Andy's Spread Trading Journal

I have entered my first trade this year.

22 x EDM7 - EDM8 on 01/16 at -0.335. Risk per spread is $225, basis seasonal.

So far it's moving into the right direction, but you never know.

My first target is around -0.245.

Happy trading,
Andy
 
Actual put on a 1 lot in my real acct to get a feel for the product. Never traded them before. havent any expectation to make on the trade, just learn with my risk capped.

So on this trade, can you post a chart of what you're looking for move wise.

mucho gracias,

j-law
 
Hi Andy! As far as I can see you are recommending many more meats spreads this year then any other market. Why do you prefer the meats markets?

Actually I do not have any preferences. I trade what I see. I look at a chart, and if I like what I see I trade it, without having any specific opinion about the market. I don’t care if I trade a grain spread or a meats spread as long as I see on the chart what I want to see. Most of the meats spreads have worked very well so far, but I do not have any guarantee it will stay like this. It can change from one week to the next, and maybe the grain spreads will become more attractive in the second half of 2006. We will see.
 
Andy,

First, thanks for sharing your trades and ideas about spread trading!

I'm also planning to get started with (index futures) spreads.

You mentioned the rollover somewhere. Is this an automated process or do you have to do this manually? My current understanding is that, when you want to stay in your position, the optimal strategy would be to buy/sell few days before the front contract expires.

Second, until now my idea was to daily review my position at, say, an hour before the close of the market and do a trade if necessary. But I see you recommend MOC orders. Can you explain a bit how MOC orders work compared to a market order before the close?
 
Rollover: The rollover is the time, when most traders get out of one month to get back in into another month. On the rollover the volume moves from one month into another (not necessarily the next contract month). Most broker will tell you this happens on a specific day, but this isn’t true. The roll over needs normally a few days. If you want to roll from one month into the next, you have to do it by your own or you let your broker do it for you. When you are long, he will just sell your position and buy it back in the new month. When you are short, he will do it just the other way around. If you want to do it on your own, ask your broker about the roll over. He will let you know a few days before the rollover starts.

MOC: Market on Close means you order becomes a market order in the last few minutes (normally in the last 3 minutes) of the trading day. You get the same result by calling your broker in the last few minutes of the trading day. Please note – you can not us MOC in the electronic traded contracts. You have to “simulate” MOC by executing your orders in the last few minutes before the close.
 
Trade

Sorry Guys, I am a bit late with my posts.

I got out (unfortunately too early) of my ED-ED trade at -0.35. My stop was definitely too close.

Hyp. loss on this trade is $-825 - commission of -$330 = -$1,155.

I got into MWH7 - WH7 already last Friday at 30 with a risk of $450. My time stop is already tomorrow. Let's see if the spread finally moves up.

I am also in LHJ7 - LCJ7 since yesterday at -26.2 with a risk of $1,000. Spread moved up nicely today. My stop is at -28.15 at the moment.

Happy trading,
Andy
 
Quote from Jordan_Andy:

Trade

Sorry Guys, I am a bit late with my posts.

I got out (unfortunately too early) of my ED-ED trade at -0.35. My stop was definitely too close.

Hyp. loss on this trade is $-825 - commission of -$330 = -$1,155.

Happy trading,
Andy
More...

If you wouldn't have gotten out what kind of move were you looking for here?
 
I try to keep it very simple. After going over my trading journal over and over again, for me it seems to be best of cashing in 1/2 of my position at my first target (same as amount of risk/contract) and using a trailing stop for the second half.

Happy trading,
Andy
 
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