The transition to Futures trading

[CanOz]

Can, you are joking, right ?

The FTSE, and others, have been in a nose dive for a wee while now.

So run away bear refers to a bear market? Sorry, its just new terminology for me...I guess I'm getting old.

 

[Caveroute]

Ok I'm on.
It's moving.
Now to see how it reacts around 6227 low of the day.
If it breaks then happy days!

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To be honest I'm poor on the open.
First 30-45 mins, I have some great setups.
Need to develop those plays on the open for sure. I'm the first to admit!

Yep, my last add on was at the l2 short @6544 on the 3 minute.

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So run away bear refers to a bear market? Sorry, its just new terminology for me...I guess I'm getting old.

Sorry Can, I'm just trying to say it's going south and has been for a while, and currently there are no signs it will change. That's all.

 

[CanOz]

Two Spreads I'm playing around with intra-day....The DAX_FESX and the ES_NKD....

Love the way they move compared with erratic directional index futures...

The Dax on the bottom, you can see it makes many more swings...

 

[pavilion103]

Triangle forming here.

This is where I'm a little unsure what to do if it breaks lower.
I want one contract to hold and one to close today.

I'd like to hold incase this continues going south.
However this probably isn't a good time to hold a position trade. That was 2 days ago.

Will most likely close this position today if it breaks lower here and gives me a reason to exit after that.
We'll see.
It's gotta keep moving first!

 

[CanOz]

I'm long my DAX spread...the markets are looking too short here...looking for a pop higher.

 

[pavilion103]

I took myself out.
I will wind down before bed now.
25.5 point win.

This could well smash lower, but I won't be up much longer!
I'll take the money and run tonight!

3 trades overall
-2.3 points
-1.4 points
+25.5 points
Net +19.5 points

 

[Caveroute]

Triangle forming here.

This is where I'm a little unsure what to do if it breaks lower.
I want one contract to hold and one to close today.

I'd like to hold incase this continues going south.
However this probably isn't a good time to hold a position trade. That was 2 days ago.

Will most likely close this position today if it breaks lower here and gives me a reason to exit after that.
We'll see.
It's gotta keep moving first!

There is a higher tri, apex at 6541.

Conventional wisdom states this will be tested and then the trend will continue.

Lets see, it may not figure at all.

 

[pavilion103]

hmmm... not contemplating a long lol.
Or should I go to bed!
LOL!

Probably bed, but we'll see!

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and by long, I mean a little pullback/test in an overall bearish looking chart.

 

[Caveroute]

hmmm... not contemplating a long lol.
Or should I go to bed!
LOL!

Probably bed, but we'll see!

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and by long, I mean a little pullback/test in an overall bearish looking chart.

Those that tradeth countertrend .......................

 

[pavilion103]

Those that tradeth countertrend .......................

Didn't take it. Stupid idea to have considered it.
RR poor anyway.

Break lower as expected.
Need to be on multiple contracts!!
Killing my profit potential with not holding.
I'm not confident enough yet to hold the single contract.

Good luck guys!

 

[CanOz]

Those that tradeth countertrend .......................

The trend is up Cav...has been for months...

 

[Caveroute]

The trend is up Cav...has been for months...

Depends on your timeframe my friend.

 

[CanOz]

I'm just stirrin...

Seriously though, watch out for the 'pop' when the shorts get squeeze...

 

[CanOz]

There's your value area its testing....

If it pushes thru 6440 we're in for a bearish spring...

 

[MichaelD]

In regard to your post above - is your dislike of limit entries purely to do with your directional assessment?
That is, if the market is rising then buy at market or a breakout but dont enter when the market is falling?

Simply put, yes.

Limit orders = buying a falling market or selling a rising market.

I exclusively enter using Stop orders, so I buy into rising markets and sell into falling ones.

 

[pavilion103]

I agree and I don't!
I would never use a limit order for price which is moving with any real conviction in one direction.

I use them near a well established support/resistance, with multiple bars at that level within a tight range, when I feel strongly that price will break to the opposite side of the range.

It helps me get the lowest risk fill that I can. For example maybe 2 or 3 points (maybe even 1 at rare times) instead of 5.

As a whole though I'd use stop limit orders most of the time.

 

[MichaelD]

...limit order...

I use them near a well established support/resistance, with multiple bars at that level within a tight range, when I feel strongly that price will break to the opposite side of the range.

It helps me get the lowest risk fill that I can. For example maybe 2 or 3 points (maybe even 1 at rare times) instead of 5.

"Goddamit market. I'm right & you'd better agree with me REAL SOON now or I'm giving someone else 1, 2 or 3 points."

At least you don't let yourself stay wrong for very long which is extremely important.

Do you have enough trades entered with limit orders to draw meaningful conclusions yet as to overall R:R ratio & profitability when compared with trades entered with Buy/Sell Stop entries?

 

[MichaelD]

All my emotions were screaming at me to stay short, and telling me that anything other than short was insanely stupid given how awful things looked on Friday and that staying short was "a sure thing".

Accordingly, I closed the vast majority of my short positions (nicely profitable).

A pleasing outcome came from this, my "Hail Mary" rule which is the one exception to my other essentially mechanical rules.

If I had let the trades go to their natural conclusion, my shorts would have been stopped out by my trailing stop a few hours later for substantially less profit (+7% vs +15%).

The "Hail Mary" rule has proven to date to be an excellent addition to my overall trading strategy.


Subsequent price action saw me get short again. Now the question is:
- are we now seeing some whopping dead cat bounces before a much larger leg downwards? (seen that before, have rules to manage this scenario)
- is this the bottom of the current downtrend? (seen that before, have rules to manage this scenario)

Price action no doubt will reveal the truth in due course.

 

[MichaelD]

https://www.aussiestockforums.com/forums/showthread.php?t=27963&p=811304#post811304

The above makes me feel very bullish.

Note: Does not alter the way I trade. Rules is rules.

 

[Trembling Hand]

"Goddamit market. I'm right & you'd better agree with me REAL SOON now or I'm giving someone else 1, 2 or 3 points."

At least you don't let yourself stay wrong for very long which is extremely important.

Do you have enough trades entered with limit orders to draw meaningful conclusions yet as to overall R:R ratio & profitability when compared with trades entered with Buy/Sell Stop entries?

I couldn't disagree with you more. Buying up trending index futs on a short term basis, especially break out stop orders would have to be the quickest way to the poor house in short term trading ever invented.

There is no right way that covers everything but there is certainly a crap way and that is stop order entries for short term trading.

If I did that (besides the fact that I don't buy breakouts) it would cost me hundreds of thousands a year.

Lets say 10 trades a day with 10 lots thats 100 contracts at 2 ticks a side (it would actually be more on my market)

100 (contracts per day) * 2(ticks) * $7 (point value)* 2 (buy and a sell) = $2800 for a day lost!!!!!

Times that by 200 trading days...... $560,000 per year for sloppy entry....... :bad: