Friday, August 31, 2007

Aug 31 $500 on 12c

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Traded 1-2 lots per trade, faded volatility spikes, and I'm leaving early before the close. Today may be the lightest volume day in ZN I've seen. The market as a whole, just isn't doing much today. I guess you can say we got the end of the month window dressing these last few days. In the past I noticed we sell off in the last hour or 2 on these end of the month portfolio dressing weeks. I won't be staying around for the close. Next week I believe volume will pick up and the market is going to pick a direction on either Monday or Tuesday.

P/L= $500 on 12contracts (pretty good Profit to contract ratio today)

Overall I ended the month positively even though I had a 6k drawdown this week. It seems like these drawdowns are monthly occurrences that help cleanse the system and help re-enforce discipline in my trading.

Thursday, August 30, 2007

Suck my Nasdaq

1 comments
I've seen a couple of this guys videos before, and he busts me up. If you want to know what trading can be like this guy may be an example. The way the market has been this last month I would have to agree, things have been crazy.

Aug 30 $1,500 on 130c

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Well, I did better today. I should have gone short about the time I made my last post, but I think I was feeling a little shaky after having the quick reversal after the news on the UN nerve gas scare around 9:15am. I'm glad I didn't wuss out and not trade today.

P/L= $1,500 on 130c

Apparently tomorrow is the big day for Bernanke if you hadn't heard it 50million times already on CNBC. I'm expecting the market to sell off because of the way the daily charts look, but when looking at the volume on bonds and equities I'm suspect. Yesterday was a short covering rally and the day before that the smart guys were buying into the close already knowing the market was geared to go down. I hope the market breaks out a direction and some volume comes back into these markets. What I notice that is interesting today is that volume on ZN is about half its' avg., and when comparing the volume between ZN and ES, ZN it about half as much, when normally it is more (ie 1.8mil instead of 990k). This makes me think bond traders are expecting some wild action tomorrow and are taking off before bernanke speaks, which isn't a bad idea. The fact that ZN went up today and volume was lighter makes me think that equities have a stronger chance of a bull rally tomorrow and bonds will sell off, or maybe we just have a non event snooze fest tomorrow and everyone takes off for labor day vacation. I know one thing for sure, and that is that I need a vacation, but I'm to young to rest.

Expecting a down day today

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Todays pattern looks like the reverse of yesterday. ER2 today and ZN yesterday look the same right now if you compare the two charts. Downside target on ER2 is 780. FXI is waving down and NYSE A/D is neutral. Today has been another rollercoaster ride so far for me, having 3k unrealized profit disappear on the sharp reversal at 9:20am. Currently I'm up $500. YM much more bullish then ER2, which tells me the market is acting correctly. ER2 had a bigger bounce yesterday which leads me to believe this market bounce was do to short covering. ER2 shouldn't be higher then YM in terms of a 3-5 day performance. Looking for a signal around 11:30-12:30pm. We could just chop into the close though with all this Bernanke talk. ER2 is setting up for a 3 wave down pattern right now. I'll keep an eye on the Aussie dollar, JPY, FXI, and ZN to see what type of action we get into the close.

Aug 29 update, lost 3k

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I should have left for work. I had 15min to go before work, so I took a small scalp, and the next thing you know I lost all my money from the day and I find myself with another big loss. I honestly can't remember what trades I put on that made me lose money so fast. Remember the old rule, never add to a loser and start out with 1 contract. 8k in 2 days. Sucks. I want to quit while I'm still ahead, but looking back I see that I have come very far to give up now. I'm just really mad that I never catch the trend and always find myself with a big loss on these types of days. The most frustrating thing of all is losing money in a short time period after I worked all day to make it. I don't know why some traders trade or why people get into this business, because it is as hard as hell. It looks to me right now that my broker will have more profits than me before the year is over. In the long haul the house always wins. I pretty much lost my voice today from cursing myself in the car. If you saw a crazed lunatic in a car screaming at themselves today it was probably me. I don't cry over losses, for some reason I can't cry. I just get really angry and want to beat people and myself up. If you were to piss me off after a day like today, there is a good chance I could go ape on you, CONGO STYLE! I don't know if I'm trading tomorrow, it's 4 hours before the open and I still haven't gone to bed. As long as volatility remains high, I think we are going to continue down. These last few weeks look like a chopfest to me.

