Be Careful The Next Few Days

[brownsfan019 17]

For any newbies to futures - tread carefully these next few days. With so much going on, we are seeing the markets jump levels at a time. We saw this last year as well and while it was fun, you also have to know what you are doing. Be prepared for markets to blow past levels like they did not exist.

[Soultrader 12]

Good point brownsfan. Be prepared for the unexpected. During the credit crisis, I saw many senior traders sweating their balls off as they could not believe prices could drop so low. The best injstituional traders I met always hedged their positions during these times in case something unexpected and unfavorable happens.

[brownsfan019 17]

I will offer a few suggestions when trading in markets that are more volatile - either decide to go for the bigger moves (b/c they will be there) or take a fixed profit and be happy. It's VERY easy right now to grab 2-3 on the ES all day. That works better for me, esp. on counter-trend trades.

 

Here's a snapshot of my blotter from a few trades here this morning:

 

 

 

What's the catch? A number of these trades moved for much more than the profit I took. A couple others however just got my profit and then retraced. For me, esp. in volatile times, taking a fixed profit and so far having a 100% win percentage is a good feeling and easy for me to do. So far today a total of 12 trades and ZERO losers.

 

Keep in mind that rarely ever happens for me, esp. using counter-trend techniques as one of my strategies.

 

And having trades hit my targets in under 1 minute is just incredible. Again, you have to be ready for those moves - levels were being passed on the ES easily.

 

Also, take a look at the very, very light DOM:

 

 

 

I took that snapshot at 12:13pm EST.

While that is lunch time zones, having a dom that light is just not usually seen. It appears a lot was made/lost since 9:30am and there's a few still left to fight the fight.

 

I personally seem to have bigger days when the DOM appears lighter. Maybe with less bot's out there it's easier for my profits to be taken out. Who knows.

[james_gsx 16]

I decided to trade today after it slowed down a little bit (I didn't trade the first hour even though there was more money to be made it was too volatile). It's actually one of my best days yet, if not my best. Although I'm being very conservative and holding onto my profits and exiting trades quickly, even though I maybe leaving money on the table I still feel good keeping my profits and waiting for the next setup.

[mister ed 10]

Great thread thanks to all the contributors.

 

For me, I have limited experience in the index futures, so I decided against trading it today. Hard decision, felt like a coward - and hard to admit it too - but I did not want to incur the increased risk of gap moves against me today. Looking forward, as my experience in index futures increases I will be better able to take advantage of a day such as this.

Edited January 22, 2008 by mister ed
I originaly used the word for feline instead of coward and it was blanked out!

[james_gsx 16]

Well, all my trades ended up blowing up in my face. I will admit, I got cocky and started to think about how much money I was going to make. I'm glad it happened because I was able to identify a few key flaws in my trading.

 

1 - I need better defined setups

2 - I need to work on my discipline.

[torero 10]

"Money is the root of all evil" this statement is never truer in trading. Focusing on finding and waiting for the next setup is the most boring thing in trading but it's what helps you kept your money won and help move the profit line higher.

[mister ed 10]

This should help (to be careful the next few days)

 

1:20 AM General

Due to current market volatility the day-trade margin has temporarily been raised to 50% of the overnight exchange requirement.

[smwinc 20]

Good point brownsfan. Be prepared for the unexpected. During the credit crisis, I saw many senior traders sweating their balls off as they could not believe prices could drop so low. The best injstituional traders I met always hedged their positions during these times in case something unexpected and unfavorable happens.

 

Our entire office has been filled with us yelling, banging mouses, tables, kicking chairs, etc.

 

There were guys coming in for interviews as we are there screaming every type of swear word that comes to mind.

 

Bring your A-Game.

[james_gsx 16]

I'm going to bump this. It looks like next week is going to be another turbulent one. JPM bought BSC for $2 a share and the Fed just lowered rates by 25bps and extended it's loans for 6 months.

 

Good trading everyone.

[torero 10]

Dang, the more the Fed pumps, the more the leaks are opening up. This is like a little boy plugging a hole in the dam with his finger... just the beginning of more things to come I think. First bailout since 29 crash.

 

The currency market is going nuts, some dropping GBPJPY dropped at least 10c during Tokyo hours... very volatile, indeed.

[smwinc 20]

Key will be if BOE or ECB do anything, or if we get any government intervening in their currency movements. Traders already know the Fed is their bitch; we will soon see how other's start to react.

[torero 10]

That's true, but I have the impression BCE sees this as the Fed and US problem, not Europe's problem. I don't see the damage in Europe was as large or widespread as in US. I think the banks here impose high qualifications to obtain loans/mortgages. The US banks just binged bending their own rules on loans and are now purging... bulimic behavior. So far Trichet has only focused on containing inflation, nothing more. BOE, no idea, they can go either way I think.

[Blu-Ray 10]

That's true, but I have the impression BCE sees this as the Fed and US problem, not Europe's problem. I don't see the damage in Europe was as large or widespread as in US. I think the banks here impose high qualifications to obtain loans/mortgages. The US banks just binged bending their own rules on loans and are now purging... bulimic behavior. So far Trichet has only focused on containing inflation, nothing more. BOE, no idea, they can go either way I think.

 

Well said, I think the BOE is swinging more towards containing inflation as well.

 

Cheers

 

Blu-Ray

[torero 10]

So far only Norther Rock was the problem which has been bailed out already. Seems other banks in UK don't seem rocked by it (pun intended). UK's economy is closely tied to US than to US, so if they are focused more on inflation, chances are Europe is even more focused on inflation than the other side.