"Tight spreads" (atm, itm, slightly otm) trading

[conduit3030]

12/4 - Long ZS (soybeans) 897 strike @ 9:56, Expiry 12/4 @ 1:30

Cost: 44.5/spread (about 1.2:1 RR)

1. ZS (soybeans) is in a very strong 15m/1h trend, it just had a strong spike up (momentum) and pulled back...looking for a momentum long in the trend's direction.

2. DX and VX both trending down - Risk on mode, means generally commodities are going to be rising (but definitely not always). See the DX-ZS image - they generally have a negative correlation, and equally important when that correlation breaks down on the hourly time-frame, it quickly reverts to negative.

----> So DX is spiking down, ZS hasn't move up as much commensurately, temporary decoupling. Given that the negative relationship tends to be the norm, we can fade the temporary discrepancy here...i.e. long ZS in anticipation of it "catching up" to the DX move downwards (see DX-ZS image)

Result:

Made $55.5/spread

---. ZS absolutely took off with the trend continuing, I like that it caught up to the dollar and vix tanking (leading relationship here worked).

 

[conduit3030]

nice trade on the pair Conduit. are you trading options on currencies and ES

Nadex - the binaries have almost the exact same structures as options credit/debit spreads without the transaction expenses being as high.

 

[Buck]

thanx for the explanation. was trying to figure out if options or futures

 

[conduit3030]

Last trade this week...

12/4 - Long ES 2070 strike @ 10:15, Expiry 12/4 @ 4:15pm

Cost: 42.25/spread (max gain 57.75)

1. Another *pretty* standard ES long trade - this time the ES and equities markets in general have been tanking for about 2 days, it looks (subjectively) like hte VIX is about to spike down and the ES is turning around after several hours of whipsawed action up and down.

2. Definitely want a higher RR trade here, as it's a reversal and not with the short-term trend (though definitely with the long term ES uptrend lol).

Result:

See final image - ES rallied hard at the end of the day/lunch - more than I was hoping for...

 

[Buck]

thanx C. here are some charts with major fib levels. may help you with targets. worth applying to your charts or even just watch the confluence in these areas when hit

 

[Buck]

yhese fibs have been on my charts for yrs and dont change with contract rollover. its a great tool for identifying targets for support and resistance.

 

[conduit3030]

yhese fibs have been on my charts for yrs and dont change with contract rollover. its a great tool for identifying targets for support and resistance.

Thanks man, what products do you trade?

 

[Buck]

ES, TF, NQ, IWM, QQQ, CL, USO, NG, UNG, GC, SI, GDX Bonds-ZB & TLT. EEM and various other ETFs

 

[conduit3030]

ES, TF, NQ, IWM, QQQ, CL, USO, NG, UNG, GC, SI, GDX Bonds-ZB & TLT. EEM and various other ETFs

Wow cool, we pretty much trade the same stuff except currencies

 

[Buck]

EEM had a weekly sell confirmed @ 3612 stop 36.60 targets 32 looks like wave 1 down complete will look to short bounce for the 32 target but think will see 28 by the time its finished. wont be this year. im more a swing trader but scalp also. a scalp for me on ES is 10-15 points

used to scalp for 2-3pts back in the day but too hard to get that without giving half or more back lol