The transition to Futures trading

[CanOz]

Sitting at KL about to board the plane back to Adelaide.

Haven't checked FTSE in 2 weeks. Looks like maybe it's coming off a bit.

Will be back onto it soon!

KL, that used to be a crappy airport...

Europe sold off well...

 

[havaiana]

Barely anyone visits the USD/JPY thread so thought I would post this here instead so hopefully I can get some feedback on a theory I have.

Are oversized orders in the book at the end of an extended move more likely to be take profits than entries? (assuming the order is not a spoof or a spread)

Example of this type of order in pic below, context is; Yen has been in an extended down move, so this limit buy is against this big movement

1. If you are placing this order as an entry of your whole position
a/ people could front run, preventing the order from being filled and/or give you a worse entry price
b/ if it gets filled and keeps going against you, other traders could suspect you are in a position that is underwater and if exited at a loss is going to take some time and cost to exit, probably not the best position to be in

2. If you are entering as a small part of a much bigger order
a/ people could front run you giving you a worse entry price

3. If you are entering to close a whole position or at least the last part of it
a/ you could move price against you, but are in profit, so not as crucial
b/ once the order is known to be real, you are advertising to other big traders that the liquidity that would usually be hard to find so cheaply is available to anyone who wants it and if they do take it could save you the time and potential of moving price against you.

 

[kid hustlr]

Got a nice long trade then, exited for a 10 point winner when I saw a huge volume sweep on the FTSE. it kind of popped up then they slammed it back down, will re-assess this trade later, given it was a good trade in profit I wonder if once again I've exited too quickly but my gut said when I see price action like that to exit. Time will tell.

Also, Still feel like any long trade has less legs than a short trade right now anyway

 

[tech/a]

10 ticks is 10 ticks

This is churning I cant find anything.

 

[kid hustlr]

10 ticks is 10 ticks

This is churning I cant find anything.

Yeah I contemplated going for a few 3 tick scalps for a while there but put that idea back in the top draw pretty quickly. I still feel contextually its pretty heavy but after 2 heavy down days I can't see it falling off a cliff again.

 

[kid hustlr]

TH when do equities start rolling over? Roll week for the bonds starts Monday afternoon and from memory the equities start the week after and then currencies are the last to go?

by my calcs that's equities starting to rollover on the 16th or so?

 

[Trembling Hand]

TH when do equities start rolling over? Roll week for the bonds starts Monday afternoon and from memory the equities start the week after and then currencies are the last to go?

by my calcs that's equities starting to rollover on the 16th or so?

Yeah its earlier than normal because of Xmas but I would just check each exchange list, the HSI is a monthly contract so I'm dealing with it what seems like all the time but they are all diff....

 

[kid hustlr]

Yeah its earlier than normal because of Xmas but I would just check each exchange list, the HSI is a monthly contract so I'm dealing with it what seems like all the time but they are all diff....

yeah ok ta mate i'll have a look tonight.

 

[havaiana]

Marty Schwartz talking trading

 

[pavilion103]

Looking at the FTSE chart for the first time since I got back.

Bloody heck there was some obvious bearish action the 3 bars before the recent fall!!!!

Devastated to be away for that period. 3 bars pushing up, closing near low and on low/deceased volume.

That really sucks!!!

 

[kid hustlr]

Would like to revisit the discussion on TIME if you boys get a chance.

Last couple of weeks I've noticed more and more how important time of day is when it comes to how to approach my trading. This is mainly in the bond futures but some quick examples:

- Late in the day its quite busy - have less standing orders
- Early in the day - same deal
- quite often the market can completely disconnect after the day close. gives opportunities to place certain trades at night and then unwind during the day and vica versa. It's like theres no recognistion of what happened during the day.
- Over lunch it can get SUPER quiet, adjust trading accordingly.
- When the treasuries re-open (at now 10 oclock am our time) it can turn busy again v quickly.

It's just little things like this which have REALLY helped my trading and I think a lot of the best guys trade the time of day really well.

TH, is this what you were getting at a few weeks back?

 

[havaiana]

Would like to revisit the discussion on TIME ...

Agree with everything you said. There are a couple of other ways that come to mind of how I use time

If I am fading a breakout, I don't know how far price will break out, but I will find if I am entering at the end of the bars (end of bar as in time), then if there is a big breakout I will usually get a better price than if I had faded at the start of the bar. Or sometimes when I have waited for near the end of the bar I'll decide to not fade yet because it has moved too far and closing at highs, now I want to wait for a pullback to go the other way. Obviously if it breaks out by 2 ticks and immediately reverses big in the first 10 seconds I can miss the entry, but doesn't happen as often as I had expected from my observations in my markets.

Price can get in a rhythm, sometimes you can use it to know when to enter and exit in terms time rather than price (made up example. lunchtime low vol day might be 1 min bar up, 1 min bar down, repeat. Market open could be 3-5 5 min bars up, 3-5 5 min bars down, repeat). When you watch it and use it with time of day as you previously mentioned and volume (likelihood of trend v range day, low v high volatility day etc) you can use it to help time entries and exits. You don't know how far it will move, but can time around how long it might move. When it starts to change it can give you a heads up on a change in market condition and another added advantage is it helps you dump trades that are going nowhere and hold on to the ones that work right away. But like anything else it's far from fail proof, sometimes it works like a charm and other times it will f*** you.

