What is wrong with the Treasury Market?

Quote from mcurto:

Exactly what Pabst said, don't be afraid to roll out the curve or toward the short end. Say if the two year is just sitting size offered all day, no one lifting it, and tens or thirties have a moderate bid, wait for the two year to confirm and at least for offers to get pulled or to go small bid to buy your ten years. This doesn't mean you have to be a spreader, but don't necessarily look for all clues in the 10yr, or whichever contract you may be trading, sometimes even offers being lifted in the very short end Fed Funds or Eurodollars can be bullish for the rest of the curve. Vice versa for a bearish day. Of course, as we get toward transparent Fed meetings twos tend to drift lower while the long end does whatever the hell it wants, until you approach supply and then the long end can be under pressures. I trade fundamentals, but not simply just if this number is bearish I'm gonna sell. Sometimes you fade these individuals based on the fact that they are already short enough size, and that the real money at some point will be an underlying bid. You do have to develop a front-running mentality, in a different sense, try to anticipate what others will do by reading what they say on Bloomberg, others new sources, its all out in the open to be interpreted.
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So focus on the debt market as a whole not just the 10 year. Keep up on the news in the treasury market so you can have an idea of what the market sentiment on a particular day is likely to be. Thanks
 
Quote from Pabst:

Mark: It appears that Livermore is searching for "tells" that will help him develop discretionary trading decisions. Not unlike what you do with candlesticks. I bet you think you're rules based but I'd guess many of your trades are triggered by an intuitive reaction filtered by your experiences to the bars as they develop. IMO that can't be taught or thusly duplicated...
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Hi Pabst,

First, candlesticks are not my primary method and I only use them as confirmation tools to what I already know or think I know.

Regarding my strategies...they are all rule-based (trading plan) and no intuition concerning the entry but there may be some intuition involved concerning the exit and such only occurs after I've reached what I call a profit target 2 (pt2) level in the trade which is a trade that has exceeded its expectations (pt1).

Further, I think all newbie Treasury traders need to have a detailed trading plan because they are up against too many seasoned veteran traders in comparison to any other futures trading instrument.

Just my personal opinion based upon the Treasury traders I socialize with in person (institutional and retail).

Therefore, newbie treasury traders should stay away from intuition trading or shooting from the hip sort'uv speak until they gain that experience where they can properly manage their risk exposure while being an intuition or pure discretionary trader.

To get to a level of trading profitably via intuition trading only...I've only seen such by those that have been doing it fulltime for a minimum of 5 years and profitably at that...

While along the way I've just seen more treasury traders that looked like they have a fighting chance because they had a trading plan (detailed methodology) in comparison to those without a trading plan.

With that said...any of my entries based upon intuition...

I consider these to be trades outside my trading plan and such are about 15% of my overall trades and are very discretionary along with occurring via a reduced position size to better manage the increased risk exposure.

However, after I saw how many trades Livermore is doing per day (he mentioned 39 roundtrips for Friday's trading)...

He's either a scalper or very active day trader which is completely different from my own approach to the markets and to the Treasury Futures.

Therefore, my comments needs to be taken with a grain of salt because I don't scalp the Treasuries.

When I trade the Treasury Futures its mainly via swing trading only during a specific period of the trading year in which I hold the trade for many days or a few weeks.

Yet, when I day trade (average about 4 trades per day) other futures or derivatives, its via either the Eminis, Eurex, Euronext or EuroFX.

Once again, I now realize my prior comments are most likely not suitable for Livermore due to the difference in trading styles or approach to the markets.

Geesh...I think I would pass out from exhaustion or need a vacation if I attempted 39 rt's in one trading day...

I'll leave that to the young traders because my 44 year old mind can't handle that :cool:

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
P.S. Looking at the last two tops and how the ZN-ZB divergence reversed from one top to the other while skepticism was building about the general consensus on a near end to the Fed's cycle of interest rate hikes, I believe that the people who have been selling bonds since Thursday are not people taking new positions but mainly people who bought at previous highs and who seized an opportunity to liquidate their long positions.
 
Quote from LivermoreRisen:

Damn. I'm worried about that too now
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So how do you suggest someone trade the debt market. You seem to have qualms with the trading of outrights. ...
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My suggestion was only that your size, for a $25k account, remain small (smaller), so you can survive, experience and learn.

(btw, trading directionally and being on both sides of a drastic move like that - you can make(lose) a lot of money quickly, but most of all, either way you can learn a lot).
 
Morgan Stanley began selling ten years around 10:00am, all told by a little after 11:00am they had sold about 25,000 (the biggest about a 6,500 lot), all on the screen, between 109-13.5 and 109-10.5. Some of the pit locals were on the other side on the screen and called upstairs to find out their counterparty. For the most part they scratched at those levels. Not sure who, but someone, was able to push it right in MS face this afternoon, for a good 10 tick rally. Would imagine some other house that had knowledge of the order and exactly who did it. Definitely not the outcome one would have expected after an order of such size, especially how locals scratched a good portion of these, but someone definitely tried to get that guy to puke up the position later in the day.
 
Quote from mcurto:

Not sure who, but someone, was able to push it right in MS face this afternoon, for a good 10 tick rally. Would imagine some other house that had knowledge of the order and exactly who did it. Definitely not the outcome one would have expected after an order of such size, especially how locals scratched a good portion of these, but someone definitely tried to get that guy to puke up the position later in the day.
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Are you sure about "someone" moving prices back up? The little rally between the end of the morning and the end of the session looked like a very gradual and smooth process -- the kind you see when one side is abandoning the market to the other side with the intention of coming back soon at a better time.
 
That move was anything but gradual and smooth, it was bid size the whole way with what looked like some guys being forced to pay up around 16.5 and 17, with about 5,000 fired off within a few seconds. Do you think people that were on the other side, after scratching, were gonna be nice and just let a guy sell 25,000? I would do the same and try to bid it right back in his face on the premise that there probably wasn't much more size paper that had to sell on the day. I talked to a few other traders who thought it behaved more like a short squeeze. A 10 tick rally in the 10yr after someone has sold 25,000 contracts is quite a move.
 
Quote from mcurto:

That move was anything but gradual and smooth, it was bid size the whole way with what looked like some guys being forced to pay up around 16.5 and 17, with about 5,000 fired off within a few seconds. Do you think people that were on the other side, after scratching, were gonna be nice and just let a guy sell 25,000? I would do the same and try to bid it right back in his face on the premise that there probably wasn't much more size paper that had to sell on the day. I talked to a few other traders who thought it behaved more like a short squeeze. A 10 tick rally in the 10yr after someone has sold 25,000 contracts is quite a move.
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Thank you for your reply and for your posts in general but looking at the price action from 11:00 to 15:00 depicted in the attached chart, you don't think that it was VERY gradual and VERY smooth? The reason why I insist on this is that if there is something I don't see or understand, I would like to know what it is.
<img src="attachment.php?s=&amp;postid=960785">
 

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