News release strategy/ (watching charts with eyeballs is not necessarily a hedge...)

F

farmerjohn1324

So yesterday, I was loaded up with three long S&P futures. ESU22 to be exact. I had already made ~$2000 that day prior to the CPI release. When 8:30am comes around, I figure since I'm watching the chart, I can just sell real quick if things go how I don't want. Well by 8:30:01 seconds, it dropped over 100 points and I'm in disbelief. I sell but there's a holdup at the exchange (traffic congestion?), but they finally sell at 4046.25, for a loss of just over $14,000 in an instant!

Keeping my composure, I quickly entered into two short contracts at 4036.50 and have since profited $10,725 from them. Thankfully this day turned out not so bad because of that. At this point, I think there's nothing but downward pressure on the market for the near-term future.

So what would have been a better strategy in advance of that news release? Vertical option spread that would limit my gains and hedge losses? Covered call/put? I was considering not being in trades until after the news release, but since I couldn't react as quick as the market, then I wouldn't have gained anything (other than the $10,725).

Thoughts?
 
zghorner said:
no advice, but nice reversal of position. That, to me, is trading.
More...

I closed it out since I made the first thread, at $10,125 profit. I read a news story that said "don't get carried away with the bear market because of the CPI numbers" and I realize it's just somebody's opinion and I could easily find another news article saying the opposite. But it's been going sideways for a while now and sometimes I get freaked out by news stories.
 
farmerjohn1324 said:
...

So what would have been a better strategy in advance of that news release?

Thoughts?
More...

Welcome to the futures market. The better strategy would have been to just stay out of the new release time-period.

If you have option-related questions about the move, you should really have this moved to the options section, because that was a major move that options could have helped or hindered. Just put a report in on your OP through the report tag, and ask @Magna to move it to options section.
 
Overnight said:
Welcome to the futures market. The better strategy would have been to just stay out of the new release time-period.

If you have option-related questions about the move, you should really have this moved to the options section, because that was a major move that options could have helped or hindered. Just put a report in on your OP through the report tag, and ask @Magna to move it to options section.
More...

Why stay out of news releases? That's where quick money can be made. That's how I doubled my $13,000 in 4 days back at the Jackson Hole speech.

I thought it was a general "trading strategies" question.
 
farmerjohn1324 said:
Why stay out of news releases? That's where quick money can be made. That's how I doubled my $13,000 in 4 days back at the Jackson Hole speech.

I thought it was a general "trading strategies" question.
More...

Nah, it looks like the bulk of your query was how to have hedged your trades/strat with options. I think that deserves the options-section treatment.
 
Maybe like share your input or screen and we can all trade the news / releases in the same direction you are. If it's good enough for you to do, it's good enough for us.
 
farmerjohn1324 said:
So yesterday, I was loaded up with three long S&P futures. ESU22 to be exact. I had already made ~$2000 that day prior to the CPI release. When 8:30am comes around, I figure since I'm watching the chart, I can just sell real quick if things go how I don't want. Well by 8:30:01 seconds, it dropped over 100 points and I'm in disbelief. I sell but there's a holdup at the exchange (traffic congestion?), but they finally sell at 4046.25, for a loss of just over $14,000 in an instant!

Keeping my composure, I quickly entered into two short contracts at 4036.50 and have since profited $10,725 from them. Thankfully this day turned out not so bad because of that. At this point, I think there's nothing but downward pressure on the market for the near-term future.

So what would have been a better strategy in advance of that news release? Vertical option spread that would limit my gains and hedge losses? Covered call/put? I was considering not being in trades until after the news release, but since I couldn't react as quick as the market, then I wouldn't have gained anything (other than the $10,725).

Thoughts?
More...
How would you feel about trading a 1 minute and a 30second chart from a flat position going into the announcement on a fully prepared set of charts marked up in a fashion that supports quick price action setups. When a setup appears on a chart on the runup to an 8:30 news release for example, you very well may see a good price action setup at 8:28 or 8:29, but usually you'll have till 8:30:30 or later to buy or sell to enter based on a setup/trigger pair taken from your toolbox. Check today's and a number of prior events like today's for 30s and 1m charts for any products that you like to work. Often a 5m chart works fine and often you will see perfectly tradeable pa setups that negate any need whatsoever to call Kreskin and Nostradomus for a prediction. The price action? It's in there. Sometimes it's a top, followed by a reversal2 followed by another reversal3 that travels about twice as far as the first. What PA setup is that fj?
Does that make sense farmerjohn1342?
 
easymon1 said:
How would you feel about trading a 1 minute and a 30second chart from a flat position going into the announcement on a fully prepared set of charts marked up in a fashion that supports quick price action setups. When a setup appears on a chart on the runup to an 8:30 news release for example, you very well may see a good price action setup at 8:28 or 8:29, but usually you'll have till 8:30:30 or later to buy or sell to enter based on a setup/trigger pair taken from your toolbox. Check today's and a number of prior events like today's for 30s and 1m charts for any products that you like to work. Often a 5m chart works fine and often you will see perfectly tradeable pa setups that negate any need whatsoever to call Kreskin and Nostradomus for a prediction. The price action? It's in there. Sometimes it's a top, followed by a reversal2 followed by another reversal3 that travels about twice as far as the first. What PA setup is that fj?
Does that make sense farmerjohn1342?
More...


He just asked "why stay out of news releases, that is where quick money is made". Pretty sure he either doesn't want to learn PA setups or doesn't have the will to. But unless I am mistaken with all your latest post it seems like you're looking for some type of protege project , this may be a good choice for you, will have your work cut out for you. Keep you real busy.
 
You must log in or register to reply here.
Back
Top