Sometimes I hate it when I am right....

 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 here. I don't want to chase the move, because I know I will get in at a terrible spot. And with the huge volatility, there is a large probability that my 10-tick stop just won't work. 

So, maybe I need to just try trading in the evening, when the ATR isn't maxed, and try to get in on a regular reversal. Of course, I know this move won't be able to last forever, but I also know the market can stay irrational longer than I can stay solvent. Sick with the plan, look for good entries, and honour the stop loss. 

Update 1000hrs:

Price seems to be makeing a concerted effort to hit that Standard line.


This time it actually hit the line and reversed. Did I get in? No - I was thinking about how I missed the move. Now, the chart seems to be flattening out, suggesting the idea for the next while is choppiness. 

Update from one of the people that trades bond futures: 

For anyone unaware, a rather important fundamental event has taken place which is causing serious volatility in the markets. Silicon Valley Bank (SVB) was essentially forced to sell 21 billion worth of bonds in order to cover customer withdrawal requests. This has created havoc in the treasury markets and is causing a bit of a domino effect in other markets as more people are responding to it.

 The liquidity is light so the order book (DOM) is very thin. The action is highly erratic. For what it's worth, it is typically best to avoid trading in this type of movement. Trying to find anything which remotely resembles a high-probability trade is very difficult. The volatility can seem enticing but it's dangerous so be extremely cautious.

 The liquidity will eventually return but in the meantime, sitting on the sidelines is not a bad option. For new traders who have not seen this type of shift in volatility and conditions, welcome to day trading;) It's not the first time conditions have changed overnight and will not be the last. This is how it looks when the major players (market makers, banks, etc.) are not quite sure what happens next. No one wants to commit to any serious size so the liquidity disappears for awhile. - John Grady

So, let's see how this plays out. I can either buy or sell. Or stand aside. That may not be a bad idea today.

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