Simple Bond Strategies

[Soultrader 12]

Been trading the 30 year bonds lately with one simple strategy using market profile. From my brief experience with the 30yr bonds, this is not a contract you want to be countertrend trading.

 

Timeframes I use: Daily, 65minute, 5min.

 

First identify the trend on the daily and 65minute. The bond markets will usually gap down or above value area. This is the most important part of this strategy. ALWAYS go with the flow. If prices open below value, look for a short setup. If prices open above value, look for a long setup.

 

You may or may not get a test of VAL and VAH. However, because it is a slow moving contract entry is relatively easy. Therefore a tight stop can be used. I personally use a 3 tick stop, with my first target at +3 ticks, 2nd target at +5 ticks, and trail the rest.

 

Chart from yesterday: (I was short at the open)

 

[notouch 10]

Nice strategy. What times do you use for the open? The bond pit opens earlier than the equities at 0720 Chicago time so presumably you use that as the open? Also this strategy would work just as well on the 10 year note (ZN) which is the most liquid contract (2 or 3 times the volume of ZB).

[Soultrader 12]

I use the 8:20am EST open. But at the same time, since the bonds can be traded premarket I have no problem opening a position before the opening.

[Guest cooter]

I've found delta volume on the 30 year to be misleading, if only because of autospreaders, like that of TT's X-Trader component. Thoughts?

[Soultrader 12]

hmm. interesting point cooter. I dont rely too much on volume with bonds at the moment but will shed any insights I may find.

[Guest cooter]

Try comparing the ZB delta volume versus the ZN, for example. Should be a bit illuminating, to say the least.

[Nick1984 10]

I've had no experience in trading bond futures before but from what I can see the price of the bonds seems to have very sudden price movements (by your chart). It seems to move in little step formation but the all of a sudden without any real warning price just dives for quite a few points.

 

Can you use any indicators on the bond futures because I dont think that your normal TICK, TRIN etc work on bond futures?

[Soultrader 12]

It was Fed Day hence the sudden drop. Only happens on key economic numbers. I actually do not use a single indicator for the bonds besides VAL and VAH.