Bund Outrights RogueTrader Style

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RogueTrader888888

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hey all

I trade bund outrights. I currently trade 2-3 lots at a time. My goal is to get that up to 10 or so in a few months.

Some thoughts for today 17 July 2008:


- obviously strong day in the equities and bulls seems to be coming back into the market. ftse up 130 points to 5622. i expect bullish sentiment to continue at least in the short term. target 5378 then 5426, maybe by middle / end of next week.


- oil is down to 133.90. this is likely short term move down, longer term still very bullish and this should help out the ftse stocks.

- as i dont trade either of those 2 markets but the bund, i see bund retracing to 111.56/67. as i am such short term trader, id never hold my positions for 30 ticks but the longer term view (particularly on a 5 minute chart) I believe are important, even when scalping since if i am bearish id be 75% short and 25% long and on the longs, quickly take a loss if need be whereas in shorts i can hold onto a little bit longer.
Bank of England Gieve speaks tomorrow at 9:05, not sure what this is, possibly minutes from the meeting earlier in the week - this could be fundamental and how they voted. This followed by EU trade balance at 10:00.

- Other thoughts are going home after lunch after making x amount of money. I am really having trouble trading with increased volatility particularly with US traders waking up and US markets opening. Seems like good trades, turn into bad trades too quickly for then I take the loss and the trade then turns into a good trade (without me). Would it be a good idea to switch over to the schatz in the afternoons...however, im concerned about increased roundtrips but since market is slower and I am good scalper, it could be good idea. thoughts appreciated.

Until tomorrow.
 
18 July 2008

wow what a drop in the bund at 11:50, was amazing to see all those stops getting filled adding to the selling pressure. news only seems to come out after the drop which suggests that many people already knew, somehow or have faster access to news.

anyway, im done trading the afternoon - it is just too difficult / or im not good enough just yet. remember im doing outrights so getting caught on the wrong side of a run and trying to get out is just ridiciulously difficult.

so frustrating since everyday this week i have made money in the morning only to lose it all and more in the afternoon from one or two big moves that go against me. thinking of getting another job in the afternoon or switching to another market (tried to get the schatz up but didnt work dunno why - need to see that). anyway also fatigue adds to bad decision making in the afternoon since im there since 7 am and by 2 pm im already really tired and my reactions arent as sharp.

overall my first week has been painfully financially but rewarding educationally. looking forward to monday. i bought a new book today called Financial Freedom Through Electornic Day Trading by Van K. Tharp and Brian June. So i'll be doing some studying and resting and looking forward to next week.
 
Continued thoughts of my first week trading the Bund outright:

Everybody needs an edge or else they stand no chance to beat the markets. I do sincerely believe that trading is 80% discipline (money management, putting in appropriate stops, not overtrading, not tilting) and 20% methodology (reading the markets - fundamentals and technicals).

Secondly, I need to define what kind of trader I am. That is something that has caused me significant discomfort and stress this week. The bottom line is that I can only take 3-4 tick loss in the Bund, which makes me a scalper if anything since 3-4 ticks is not very much (1 minute timeframe charts). However, I am always looking for that one large directional trade, 10+ ticks (2-5 minute charts). Sometimes I do not know when to sit and wait for a large move and when to scalp and both these different strategies are conflicting since the waiting is preventing me from going in and out (and making lets say 5 ticks by scalping), and the waiting for the large move rarely happens and its more "predicting" than anything. I may take a long term view but I am not an analyst to to predict, or a pundit just a short term trader trying to take advantage of short term fluctuations in the market! I dont even have the appropriate economics background to make such predictions and to deny this is only arrogance.

Therefore, my role from now on will be:

1) Very short term, 1 minute chart scalper. I pay small roundtrip costs so it only makes sense. If the position doesnt go in my favour in 2 minutes then its probably best to scratch it, UNLESS i am directly in front of the queue in next position and patience is required. This will be my edge. I have good reflexes and am able to pull orders that go against me and join the queue early to get into the the next price.

Going back to my edge. If one doesnt have an edge, this is just a waste of time. My edge is my attitude to winning and improving. I have been stopped out twice this week but I am not even close to giving up - in fact these "setbacks" have made me stronger and more determined to succeed where others have failed. It is far too easy to give up and go back to some silly 9-5 job where one can live comfortably enough but always have to answer to superiors, clients, co-workers. Dont get me wrong, I am highly educated and my market worth now is £35k, which is comfortable, and im only 25 but I believe that I can make £100k a year trading, if not this year, then the next.

My weakness is certainly my discipline. I watch time and time again positions go against me and I do not take the loss. Bund if vicious market and one can be offside by 1 tick and then onside by 2 ticks so quickly but at the same time, can be offside by 4 ticks and joining queue to take loss only to watch it go even more offside. Therefore, its imperative to take MAXIMUM MAXIMUM MAXIMUM 2 tick loss. Moreover, just because I have orders in front of the queue and its going against me (and I can quickly average and try to get 1 tick lower) its no excuse, pull those damn orders and get out! Averaging is for suckers! Thats another rule. I will only average (pyramid) when the position is going in my favour, not against! Scratching positions is sometimes a winning trade in itself. There is no right or wrong in trading, just making more decisions that have positive expected value and avoiding decisions that have negative expected value.

