The transition to Futures trading

[CanOz]

My philosophy is get stop to BE ASAP then there is nothing lost. From there trail a bit looser if you like.

Eliminate risk first!

This is fine if the markets are volatile enough so that the move has enough continuation. But lately the markets have been moving very differently and you end up working for the broker if you move to BE too early.

I had half a dozen last night that went to one tick of my first contracts profit target and then back to take out my BE stop. I had a ton of commissions the time i was done for the night.

Anyway, at the end of the day we're just a bunch of retail traders. There is no longevity in trading this way.

Someone said one time, on this forum or another..."the grey haired old guys in front of the screens in the photos at the Prop shops are the spreaders"... Meaning the outright directional traders don't last long enough to get that old in front of a screen.

 

[sinner]

Someone said one time, on this forum or another..."the grey haired old guys in front of the screens in the photos at the Prop shops are the spreaders"... Meaning the outright directional traders don't last long enough to get that old in front of a screen.

Come, join the spot FX market, where every contract is an implicit spread on overnight risk free cash.

 

[kid hustlr]

Anyway, at the end of the day we're just a bunch of retail traders. There is no longevity in trading this way.

Someone said one time, on this forum or another..."the grey haired old guys in front of the screens in the photos at the Prop shops are the spreaders"... Meaning the outright directional traders don't last long enough to get that old in front of a screen.

Jeez Can that's pretty somber!!

 

[pavilion103]

Filled the gap on open. Bullish bias here.

 

[CanOz]

Pav, why do you see a GAP fill on the open as bullish?

 

[pavilion103]

Pav, why do you see a GAP fill on the open as bullish?

I figured that if it showed a lack of supply around this area it could provide a good long setup.

Hasn't eventuated that way, so still on the sidelines.

 

[CanOz]

interesting, i can't even bring up my FTSE workspace at the moment, Ninjatrader is giving me issues...

I was acutally looking at the FDAX/FESX spread and when the markets gapped open the spread opened at the top of the range, to me it looked like a piss easy play to short the spread, so i did. Then after my trade was nicely in profit i cut the FESX leg off the spread, leaving me only with the DAX nicely in profit.

I tell ya, starting out with a spread trade is much easier to manage than an outright. Its like driving with a seatbelt on...

 

[pavilion103]

I could definitely use an 'easy' trade at the moment. None of my setups appearing.

 

[kid hustlr]

Fellow chartists + traders, any views on where this market may go? its the aussie 10 year bond future (XT)

 

[pavilion103]

FTSE not stopping yet!

 

[havaiana]

Fellow chartists + traders, any views on where this market may go? its the aussie 10 year bond future (XT)

View attachment 55006

I can never bring myself to go long after it has already moved that much, I hate the idea of being one of the last on a move and potentially being one of the worst buyers in a 0-sum game if it reverses on me. I would be looking to short or wait for a big retracement before getting involved. I miss the bigger moves a lot though when the bigger retracement doesn't come.

What do they look like now post FOMC?

 

[kid hustlr]

I can never bring myself to go long after it has already moved that much, I hate the idea of being one of the last on a move and potentially being one of the worst buyers in a 0-sum game if it reverses on me. I would be looking to short or wait for a big retracement before getting involved. I miss the bigger moves a lot though when the bigger retracement doesn't come.

What do they look like now post FOMC?

Yeah agreed hav. I actually was confused by that pattern as it looked like it was bullish, on the daily you can see the big push up 4-5 days ago then it kind of stayed in the top of the range for the next 4-5 days and the down day was on very low volume.

Alternatively when you look at the 60m, it was kind of slowly grinding in the range perhaps edging higher and whilst it was making higher lows, I generally don't associate that type of set up with a high probability of bursting through on the upside. I feel like it will kind of churn, perhaps edging slightly higher until it gets a catalyst one way or the other.

As it turns out the catalyst was FOMC and they have since sold it off hard.

Now im inclined to think it may consolidate here for a bit and then I'll be looking to sell it again.

thoughts/tech, pav ?

 

[Caveroute]

Nobody knows what it will do next – but my thinking would be:

There are several trading ranges on the chart, the last one began on ~23 – just after the big spike.

Your currently at the bottom of this TR, two attempts to break out i nthe last 4 bars have failed.

The last 4 bars are consecutive inside bars, the last three being doji’s .

So, as inertia rules, my take would be the most likely next steps would be to try to go back to the top of the TR, 96.075 or there abouts.

Conversely, as you say we may get a second leg down and if we do the target would be the bottom of the spike that spawned the current TR.

However, you need to see some more action before you can decide which way it will go.

I read this morning that FOMC reports tends to rattle the cage, but once things settle then things go back to how they were. No evidence either way for this, just something I read, fwiw.

 

[CanOz]

I bet the spreaders are all over that move...

