The transition to Futures trading

[pavilion103]

Do you mean that positions should never be held when you can't monitor them incase a large announcement/shock comes out?

In which case do you believe that positions should not be left running if I take one at the open and then go off somewhere?

Or positions shouldn't ever be held overnight?

Or just that positions shouldn't be held with pending major announcements coming out?

I'm ignorant in this area so would love your thoughts.


I noted that when the Swiss announcement came out it didn't have this impact, even though it did shock the market. Price fell quickly but still offered the chance to get out.


Can you clarify all the above for me?

Thanks

 

[Trembling Hand]

Or just that positions shouldn't be held with pending major announcements coming out?

This one.

But also you should trade with the idea that a disaster will happen to you trading sooner or later. In ways that you didn't think were possible. Being sloppy with pending major announcements will ensure you have more than your fair share of disasters.

 

[pavilion103]

This one.

But also you should trade with the idea that a disaster will happen to you trading sooner or later. In ways that you didn't think were possible. Being sloppy with pending major announcements will ensure you have more than your fair share of disasters.

Ok that is good.

I like to trade with as much certainty as possible in terms of context, setups etc. This is where I make my money. During weeks like this and with these sorts of announcements (for me) it just leads to confusion anyway. I don't want to be putting myself at risk of a catastrophic loss as well as bad trading due to uncertainty.

In terms of a major disaster I'm not sure what to expect. If I lost 100 points out of no where it wouldn't be a huge deal. If I lost 400 it might be. If I lose 1,000 it would be.

 

[VSntchr]

But also you should trade with the idea that a disaster will happen to you trading sooner or later. In ways that you didn't think were possible.

This is as terrifying as it is important to ponder..

 

[tech/a]

Hmmm
I don't know if its terrifying if your trading within means.

If I'm trading the DAX and there is an 800 tick shock once every 2 yrs
That's $28K / Contract.
If I'm trading 1 and doing say $2000 a week on average That's handle able.

But as T/H says if I keep away from News then that should equate to one every 5 yrs.

Just think you look at it like any risk.
Try and quantify it. Other wise you'll be frozen by fear!

 

[pavilion103]

Hmmm
I don't know if its terrifying if your trading within means.

If I'm trading the DAX and there is an 800 tick shock once every 2 yrs
That's $28K / Contract.
If I'm trading 1 and doing say $2000 a week on average That's handle able.

But as T/H says if I keep away from News then that should equate to one every 5 yrs.

Just think you look at it like any risk.
Try and quantify it. Other wise you'll be frozen by fear!

That's right. 1 major shock in 5 years won't cripple you if you are trading within your means and making good consistent profit.

Taking all the necessary precautions (avoiding news) will also help as was said.

I made 10,000 in 2 weeks. If I lost that in a shock once every 5 years it wouldn't be disastrous.

 

[barney]

Taking all the necessary precautions (avoiding news) will also help as was said.

Just on avoiding news ....... everyone who was decimated vs the CHF currency last week had the displeasure of having NO advertised NEWS announcement prior to the Swiss National Bank dropping their nuclear currency bomb on the market ...... so avoiding news is not always possible.

Interesting side issue to the above, considering the news announcement was not public knowledge, it was curious that George Soros took all his CHF Shorts out of the market just prior to the announcement hitting the wires Make your own mind up on that one

For those who didn't see the effect of the impromptu NEWS announcement, here are the two USD/CHF charts I posted earlier in the thread. They should give any trader a cold shiver.

PS. They are DAILY charts!

 

[pavilion103]

Some terrible erratic trading yesterday. Finished the week down around $700.
Mentally I've crumbled this week. The result isn't disastrous but the way I've trade has been poor.
Before I really attack the market I like to be clear about direction.
I haven't been this week and I need things to consolidate a little now before I really go hard.

$10,000 in 3 weeks is a good start.
I need to pause. I need to realise I won't be making $5,000 per week.
Slowly build with $1,000 at a time and I will also hit those big weeks in between.
In the meantime limit losses.
Losses I can handle, but ones from silly trades are unacceptable.
Weekend. Refresh. New start next week!

 

[CanOz]

You'll have some bad weeks Pav, roll on....

Interesting discussion about the news risk....I was in the market during the CHF news, but short the CDN...I got stopped out on my trailing stop. A few days later I was in a GBP short the day of the EU QE news and I exited a couple of hours before the announcement. I could have hung onto that trade, but thought the markets might still be gittery on news and a little illiquid after the ann....it would have been ok it turns out and the trade is still working, but without me. That's ok, I'm still happy with my decision to remove the risk....

You can't manage return, you can only manage risk.

Cheers,


CanOz
Edit...both trades were from Nick's Power Setups, EOD patterns

 

[pavilion103]

35 points net profit.
Done for the night.
Wasn't expecting anything tonight. Bonus.

 

[pavilion103]

My night.
2 good trades. 1 bad trade.

Always good to get into the black on the first night of the week.

Entry was good. Exit was good.

 

[pavilion103]

Given the initial 5 point loss. A little more open risk than I'd like.

Could finish 11 down if this comes all the way back to 6784.

 

[pavilion103]

Closed out.
8.9 down for the night.
Not behaving as desired.

 

[pavilion103]

Utterly butchered tonight.

Got a ripping entry right near the high of the day.

For some stupid reason exited for 25 points.

Threw away those 25 points in frustration.

Ended up with nothing.

So uncharacteristic.

That is a hold every day of the week.

 

[pavilion103]

Either taking off for 50-60 points or holding as a position trade given I go back to study next week so will miss 2 trading days per week for the next 2 months.

 

[pavilion103]

Well I've shown the good. Only fair to show the bad.
I'm actually very embarrassed to post this.
This is as poor as I have ever traded the opening. I remember one similar that I posted in here last year. This is probably the equal worst I've ever done.

Blew every rule in the book including: WAIT PATIENTLY... a setup WILL come... it always does. Well at least 95% of the time. So so silly from me tonight.

 

[pavilion103]

Subsequent trades.

 

[pavilion103]

also for work/life balance I've put the SPI on hold.
I've removed it from my excel files.
I'll give a recap at the end of the week.

After 2 good weeks to start the year I've had 2 lackluster ones.

 

[pavilion103]

Just could not find a setup on open last night.
Finally got on one around 6755 and then got out for no real reason. Had about 7 points at risk and didn't want to lose any more for the week. Disappointing.

Finished down just under 300 for the week.

Taking out my SPI stats I think that is about
1. 2,500
2. 6,000
3. -500
4. -300

Total just over 7,500 or so.
Avg $1,900

Good loss limitation but not a single big win in 2 weeks.

Wednesday night had I held and last night was the big chance too.

This opens my eyes to how few big trades are actually needed to average good profit.

Even one night of 80+50 = 130 = $2,500 would have been nice.
Need to be patient and realize that 1 or 2 good trades per week is more than enough.

Even just nailing 1 in the last 2 weeks would have gone a long way.

Patience. They will come.

 

[tech/a]

That they will