Warning to all bulls. Beware of the downside. looking at the daily chart of the last month I see leg 1 completed and the current phase we are in now which is consolidation/chop. I believe we have 1 more leg down to go. Even after yesterdays strong close, I'm not bullish. I'm expecting tomorrow to be positive/choppy from more short covering and resistance overhead. Although we have a large tail on this daily candlestick, I'm always speculative.

Wednesday, August 29, 2007

Aug 29 $1,800 on 124c

2 comments


Made a decent recovery from yesterdays loss. I took a loss on YM by doing my typical churning routine. I kept trying to go long on YM around 10-10:45am my time, but I kept getting stopped out, which was frustrating because ER2 was showing a bounce during this time period, and I view YM as the more bullish of the 2 indices which made me take a long trade on YM over ER2, but I ended up with a loss. I knew we were going up, so I went long on ER2 even after getting stopped out on YM numerous times and I made back my loses on YM and reached a new intraday P/L high. I've got work in 45min, so I'm lucky I finished trading before I had to leave.

P/L= $1,800 on 124c

The way I see it, I need to find some time to go over my trade signals and trade executions so that I don't find myself churning huge losses like I did yesterday. I was going to trade on the simulator today, but instead I traded small and worked my way up, like I should always do. Overall I'm not stressed out about my loss from yesterday because I know what I did wrong. My loss from yesterday wasn't from taking a huge loss from a large move against me, but it was death from a thousands cuts, (ie Churning)

Aug 28 $-5,100 on 262c

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Yesterday I did everything wrong and had to leave to work before I could post. I was short going into the close, but apparently I kept using too tight off a stop, which frustrated me and I ended up getting long some how and lost money into the close.
I was down about 4k from account churning and using the wrong order execution during the mid-day, so I was trying to use size to make things back before the close, but the losses just kept coming.

P/L= $-5,100 on 262c

With the way I've been trading the last 2 weeks, I was due for a big loss. My skills in adding to position has been terrible, by that I mean I've been using buy stops to add to longs and then I would trail my profits even closer, and I would just churn my account when the price has remained relatively flat. If I do the exact opposite of what I've been doing lately, I may have found the edge that I'm looking for.

Monday, August 27, 2007

Aug 27 $1,800 on 103c

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Today I basically did the opposite of what I did last week. My mind was programed from the past few weeks to execute on a momentum style type of trade, where I would add to winners and trail my stop closely. With the decline in volatility, that trading style hasn't worked for the past week. So I've been taking profits at volatility peaks and adding to positions on bounces/retracements (like I should have been doing all along). The single most important aspect of trading is not so much the trade setup, but how you add or subtract contracts on your core position. You could have the direction right, but if volatility is faded, then if you added to your core position on breakouts, then your avg. cost will be getting faded too.

P/L= $1,800 on 103 contracts

Traded the first 4 hours, time to hit the gym before work.

I mentioned FXI, CHL, and LFC this weekend,,,,yeah, there up at new highs today.

Aug 24 $-1,700 on 84 contracts

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Last Friday I traded before I went to work, I was long and had to leave for work and had to close out my trade for a loss. I said I was going to not trade that morning, but I had 2 hours before work, so I didn't pass up the opportunity. Sorry no blotter.

P/L= $-1,700 on 84 contracts

Saturday, August 25, 2007

What's the Deal?

5 comments
Guess what's making new highs.....FXI,,,along with it, as a part of FXI's components we also got CHL and LFC making new highs. There aren't that many stocks making new highs right now, so this gives a clue to what is still being bought up. Why does Fisher investments have such a large stake in EWJ (Japan) if FXI (China) is growing in leaps and bounds? Looks can be deceiving, it turns out Fisher is the largest holder in CHL, which is a large percentage of FXI as a component.

I was watching some videos over at thestreet.com, and FCX (Freeport-McMoRan Copper & Gold Inc. ) has got to be the most pumped up stock right now along with Warren Buffets new stock USB (US Bancorp). The videos on wall street confidential are some of the best trading related videos I've watched. Believe it or not I've learned a thing or two from Cramer. I don't watch Mad Money because it is geared toward entertainment, but some of the stuff on thestreet.com is pretty informative and educational. For example, Cramer's explanation of what happens on Monday following option expiration may provide an edge in picking the direction of the market open for that particular day. To be good at this game, you got to know your opponents, just like a good gambler studies there competitors. I don't listen to Cramers stock picks, but I do follow his thoughts and the market psychology he presents on thestreet.com.