Have had a few drinks so if my post isn't clear let me know and will try and explain better later.

Would also like to know TH's thoughts, i remember him mentioning about a certain setup in hang seng that when it spikes x ticks, fade, than exit after x amount of time. And another post about price moving in 3-5 day patterns. His blog post about candles printing in the last seconds of a bar helped me heaps.

 

[CanOz]

Interesting tidbit from the Propex site:

You can always tell a scalper by the type of questions he asks – short and to the point.

It makes them easy to answer. Here are some questions recently received via email.

Below are some of my thoughts on ZN. Wondering if you could comment on them? Am i in the right direction in analyzing the market? Do the 'rules' listed down in some bullet points make sense?

1. Scratch more often. Queue to enter. Scratch if size gets thinner too fast. See pt 9 too.

Love it.

2. When approaching a weak support or resistance from a few ticks away, fade once only.

Hmmm, sometimes yes, sometimes no. Try scaling in like you would in the levels drill.

3. The longer a position waits to square, the more likely it will lose. Scratch or cut non performing positions earlier.

More time in the market will teach you the 'know when to hold and know when to fold' approach.

4. Follow EMA 22 on 1 min chart. Only upsize once when touch ema. Reduce to one clip ASAP, by scratch/cut/tp.

Not my thing, but if it works for you then fine.

5. Fading major support/resistance fail: cut and turn around immediately.

Careful not to pay up on entry.

6. PATIENCE!!!

Absolutely, more than anything.

7. Look for leading signal from related market.

Yes

8. Try averaging moderately in sideways market. Enter at every two ticks.

Yes

9. For ZN sl and tp should not be 1 tick.

Yes, but be flexible

 

[kid hustlr]

Yeah interesting stuff Hav. When we start talking specifics and shorter time frames I think here's where 'knowing your market' and the specifics on each market become so important and the ultimate difference.

When I think back to the lunch time example I mentioned above I can even go deeper than that. So often our XT might get pushed one way in the morning. Then it settles down over lunch and then gets pushed again in the afternoon. It's one player pushing the market and at some stage he heads off to lunch, the market might come back to him a little over that period then he hits it again in the afternoon.

Similarly its not uncommon for us to drift a couple of ticks over lunch as the volume thins out. That being said it is VERY unlikely that's its going to drift through a big support/resistance level during this period. In my opinion if we drift into a support/resistance area its a good chance to take a low risk entry.

It's even the little things. If we get clobbered all day, buying the last half hour is a pretty good play, shorts need to unwind.

Each one of these points can be dissected with such detail when you start thinking about who the players are and what their goals and time period are. Ultimately you've just got to build a picture/view and execute as best as possible

 

[Trembling Hand]

Would also like to know TH's thoughts, i remember him mentioning about a certain setup in hang seng that when it spikes x ticks, fade, than exit after x amount of time. And another post about price moving in 3-5 day patterns. His blog post about candles printing in the last seconds of a bar helped me heaps.

Time to me is everything. It is support and resistance. Not some linear trend line nor some silly couple of numbers that one can pick out where something happened previously, or even some straight line running years back on a chart that may be there depending if you are using log, semi-log or not!!!!. What sends markets to the moon or into cascading selloffs is time. Its also why gap fill opens require time to work back rather than the very rare straight line close in first 15 min that we had on the HSI last Monday.

To move a market you need to built up participation AND you need people to act. The way you do that mostly is by trapping enough on the wrong side to have an explosive move as they all scramble for the exits at once (these are moves after the open vol has been absorbed) or the other way is to have the story build; that is convince enough punters sitting on the sidelines that they need to get in on this story. (this is the opening action after ON news etc and the day themes as the market goes from direction-less to explosion(the god its boring day to WOW!!))

Without time and an imbalance between week and strong hands it is too easy to lean on the initial breaks and push it back into the old range. That is when I play fade everything because you have weakies jumping and acting on little and quiet moves. Thats why most breaks fail until enough time goes by that there is simply too much pressure. And you have a lot of positions open in expectation of counter moves, thats when you see support and resistance just melt away because in actual fact it wasn't the price that had it range bound it was the lack of time.

 

[ThingyMajiggy]

So like now for instance you'd be fading everything on the Seng at this time of day?

 

[Trembling Hand]

So like now for instance you'd be fading everything on the Seng at this time of day?

I have been but now starting to think about the possibility of an up side break into the DAX open so maybe hang on to longs to see what happens. If it goes add and add lots. If it doesn't no harm done.

 

[Trembling Hand]

Like this one. 23810ish and will add if it bounces.

 

[Trembling Hand]

Could be a perfect example but wrong direction......

 

[Caveroute]

Could be a perfect example but wrong direction......

Uhm, dunno, looks like a bull spike and channel right now.