Bond Trader 2006

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Quote from johnpinochet:

At 0935 things were looking a little too strong. Got out of 1 ZB at 112 20 and stood aside.

End of my short bias. May just sit out the rest of the day.

I was only joking about re-testing the highs, but obviously it appears to be doing just that.
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Interesting how I publicly stated that it was the end of my short bias, and yet I subconsciously could not get the short bias out of my mind. I continued to view the market from a short bias.

Sorry, I'm engaging in a lot of introspection. I'm going to collect my thoughts and elaborate more later. There is a rather fundamental issue going on here. The issues involved deal with short term vs long term trading, pivot point/price point trading vs trend trading, and psychology.

One question I have for you. Is anyone aware of a service that provides real time news on the credit markets? I'm thinking of something like Briefing.com's intra day credit market analysis. I get them now through the Wall Street journal, but it isn't real time. There is a signficant delay. I was so impressed with them that I actually signed up for the premium edition, but cancelled after a week or two when I saw that they really don't publish real time anyway, i.e. their spin on 0930 market activity might be published 30 - 45 minutes later. As I read their take on Friday's activity now via my WSJ.com account, I see that had I had access to their analysis during that key 0930 level, I definitely would have reversed my bias and trade and gone long without hesitation.
 
my quick thought on wanting outside news analysis to help with your decision on direction for ZB... is to drop that thought quickly. I dont think you'll need it (and the more unnecessary dependencies you can remove the better). The chart really has all the info in it that you will need imo, as youve already shown to yourself.

-Q
 
Pre-market Commentary 06 February 2006

Unfortunately, starting today, I will dramatically scale back on my minute by minute commentary. I went back and re-read everything I had posted, as well as looking at the charts as well as looking at my IB daily statements. My conclusion after looking closely at the above, is that posting here minute by minute has been detrimental to my account. Now, I don't mean to say that it has impacted me in a negative way, because it certainly hasn't. What I mean to say is that it has been detrimental to maximizing my trading performance. I've missed out on 1/2 target profit objectives, and I've missed out on taking moves due to my posting here.

In addition, even though I assume no one is trading my moves, every time I initiate a trade, in the back of my mind I'm thinking to myself, that I need to be cognizant of the possibility that other people are riding along with me. This has led me to be remarkably cautious on days where I would otherwise have taken the plunge and upped my contract size. As an excellent example of this, I consider my second trade on Friday to be one where I would normally double up on my standard 2 contract entry. The trade was a no brainer. I did not.

So, for this week, I will only post pre-market commentary, and maybe a blow by blow analysis, after the fact. Yes, I realize it is after the fact, but I don't care. I have nothing to prove beginning this week. A couple of weeks ago, the thought occured to me that even though my methods were working, I had no idea what it would be like to actually be under the pressure of posting live and having real live people applaud or laugh. Now, I believe that I've proven what I've set out to prove: that I can post my commentary and my trades real-time, under fire and still be successful. It is time to get back to the business of trading.

Fundamental Issues

Today there are no economic reports. Expect market activity to center around digesting last Friday's economic report numbers and price activity.

Technical issues

Finally, we have some new numbers to look at. These numbers are rather interesting as well. Here they are:

114 01
113 16
112 25

I will not provide outlier highs or lows today as I don't think we will do much more than trade in a range. We have no news today. Later this week we have major reports, so I think today will be a day of consolidation. Of course, the market may realize how stupid it has been and turn around and crash back down to 112 03, but that is wishful thinking.

Some more tidbits

R1 113 29
Pivot 113 01
S1 112 19

More importantly, here are two major Fibonacci numbers for this area:

113 11
112 23

If I were a betting man, I would bank on important things happening around the following numbers today: 113 11, 113 01, and if we were to get down that low, 112 25.
 
Just as I expected, there really wasn't much activity today. You probably could have traded today with your eyes closed.

0721 Sold 2 ZB's at 113 08. I had a limit at 113 10, but didn't get filled. As price weakened I got in finally at 113 08.

The above sell was based off the Fib number. My NN CCI was pointing down. I knew this would be a quick trade as the first level of major support was 113 01. My target was 113 04 to 113 01.

0742 Closed position at 113 03. Now it is time to look for a buy.

Knowing that we would have major trouble getting below 113 01, I put in a buy at 113 02. Didn't get filled. I raised it to 113 03.

0750 Bought 2 ZB's at 113 03.

Starting at 0800 something about the chart started to stick out like a sore thumb. I knew that we were good to at least 113 10 and maybe higher. As I studied the chart more, I realized that it could develop into a mini version of Friday mornings activity. The next t trade was purely based on 3 things: a desire to add to my position, some understanding of the fractal behaviour of markets, and the knowledge of the two important numbers up above, i.e. 113 11 and 113 16.