What's the deal with mortgage stocks. I hear radio commercials out here in Cali all the time for Beazer, Centex, and Countrywide. Are these companies going bankrupt, or is the 2 Billion dollar stake by BofA in CFC going to make a difference?

As far as I can see, there has been no big change in the market as far as trends. China and emerging markets are still kicking butt and the home building and mortgage related stocks are still underperforming.

Thursday, August 23, 2007

Aug 23 $100 on A Shocking 305 contracts

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Please don't laugh at my P/L to contract ratio. I had a battle today. I was down over 5k at one point during the day, so I'm lucky to come out positive today. I churned myself to death up until the mid-day, and then decided I had to just hold on to my positions and wait for a good exit signal. When EcBOT went down, I went short on ER2 and I kept getting stopped out by trying to get a breakout to the down side on ER2. When I did get a breakout on ER2 30min later, I didn't act quickly enough because we got a quick short covering rally after the initial breakout and I got stopped out for close to break even by using my trailing stop. So even though I had the right direction for the trade, I lost close to 3k on the trade setup by using stops that were too close and by adding to my position near the breakout point/lower bollinger band, instead of near the top of the bollinger band. I later switched my trading style to buy and hold, instead of scalping, and I ended up catching a few points to the upside with some size and exited around 795 on ER2. I also caught 2pts to the downside on ER2 after we hit the mid-day high. So overall I churned my self to death over the course of about 45min, and then I switched my trading style to take only bigger signals and I ended up making back my money. I started out the day trading the same way I did yesterday, which was the wrong type of style for this market environment(ie breakout, churn, retrace, churn, breakout). I may have to switch to trading stocks because the action on the index futures has been really tough this week.

P/L= $100 on 305 contracts (that is a record # of contracts traded in a day,,,wish it was a record P/L instead)

I got work early tomorrow, so I won't be trading. Overall I'm happy with this week, considering I traded terribly these last 2 days and I still managed to hit my minimum weekly goal.

Wednesday, August 22, 2007

Rising Opening Gaps- Nice setup for NYSE

1 comments
I'm looking at ES after hours right now,,,,,this reminds me of that Jim Cramer hedge fund manipulation video,,,,you know, the one where you buy the futures overnight and spill out rumors during the day.
Is this pop up real or what?
Lets think of the best strategy we can.
OK, BINGO!
Buy near the lows last Thursday on panic selling.
Ramp up the futures huge every night causing short sellers to cover and raise the market more? Where are the real buyers for this stealth rally???? Nice scheme, saves a ton of money too, not having to buy actual stocks during the day. All you gotta do is buy a couple thousand ES overnight and pop up the futures overnight causing all those stocks to open higher tomorrow so you can sell your longs off to those dumb shorts that are hurting from these frigging gap up mornings. Meanwhile NYSE could care less from the reduced intraday action they're getting in the way of commissions, they still have to unload the longs they were forced to buy from the last couple weeks of selling. These markets are manipulated. Focus on being on the right side, even if the "right" side is using cheap tactics to screw others over, because at the end of the day, they are the ones making the money.

Aug 22 $100 on 74c and 1400s

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Today has got to be the lamest day ever. I tried trading size on a couple of moves and I just ended up churning my account by not applying the right type of trade executions for the trade signal (ie, adding to position at the top of a channel, instead of on a dip, causing my breakeven and stop to be tighter, thus stopping me out on many trades; moreover, I was trying a breakout strategy on many trades, which doesn't work in a low volume choppy market). I'm calling it a day. Stocks and currencies are moving more than the index futures today. I didn't trade the whole time today so I'm not really concerned about how small my profit is. Time to go do something more productive now.

P/L= $100 on 75c and 1400 shares

Aug 22 premarket

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Stock index futures are up and bond futures are down. Be on the lookout for a bullish trending day today if there is no gap fill within the first hour. Pay close attention to JPY and AUD currencies. Watch for possibility of huge short covering rally up to 50ma on indices. I will be watching to see if XLE, XLF, XHB, and SMH are trending higher and also I'll be watching to see if volume is above average. News this morning is the Oil # at 10:30am EST, so watch to see if XLE reacts on heavy volume and if it starts to trend later in the day.

