euribor problems

[robertola]

have been trading Euribor futures for about a month live now....I was fine to start with and had my size upped...now i am finding it very hard..

I am losing the majority of trades and cant understand what is going on..I have only moved from 2 to 4 lots!

I am working with 1/2 tick stops..and find myself getting stopped out all the time. My bosses say i should look for more edge..

any experienced people with some advice for me?

 

[Strategic Trader]

your boss is wrong - not 'more edge' - your edge presently is not working, you need an 'edge' - don't trade till you forget the old and also find a new one

 

[robertola]

your boss is wrong - not 'more edge' - your edge presently is not working, you need an 'edge' - don't trade till you forget the old and also find a new one

explain please

 

[Strategic Trader]

you dont need more edge - your edge does not work at all - so you need to go back to the start and find one edge that works - then once that one is in place- you can start looking for others - sounds like you were just using a close stop and looking for small tick profits - fine if you really understand about trading ranges - but otherwise just going to grind you down over time

 

[robertola]

you dont need more edge - your edge does not work at all - so you need to go back to the start and find one edge that works - then once that one is in place- you can start looking for others - sounds like you were just using a close stop and looking for small tick profits - fine if you really understand about trading ranges - but otherwise just going to grind you down over time

Hello again...i hear lots of people with different trading strategies on the Euribor market...some position trade within the day with wider stops and lots 1/2 tick trade it with momentum...it seems in the latter example all that happens is that locals squeeze each other out and no-one wins...just how much loss is acceptable in order for a decent gain in a day trading environment? I am doin ok at the moment but feel i would like to extend profits to more than i am doing..but it seems that every time this happens it comes back on me visciously before going my way again. and is it worth trading the open in youre opinion and running an outright position all day?

 

[Strategic Trader]

each "edge" will have a different time scale and even different time of the day when it is best to use it

it all works - just finding your comfort zone and finding the least risk and therefore most profitiable trades - which means waiting on each set up unitil it is most likely to be profitable

taking an outright at the begining ot the day and holding till the close is obviously in theory an easy way to trade - but you need to be right from the get go on market direction - if you get it wrong - you need to be prepared to walk away from the trade with a loss and not try to keep re-entering - cause on a chop day you will screwed - and you need to be dynamic on your profit exit - since you dont want to let the market come back to the open and watch your profit get pissed away

 

[robertola]

each "edge" will have a different time scale and even different time of the day when it is best to use it

it all works - just finding your comfort zone and finding the least risk and therefore most profitiable trades - which means waiting on each set up unitil it is most likely to be profitable

taking an outright at the begining ot the day and holding till the close is obviously in theory an easy way to trade - but you need to be right from the get go on market direction - if you get it wrong - you need to be prepared to walk away from the trade with a loss and not try to keep re-entering - cause on a chop day you will screwed - and you need to be dynamic on your profit exit - since you dont want to let the market come back to the open and watch your profit get pissed away

Yeah..I agree..how have u found the market recently..is it me or is this classed as pretty static ?..and I dont think its flowing very well on the nearer ended stuff...entry levels are very hard..bund bobl and shatz are trading very differently..due to what greenspan and trichet have said over the last coupek of months.

 

[Strategic Trader]

markets will tend toward low volatility for long periods of time, with short term periods of high volatility

the short term periods of high volatility tend to usher in new waves of traders who are gradually washed away during the ensuing bearish trend after a bullish volatilty run, and those that are left are gradually worn away with the following long term periods of low volatility

so you need to find strategies suitable for low volatility periods - always of course being cautious for intermitent revaluations resulting in very short term volatility, and of course the following return to high volatility - but the long term low volatilty periods can be measured in tens of years - where as short term high volatility will be measured in years

t

 

[Arcadian]

Market impact won't be a issue with that lot size, so it isn't what you're doing differently, it's what you're doing where the problem lies.

Ask yourself whether you ever had an edge or if were you just randomly lucky in your first month. This isn't a putdown, it's a hard question which you need to answer for yourself.

If you did have an edge, is your stop too tight?

If your style was only trying to capture the bid/ask spread but no more than that then you need the majority of your trades to not be stopped out just to cover costs. If the majority of your trades now loses, take positions in the direction opposite to where you want to take them and you should improve. Sound absurd? It is. Can you do something like take cues off the bund and see how the rest of the curve reacts to its movements, then go for more than EUR12.50 on winning trades?

have been trading Euribor futures for about a month live now....I was fine to start with and had my size upped...now i am finding it very hard..

I am losing the majority of trades and cant understand what is going on..I have only moved from 2 to 4 lots!

I am working with 1/2 tick stops..and find myself getting stopped out all the time. My bosses say i should look for more edge..

any experienced people with some advice for me?

 

[Pobtastic]

Whoa whoa!!!

What is the point in even considering about trading on the open and running it till the close? The only way to learn to trade is to actually do it! In the long run you'll earn far more by getting into and getting out of a position ALL day rather than just once... Could you really watch a position make say two or three whole Euribor ticks and not get out of it due to some stupid belief that it'll be better to run it into the close? More to the point, could you see it against you by that much?

The only way to make money in these markets is to TRADE. Don't listen to anyone telling you that you need more/ a new edge or whatever. You can only progress at your own speed, you should never rush into picking your size up. Lets put it this way, you've effectively doubled your size haven't you? If you were trading 50 lots would it be so easy to go up to trading 100 lots? I doubt it... The best thing you can do for yourself is to go back to doing what you were doing before and build your confidence up again gradually. You'll never make any money when you're telling yourself "I don't understand what's going on..." you can be your own worst enemy sometimes...

Take your time - take it slowly - and take it easy!

Happy trading

Pobster

 

[TWI]

Ask yourself following
What has changed other than your change from 2 to 4 lots?
What is your edge, do you really have one?
Are you consistent in your methodology?
Why did you lose money, analyse your trades and your decisions more closely i.e. should you have scratched, should you have been on that price in first place?
What can you do to improve your chances?
What would happen if your took contrary signals i.e. jumped on opposite side of bid/ask?
Could you find a way to spread your position either as a calendar or to another market that would have avoided taking a stop?

Euribor has without doubt become very tight in the last year but I have not noticed and appreciable change in the last month. You have to divorce yourself from your volume, a 100lot should be treated no differently to a 1lot in your mind. Much easier said than done but if you cannot do this then take your volume back down.
Always good to keep a close eye on the bund and have some levels in mind, do you get any reports or know how to find support resistance? You should know where these are likely to occur. New Highs and lows are a good start.
Good Luck and don't lose faith, we have all been there, suffering is part of the entry fee.

 

[Alexxxx]

half a tick loss-stop may just be too little.

 

[TWI]

That depends whether you are trading spreads or outrights. I would say with spreads it should never be more thatn 1/2 and usually should be a scratch at worst. With outrights, think you need to find something to spread it too.