TheNegotiator

Well Db, whilst the plan is critical it wasn't my intention to start another thread solely devoted to plans. I suppose if you take a broader view of a plan (which I believe you really should, but many don't) rather than covering trading only, then including all the aspects I mention which help me to focus makes sense and I guess this thread is all about plans! Omg. :doh: lol. Anyway, when it comes to people not taking the time to actually do a proper plan (and to plan how to actually follow the plan), I'm sure you know Db that there are many reasons why people don't do it. There are those who say they get it but really do not. So the value they place on it is vastly diminished compared to what it should be. There are those who really don't get it and think a plan is dumb and pointless. They just can't see how it's helpful for whatever reason. Either way, in talking about it in various different ways - and really there are only so many core topics in trading which are important however you spin it - another person might just have that lightbulb moment. People are can view the same idea so differently that all it takes is someone to present it in a way that penetrates their core. You might say to someone "you should plan because of A, B, C" with really good logic and yet the person does not heed that wisdom. Then I or someone else says to the person "you should plan because of X, Y, Z" which in essence is exactly the same thing and the person gets it. Or maybe if we fill the interweb with enough sound knowledge again and again, something will just eventually click. Of course there are those who will not ever get it, but then if they don't try...

The point about the IB is that a good amount of business is done in the first hour by big players (OTF). A small IB means probably that there's not too much OTF interest (aka market movers) and therefore there might not be a huge range for the rest of the session. On the other hand, it could also mean that they're waiting for some specific information due to come out imminently before acting. A large IB could be that the market has reacted to something early on or premarket (such as eco numbers etc.). There is a big move but then little further interest in pushing any more. It could be that you get a "normal" day whereby neither the IB high or low is taken out and the implication of this is that possibly OTF cancel each other out. So once this has been resolved in the following session(s), a move can take place. It could also be that there is big news to be priced in and an IB extreme breaks fairly quickly. This could for example, give rise to a trend day. Ultimately, it's all about market logic and assessing what you feel is more likely to happen so when opportunities arise, you are better placed to decide on whether or not you feel they are good ones.

I think that one issue people can have is they get sucked into concentrating and then trading by price movement. Price movement outside of a plan ≠ great chance to trade. All price movement ≠ good. So focusing on just the plan but assessing the context of what the market is doing when you're not in trade mode is the way to go imho.

It was something about some sources suggesting that the bond buying programme would be limited contrary to what has been said recently. They've said that it was probably already in the market though (and not necessarily even accurate) and given the fact that the IB is currently just 3.75 pts wide, it's probably nothing.

However, there is also newsflow about the ecb bond buying programme.

If we were to get through 56.50 I suspect we could go a bit higher than 59.00

Overall, we have been in a down trend for this consolidation:-

Very much so. Given this, you need to have a plan to tell you what you're looking for and learn what that looks like in real-time so that your attention is piqued when required. Think back to when you started and I'm sure even a short space of time concentrating was tiring.

I'm looking at the idea that any temp consolidation high is in at 68.00. The low possibly in at 50.50 although I am also looking at the possibility of just above 45.00. Just one possibility.

So how does everyone see the current market behavior?

How do you go about doing this then? Placing a high level of importance on meditation (or at the very least something where you can properly take your mind off everything) and physical exercise is what I find helps me personally.

With one of the reasons Db started his Trading By Price/Trading in 90 Minutes in mind, I thought I'd start a thread to talk about focus and concentration. See the thing is in any performance endeavor, if you can't focus properly on what you are doing whether you have the best plan in the world or no plan at all, you aren't going to be able to execute it very well. Perhaps in trading and to a greater extent in day trading, there is a need to be able to concentrate for long periods potentially. The obvious way around this is the idea that you trade the first 90 odd minutes of a session. That way you will likely capture a portion of the day in which the market moves. On the other hand, it doesn't always work like that. It's important to recognize and account for the fact that the market does not care what your timeframe is and it is you who are artificially applying the window to it in order that you might be able to function better within that time. Earlier in my career, I tended to do long sessions and be able to concentrate. However, they were draining at times and I found even then that the best days were ones which were done and dusted a couple of hours into the session. More and more I will try to trade in the first couple and last hour of the primary session and tend to other work in the meantime. But what I'm interested in discussing here for the benefit of others who perhaps haven't quite figured it out for themselves yet, is the way in which everyone prepares their mind for the day in order that they are on point. For me, it is a combination of factors:- 1) Having tended to or allocating time for concerns outside of direct trading. 2) Being prepared for what to expect from the day. Knowing what eco releases are due etc. and technical levels as well as running through some possible scenarios in my mind to give me a better handle on things when they do start to happen. 3) Making sure I'm free from distractions such as work interruptions or family stuff for example. 4) Making sure I'm in the best physical condition I can be. So I shouldn't be tired or desperately hungry for example, although eating then trading also doesn't tend to work for me. Clearly being unwell is not especially supportive of a clear and focused mind either. 5) Finally, some kind of psyching myself up can help. Personally I like listening to certain music and that helps to centre me somewhat. I can't think of anything else in particular right now myself, but I'm sure that others have very specific ways they get ready mentally for the trading day and I'm sure that others would love to hear about it!