Tuesday, August 21, 2007

Aug 21 $400 on 75c Choppy Trading

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Today I had a lot of stops hit and I did a lot of churning. I made money because I had short stops in place around 12:30pm; the time of the sharp reversal when we were near the HOD. I was about breakeven leading up until that time period, so I'm doing good by always having stops in place in-case of a quick reversal move like we had then. I could keep trading for another hour, but I think the market is going to continue to chop for another hour, so I'm off to other business. My goal this week is going to be putting in more time analyzing volatility spikes, block trades, and intermarket relationships. I also want to drill down the trading psychology behind the moves that I see on my chart; moreover, I want to ask myself, is this market non trending and are volatility spikes a result of stop running, or are there LARGE active participants in the market that are controlling the market in a trending fashion. Today's trading action presents itself as a choppy, stop running type of day, with significantly less volume and sharp spikes due to less professional traders in the market place.

P/L= $400 on 75contracts

Monday, August 20, 2007

Aug 20 $1k on 49c

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Traded the first 90 minutes, my most productive time period as usual, and now I'm going to take care of other things. The market is chopping, I hit my daily goal, and I have to leave for work in about an hour, so I'm quiting early. I'm expecting a retest to VWAP later in the day. I was down as much as $900 on having a string of losers, but then I got a runner on ER2 for about 2+pts in which I had buy stops in place to add to the winner, which helped me turn my loss into a profit. Mondays following OPEX are notorious for being choppy and based on my past results I have underperformed trading these days.

P/L= $1k on 49c (Avg 4.7pt on ESTX50 and 0.2pt on ER2)

On a side note, I'm now running tradestation along with my QT/IB setup, and I hope to find some time to start learning how to use tradestation to my advantage. If there are any TS users out there that have any helpful tips you want to pass my way, feel free to comment or leave me an email. So far I've had no latency issues or computer freezing while running both programs (the TS data is still delayed right now because I haven't purchased the data feed). I'm wondering if I can get my TS charts to look like some of my QT tick charts, which I doubt. The only thing that is bugging me right now is that I can't zoom in and out on my chart windows using the scroller on TS, unlike a feature that QT has, and it takes more time to switch chart formats.

Friday, August 17, 2007

Aug 17 $1,000 on 84 contracts

2 comments


If you know what the max pain theory is,,,,it just happened this morning, the biggest max pain move I've ever seen. Although I think this mornings pop was totally setup, I won't complain because it has provided some great volatility to trade. I really had no setups today that I took, the only thing I did that made me money today was cut my losses fast and tried adding size to my winners while trailing my profit, and this strategy worked because of strong momentum moves that would allow me to trail my profits without getting chopped to pieces. I wish I would have shorted ER2 around that 15min mark and rode it down for a nice 20pts. Cramer made a call into CNBC right at the high saying that the market was going to 14,500 and that everything was just peachy,,,,,NICE CALL,,,,for a SHORT SIGNAL!!! Although there has been big moves lately I still haven't caught a big one, which makes me think I need to do move drilling to perfect my executions and analysis of my charts. Not bad for an hours work. Almost 100 contracts traded in the first hour by me,,,that's gotta be a record. I traded ES instead of ER2 because I wanted to make sure I got good fills when using my stops. Gotta leave for work

P/L= $1,000 on 84 contracts

This is market manipulation at its greatest

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FREAKIN NUTS!

NYSE A/D at 17!???

Dow over 300 near open

THis is absolutely nuts

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YM is gonna open up 200pts,,,margin calls through the roof.

Thursday, August 16, 2007

Aug 16 $2,200 on 175contracts

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Today has got to be the most volatile day I've traded, I think the volume has got to be greater than feb 27 and the selloff in march, excellent volatility. I was getting bulletins from IB all day about increased margin requirements on VIX options. This market is going nuts! I'm done early because I got work. I don't think I will be trading tomorrow because I have work early and it's OPEX. I missed a huge short covering rally on ER2, I was afraid to chase it because I was thinking about capital preservation, so I waited for volume exhaustion and shorted YM for a few points.

