bondtrader's Blog

Futures Trading, Musings, and Random Thoughts

Thursday, September 23, 2004

Market Behaviour

Strong trends are followed by trading ranges and vice-versa. A tight trading range is followed by a breakout and a strong move in the direction of the breakout.

Strong trends call for a money-management strategy that allows you to take part in the trend -- larger stops and longer profit targets.

Trading ranges call for more aggressive money-management techniques and even scalp trading, to prevent from being whipsawed too much.

Just something to take note of during the trading day.

Monday, September 20, 2004

Results for the Day

The trading day is just about over, but it doesn't look like there are any more trades to be had. Trades on the mini-Russell tend to thin out in the afternoon.

Since my Stats Manager is still not working, I have to type in the trade manually again. (So much for smart software and technology...)

14 trades, 12 winners, 2 losers. 32 ticks total, NET $185.20.

Here are the trades:

BUY 2 @ 573.3 7:34:36AM ER2264734301
SLD 1 @ 573.8 7:35:10AM +5
SLD 1 @ 574.0 7:36:43AM +7

SELL 2 @ 573.3 7:48:27AM ER2264748272
BOT 1 @ 572.8 7:50:49AM +5
BOT 1 @ 573.2 7:51:20AM +1

SELL 2 @ 571.5 9:58:57AM ER2264958563
BOT 1 @ 571.3 9:59:25AM +2
BOT 1 @ 571.3 10:00:01AM +2

SELL 2 @ 571.3 10:30:47AM ER22641030441
BOT 2 @ 571.2 10:37:20AM +2

BUY 2 @ 571.2 10:46:35AM ER22641046202
SLD 1 @ 571.2 10:50:23AM +0
SLD 1 @ 571.5 10:50:32AM +3

SELL 2 @ 571.4 10:59:18AM ER22641058453
BOT 1 @ 571.3 11:00:42AM +1
BOT 1 @ 571.4 11:02:16AM +0

SELL 2 @ 571.0 11:09:09AM ER2264118474
BOT 1 @ 570.7 11:09:50AM +3
BOT 1 @ 570.0 11:10:21AM +10

BUY 2 @ 570.2 11:14:20AM ER22641114155
SLD 2 @ 569.5 11:15:40AM -14

SELL 2 @ 569.7 11:21:53AM ER2264112096
BOT 1 @ 569.5 11:22:27AM +2
BOT 1 @ 569.7 11:25:06AM +0

SELL 1 @ 570.7 11:55:16AM ER22641154287
BOT 1 @ 570.5 11:57:44AM +2
BOT 1 @ 570.5 11:58:15AM +2

BUY 2 @ 570.8 12:07:35PM ER226412779
SLD 1 @ 571.3 12:08:14PM +5
SLD 1 @ 571.0 12:09:41PM +2

SELL 2 @ 570.6 12:11:49PM ER226412111111
BOT 2 @ 571.2 12:12:59PM -12

BUY 2 @ 571.5 12:26:19PM ER226412261812
SLD 2 @ 571.6 12:26:51PM +2

BUY 2 @ 572.1 12:30:39PM ER226412303113
SLD 1 @ 572.2 12:31:12PM +1
SLD 1 @ 572.2 12:31:39PM +1

Looking at the individual trades, the most bang for the buck is in the morning, where one of my biggest trades was. There was also one big trade in the afternoon. However, it was followed by a big loser. Most of the other trades were small; but that is how it's played. You never try to score a homerun each time; just get it a little at a time. I was looking over the shoulders of a fellow trader last week (via a chat room), and one of his money management styles is to lighten up on his position once he had a few winning trades in a row. He's just playing the probabilities -- once he has a few wins, a loss is bound to happen. I didn't think much of it at first, but after looking at him trade for 2 days, he was quite right.

I was also observing myself today, and found that after a big win, especially my first trade in the morning, my succeeding trades were smaller net wins, partly due to the markets at that particular time, partly due to me lessening the risk by taking the profits as they came to me. I also noted that the big trade in the afternoon came after I took a break from the markets between the morning and the afternoon session. Some of trades prior to the big one in the afternoon were taken after I stepped away from the computer screen for a while (even just 5 minutes). It didn't matter how long it was. The point is it did make a difference. Another trend that I noticed is that the morning really gives the best opportunities. (I talked about this in my previous post "Intraday Trends".)

Anyway, that's a wrap. See you tomorrow.