Looking very much forward to next week.

RogueTrader
 
Just finished over the weekend this book: Financial Freedom Through Electornic Day Trading by Van K. Tharp and Brian June and here are some notes I have made that I have found useful.

• If you’re a pure scalper – mechanical. Do not wait for it to get to the high price boundary. Do not let a profit disappear into a loss. (So much easier said than done!!!!)
• When determining exit strategy, consider timeframe. 2 times 1 minute chart. If after 2 minutes nothing happens, usually exit trade.

• Develop a trading plan using discipline, particularly placing R1 stops and FOLLOW THEM.

• Positive-self talk: reinforce positive messages and repel negative ones. Negative words/thoughts attract negative actions. Grateful mistakes are made and want to fix them. Assume responsibility for mistakes, not other traders, market makers, manipulators, ONLY YOU. Reward yourself when you follow rules.

o Visualisations, particularly when problems are blocking you: If I’m making errors, re-run how things SHOULD be done. Next time experience situation, do it correctly.

• Failure to define who you are and what your goal is as a trader. Daily goals, weekly, monthly…drawdowns…
• Mixing two different styles of trading: I am a scalper and cannot try to operate as a swing trader at this early stage. Stick to what I am good at, my edge. Prove to yourself that you can make money at this style then move onto combining different styles. By mixing, you break discipline so the rules you worked so hard to develop.

Market Wizards: When you notice yourself getting emotional, move away from your current position. If possible, move at least ten feet away and then turn around and imagine yourself in your old position doing what you were doing. What did you look like? What was your breathing like? Notice any tension in your body. Notice your breathing. Just notice what you were like while doing that behaviour. Next, imagine a great trader in the same situation. What would that trader look like? How would he respond to the situation? Notice all the details of his posture and breathing. Lastly, return to your old trading position and jump into the body of your model trader. At this point you will find that your behaviour is quite different.

Try it. It only requires a little imagination.
 
What you aiming to do on Monday? I see either a calm retracement or crazzzzzzziness.
 
i look forward to getting some technicals to give me some decent levels since after friday's drop everything has changed. I think it will be crazy, particularly in the afternoon (thats why i should stay away).

Ill be looking to go with the trend and scalp my way to a profitable monday, both long and short and be disciplined!
 
since 16th jul bund has opened lower and traded down to close lower, this morning opened higher.... yesterdays low on the daily trendline 110.14 moves to 110.16 today, getting real close. this is significant support. Looks like we might get a higher close tonight on the basis nothing doin' now all figs out of the way and dow struggling along with dax. obviously with a 110.15 stop........
 
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stopped.......110.15. Close was 110.20 so pattern continues ( lower open lower close) but less momentum today. Daily trend support still in play. I'm outta here.........
 
This thing is all over the place. I am looking forward to a day when there's a nice 15 tick range instead of these crazy runs up an down, please?
 
monthly bund chart 15 years

critical support causing jitters ......
 

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Very short time frames usually 5-10mins. I always let the volume tell me when its time to get out. For trading I never look longer than a 10 minute chart but use the longer dated charts just to get the big picture. Also... the smallest daily bar (daily range) in the past six months or so has been about 30 tics. Averaging a lot higher than that on daily ranges. All good news for an outright trader.....
 
ahhh enough for today...

23 July 2008

I need to stop getting caught by these 5 tick moves one way that always come back. are they manipulators or what. squeeze me out like a bottle of ketchup!

nice little range today between 97 and 86 and doing some scalping there. Just these moves kill me, must avoid them somehow and averaging when offiside is my huge weakness but why do i keep doing it?
 
Monday, July 28

Doing better now since I stopped averaging losers and averaging winners. Also taking afternoon off once I had good morning but following graph at home (dislike trading busy afternoons and fridays). I look to see some more weakness on equities with an eventual rally on oil.
 
Wednesday 30 July

Glad not to be trading afternoons but I see lots of opportunities.

I could just imagine myself today shorting this thing after 2 when it stops going up and then taking the loss at .86 then .97 then 112.07 / .11, .18

best thing to do is just keep ur nerve and hold onto positions which are going in ur favour in the trend (so much easier said than done). For example, u feel that the move from 112.00 to 111.65 was overdone and possibly some support at around that place. Then put in a buy order at .75 and once u see it go your way then maybe some more at .78, get some out at .81 but keep the original long for a while longer. But this proves tricky holding ur nerve and feeling like u should take the profit when it comes off a bit and possibly a strong retracement (only to watch it continue to go up).

The problem with scalping sometimes is that u get out of a perfectly good position, to reverse it and instead of continuing a winning trade, it turns into a loser. I need a bit more conviction at times and go with the trend. Will try some of that before non-farms lol
 
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