P/L= $2,200 on 175c

Side note- Sue Herrera asked some smart guy on CNBC who's buying if all these hedge funds are liquidating even the good positions like gold, and he said, the specialists are buying. This day reminds me of the reversal day we had in march. There was a huge move in the YEN/US trade today just like we had last march and feb on the big selloff days.

Breaking news from CNBC- charles schwab website having issues,,,,,, Let me guess, all their customers have overloaded the servers from trying to log on and sell there positions. Is it time to buy?...........

MASSIVE SELLING

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12:46PM EST, MAX PAIN!??
YEN is going through the ROOOOF!!!
THIS IS CRAZY TRADING!!!!!!!!

Wednesday, August 15, 2007

Aug 15 $2,100 on 109c

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Traded a little bit larger size. Made my money on the open and close, and did some churning during the afternoon. Again, no trading for me in the last half hour due to my past trading results. Expecting some crazy action, or a lot of chop these next 2 days with option exp. on Friday.

P/L= $2,100 on 109c

Market analysis-
The ZN and ES inverse relationship showed up big time today at 1:30pm EST. I came back to trade around 2:30pm and caught some of the move down, unfortunately I didn't hold long enough based on the rule that as long as the NYSE A/D is trending, you stay in the position through the noise. The last couple days has been difficult in the placement of stops and adding to positions, but what I'm seeing is breakouts, chop, fake breakouts, chop, breakout, that type of trading action, which means wider stops need to be used, adding to positions must be done on pullbacks as opposed to adding on breakouts, and profits need to be taken on volatility spikes.

If some of you are having trouble shorting and are only looking for things moving up, then maybe you should trade bonds for awhile or turn your stock charts upside down.

No one has really talked about this, but it needs to be brought up. We hear about all the hedge funds losing money, but there are a couple hedge funds that bet the market was going to tank and that everything related to the word "subprime" would tank too. What hedge funds are the ones that bet right and made 200-300% gains in the last month? You don't hear CNBC talking about the short bias hedge funds that are making a ton of money, all you hear are people talking about, "when is the right time to buy?" and "are we having a correction?" and "what is the deal with interest rates?".
Lets talk about the hedge funds that are killing it in the markets,,,no wait, then their strategies wouldn't work anymore,,,OK,,,alright then, lets do the exact opposite of whatever all those losing hedge funds are doing. Are the loser hedge funds cutting some equity positions to pay off defaulted loans? Warren Buffet is buying, should I too? Why would I buy US equities when our interest rates and economy are nowhere near as good as China's. If I were an investor, I would probably be buying China and everything related to China, and shorting the US. If I had to buy US stocks I would be buying value big cap stocks and selling growth small cap stocks because of the way interest rates are and the fact that small cap growth is likely to under perform because they won't be able borrow money and expand there "growing" business, while big caps can just sell some of there stock to raise money and continue to survive even in the current bearish environment. Whatever the case, I like the volatility and volume.

Tuesday, August 14, 2007

Aug 14 $500 on 26c Choppy down day

1 comments


Choppy light volume day. I don't enter new trades the last 30min, it's a rule I've made now. I missed the first 2 hours due to computer freezing up, overall I had a descent day considering the time I traded.

P/L= $500 on 26c

Monday, August 13, 2007

Aug 13 $700 on 28c

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ER2 and YM are averaging back to where they should be, with ER2 under performing YM today. ZN has been in a slow creeper trend up for most the morning and ES has been trading inversely. It was choppy trading after the first hour and a half even though the trend looks like a straight line down. In this type of environment it is better to have profit targets in place and to not add to winners by the use of stops on breakouts, but rather, to add to winners on minor pullbacks. I tried adding to a couple winners on ER2 and saw quick reversals with stops getting hit, so I worked on having my profit targets in place and adding to my position on pullbacks/bounces.

P/L= $700 on 28 contracts

My P/L to contract ratio was much better earlier in the day when I had around $450 on 12 contracts. Later in the day I had about 1/3 of my stops hit, so my P/L to contract ratio declined.

Time to go to the gym.

LATER TRADERS!

Friday, August 10, 2007

Aug 10 No Trading

1 comments
Got work early this morning, no trades taken.