0818 Bought 2 more ZB's at 113 06.

0828 Sold 2 ZB's at 113 11 for 1/2 profit target.

Got out of everything at 113 13 when we pulled back off of the high.

At this point, knowing that we had no news, and that we probably would just consolidate for today, AND that I had 2 successful trades in a row, I decided to call it a day.
 
Quick re-cap of Tuesday and Wednesday

07 February 2006

I published the 113 11 number on Monday, and if you recall last week, I had 113 10 as a price projection number. Depending on your own indicators, you may not have known to go short right at 113 10, but surely by the time we reached 113 07 - 113 05 at 0905 CST, you had to know that 113 01 or lower was a possibility. You could have gone short for a fill as bad as 113 05 and still made a quick 4 ticks at 113 01. For those of you who trade multiple contracts, you would have held on to some for a break through 113 01, with an eye towards getting out of everything soon.

The above trade was a no brainer. We had no news, and the market is essentially in a holding pattern until Thursday (today).

Your second sell would have been at 1310 CST when the market tried to test 113 01 again from below.

Finally, you would have been cautious knowing that it is best to take profits quickly as more than likely, Mon => Wed would be in a narrow trading range due to lack of news.

08 February 2006

To be continued....
 
08 February 2006

Continued....

There really isn't much to say about Wednesday, other than you should have been shorting from 113 01 starting between 0755 and 0905 CST.

09 February 2006

Since we are back to being in last week's stupid range again, we are back to using last weeks numbers. Bottom line, I'd be a seller at attempts back up to key Fib, Pivot, and/or Price Projection numbers.

At the moment, 0750 CST 09 Feb 2006, we are back down again close to last Friday's lows.

In conclusion, I'd be looking for an entry to sell. Keep in mind what last week Friday did (back up to new highs within an hour of establishing a new low) and be cautious.
 
Thursday was essentially a repeat of last week Friday in terms of the market not staying down at the lows very long. There was better behaviour at the key numbers for some solid shorts.

Today we are back to the numbers I published on 06 Feb 2006.

I'm not going to call market behaviour here in advance. Not with the report coming out in a few minutes.


International Trade 0730 CST

Treasury Budget 1300 CST

Here are the numbers for today (repeat of 06 Feb 2006):

114 01
113 16
112 25
 
Quote from johnpinochet:


09 February 2006

Since we are back to being in last week's stupid range again, we are back to using last weeks numbers. Bottom line, I'd be a seller at attempts back up to key Fib, Pivot, and/or Price Projection numbers.

At the moment, 0750 CST 09 Feb 2006, we are back down again close to last Friday's lows.

In conclusion, I'd be looking for an entry to sell. Keep in mind what last week Friday did (back up to new highs within an hour of establishing a new low) and be cautious.
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Recap Thursday 09 February 2006

Just looking at the above, what did we know about Thursday prior to even initiating a trade?

We knew from last week that 112 03/04 was important.
We knew that 112 15 was important.
We knew that 112 21 was extremely important.
We knew from last week that the market can easily hit new lows and turn around within an hour and

hit new highs.

Here is what you could have done if you wanted to take a risky trade against the trend:

Between 0755 and 0805 you could have bought between 112 06/08, knowing that the low of last week would probably hold as the 0730 report did absolutely nothing. Your upside target would have been 112 15 to 112 21.

I didn't take the trade as I hate taking trades against the 5 minute trend.

Here's what I did:

All times are based on the 5 min chart, 5 min bar.

I knew that we had an upside target of at least 112 15 from the low established at 0755 (5 min chart). I put in a limit order to sell 1 ZB at 112 14. Obviously I got filled.

0840 - 0845 (5 min bar) I watched the activity carefully. Unlike Friday, this time I was prepared to admit that my short bias may be wrong, and reverse. In addition, I knew that a 0900 report was coming out so I needed to get out soon. I put in an order to buy 1 ZB at 112 11.

Filled just before report.

0905 You knew that something was "up" at this point. Pardon the pun. The low of the day held. 112 09 held. Even if you didn't believe it, you had to think of going long. I tried to get filled at a few different prices and FINALLY got in at 112 14, 1 ZB long.

0915 Remembering what happened last week Friday, I decided to add to my position with an eye towards a quick exit at 112 21. Long 3 more ZB's at 112 16.

0925 Out of 2 ZB's at 112 21. Held remainder for possible break above.

0940 Out of 2 ZB's at 112 19. Now it is time to wait. Will we go higher or lower. You don't know at this point.

1015 - 1025 We are back up testing 112 21. My neural net CCI is exceptionally weak.

1030 Short 2 ZB's at 112 19. Target is 112 15/10.

1100 Close out everything at 112 15.

At this point I've had 3 successful trades in a row. At 2 successful trades in a row, I'm cautious. Now with 3, and considering the time, I decided to call it a day.
 

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