Bond Futures
- Thread starter spreadem
- Start date
Don't you think the downside in bonds is limited due to the very fact you listed above?
If the interest rates go up sharply and the real estate mkt collapses. All those idiots who took out hefty home equity loans and second mortgages would be in trouble in this high unemployment environment.
Collapse in housing mkt would lead to a recession..........but you know this is all useless fundamental analysis.....going back to reading the bond TA tea leaves...
Yeah maybe.
But it's been a nice move so far; over $7000 per contract.
Better than working for a living.
Dr. Zhivodka
This has Bond move has been a fantastic example of why one need not make trading some overly difficult task.
Simply put if you can perceive when the herd is leaning the wrong way you can just put on your positions and then get the hell out of the way and try not to outthink the move. This is easier than it appears.
And since the capital markets are essentially fractal in nature moves like this occur in all market and in all periodicities many times per (pick one) day, week, month, year.
Trading can be easy, but you MUST be patient and let the market come to you.
Regards,
Dr. Zhivodka
Simply put if you can perceive when the herd is leaning the wrong way you can just put on your positions and then get the hell out of the way and try not to outthink the move. This is easier than it appears.
And since the capital markets are essentially fractal in nature moves like this occur in all market and in all periodicities many times per (pick one) day, week, month, year.
Trading can be easy, but you MUST be patient and let the market come to you.
Regards,
Dr. Zhivodka
Finally, after 5 trading days of being range-bound sept bonds broke thru. Bonds oscillated between 115 and 116 for 5 trading days, but when the 115 support level was broken on Monday on good volume then it became obvious to be short bonds.
After several aborted trades, I am again short on Monday's strong move.
A few weeks ago I said that Sept bonds would be trading in the 113'16 range according to the classical head & shoulders topping pattern ... here we are!
After several aborted trades, I am again short on Monday's strong move.
A few weeks ago I said that Sept bonds would be trading in the 113'16 range according to the classical head & shoulders topping pattern ... here we are!
Analysis good. Trading not so good.
Yes, however my point is how much did you lose and/or miss by trying to outthink this move?
I'm not trying to bash or embarrass you, the market does that in spades to all of us. But seeing a H&S pattern and actually taking full trend profits are two VERY different things entirely.
With the former skill set you're qualified to write a book. With the latter skill set you are able to make enough money from the markets so that you don't HAVE to write a book.
Regards,
Dr. Zhivodka
I caught two big chunks of the move but not the whole move. Also incurred some losses there in the middle.
The problem came to be when I was sitting on a huge winfall profit (I was short from 121 to 116) ... how to protect the profit. The challenge is to not give back the money made from the market.
While "I thought" that the market might trade to 113 level, it wouldn't have been smart to lose a large portion of the profits made If my theory were wrong.
How does one, who is sitting on a nice profit, maintain the position without putting his/her profit at risk?
Ah .... see now you're asking the right questions grasshoppa.
The answer depends on what you consider to be "a nice profit." And whether or not your account is properly capitalized.
Me, I know how Bonds and interest rates trade. And since I'm short from 122.00, it's is VERY possible that I could be in this short Bond trade for not weeks or months, but years. In that context I'm perfectly willing to allow them the latitude to bounce around a bit.
Bond and currencies don't trade like shares, at least I don't perceive them to be similar. The simple fact is that some markets are more conducive to trend following systems and some markets are better traded with counter-trend systems.
Young traders (not a comment on you personally), especially those who grew up in daytrading shops have a very tough time accepting that not every thing trades like KLAC or QLGC. This is mainly due to the fact that they don't have the depth of experience to notice this yet.
There's great big wide world of markets out there to trade. Contrary to the know-nothings in the financial media, the world doesn't revolve around the share market.
Regards,
Dr. Zhivodka
As far as keeping profit while staying in a trade, I do it by selling half positions. For instance, I shorted as the 30 year originally broke 118, with my initial stop at break even. As it moved down, I moved a stop for half my position down, and kept the rest at break even. As it turned out, I did get half my position stopped out with a 1 point profit, and let the rest ride. Fortunately, I've been able to ride the remaining half all the way down to where it is now.
I've found that the selling halves strategy has been the best way for me to stay in the game while putting some guaranteed money in my account.
I've found that the selling halves strategy has been the best way for me to stay in the game while putting some guaranteed money in my account.