sld 1 x ZF 108'135). Daily was below, hourly in the cloud and 10M below the cloud.  Was an 8-tick reversal, and put a 20-tick stop on the trade but of course it didn't matter. By bedtime, I was stopped out. You can see from a screenshot this morning what happened: So, not quite sure what is going on. ATR for ZF currently running at 0'315 (normal is 0'150), and today the range is at 3 x the daily ATR. I do note that most of my trades have been on the short side, so maybe I am holding a bias that way. The one long trade on 06 March was an ORB, not a long-term trade. But even that one didn't work.  Since 03 March, haven't had a winning trade.  I need to figure out what I need to do. The market, of course, will do what it...

 So, time to get back into it. Looked at the charts, and things looked like they were rolling over.  I had a thought to get in early, but with CPI numbers at 0830hrs, was glad I didn't: No matter which way I would have traded it, I would have been stopped out. Good confirmation of my plan to not hold over numbers unless I have a big cushion.  But once the numbers were out, tried a couple of trades to see if all the craziness of the wild volatility was done. At 0836hrs, Sld 1 x ZF @ 108'16. This was a 12-tick reversal off the lows of the day. Prices looked like they were continuing lower. Note: 12-tick is the default for ZF (8 for ZN and ZB). But, at 0837hrs, BOT 1 x ZF @ 108'200. The reversal didn't hold. Changed up to Fib retracement of 50%. Let the price come up to 108'255, go a little higher, then come back down. at 0843hrs, Sld 1 x ZF @ 108'255. Stop of 20 ticks to give it some room to breathe. And breathe it did. At 0855hrs, Bot 1 x ZF @ 108'305. So, th...

 So, what about that volatility? Talk about crazy! Didn't know what would happen today, so didn't trade last night (Sunday). In all honesty, may have gotten in, but the price swings were huge and I probably would have gotten stopped out. Woke up today to look at the charts? Wow! What a run! All bonds are running approximately 3 4 x their ATR today! Looks like the long side is king, but where to get in? Just jump in and hope I am not stopped out? Or try to have something that fits the rules? Let's try plan B (which should always be plan A). Looked at the charts and drew a fib on the last large run up from 0700hrs. Saw that the 50% retracement was just above the Standard line. So, put in a buy at the Standard Line, with 10 tick stop loss. If price goes below the Standard line, there is a greater probability of it running lower.  So, put in a buy at 109'060 and waited. And how low did it go? Do you really need to ask? 109'062. Then reversed. Not sure where to go from...

OK Boss. Not having a good run this week. Here is where the mental game comes into play. After taking eight (8!) losses in a row, it is messing with my mind. WTF am I doing? Can I do this? Am I stupid? Here is where it gets worse: last night I had a look at the markets after they opened. Here is what I saw: Look at how much they have climbed! And they have already pulled back 8 ticks! Where will they go from here? I bet if they have gone down 8, they will go down 16! That will give me a better entry! That's what I will do!  So, I put in a buy at 111'270. That will teach the market I can't be messed with! Now I bring your attention to Exhibit C - what the market did last night and this morning: So, you may notice that the price came down 8 ticks where I was looking at it and took off from there. It did come down this morning but would have filled if I had kept in my target of 112'150, or if I had gone for a full point, I would have been filled as well. MTF! So, why Gene ...

  Are you gonna go my way? And I got to, got to know! - the great Lenny Kravitz So no trades this morning. Didn't get in yesterday, and once the markets took off to the upside this morning after the Claims numbers, I wasn't going to jump in front of a bus. This leads me to a new tool in my belt. ATR. The bond market seems to love running up on news, maxing out the ATR for the day, and then - if going in the proper direction, it just peters out, or if it has run against the normal flow, it will reverse off the highs. So, where the heck am I going with this? Looking at the charts this morning, all timeframes were below the cloud. Did I get in? No, as I knew that the numbers at 0830 were market movers. Which way? Don't know, but getting run over isn't fun. So, numbers came out. Market spiked up. Will they then come back down soon? No, they seemed to keep going up. Did I get in? No, because the daily is still in a steep decline - however it has been steep lately, so ...