The transition to Futures trading

[CanOz]

Enjoying the thread boys.

Mind if I get your thoughts on the 10 year aussie bond mkt? Only posting because I value you're opinion.



the huge volume spikes in the daily are contract rollover.

EDIT: I generally find that the bond markets don't chart 'that well' when compared to say an equity index or a big commodity due to the smaller ranges, that being said there still looks to be some good break out opportunites, the volatility has really picked up over the last several weeks

Learn how to spread. I have it on good word that the prop boys teach the recruits how to bill spread because it's easier than directional plays....maybe some ex prop guys could teach you.

The prop guys don't trade like this, it's a retail thing.

CanOz

 

[kid hustlr]

Learn how to spread. I have it on good word that the prop boys teach the recruits how to bill spread because it's easier than directional plays....maybe some ex prop guys could teach you.

The prop guys don't trade like this, it's a retail thing.

CanOz

Yep I understand this, was just interested on the guys thoughts.

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Interesting possible short set up on NK225 if it breaks lower.

 

[CanOz]

Yep I understand this, was just interested on the guys thoughts.

I also heard that recently the Bill Spreaders were really doing well in all of this "mis-priced" mess!

 

[tech/a]

In the 15 min frame there is a small rectangle which is my first starting place.
Sell and buy enough ticks above and or below not to be affected by stop covering.

The 15 min looks like a 5 wave completion with Volume over the bars in the rectangle supporting that.
The 60 min looks more like an ABC correction with volume supporting that--perhaps a little more in it to the upside but ultimately short in an overall corrective pattern in the down move.

Interested in how it pans out.

 

[kid hustlr]

thx Tech. Agreed completely on the 60 min, I want to sell it at some stage but I might need to sit on my hands.

 

[pavilion103]

Tech, will you be at the screen for the open this evening?

I might post some interesting thoughts on my trading yesterday also.

I spent too many bloody hours at the screen last night but worth it considering I spend 7.5 hours at one during the day for $300

 

[tech/a]

Tech, will you be at the screen for the open this evening?

I might post some interesting thoughts on my trading yesterday also.

I spent too many bloody hours at the screen last night but worth it considering I spend 7.5 hours at one during the day for $300

No Probably not!

 

[kid hustlr]

tech/Pav,

Do you find the recent volatility over the past few weeks has led to a more set ups and more profitable set ups than usual? Just looking over some charts and replaying some price action, I feel that your type of break out/pattern trading is very well suited to these conditions.

I guess ultimately my questions is, does higher volatility = higher profitability/opportunity?

 

[kid hustlr]

Example trade:

Tech/Pav I'm really enjoying this thread and I'd love to hear your thoughts on this trade.

Now I want to preface this by saying if every trade worked as well as this one I wouldn't be posting on an internet forum.

See trade below:



I used much smaller than my usual size for this one as it is not how I usually trade, I consider it an experiment. I'm just interested on hearing your guys thoughts and how/if you would have approached it in a similar way.

My thoughts were as follows:

Based on the volume and the price action yesterday (which I observed) I felt if we broke below the lower trend line then this was a sell. As I hinted at in the post above this, I feel the current climate is a good one for break out trading as markets are thinner and there seems to be more stops floating around which are obviously a big factor when looking for break outs.

Now we actually opened way below the trend line, I'm not sure if I should have just opened a sell immediately (I assume you guys do this?) Instead I looked for a retrace and then entered the sell @ 96.115.

I set the stop @ 96.130 which truth be told is a purely arbitrary number. Effectively I just wanted to give my trade 'some room' that if it went against me slightly then I would be stopped out too early. I have no doubt I need to be more systematic/structured there.

Anyway, the trade turned around very quickly and went in my favour very nicely, in fact it was like a conspiracy how quick it went my way.

Now I moved the initial stop to b/e once it was 2 ticks in my favour and decided to exit the trade based on what I deemed to be support from yesterday @ 96.085.

Now there were a couple of other factors in terms of watching the price action and the depth of market which made me more inclined to take this trade which I won't go into but I would love some thoughts opinions on if you think this was a decent R:R trade.

 

[tech/a]

I guess ultimately my questions is, does higher volatility = higher profitability/opportunity?

It gives you more opportunity for larger R returns as there tends to be longer moves.
Flatter markets are harder to trade with less momentum.---I find.
But you can still make consistent gains when its flatter.
Often happens to me when I miss moves as I have on the last 2 nights.
But picked up $330 Yesterday for a few minutes and $166 Last night for similar.

Peanuts for some.

To your trade

Great identification of a topping pattern.
Triangle has a measured move so thats where id expect to be around when exiting.
Your entry was text book filling of gap. I personally set the "Logical" stop further outs so that stop
chasers dont get mine. If its 2 ticks ill go 4 or the otherside of a round number.
The key is moving to B/E.
You were very quick and Id probably wait a little longer.
I move to B/E when a current bar has closed in my direction--in the timeframe Im trading.

Interested in wether it completed the triangle move and if there was an exhaustion volume type signal of a pull up

My thoughts.

 

[pavilion103]

I've found that these trending days have allowed me to get in early in the day and hold my position longer without being stopped. Knowing that the spread of these bars could potentially be wider than usual gives me more confidence to hold.

I really do need to adjust to the timeframe that I'm trading though. I want to focus more on picking up 10-30 points rather than trying to hit home runs all the time which won't happen.

Really seeing the significance of the break even stop. Without it profitability would turn into loss.

 

[kid hustlr]

It gives you more opportunity for larger R returns as there tends to be longer moves.
Flatter markets are harder to trade with less momentum.---I find.
But you can still make consistent gains when its flatter.
Often happens to me when I miss moves as I have on the last 2 nights.
But picked up $330 Yesterday for a few minutes and $166 Last night for similar.

