Wednesday 25 January 2012
There have been a couple of occasions recently where I've been sounding out potential trades however despite doing the analysis the trades weren't taken. Both of these were excellent opportunities, there is little point in giving specific details, suffice to say it has been something that's occured occasionally before.
I've been thinking about the reasons behind this and decided to create a more disciplined approach that clearly separates - the Analysis - the Signal - and the Trade (The AST process). It makes sense to define the process to enable clearer more structured thinking, a more professional approach. All the value in my trading is really created when the Analysis is done and a Signal is defined, the Trade being the final step to complete the process.
I've been thinking about the reasons behind this and decided to create a more disciplined approach that clearly separates - the Analysis - the Signal - and the Trade (The AST process). It makes sense to define the process to enable clearer more structured thinking, a more professional approach. All the value in my trading is really created when the Analysis is done and a Signal is defined, the Trade being the final step to complete the process.
Friday 20 January 2012
Spotted a good opportunity for a short this evening;
My indicator diverged from the market, and a sharp move up in the NASDAQ at 18:23 was not correlated with the currency markets, suggesting a fake out move.
Went short at 2433.75;
Market sold off down to 2426, moved stop to 2429.75. The market has been trading in a tight range today so I kept a reasonably close stop, enough to get something out of the trade if hit without being too close to the price, to allow the possiblity of it running further. The market rallied back up, taking me out for a 4 point gain. Hindsight is wonderful folks, clearly the point to exit was around 2426 since the market had sold off down to that level and rallied from there three times previously today.
This was a live trade on my account. I have been taking quite a lot of trades on sim since the start of the year however I will not post any of those trades on my blog. (I'm using the sim to experiment with different types of trading, and if I see a good probability set up, I'll be trading it on my live account not the sim account). I was always very leery of trading on the sim however it's actually proving quite useful to practice on.
I'm still mulling over a new approach to use, it may well transpire that I use a variety of different approaches together, depending on the situation - that's what I'm thinking right now.
My indicator diverged from the market, and a sharp move up in the NASDAQ at 18:23 was not correlated with the currency markets, suggesting a fake out move.
Went short at 2433.75;
Market sold off down to 2426, moved stop to 2429.75. The market has been trading in a tight range today so I kept a reasonably close stop, enough to get something out of the trade if hit without being too close to the price, to allow the possiblity of it running further. The market rallied back up, taking me out for a 4 point gain. Hindsight is wonderful folks, clearly the point to exit was around 2426 since the market had sold off down to that level and rallied from there three times previously today.
This was a live trade on my account. I have been taking quite a lot of trades on sim since the start of the year however I will not post any of those trades on my blog. (I'm using the sim to experiment with different types of trading, and if I see a good probability set up, I'll be trading it on my live account not the sim account). I was always very leery of trading on the sim however it's actually proving quite useful to practice on.
I'm still mulling over a new approach to use, it may well transpire that I use a variety of different approaches together, depending on the situation - that's what I'm thinking right now.
Entry from 19th Jan 2012
This is the ratio of Crude Oil to Natural Gas (Using Dow Jones sub-Indexes) - 2 year chart;
I've only just found this and it looks like a parabola to me, my impression is that it's more likely to point to a forthcoming low in Natural Gas than a high in Crude Oil but whilst the equity markets are making new highs, Crude Oil is not.
You have to go back to 2002 to find a point when Natural Gas was cheaper, it's almost closed at the low of the decade today.
NAtural Gas - 2002 to present;
The indicator in grey beneath the chart is the Disparity Index, spikes to the top of the range can point to highs, spikes to the bottom, lows.
Sentiment for Natural Gas is extremely low;
Chart fromwww.sentimentrader.com
The price can only go so low, it would be interesting to know the average cost to extract it from the ground.
Is Natural Gas going to hit a low very soon?
It may be worth looking at Natural Gas futures here.
I've only just found this and it looks like a parabola to me, my impression is that it's more likely to point to a forthcoming low in Natural Gas than a high in Crude Oil but whilst the equity markets are making new highs, Crude Oil is not.
You have to go back to 2002 to find a point when Natural Gas was cheaper, it's almost closed at the low of the decade today.
NAtural Gas - 2002 to present;
The indicator in grey beneath the chart is the Disparity Index, spikes to the top of the range can point to highs, spikes to the bottom, lows.
Sentiment for Natural Gas is extremely low;
Chart fromwww.sentimentrader.com
The price can only go so low, it would be interesting to know the average cost to extract it from the ground.
Is Natural Gas going to hit a low very soon?
It may be worth looking at Natural Gas futures here.
Post from 13th January
I woke this morning, checked the markets and felt there may be a good opportunity for a short, so went short E-Mini NASDAQ as of 6.40am, (although this year I've been trading on a sim account, this is a live trade on my account.)
NASDAQ futures - 1 year;
Looks over extended.
This is from M3 Financial Sense blog;
I put the trade on just after the Dollar Index bounced off the support level;
I also have sell signal on my DBDT indicator that triggered on the close yesterday for the S&P 500;
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Later;
I opted to trail the stop by 10 points since I felt it could develop into a big down day. The market sold off down to as low as 2358 then rallied up through 2368 taking me out for a 16.5 point gain.
Entry and exit
NASDAQ futures - 1 year;
Looks over extended.
This is from M3 Financial Sense blog;
I put the trade on just after the Dollar Index bounced off the support level;
I also have sell signal on my DBDT indicator that triggered on the close yesterday for the S&P 500;
----------------------------------------------------------------------------------------------------
Later;
I opted to trail the stop by 10 points since I felt it could develop into a big down day. The market sold off down to as low as 2358 then rallied up through 2368 taking me out for a 16.5 point gain.
Entry and exit
Entry from 11th Jan 2012
I've been back to notes of my conversation with Jeff Quinto and decided for the first time in my life, to trade a simulated account. His advice was essentially you shouldn't be trading futures on a live account until you can consistently make money on a weekly basis. I've been trading on the sim the last few days, just taking trades on a discretionary basis, without using any indicators, and I'm down 34 points already. I really admire those guys who can trade that way and make a living, it seems like the hardest way to trade.
I'll have to come up with a new strategy...and then try that on sim.
I'll have to come up with a new strategy...and then try that on sim.
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