Questions?
When is a good time to buy this market slump?
I would say, based on technical analysis, when we make a higher lower and when volatility decreases. Until then, lets just pretend that we live a a backwards world were we get up every morning and expect the market to go down, because that's what bear markets do. You ever notice that when the markets made big gains that there never had to be a solid reason for it, but when we selloff there has to be a reason for it, so that investors feel that what is happening to there stocks is not a normal occurrence, and as soon as problem X is fixed the market will start going back up for them in an orderly fashion, a market where you can just buy a stock and not have to worry about losing money because the market always goes up.

I heard an average joe talking about the credit crisis and housing bubble while I was getting food at subway the other day, he also brought up some words that he just learned, called "shorting stock". I'd be interested in knowing how much the short interest has grown on all those housing related stocks. Are all these companies going to go out of business, leaving the US with no mortgage lenders and millions of US citizens without homes and further reducing the avg. US credit ratings, or is it possible that everyone is jumping on board and shorting these stocks with herd like mentality and bringing negative psychological thoughts which ends up spreading bringing the rest of the market down with it. What about the hedge funds? Didn't we see this happen in February when the carry trade unwound for a couple weeks, bringing quick losses to all those funds that relied on their computer models to make money for them, except of course for that one statistical anomaly that occurs out of nowhere, right? So who is making all money in the current market environment? Do you ever hear about the bear funds blowing up when the market tears up? Not really, you normally only hear about the long funds that get hit when the market goes down. Diversified? Please.......

Have a good weekend ya'll.

Thursday, August 09, 2007

YM down 380 in AH

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If you bought into the close yesterday thinking you had the bears trapped, then you probably feel like the guy in this truck,,,,,so close, yet, so far away.



I ask you people this...How many of you would make an attempt on the mt. after just seeing what happened to that guy? It's kinda like going long tomorrow after getting demoralized today, wouldn't ya say?

Aug 9 update $1,500 on 51c

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I came back in the afternoon and took some signals. Last night I stayed up until 2:30am, working 5 hours on my charts and signals, and it payed off today. I did take more heat than I should have around 3pm EST, when I went long YM. YM was chopping around at 5-10pts every couple minutes, so I was cautious in adding to my position. Overall, my signals are working and I'm doing good by keeping tight stops on volatility spikes.

P/L= $1,500 on 51c (I was much more efficient on P/L to contract ratio today, about 2x better than my avg. 3 ticks I get on ER2)

Market Review- I'm not surprised to see the market down this much today. I notice a very interesting pattern, which may be an old secret for Traders, that is, the price on the indices and bonds will return to whatever price they were before the FOMC announcement. Here is the scenario, we make a sharp movement on FOMC day, on day 2 we travel in the same direction or a little more but with no strong trend, on the 3rd we return back to where the price was before the FOMC announcement, however, this pattern only works when interest rates are left unchanged, which makes sense, right? When interest rates are cut, I'm not sure how the pattern will work out.

I wouldn't be surprised to see the market up 100pts tomorrow, however I'm expecting a lot of chop.

Aug 9 $800 on 24 contracts

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Traded the first 2 hours. I'm leaving early because I'm expecting chop for awhile and I've traded the most productive time period based on my stats, so I'm leaving while I'm ahead. I might make a post later with a picture, but I can't right now because I'm recording and I don't want to lock up my computer. Max size held was 2 contracts. almost all my trades were based on my signals. I got 3 stops hit. I'm doing good by keeping my stops and keeping my size down to 2-3 contracts when scalping. I'm only adding to losers that are within 1-1.4pt of my initial entry price on ER2. This may seem like a wide range, but given the volatility, it is reasonable.

Wednesday, August 08, 2007

Aug 8 Trade Summary 1,300 on 104c

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I'll post later, my computer keeps locking up.

Tuesday, August 07, 2007

Aug 7 Choppy $300 before FOMC

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My main goals today were to hit my daily goal of $300, and to record todays trading to do some analysis later. Although I did a lot of churning today, I stuck to using my stops and I kept my risk down by keeping my max contract size under 3. I bought ESTX50 around 11:40EST, got hit for a 3 pt stop, and then watched and grieved over the 30pt rally that I missed by 1 not having my stop 1 tick lower. I know, coulda, woulda, shoulda. At least I'll be able to go back and analyze the trade.

P/L= 300 on yikes,,,74 contracts (hey, at least I'm reducing my commissions by doing more volume,,,right?)