Peanuts for some.

To your trade

Great identification of a topping pattern.
Triangle has a measured move so thats where id expect to be around when exiting.
Your entry was text book filling of gap. I personally set the "Logical" stop further outs so that stop
chasers dont get mine. If its 2 ticks ill go 4 or the otherside of a round number.
The key is moving to B/E.
You were very quick and Id probably wait a little longer.
I move to B/E when a current bar has closed in my direction--in the timeframe Im trading.

Interested in wether it completed the triangle move and if there was an exhaustion volume type signal of a pull up

My thoughts.

Thanks tech, completely agreed about the gap fill and that was my view as well. I actually could have got in half a tick better but I didn't want to miss the trade. As an aside when I say "tick" I'm referring to 2 half ticks.

When you refer to the triangle having a measured move, are you referring to the fact that the 'range of the triangle' should set your exit target? For example if the triangle range is 8 ticks then the target is 8 ticks?

See below for the next hour or so of the market. I think I will work off 15 minute charts as I feel more comfortable with this time frame ( I can set + forget) and they also appear to create more pronounced patterns.



my plan is to continue with this form of trading on a very small basis relative to my usual size. Especially with the high volatility and thin markets at the moment there is most definitely opportunities.

 

[tech/a]

Bounced back and filled the gap in a hurry.
The 2 wide range bars at the reversal are the key.
Looks like a failed breakout.---more consolidation but it wants to go lower.
Would be interested in more of the same chart.

For FTSE I use a 9 min for patterns .
but each will have their favorite.

 

[mr. jeff]

I've found that these trending days have allowed me to get in early in the day and hold my position longer without being stopped. Knowing that the spread of these bars could potentially be wider than usual gives me more confidence to hold.

I really do need to adjust to the timeframe that I'm trading though. I want to focus more on picking up 10-30 points rather than trying to hit home runs all the time which won't happen.

Really seeing the significance of the break even stop. Without it profitability would turn into loss.

For 30 pts what are your stops when opening the trade - R:R ?

 

[pavilion103]

For 30 pts what are your stops when opening the trade - R:R ?

My main focus is low risk setups. If I can go very tight in a low risk area I will.
But usually I'm comfortable with about 10-15 points. When I start getting larger than this I feel uneasy.

The one the other night was 17 points and that yielded a 60 point move in the next 30 mins.

Look to then to reduce risk ASAP. Then stop to BE when I can.

My main focus is on maintaining this discipline. If I make 90 points on day that's when my expectancy starts to look good.

 

[pavilion103]

Also I don't have selling targets as such, I look mainly at the price action and volume. But I'm learning that with futures I have to give strong weighting to those areas of support and resistance so maybe a little easier to determine the likely RR prior to the trade.

 

[tech/a]

My main focus is low risk setups. If I can go very tight in a low risk area I will.
But usually I'm comfortable with about 10-15 points. When I start getting larger than this I feel uneasy.

The one the other night was 17 points and that yielded a 60 point move in the next 30 mins.

Look to then to reduce risk ASAP. Then stop to BE when I can.

My main focus is on maintaining this discipline. If I make 90 points on day that's when my expectancy starts to look good.

The point is its trading R/R not simply the initial R/R.
If you can get on momentum then you can move your stop to B/E pretty quickly.

As you saw PAV in the Trading exercise its a very powerful tool to skew results.
After all its about profit not being right!

Good to see you have adopted it in all your trading.

 

[pavilion103]

The point is its trading R/R not simply the initial R/R.
If you can get on momentum then you can move your stop to B/E pretty quickly.

As you saw PAV in the Trading exercise its a very powerful tool to skew results.
After all its about profit not being right!

Good to see you have adopted it in all your trading.

Very significant point.

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The point is its trading R/R not simply the initial R/R.
If you can get on momentum then you can move your stop to B/E pretty quickly.

As you saw PAV in the Trading exercise its a very powerful tool to skew results.
After all its about profit not being right!

Good to see you have adopted it in all your trading.

That's because it works!!

Contrary to what some on the forum may believe (and as you know) I haven't simply followed your methodology/philsophy blindly. I've read over 30 trading books and other resources. Tested many of these things over a couple of years and then come to the conclusions that I have. It just happens that the things you have taught me happen to be VERY EFFECTIVE and you've led me down a great path. Your way of trading MAKES SENSE. It resonated with me from the beginning.

Futures is a whole new ball game but many things like risk management remain the foundation.

 

[kid hustlr]

Bounced back and filled the gap in a hurry.
The 2 wide range bars at the reversal are the key.
Looks like a failed breakout.---more consolidation but it wants to go lower.
Would be interested in more of the same chart.

For FTSE I use a 9 min for patterns .
but each will have their favorite.

See chart now. This is at 12 oclock. Very choppy day, very thin market, any serious buyers/sellers are pushing the market 5-6 half ticks.

Interested to hear your opinion on what I wrote on the chart, if we were to consolidate here I was wondering about another short position @ 96.06. Its the top of the wide range, heavy volume bar. Given the volume which has traded below 96.06 however, both in that high range bar, as well as the action several days ago, I believe there would some buying support which would prevent any breakout? As such I'm hesitant to take this trade.



Also tech/pav, any suggested reading to get me up to speed on this. Tech I've read most of your threads/stickes, but any other books you recommend?

 

[DJG]

Here's my view on your chart Kid Hustlr - I'm no where near as experienced as Pav and Tech but here's another view if you want it.

I'll be interested to see how it plays out.