 

[pavilion103]

Looking at the recent FTSE charts is quite interesting to note the 3 runs recently, up, down up. Each of around 300 (to 400) or so points.

I also noticed that most of the days in these made higher highs or lower lows almost the whole way. There was not much volatility.

This really shows me that IF (big if) you were able to identify the trend and look to take an entry only in that direction intra-day, that there was potential to hold these over night and potentially run a nice little move of around 200 points.

This is one thing that I am beginning to notice. If I trade in intraday in the direction of the overall trend, there is the possibility to potentially get on one of these moves.

200*$17 = $3,400
Not bad

When you are only risking between 5 and 10 points on entry and moving stops to BE ASAP, then a couple of moves like that increase the expectancy greatly! Not to mention any decent intraday moves of 30-40 points.

Just some thoughts.......

This type of trading excites me.

The other thing I love about futures is that profit can simply be multipled by trading more contracts. I know you must build up to this and it doesn't come easy BUT the key point for me is that the potential exists.

 

[pavilion103]

Much more difficult to identify the trend than it is in hindsight of course.

This most recent one up had 15 days of higher lows.

Also gets me thinking about the idea of adding contracts.

1) enter intraday trades in the direction of the trend (once it has been estbalished/identified)
2) move stops to BE asap and let them run.
3) let them run over night with wideish stops.
4) Look for another trade in this direction the next day (if it is there).


This is all very challenging to do in real time.
But I'm basically putting my thoughts out there because I am excited about the possibilities.


With patience.......
and enduring the frustration of being stopped many times as BE.

The trader WILL eventually get on ONE that would make an absolute killing!!!

I look forward to documenting my success in this manner one day (hopefully soon!)

 

[kid hustlr]

Looking at the recent FTSE charts is quite interesting to note the 3 runs recently, up, down up. Each of around 300 (to 400) or so points.

I also noticed that most of the days in these made higher highs or lower lows almost the whole way. There was not much volatility.

This really shows me that IF (big if) you were able to identify the trend and look to take an entry only in that direction intra-day, that there was potential to hold these over night and potentially run a nice little move of around 200 points.

This is one thing that I am beginning to notice. If I trade in intraday in the direction of the overall trend, there is the possibility to potentially get on one of these moves.

200*$17 = $3,400
Not bad

When you are only risking between 5 and 10 points on entry and moving stops to BE ASAP, then a couple of moves like that increase the expectancy greatly! Not to mention any decent intraday moves of 30-40 points.

Just some thoughts.......

This type of trading excites me.

The other thing I love about futures is that profit can simply be multipled by trading more contracts. I know you must build up to this and it doesn't come easy BUT the key point for me is that the potential exists.

yeah classic example of understanding how the market is trading. sinner talks about this all the time. the last few months you and tech made a killing because the volatility was up and the ranges were high, lots of momentum type plays available. Lately the vol has been down, heaps of steady grind type days, there no massive volume as the big boys aren't getting involved. I think this type of slow moving, grind type price action is, imo, more suited to the 'find a position and hold it over night'/ swing trading type play.

my 2c

 

[pavilion103]

Yeh that is exactly right.

1) Idenfity market behaviour (volume, volatility, trending/ranging etc)

2) Identify the trend (if there is one).


Adjust trading strategy and objectives based on the above.

 

[kid hustlr]

I just wonder if we are starting to see a slight turning of the tides after the price action over the past several days.



I've got 3 charts there. the first 2 bar charts are the futures daily charts. One is zoomed in to better study the volume whilst the other shows a more longer term picture. The bar chart from yahoo finance is just the cash index.

Interesting to note a slight uptick in volume over the past 3 days which suggest some supply coming into the market. We are also nearing longer term resistance so a pullback of some sort might be expected.

The big reversal several days ago may very well mark a short term high.

I thought the cash index was very interesting. It portrays a slightly different picture to the futures contract. The closes have been much lower on this chart and it, in my opinion, portrays a far bearish picture. In effect what has happened is after the cash close the futures index has been bought up, as a result on the futures contract (which is 24 hour) suggests down thrusts whereas the cash index shows just simply down bars.

Truth be told I'm not sure what to make of this (if anything at all) but I'm going to keep an eye on it, the big boys do there business during the day and if they are selling, I want to be to.

So the plan this week is as always, look for my set ups on an intraday basis whilst recognising the longer term context. I think if we get some form of upthrust/test on weak volume which is quickly sold back down then It's a pretty strong sign to get short. In the past I have been hasty in attempting to find tops and bottoms however so I must remember that whilst some bearish signs are appearing, the momentum is still to the upside until proven otherwise

 

[pavilion103]

My sentiments have changed after the last few days. Not anticipating anything but just thinking the steady run up is not likely in the same way that it has progressed up until now. Will see if it pulls back. Will see how it behaves around the higher volume area. I also sense the change. We'll follow it closely.