NYSE A/D analysis-
There are critical levels on NYSE A/D that I've noticed are key points for where breakouts occur. The values of 0.80 and 1.50 are the 2 most critical levels for when breakouts occur when looking at NYSE A/D.

I won't be trading FOMC announcement because I have to leave 20 minutes after the announcement to go to work, leaving me with not enough time to manage any trades I place.

LATER TRADERS

Monday, August 06, 2007

Aug 6 Trade Summary First Day Trading ESTX50 and DAX Futures

4 comments


Today I made the bulk of my money in the first hour trading 11 contracts and making $300 trading ESTX50 and DAX futures. I then did some account churning during mid-day, losing my stake, and then making it back trading ER2. Overall I need to only take trades based on my signals and I need to better understand what my signals are telling me in conjunction with the market internals and with what the bond futures and currencies are doing. I came and went from the computer today, so I'm not really mad that I missed some good short term moves. My goal was to stick to my style scalping and test my hand at trading ESTX50 and the DAX futures for the first time.

PL= $400 on 32 contracts (I'm rounding PL now to the hundredths place)

Trade Analysis-
I liked the movement in ESTX50 and the liquidity that it provides. The DAX reminds me of ER2 except it has even less liquidity and is likely more risky to trade. My decision to start trading the European Futures was because the commissions are lower and ESTX50 provides just as good liquidity and range as ES. Also, the European markets have already been trading for 6 hours by the time that I get up, so I can see what the ranges are and also compare them to the US indices for a better trade signal. I also have to give Credit for the peer pressure factor. Everyone's doing it DUDE,,,,Like all the cool Traders are!! You Know JOHN CARTER,,,Yeah,,I heard he's trading it and making a KILLING!!!,,,Just kidding guys,,,
I actually got an email from Eurex about a webinar coming up TOMORROW with Trevor Harnett from Market Delta, and I ended up finding another webinar previously recorded with John Carter Trading ESTX50 Futures contract, which was very informative. Thanks John Carter from TradeTheMarkets and Eurex for the Webinar found here- Eurex Webinar
Tomorrows webinar with Trevor should be good to, so I'm gonna try to watch that too or checkout the recording later.

In other news I'm in the stages of opening an account with Tradestation, but I'm contemplating if I should still. My primary reasons were so that I could use the Option analyzer to start making some slow and steady income using good option strategies, and also to see if the backtesting function was worth my time.
My primary concerns are- CAN MY COMPUTER HANDLE IT?
Can Mr.CPU take on IB, quotetracker, and tradestation all at once, or will I have to resort to using TS at the end of the day,,,,I guess that's all I really need it for anyway for my option analyzing and backtesting. What'ya guys think. I know Lord Tedders and Dave Johnson use TS. Anyway, I got time to think about it.

LATER TRADERS

Forecast for Craziness

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This just in, IB increases Intraday margins on trading US index Futures due to INCREASED VOLATILITY. Good luck Traders, this may be a good week to just watch the charts. YM remains a better buy, and ER2 remains the better short for intraday trade signals, this trend hasn't changed for the last 6 months if not more.

Sunday, August 05, 2007

The night before D-day

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Heading into this week, I plan on keeping my size down and waiting for the setup to come to me. I'm expecting tomorrow to be a crazy open, one in which I will likely be watching. I read an interesting article at FuturePath trading, one that talks about how, we have less blackbox activity, instead of what I thought was increased blackbox activity.

Here is a quote from the post'
If you were trading the SPs on Wednesday, you probably noticed a marked chance in behavior re the "noise level". 10 ticks up, 10 ticks right back down, 10 ticks up, ten ticks down...., also, affectionately known as "noise". You probably also noticed a huge drop in the size of the bid/ask. All markets have their own footprints and the footprint in the SPs had definately changed mid week. It is pretty hard to keep things "mum" in this industry, so it did not take more then a few hours of networking around to learn that one of the largest firms specializing in algorithmic "black box" auto systems (market making), had taken a rather large hit the prior few days, and had turned off all their auto-trading systems. Another large firm specializing in the same game, claimed "technical difficulties" and had also shut off their auto trading systems. These type of systems add liquidity to the system and generally make up about 40% of the volume in the e minis. Some of the systems work in the manner that a floor specialist would - buying on bid, and selling out on offer 2-3 ticks higher, or shorting on offer, and covering on bid 2-3 ticks lower - constantly extracting dollars out of the spread between the bid ask. (FromFuture Path Trading)

This post makes since to me. When the market is this volatile, even the fastest computers can't keep up with the craziness that us humans exhibit when trading. What does this mean though? I'm thinking a lot of automated trading systems are getting there butts kicked right now and that prop traders are making a lot more money.

