Pabst's Blue Ribbon Trades

After reading your last two posts a few times I've had an epiphany of sorts. You're right, even as a "position trader" I'm a quasi scalper. :p

If I was short a lesser amount of Bonds I would have stayed with a looser stop. However now you have me wondering if one isn't better served by micro-managing profit protection.

I'm cognizant that I need not outguess the market but rather anticipate what stupid thing I might do next. To wit: I'm bearish bonds. However I know that Bonds are capable of turning good at any time. Thus I think it's prudent since I'm overtrading a bit-to use scaled trailing stops. Because I'm a bear and by nature an aggressive trader I know I'll have no hesitation in reestablishing my shorts if I lose my position at bad prices. On the other hand I don't want to freeze with 20 Bonds on in some huge flight to quality move. It was a pretty sweet feeling Friday when bonds printed 112 for me to know I was flat at an average of a half point lower than there. (How freakin' ironic is it that Friday's high was the AVERAGE PRICE of my position entering the day: S @112.08 and 111.24) If I'd had full boat on at a scratch I probably would've hesitated. These days hesitations are going to become lethal.

When iniating I'm going to keep my max size in everything other than Cotton at 5's and be a bit looser.

To-morrow OT I'll post some of Dennis's position sizing instructions to the Turtles. I need to work out some calculations on ATR's in a few markets.




Quote from OldTrader:

Pabst:

Thanks for the comments. But trust me when I tell you I've made more than a few mistakes since the 1960s....lol.

You know really, what's most important to me has to do with the type of market. What you need is a market when you can use a reasonable stop that still allows you to focus on a worthwhile profit...if that makes any sense.

In the crude oil market for instance, I work with stops of $.50-$1 usually. Now, I think crude is volatile enough these day that even with a stop of this type, you can get a worthwhile reward even on an intraday basis.

In the ES (normally the only index I trade), most of the time I have to think multiday because I use wider stops. In fact, that would be true for me in gold, T-notes (I don't trade the bonds).

That said, I use wider stops AND I use smaller size. You mentioned leverage above. And it's true...the futures market gives you plenty of leverage. What I've found though is that you have to be cautious with the leverage because the stops that you can reasonably set create too big a percentage loss in the account. The way people handle this sometimes is they decrease the size of the stop so that the $ losses are smaller, but in doing so they create a loss small enough that it makes successful trading difficult. I view this as the day trade syndrome. Guys using a 1point or so type of stop in the ES.

What I've learned is that trading a little bigger game is important and that one of the keys to doing this is smaller size, wider stops. That said, once I enter a trade, it needs to prove itself...so if the wrong things are happening I'm going to close the position whether deep in my heart I want to make a multiday trade or not....lol.

Enjoying the journal Pabst. Have a good weekend.

OldTrader

EDIT: I realized I left something out that I wanted to say. I like to fade the day traders at key points. I think one of the edges I have is the idea that I can think multiday unlike the day trader, I have a bigger risk threshhold and probably a bigger account. These are all advantages which allow me to fade the typical daytrader at a point where I have maximum potential. I think as you age, you have to use the advantages you have. I'm not going to beat some of these guys at the speed game, so I just don't play that game. Some of my advantages revolve around the willingness to trade the larger picture, take on bigger risk, hold more than one day, etc etc.
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Quote from Pa(b)st Prime:

[...]

To-morrow OT I'll post some of Dennis's position sizing instructions to the Turtles. I need to work out some calculations on ATR's in a few markets.
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That's could be quite interesting hearing of position sizing from a scalper that keeps overnight positions!
:p

It's a good situation to develop some original ideas.
 
While ET was down (I tried to post it in real time) I bought 5 SK at 757 and got out of 3 at 764 and 2@ 767. I'm still short 5 puts.

I'm itching to sell some more bonds but I'll wait to see if they can break down out of this horseshit range.
 
Quote from Pa(b)st Prime:

While ET was down (I tried to post it in real time) I bought 5 SK at 757 and got out of 3 at 764 and 2@ 767. I'm still short 5 puts.

I'm itching to sell some more bonds but I'll wait to see if they can break down out of this horseshit range.
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Good trade, but I wonder why you'd add a "Texas hedge" when you were already long and worried?
 
Quote from atticus:

Good trade, but I wonder why you'd add a "Texas hedge" when you were already long and worried?
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My fear early was that Beans would do what Wheat wound up doing, that is break 20 cents on air. But after I saw Beans hold up pretty well with Wheat and Cotton tanking I figured the least line of resistance in Beans would be higher if and when W and CT stabilized.
 
I haven't traded yet today.

Open positions:

S 5 SK puts @ 20 cents

S 15 USM (ZB) 5-111.10 and 10-111.17

L 5 May Cotton and 2 July

I'm sticking with CT and the Bonds with wide stops. If Beans trade in the mid 780's I'll cover my puts.

I'm looking to be a very aggressive buyer of Corn basis 3.62 1/2
in May.
 
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