bondtrader's Blog

Futures Trading, Musings, and Random Thoughts

Friday, July 02, 2004

Here we go again...

I'm back after a break. It was Canada Day yesterday, so I thought I'd take a break.

I did manage a couple of trades yesterday, but I had to hurry off somewhere so I wasn't able to post my results.

What a big move in the bonds this morning, due to the Non-farm Payrolls report: Nonfarm payrolls rose by 112,000 last month, less than half the 244,000 that had been expected by Wall Street economists. Bad news for the economy, good news for us bond traders, if you happen to get in right before the release. However, when this market moves, it moves so fast and so quick, that by the time you get in, the market has gone up 1 full point (that's $1,000.00)... in 8 seconds!!!

Anyway, exhilarating morning for the bonds. Thursday and Friday openings are the best days to trade the bonds becase that's when all the exciting market action happens.

For now, let's go back to the markets...

Wednesday, June 30, 2004

Fed Watch

Today I decided to stay on the sidelines in front of the big announcement. That, and the fact that I'm still in re-group mode. Surprisingly, the Bonds rallied this morning after the Chicago PMI report. Pretty interesting move for a day when all eyes are on what the Fed will do. They've raised rates .25 basis points. So there.

I hope this will get the market out of this wait-and-see mode we've been in for the last couple of weeks. It has been a little difficult to play when there's no one to play with. So now, I hope we get back some normalcy in the market.

Over the next few days, my plan will be to get back to my starting point psychologically and fiscally. I've been watching Bonds over the last 1.5 years, and I have never had 2 losses in a row for the last 12 months. About a week ago, I experience my first ever 2-losses-in-a-row, and it had affected my confidence a bit. So now, I have to go back to basics and do some intense work to bring me back up to where I was.

This takes me back to Mark Douglas' exercise in his book, "Trading In The Zone". Here's what I'm going to be doing for the next few days:
1) I will be trading only my main trading setup for the next 20 trades.
2) I will be trading with only 1 contract.
3) I will be taking 2 tics minimum out of each trade, until I get back to where I was.



Tuesday, June 29, 2004

Recap of Trading Day: 2004-06-29

Here are today's results:
Tradelog 20040629

Only one (1) trade today.

What a strong uptrend today. It just didn't want to go down. Anybody who tried to get in on the short side would have been slaughtered. This is one of those days when "trend-following" really works. Just when you think it might be over and start to reverse, more buyers step in.

I have to admit though, my confidence is a bit shattered since I had 2 losses in a row, and so I took only 1 trade today. I need to regroup, re-focus and go back to the basics.

I need to work again on my mental game, which is by far the most crucial aspect of trading.

All eyes will be on tomorrow's FOMC meeting, so be careful.

Monday, June 28, 2004

Trading Metaphors

I just love the following trading metaphors from Money Management 1 that I decided to re-print it here (emphasis mine).


"Trading is like driving. Where you want to go etc., the "how much do you want to make" metaphor, depends on me.


  • How fast do I want to go? Well, how much risk do I want to take, e.g., tickets, accidents, etc., or in trading, how quickly do I want to achieve my goals.

  • How much wear on my car (me and everyone around me) do I want to incurr? I could wear my breaks and tires out by starting and stopping at every stop light - i.e., entering the market by choosing too tight of stops or exits.

  • What if I never get where I'm going?
    Have I prepared a road map (trading plan) with check points."



"Trading is all about management - yourself, your money, your attitude and your position. It is NOT about predictions, forecasts or OPINIONS."



And talking about trade management, this one really sums it up best:

  • emotions can be managed but not controlled

  • view each trade merely one in a series of probabilities

  • know why you take a trade and what must happen for you to remain in it (!!!)
    If it fails to happen - get out even if your stop has not been triggered.

Live from the pit

I signed up for a free trial to Bondsquawk.com over the weekend and this is my first day using it. What a valuable service! It's like being in the Bond trading pit yourself (includes 10-year and 5-year Notes too). You can hear when big players are making their move, when the markets are just about to take off on a trend (traders yelling in the background), and when the volume is thin. They've confirmed what I've noticed over the last week and a half: the volume in the bond pit dries up after 7:30 Pacific, or 9:30 Chicago time. They've been saying it's light for the last 2.5 hours.

Too bad the price is a little too steep. But you have a chance to test their service. They have a 3-day free trial. Check it out!