It does feel as if it 'should' promote stronger equity markets and decrease the appetite for what is viewed as 'safe'.

I did look. On the day itself it looks like the 10yr was down for the day (8/5/11 I believe) then on the following Monday it resumed its move higher. I seem to remember them announcing it after the pit close @3pm ET but can't be sure. S&P downgrades U.S. credit rating for first time - The Washington Post Anyway, same argument applies really.

Slow, slow day so far:-

When something bad happens, there is a "flight to safety/quality". Typically the dollar and bonds. Therefore especially US treasuries (and the short end moves more relatively). Re-reading this, I know it sounds a little odd. I can't remember exactly what the markets did at the time and I'm not going to go back and look. However, what I do remember is that there was a bit of derision of S&P at the time and nobody felt there was any increased default risk. If anything, it was taken as the US economy isn't brilliant. Treasuries were still seen as rock solid, hence flight to safety.

Just a few points:- No, because of QE3. As the dollar is diluted, money becomes less valuable and the further down the curve you go, the more this is felt. So QE3 = bad for bond prices. When something bad happens, there is a "flight to safety/quality". Typically the dollar and bonds. Therefore especially US treasuries (and the short end moves more relatively). Again, this isn't strictly accurate. If something isn't seen as inflationary and interest rates are cut (i.e. money supply is increased) then yes, old issues are more valuable because their 'coupon' rate is higher (attached interest rate) than new issues will be. In terms of pumping money into the economy, the dollar is still the dollar and old as well as new issues are priced in the same currency. Inflation = bad for long end bonds priced in that currency = bond prices go down. Plus the fact is that bond yields were dropping (prices rising) due to perceived risk in the economy which, the Fed is moving to mitigate via QE. So if risk goes down, bond prices should fall. Do you mean inversely or you mean bund yields? As Euro fx goes up, bund generally goes down - this is a risk thing too. Similar if not the same reason as why ES goes up as DX goes down.

One way action so far:-

The market was certainly given a Fed adrenaline shot yesterday! Just shows that there's really not much point trying to predict what the outcome of an event or eco release will be, just have a number of plans to account for various different possibilities. The move yesterday was pretty big. So given that and what Fridays have been like recently, I suspect that we won't see fireworks today. If we did, I'll be watching to see how the market reacts to some of the volume developments below from yesterday. Above I would be ultimately looking for a test of 1479.00 with 62, 68.50, 73 as other possible tests from the profile. Here's the chart anyway:-

My guess (and it has to be only a guess) is that the Fed won't act right now, at least not in the same way as they have done in prior QE programmes. I think there's a decent chance that they will look to commit to other initiatives (like for housing and small businesses) although not as a replacement to previous methods. The markets are up (in theory) and numbers aren't all that bad. So would pumping money into the economy as before be the best way to act? Not in my mind. If that did happen we would likely correct somewhat with a possibility of a fairly quick move to around 1400 mark (Dec). But I really don't know.:missy:

I mean there will be some moves later, possibly big ones, if you don't use up your ammo early on in the roll chop. Plus, pick your trades and don't be too stubborn when it does start to move. Often there are big knee-jerk reactions to news as traders try to act early so as to not miss out. If you get onside and it reverses on you, there's no sense in clinging on. Not that this only applies to today, but clearly it's likely to be more important when the market is due for big news.

You can of course wait if you prefer. However, I always roll as soon as possible just because I prefer the feel of the 'new' contract in general. Imho it really doesn't matter too much for the volume to overtake the current expiry. One, that would be late anyway because the actual trading activity overtakes before the day total overtakes and two, all you need is for there to be enough trading activity. I don't trade massively on roll anyway and with FOMC later and current activity, I am in no mood to push it right now. So wait until tomorrow, don't wait until tomorrow. I'm on Dec though

Anyway, I'm moving on to Dec from open and have updated data already. Here are the updated charts:-

Well here it is - FOMC day. Thrown into the mix is also roll day. Great fun. Pfft. Still, there should be some decent opportunities for those who are sensible about it.

You'll read a lot of material good and bad (and there will be a lot of bad) in your quest to become a consistent trader. It won't truly end either - we are all perpetual students of the market. So I'll try to be succinct. PLAN - Plan the structure of your day. Plan how you wish to trade. Plan how you wish to study. Plan what you wish to add to you trading when you learn something new. Plan how you should test the efficacy of this. JOURNAL - Record your trades. Record your thoughts on the market. Record your emotions. Record how your product reacts to Non-farm payrolls. REVIEW - Journalling is important even if you don't review imho. If you commit something to paper (or a spreadsheet or doc etc.) you are forced to think about it. However, if you plan to review then you can see things without emotional bias and you can see the cumulative performance of you and your plan. Trading is somewhat about point of reference. If you have point of reference for the market, for yourself and for your performance, then things become clearer and easier to build upon successes and correct failures. Study is no different and should fit into the overall structure.