Tech/a vs. CanOz - Futures Trading Competition

[CanOz]

Canoz, I got into trouble with an option calendar spread with IB some years ago now. I learnt from that rather painful lesson that it pays to set the spread up as a long spread - and then sell it to create a short position. Otherwise it gets very confusing! I think it makes no difference whether it's options or futures when setting up a spread in IB.

Hope that helps!

Yes! That's what i found as well Sails, thanks for confirming it I think thats where IB is a little tricky.

Thankfully i have a reasonably good knowledge of the futures contracts, otherwise to have all that to contend with on top of the platform would be too much. Despite me testing these on the sim i still found issues when i went to chart the spreads. To enter them manually presented no problems though...

 

[sails]

Yes! That's what i found as well Sails, thanks for confirming it I think that where IB is a little tricky.

Thankfully i have a reasonably good knowledge of the futures contracts, otherwise to have all that to contend with on top of the platform would be too much. Despite me testing these on the sim i still found issues when i went to chart the spreads. To enter them manually presented no problems though...

Yeah it is tricky until you understand how the IB platform works. And I was no novice at option spread trading when I was caught!

 

[CanOz]

Wow, for combos, like this one i can even use the chart trader...one leg as a limit, the next as a market order.

 

[CanOz]

This is one that actually works as a combo, its ZW Mar 14 - KE Sep 14, sell +-10 days from the 3rd of Jan...looks quite ripe to me...

 

[CanOz]

Here's what we have pending for this evening...

A re-entry on our HO spread, a Brent trade, and a Wheat trade.

 

[tech/a]

FTSE heading toward Resistance again.
Heading to Dinner in a minute
Will see if anything interesting when I return.

Don't want to set an order and hope!
(I know your not doing that Can!)

 

[pavilion103]

FTSE heading toward Resistance again. Heading to Dinner in a minute Will see if anything interesting when I return. Don't want to set an order and hope! (I know your not doing that Can!)

Was only able to get on for 30 mins before heading out.
Was tempted to get in on open with a 20 point stop to the highest recent high. I didn't.

Looks like it's pushing up again with a good chance maybe to short near highs once more. Looks ominous IMO.

 

[tech/a]

Was only able to get on for 30 mins before heading out.
Was tempted to get in on open with a 20 point stop to the highest recent high. I didn't.

Looks like it's pushing up again with a good chance maybe to short near highs once more. Looks ominous IMO.

Missed it --

 

[CanOz]

FTSE setting up a long pattern? big drop then grind down until enuf shorts are trapped...

 

[tech/a]

FTSE setting up a long pattern? big drop then grind down until enuf shorts are trapped...

If I'd have got on early I would stay short.
I think it will continue down with weakness
From the US
But risk is to high now.

 

[pavilion103]

Good opportunity was there. A very good place to have had a crack.

There was a two bar reversal low at 6670 (bottom of a channel and near a previous low). Maybe a bit if a push up now?

I'll post any other thoughts in the futures thread

 

[CanOz]

As I'm curious to see the chart of the spread I found this resource at britefutures.com.

I assume you entered this spread recently (Jan14) based on the seasonal stats rather than the chart pattern. A good swing started in Sept13. Hope it breaks up from the current descending triangle pattern for you.

View attachment 56202

Thanks Peter, that site will come in handy to double chech my charts from time to time....the spread is a bear spread.

@beachlife - spread trading is directional, so yes we're looking for the price difference to continue in a direction...a direction that due to seasonal supply and demand changes, usually repeats itself.

 

[CanOz]

We ended up having some favorable closes in two of the three spreads. The Brent bull spread and the Bear wheat spread are in profit after their first close.

The HO bear spread is still behind a little.

I've got some time today to re-do the video on IB spreads. I'll post a good webinar too from YT on Spread trading.

We've also got a new spread, a bull copper spread to look at for an entry this evening...

 

[beachlife]

I get how spreads work with options, but I dont get it with futures. How do you position size to your 2% risk without a delta for the various contracts? Or is some sort of rate of change data available somewhere?

 

[CanOz]

I get how spreads work with options, but I dont get it with futures. How do you position size to your 2% risk without a delta for the various contracts? Or is some sort of rate of change data available somewhere?

That's a good question and its tricky and a bit ambiguous. Generally you need to get a feel for this using sim, but you can calculate an approximate point value for the spread as you know the point value of the contracts, the tick values are the same, see here. I use a money stop and generally in my experience most of my spreads fall into the 1% risk given my account size. I could trade 2 contracts on most trades and still be within my 2% risk rule. By taking trades that are close to support and resistance and provide a good risk to reward profile you'll certainly know when you are wrong by using using a money stop...

These things generally move pretty slow, so you'll have time to assess the risk as it moves as well. When it comes to the money stops Jay Richards of JustSpreads has been very helpful in determining the money stop to use.

I always try and err on the conservative side when it comes to risk too, taking less than 2% where i can...

 

[skc]

When it comes to the money stops Jay Richards of JustSpreads has been very helpful in determining the money stop to use.

Thanks for sharing this site. Looks like it has plenty of useful materials.

 

[tech/a]

Set bracket orders and had tea.
returned to see I had incorrectly
set the Limit Buy and stop side of the bracket
No damage but missed a good move! (I was short)

 

[CanOz]

Well we've got good news and bad news on the spreads today. The good news is that our HO bear spread has come good and our Wheat bear spread has totally broken through support. The bad new is that our Brent bull spread is looking bearish now instead of bullish.

I plan to exit the Brent spread this evening and await another entry...

 

[CanOz]

One for the watchlist on the currencies....

 

[peter2]

I don't know how you can use those "hairy caterpillar" charts. To my inexperienced eye they indicate the spreads to avoid as the market participants all agree on the costs of carry between contracts and there is no real change in supply/demand.

Not sure about seasonal patterns in currencies. They might occur at EOFY's as large companies repatriate their P&L to their base currencies. I'm aware of different EOFY's between US, Aust(UK) and Japan.

As for that GBPCAD chart. I'd call that an UP-trend that has just broken higher once more. The GBP is currently quite strong and the CAD has weakened noticeably in the last few days. Hence the move in this pair. However your 5y,15y seasonal averages are compelling and I'll be watching.