With the current sentiment right now, who wants to BUY?

If the Banks and Brokers are the primary institutions that control the stock market, and they are weak and being downgraded, why would you buy? Moreover, if the banks and brokers are selling there own stock, would you buy?

Friday, August 03, 2007

Aug 3 Trade Summary $250 on 10c

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Traded the first hour, got work early, trade signals are working, but need to work on stop placement for solid trading system. Traded between 1-3 lots today. Made a recording this morning, the first in a long time, should be a good review.

P/L= $250 on 10 contracts

Have a good weekend Ya'LL!

Thursday, August 02, 2007

Aug 2 Trade Summary 500 on 20c

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Trade Summary-
I traded the first 2 hours and I'm pleased with my trading results today because the max heat taken today was about $100 with 2 contracts.Max size held was 6 contracts for about 1 min, with avg size held at 2 contracts. I notice my avg. profit per contract is normally about 3 ticks most days.

P/L= $500 on 20 contracts

Last night I worked on my chart trade signals and today I took trades from those signals. While I've got good trade signals I still need to work on the next part of my trading system which is the most vital; moreover, I need to work on position sizing and the risk management aspect of each trade taken based on the signals. Each trading day is different so a predefined stop loss on each trade will not work in my opinion over the long haul. A refinement of the profit and stop loss targets need to be adjusted each day based on the current market volatility.

Wednesday, August 01, 2007

Aug 1 Trade Summary $1,500 CRAY-ZY

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It's 1:30pm EST and the market is now starting to get CHOPPY,,,ER,,or,,AH,,LESS CRAZY

I started out the day scared shitless to enter a trade. WHY?
ER2 popped 10pts in the first 6min of trade. If I had put in a ten lot short I would'a shit my pants trading the usual way I trade,,,,that is of course,,TRADING without STOPS. Guess what, the next 12 min we went 17pts the other way, by now I think I would've owed IB money if I had gone short at the top on a revenge trade.

Instead of trading ER2 at the open I waited an hour and then I put on a sorta hedge trade, real small, just to get my feet wet.
Short XHB, long PGJ, with 100 shares, makes sense right? Well the trade started working out immediately and when I saw PGJ lose value I closed out the trade, I should have let XHB ride for the extra dollar to the downside on the horrific collapse of BZH and NFI at 10:30am EST. Oh'well.







After that I entered the ER2 jungle and started scalping. Today was the day to take profits quick and to not scale into positions, because as soon as you were up a good amount ER2 would reverse. After awhile you could just see how blackbox systems were popping every which direction taking out stops and taking your money if you weren't quick enough to tighten your stops.



P/L $1,500 on 54 contracts

Trade Summary-
Most of the day the max size held was 3 contracts with an initial entry of 1 contract to scale in. Some trades were quick, like 4 ticks in 2 seconds,,yep, as soon as I shorted I clicked buy and got 4 ticks, you see what I'm talking about blackbox's now!



PS-Here is what I'm reading (good stuff, check it)

Non Stationary Markets: A Theory of Market Participation by the TICK DR.,,He talks about how the recent volatility is difficult to trade,,,Um,,,,just a little,,,
Also he talks about those mysterious BLACK BOXES,,,,,OOOO,,,,,SPOOOKY

Checkout a new blog I just found called Cluelessqtrader
He talks about when he thinks the market may have hit support,,,he's right
I'm already hearing it on CNBC right now, more carnage in the home builders and we're starting to hear possible hedgefund blowups,,,GO BEAR STEARNS!!!(YOU SEE THE CROWD around THE NYSE POST THIS MORNING,,,,MOST be giving away free VICODIN,,,for the pain that all there investors are going to be in from investing in that company from all those mortgage hedge fund blowups!)



PS-Anyone talking about the YEN TRADE on CNBC,,,


what about the Ausie dollar?


Here's a trading tip for ya'll, if XHB and XLF go up, buy, if PGJ is going down, stay short.

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