Inter-Indices Spread Trade

Current market is too volatile to make directional trades, I prefer to trade inter-indicies spreads.

Nasdaq / Dow Jones ratio is pointing down after peaking the resistance of 0.21. To tap on this trend I had shorted 1 lot of Nasdaq mini and had bought 1 lot of Dow Jones mini.

Shorted 1 lot of Nasdaq Dec08 at 1744.25
(Value of 1 point is $20)

Bought 1 lot of Dow Jones Dec08 at 11281
(Value of 1 point is $5)

HI BEND,
I see what your doing.
For me the ratio on the $$ is slightly out.

What i do some times is , long 0ne S+P and short two Nasdaq and trade between them.

One dose not get much profit, but dose generate a core income.

TomTom said:

HI BEND,
I see what your doing.
For me the ratio on the $$ is slightly out.

What i do some times is , long 0ne S+P and short two Nasdaq and trade between them.

One dose not get much profit, but dose generate a core income.

Click to expand...

Hi Tom, I had executed spread trade on Oil / Gold as well, take a look here:

http://www.trade2win.com/boards/energy/37618-oil-gold-ratio-going-down.html

TomTom said:

HI BEND,
I see what your doing.
For me the ratio on the $$ is slightly out.

What i do some times is , long 0ne S+P and short two Nasdaq and trade between them.

One dose not get much profit, but dose generate a core income.

Click to expand...

I do not understand why you long 1 S&P and short 2 Nasdaq.

Update on Nasdaq / Dow Jones Spread Trade
On 10 September I had mentioned that Nasdaq / Dow Jones ratio is pointing down after peaking the resistance of 0.21. To tap on this trend I had shorted 1 lot of Nasdaq mini and had bought 1 lot of Dow Jones mini.

Current market is too volatile to make directional trades, I prefer to trade inter-indicies spreads.

Trade details:
Shorted 1 lot of Nasdaq mini Dec08 at 1744.25
Currently Nasdaq is trading at 1736.50, gain is US$155.
(Value of 1 point is $20)

Bought 1 lot of Dow Jones mini Dec08 at 11281
Currently Dow Jones is trading at 11317.00, gain is US$180.
(Value of 1 point is $5)

Net profit for this spread trade is 155 + 180 = US$335 (took profit).